38576 Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 412 

[CMS–1690–F] 

RIN 0938–AT32 

Medicare Program; FY 2019 Inpatient 

Psychiatric Facilities Prospective 

Payment System and Quality 

Reporting Updates for Fiscal Year 

Beginning October 1, 2018 (FY 2019) 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule updates the 

prospective payment rates for Medicare 

inpatient hospital services provided by 

inpatient psychiatric facilities (IPFs), 

which include psychiatric hospitals and 

excluded psychiatric units of an acute 

care hospital or critical access hospital. 

These changes are effective for IPF 

discharges occurring during the fiscal 

year (FY) beginning October 1, 2018 

through September 30, 2019 (FY 2019). 

This final rule also updates the IPF 

labor-related share, the IPF wage index 

for FY 2019, and the International 

Classification of Diseases 10th Revision, 

Clinical Modification (ICD–10–CM) 

codes for FY 2019. It also makes 

technical corrections to the IPF 

regulations, and updates quality 

measures and reporting requirements 

under the Inpatient Psychiatric Facility 

Quality Reporting (IPFQR) Program. In 

addition, it updates providers on the 

status of IPF PPS refinements. 

DATES: These regulations are effective 

on October 1, 2018. 

FOR FURTHER INFORMATION CONTACT: The 

IPF Payment Policy mailbox at 

IPFPaymentPolicy@cms.hhs.gov for 

general information. 

Mollie Knight (410) 786–7948 or 

Hudson Osgood (410) 786–7897, for 

information regarding the market basket 

update or the labor related share. 

Theresa Bean (410) 786–2287 or James 

Hardesty (410) 786–2629, for 

information regarding the regulatory 

impact analysis. 

James Poyer (410) 786–2261 or Jeffrey 

Buck (410) 786–0407, for information 

regarding the inpatient psychiatric 

facility quality reporting program. 

SUPPLEMENTARY INFORMATION: 

Availability of Certain Tables 

Exclusively Through the Internet on the 

CMS Website 

Tables setting forth the final fiscal 

year (FY) 2019 Wage Index for Urban 

Areas Based on Core-Based Statistical 

Area (CBSA) Labor Market Areas and 

the FY 2019 Wage Index Based on CBSA 

Labor Market Areas for Rural Areas are 

available exclusively through the 

internet, on the CMS website at https:// 

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/IPFPPS/ 

WageIndex.html. 

In addition, tables showing the 

complete listing of final ICD–10 Clinical 

Modification (CM) and Procedure 

Coding System (PCS) codes underlying 

the FY 2019 Inpatient Psychiatric 

Facilities (IPF) Prospective Payment 

System (PPS) for the IPF comorbidity 

adjustment, code first, and 

electroconvulsive therapy (ECT) are 

available online at: https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/Inpatient

PsychFacilPPS/tools.html. Addenda B–1 

to B–4 to this final rule show the tables 

of the ICD–10–CM/PCS codes, which 

affect FY 2019 IPF PPS comorbidity 

categories, code first, and non-specific 

codes with regards to laterality. 

I. Executive Summary 

A. Purpose 

This final rule updates the 

prospective payment rates, the outlier 

threshold, and the wage index for 

Medicare inpatient hospital services 

provided by Inpatient Psychiatric 

Facilities (IPFs) for discharges occurring 

during the Fiscal Year (FY) beginning 

October 1, 2018 through September 30, 

2019. Additionally, this final rule makes 

technical corrections to the IPF 

regulations and updates the Inpatient 

Psychiatric Facilities Quality Reporting 

(IPFQR) Program. 

B. Summary of the Major Provisions 

1. Inpatient Psychiatric Facilities 

Prospective Payment System (IPF PPS) 

In this final rule, we update the IPF 

PPS, as specified in 42 CFR 412.428. 

The updates include the following: 

• Effective for the FY 2019, we 

adjusted the final 2012-based IPF 

market basket update of 2.9 percent by 

a reduction for economy-wide 

productivity of 0.8 percentage point as 

required by section 1886(s)(2)(A)(i) of 

the Social Security Act (the Act). We 

reduced the 2012-based IPF market 

basket update by 0.75 percentage point 

as required by section 1886(s)(2)(A)(ii) 

of the Act, resulting in a final IPF 

payment rate update of 1.35 percent for 

FY 2019. 

• The 2012-based IPF market basket 

results in a labor-related share of 74.8 

percent for FY 2019. 

• We updated the IPF PPS federal per 

diem base rate from $771.35 to $782.78. 

• Providers who failed to report 

quality data for FY 2019 payment will 

receive a FY 2019 federal per diem base 

rate of $767.33. 

• We updated the electroconvulsive 

therapy (ECT) payment per treatment 

from $332.08 to $337.00. 

• Providers who failed to report 

quality data for FY 2019 payment will 

receive a FY 2019 ECT payment per 

treatment of $330.35. 

• We updated the labor-related share 

of 74.8 percent (based on the 2012-based 

IPF market basket) and core base 

statistical area (CBSA) rural and urban 

wage indices for FY 2019, and provided 

a wage index budget-neutrality 

adjustment of 1.0013. 

• We updated the fixed dollar loss 

threshold amount from $11,425 to 

$12,865 to maintain estimated outlier 

payments at 2 percent of total estimated 

aggregate IPF PPS payments. 

• We implemented minor technical 

corrections to IPF regulations. 

2. Inpatient Psychiatric Facility Quality 

Reporting (IPFQR) Program 

We are adopting several proposals 

related to measures and one proposal 

related to data submission for the IPFQR 

Program. Specifically, we proposed the 

removal of eight (8) measures beginning 

with the FY 2020 payment 

determination. 

1. Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431); 

2. Alcohol Use Screening, SUB–1 

(NQF #1661); 

3. Assessment of Patient Experience 

of Care; 

4. Use of an Electronic Health Record; 

5. Tobacco Use Screening, TOB–1 

(NQF #1651); 

6. Hours of Physical Restraint Use 

(NQF #0640); 

7. Hours of Seclusion Use (NQF 

#0641); and 

8. Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge, TOB–3 and 

TOB–3a (NQF #1656). 

We are finalizing the removal of five 

of these eight measures: 

1. Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431); 

2. Alcohol Use Screening, SUB–1 

(NQF #1661); 

3. Assessment of Patient Experience 

of Care; 

4. Use of an Electronic Health Record; 

and 


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5. Tobacco Use Screening, TOB–1 

(NQF #1651). 

In addition, we proposed to no longer 

require facilities to submit the sample 

size count for measures for which 

sampling is performed beginning with 

the FY 2020 Payment Determination 

(that is, data reported during summer of 

CY 2019) and are finalizing this policy 

as proposed. 

3. Summary of Impacts 

Provision description Total transfers and cost reductions 

FY 2019 IPF PPS payment update .................... The overall economic impact of this final rule is an estimated $50 million in increased payments to IPFs during FY 2019. 

Updated IPFQR Program requirements .............. The total reduction in costs beginning in FY 2018 calculated in 2018 dollars for IPFs as a result of the updates to quality reporting requirements is estimated to be $20 million. 

II. Background 

A. Overview of the Legislative 

Requirements 

Section 124 of the Medicare, 

Medicaid, and State Children’s Health 

Insurance Program Balanced Budget 

Refinement Act of 1999 (BBRA) (Pub. L. 

106–113) required the establishment 

and implementation of an IPF PPS. 

Specifically, section 124 of the BBRA 

mandated that the Secretary of the 

Department of Health and Human 

Services (the Secretary) develop a per 

diem PPS for inpatient hospital services 

furnished in psychiatric hospitals and 

excluded psychiatric units including an 

adequate patient classification system 

that reflects the differences in patient 

resource use and costs among 

psychiatric hospitals and excluded 

psychiatric units. ‘‘Excluded’’ 

psychiatric unit means a psychiatric 

unit in an acute care hospital that is 

excluded from the Inpatient Prospective 

Payment System (IPPS), or a psychiatric 

unit in a Critical Access Hospital (CAH) 

that is excluded from the CAH payment 

system. These excluded psychiatric 

units would be paid under the IPF PPS. 

Section 405(g)(2) of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) 

(Pub. L. 108–173) extended the IPF PPS 

to psychiatric distinct part units of 

CAHs. 

Sections 3401(f) and 10322 of the 

Patient Protection and Affordable Care 

Act (Pub. L. 111–148) as amended by 

section 10319(e) of that Act and by 

section 1105(d) of the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152) (hereafter referred to 

jointly as ‘‘the Affordable Care Act’’) 

added subsection (s) to section 1886 of 

the Social Security Act (the Act). 

Section 1886(s)(1) of the Act titled 

‘‘Reference to Establishment and 

Implementation of System,’’ refers to 

section 124 of the BBRA, which relates 

to the establishment of the IPF PPS. 

Section 1886(s)(2)(A)(i) of the Act 

requires the application of the 

productivity adjustment described in 

section 1886(b)(3)(B)(xi)(II) of the Act to 

the IPF PPS for the rate year (RY) 

beginning in 2012 (that is, a RY that 

coincides with a fiscal year (FY)) and 

each subsequent RY. As noted in our FY 

2018 IPF PPS notice, published in the 

Federal Register on August 7, 2017 (82 

FR 36771 through 36789), for the RY 

beginning in 2017, the productivity 

adjustment currently in place is equal to 

0.6 percentage point. 

Section 1886(s)(2)(A)(ii) of the Act 

requires the application of an ‘‘other 

adjustment’’ that reduces any update to 

an IPF PPS base rate by percentages 

specified in section 1886(s)(3) of the Act 

for the RY beginning in 2010 through 

the RY beginning in 2019. As noted in 

the FY 2018 IPF PPS notice, for the RY 

beginning in 2017, section 1886(s)(3)(D) 

of the Act requires that the reduction 

currently in place be equal to 0.75 

percentage point. 

Sections 1886(s)(4)(A) and 

1886(s)(4)(B) of the Act require that for 

RY 2014 and each subsequent RY, IPFs 

that fail to report required quality data 

with respect to such a RY shall have 

their annual update to a standard 

federal rate for discharges reduced by 

2.0 percentage points. This may result 

in an annual update being less than 0.0 

for a RY, and may result in payment 

rates for the upcoming RY being less 

than such payment rates for the 

preceding RY. Any reduction for failure 

to report required quality data shall 

apply only to the RY involved, and the 

Secretary shall not take into account 

such reduction in computing the 

payment amount for a subsequent RY. 

We refer readers to section II.B of this 

final rule for an explanation of the IPF 

RY. More information about the 

specifics of the current IPFQR Program 

is available in the FY 2018 IPPS/LongTerm Care Hospital (LTCH) PPS final 

rule (82 FR 38461 through 38474). 

To implement and periodically 

update these provisions, we have 

published various proposed and final 

rules and notices in the Federal 

Register. For more information 

regarding these documents, see the 

Center for Medicare & Medicaid (CMS) 

website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/ 

index.html?redirect=/Inpatient

PsychFacilPPS/. 

B. Overview of the IPF PPS 

The November 2004 IPF PPS final 

rule (69 FR 66922) established the IPF 

PPS, as required by section 124 of the 

BBRA and codified at 42 CFR part 412 

Subpart N. The November 2004 IPF PPS 

final rule set forth the federal per diem 

base rate for the implementation year 

(the 18-month period from January 1, 

2005 through June 30, 2006), and 

provided payment for the inpatient 

operating and capital costs to IPFs for 

covered psychiatric services they 

furnish (that is, routine, ancillary, and 

capital costs, but not costs of approved 

educational activities, bad debts, and 

other services or items that are outside 

the scope of the IPF PPS). Covered 

psychiatric services include services for 

which benefits are provided under the 

fee-for-service Part A (Hospital 

Insurance Program) of the Medicare 

program. 

The IPF PPS established the federal 

per diem base rate for each patient day 

in an IPF derived from the national 

average daily routine operating, 

ancillary, and capital costs in IPFs in FY 

2002. The average per diem cost was 

updated to the midpoint of the first year 

under the IPF PPS, standardized to 

account for the overall positive effects of 

the IPF PPS payment adjustments, and 

adjusted for budget-neutrality. 

The federal per diem payment under 

the IPF PPS is comprised of the federal 

per diem base rate described previously 

and certain patient- and facility-level 

payment adjustments that were found in 

the regression analysis to be associated 

with statistically significant per diem 

cost differences. 

The patient-level adjustments include 

age, Diagnosis-Related Group (DRG) 

assignment, and comorbidities; 

additionally, there are variable per diem 

adjustments to reflect higher per diem 

costs at the beginning of a patient’s IPF 

stay. Facility-level adjustments include 

adjustments for the IPF’s wage index, 

rural location, teaching status, a cost-ofliving adjustment for IPFs located in 

Alaska and Hawaii, and an adjustment 


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for the presence of a qualifying 

emergency department (ED). 

The IPF PPS provides additional 

payment policies for outlier cases, 

interrupted stays, and a per treatment 

payment for patients who undergo 

electroconvulsive therapy (ECT). During 

the IPF PPS mandatory 3-year transition 

period, stop-loss payments were also 

provided; however, since the transition 

ended as of January 1, 2008, these 

payments are no longer available. 

A complete discussion of the 

regression analysis that established the 

IPF PPS adjustment factors can be found 

in the November 2004 IPF PPS final rule 

(69 FR 66933 through 66936). 

Section 124 of the BBRA did not 

specify an annual rate update strategy 

for the IPF PPS and was broadly written 

to give the Secretary discretion in 

establishing an update methodology. 

Therefore, in the November 2004 IPF 

PPS final rule, we implemented the IPF 

PPS using the following update strategy: 

• Calculate the final federal per diem 

base rate to be budget-neutral for the 18- 

month period of January 1, 2005 

through June 30, 2006. 

• Use a July 1 through June 30 annual 

update cycle. 

• Allow the IPF PPS first update to be 

effective for discharges on or after July 

1, 2006 through June 30, 2007. 

In RY 2012, we proposed and 

finalized switching the IPF PPS 

payment rate update from a RY that 

begins on July 1 and ends on June 30, 

to one that coincides with the federal 

FY that begins October 1 and ends on 

September 30. In order to transition 

from one timeframe to another, the RY 

2012 IPF PPS covered a 15-month 

period from July 1, 2011 through 

September 30, 2012. Therefore, the IPF 

RY has been equivalent to the October 

1 through September 30 federal FY 

since RY 2013. For further discussion of 

the 15-month market basket update for 

RY 2012 and changing the payment rate 

update period to coincide with a FY 

period, we refer readers to the RY 2012 

IPF PPS proposed rule (76 FR 4998) and 

the RY 2012 IPF PPS final rule (76 FR 

26432). 

C. Annual Requirements for Updating 

the IPF PPS 

In November 2004, we implemented 

the IPF PPS in a final rule that 

published on November 15, 2004 in the 

Federal Register (69 FR 66922). In 

developing the IPF PPS, and to ensure 

that the IPF PPS is able to account 

adequately for each IPF’s case-mix, we 

performed an extensive regression 

analysis of the relationship between the 

per diem costs and certain patient and 

facility characteristics to determine 

those characteristics associated with 

statistically significant cost differences 

on a per diem basis. For characteristics 

with statistically significant cost 

differences, we used the regression 

coefficients of those variables to 

determine the size of the corresponding 

payment adjustments. 

In that final rule, we explained the 

reasons for delaying an update to the 

adjustment factors, derived from the 

regression analysis, including waiting 

until we have IPF PPS data that yields 

as much information as possible 

regarding the patient-level 

characteristics of the population that 

each IPF serves. We indicated that we 

did not intend to update the regression 

analysis and the patient-level and 

facility-level adjustments until we 

complete that analysis. Until that 

analysis is complete, we stated our 

intention to publish a notice in the 

Federal Register each spring to update 

the IPF PPS (69 FR 66966). 

On May 6, 2011, we published a final 

rule in the Federal Register titled, 

‘‘Inpatient Psychiatric Facilities 

Prospective Payment System—Update 

for Rate Year Beginning July 1, 2011 (RY 

2012)’’ (76 FR 26432), which changed 

the payment rate update period to a RY 

that coincides with a FY update. 

Therefore, final rules are now published 

in the Federal Register in the summer 

to be effective on October 1. When 

proposing changes in IPF payment 

policy, a proposed rule would be issued 

in the spring and the final rule in the 

summer to be effective on October 1. For 

further discussion on changing the IPF 

PPS payment rate update period to a RY 

that coincides with a FY, we refer 

readers to our RY 2012 IPF PPS final 

rule (76 FR 26434 through 26435). For 

a detailed list of updates to the IPF PPS, 

we refer readers to our regulations at 42 

CFR 412.428. 

Our most recent IPF PPS annual 

update was published in a notice with 

comment period on August 7, 2017 in 

the Federal Register titled, ‘‘Medicare 

Program; FY 2018 Inpatient Psychiatric 

Facilities Prospective Payment 

System—Rate Update’’ (82 FR 36771), 

which updated the IPF PPS payment 

rates for FY 2018. That notice with 

comment period updated the IPF PPS 

federal per diem base rates that were 

published in the FY 2017 IPF PPS 

notice (81 FR 50502) in accordance with 

our established policies. 

III. Provisions of the FY 2019 IPF PPS 

Final Rule and Responses to Comments 

On May 8, 2018, we published a 

proposed rule in the Federal Register 

(83 FR 21104) entitled Medicare 

Program: FY 2019 Inpatient Psychiatric 

Facilities Prospective Payment System 

and Quality Reporting Updates for 

Fiscal Year Beginning October 1, 2018 

(FY 2019). The May 8, 2018 proposed 

rule (herein referred to as the FY 2019 

IPF PPS proposed rule) proposed 

updates to the prospective payment 

rates for Medicare inpatient hospital 

services provided by inpatient 

psychiatric facilities. In addition to the 

updates, we proposed to make minor 

technical corrections to several IPF 

regulations, and proposed updates to 

the IPF Quality Reporting program. 

We received a total of 88 comments 

on these proposals from 44 providers, 

21 industry groups or associations, 6 

advocacy groups, 10 individuals, and 4 

anonymous sources. Of the 88 

comments, 9 focused on payment 

policies, 85 focused on the quality 

reporting proposals, and 12 focused on 

the RFI. A summary of the proposals, 

the comments and our responses 

follows. 

A. Update to the FY 2019 Market Basket 

for the IPF PPS 

1. Background 

The input price index that was used 

to develop the IPF PPS was the 

‘‘Excluded Hospital with Capital’’ 

market basket. This market basket was 

based on 1997 Medicare cost reports for 

Medicare participating inpatient 

rehabilitation facilities (IRFs), IPFs, 

LTCHs, cancer hospitals, and children’s 

hospitals. Although ‘‘market basket’’ 

technically describes the mix of goods 

and services used in providing health 

care at a given point in time, this term 

is also commonly used to denote the 

input price index (that is, cost category 

weights and price proxies) derived from 

that market basket. Accordingly, the 

term market basket, as used in this 

document, refers to an input price 

index. 

Since the IPF PPS inception, the 

market basket used to update IPF PPS 

payments has been rebased and revised 

to reflect more recent data on IPF cost 

structures. We last rebased and revised 

the IPF market basket in the FY 2016 

IPF PPS rule, where we adopted a 2012- 

based IPF market basket, using Medicare 

cost report data for both Medicare 

participating psychiatric hospitals and 

excluded psychiatric units. We refer 

readers to the FY 2016 IPF PPS final 

rule for a detailed discussion of the 

2012-based IPF PPS Market Basket and 

its development (80 FR 46656 through 

46679). The FY 2016 IPS PPS final rule 

also includes references to the historical 

market baskets used to update IPF PPS 

payments since PPS implementation. 


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2. FY 2019 IPF Market Basket Update 

For FY 2019 (beginning October 1, 

2018 and ending September 30, 2019), 

we used an estimate of the 2012-based 

IPF market basket increase factor to 

update the IPF PPS base payment rate. 

Consistent with historical practice, we 

estimated the market basket update for 

the IPF PPS based on IHS Global, Inc.’s 

(IGI) forecast. IGI is a nationally 

recognized economic and financial 

forecasting firm that contracts with the 

CMS to forecast the components of the 

market baskets and multifactor 

productivity (MFP). For the proposed 

rule, based on IGI’s first quarter 2018 

forecast with historical data through the 

fourth quarter of 2017, the 2012-based 

IPF market basket increase factor for FY 

2019 was 2.8 percent. As stated in the 

proposed rule (89 FR 21107), if more 

recent data subsequently became 

available, we would use such data, if 

appropriate, to determine the FY 2019 

IPF market basket update and MFP 

adjustment for the final rule. Based on 

IGI’s most recent second quarter 2018 

forecast with historical data through the 

first quarter of 2018, the final 2012- 

based IPF market basket increase factor 

for FY 2019 is 2.9 percent. 

Section 1886(s)(2)(A)(i) of the Act 

requires the application of the 

productivity adjustment described in 

section 1886(b)(3)(B)(xi)(II) of the Act to 

the IPF PPS for the RY beginning in 

2012 (a RY that coincides with a FY) 

and each subsequent RY. For this FY 

2019 IPF PPS rule, based on IGI’s 

second quarter 2018 forecast, the MFP 

adjustment for FY 2019 (the 10-year 

moving average of MFP for the period 

ending FY 2019) is projected to be 0.8 

percent. We reduced the 2.9 percent IPF 

market basket update by this 0.8 

percentage point productivity 

adjustment, as mandated by the Act. We 

note that the MFP adjustment did not 

change from the 0.8 percentage point 

that was proposed (89 FR 21107). For 

more information on the productivity 

adjustment, we refer reader to the 

discussion in the FY 2016 IPF PPS final 

rule (80 FR 46675). 

In addition, for FY 2019 the 2012- 

based IPF PPS market basket update is 

further reduced by 0.75 percentage 

point as required by sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the 

Act. This results in an estimated FY 

2019 IPF PPS payment rate update of 

1.35 percent (2.9¥0.8¥0.75 = 1.35). 

3. IPF Labor-Related Share 

Due to variations in geographic wage 

levels and other labor-related costs, we 

continue to adjust the payment rates 

under the IPF PPS by a geographic wage 

index, which applies to the labor-related 

portion of the federal per diem base rate 

(hereafter referred to as the labor-related 

share). 

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 IPF market basket, we 

continue to include in the labor-related 

share the sum of the relative importance 

of Wages and Salaries; Employee 

Benefits; Professional Fees: LaborRelated; Administrative and Facilities 

Support Services; Installation, 

Maintenance, and Repair; All Other: 

Labor-related Services; and a portion (46 

percent) of the Capital-Related cost 

weight from the 2012-based IPF market 

basket. The relative importance reflects 

the different rates of price change for 

these cost categories between the base 

year (FY 2012) and FY 2019. Using IGI’s 

second quarter 2018 forecast for the 

2012-based IPF market basket, the IPF 

labor-related share for FY 2019 is the 

sum of the FY 2019 relative importance 

of each labor-related cost category. For 

more information on the labor-related 

share and its calculation, we refer 

readers to the FY 2016 IPF PPS final 

rule (80 FR 46676 through 46679). For 

FY 2019, the update to the labor-related 

share based on IGI’s second quarter 

2018 forecast of the 2012-based IPF PPS 

market basket is 74.8 percent. 

Comment: A few commenters 

appreciated the increase to the rates 

from the market basket update, but were 

concerned about the required reductions 

to the market basket update. One noted 

that these small increases don’t keep up 

with the cost of care and that the 

updates need to account properly for 

inflation. Another commenter noted that 

the Department of Health and Human 

Service (HHS) is obligated to negatively 

adjust the market base rate as stipulated 

by the Act. The commenter also stated 

that the mandated adjustment fails to 

recognize the negative impacts that 

decreased payments can have on the 

ability of psychiatrists and IPFs to 

provide services, and recommend CMS 

to look at avenues to increase 

reimbursement for psychiatrists and 

mental and behavioral health (MBH) 

services in order to incentivize an 

expansion of access and treatment. 

Response: The IPF market basket was 

developed to be specific to IPFs and 

their cost structures. Therefore, we 

believe it properly accounts for the 

inflation associated with providing IPF 

services. For more details on how that 

IPF-specific market basket was 

developed, we refer readers to the FY 

2016 IPF Final rule (80 FR 46656 

through 46679). 

We appreciate the commenters’ 

support for our increases to the 

payments, and their recognition that 

HHS (specifically, CMS) is obligated to 

reduce the market basket update in 

accordance with the Social Security Act. 

We note that section 1886(s)(3)(E) of the 

Act was amended by the Affordable 

Care Act at 3401(f)(3) and required an 

‘‘other adjustment’’ for each RY 

beginning in 2010 through 2019. This 

section of the Act currently requires the 

‘‘other adjustment’’ of 0.75 percentage 

point to be in place for only one more 

FY (the FY beginning in October 2019, 

which is FY 2020). 

The IPF PPS is designed to account 

for provider resource use, including 

patient-level and facility-level 

differences in costs. We believe the IPF 

payment system supports and 

encourages access to IPFs. 

Payments for professional services of 

psychiatrists are outside the scope of 

this IPF PPS rule. 

B. Updates to the IPF PPS Rates for FY 

Beginning October 1, 2018 

The IPF PPS is based on a 

standardized federal per diem base rate 

calculated from the IPF average per 

diem costs and adjusted for budgetneutrality in the implementation year. 

The federal per diem base rate is used 

as the standard payment per day under 

the IPF PPS and is adjusted by the 

patient-level and facility-level 

adjustments that are applicable to the 

IPF stay. A detailed explanation of how 

we calculated the average per diem cost 

appears in the November 2004 IPF PPS 

final rule (69 FR 66926). 

1. Determining the Standardized 

Budget-Neutral Federal per Diem Base 

Rate 

Section 124(a)(1) of the BBRA 

required that we implement the IPF PPS 

in a budget-neutral manner. In other 

words, the amount of total payments 

under the IPF PPS, including any 

payment adjustments, must be projected 

to be equal to the amount of total 

payments that would have been made if 

the IPF PPS were not implemented. 

Therefore, we calculated the budgetneutrality factor by setting the total 

estimated IPF PPS payments to be equal 

to the total estimated payments that 

would have been made under the Tax 

Equity and Fiscal Responsibility Act of 

1982 (TEFRA) (Pub. L. 97–248) 

methodology had the IPF PPS not been 


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implemented. A step-by-step 

description of the methodology used to 

estimate payments under the TEFRA 

payment system appears in the 

November 2004 IPF PPS Final rule (69 

FR 66926). 

Under the IPF PPS methodology, we 

calculated the final federal per diem 

base rate to be budget-neutral during the 

IPF PPS implementation period (that is, 

the 18-month period from January 1, 

2005 through June 30, 2006) using a July 

1 update cycle. We updated the average 

cost per day to the midpoint of the IPF 

PPS implementation period (October 1, 

2005), and this amount was used in the 

payment model to establish the budgetneutrality adjustment. 

Next, we standardized the IPF PPS 

federal per diem base rate to account for 

the overall positive effects of the IPF 

PPS payment adjustment factors by 

dividing total estimated payments under 

the TEFRA payment system by 

estimated payments under the IPF PPS. 

Additional information concerning this 

standardization can be found in the 

November 2004 IPF PPS final rule (69 

FR 66932) and the RY 2006 IPF PPS 

final rule (71 FR 27045). We then 

reduced the standardized federal per 

diem base rate to account for the outlier 

policy, the stop loss provision, and 

anticipated behavioral changes. A 

complete discussion of how we 

calculated each component of the 

budget-neutrality adjustment appears in 

the November 2004 IPF PPS final rule 

(69 FR 66932 through 66933) and in the 

RY 2007 IPF PPS final rule (71 FR 27044 

through 27046). The final standardized 

budget-neutral federal per diem base 

rate established for cost reporting 

periods beginning on or after January 1, 

2005 was calculated to be $575.95. 

The federal per diem base rate has 

been updated in accordance with 

applicable statutory requirements and 

§ 412.428 through publication of annual 

notices or proposed and final rules. A 

detailed discussion on the standardized 

budget-neutral federal per diem base 

rate and the electroconvulsive therapy 

(ECT) payment per treatment appears in 

the FY 2014 IPF PPS update notice (78 

FR 46738 through 46739). These 

documents are available on the CMS 

website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/ 

index.html. 

IPFs must include a valid procedure 

code for ECT services provided to IPF 

beneficiaries in order to bill for ECT 

services, as described in our Medicare 

Claims Processing Manual, Chapter 3, 

Section 190.7.3 (available at https://

www.cms.gov/Regulations-andGuidance/Guidance/Manuals/ 

Downloads/clm104c03.pdf.) There were 

no changes to the ECT procedure codes 

used on IPF claims as a result of the 

final update to the ICD–10–PCS code set 

for FY 2019. 

Comment: A commenter appreciated 

our maintaining the ICD–10 codes for 

ECT. 

Response: We appreciate the 

commenter’s support. 

2. Update of the Federal per Diem Base 

Rate and Electroconvulsive Therapy 

Payment per Treatment 

The current (FY 2018) federal per 

diem base rate is $771.35 and the ECT 

payment per treatment is $332.08. For 

the FY 2019 federal per diem base rate, 

we applied the payment rate update of 

1.35 percent (that is, the 2012-based IPF 

market basket increase for FY 2019 of 

2.9 percent less the productivity 

adjustment of 0.8 percentage point, and 

further reduced by the 0.75 percentage 

point required under section 

1886(s)(3)(E) of the Act), and the wage 

index budget-neutrality factor of 1.0013 

(as discussed in section III.D.1.e of this 

rule) to the FY 2018 federal per diem 

base rate of $771.35, yielding a federal 

per diem base rate of $782.78 for FY 

2019. Similarly, we applied the 1.35 

percent payment rate update and the 

1.0013 wage index budget-neutrality 

factor to the FY 2018 ECT payment per 

treatment, yielding an ECT payment per 

treatment of $337.00 for FY 2019. 

Section 1886(s)(4)(A)(i) of the Act 

requires that for RY 2014 and each 

subsequent RY, in the case of an IPF 

that fails to report required quality data 

with respect to such rate year, the 

Secretary shall reduce any annual 

update to a standard federal rate for 

discharges during the RY by 2.0 

percentage points. Therefore, we are 

applying a 2.0 percentage point 

reduction to the federal per diem base 

rate and the ECT payment per treatment 

as follows: 

• For IPFs that fail requirements 

under the Inpatient Psychiatric 

Facilities Quality Reporting (IPFQR) 

Program, we applied a ¥0.65 percent 

payment rate update (that is, the IPF 

market basket increase for FY 2019 of 

2.9 percent less the productivity 

adjustment of 0.8 percentage point, 

further reduced by the 0.75 percentage 

point for an update of 1.35 percent, and 

further reduced by 2 percentage points 

in accordance with section 

1886(s)(4)(A)(ii) of the Act, which 

results in a negative update percentage) 

and the wage index budget-neutrality 

factor of 1.0013 to the FY 2018 federal 

per diem base rate of $771.35, yielding 

a federal per diem base rate of $767.33 

for FY 2019. 

• For IPFs that fail to meet 

requirements under the IPFQR Program, 

we applied the ¥0.65 percent annual 

payment rate update and the 1.0013 

wage index budget-neutrality factor to 

the FY 2018 ECT payment per treatment 

of $332.08, yielding a ECT payment per 

treatment of $330.35 for FY 2019. 

C. Updates to the IPF PPS Patient-Level 

Adjustment Factors 

1. Overview of the IPF PPS Adjustment 

Factors 

The IPF PPS payment adjustments 

were derived from a regression analysis 

of 100 percent of the FY 2002 Medicare 

Provider and Analysis Review 

(MedPAR) data file, which contained 

483,038 cases. For a more detailed 

description of the data file used for the 

regression analysis, see the November 

2004 IPF PPS final rule (69 FR 66935 

through 66936). We continue to use the 

existing regression-derived adjustment 

factors established in 2005 for FY 2019. 

However, we have used more recent 

claims data to simulate payments to 

finalize the outlier fixed dollar loss 

threshold amount and to assess the 

impact of the IPF PPS updates. 

2. IPF PPS Patient-Level Adjustments 

The IPF PPS includes payment 

adjustments for the following patientlevel characteristics: Medicare Severity 

Diagnosis Related Groups (MS–DRGs) 

assignment of the patient’s principal 

diagnosis, selected comorbidities, 

patient age, and the variable per diem 

adjustments. 

a. Update to MS–DRG Assignment 

We believe it is important to maintain 

for IPFs the same diagnostic coding and 

Diagnosis Related Group (DRG) 

classification used under the Inpatient 

Prospective Payment System (IPPS) for 

providing psychiatric care. For this 

reason, when the IPF PPS was 

implemented for cost reporting periods 

beginning on or after January 1, 2005, 

we adopted the same diagnostic code set 

(ICD–9–CM) and DRG patient 

classification system (MS–DRGs) that 

were utilized at the time under the IPPS. 

In the RY 2009 IPF PPS notice (73 FR 

25709), we discussed CMS’ effort to 

better recognize resource use and the 

severity of illness among patients. CMS 

adopted the new MS–DRGs for the IPPS 

in the FY 2008 IPPS final rule with 

comment period (72 FR 47130). In the 

RY 2009 IPF PPS notice (73 FR 25716), 

we provided a crosswalk to reflect 

changes that were made under the IPF 

PPS to adopt the new MS–DRGs. For a 

detailed description of the mapping 

changes from the original DRG 


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adjustment categories to the current 

MS–DRG adjustment categories, we 

refer readers to the RY 2009 IPF PPS 

notice (73 FR 25714). 

The IPF PPS includes payment 

adjustments for designated psychiatric 

DRGs assigned to the claim based on the 

patient’s principal diagnosis. The DRG 

adjustment factors were expressed 

relative to the most frequently reported 

psychiatric DRG in FY 2002, that is, 

DRG 430 (psychoses). The coefficient 

values and adjustment factors were 

derived from the regression analysis. 

Mapping the DRGs to the MS–DRGs 

resulted in the current 17 IPF MS– 

DRGs, instead of the original 15 DRGs, 

for which the IPF PPS provides an 

adjustment. For FY 2019, we did not 

propose any changes to the IPF MS– 

DRG adjustment factors but proposed to 

maintain the existing IPF MS–DRG 

adjustment factors. 

In the FY 2015 IPF PPS final rule 

published August 6, 2014 in the Federal 

Register titled, ‘‘Inpatient Psychiatric 

Facilities Prospective Payment 

System—Update for FY Beginning 

October 1, 2014 (FY 2015)’’ (79 FR 

45945 through 45947), we finalized 

conversions of the ICD–9–CM-based 

MS–DRGs to ICD–10–CM/PCS-based 

MS–DRGs, which were implemented on 

October 1, 2015. Further information on 

the ICD–10–CM/PCS MS–DRG 

conversion project can be found on the 

CMS ICD–10–CM website at https://

www.cms.gov/Medicare/Coding/ICD10/ 

ICD-10-MS-DRG-ConversionProject.html. 

For FY 2019, we continue to make the 

existing payment adjustment for 

psychiatric diagnoses that group to one 

of the existing 17 IPF MS–DRGs listed 

in Addendum A. Addendum A is 

available on our website at https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/tools.html. Psychiatric 

principal diagnoses that do not group to 

one of the 17 designated MS–DRGs will 

still receive the federal per diem base 

rate and all other applicable 

adjustments, but the payment will not 

include an MS–DRG adjustment. 

The diagnoses for each IPF MS–DRG 

will be updated as of October 1, 2018, 

using the final IPPS FY 2019 ICD–10– 

CM/PCS code sets. The FY 2019 IPPS 

rule includes tables of the changes to 

the ICD–10–CM/PCS code sets which 

underlie the FY 2019 IPF MS–DRGs. 

Both the FY 2019 IPPS rule and the 

tables of changes to the ICD–10–CM/ 

PCS code sets which underlie the FY 

2019 MS–DRGs are available on the 

IPPS website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/ 

index.html. 

Code First 

As discussed in the ICD–10–CM 

Official Guidelines for Coding and 

Reporting, certain conditions have both 

an underlying etiology and multiple 

body system manifestations due to the 

underlying etiology. For such 

conditions, the ICD–10–CM has a 

coding convention that requires the 

underlying condition be sequenced first 

followed by the manifestation. 

Wherever such a combination exists, 

there is a ‘‘use additional code’’ note at 

the etiology code, and a ‘‘code first’’ 

note at the manifestation code. These 

instructional notes indicate the proper 

sequencing order of the codes (etiology 

followed by manifestation). In 

accordance with the ICD–10–CM 

Official Guidelines for Coding and 

Reporting, when a primary (psychiatric) 

diagnosis code has a ‘‘code first’’ note, 

the provider would follow the 

instructions in the ICD–10–CM text. The 

submitted claim goes through the CMS 

processing system, which will identify 

the primary diagnosis code as nonpsychiatric and search the secondary 

codes for a psychiatric code to assign a 

DRG code for adjustment. The system 

will continue to search the secondary 

codes for those that are appropriate for 

comorbidity adjustment. 

For more information on the code first 

policy, see our November 2004 IPF PPS 

final rule (69 FR 66945) and see sections 

I.A.13 and I.B.7 of the FY 2019 ICD–10– 

CM Coding Guidelines, available at 

https://www.cdc.gov/nchs/icd/

icd10cm.htm#FY%202019

%20release%20of%20ICD-10-CM. In 

the FY 2015 IPF PPS final rule, we 

provided a code first table for reference 

that highlights the same or similar 

manifestation codes where the code first 

instructions apply in ICD–10–CM that 

were present in ICD–9–CM (79 FR 

46009). From FY 2018 to FY 2019, there 

were no changes to the final ICD–10– 

CM/PCS codes in the IPF Code First 

table. The final FY 2019 Code First table 

is shown in Addendum B–2 on our 

website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/ 

tools.html. 

Comment: A commenter appreciated 

our consistency in maintaining the IPF 

MS–DRGs. 

Response: We appreciate the 

commenter’s support. 

b. Payment for Comorbid Conditions 

The intent of the comorbidity 

adjustments is to recognize the 

increased costs associated with 

comorbid conditions by providing 

additional payments for certain existing 

medical or psychiatric conditions that 

are expensive to treat. In our RY 2012 

IPF PPS final rule (76 FR 26451 through 

26452), we explained that the IPF PPS 

includes 17 comorbidity categories and 

identified the new, revised, and deleted 

ICD–9–CM diagnosis codes that generate 

a comorbid condition payment 

adjustment under the IPF PPS for RY 

2012 (76 FR 26451). 

Comorbidities are specific patient 

conditions that are secondary to the 

patient’s principal diagnosis and that 

require treatment during the stay. 

Diagnoses that relate to an earlier 

episode of care and have no bearing on 

the current hospital stay are excluded 

and must not be reported on IPF claims. 

Comorbid conditions must exist at the 

time of admission or develop 

subsequently, and affect the treatment 

received, length of stay (LOS), or both 

treatment and LOS. 

For each claim, an IPF may receive 

only one comorbidity adjustment within 

a comorbidity category, but it may 

receive an adjustment for more than one 

comorbidity category. Current billing 

instructions for discharge claims, on or 

after October 1, 2015, require IPFs to 

enter the complete ICD–10–CM codes 

for up to 24 additional diagnoses if they 

co-exist at the time of admission, or 

develop subsequently and impact the 

treatment provided. 

The comorbidity adjustments were 

determined based on the regression 

analysis using the diagnoses reported by 

IPFs in FY 2002. The principal 

diagnoses were used to establish the 

DRG adjustments and were not 

accounted for in establishing the 

comorbidity category adjustments, 

except where ICD–9–CM code first 

instructions applied. In a code first 

situation, the submitted claim goes 

through the CMS processing system, 

which will identify the principal 

diagnosis code as non-psychiatric and 

search the secondary codes for a 

psychiatric code to assign an MS–DRG 

code for adjustment. The system will 

continue to search the secondary codes 

for those that are appropriate for 

comorbidity adjustment. 

As noted previously, it is our policy 

to maintain the same diagnostic coding 

set for IPFs that is used under the IPPS 

for providing the same psychiatric care. 

The 17 comorbidity categories formerly 

defined using ICD–9–CM codes were 

converted to ICD–10–CM/PCS in our FY 

2015 IPF PPS final rule (79 FR 45947 

through 45955). The goal for converting 

the comorbidity categories is referred to 

as replication, meaning that the 

payment adjustment for a given patient 


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encounter is the same after ICD–10–CM 

implementation as it would be if the 

same record had been coded in ICD–9– 

CM and submitted prior to ICD–10–CM/ 

PCS implementation on October 1, 

2015. All conversion efforts were made 

with the intent of achieving this goal. 

For FY 2019, we are finalizing our 

proposal to use the same comorbidity 

adjustment factors in effect in FY 2018, 

which are found in Addendum A, 

available on our website at https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/tools.html. 

We have updated the ICD–10–CM/ 

PCS codes which are associated with 

the existing IPF PPS comorbidity 

categories, based upon the final FY 2019 

update to the ICD–10–CM/PCS code set. 

The FY 2019 ICD–10–CM/PCS updates 

included ICD–10–CM/PCS codes added 

to the Drug and/or Alcohol Abuse, 

Gangrene, Oncology Treatment, and 

Poisoning comorbidity categories, and 

codes deleted from the Oncology 

Treatment comorbidity category. These 

updates are detailed in Addenda B–1 

and B–3 of this final rule, which is 

available on our website at https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/tools.html. 

In accordance with the policy 

established in the FY 2015 IPF PPS final 

rule (79 FR 45949 through 45952), we 

reviewed all FY 2019 ICD–10–CM codes 

to remove site unspecified codes from 

the FY 2019 ICD–10–CM/PCS codes in 

instances where more specific codes are 

available. As we stated in the FY 2015 

IPF PPS final rule, we believe that 

specific diagnosis codes that narrowly 

identify anatomical sites where disease, 

injury, or condition exist should be used 

when coding patients’ diagnoses 

whenever these codes are available. We 

finalized that we would remove site 

unspecified codes from the IPF PPS 

ICD–10–CM/PCS codes in instances in 

which more specific codes are available, 

as the clinician should be able to 

identify a more specific diagnosis based 

on clinical assessment at the medical 

encounter. Therefore, we are removing 3 

site unspecified codes from the list of 

Oncology Treatment Diagnosis codes. 

See Addendum B–4 to this rule for a 

listing of the 3 ICD–10–CM/PCS site 

unspecified codes to be removed. 

Addendum B–4 is available on our 

website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/InpatientPsychFacilPPS/ 

tools.html. 

c. Patient Age Adjustments 

As explained in the November 2004 

IPF PPS final rule (69 FR 66922), we 

analyzed the impact of age on per diem 

cost by examining the age variable 

(range of ages) for payment adjustments. 

In general, we found that the cost per 

day increases with age. The older age 

groups are more costly than the under 

45 age group, the differences in per 

diem cost increase for each successive 

age group, and the differences are 

statistically significant. For FY 2019, we 

are finalizing our proposal to continue 

to use the patient age adjustments 

currently in effect in FY 2018, as shown 

in Addendum A of this rule (see https:// 

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/tools.html). 

d. Variable per Diem Adjustments 

We explained in the November 2004 

IPF PPS final rule (69 FR 66946) that the 

regression analysis indicated that per 

diem cost declines as the length of stay 

(LOS) increases. The variable per diem 

adjustments to the federal per diem base 

rate account for ancillary and 

administrative costs that occur 

disproportionately in the first days after 

admission to an IPF. We used a 

regression analysis to estimate the 

average differences in per diem cost 

among stays of different lengths. As a 

result of this analysis, we established 

variable per diem adjustments that 

begin on day 1 and decline gradually 

until day 21 of a patient’s stay. For day 

22 and thereafter, the variable per diem 

adjustment remains the same each day 

for the remainder of the stay. However, 

the adjustment applied to day 1 

depends upon whether the IPF has a 

qualifying ED. If an IPF has a qualifying 

ED, it receives a 1.31 adjustment factor 

for day 1 of each stay. If an IPF does not 

have a qualifying ED, it receives a 1.19 

adjustment factor for day 1 of the stay. 

The ED adjustment is explained in more 

detail in section III.D.4 of this rule. 

Final Decision: For FY 2019, we are 

finalizing our proposal to continue to 

use the variable per diem adjustment 

factors currently in effect as shown in 

Addendum A of this rule (available at 

https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

InpatientPsychFacilPPS/tools.html). A 

complete discussion of the variable per 

diem adjustments appears in the 

November 2004 IPF PPS final rule (69 

FR 66946). 

D. Updates to the IPF PPS Facility-Level 

Adjustments 

The IPF PPS includes facility-level 

adjustments for the wage index, IPFs 

located in rural areas, teaching IPFs, 

cost of living adjustments for IPFs 

located in Alaska and Hawaii, and IPFs 

with a qualifying ED. 

1. Wage Index Adjustment 

a. Background 

As discussed in the RY 2007 IPF PPS 

final rule (71 FR 27061), RY 2009 IPF 

PPS (73 FR 25719) and the RY 2010 IPF 

PPS notices (74 FR 20373), in order to 

provide an adjustment for geographic 

wage levels, the labor-related portion of 

an IPF’s payment is adjusted using an 

appropriate wage index. Currently, an 

IPF’s geographic wage index value is 

determined based on the actual location 

of the IPF in an urban or rural area, as 

defined in § 412.64(b)(1)(ii)(A) and (C). 

b. Updated Wage Index for FY 2019 

Since the inception of the IPF PPS, we 

have used the pre-floor, pre-reclassified 

acute care hospital wage index in 

developing a wage index to be applied 

to IPFs, because there is not an IPFspecific wage index available. We 

believe that IPFs compete in the same 

labor markets as acute care hospitals, so 

the pre-floor, pre-reclassified hospital 

wage index should reflect IPF labor 

costs. As discussed in the RY 2007 IPF 

PPS final rule (71 FR 27061 through 

27067) for RY 2007, under the IPF PPS, 

the wage index is calculated using the 

IPPS wage index for the labor market 

area in which the IPF is located, without 

taking into account geographic 

reclassifications, floors, and other 

adjustments made to the wage index 

under the IPPS. For a complete 

description of these IPPS wage index 

adjustments, we refer readers to the FY 

2013 IPPS/LTCH PPS final rule (77 FR 

53365 through 53374). For FY 2019, we 

will continue to apply the most recent 

hospital wage index (the FY 2018 prefloor, pre-reclassified hospital wage 

index, which is the most appropriate 

index as it best reflects the variation in 

local labor costs of IPFs in the various 

geographic areas) using the most recent 

hospital wage data (data from hospital 

cost reports for the cost reporting period 

beginning during FY 2014) without any 

geographic reclassifications, floors, or 

other adjustments. We will apply the FY 

2019 IPF wage index to payments 

beginning October 1, 2018. 

We will apply the wage index 

adjustment to the labor-related portion 

of the federal rate, which will change 

from 75.0 percent in FY 2018 to 74.8 

percent in FY 2019. This percentage 

reflects the labor-related share of the 

final 2012-based IPF market basket for 

FY 2019 (see section III.A.3 of this rule). 

c. Office of Management and Budget 

Bulletins 

Office of Management and Budget 

(OMB) publishes bulletins regarding 

Core-Based Statistical Area (CBSA) 


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changes, including changes to CBSA 

numbers and titles. In the RY 2007 IPF 

PPS final rule (71 FR 27061 through 

27067), we adopted the changes 

discussed in the OMB Bulletin No. 03– 

04 (June 6, 2003), which announced 

revised definitions for Metropolitan 

Statistical Areas (MSAs), and the 

creation of Micropolitan Statistical 

Areas and Combined Statistical Areas. 

In adopting the OMB CBSA geographic 

designations in RY 2007, we did not 

provide a separate transition for the 

CBSA-based wage index since the IPF 

PPS was already in a transition period 

from TEFRA payments to PPS 

payments. 

In the RY 2009 IPF PPS notice, we 

incorporated the CBSA nomenclature 

changes published in the most recent 

OMB bulletin that applies to the 

hospital wage index used to determine 

the current IPF wage index and stated 

that we expect to continue to do the 

same for all the OMB CBSA 

nomenclature changes in future IPF PPS 

rules and notices, as necessary (73 FR 

25721). The OMB bulletins may be 

accessed online at https://

www.whitehouse.gov/omb/bulletins/. 

In accordance with our established 

methodology, we have historically 

adopted any CBSA changes that are 

published in the OMB bulletin that 

corresponds with the hospital wage 

index used to determine the IPF wage 

index. For the FY 2015 IPF wage index, 

we used the FY 2014 pre-floor, prereclassified hospital wage index to 

adjust the IPF PPS payments. On 

February 28, 2013, OMB issued OMB 

Bulletin No. 13–01, which established 

revised delineations for MSAs, 

Micropolitan Statistical Areas, and 

Combined Statistical Areas, and 

provided guidance on the use of the 

delineations of these statistical areas. A 

copy of this bulletin may be obtained at 

https://www.whitehouse.gov/omb/ 

bulletins/. 

Because the FY 2014 pre-floor, prereclassified hospital wage index was 

finalized before the issuance of this 

Bulletin, the FY 2015 IPF wage index, 

which was based on the FY 2014 prefloor, pre-reclassified hospital wage 

index, did not reflect OMB’s new area 

delineations based on the 2010 Census. 

According to OMB, ‘‘[t]his bulletin 

provides the delineations of all 

Metropolitan Statistical Areas, 

Metropolitan Divisions, Micropolitan 

Statistical Areas, Combined Statistical 

Areas, and New England City and Town 

Areas in the United States and Puerto 

Rico based on the standards published 

on June 28, 2010, in the Federal 

Register (75 FR 37246 through 37252) 

and Census Bureau data.’’ These OMB 

Bulletin changes are reflected in the FY 

2015 pre-floor, pre-reclassified hospital 

wage index, upon which the FY 2016 

IPF wage index was based. We adopted 

these new OMB CBSA delineations in 

the FY 2016 IPF wage index and 

subsequent IPF wage indexes. 

Generally, OMB issues major 

revisions to statistical areas every 10 

years, based on the results of the 

decennial census. However, OMB 

occasionally issues minor updates and 

revisions to statistical areas in the years 

between the decennial censuses. On 

July 15, 2015, OMB issued OMB 

Bulletin No. 15–01, which provides 

minor updates to, and supersedes, OMB 

Bulletin No. 13–01 that was issued on 

February 28, 2013. The attachment to 

OMB Bulletin No. 15–01 provides 

detailed information on the update to 

statistical areas since February 28, 2013. 

The updates provided in the attachment 

to OMB Bulletin No. 15–01 are based on 

the application of the 2010 Standards 

for Delineating Metropolitan and 

Micropolitan Statistical Areas to Census 

Bureau population estimates for July 1, 

2012 and July 1, 2013. The complete list 

of statistical areas incorporating these 

changes is provided in OMB Bulletin 

No. 15–01. A copy of this bulletin may 

be obtained at https://

www.whitehouse.gov/omb/bulletins/. 

OMB Bulletin No. 15–01 establishes 

revised delineations for the Nation’s 

Metropolitan Statistical Areas, 

Micropolitan Statistical Areas, and 

Combined Statistical Areas. The bulletin 

also provides delineations of 

Metropolitan Divisions as well as 

delineations of New England City and 

Town Areas. 

In accordance with our longstanding 

policy, the IPF PPS continues to use the 

latest labor market area delineations 

available as soon as is reasonably 

possible to maintain a more accurate 

and up-to-date payment system that 

reflects the reality of population shifts 

and labor market conditions. As 

discussed in the FY 2017 IPPS/LTCH 

PPS final rule (81 FR 56913), the 

updated labor market area definitions 

from OMB Bulletin 15–01 were 

implemented under the IPPS beginning 

on October 1, 2016 (FY 2017). 

Therefore, we implemented these 

revisions for the IPF PPS beginning 

October 1, 2017 (FY 2018), consistent 

with our historical practice of modeling 

IPF PPS adoption of the labor market 

area delineations after IPPS adoption of 

these delineations. 

In summary, the FY 2018 pre-floor, 

pre-reclassified hospital wage index, 

which is used to determine the FY 2019 

IPF wage index, has no changes to its 

OMB designations and already includes 

changes adopted in previous FYs. 

The final FY 2019 IPF wage index is 

located on the CMS website at https:// 

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/WageIndex.html. 

We received the following comments 

related to the IPF wage index. 

Comment: Three commenters 

suggested changes to the IPF wage 

index. One commenter indicated that 

IPFs are subject to wage index protocols 

that differ from those applied to other 

post-acute care providers, which result 

in providers in the same labor market 

being subject to inconsistent wage index 

adjustments. Specifically, the 

commenter stated that the IPF PPS uses 

the prior year pre-classified acute care 

inpatient PPS wage index values, even 

though this 1-year lag is not applied for 

long term acute care hospitals or skilled 

nursing facilities. This commenter also 

stated that given all of the post-acute 

care settings are on a track that may 

result in payment under a single, 

combined system, there was a lack of 

justification for this unique treatment of 

IPFs. The commenter requested that 

CMS explore harmonizing the different 

wage methodologies across all postacute care settings to ensure consistency 

for all providers. 

Two commenters agreed with CMS’ 

statement in the proposed rule that IPFs 

compete in the same labor markets as 

acute care hospitals. However, these 

commenters noted that under the IPF 

PPS, the wage index is calculated using 

the IPPS wage index for the labor 

market area in which the IPF is located, 

without taking into account geographic 

reclassifications, floors, and other 

adjustments made to the wage index 

under the IPPS. Because the IPF PPS 

wage index uses the pre-floor, prereclassified IPPS wage index as its basis, 

these commenters indicated that IPFs 

are at a severe disadvantage when 

competing with general acute care 

hospitals, since their payments under 

the IPF PPS simply do not reflect the 

economic conditions of these labor 

markets. The commenters stated that 

this issue is particularly acute in the 

‘‘frontier states,’’ so named by the 

Affordable Care Act provision that 

established a floor on the area wage 

indexes in particularly rural states. The 

commenters noted that under the 

Affordable Care Act provision, states 

with a high share of low populationdensity counties have a ‘‘floor’’ on their 

area wage index. The commenters 

added that in accordance section 

10324(a) of the Affordable Care Act, the 

frontier state adjustment is not subject 

to budget neutrality. They indicated that 


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1Medicare Payment Advisory Commission. 

Report to the Congress. Medicare and the Health 

Care Delivery System, Chapter 3, ‘‘Mandated 

Report: Developing a unified payment system for 

post-acute care,’’ pages 57–105. June 2016. 

because CMS does not take this floor 

into account when applying the IPPS 

wage index to IPFs, the wage index for 

an acute hospital can be up to 30 

percent higher than an IPF in the same 

labor market. Consequently, IPFs in a 

frontier state are underpaid relative to 

general acute care hospitals in the same 

geographic areas, even though they 

compete directly for the same 

employees. These commenters 

recommended CMS not to disregard the 

frontier state ‘‘floor’’ of 1.0 when it 

applies the acute care hospital wage 

index to IPFs, including the nonapplication of budget neutrality, which 

is consistent with the IPPS payment 

methodology. 

Response: We thank the commenters 

for their input on these wage index 

issues. Regarding the comment to 

harmonize the IPF wage index with 

those of other post-acute care (PAC) 

providers, we are not sure if the 

commenter is referring to the FY 2019 

President’s Budget proposal to reform 

PAC payment and consolidate into one 

payment system (consistent with a 

recommendation made by the Medicare 

Payment Advisory Commission 1), or if 

the commenter is referring to a 

demonstration project of PAC payment 

reform (https://www.cms.gov/ResearchStatistics-Data-and-Systems/StatisticsTrends-and-Reports/Reports/ResearchReports-Items/PAC_Payment_Reform_

Demo_Final.html). Regardless, IPFs are 

not included in either the President’s 

FY 2019 Budget proposal or the PAC 

payment reform demonstration project. 

We also note that other Medicare 

providers (for example, Inpatient 

Rehabilitation Facilities and hospices) 

also have a 1-year lag in their wage 

index. This lag was established at a time 

when computerized data systems were 

not as agile as at present, and the 

preparation of the hospital wage index 

(which is the basis of the IPF wage 

index) was more time-consuming. By 

using the prior FY’s hospital wage index 

for developing the IPF wage index, IPFs 

are able to use the most reliable wage 

index data. Any errors in the prior 

year’s hospital wage index would have 

been identified and corrected prior to 

using it for developing the IPF wage 

index. 

Regarding the comments requesting 

us to consider the ‘‘frontier’’ floor, we 

will take the commenters’ suggestions 

into consideration. 

d. Adjustment for Rural Location 

In the November 2004 IPF PPS final 

rule, we provided a 17 percent payment 

adjustment for IPFs located in a rural 

area. This adjustment was based on the 

regression analysis, which indicated 

that the per diem cost of rural facilities 

was 17 percent higher than that of urban 

facilities after accounting for the 

influence of the other variables included 

in the regression. For FY 2019, we are 

finalizing our proposal to continue to 

apply a 17 percent payment adjustment 

for IPFs located in a rural area as 

defined at § 412.64(b)(1)(ii)(C). A 

complete discussion of the adjustment 

for rural locations appears in the 

November 2004 IPF PPS final rule (69 

FR 66954). 

Comment: One commenter supported 

CMS’ maintaining the 17 percent IPF 

rural adjustment. 

Response: We appreciate the 

commenter’s support for our IPF rural 

adjustment. 

e. Budget Neutrality Adjustment 

Changes to the wage index are made 

in a budget-neutral manner so that 

updates do not increase expenditures. 

Therefore, for FY 2019, we are finalizing 

our proposal to continue to apply a 

budget-neutrality adjustment in 

accordance with our existing budgetneutrality policy. This policy requires 

us to update the wage index in such a 

way that total estimated payments to 

IPFs for FY 2019 are the same with or 

without the changes (that is, in a 

budget-neutral manner) by applying a 

budget neutrality factor to the IPF PPS 

rates. We use the following steps to 

ensure that the rates reflect the update 

to the wage indexes (based on the FY 

2014 hospital cost report data) and the 

labor-related share in a budget-neutral 

manner: 

Step 1. Simulate estimated IPF PPS 

payments, using the FY 2018 IPF wage 

index values (available on the CMS 

website) and labor-related share (as 

published in the FY 2018 IPF PPS 

notice with comment period (82 FR 

35771)). 

Step 2. Simulate estimated IPF PPS 

payments using the FY 2019 IPF wage 

index values (available on the CMS 

website) and FY 2019 labor-related 

share (based on the latest available data 

as discussed previously). 

Step 3. Divide the amount calculated 

in step 1 by the amount calculated in 

step 2. The resulting quotient is the FY 

2019 budget-neutral wage adjustment 

factor of 1.0013. 

Step 4. Apply the FY 2019 budgetneutral wage adjustment factor from 

step 3 to the FY 2018 IPF PPS federal 

per diem base rate after the application 

of the market basket update described in 

section III.A.2 of this rule, to determine 

the FY 2019 IPF PPS federal per diem 

base rate. 

2. Teaching Adjustment 

In the November 2004 IPF PPS final 

rule, we implemented regulations at 

§ 412.424(d)(1)(iii) to establish a facilitylevel adjustment for IPFs that are, or are 

part of teaching hospitals. The teaching 

adjustment accounts for the higher 

indirect operating costs experienced by 

hospitals that participate in graduate 

medical education (GME) programs. The 

payment adjustments are made based on 

the ratio of the number of full-time 

equivalent (FTE) interns and residents 

training in the IPF and the IPF’s average 

daily census (ADC). 

Medicare makes direct GME payments 

(for direct costs such as resident and 

teaching physician salaries, and other 

direct teaching costs) to all teaching 

hospitals including those paid under a 

PPS, and those paid under the TEFRA 

rate-of-increase limits. These direct 

GME payments are made separately 

from payments for hospital operating 

costs and are not part of the IPF PPS. 

The direct GME payments do not 

address the estimated higher indirect 

operating costs teaching hospitals may 

face. 

The results of the regression analysis 

of FY 2002 IPF data established the 

basis for the payment adjustments 

included in the November 2004 IPF PPS 

final rule. The results showed that the 

indirect teaching cost variable is 

significant in explaining the higher 

costs of IPFs that have teaching 

programs. We calculated the teaching 

adjustment based on the IPF’s ‘‘teaching 

variable,’’ which is (1 + (the number of 

FTE residents training in the IPF/the 

IPF’s ADC)). The teaching variable is 

then raised to 0.5150 power to result in 

the teaching adjustment. This formula is 

subject to the limitations on the number 

of FTE residents, which are described 

later in this section of this rule. 

We established the teaching 

adjustment in a manner that limited the 

incentives for IPFs to add FTE residents 

for the purpose of increasing their 

teaching adjustment. We imposed a cap 

on the number of FTE residents that 

may be counted for purposes of 

calculating the teaching adjustment. The 

cap limits the number of FTE residents 

that teaching IPFs may count for the 

purpose of calculating the IPF PPS 

teaching adjustment, not the number of 

residents teaching institutions can hire 

or train. We calculated the number of 

FTE residents that trained in the IPF 

during a ‘‘base year’’ and used that FTE 


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resident number as the cap. An IPF’s 

FTE resident cap is ultimately 

determined based on the final 

settlement of the IPF’s most recent cost 

report filed before November 15, 2004 

(publication date of the IPF PPS final 

rule). A complete discussion of the 

temporary adjustment to the FTE cap to 

reflect residents added due to hospital 

closure and by residency program 

appears in the RY 2012 IPF PPS 

proposed rule (76 FR 5018 through 

5020) and the RY 2012 IPF PPS final 

rule (76 FR 26453 through 26456). 

In the regression analysis, the 

logarithm of the teaching variable had a 

coefficient value of 0.5150. We 

converted this cost effect to a teaching 

payment adjustment by treating the 

regression coefficient as an exponent 

and raising the teaching variable to a 

power equal to the coefficient value. We 

note that the coefficient value of 0.5150 

was based on the regression analysis 

holding all other components of the 

payment system constant. A complete 

discussion of how the teaching 

adjustment was calculated appears in 

the November 2004 IPF PPS final rule 

(69 FR 66954 through 66957) and the 

RY 2009 IPF PPS notice (73 FR 25721). 

As with other adjustment factors 

derived through the regression analysis, 

we do not plan to rerun the teaching 

adjustment factors in the regression 

analysis until we more fully analyze IPF 

PPS data as part of the IPF PPS 

refinement we discuss in section V. 

Therefore, in this FY 2019 rule, we 

are finalizing our proposal to continue 

to retain the coefficient value of 0.5150 

for the teaching adjustment to the 

federal per diem base rate. 

Comment: One commenter took no 

position on the IPF teaching adjustment, 

but encouraged CMS to lift the graduate 

medical education (GME) cap on 

psychiatric residents. 

Response: The IPF PPS teaching 

adjustment is associated with indirect 

medical education (IME) rather than 

with GME. GME policies are outside the 

scope of this rule. 

3. Cost of Living Adjustment for IPFs 

Located in Alaska and Hawaii 

The IPF PPS includes a payment 

adjustment for IPFs located in Alaska 

and Hawaii based upon the area in 

which the IPF is located. As we 

explained in the November 2004 IPF 

PPS final rule, the FY 2002 data 

demonstrated that IPFs in Alaska and 

Hawaii had per diem costs that were 

disproportionately higher than other 

IPFs. Other Medicare prospective 

payment systems (for example: the IPPS 

and LTCH PPS) adopted a cost of living 

adjustment (COLA) to account for the 

cost differential of care furnished in 

Alaska and Hawaii. 

We analyzed the effect of applying a 

COLA to payments for IPFs located in 

Alaska and Hawaii. The results of our 

analysis demonstrated that a COLA for 

IPFs located in Alaska and Hawaii 

would improve payment equity for 

these facilities. As a result of this 

analysis, we provided a COLA in the 

November 2004 IPF PPS final rule. 

A COLA for IPFs located in Alaska 

and Hawaii is made by multiplying the 

non-labor-related portion of the federal 

per diem base rate by the applicable 

COLA factor based on the COLA area in 

which the IPF is located. 

The COLA factors through 2009 are 

published on the Office of Personnel 

Management (OPM) website (https://

www.opm.gov/oca/cola/rates.asp). 

We note that the COLA areas for 

Alaska are not defined by county as are 

the COLA areas for Hawaii. In 5 CFR 

591.207, the OPM established the 

following COLA areas: 

• City of Anchorage, and 80-kilometer 

(50-mile) radius by road, as measured 

from the federal courthouse. 

• City of Fairbanks, and 80-kilometer 

(50-mile) radius by road, as measured 

from the federal courthouse. 

• City of Juneau, and 80-kilometer 

(50-mile) radius by road, as measured 

from the federal courthouse. 

• Rest of the State of Alaska. 

As stated in the November 2004 IPF 

PPS final rule, we update the COLA 

factors according to updates established 

by the OPM. However, sections 1911 

through 1919 of the Nonforeign Area 

Retirement Equity Assurance Act, as 

contained in subtitle B of title XIX of the 

National Defense Authorization Act 

(NDAA) for FY 2010 (Pub. L. 111–84, 

October 28, 2009), transitions the Alaska 

and Hawaii COLAs to locality pay. 

Under section 1914 of NDAA, locality 

pay was phased in over a 3-year period 

beginning in January 2010, with COLA 

rates frozen as of the date of enactment, 

October 28, 2009, and then 

proportionately reduced to reflect the 

phase-in of locality pay. 

When we published the proposed 

COLA factors in the RY 2012 IPF PPS 

proposed rule (76 FR 4998), we 

inadvertently selected the FY 2010 

COLA rates, which had been reduced to 

account for the phase-in of locality pay. 

We did not intend to propose the 

reduced COLA rates because that would 

have understated the adjustment. Since 

the 2009 COLA rates did not reflect the 

phase-in of locality pay, we finalized 

the FY 2009 COLA rates for RY 2010 

through RY 2014. 

In the FY 2013 IPPS/LTCH final rule 

(77 FR 53700 through 53701), we 

established a new methodology to 

update the COLA factors for Alaska and 

Hawaii, and adopted this methodology 

for the IPF PPS in the FY 2015 IPF final 

rule (79 FR 45958 through 45960). We 

adopted this new COLA methodology 

for the IPF PPS because IPFs are 

hospitals with a similar mix of 

commodities and services. We think it 

is appropriate to have a consistent 

policy approach with that of other 

hospitals in Alaska and Hawaii. 

Therefore, the IPF COLAs for FY 2015 

through FY 2017 were the same as those 

applied under the IPPS in those years. 

As finalized in the FY 2013 IPPS/LTCH 

PPS final rule (77 FR 53700 and 53701), 

the COLA updates are determined every 

4 years, when the IPPS market basket 

labor-related share is updated during 

rebasing. Because the labor-related share 

of the IPPS market basket was updated 

for FY 2018, the COLA factors were 

updated in FY 2018 IPPS/LTCH 

rulemaking (82 FR 38529). As such, we 

also updated the IPF PPS COLA factors 

for FY 2018 (82 FR 36780 through 

36782) to reflect the updated COLA 

factors finalized in the FY 2018 IPPS/ 

LTCH rulemaking. 

Final Decision: For FY 2019, we are 

finalizing our proposal to continue to 

use the COLA factors established for the 

IPF PPS in FY 2018 to adjust the 

nonlabor-related portion of the per diem 

amount for IPFs located in Alaska and 

Hawaii. These factors are shown in 

Table 1. For comparison purposes, we 

also are showing the FY 2015 through 

FY 2017 COLA factors. 

TABLE 1—COMPARISON OF IPF PPS COST-OF-LIVING ADJUSTMENT FACTORS: IPFS LOCATED IN ALASKA AND HAWAII

Area FY 2015 

through 2017 

FY 2018 

and FY 2019 

Alaska: 

City of Anchorage and 80-kilometer (50-mile) radius by road ......................................................................... 1.23 1.25 

City of Fairbanks and 80-kilometer (50-mile) radius by road .......................................................................... 1.23 1.25 

City of Juneau and 80-kilometer (50-mile) radius by road .............................................................................. 1.23 1.25 


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TABLE 1—COMPARISON OF IPF PPS COST-OF-LIVING ADJUSTMENT FACTORS: IPFS LOCATED IN ALASKA AND HAWAII— 

Continued 

Area FY 2015 

through 2017 

FY 2018 

and FY 2019 

Rest of Alaska .................................................................................................................................................. 1.25 1.25 

Hawaii: 

City and County of Honolulu ............................................................................................................................ 1.25 1.25 

County of Hawaii .............................................................................................................................................. 1.19 1.21 

County of Kauai ................................................................................................................................................ 1.25 1.25 

County of Maui and County of Kalawao .......................................................................................................... 1.25 1.25 

The IPF PPS COLA factors for FY 

2019 are also shown in Addendum A of 

this rule, available at https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/InpatientPsych

FacilPPS/tools.html. 

4. Adjustment for IPFs With a 

Qualifying Emergency Department (ED) 

The IPF PPS includes a facility-level 

adjustment for IPFs with qualifying EDs. 

We provide an adjustment to the federal 

per diem base rate to account for the 

costs associated with maintaining a fullservice ED. The adjustment is intended 

to account for ED costs incurred by a 

psychiatric hospital with a qualifying 

ED or an excluded psychiatric unit of an 

acute care hospital or a CAH, for 

preadmission services otherwise 

payable under the Medicare Hospital 

Outpatient Prospective Payment System 

(OPPS), furnished to a beneficiary on 

the date of the beneficiary’s admission 

to the hospital and during the day 

immediately preceding the date of 

admission to the IPF (see § 413.40(c)(2)), 

and the overhead cost of maintaining 

the ED. This payment is a facility-level 

adjustment that applies to all IPF 

admissions (with one exception 

described below), regardless of whether 

a particular patient receives 

preadmission services in the hospital’s 

ED. 

The ED adjustment is incorporated 

into the variable per diem adjustment 

for the first day of each stay for IPFs 

with a qualifying ED. Those IPFs with 

a qualifying ED receive an adjustment 

factor of 1.31 as the variable per diem 

adjustment for day 1 of each patient 

stay. If an IPF does not have a qualifying 

ED, it receives an adjustment factor of 

1.19 as the variable per diem adjustment 

for day 1 of each patient stay. 

The ED adjustment is made on every 

qualifying claim except as described in 

this section of the rule. As specified in 

§ 412.424(d)(1)(v)(B), the ED adjustment 

is not made when a patient is 

discharged from an acute care hospital 

or CAH and admitted to the same 

hospital’s or CAH’s excluded 

psychiatric unit. We clarified in the 

November 2004 IPF PPS final rule (69 

FR 66960) that an ED adjustment is not 

made in this case because the costs 

associated with ED services are reflected 

in the DRG payment to the acute care 

hospital or through the reasonable cost 

payment made to the CAH. 

Therefore, when patients are 

discharged from an acute care hospital 

or CAH and admitted to the same 

hospital’s or CAH’s excluded 

psychiatric unit, the IPF receives the 

1.19 adjustment factor as the variable 

per diem adjustment for the first day of 

the patient’s stay in the IPF. For FY 

2019, we will continue to retain the 1.31 

adjustment factor for IPFs with 

qualifying EDs. A complete discussion 

of the steps involved in the calculation 

of the ED adjustment factor in our 

November 2004 IPF PPS final rule (69 

FR 66959 through 66960) and the RY 

2007 IPF PPS final rule (71 FR 27070 

through 27072). 

Final Decision: We did not receive 

any comments on the ED adjustment. 

Therefore, we are finalizing this section 

as proposed. 

E. Other Payment Adjustments and 

Policies 

1. Outlier Payment Overview 

The IPF PPS includes an outlier 

adjustment to promote access to IPF 

care for those patients who require 

expensive care and to limit the financial 

risk of IPFs treating unusually costly 

patients. In the November 2004 IPF PPS 

final rule, we implemented regulations 

at § 412.424(d)(3)(i) to provide a percase payment for IPF stays that are 

extraordinarily costly. Providing 

additional payments to IPFs for 

extremely costly cases strongly 

improves the accuracy of the IPF PPS in 

determining resource costs at the patient 

and facility level. These additional 

payments reduce the financial losses 

that would otherwise be incurred in 

treating patients who require more 

costly care and; therefore, reduce the 

incentives for IPFs to under-serve these 

patients. We make outlier payments for 

discharges in which an IPF’s estimated 

total cost for a case exceeds a fixed 

dollar loss threshold amount 

(multiplied by the IPF’s facility-level 

adjustments) plus the federal per diem 

payment amount for the case. 

In instances when the case qualifies 

for an outlier payment, we pay 80 

percent of the difference between the 

estimated cost for the case and the 

adjusted threshold amount for days 1 

through 9 of the stay (consistent with 

the median LOS for IPFs in FY 2002), 

and 60 percent of the difference for day 

10 and thereafter. We established the 80 

percent and 60 percent loss sharing 

ratios because we were concerned that 

a single ratio established at 80 percent 

(like other Medicare PPSs) might 

provide an incentive under the IPF per 

diem payment system to increase LOS 

in order to receive additional payments. 

After establishing the loss sharing 

ratios, we determined the current fixed 

dollar loss threshold amount through 

payment simulations designed to 

compute a dollar loss beyond which 

payments are estimated to meet the 2 

percent outlier spending target. Each 

year when we update the IPF PPS, we 

simulate payments using the latest 

available data to compute the fixed 

dollar loss threshold so that outlier 

payments represent 2 percent of total 

projected IPF PPS payments. 

2. Update to the Outlier Fixed Dollar 

Loss Threshold Amount 

In accordance with the update 

methodology described in § 412.428(d), 

we are updating the fixed dollar loss 

threshold amount used under the IPF 

PPS outlier policy. Based on the 

regression analysis and payment 

simulations used to develop the IPF 

PPS, we established a 2 percent outlier 

policy, which strikes an appropriate 

balance between protecting IPFs from 

extraordinarily costly cases while 

ensuring the adequacy of the federal per 

diem base rate for all other cases that are 

not outlier cases. 

Based on an analysis of the latest 

available data (the March 2018 update 

of FY 2017 IPF claims) and rate 

increases, we believe it is necessary to 

update the fixed dollar loss threshold 


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amount to maintain an outlier 

percentage that equals 2 percent of total 

estimated IPF PPS payments. We will 

update the IPF outlier threshold amount 

for FY 2019 using FY 2017 claims data 

and the same methodology that we used 

to set the initial outlier threshold 

amount in the RY 2007 IPF PPS final 

rule (71 FR 27072 and 27073), which is 

also the same methodology that we used 

to update the outlier threshold amounts 

for years 2008 through 2018. Based on 

an analysis of these updated data, we 

estimate that IPF outlier payments as a 

percentage of total estimated payments 

are approximately 2.24 percent in FY 

2018 (compared to approximately 2.27 

percent in the proposed rule). Therefore, 

we are updating the outlier threshold 

amount to $12,865 to maintain 

estimated outlier payments at 2 percent 

of total estimated aggregate IPF 

payments for FY 2019. This final rule 

update is a decrease from the proposed 

threshold of $12,935. 

Comment: A commenter was 

appreciative of our updating the outlier 

threshold, and noted that it is critical to 

receive reimbursement that allows IPFs 

to accept high cost patients. 

Response: We thank the commenter 

for their support of our outlier policy. 

3. Update to IPF Cost-to-Charge Ratio 

Ceilings 

Under the IPF PPS, an outlier 

payment is made if an IPF’s cost for a 

stay exceeds a fixed dollar loss 

threshold amount plus the IPF PPS 

amount. In order to establish an IPF’s 

cost for a particular case, we multiply 

the IPF’s reported charges on the 

discharge bill by its overall cost-tocharge ratio (CCR). This approach to 

determining an IPF’s cost is consistent 

with the approach used under the IPPS 

and other PPSs. In the FY 2004 IPPS 

final rule (68 FR 34494), we 

implemented changes to the IPPS policy 

used to determine CCRs for acute care 

hospitals, because we became aware 

that payment vulnerabilities resulted in 

inappropriate outlier payments. Under 

the IPPS, we established a statistical 

measure of accuracy for CCRs to ensure 

that aberrant CCR data did not result in 

inappropriate outlier payments. 

As we indicated in the November 

2004 IPF PPS final rule (69 FR 66961), 

we believe that the IPF outlier policy is 

susceptible to the same payment 

vulnerabilities as the IPPS; therefore, we 

adopted a method to ensure the 

statistical accuracy of CCRs under the 

IPF PPS. Specifically, we adopted the 

following procedure in the November 

2004 IPF PPS final rule: 

• Calculated two national ceilings, 

one for IPFs located in rural areas and 

one for IPFs located in urban areas. 

• Computed the ceilings by first 

calculating the national average and the 

standard deviation of the CCR for both 

urban and rural IPFs using the most 

recent CCRs entered in the CY 2018 

Provider Specific File. 

For FY 2019, we will continue to 

follow this methodology. 

To determine the rural and urban 

ceilings, we multiplied each of the 

standard deviations by 3 and added the 

result to the appropriate national CCR 

average (either rural or urban). The 

upper threshold CCR for IPFs in FY 

2019 is 2.0068 for rural IPFs, and 1.6862 

for urban IPFs, based on CBSA-based 

geographic designations. If an IPF’s CCR 

is above the applicable ceiling, the ratio 

is considered statistically inaccurate, 

and we assign the appropriate national 

(either rural or urban) median CCR to 

the IPF. 

We apply the national CCRs to the 

following situations: 

• New IPFs that have not yet 

submitted their first Medicare cost 

report. We continue to use these 

national CCRs until the facility’s actual 

CCR can be computed using the first 

tentatively or final settled cost report. 

• IPFs whose overall CCR is in excess 

of three standard deviations above the 

corresponding national geometric mean 

(that is, above the ceiling). 

• Other IPFs for which the Medicare 

Administrative Contractor (MAC) 

obtains inaccurate or incomplete data 

with which to calculate a CCR. 

We will continue to update the FY 

2019 national median and ceiling CCRs 

for urban and rural IPFs based on the 

CCRs entered in the latest available IPF 

PPS Provider Specific File. Specifically, 

for FY 2019, to be used in each of the 

three situations listed previously, using 

the most recent CCRs entered in the CY 

2018 Provider Specific File, we provide 

an estimated national median CCR of 

0.5890 for rural IPFs and a national 

median CCR of 0.4365 for urban IPFs. 

These calculations are based on the 

IPF’s location (either urban or rural) 

using the CBSA-based geographic 

designations. 

A complete discussion regarding the 

national median CCRs appears in the 

November 2004 IPF PPS final rule (69 

FR 66961 through 66964). 

IV. Technical Corrections to the IPF 

Regulations 

We proposed to make minor technical 

corrections to the IPF payment 

regulations at § 412.27(a), § 412.402 and 

§ 412.428 to update, correct, or clarify 

existing regulations text. We note that 

these are technical corrections and they 

do not affect or change any existing 

policies. 

Excluded Psychiatric Units: Additional 

Requirements (§ 412.27) 

At § 412.27, we set forth additional 

requirements for excluded psychiatric 

units. In paragraph (a) we detail 

admission requirements and state that 

eligible patients must have a psychiatric 

principal diagnosis that is listed in the 

Fourth Edition of the American 

Psychiatric Association’s Diagnostic and 

Statistical Manual (DSM) or Chapter 

Five (‘‘Mental Disorders’’) of the 

International Classification of Diseases, 

Ninth Revision, Clinical Modification. 

This language has been in place since 

2006, but there have since been updates 

to the versions of these code sets. 

In a final rule published on 

September 5, 2012 (77 FR 54664), the 

Secretary adopted ICD–10–CM and ICD– 

10–PCS, in place of ICD–9–CM, as 

standard medical data code sets under 

the Health Insurance Portability and 

Accountability Act of 1996 (HIPAA). 

This change is reflected in the HIPAA 

regulations at 45 CFR 162.1002(c). In the 

August 4, 2014 final rule (79 FR 45128), 

the Secretary set October 1, 2015 as the 

compliance date for HIPAA covered 

entities to use the ICD–10 code sets. 

Because we are required to use the 

HIPAA standards, in the FY 2015 IPF 

PPS final rule published August 6, 2014 

in the Federal Register titled, ‘‘Inpatient 

Psychiatric Facilities Prospective 

Payment System—Update for FY 

Beginning October 1, 2014 (FY 2015)’’ 

(79 FR 45945 through 45947), we 

finalized conversions of the ICD–9–CMbased MS–DRGs to ICD–10–CM/PCSbased MS–DRGs. However, we 

neglected to make a conforming change 

to § 412.27(a). Therefore, we proposed 

to correct § 412.27(a) to state that 

eligible patients must have a psychiatric 

principal diagnosis that is listed in ICD– 

10–CM. 

The revision to § 412.27(a) will 

simply continue our longstanding 

policy of recognizing psychiatric 

diagnoses that are DSM diagnosis codes. 

We note that the DSM diagnosis codes 

map to ICD–10–CM codes, but the 

mapping is not exclusive to chapter 5 of 

the ICD–10–CM, as it was with ICD–9– 

CM; rather, they map to other chapters 

in ICD–10–CM as well. Therefore, the 

correction to § 412.27(a) will no longer 

reference the DSM and would not 

specifically mention chapter 5 of ICD– 

10–CM. 

Comment: A commenter supported 

the continued technical updates that 

represent psychiatric principal 

diagnoses based on current editions of 


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the American Psychiatric Association’s 

Diagnostic and Statistical Manual (DSM) 

and the International Classification of 

Diseases. Another commenter made an 

out-of-scope suggestion that we change 

the regulation at § 412.27 so that the 

190-day lifetime maximum on inpatient 

days at psychiatric hospitals would also 

apply to psychiatric units. In addition, 

this commenter also commented on a 

proposal in the FY 2019 IPPS proposed 

rule. 

Response: We appreciate the support 

for the technical correction we 

proposed, and note that the DSM codes 

are encompassed in the ICD–10–CM 

code set. We are not responding to the 

comments related to applying the 190- 

day lifetime maximum on inpatient 

psychiatric hospital days to IPF units or 

to the IPPS proposed rule because they 

are out of scope of this rulemaking. 

Final Decision: We are finalizing the 

proposed update to § 412.27(a) with no 

change. 

Definitions § 412.402 

At § 412.402, there is a typographical 

error in the definition of ‘‘Principal 

Diagnosis.’’ We inadvertently repeat the 

language that a principal diagnosis is 

also referred to as a primary diagnosis. 

Final Decision: We received no 

comments on this proposal. Therefore, 

we are finalizing our proposal to correct 

this error by removing the duplicate 

language. 

Publication of Changes to the Inpatient 

Psychiatric Facility Prospective Payment 

System (§ 412.428) 

In the FY 2016 IPF PPS regulations, 

we proposed and finalized an IPFspecific market basket for updating the 

annual IPF payment rates (80 FR 46656 

through 46679). This new IPF-specific 

market basket replaced the 

Rehabilitation, Psychiatric, and LongTerm Care (RPL) market basket, which 

had been in place for discharges 

occurring from July 1, 2006 through 

September 30, 2015. However, in our FY 

2016 IPF PPS final rule, we did not 

update the regulations text at § 412.428 

to reflect the adoption of the IPFspecific market basket. Therefore, we 

are updating § 412.428 to indicate that 

the use of the RPL market basket ended 

as of September 30, 2015, and that the 

IPF market basket was implemented for 

use in updating IPF PPS payment rates 

for discharges occurring on or after 

October 1, 2015. In addition, we are 

making other technical changes to this 

section for clarification and consistency. 

Final Decision: We received no 

comments on this proposal. Therefore, 

we are finalizing these changes as 

proposed. 

V. Update on IPF PPS Refinements and 

Comment Solicitation 

For RY 2012, we identified several 

areas of concern for future refinement, 

and we invited comments on these 

issues in the RY 2012 IPF PPS proposed 

and final rules. For further discussion of 

these issues and to review the public 

comments, we refer readers to the RY 

2012 IPF PPS proposed rule (76 FR 

4998) and final rule (76 FR 26432). 

We have delayed making refinements 

to the IPF PPS until we have completed 

a thorough analysis of IPF PPS data on 

which to base those refinements. 

Specifically, we will delay updating the 

adjustment factors derived from the 

regression analysis until we have IPF 

PPS data that include as much 

information as possible regarding the 

patient-level characteristics of the 

population that each IPF serves. We 

have begun and will continue the 

necessary analysis to better understand 

IPF industry practices so that we may 

refine the IPF PPS in the future, as 

appropriate. Our preliminary analysis 

has also revealed variation in cost and 

claim data, particularly related to labor 

costs, drugs costs, and laboratory 

services. Some providers have very low 

labor costs, or very low or missing drug 

or laboratory costs or charges, relative to 

other providers. In the proposed rule, 

we solicited comments about 

differences in the IPF labor mix, 

differences in IPF patient mix, and 

differences in provision of drugs and 

laboratory services. We anticipated that 

these comments would better inform 

our refinement process. 

As we noted in the FY 2016 IPF PPS 

final rule (80 FR 46693 through 46694), 

our preliminary analysis of 2012 to 2013 

IPF data found that over 20 percent of 

IPF stays reported no ancillary costs, 

such as laboratory and drug costs, in 

their cost reports, or laboratory or drug 

charges on their claims. Because we 

expect that most patients requiring 

hospitalization for active psychiatric 

treatment will need drugs and 

laboratory services, we again remind 

providers that the IPF PPS federal per 

diem base rate includes the cost of all 

ancillary services, including drugs and 

laboratory services. OnNovember 17, 

2017, we issued Transmittal 12, which 

made changes to the hospital cost report 

form CMS–2552–10 (OMB No. 0938– 

0050), and included cost report Level I 

edit 10710S, effective for cost reporting 

periods ending on or after August 31, 

2017. Edit 10710S now requires that 

cost reports from psychiatric hospitals 

include certain ancillary costs, or the 

cost report will be rejected. On January 

30, 2018, we issued Transmittal 13, 

which changed the implementation date 

for Transmittal 12 to be for cost 

reporting periods ending on or after 

September 30, 2017. For details, we 

refer readers to see these Transmittals, 

which are available on the CMS website 

at https://www.cms.gov/Regulationsand-Guidance/Guidance/Transmittals/ 

index.html. CMS suspended edit 

10710S effective April 27, 2018, 

pending evaluation of the application of 

the edit to all-inclusive-rate providers. 

We pay only the IPF for services 

furnished to a Medicare beneficiary who 

is an inpatient of that IPF (except for 

certain professional services), and 

payments are considered to be payments 

in full for all inpatient hospital services 

provided directly or under arrangement 

(see 42 CFR 412.404(d)), as specified in 

42 CFR 409.10. 

We will continue to analyze data from 

claims and cost reports that do not 

include ancillary charges or costs, and 

will be sharing our findings with CMS 

Office of the Center for Program 

Integrity and CMS Office of Financial 

Management for further investigation, as 

the results warrant. Our refinement 

analysis is dependent on recent precise 

data for costs, including ancillary costs. 

We will continue to collect these data 

and analyze them for both timeliness 

and accuracy with the expectation that 

these data will be used in a future 

refinement. It is currently our intent to 

explore refinements to the adjustments 

in future rulemaking. Since we are not 

making refinements in this rule, for FY 

2019 we will continue to use the 

existing adjustment factors. 

We did not receive any comments on 

our solicitation; however, we did 

receive three comments related to 

missing ancillary costs or charges. 

Comment: We received a few 

comments related to missing ancillary 

charges, and costs on the Medicare cost 

report. Two commenters stated that 

because these ancillary costs often 

represent a relatively low portion of 

their member hospitals’ costs, they 

typically do not make a separate charge 

for ancillary services. The commenters 

stated that costs associated with 

ancillary services are typically reported 

in the routine cost center in the 

Medicare cost report. In addition, they 

stated that laboratory and drug costs 

represent approximately 1 percent and 4 

percent respectively, of the costs of IPF 

services and these commenters did not 

consider these costs sufficiently 

significant to justify a separate 

calculation of costs. 

A third commenter stated that a 

number of State psychiatric hospitals 

complete the Medicare Cost Report 

utilizing an all-inclusive rate 


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2The statute uses the term ‘‘rate year’’ (RY). 

However, beginning with the annual update of the 

inpatient psychiatric facility prospective payment 

system (IPF PPS) that took effect on July 1, 2011 

(RY 2012), we aligned the IPF PPS update with the 

annual update of the ICD codes, effective on 

October 1 of each year. This change allowed for 

annual payment updates and the ICD coding update 

to occur on the same schedule and appear in the 

same Federal Register document, promoting 

administrative efficiency. To reflect the change to 

the annual payment rate update cycle, we revised 

the regulations at 42 CFR 412.402 to specify that, 

beginning October 1, 2012, the RY update period 

would be the 12-month period from October 1 

through September 30, which we refer to as a 

‘‘fiscal year’’ (FY) (76 FR 26435). Therefore, with 

respect to the IPFQR Program, the terms ‘‘rate year,’’ 

as used in the statute, and ‘‘fiscal year’’ as used in 

the regulation, both refer to the period from October 

1 through September 30. For more information 

regarding this terminology change, we refer readers 

to section III. of the RY 2012 IPF PPS final rule (76 

FR 26434 through 26435). 

methodology and as a result may not 

separately report these ancillary costs. 

This commenter suggested that CMS 

review the data analysis to identify 

correlation between the reporting of 

ancillary costs and all-inclusive rate 

providers. The commenter also 

suggested that the cost report edit 

related to ancillary costs should 

probably not be applied to all-inclusive 

rate providers. 

Response: We agree that CMS Pub. 

15–1, chapter 22, section 2208.1.A, 

states that all-inclusive-rate providers’ 

ancillary services may not be considered 

sufficiently significant to justify a 

separate calculation of costs for 

Medicare and non-Medicare patients. 

Therefore, we agree that the edit related 

to ancillary costs should not apply to 

the all-inclusive-rate providers. CMS 

will exclude all-inclusive rate providers 

from the application of the edit. We are 

aware that some providers are not 

identifying as an all-inclusive-rate 

provider on Worksheet S–2, Part I, line 

115, and are reporting ancillary services 

costs that represent a low portion of the 

hospital’s cost in the routine cost center 

on the Medicare cost report. The 

providers are using section 2208 to 

justify not reporting the ancillary costs. 

Providers that are approved as allinclusive rate but that do not identify as 

all-inclusive rate on the Medicare cost 

report will not benefit from the 

exclusion from the edit and will be 

required to report ancillary services 

accordingly. 

VI. Inpatient Psychiatric Facilities 

Quality Reporting (IPFQR) Program 

A. Background and Statutory Authority 

Section 1886(s)(4) of the Act, as added 

and amended by sections 3401(f) and 

10322(a) of the Patient Protection and 

Affordable Care Act, requires the 

Secretary to implement a quality 

reporting program for inpatient 

psychiatric hospitals and psychiatric 

units. Section 1886(s)(4)(A)(i) of the Act 

requires that, for FY 2014 2 and each 

subsequent FY, the Secretary must 

reduce any annual update to a standard 

federal rate for discharges occurring 

during the FY by 2.0 percentage points 

in the case of a psychiatric hospital or 

psychiatric unit that does not comply 

with quality data submission 

requirements with respect to an 

applicable FY. 

As provided in section 

1886(s)(4)(A)(ii) of the Act, the 

application of the reduction for failure 

to report under section 1886(s)(4)(A)(i) 

of the Act may result in an annual 

update of less than 0.0 percent for a FY, 

and may result in payment rates under 

section 1886(s)(1) of the Act being less 

than the payment rates for the preceding 

year. In addition, section 1886(s)(4)(B) 

of the Act requires that the application 

of the reduction to a standard federal 

rate update be noncumulative across 

FYs. Thus, any reduction applied under 

section 1886(s)(4)(A) of the Act will 

apply only with respect to the FY rate 

involved and the Secretary may not take 

into account the reduction in computing 

the payment amount under the system 

described in section 1886(s)(1) of the 

Act for subsequent years. 

Section 1886(s)(4)(C) of the Act 

requires that, for FY 2014 and each 

subsequent FY, each psychiatric 

hospital and psychiatric unit must 

submit to the Secretary data on quality 

measures as specified by the Secretary. 

The data must be submitted in a form 

and manner and at a time specified by 

the Secretary. Under section 

1886(s)(4)(D)(i) of the Act, unless the 

exception of subclause (ii) applies, 

measures selected for the quality 

reporting program must have been 

endorsed by the entity with a contract 

under section 1890(a) of the Act. The 

National Quality Forum (NQF) currently 

holds this contract. 

Section 1886(s)(4)(D)(ii) of the Act 

provides an exception to the 

requirement for NQF endorsement of 

measures: in the case of a specified area 

or medical topic determined appropriate 

by the Secretary for which a feasible and 

practical measure has not been endorsed 

by the entity with a contract under 

section 1890(a) of the Act, the Secretary 

may specify a measure that is not so 

endorsed as long as due consideration is 

given to measures that have been 

endorsed or adopted by a consensus 

organization identified by the Secretary. 

Section 1886(s)(4)(E) of the Act 

requires the Secretary to establish 

procedures for making public the 

quality measure data submitted by 

inpatient psychiatric hospitals and 

psychiatric units under the IPFQR 

Program. These procedures must ensure 

that an inpatient psychiatric facility or 

unit has the opportunity to review its 

data before the data are made public. 

The Secretary must report quality 

measures that relate to services 

furnished in inpatient settings and 

psychiatric hospitals and units on the 

CMS website. 

B. Covered Entities 

In the FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53645), we established that 

the IPFQR Program’s quality reporting 

requirements cover those psychiatric 

hospitals and psychiatric units paid 

under Medicare’s IPF PPS 

(§ 412.404(b)). Generally, psychiatric 

hospitals and psychiatric units within 

acute care and critical access hospitals 

that treat Medicare patients are paid 

under the IPF PPS. Consistent with 

previous regulations, we continue to use 

the term ‘‘inpatient psychiatric facility’’ 

(IPF) to refer to both inpatient 

psychiatric hospitals and psychiatric 

units. This usage follows the 

terminology in our IPF PPS regulations 

at § 412.402. For more information on 

covered entities, we refer readers to the 

FY 2013 IPPS/LTCH PPS final rule (77 

FR 53645). 

C. Previously Finalized Measures and 

Administrative Procedures 

The current IPFQR Program includes 

18 measures. For more information on 

these measures, we refer readers to the 

following final rules: 

• The FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53646 through 53652); 

• The FY 2014 IPPS/LTCH PPS final 

rule (78 FR 50889 through 50897); 

• The FY 2015 IPF PPS final rule (79 

FR 45963 through 45975); 

• The FY 2016 IPF PPS final rule (80 

FR 46695 through 46714); and 

• The FY 2017 IPPS/LTCH PPS final 

rule (81 FR 57238 through 57247). 

For more information on previously 

adopted procedural requirements, we 

refer readers to the following rules: 

• The FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53653 through 53660); 

• The FY 2014 IPPS/LTCH PPS final 

rule (78 FR 50897 through 50903; 

• The FY 2015 IPF PPS final rule (79 

FR 45975 through 45978); 

• The FY 2016 IPF PPS final rule (80 

FR 46715 through 46719); 

• The FY 2017 IPPS/LTCH PPS final 

rule (81 FR 57248 through 57249); and 

• The FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38471 through 38474) 


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3See, for example United States Department of 

Health and Human Services. ‘‘Healthy People 2020: 

Disparities. 2014.’’ Available at: http://

www.healthypeople.gov/2020/about/foundationhealth-measures/Disparities; or National Academies 

of Sciences, Engineering, and Medicine. Accounting 

for Social Risk Factors in Medicare Payment: 

Identifying Social Risk Factors. Washington, DC: 

National Academies of Sciences, Engineering, and 

Medicine 2016. 

4 Department of Health and Human Services 

Office of the Assistant Secretary for Planning and 

Evaluation (ASPE), ‘‘Report to Congress: Social Risk 

Factors and Performance Under Medicare’s ValueBased Purchasing Programs.’’ December 2016. 

Available at: https://aspe.hhs.gov/pdf-report/reportcongress-social-risk-factors-and-performanceunder-medicares-value-based-purchasingprograms. 

5Available at: http://www.qualityforum.org/SES_

Trial_Period.aspx. 

6Available at: http://www.qualityforum.org/ 

WorkArea/linkit.aspx?LinkIdentifier=

id&ItemID=86357. 

7Meaningful Measures web page: https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/QualityInitiativesGenInfo/ 

MMF/General-info-Sub-Page.html. 

8Remarks by Administrator Seema Verma at the 

Health Care Payment Learning and Action Network 

(LAN) Fall Summit, as prepared for delivery on 

October 30, 2017. Available at: https://

www.cms.gov/Newsroom/MediaReleaseDatabase/ 

Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html. 

D. Accounting for Social Risk Factors 

In the FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38462 through 38463), we 

discussed the importance of improving 

beneficiary outcomes including 

reducing health disparities. We also 

discussed our commitment to ensuring 

that medically complex patients, as well 

as those with social risk factors, receive 

excellent care. We discussed how 

studies show that social risk factors, 

such as being near or below the poverty 

level as determined by HHS, belonging 

to a racial or ethnic minority group, or 

living with a disability, can be 

associated with poor health outcomes 

and how some of this disparity is 

related to the quality of health care.3

Among our core objectives, we aim to 

improve health outcomes, attain health 

equity for all beneficiaries, and ensure 

that complex patients as well as those 

with social risk factors receive excellent 

care. Within this context, reports by the 

Office of the Assistant Secretary for 

Planning and Evaluation (ASPE) and the 

National Academy of Medicine have 

examined the influence of social risk 

factors in CMS value-based purchasing 

programs.4 As we noted in the FY 2018 

IPPS/LTCH PPS final rule (82 FR 

38404), ASPE’s report to the Congress 

found that, in the context of value-based 

purchasing programs, dual eligibility 

(that is, eligibility for both Medicare and 

Medicaid) was the most powerful 

predictor of poor health care outcomes 

among those social risk factors that they 

examined and tested. In addition, as we 

noted in the FY 2018 IPPS/LTCH PPS 

final rule (82 FR 38241), the National 

Quality Forum (NQF) undertook a 2- 

year trial period in which certain new 

measures and measures undergoing 

maintenance review have been assessed 

to determine if risk adjustment for social 

risk factors is appropriate for these 

measures.5 The trial period ended in 

April 2017 and a final report is available 

at: http://www.qualityforum.org/SES_

Trial_Period.aspx. The trial concluded 

that ‘‘measures with a conceptual basis 

for adjustment generally did not 

demonstrate an empirical relationship’’ 

between social risk factors and the 

outcomes measured. This discrepancy 

may be explained in part by the 

methods used for adjustment and the 

limited availability of robust data on 

social risk factors. NQF has extended 

the socioeconomic status (SES) trial,6

allowing further examination of social 

risk factors in outcome measures. 

In the FY 2018 and CY 2018 proposed 

rules for our quality reporting and 

value-based purchasing programs, we 

solicited feedback on which social risk 

factors provide the most valuable 

information to stakeholders and the 

methodology for illuminating 

differences in outcomes rates among 

patient groups within a hospital or 

provider that would also allow for a 

comparison of those differences, or 

disparities, across providers. Feedback 

we received across our quality reporting 

programs included encouraging CMS to 

explore whether factors that could be 

used to stratify or risk adjust the 

measures (beyond dual eligibility); 

considering the full range of differences 

in patient backgrounds that might affect 

outcomes; exploring risk adjustment 

approaches; and to offer careful 

consideration of what type of 

information display would be most 

useful to the public. We also sought 

public comment on confidential 

reporting and future public reporting of 

some of our measures stratified by 

patient dual eligibility. In general, 

commenters stated that stratified 

measures could serve as tools for 

hospitals to identify gaps in outcomes 

for different groups of patients, improve 

the quality of health care for all patients, 

and empower consumers to make 

informed decisions about health care. 

Commenters encouraged us to stratify 

measures by other social risk factors 

such as age, income, and educational 

attainment. With regard to value-based 

purchasing programs, commenters also 

cautioned to balance fair and equitable 

payment while avoiding payment 

penalties that mask health disparities or 

discourage the provision of care to more 

medically complex patients. 

Commenters also noted that value-based 

payment program measure selection, 

domain weighting, performance scoring, 

and payment methodology must 

account for social risk. 

As a next step, we are considering 

options to improve health disparities 

among patient groups within and across 

hospitals by increasing the transparency 

of disparities as shown by quality 

measures. We also are considering how 

this work applies to other CMS quality 

programs in the future. We refer readers 

to the FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38403 through 38409) and 

the FY 2019 IPPS/LTCH PPS Proposed 

Rule (83 FR 20495 through 20496) 

published in the May 7, 2018 Federal 

Register for more details, where we 

discuss the potential stratification of 

certain Hospital IQR Program outcome 

measures. Furthermore, we continue to 

consider options to address equity and 

disparities in our value-based 

purchasing programs. 

We plan to continue working with 

ASPE, the public, and other key 

stakeholders on this important issue to 

identify policy solutions that achieve 

the goals of attaining health equity for 

all beneficiaries and minimizing 

unintended consequences. 

Comment: Several commenters 

supported CMS’s ongoing evaluation of 

social risk factors. One commenter 

recommended evaluating social risk 

factors specific to the IPF setting and 

analyzing factors such as facilities with 

high numbers of specialty populations 

(such as geriatric or diagnosis-specific) 

as well as stratifying outcomes for 

locked versus unlocked facilities. 

Another commenter expressed support 

for stratification by race, ethnicity, 

geographic area, sex, and disability, and 

recommended evaluation of 

stratification by primary language. 

Response: We thank these 

commenters for their support and will 

consider these topics in our future 

analyses of social risk factors. 

E. Improving Patient Outcomes and 

Reducing Burden Through Meaningful 

Measures 

Regulatory reform and reducing 

regulatory burden are high priorities for 

CMS. To reduce the regulatory burden 

on the healthcare industry, lower health 

care costs, and enhance patient care, in 

October 2017, we launched the 

Meaningful Measures Initiative.7 This 

initiative is one component of our 

agency-wide Patients Over Paperwork 

Initiative,8 which is aimed at evaluating 

and streamlining regulations with a goal 

to reduce unnecessary cost and burden, 


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increase efficiencies, and improve 

beneficiary experience. The Meaningful 

Measures Initiative is aimed at 

identifying the highest priority areas for 

quality measurement and quality 

improvement in order to assess the core 

quality of care issues that are most vital 

to advancing our work to improve 

patient outcomes. The Meaningful 

Measures Initiative represents a new 

approach to quality measures that 

fosters operational efficiencies, and will 

reduce costs including collection and 

reporting burden while producing 

quality measurement that is more 

focused on meaningful outcomes. 

The Meaningful Measures Framework 

has the following objectives: 

• Address high-impact measure areas 

that safeguard public health; 

• Patient-centered and meaningful to 

patients; 

• Outcome-based where possible; 

• Fulfill each program’s statutory 

requirements; 

• Minimize the level of burden for 

health care providers (for example, 

through a preference for EHR-based 

measures where possible, such as 

electronic clinical quality measures); 

• Significant opportunity for 

improvement; 

• Address measure needs for 

population based payment through 

alternative payment models and, 

• Align across programs and/or with 

other payers. 

In order to achieve these objectives, 

we have identified 19 Meaningful 

Measures areas and mapped them to six 

overarching quality priorities as shown 

in Table 2: 

TABLE 2—MAPPING OF MEANINGFUL MEASURES AREAS TO QUALITY PRIORITIES

Quality priority Meaningful measure area 

Making Care Safer by Reducing Harm Caused in the Delivery of Care Healthcare-Associated Infections. 

Preventable Healthcare Harm. 

Strengthen Person and Family Engagement as Partners in Their Care Care is Personalized and Aligned with Patient’s Goals. 

End of Life Care according to Preferences. 

Patient’s Experience of Care. 

Patient Reported Functional Outcomes. 

Promote Effective Communication and Coordination of Care ................. Medication Management. 

Admissions and Readmissions to Hospitals. 

Transfer of Health Information and Interoperability. 

Promote Effective Prevention and Treatment of Chronic Disease .......... Preventive Care. 

Management of Chronic Conditions. 

Prevention, Treatment, and Management of Mental Health. 

Prevention and Treatment of Opioid and Substance Use Disorders. 

Risk Adjusted Mortality. 

Work with Communities to Promote Best Practices of Healthy Living .... Equity of Care. 

Community Engagement. 

Make Care Affordable .............................................................................. Appropriate Use of Healthcare. 

Patient-focused Episode of Care. 

Risk Adjusted Total Cost of Care. 

By including Meaningful Measures in 

our programs, we believe that we can 

also address the following cross-cutting 

measure considerations: 

• Eliminating disparities; 

• Tracking measurable outcomes and 

impact; 

• Safeguarding public health; 

• Achieving cost savings; 

• Improving access for rural 

communities; and, 

• Reducing burden. 

We believe that the Meaningful 

Measures Initiative will improve 

outcomes for patients, families, and 

health care providers while reducing 

burden and costs for clinicians and 

providers, as well as promoting 

operational efficiencies. 

Comment: Several commenters 

expressed support for the Meaningful 

Measures Initiative and the associated 

effort to assess measures, align programs 

and reduce burden. One commenter 

further recommended that CMS 

collaborate with other entities (such as 

accreditation agencies and states) to 

further reduce burden. 

Response: We thank these 

commenters for their support and will 

consider additional ways to put patients 

first through our measures and reduce 

burden. 

F. Removal or Retention of IPFQR 

Program Measures 

1. Considerations for Removing or 

Retaining Measures 

In the FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38463 through 38465), we 

finalized our proposals to adopt 

considerations for removing or retaining 

measures within the IPFQR Program. In 

that final rule, we finalized: (1) Measure 

removal factors; (2) criteria for 

determining when a measure is 

‘‘topped-out;’’ and (3) measure retention 

factors. 

Specifically, the measure removal 

factors we adopted are: 

• Factor 1. Measure performance 

among IPFs is so high and unvarying 

that meaningful distinctions and 

improvements in performance can no 

longer be made (‘‘topped-out’’ 

measures); 

• Factor 2. Measure does not align 

with current clinical guidelines or 

practice; 

• Factor 3. Measure can be replaced 

by a more broadly applicable measure 

(across settings or populations) or a 

measure that is more proximal in time 

to desired patient outcomes for the 

particular topic; 

• Factor 4. Measure performance or 

improvement does not result in better 

patient outcomes; 

• Factor 5. Measure can be replaced 

by a measure that is more strongly 

associated with desired patient 

outcomes for the particular topic; 

• Factor 6. Measure collection or 

public reporting leads to negative 

unintended consequences other than 

patient harm; and 

• Factor 7. Measure is not feasible to 

implement as specified. 

The ‘‘topped out’’ criteria that we 

adopted are: (1) Statistically 

indistinguishable performance at the 

75th and 90th percentiles; and (2) the 

truncated coefficient of variation is less 

than or equal to 0.10. 

The measure retention factors that we 

adopted are: 

• Measure aligns with other CMS and 

HHS policy goals, such as those 

delineated in the National Quality 

Strategy or CMS Quality Strategy; 


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• Measure aligns with other CMS 

programs, including other quality 

reporting programs; and 

• Measure supports efforts to move 

IPFs towards reporting electronic 

measures. 

We are not making any changes to 

these previously finalized measure 

removal or retention factors, or our 

criteria for determining when a measure 

is topped-out. However, we are adding 

an additional measure removal factor. 

This is discussed in more detail below. 

a. New Removal Factor 

We are adopting the following 

additional factor to consider when 

evaluating measures for removal from 

the IPFQR Program measure set: Factor 

8. The costs associated with a measure 

outweigh the benefit of its continued 

use in the program. 

As we discussed in section VI.E. of 

this final rule on our new Meaningful 

Measures Initiative, we are engaging in 

efforts to ensure that the IPFQR Program 

measure set continues to promote 

improved health outcomes for 

beneficiaries while minimizing the 

overall costs associated with the 

program. We believe these costs are 

multi-faceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. We have identified several 

different types of costs, including, but 

not limited to: (1) Provider and clinician 

information collection burden and 

related cost and burden associated with 

the submitting/reporting of quality 

measures to CMS; (2) the provider and 

clinician cost associated with 

complying with other IPFQR 

programmatic requirements; (3) the 

provider and clinician cost associated 

with participating in multiple quality 

programs, and tracking multiple similar 

or duplicative measures within or across 

those programs; (4) the CMS cost 

associated with the program oversight of 

the measure, including maintenance 

and public display; and/or (5) the 

provider and clinician cost associated 

with compliance to other federal and/or 

State regulations (if applicable). 

For example, it may be needlessly 

costly and/or of limited benefit to retain 

or maintain a measure which our 

analyses show no longer meaningfully 

supports program objectives (for 

example, informing beneficiary choice 

or payment scoring). It may also be 

costly for health care providers to track 

confidential feedback preview reports, 

and publicly reported information on a 

measure where we use the measure in 

more than one program. CMS may also 

have to expend unnecessary resources 

to maintain the specifications for the 

measure, as well as the tools needed to 

collect, validate, analyze, and publicly 

report the measure data. Furthermore, 

beneficiaries may find it confusing to 

see public reporting on the same 

measure in different programs. 

When these costs outweigh the 

evidence supporting the continued use 

of a measure in the IPFQR Program, we 

believe it may be appropriate to remove 

the measure from the program. 

Although we recognize that one of the 

main goals of the IPFQR Program is to 

improve beneficiary outcomes by 

incentivizing health care providers to 

focus on specific care issues and making 

public data related to those issues, we 

also recognize that those goals can have 

limited utility where, for example, the 

publicly reported data are of limited use 

because they cannot be easily 

interpreted by beneficiaries to influence 

their choice of providers. In these cases, 

removing the measure from the IPFQR 

Program may better accommodate the 

costs of program administration and 

compliance without sacrificing 

improved health outcomes and 

beneficiary choice. 

We are removing measures based on 

this factor on a case-by-case basis. We 

might, for example, decide to retain a 

measure that is burdensome for health 

care providers to report if we conclude 

that the benefit to beneficiaries justifies 

the reporting burden. Our goal is to 

move the program forward in the least 

burdensome manner possible, while 

maintaining a parsimonious set of 

meaningful quality measures and 

continuing to incentivize improvement 

in the quality of care provided to 

patients. 

We solicited public comments on our 

proposal to adopt an additional measure 

removal factor, ‘‘the costs associated 

with a measure outweigh the benefit of 

its continued use in the program,’’ 

effective upon publication of the FY 

2019 IPF PPS final rule. We refer 

readers to section VI.F.2.a of this final 

rule for discussion on removing four 

IPFQR Program measures based on this 

removal factor. 

Comment: Several commenters 

expressed support for adoption of the 

new measure removal factor ‘‘the costs 

associated with a measure outweigh the 

benefit of its continued use in the 

program.’’ 

Response: We thank these 

commenters for their support. 

Comment: Several commenters 

expressed concern about adoption of the 

measure removal Factor 8. The costs 

associated with a measure outweigh the 

benefit of its continued use in the 

program. One commenter expressed 

concern that this factor is not supported 

by scientific criteria, and that therefore, 

adoption of this factor could cause 

significant harm to patients. Another 

commenter stated their belief that it is 

inappropriate to apply a cost-benefit 

analysis to measures which can save 

lives and ensure patient safety. 

Response: We agree with commenters 

that it is important to adequately weigh 

the potential benefits of a measure in 

determining whether the costs outweigh 

those benefits. However, we disagree 

that this can only be achieved by 

applying scientific criteria. We believe 

that an appropriate measure set for a 

specific program is achieved by 

applying a balanced set of factors to 

ensure that each measure serves a 

purpose in the program, and this costbenefit analysis is one element of that 

set of factors. Under this analysis, 

qualitative benefits (that is, benefits that 

cannot be assigned a specific numerical 

value) would be weighed against 

potential costs to ensure that measures 

that save lives and ensure patient safety 

are retained when appropriate. 

Comment: One commenter urged 

CMS to retain measures that are highcost, but continue to serve beneficiaries 

in cases when the benefits would justify 

the cost. 

Response: We agree with this 

commenter’s suggestion that costs may 

be outweighed by benefits (especially 

benefits to beneficiaries), and intend to 

evaluate measures on a case-by-case 

basis to achieve this balance. 

Comment: Several commenters 

requested that CMS clarify how it 

intends to evaluate the costs and 

benefits of each measure. One 

commenter observed that costs should 

include investing resources for quality 

improvement and tracking performance. 

Another commenter observed that 

benefits should prioritize benefits 

specific to the psychiatric needs that 

drive admission. 

Response: In the FY 2019 IPF PPS 

proposed rule (83 FR 21118), we 

expressed that we will evaluate costs 

and benefits on a case-by-case basis and 

identified several types of costs to 

provide examples of costs which we 

would evaluate in this analysis. We 

refer readers to section VI.F.1.a. of this 

final rule and the FY 2019 IPF PPS 

proposed rule for non-exhaustive 

examples of the different types of costs 

we will consider (83 FR 21118). These 

costs include, but are not limited to: (1) 

Provider and clinician information 

collection burden and related cost and 

burden associated with the submitting/ 

reporting of quality measures to CMS; 

(2) the provider and clinician cost 

associated with complying with other 


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IPFQR programmatic requirements; (3) 

the provider and clinician cost 

associated with participating in 

multiple quality programs, and tracking 

multiple similar or duplicative 

measures within or across those 

programs; (4) the CMS cost associated 

with the program oversight of the 

measure, including maintenance and 

public display; and/or (5) the provider 

and clinician cost associated with 

compliance to other federal and/or state 

regulations (if applicable). We intend to 

evaluate each measure on a case-by-case 

basis, while considering input from a 

variety of stakeholders, including, but 

not limited to: patients, caregivers, 

patient and family advocates, providers, 

provider associations, healthcare 

researchers, healthcare payers, data 

vendors, and other stakeholders with 

insight into the direct and indirect 

benefits and costs, financial and 

otherwise, of maintaining the specific 

measure in the IPFQR Program. We note 

that we intend to assess the costs and 

benefits to all program stakeholders, 

including but not limited to, those listed 

above. We further note that our 

assessment of costs is not limited to a 

strictly quantitative analysis. 

The commenter’s example of 

resources for quality improvement is an 

example of a cost that would be 

evaluated on a case-by-case basis 

because we believe that investing 

resources in quality improvement is an 

inherent part of delivering high-quality, 

patient-centered care, and is therefore, 

generally not considered a part of the 

quality reporting program requirements. 

However, there may be cases in which 

a measure would require such a specific 

quality improvement initiative that it 

would be appropriate to consider this 

cost to be associated with the measure. 

We also believe that in assessing the 

benefits of a measure, it is appropriate 

to consider the patient’s whole 

experience of care, not only the primary 

reason for admission. Therefore, we 

believe that the benefits to be evaluated 

for each measure are specific to the 

measure and the original reasons for 

including the measure in the program. 

Comment: One commenter 

recommended that CMS ensure 

screening measures, including those for 

vaccinations and substance use, are 

truly duplicative, topped-out, or part of 

best practices prior to removing such 

measures. 

Response: Factors regarding a 

measure’s continued ability to achieve 

program objectives, such as whether the 

measure is duplicative, topped-out, or 

part of best practices, are among the 

factors we will consider when 

evaluating a measure’s continued 

benefit within the program. We evaluate 

each measure on a case-by-case basis 

using the previously established criteria 

for topped-out status (that is, that a 

measure is topped-out if there is 

statistically indistinguishable 

performance at the 75th and 90th 

percentiles and the truncated coefficient 

of variation is less than or equal to 0.10 

(82 FR 38463)). To determine whether a 

measure is duplicative, we evaluate the 

IPFQR program measure set and 

measure sets of other programs, if 

applicable, to ensure that other 

measures are not capturing the same 

data. We determine whether a measure 

is part of best practices in a variety of 

ways, including but not limited to a 

review of nationally recognized clinical 

guidelines and having technical expert 

panels review the measure. Generally, if 

we determine that a measure is 

duplicative, topped-out, or part of best 

practices we would consider that its 

benefits have been reduced and 

therefore this would be a factor to 

consider in evaluating whether the costs 

outweigh the benefits. However, there 

may be times when a screening measure 

is not duplicative, topped-out, or part of 

best practices, but that the costs are 

sufficiently high (or the continued 

benefit has become reduced by some 

other means, such as a reduction in the 

prevalence of the condition being 

screened for) that the measure would be 

appropriate to remove. We will continue 

to evaluate the benefits and costs of 

each measure on a case-by-case basis. 

We will also continue to propose 

measures for removal, including 

screening measures, through the notice 

and comment rulemaking process in 

which we will provide descriptions of 

the analyses which led us to conclude 

that measures are appropriate to 

remove. 

Final Decision: After careful 

consideration of the comments received, 

we are finalizing our proposal to adopt 

the new measure removal Factor 8. The 

costs associated with a measure 

outweigh the benefit of its continued 

use in the program as proposed. 

2. Measures for Removal 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21118 through 21123), we 

proposed to remove eight measures from 

the IPFQR Program. We developed these 

proposals after conducting an overall 

review of the program under the 

Framework associated with our new 

Meaningful Measures Initiative, which 

is discussed in more detail in section 

VI.E. of this final rule. We believe that 

the Framework will allow IPFs and 

patients to continue to obtain 

meaningful information about IPF 

performance and incentivize quality 

improvement, while streamlining the 

measure sets to reduce program 

complexity so that the costs do not 

outweigh the benefits of improving 

beneficiary care. In addition, we note 

that in the FY 2018 IPPS/LTCH PPS 

final rule (82 FR 38464), several 

commenters requested that we evaluate 

the current measures in the IPFQR 

Program using the removal and 

retention factors that we finalized in 

that rule. 

In evaluating the IPFQR Program 

measure set under our Meaningful 

Measures Framework and according to 

our measure removal and retention 

factors, we identified eight measures 

which we believed were appropriate to 

remove from the IPFQR Program for the 

FY 2020 payment determination and 

subsequent years. First, we identified 

five measures for which the costs 

associated with each measure outweigh 

the benefit of its continued use in the 

program, under new measure removal 

Factor 8 adopted in section VI.F.1.a of 

this final rule. Second, we identified 

three measures that meet our topped-out 

criteria under measure removal Factor 1. 

These measures are discussed in more 

detail below. 

a. Measures in Which Costs Outweigh 

Benefits 

i. Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431) Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21119 through 21120) we 

proposed to remove the Influenza 

Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure, a National Healthcare Safety 

Network (NHSN) measure, from the 

IPFQR Program beginning with FY 2020 

payment determination under our 

measure removal Factor 8. The costs 

associated with a measure outweigh the 

benefit of its continued use in the 

program. We initially adopted the 

Influenza Vaccination Coverage Among 

Healthcare Personnel measure because 

we recognize that influenza 

immunization is an important public 

health issue, especially for vulnerable 

patients who may have limited access to 

the healthcare system, such as patients 

in IPFs. 

We adopted the Influenza Vaccination 

Coverage Among Healthcare Personnel 

(NQF #0431) measure in in the FY 2015 

IPF PPS final rule (79 FR 45968 through 

45970) due to public health concerns 

regarding influenza virus infection 

among the IPF population. We believe 

that the Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 


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9https://www.cdc.gov/nhsn/ipfs/enroll.html (the 

estimates for time to complete are 2 hours 45 

minutes for step 1, 10 minutes for step 2, 16 

minutes for step 3a, 35 minutes for step 3b, 32 

minutes for step 4, and 5 minutes for step 5; totaling 

263 minutes). 

10CDC, Influenza Vaccination Information for 

Health Care Workers, Accessed at https://

www.cdc.gov/flu/healthcareworkers.htm. 

#0431) measure addresses this public 

health concern by assessing influenza 

vaccination in the IPF among healthcare 

personnel (HCP), who can serve as 

vectors for influenza transmission. We 

also adopted the Influenza 

Immunization (IMM–2, NQF #1659) 

measure in the FY 2015 IPF PPS final 

rule (79 FR 45967 through 45968) to 

address the same public health concern 

of influenza virus infection in the IPF 

patient population by assessing patient 

screening for and provision of influenza 

vaccinations. 

The information collection burden for 

the Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431) measure is less than the 

information collection burden for 

measures that require chart abstraction 

of patient data because influenza 

vaccination among healthcare personnel 

can be calculated through review of 

records maintained in administrative 

systems and because facilities have 

fewer healthcare personnel than 

patients; therefore, the measure does not 

require review of as many records; 

however, this measure does still pose 

some information collection burden on 

facilities due to the requirement to 

identify personnel who have been 

vaccinated against influenza, and the 

reason that unvaccinated personnel 

have not been vaccinated. 

Furthermore, as we stated in section 

VI.F.1.a of this final rule, costs are 

multi-faceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. For example, it may be costly 

for health care providers to maintain 

general administrative knowledge to 

report these measures. Additionally, 

CMS must expend resources in 

maintaining information collection 

systems, analyzing reported data, and 

providing public reporting of the 

collected information. In our analysis of 

the IPFQR Program measure set, we 

recognized that some facilities face 

challenges with the administrative 

requirements of the NHSN for reporting 

the Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431) measure. These administrative 

requirements (which are unique to the 

NHSN) include annually completing 

NHSN system user authentication. 

Enrolling in NHSN is a five-step process 

that the CDC estimates takes an average 

of 263 minutes per facility.9

Furthermore, submission via NHSN 

requires the system security 

administrator of participating facilities 

to re-consent electronically, ensure that 

contact information is kept current, 

ensure that the IPF has an active facility 

administrator account, keep Secure 

Access Management Service (SAMS) 

credentials active by logging in 

approximately every 2 months and 

changing their password, create a 

monthly reporting plan, and ensure that 

the facility’s CCN information is up-to 

date. Unlike acute care hospitals which 

participate in other quality reporting 

programs which may require NHSN 

reporting, such as the Hospital IQR 

Program and HAC Reduction Program, 

IPFs are only required to participate in 

NHSN to submit data for this one 

measure. This may unduly disadvantage 

smaller IPFs, specifically those that are 

not part of larger hospital systems, 

because these IPFs do not have NHSN 

access for other quality reporting or 

value-based payment programs. It is our 

goal to ensure that the IPFQR Program 

is equitable to all providers and this 

measure may disproportionately affect 

small, independent IPFs. Especially for 

these small, independent IPFs, the 

incremental costs of this measure over 

the rest of the IPFQR Program measure 

set are significant because of the 

requirements of NHSN participation. As 

a result, we believe that the costs and 

burdens associated with this chartabstracted measure outweigh the benefit 

of its continued use in the program. 

We continue to believe that the 

Influenza Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure provides the benefit of 

protecting IPF patients against 

influenza; however, we believe that 

these benefits are offset by other efforts 

to reduce influenza infection among IPF 

patients, such as numerous healthcare 

employer requirements for healthcare 

personnel to be vaccinated against 

influenza.10

We also believe that by continuing to 

include the Influenza Immunization 

(IMM–2, NQF #1659) measure in the 

IPFQR program, the measure set 

remains responsive to the public health 

concern of influenza infection within 

the IPF population by collecting data on 

rates of influenza immunization among 

IPF patients. Further, we believe that 

while the Influenza Immunization 

(IMM–2, NQF #1659) measure has 

information collection burden 

associated with chart abstracting data, 

this measure is less costly than the 

NHSN Participation required for the 

Influenza Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure in the IPF context. 

We wish to minimize the level of cost 

of our programs for providers, as 

discussed under the Meaningful 

Measures Initiative in section VI.E. of 

this final rule. In our assessment of the 

IPFQR measure set, we prioritized 

measures that align with this 

Framework, as the most important to the 

IPF population. Our assessment 

concluded that while the Influenza 

Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure continues to provide benefits, 

these benefits are diminished by other 

efforts and are outweighed by the 

significant costs of reporting this 

measure. 

For these reasons, we proposed to 

remove the Influenza Vaccination 

Coverage Among Healthcare Personnel 

(NQF #0431) measure from the IPFQR 

Program for the FY 2020 payment 

determination and subsequent years. 

Comment: Several commenters 

expressed support for removal of the 

Influenza Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure and agreed with CMS’s 

rationale that this measure is unduly 

burdensome for IPFs whose only 

requirement for NHSN participation is 

reporting this measure with already 

high performance. 

Response: We thank these 

commenters for their support. 

Comment: Several commenters 

recommended that CMS not remove the 

Influenza Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure. Some commenters observed 

that IPFs are high-risk settings for the 

spread of flu from personnel to patients 

because of group activities and 

communal atmospheres expose patients 

and that this measure is targeted at 

preventing inpatient outbreaks, which is 

a different target than the Influenza 

Immunization (IMM–2, NQF #1659) 

measure. Several commenters observed 

that the rationale for removing this 

measure from the IPFQR Program is 

contradictory to the rationale for 

retaining it in the Hospital IQR Program. 

Response: We thank these 

commenters for their input. We agree 

that influenza vaccination for both 

patients and healthcare personnel is 

important in the IPF setting, as well as 

other healthcare settings, and we believe 

that these two activities are both 

intended to address the public health 

concern of reducing influenza infection. 

We also believe that patients in the 

inpatient psychiatric setting may have 

additional risk of contracting influenza 


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11CDC, Menu of State Hospital Influenza 

Vaccination Laws, Accessed at https://

www.cdc.gov/phlp/docs/menu-shfluvacclaws.pdf. 

due to group activities and a communal 

setting. However, we do not believe that 

group activities and a communal setting 

increase the risk of contracting 

influenza from healthcare personnel, 

rather we believe that these increase the 

risk of contracting influenza from other 

patients. Therefore, we do not believe 

that ensuring influenza vaccination 

coverage among healthcare personnel 

addresses the increased risk specific to 

group activities and a communal setting. 

We believe that the burden of 

reporting this measure is greater for IPFs 

compared to the relative burden for 

acute care hospitals participating in the 

Hospital IQR and Hospital-Acquired 

Condition Reduction Programs. The 

entire burden of registering for and 

maintaining access to the CDC’s NHSN 

system for IPFs, especially independent 

or freestanding IPFs, is due to this one 

measure; whereas acute care hospitals 

paid under IPPS, participating in the 

Hospital IQR Program, the HospitalAcquired Condition Reduction Program 

and the Hospital Value-Based 

Purchasing Program, for example, must 

register and maintain NHSN access for 

several healthcare safety measures, not 

just one. Furthermore, because the topic 

is addressed in other initiatives, such as 

state laws 11 and employer programs, we 

believe that the burden of this measure 

on IPFs, especially independent or 

freestanding IPFs, outweighs the benefit 

of addressing this topic again under the 

IPFQR Program. 

Final Decision: After careful 

consideration of the comments received, 

we are finalizing our proposal as 

proposed to remove the Influenza 

Vaccination Coverage Among 

Healthcare Personnel (NQF #0431) 

measure from the IPFQR Program for the 

FY 2020 payment determination and 

subsequent years. 

ii. Alcohol Use Screening (NQF #1661) 

Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21120), we proposed to remove 

the Alcohol Use Screening, (SUB–1, 

NQF #1661) measure from the IPFQR 

Program beginning with the FY 2020 

payment determination under our 

measure removal Factor 8. The costs 

associated with a measure outweigh the 

benefit of its continued use in the 

program. We adopted the Alcohol Use 

Screening (SUB–1, NQF #1661) measure 

in the FY 2014 IPPS/LTCH PPS final 

rule (78 FR 50890 through 50892) 

because we believe it is important to 

address the common comorbidity of 

alcohol use among IPF patients. This 

measure requires facilities to chartabstract measure data on a sample of IPF 

patient records, in accordance with 

established sampling policies (FY 2016 

IPF PPS final rule, 80 FR 46717 through 

46719). We have previously stated our 

intent to move away from chartabstracted measures in order to reduce 

information collection burden in other 

CMS quality programs (78 FR 50808; 79 

FR 50242; 80 FR 49693). 

When we introduced the Alcohol Use 

Screening (NQF #1661) measure to the 

IPFQR Program, the benefits of this 

measure were high, because facility 

performance was not consistent and 

therefore the measure provided a means 

of distinguishing facility performance 

and incentivized facilities to improve 

rates of screening for this common 

comorbidity. 

Now, data collected for the FY 2016 

through FY 2018 payment 

determinations show high levels of 

measure performance, as indicated in 

Table 3. 

TABLE 3—PERFORMANCE ANALYSIS FOR ALCOHOL USE SCREENING

Year Mean Median 75th 

percentile 

90th 

percentile 

Truncated 

coefficient 

of variation 

(TCV) 

2014 (FY 2016 Payment Determination) ............................. 74.8 86.8 97.0 100 .32 

2015 (FY 2017 Payment Determination) ............................. 88.5 97.5 99.6 100 .13 

2016 (FY 2018 Payment Determination) ............................. 92.4 98.4 99.7 100 .07 

These data further show that there is 

little room for improvement in the 

Alcohol Use Screening (NQF #1661) 

measure, and that the quality 

improvement benefits from the measure 

have greatly diminished. Based on these 

data, we believe that most IPFs 

routinely provide alcohol use screening, 

and that IPFs will continue to provide 

alcohol use screening to patients 

because it has become an embedded 

part of their clinical workflows. 

Therefore, we believe that this measure 

no longer meaningfully supports the 

program objectives of informing 

beneficiary choice and driving 

improvement in IPF screening for 

alcohol use. 

Furthermore, as we stated in section 

VI.F.1.a of this final rule, costs are 

multi-faceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. For example, it may be costly 

for health care providers to maintain 

general administrative knowledge to 

report these measures. Additionally, 

CMS must expend resources in 

maintaining information collection 

systems, analyzing reported data, and 

providing public reporting of the 

collected information. Here, IPF 

information collection burden and 

related costs associated with reporting 

this measure to CMS is high because the 

measure is a chart-abstracted measure. 

Furthermore, CMS incurs costs 

associated with the program oversight of 

the measure for public display. As a 

result, we believe that the costs and 

burdens associated with this chartabstracted measure outweigh the benefit 

of its continued use in the program. 

Therefore, we proposed to remove the 

Alcohol Use Screening (SUB–1, NQF 

#1661) measure from the IPFQR 

Program beginning with the FY 2020 

payment determination. 

Comment: Many commenters 

supported our proposal to remove the 

Alcohol Use Screening (SUB–1, NQF 

#1661) measure. Several commenters 

agreed that performance on this measure 

is sufficiently high to indicate that the 

benefit of including the measure in the 

IPFQR Program has diminished, and 

that now the costs of this measure 

outweigh the benefits of retaining it. 

Some commenters recommended that 

CMS remove the Alcohol Use Brief 

Intervention Provided or Offered and 

Alcohol Use Brief Intervention (SUB–2/ 

SUB–2a, NQF #1663) measure and the 

Alcohol and Other Drug Use Disorder 

Treatment Provided or Offered at 


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Discharge and Alcohol and Other Drug 

Use Disorder Treatment at Discharge 

(SUB–3/SUB–3a, NQF #1654) measure 

as well because the removal of SUB–1 

measure, while retaining the rest of the 

SUB measure set, does not reduce 

provider burden because the 

denominators of the SUB–2/SUB–2a 

and SUB–3/SUB–3a measures require 

collecting the data for the SUB–1 

measure. 

Response: We thank these 

commenters for their support, but 

disagree that removal of SUB–1 alone 

does not reduce provider burden. We 

believe that removal of SUB–1 will 

reduce provider information collection, 

abstraction, and reporting burden even 

while SUB–2/SUB–2a and SUB–3/SUB– 

3a measures are part of the IPFQR 

Program measure set. We will evaluate 

the continued use of SUB–2/SUB–2a 

and SUB–3/SUB–3a as we continue to 

analyze the IPFQR Program measure set. 

Comment: Many commenters 

recommended that CMS retain the 

Alcohol Use Screening (SUB–1, NQF 

#1661) measure. Some commenters 

observed that substance use is a 

common comorbid condition with 

serious mental illness, and that the 

societal costs of untreated alcoholism 

outweigh the costs associated with 

collecting and reporting this measure. 

Another commenter expressed that CMS 

has not provided sufficient evidence 

that alcohol use screening has become 

an embedded part of clinical practice. 

One commenter also observed that there 

has been an increase in alcoholism 

among the elderly. 

Response: We believe that processes 

such as screening are supported by the 

infrastructure and workflows within an 

IPF. Therefore, we believe the 

consistently high performance on the 

Alcohol Use Screening (SUB–1, NQF 

#1661) measure serves as substantial 

evidence that most IPFs have built and 

utilize the appropriate infrastructure to 

facilitate this screening as part of their 

workflows. We believe that this 

evidence is sufficient evidence that 

alcohol use screening has become an 

embedded part of clinical practice. We 

agree with commenters that alcoholism 

is a common and costly comorbidity 

with serious mental illness, and that 

these costs include societal costs, such 

as lost productivity, treatment for 

alcohol associated illness, and 

mortality. We also agree with 

commenters that there is an increase in 

alcoholism among the elderly. However, 

we believe that the high performance on 

the Alcohol Use Screening (SUB–1, 

NQF #1661) measure indicates that its 

continued benefit has diminished which 

was supported by many commenters 

who expressed support for our proposal 

and agreed with our rationale. We note 

that we are retaining the Alcohol Use 

Brief Intervention Provided or Offered 

and Alcohol Use Brief Intervention 

Provided (SUB–2 and SUB–2a, NQF 

#1663) measure and the Alcohol and 

Other Drug Use Disorder Treatment 

Provided or Offered at Discharge and 

Alcohol and Other Drug Use Disorder 

Treatment at Discharge (SUB–3 and 

SUB–3a, NQF #1654) measure because 

we believe these measures provide 

significant benefit by encouraging IPFs 

to provide alcohol use interventions. 

Comment: Several commenters 

expressed concerns regarding the 

proposal to remove the Alcohol Use 

Screening (SUB–1, NQF #1661) 

measure. One commenter requested that 

CMS provide data showing that 

screening measures, including alcohol 

screening, are truly duplicative, toppedout, or part of best practices prior to 

removing these measures. Another 

commenter expressed that it is unclear 

how to identify the need for addiction 

counseling and referrals without the 

alcohol use screening measure. 

Response: We thank these 

commenters for this input. We note that 

we proposed to remove the Alcohol Use 

Screening (SUB–1, NQF #1661) measure 

because our data, which were included 

in the FY 2019 IPF PPS proposed rule 

(83 FR 21120) and is repeated in Table 

3 show that there is little room for 

improvement on this measure (as of the 

FY 2018 payment determination, it 

meets our statistical criteria for ‘‘toppedout’’ because the performance at the 

75th and 90th percentiles is statistically 

indistinguishable at 99.7 percent and 

100 percent respectively, and the TCV is 

0.07 which is less than 0.1). For these 

reasons, these data indicate that the 

benefits of maintaining it have been 

reduced such that they no longer 

outweigh the costs of including the 

measure in the program. We recognize 

that IPFs will still need to continue to 

screen for alcohol use, through a 

standardized assessment instrument 

consistent with their internal 

procedures, to identify patients who 

need addiction counseling or referrals to 

be able to report on the Alcohol Use 

Brief Intervention Provided or Offered 

and Alcohol Use Brief Intervention 

(SUB–2/SUB–2a, NQF #1663) measure 

and to report on the Alcohol and Other 

Drug Use Disorder Treatment Provided 

or Offered at Discharge and Alcohol and 

Other Drug Use Disorder Treatment at 

Discharge (SUB–3/SUB–3a, NQF #1664) 

measure. However, due to this measure 

removal, facilities will no longer be 

required to abstract and report on the 

process of performing this screening for 

purposes of the IPFQR Program. 

Final Decision: After careful 

consideration of the comments we 

received, we are finalizing our proposal 

as proposed to remove the Alcohol Use 

Screening (SUB–1, NQF #1663) measure 

from the IPFQR program for FY 2020 

payment determination and subsequent 

years. 

iii. Assessment of Patient Experience of 

Care Measure and Use of an Electronic 

Health Record (EHR) Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21120 through 21121), we 

proposed to remove two measures: (1) 

Assessment of Patient Experience of 

Care measure; and (2) Use of an EHR 

measure from the IPFQR Program 

beginning with the FY 2020 payment 

determination under measure removal 

Factor 8. The costs associated with a 

measure outweigh the benefit of its 

continued use in the program. 

We adopted the Assessment of Patient 

Experience of Care measure as a 

voluntary information collection in the 

FY 2014 IPPS/LTCH PPS final rule (78 

FR 50896 through 50897) and adopted 

it as a measure for the IPFQR Program 

in the FY 2015 IPF PPS final rule (79 FR 

45964 through 45965). The Assessment 

of Patient Experience of Care measure 

collects data on whether each facility 

administers a patient experience of care 

survey. However, it does not provide 

data on the results of this survey, or the 

percentage of patients to whom the 

survey was administered. The measure 

was adopted in part to inform potential 

future development of patient 

experience of care measures. We believe 

that we have now collected sufficient 

information to inform development of 

such a measure and, therefore, the 

benefit of collecting this measure has 

been significantly reduced. 

Similarly, we adopted the Use of an 

EHR measure in the FY 2015 IPF PPS 

final rule (79 FR 45965 through 45967) 

because of evidence demonstrating the 

positive effects of EHRs on multiple 

aspects of medical care. The Use of an 

EHR measure requires facilities to select 

between the following three statements: 

• The facility most commonly used 

paper documents or other forms of 

information exchange (for example, 

email) not involving the transfer of 

health information using EHR 

technology at times of transitions in 

care; 

• The facility most commonly 

exchanged health information using 

non-certified EHR technology (that is, 

not certified under the ONC HIT 

Certification Program) at times of 

transitions in care; and 


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• The facility most commonly 

exchanged health information using 

certified EHR technology (certified 

under the ONC HIT Certification 

Program) at times of transitions in care. 

The measure then requires the facility 

to provide a ‘‘yes’’ or ‘‘no’’ answer to the 

following question: ‘‘Did the transfers of 

health information at times of 

transitions in care include the exchange 

of interoperable health information with 

a health information service provider 

(HISP)?’’ 

As discussed in section VI.E of this 

final rule, one of the goals of the 

Meaningful Measures Initiative is to 

reduce costs associated with payment 

policy, quality measures, 

documentation requirements, 

conditions of participation, and health 

information technology. Another goal of 

the Meaningful Measures Initiative is to 

utilize measures that are ‘‘outcomebased where possible.’’ As shown above, 

the Use of an EHR measure is a 

structural measure that tracks facilitylevel use of EHR technology, but does 

not directly measure patient outcomes. 

Furthermore, performance on this 

measure has remained relatively static 

for the past two program years. We 

believe that we have now collected 

sufficient data to inform potential future 

development of measures that more 

directly target the aspects of medical 

care addressed using EHRs (for example, 

care coordination, care transitions, and 

care provided to individual patients). 

While some of the intended objectives 

of both the Assessment of Patient 

Experience of Care measure and Use of 

an EHR measure have been met, keeping 

both measures in the IPFQR Program’s 

measure set creates administrative cost 

to hospitals associated with reporting 

these measures. We believe that 

removing these measures would 

alleviate some administrative cost. 

While the information collection burden 

associated with these measures is 

relatively low, as we stated in section 

VI.F.1.a of this final rule, costs are 

multi-faceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. For example, it may be costly 

for health care providers to maintain 

general administrative knowledge to 

report these measures. Additionally, 

CMS must expend resources in 

maintaining information collection 

systems, analyzing reported data, and 

providing public reporting of the 

collected information. In light of the fact 

that the benefits for both the Assessment 

of Patient Experience of Care measure 

and Use of an EHR measure have been 

significantly reduced, the costs of these 

measures now outweigh their benefits. 

Therefore, in the FY 2019 IPF PPS 

proposed rule, we proposed to remove: 

(1) The Assessment of Patient 

Experience of Care measure; and (2) the 

Use of an EHR measure from the IPFQR 

Program beginning with the FY 2020 

payment determination and subsequent 

years. 

Comment: Several commenters 

expressed support for removing the 

Assessment of Patient Experience of 

Care measure and the Use of an 

Electronic Health Record (EHR) measure 

because the costs of retaining these 

measures in the IPFQR Program 

outweigh the benefits. 

Response: We thank these 

commenters for their support. 

Comment: Several commenters 

recommended that CMS retain the 

Assessment of Patient Experience of 

Care measure. Some of these 

commenters expressed that this measure 

encourages facilities to ensure that 

patients have an opportunity to express 

their perspectives and recommended 

that this measure be retained until we 

can introduce a better patient 

experience measure. One commenter 

expressed concern about removing the 

Patient Experience of Care measure 

because understanding consumer 

experience is important in ensuring a 

person-centered healthcare system. 

Response: We agree with commenters 

that encouraging facilities to ensure that 

patients have an opportunity to express 

their perspectives is an important aspect 

of patient-centered care, and therefore a 

measure that encourages this practice 

has value. However, we note that the 

Patient Experience of Care measure only 

collects data on whether each facility 

administers a patient experience of care 

survey, not the results of such a survey 

or the percentage of patients to whom 

the survey was administered. As a 

result, this measure does not assess or 

publicly report data on patients’ 

experience of care within a given IPF. 

Comment: One commenter 

recommended that CMS update the Use 

of an EHR measure to exclude the 

option for non-certified EHR use 

because use of this technology is 

ineffective. 

Response: We believe that the Use of 

an EHR measure’s inclusion of an 

attestation option for IPFs using noncertified EHRs is appropriate because 

doing so allows assessment of the 

degree to which IPFs nationwide 

employ EHR systems in their service 

program. Without such an option, IPFs 

which are either in the process of 

transitioning to a certified EHR or have 

encountered other implementation 

difficulties, such as a lack of resources 

to adopt a certified EHR, would be 

inappropriately categorized as not using 

an EHR at all. We note this measure is 

not intended to collect data on the 

effectiveness of an IPF’s EHR, only the 

use of this technology. We further note 

that, as discussed below, we are 

finalizing our proposal to remove this 

measure. 

Comment: One commenter opposed 

removal of the Use of an EHR measure 

because the data are valuable in 

understanding the use of EHRs in IPFs 

and in encouraging IPFs to use this 

technology. 

Response: Because the data on this 

measure has remained relatively static 

for the past two years, we believe that 

the measure is no longer providing 

value in understanding the use of EHRs 

in IPFs. Furthermore, we believe that 

resources invested in continuing to 

maintain, report, and display data for 

this measure could be better allocated to 

measure or improve other aspects of 

quality. 

Comment: Several commenters 

expressed that these measures have 

negligible burden and therefore 

disagreed with the removal factor under 

which CMS proposed to remove these 

measures. 

Response: We agree with commenters 

that the reporting burden associated 

with these measures is small; however, 

we believe that costs are multi-faceted 

and include administrative costs to 

hospitals and costs to CMS in 

maintaining information collection 

systems, analyzing reported data, and 

providing public reporting of the 

collected information to the point that 

the benefits of these measures have been 

greatly reduced, and the costs of these 

measures now outweigh their benefits. 

Final Decision: After carefully 

considering the comments received, we 

are finalizing our proposal as proposed 

to remove the Assessment of Patient 

Experience of Care measure and the Use 

of an EHR measure for the FY 2020 

payment determination and subsequent 

years. 

iv. Tobacco Use Treatment Provided or 

Offered at Discharge (TOB–3 and TOB– 

3a, NQF #1656) Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21121 through 21122), we 

proposed to remove the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure from the IPFQR 

Program beginning with the FY 2020 

payment determination under our 

measure removal Factor 8. The costs 

associated with a measure outweigh the 


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benefit of its continued use in the 

program. 

The Tobacco Use Treatment Provided 

or Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure assesses 

whether patients were referred to or 

refused evidence-based outpatient 

counseling and received or refused a 

prescription for FDA-approved 

cessation medication upon discharge 

and also identifies those IPF patients 

who were referred to evidence-based 

outpatient counseling and received a 

prescription for FDA-approved 

cessation medication upon discharge. 

This measure requires facilities to chartabstract measure data on a sample of IPF 

patient records, in accordance with 

established sampling policies (FY 2016 

IPF PPS final rule, 80 FR 46717 through 

46719). When we introduced the 

measure to the IPFQR Program, the 

benefits of this measure were great, 

because facility performance was not 

consistent and the measure provided a 

means of distinguishing facility 

performance and incentivizing facilities 

to improve rates of providing treatment 

for this common comorbidity. 

However, when we proposed to 

remove this measure we believed the 

benefit of keeping the Tobacco Use 

Treatment Provided or Offered at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure in the IPFQR Program 

had become limited because we 

believed that the same measure data is 

captured in the data elements required 

by the Transition Record with Specified 

Elements Received by Discharged 

Patients (Discharges from an Inpatient 

Facility to Home/Self Care or Any Other 

Site of Care) (NQF #0647) measure, 

which was more recently added to the 

IPFQR Program (80 FR 46701 through 

46706). The transition record created to 

meet the requirements for inclusion in 

the numerator of the Transition Record 

with Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure includes elements on major 

procedures and tests performed during 

inpatient stay, summary of results, a 

current medication list, and postdischarge patient instructions. To meet 

the inclusion criteria for the numerator 

of this measure, the post-discharge 

patient instructions must provide 

information on all recommended 

actions for the patient after discharge. 

These post-discharge patient 

instructions may include tobacco use 

treatment, if provided, and therefore, we 

believed they would capture the same 

information as the numerator of the 

Tobacco Use Treatment Provided or 

Offered at Discharge (TOB–3 and TOB– 

3a, NQF #1656) measure. Additionally, 

because the transition record created to 

meet the requirements for inclusion in 

the numerator of the Transition Record 

with Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure must include a current 

medication list, we believed this 

medication list would capture a 

prescription for an FDA approved 

cessation medication at discharge, if 

provided, the second element of tobacco 

use treatment measured by the Tobacco 

Use Treatment Provided or Offered at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure. 

Furthermore, as we stated in section 

VI.F.1.a of this final rule, costs are 

multi-faceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. For example, it may be costly 

for health care providers to maintain 

general administrative knowledge to 

report these measures. Additionally, 

CMS must expend resources in 

maintaining information collection 

systems, analyzing reported data, and 

providing public reporting of the 

collected information. For this measure, 

provider and clinician information 

collection burden and related cost and 

burden associated with the submitting 

of quality measures to CMS is high 

because it is a chart-abstracted measure. 

Additionally, CMS incurs costs 

associated with the program oversight of 

the measure, including public display. 

Therefore, we believed that the 

benefits provided by the Tobacco Use 

Treatment Provided or Offered at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure had been reduced to the 

point that they are now outweighed by 

the costs of the measure. As such, we 

proposed to remove the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure from the IPFQR 

Program beginning with the FY 2020 

payment determination and subsequent 

years. 

Comment: Several commenters 

supported the proposal to remove the 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment Provided at Discharge (TOB– 

3 and TOB–3a) measure and agreed with 

CMS’s rationale for removing this 

measure. One commenter further 

observed that tobacco use is secondary 

to the reason for the hospitalization and 

therefore tobacco use treatment should 

not be a focus of the IPFQR Program. 

Another commenter observed that 

because tobacco use is such a common 

comorbidity in this patient population 

this care is already embedded in clinical 

practices. 

Response: We continue to believe that 

addressing a patient’s tobacco use is a 

part of providing high quality care. As 

stated in previous rules (see for 

example, the FY 2015 IPF PPS final rule 

(79 FR 45972) and the FY 2016 IPF PPS 

final rule (80 FR 46698)) we believe that 

reporting information regarding tobacco 

cessation treatment provides meaningful 

distinctions between IPFs because of the 

prevalence of tobacco use in this patient 

population and the increase in 

premature morbidity and mortality 

associated with tobacco use. 

Furthermore, we believe that limiting 

the program to only measures or 

conditions that specifically apply to the 

psychiatric population creates a false 

demarcation between psychiatric and 

non-psychiatric care. Data collected for 

the FY 2018 payment determination 

show mean performance on Tobacco 

Use Treatment Provided or Offered at 

Discharge (TOB–3) to be 40.8 percent 

and mean performance on Tobacco Use 

Treatment Provided at Discharge (TOB– 

3a) to be 9.5 percent. Therefore, we 

believe that this tobacco use treatment 

is not currently embedded in clinical 

procedures. Despite this, we proposed 

to remove this measure because we 

believed that equivalent information 

was captured through the transition 

measure. However, we no longer believe 

that this is the case, as discussed below, 

and therefore, we are not finalizing 

removal of this measure from the IPFQR 

Program. 

Comment: Numerous commenters 

expressed that the Transition Record 

Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure is 

not a sufficient replacement for the 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment Provided at Discharge (TOB– 

3 and TOB–3a, NQF #1656) measure. 

Specifically, some commenters observed 

that the discharge record created as part 

of the Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure does not 

report data on smoking cessation, so 

removing the Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment at Discharge 

(TOB–3 and TOB–3a, NQF #1656) 

measure may cause some clinicians to 

cease providing this care. Other 

commenters observed that data reported 

for the Transition Record Received by 

Discharged Patients (Patients 


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Discharged to Home or Other Site of 

Care) (NQF #0647) measure does not 

enable patients and their families to 

assess facilities with respect to tobacco 

cessation referrals and treatment at 

discharge. One commenter further 

observed that the transition record 

measure may only capture FDAapproved cessation medications and not 

evidence based outpatient counseling. 

Another commenter observed that 

discharge records often do not include 

information about tobacco use screening 

or referral or prescriptions for treatment. 

Response: When we proposed to 

remove the Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment Provided at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure from the IPFQR 

Program, we believed that providers 

would include referral or prescriptions 

for tobacco cessation treatment in the 

transition record developed for the 

Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure, and 

therefore, this measure would continue 

to encourage providers to provide 

tobacco cessation treatment. However, 

in reviewing the comments we received, 

we realized that providers will only 

document this treatment if it is 

provided, but will consider the 

transition record to be complete even if 

no tobacco cessation treatment is 

provided to patients for whom this 

treatment is appropriate. Therefore, the 

Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure will not 

meet the program objective of 

encouraging IPFs to provide tobacco 

cessation treatment. Furthermore, this 

measure will not meet the program 

objectives of providing information on 

tobacco cessation treatment to patients 

and their families because high 

performance on the Transition Record 

Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure does 

not indicate that the appropriate tobacco 

cessation treatments were provided. 

We continue to believe that a 

prescription for an FDA-approved 

cessation medication should be 

included in the medication list, and a 

referral to evidence-based cessation 

treatment should be included in postdischarge patient instructions if 

providers offer these services. We note 

that the Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure continues to 

meet its originally intended objective of 

assessing whether patients were 

provided a discharge record. However, 

the measure design does not provide 

specific detail on the data provided 

within this discharge record. Because of 

this, we now believe that the Transition 

Record Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure may 

not provide sufficient incentive to 

providers to offer tobacco cessation care, 

nor does this measure capture data 

specific to providing or offering upon 

discharge tobacco cessation treatment in 

a way that is meaningful for patients 

and their caregivers. Because of this, we 

do not believe the measure encourages 

providers to provide tobacco cessation 

treatment or provides information for 

consumers to identify whether this 

treatment was provided. Thus, the 

benefits of the Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment Provided at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure are greater than we 

initially believed when we proposed to 

remove this measure in the proposed 

rule. With this new understanding of 

the continued benefits of the TOB–3 and 

TOB–3a (NQF #1656) measure in the 

IPFQR Program, we now believe that the 

benefits outweigh the costs of the 

measure. 

Comment: Many commenters opposed 

the removal of Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment at Discharge 

(TOB–3 and TOB–3a, NQF #1656) 

measure. Many commenters expressed 

concern that psychiatric patients are 

over-represented in the population 

using tobacco and that these patients die 

earlier and more frequently from 

tobacco-related illness, and therefore 

this program should ensure they are 

offered resources to quit. 

Response: We agree with commenters 

that psychiatric patients are overrepresented in the population of tobacco 

users and that these patients die earlier 

and more frequently from tobaccorelated illness. Furthermore, we agree 

with commenters that it is appropriate 

for the IPFQR Program to encourage 

IPFs to offer tobacco cessation resources 

to patients who use tobacco. When we 

proposed to remove the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

Provided at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure from the 

IPFQR Program we believed that the 

Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure would 

continue to encourage IPFs to provide 

these resources. However, as described 

above we now recognize that the 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment Provided at Discharge (TOB– 

3 and TOB–3a, NQF #1656) measure 

may not adequately encourage IPFs to 

offer tobacco cessation resources to 

patients who use tobacco and see greater 

value of the TOB–3 and TOB–3a (NQF 

#1656) measure. 

Comment: One commenter observed 

that the removal of the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

from the IPFQR Program broadens the 

potential denominator for the Tobacco 

Use Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

Provided at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure (by not 

requiring screening on the day of 

admission) and therefore makes this 

measure more meaningful by 

encouraging IPFs to offer tobacco 

cessation treatment and referrals to a 

greater number of patients who use 

tobacco and therefore increases the 

importance of retaining TOB–3 and 

TOB–3a (NQF #156). 

Response: We thank the commenter 

for their input and share the 

commenter’s interest in encouraging 

IPFs to offer tobacco cessation treatment 

and referrals to as many tobacco users 

as possible through the potentially 

expanded denominator of TOB–3 and 

TOB–3a (NQF #1656). 

Comment: One commenter expressed 

concerns that CMS may expand the 

requirements of the Transition Record 

with Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure to better replace Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge measure (TOB–3 and 

TOB–3a, NQF #1656). 

Response: We wish to clarify that we 

did not intend for the Transition Record 

with Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure to act as a replacement for 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure. In the 

FY 2019 IPF PPS Proposed Rule (83 FR 

21121 through 21122), we stated that 

because the transition record created to 

meet the requirements of the Transition 

Record Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure 

includes elements on major procedures 

and tests performed during inpatient 

stay, summary of results, a current 


sradovich on DSK3GMQ082PROD with RULES4
38600 Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 

12NQF, Care Coordination Measures Technical 

Report, Pages 24–26, Available at: http://

www.qualityforum.org/Projects/c-d/Care_

Coordination_2016-2017/Final_Report.aspx. 

13Centers for Disease Control and Prevention. 

Annual Smoking-Attributable Mortality, Years of 

Potential Life Lost, and Productivity Losses— 

United States, 2000–2004.’’ Morb Mortal Wkly Rep. 

2008. 57(45): 1226–1228. Available at: http://

www.cdc.gov/mmwr/preview/mmwrhtml/ 

mm5745a3.htm. 29Fiore. 

medication list, and post-discharge 

instructions, it would include any 

prescriptions for FDA-approved 

cessation medications and tobacco use 

treatment in the latter two sections, if 

appropriate. We further stated that 

because we believed this data was being 

captured by another measure that the 

benefit of TOB–3 and TOB–3a had been 

reduced. We did not state that it was our 

intent to expand the Transition Record 

with Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure’s requirements based on the 

proposal to remove the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure. However, as discussed 

below, we are not finalizing our 

proposal to remove Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure. 

Comment: One commenter expressed 

concern that the Transition Record 

Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure is 

not NQF endorsed, and therefore the 

commenter does not have the same 

confidence regarding measure 

specifications and testing as with 

respect to Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment at Discharge 

(TOB–3 and TOB–3a, NQF #1656) 

measure. 

Response: We acknowledge that the 

Transition Record Received by 

Discharged Patients (Patients 

Discharged to Home or Other Site of 

Care) (NQF #0647) measure has been 

NQF-endorsed in the past and recently 

lost that endorsement status. We note 

that this measure was NQF-endorsed at 

the time of adoption into the IPFQR 

Program. The NQF standing committee 

that assessed the measure for continuing 

endorsement assessed that the measure 

did not meet the performance gap 

subcriterion for maintaining 

endorsement.12 However, information 

regarding this measure including 

information on the measure 

specifications and testing that was 

performed to obtain NQF-endorsement 

continues to be available at: http://

www.qualityforum.org/WorkArea/ 

linkit.aspx?LinkIdentifier=id&ItemID=

69980. Even though the Transition 

Record Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure is no 

longer NQF endorsed, we believe that it 

provide valuable information for 

patients regarding care coordination, 

discharge planning, and communication 

from providers. We note that in the FY 

2017 IPPS/LTCH PPS final rule, we 

reiterated a listserv announcement 

which delayed implementation of this 

measure until the FY 2019 payment 

determination (81 FR 57238). Therefore, 

we do not have sufficient data to 

identify whether NQF’s finding of lack 

of evidence of a performance gap 

applies to the IPF setting. 

For these reasons, we believe that the 

measure is a valuable component of the 

IPFQR Program measure set; however, 

as discussed above, we are not finalizing 

removal of the Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment at Discharge 

(TOB–3 and TOB–3a, NQF #1656) 

measure as proposed because we no 

longer believe that the Transition 

Record Received by Discharged Patients 

(Patients Discharged to Home or Other 

Site of Care) (NQF #0647) measure 

reduces the benefits of the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure to a level such that 

these benefits are outweighed by the 

costs. 

Comment: Many commenters 

observed that the high societal costs of 

healthcare and mortality associated with 

smoking outweigh the burden of 

collecting this measure data. One 

commenter expressed the belief that 

providing tobacco cessation 

prescriptions and referrals at discharge 

is less expensive than CMS’s estimated 

cost of this measure. 

Response: We note that our estimate 

of the costs associated with the Tobacco 

Use Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure provided in the 

proposed rule focused primarily on the 

information collection burden or other 

reporting costs related to participating 

in the program, not the cost of providing 

care to the patient. However, we agree 

that data indicate that the societal costs 

associated with tobacco use are very 

high.13 For reasons discussed above, we 

are not finalizing removal of the 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure. This will 

allow us to continue to encourage 

providers to provide tobacco cessation 

treatment at discharge through the 

IPFQR Program measure set, thereby 

addressing this common and costly 

comorbidity. 

Comment: Another commenter 

observed that this measure is a recent 

addition to the IPFQR Program and 

therefore there has not been sufficient 

time to track progress on this measure. 

Response: We acknowledge that the 

Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure is a 

relatively recent addition to the IPFQR 

Program measure set, adopted in the FY 

2016 IPF PPS final rule beginning with 

the FY 2018 payment determination (80 

FR 46696 through 46699). As discussed 

above, we are not finalizing removal of 

the Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656) measure as 

proposed. This will allow us to continue 

evaluating the benefit of maintaining 

this measure in the IPFQR Program, as 

well as enabling us to more accurately 

establish historical measure 

performance trends. 

Final Decision: After careful 

consideration of the comments we 

received, we are not finalizing our 

proposal to remove the Tobacco Use 

Treatment Provided or Offered at 

Discharge and Tobacco Use Treatment 

at Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure from the IPFQR 

Program. This measure will continue to 

be part of the IPFQR Program measure 

set for FY 2019 payment determination 

and subsequent years. 

b. Topped-Out Measures 

In the FY 2018 IPPS/LTCH PPS final 

rule, we finalized criteria for evaluating 

whether measures within the IPFQR 

Program measure set are topped-out (82 

FR 38463). We stated that a measure is 

topped-out if there is statistically 

indistinguishable performance at the 

75th and 90th percentiles and the TCV 

is less than or equal to 0.10. Based on 

our analysis of IPFQR Program measure 

data for January 1, 2015 through 

December 31, 2015, IPF performance on 

the following three measures is toppedout. 

i. Tobacco Use Screening (TOB–1, NQF 

#1651) Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21122), we proposed to remove 


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the Tobacco Use Screening (TOB–1, 

NQF #1651) measure from the IPFQR 

Program beginning with FY 2020 

payment determination under our 

previously finalized measure removal 

Factor 1. Measure performance among 

IPFs is so high and unvarying that 

meaningful distinctions and 

improvements in performance can no 

longer be made (‘‘topped-out’’ 

measures). Based on our analysis of 

IPFQR Program measure data for 

January 1, 2015 through December 31, 

2015 (that is, FY 2017 payment 

determination data), IPF performance on 

Tobacco Use Screening (TOB–1, NQF 

#1651) measure is statistically 

indistinguishable at the 75th and 90th 

percentiles and the TCV is less than or 

equal to 0.10. This analysis is captured 

in Table 4: 

TABLE 4—TOPPED-OUT ANALYSIS RESULTS FOR TOBACCO USE SCREENING

Measure Mean Median 75th 

Percentile 

90th 

Percentile TCV Topped-out 

TOB–1 ..................................................... 93.32 98.79 100 100 0.066 Yes. 

The Tobacco Use Screening (TOB–1, 

NQF #1651) measure meets both of the 

statistical criteria for topped-out status. 

Our analysis shows that tobacco use 

screening is widely in practice and there 

is little room for improvement. We 

believe that IPFs will continue this 

practice even after the measure is 

removed because we believe that the 

high performance on this measure 

shows that this practice has become an 

embedded part of clinical workflows. 

For these reasons, we believe that the 

utility of the Tobacco Use Screening 

(TOB–1, NQF #1651) measure in the 

program is limited because measure 

performance among IPFs is so high and 

unvarying that meaningful distinctions 

and improvements in performance can 

no longer be made. Therefore, we 

proposed to remove the Tobacco Use 

Screening (TOB–1) measure from the 

IPFQR Program beginning with the FY 

2020 payment determination. 

Comment: Several commenters 

supported the proposal to remove 

Tobacco Use Screening (TOB–1, NQF 

#1651) measure. 

Response: We thank these 

commenters for their support. 

Comment: Several commenters 

recommended also removing the 

Tobacco Use Brief Intervention 

Provided or Offered and Tobacco Use 

Brief Intervention Provided (TOB–2 and 

TOB–2a, NQF #1654) measure because 

it cannot be effectively collected 

without the data from the Tobacco Use 

Screening (TOB–1, NQF #1651) 

measure; and therefore, removing the 

Tobacco Use Screening (TOB–1, NQF 

#1651) measure does not reduce 

provider burden. Another commenter 

supported the proposal to remove the 

Tobacco Use Screening (TOB–1, NQF 

#1651) measure without removing the 

Tobacco Use Brief Intervention 

Provided or Offered and Tobacco Use 

Brief Intervention Provided (TOB–2 and 

TOB–2a, NQF #1654) measure. 

Response: We proposed to remove the 

Tobacco Use Screening (TOB–1, NQF 

#1651) measure because it is toppedout, which indicates the majority of 

facilities are conducting this screening. 

The Tobacco Use Brief Intervention 

Provided or Offered and Tobacco Use 

Brief Intervention Provided (TOB–2 and 

TOB–2a, NQF #1654) measure, by 

contrast, is not topped-out. As a result, 

we believe there is continued benefit to 

collecting and publicly reporting data 

on facility performance on TOB–2 and 

TOB–2a. 

The cost reduction associated with 

removing the Tobacco Use Screening 

(TOB–1, NQF #1651) measure is 

associated with no longer requiring 

facilities to abstract and report data, 

which decreases the information 

collection burden and the 

administrative costs for CMS and 

facilities, as well as potentially reduces 

inconvenience to patients by allowing 

screening at a time when it is most 

clinically appropriate to do so, even if 

that is not within one day of admission. 

Further, we note that screening patients 

for tobacco use remains a part of clinical 

best practice because of the high 

prevalence of tobacco use in this patient 

population and the associated morbidity 

and mortality. Therefore, we believe it 

is appropriate for providers to continue 

to provide tobacco use screening which 

will ensure that the data necessary to 

collect and report the Tobacco Use Brief 

Intervention Provided or Offered and 

Tobacco Use Brief Intervention 

Provided (TOB–2 and TOB–2a, NQF 

#1654) measure will still be available. 

Comment: Many commenters opposed 

removing the Tobacco Use Screening 

(TOB–1, NQF #1651) measure because 

of the high prevalence of tobacco use in 

this patient population. These 

commenters expressed that tobacco use 

screening is an important part of 

psychiatric care and expressed concern 

that removal of the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

may cause facility performance to 

decline. Some commenters cited a 

recent CDC report that says only 

approximately 50 percent of mental 

health facilities screen for tobacco use. 

Response: We agree with commenters 

that tobacco use is high in this patient 

population, and that this has a high 

societal cost, as well as a high burden 

of morbidity and mortality for these 

patients. However, we disagree that the 

cited CDC report which indicates that 

only approximately 50 percent of 

mental health facilities screen for 

tobacco use indicates that the Tobacco 

Use Screening (TOB–1, NQF #1651) 

measure is not topped-out. This report, 

available at https://www.cdc.gov/mmwr/ 

volumes/67/wr/mm6718a3.htm?s_

cid=mm6718a3_w assesses the use of 

tobacco screening in all mental health 

facilities, whereas the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

only assesses screening at admission 

within inpatient facilities. Therefore, we 

believe that the data accurately indicate 

this measure is topped-out are accurate, 

and that the measure has served its 

purpose to encourage facilities to 

institute policies and procedures that 

ensure patients are screened for tobacco 

use. 

Comment: Some commenters stated 

the cost of healthcare associated with 

tobacco-related illness is lower than the 

cost of reporting this measure. Another 

commenter asserted that the 

administrative costs to CMS do not 

outweigh the benefits of this measure. 

Response: We note that we proposed 

to remove this measure due to its 

topped-out status. Our topped-out 

analysis shows that tobacco screening 

use is widely in practice, and we believe 

that IPFs will continue to perform these 

screenings even after the measure is 

removed because we believe that the 

high performance on this measure 

shows that this practice has become an 

embedded part of clinical workflows— 

the foundation laid by this measure will 

continue. Therefore, we believe that 

removing this measure will not affect 

the benefit to IPF patients associated 

with tobacco use screening in the IPF 

setting. 

Comment: One commenter supported 

the proposal to remove the Tobacco Use 


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Screening (TOB–1, NQF #1651) measure 

because the commenter believes that 

this measure’s restriction to screening 

within the first day of admission lessens 

the efficacy of the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

and therefore, removes some patients 

who may benefit from tobacco use 

interventions from the denominator of 

the Tobacco Use Brief Intervention 

Provided or Offered and Tobacco Use 

Brief Intervention Provided (TOB–2 and 

TOB–2a, NQF #1654) measure. One 

commenter suggested that CMS modify 

the measure to capture more accurate or 

complete tobacco use screening data. 

Response: We thank the commenter 

for support of our proposal to remove 

the Tobacco Use Screening (TOB–1, 

NQF #1651) measure from the IPFQR 

Program. We agree that there may be 

other ways to capture tobacco use 

screening data which would capture 

more accurate or complete tobacco use 

screening data, or which would 

eliminate restrictions which may affect 

the denominator of the measure. We 

welcome suggestions for new measures. 

We also encourage commenters with 

suggestions for improving measure 

specifications (available for this 

measure at http://

www.qualityforum.org/QPS/1651) reach 

out directly to the appropriate measure 

steward. 

Comment: One commenter 

recommended that CMS ensure 

screening measures, including those for 

tobacco use, are really duplicative, 

topped-out, or part of best practices 

prior to removing such measures. 

Response: Based on our analysis of 

the data as provided in section VI.F.2.b.i 

of this final rule and in the FY 2019 IPF 

PPS proposed rule (83 FR 21122), this 

measure meets our criteria for ‘‘toppedout’’ status. As stated above, based on 

our analysis of IPFQR Program measure 

data for January 1, 2015 through 

December 31, 2015 (that is, FY 2017 

payment determination data), IPF 

performance on the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

is statistically indistinguishable at the 

75th and 90th percentiles and the TCV 

is less than or equal to 0.10. 

Furthermore, for reasons described 

above, we believe that this process has 

become embedded in clinical workflows 

and supporting infrastructure and 

therefore is also part of widespread best 

practice. 

Final Decision: After careful 

consideration of the comments we 

received, we are finalizing our proposal 

as proposed to remove the Tobacco Use 

Screening (TOB–1, NQF #1651) measure 

for FY 2020 payment determination and 

subsequent years. 

ii. Hours of Physical Restraint Use 

(HBIPS–2, NQF #0640) Measure and 

Hours of Seclusion Use (HBIPS–3, NQF 

#0641) Measure 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21122 through 21123), we 

proposed to remove two measures: (1) 

The Hours of Physical Restraint Use, 

(HBIPS–2) (NQF #0640) measure; and 

(2) the Hours of Seclusion Use (HBIPS– 

3) (NQF #0641) measure from the IPFQR 

Program for the FY 2020 payment 

determination and subsequent years 

under our previously finalized measure 

removal Factor 1. Measure performance 

among IPFs is so high and unvarying 

that meaningful distinctions and 

improvements in performance can no 

longer be made (‘‘topped-out’’ 

measures). Our finalized policy states 

that a measure is topped out if there is 

statistically indistinguishable 

performance at the 75th and 90th 

percentiles and the TCV is less than or 

equal to 0.10. This policy is designed to 

compare performance at the 75th and 

90th percentile of top performing 

facilities. Because lower results are 

better for the Hours of Physical Restraint 

Use (HBIPS–2, NQF #0640) measure and 

Hours of Seclusion Use (HBIPS–3, NQF 

#0641) measure, the top performing 

facilities are those at the 25th and 10th 

percentile. Therefore, we evaluated the 

25th and 10th percentile of measure 

results, which is equivalent to the 75th 

and 90th percentile of facility 

performance. 

Due to the design of these measures— 

that lower results are better—we could 

not apply the second criterion, a TCV 

that is less than or equal to 0.10. The 

coefficient of variation is calculated by 

dividing the standard deviation by the 

mean. Because the mean is near zero for 

these measures, this leads to division by 

a number near zero, which results in a 

large coefficient of variation, and 

therefore a large TCV. This means that 

for measures with a target performance 

of zero, the second topped-out criterion 

‘‘the truncated coefficient of variation is 

less than or equal to 0.10’’ is not 

applicable. While different than our 

established topped-out criteria, we 

believe that our approach for evaluating 

data for these measures is appropriate 

because it applies the relevant criterion 

in a way that assesses performance 

among the top performing facilities. 

Our analysis for Hours of Physical 

Restraint Use (HBIPS–2, NQF #0640) 

measure is captured in Table 5: 

TABLE 5—TOPPED-OUT ANALYSIS RESULTS FOR HOURS OF PHYSICAL RESTRAINT USE

Payment determination year Mean Median 

25th Percentile 

measure results 

(75th percentile 

of facility 

performance) 

10th Percentile 

measure results 

(90th percentile 

of facility 

performance) 

TCV Topped-out 

2014 .......................................... 2.2 0.0 0.0 0.0 N/A ................... Yes. 

2015 .......................................... 1.8 0.1 0.0 0.0 N/A ................... Yes. 

2016 .......................................... 0.9 0.1 0.0 0.0 N/A ................... Yes. 

2017 .......................................... 1.4 0.1 0.0 0.0 N/A ................... Yes. 

2018 .......................................... 0.6 0.1 0.0 0.0 N/A ................... Yes. 

Our analysis for Hours of Seclusion 

Use (HBIPS–3, NQF #0641) measure is 

captured in Table 6. 


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14For example, the Hospital IQR Program also 

evaluates measures on a case-by-case basis using 

finalized measure removal factors (79 FR 50203) 

and (80 FR 49641 through 49642). 

TABLE 6—TOPPED-OUT ANALYSIS RESULTS FOR HOURS OF SECLUSION USE

Payment determination year Mean Median 

25th Percentile 

measure results 

(75th percentile 

of facility 

performance) 

10th Percentile 

measure results 

(90th percentile 

of facility 

performance) 

TCV Topped-out 

2014 .......................................... 0.8 0.0 0.0 0.0 N/A ................... Yes. 

2015 .......................................... 1.1 0.0 0.0 0.0 N/A ................... Yes. 

2016 .......................................... 0.5 0.0 0.0 0.0 N/A ................... Yes. 

2017 .......................................... 1.1 0.0 0.0 0.0 N/A ................... Yes. 

2018 .......................................... 0.4 0.0 0.0 0.0 N/A ................... Yes. 

We continue to believe that the use of 

physical restraints and seclusion as 

clinical interventions are important 

patient safety issues because of the 

severity of these interventions. 

However, we note that Hours of 

Physical Restraint Use (HBIPS–2) 

measure and Hours of Seclusion Use 

(HBIPS–3) measure have only been one 

element of the coordinated approach to 

minimizing the use of physical restraint 

and seclusion. They are not the primary 

method by which CMS monitors or 

assesses the appropriateness of their 

use. IPFs are subject to the Conditions 

of Participation (COP) concerning 

patient’s rights, which include an 

extensive section on the use of seclusion 

and restraints (42 CFR 482.13(e), (f), and 

(g)). Unannounced surveys by state 

surveyors and surveys by CMSapproved accreditation organizations 

(for example, The Joint Commission 

(TJC)) for deeming purposes are the 

primary means by which CMS enforces 

these provisions, which assess 

compliance with these requirements on 

a case-by-case basis. This focus on the 

appropriate use of these interventions 

has led to consistently high performance 

on these measures for several years. Our 

‘‘topped-out’’ analyses of the measures 

shows that meaningful distinctions and 

improvements in performance can no 

longer be made through continued use 

of these measures in the IPFQR 

Program, and thus, utility in the 

program is limited. However, we believe 

that the continued monitoring of the use 

of seclusion and restraint by surveyors 

will continue to protect against patient 

harm related to inappropriate use of 

seclusion and restraint. 

Therefore, we proposed to remove 

from the IPFQR Program beginning with 

the FY 2020 payment determination 

both measures: (1) The Hours of 

Physical Restraint Use (HBIPS–2) 

measure; and (2) the Hours of Seclusion 

use (HBIPS–3) measure. 

Comment: Several commenters 

supported the removal of the Hours of 

Physical Restraint Use (HBIPS–2, NQF 

#0640) measure and the Hours of 

Seclusion Use (HBIPS–3, NQF #0641) 

measure and agreed with CMS’s 

rationale that sufficient standards 

remain in place to ensure continued 

performance. One commenter expressed 

that these measures are difficult to 

report and therefore very burdensome. 

Response: We appreciate the support 

for removing these measures. 

Comment: One commenter requested 

that CMS provide more data on how it 

determined these measures were 

topped-out and develop and publicize a 

’’lifecycle’’ for removing topped-out 

measures similar to that in use in the 

MIPS QPP. Another commenter 

recommended that CMS develop 

measures that address these topics and 

allow comparison across and within 

facilities by accounting for risk factors 

rather than removing HBIPS–2 and 

HBIPS–3 without replacing these 

measures. Some commenters 

recommended that CMS make the data 

collected from facilities and then 

published by CMS regarding these 

interventions more meaningful by 

stratifying the data. 

Response: We thank these 

commenters for their comments. We 

refer readers to Tables 5 and 6, which 

demonstrate the calculations we used to 

identify that these measures meet the 

applicable statistical criteria for being 

topped-out—that is, there is statistically 

indistinguishable difference in 

performance between the 75th and 90th 

percentiles of facilities. We believe that 

the commenter is referring to the four 

year timeline which requires a measure 

to be identified as topped-out for three 

consecutive years prior to proposal for 

removal through notice and comment 

rulemaking in the fourth year in the 

MIPS QPP (82 FR 53637 through 53640). 

We do not have a similar ‘‘lifecycle’’ 

policy in the IPFQR Program for 

removing topped-out measures or other 

measures that we have determined are 

no longer appropriate for the IPFQR 

Program. Instead, according to IPFQR 

Program policy, which aligns with 

policies in other quality reporting 

programs,14 we evaluate each measure 

according to the measure removal and 

retention factors in order to make caseby-case decisions about the appropriate 

course of action for each measure. We 

will consider the suggestion for a 

‘‘lifecycle’’ and for the refinement of 

existing measures and/or development 

of new measures that address use of 

physical restraints and use of seclusion 

within the IPF setting as we continue 

planning for the IPFQR Program. 

We note that as described in section 

VI.D of this final rule regarding social 

risk factors, we continue to seek to 

identify ways to account for social risk 

within the IPFQR Program. We will 

consider the suggestions for stratifying 

data regarding these measures as part of 

this analysis. 

Comment: Numerous commenters 

opposed the removal of the Hours of 

Physical Restraint Use (HBIPS–2, NQF 

#0640) measure and the Hours of 

Seclusion Use (HBIPS–3, NQF #0641) 

measure because they are critical patient 

safety measures of interventions that 

can traumatize already vulnerable 

patients. Many commenters expressed 

concern that removing these measures 

would result in a deterioration in 

facility performance on these topics 

which could harm patients. Some 

commenters expressed that because 

these are patient safety measures, any 

variation in these measures provides 

meaningful data, and therefore, the 

topped-out criteria are not applicable. 

Response: We thank these 

commenters for their input. We do not 

have data indicating that removing these 

measures will cause a deterioration in 

IPF performance in use of seclusion 

and/or restraints. We initially believed 

the topped-out status of these measures 

justified their removal from the IPFQR 

Program, despite our continued belief 

that use of physical restraints and 

seclusion are critical patient safety 

issues and that it is important for CMS 


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to encourage IPFs to minimize their use 

of these interventions. After reviewing 

comments (the vast majority of which, 

from a diverse group of stakeholders, 

opposed removing these measures) we 

decided to keep these measures, despite 

their topped-out status, in order to allow 

these critical patient data to continue to 

be publicly reported for use by patients 

and their families/caregivers in selecting 

an IPF for their care and by IPFs in 

quality improvement activities. We 

further believe retaining these measures 

will better ensure IPFs continue to 

proactively track and continually strive 

for performance improvement on these 

measures. 

Comment: Other commenters 

observed that these measures remind 

providers of the importance of these 

topics and provide more ability to 

directly monitor performance than COP 

surveys. Some commenters expressed 

that COP surveys serve a different 

purpose (that is, ensure compliance 

with regulations) than quality measures, 

which serve to incentivize high 

performance and that provide consumer 

information. 

Response: While we continue to 

believe that surveys ensuring adherence 

to the COPs are an important tool in 

achieving and maintaining low rates of 

seclusion and restraint use, we agree 

with commenters that these COP 

surveys do not provide benchmark data, 

information to consumers, or a 

continual reminder of the importance of 

maintaining low rates, of the same way 

the Hours of Physical Restraint Use 

(HBIPS–2, NQF #0640) measure and the 

Hours of Seclusion Use (HBIPS–3, NQF 

#0641) measure do. 

We would like to clarify that the 

IFPQR Program, as a pay-for-reporting 

quality program, does not provide direct 

incentives (that is, payment impacts) for 

high or low performance on program 

measures. However, we agree that use of 

the Hours of Physical Restraint Use 

(HBIPS–2, NQF #0640) measure and 

Hours of Seclusion Use (HBIPS–3, NQF 

#0641) measure in the IPFQR Program 

provides indirect incentives to strive for 

high performance on these measures 

because the program publicly reports 

measure rates for all participating IPFs, 

which allows patients, their caregivers, 

and IPFs to compare performance across 

IPFs. As stated above, we have decided 

to keep these measures in the program 

despite their topped-out status. 

Comment: Some commenters 

recommend that CMS retain these 

measures because these measures allow 

hospitals to compare their performance 

to other hospitals. 

Response: As stated above, we have 

decided to keep these measures in the 

program despite their topped-out status. 

We agree with these commenters that 

public reporting of these measures 

allows hospitals to compare their 

performance to other commenters. This 

is a valuable function of these quality 

measures that is not achieved by COP 

surveys, for example. 

Final Decision: After careful 

consideration of the comments we 

received, we are not finalizing our 

proposal to remove the Hours of 

Physical Restraint Use (HBIPS–2, NQF 

#0640) measure and the Hours of 

Seclusion Use (HBIPS–3, NQF #0641) 

measure from the IPFQR Program. These 

two measures will continue to be part of 

the IPFQR Program measure set for the 

FY 2019 payment determination and 

subsequent years. 

G. Previously Finalized and Newly 

Finalized Measure Sets for the FY 2020 

Payment Determination and Subsequent 

Years 

1. Previously Finalized Measures for the 

FY 2020 Payment Determination and 

Subsequent Years 

We previously finalized 18 measures 

for the FY 2020 payment determination 

and subsequent years. These measures 

are set forth in Table 7. 

TABLE 7—PREVIOUSLY FINALIZED MEASURES FOR THE FY 2020 PAYMENT DETERMINATION AND SUBSEQUENT YEARS

NQF No. Measure ID Measure 

0640 ........................ HBIPS–2 ................................................ Hours of Physical Restraint Use. 

0641 ........................ HBIPS–3 ................................................ Hours of Seclusion Use. 

560 .......................... HBIPS–5 ................................................ Patients Discharged on Multiple Antipsychotic Medications with Appropriate 

Justification. 

576 .......................... FUH ....................................................... Follow-up After Hospitalization for Mental Illness. 

1661 ........................ SUB–1 ................................................... Alcohol Use Screening. 

1663 ........................ SUB–2 and SUB–2a .............................. Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use 

Brief Intervention. 

1664 ........................ SUB–3 and SUB–3a .............................. Alcohol and Other Drug Use Disorder Treatment Provided or Offered at Discharge and SUB–3a Alcohol and Other Drug Use Disorder Treatment at Discharge. 

1651 ........................ TOB–1 ................................................... Tobacco Use Screening. 

1654 ........................ TOB–2 and TOB–2a .............................. Tobacco Use Treatment Provided or Offered and TOB–2a Tobacco Use Treatment. 

1656 ........................ TOB–3 and TOB–3a .............................. Tobacco Use Treatment Provided or Offered at Discharge and Tobacco Use 

Treatment at Discharge. 

1659 ........................ IMM–2 .................................................... Influenza Immunization. 

0431 ........................ N/A ......................................................... Influenza Vaccination Coverage Among Healthcare Personnel. 

647 .......................... N/A ......................................................... Transition Record with Specified Elements Received by Discharged Patients 

(Discharges from an Inpatient Facility to Home/Self Care or Any Other Site of 

Care). 

648 .......................... N/A ......................................................... Timely Transmission of Transition Record (Discharges from an Inpatient Facility 

to Home/Self Care or Any Other Site of Care). 

N/A .......................... N/A ......................................................... Screening for Metabolic Disorders. 

2860 ........................ N/A ......................................................... Thirty-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an Inpatient Psychiatric Facility. 

N/A .......................... N/A ......................................................... Assessment of Patient Experience of Care. 

N/A .......................... N/A ......................................................... Use of an Electronic Health Record. 


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15The PHQ–9 is publicly available at: http://

www.phqscreeners.com/sites/g/files/g10016261/f/ 

201412/PHQ-9_English.pdf. 

2. Measure Set for the FY 2020 Payment 

Determination and Subsequent Years 

With the measure removals we are 

finalizing in section VI.F.2 of this final 

rule, five of the previously finalized 

measures described in Table 7 will be 

removed for the FY 2020 payment 

determination and subsequent years. 

The remaining thirteen measures are set 

forth in Table 8. 

TABLE 8—MEASURE SET FOR THE FY 2020 PAYMENT DETERMINATION AND SUBSEQUENT YEARS

NQF No. Measure ID Measure 

0640 ........................ HBIPS–2 ................................................ Hours of Physical Restraint Use. 

0641 ........................ HBIPS–3 ................................................ Hours of Seclusion Use. 

560 .......................... HBIPS–5 ................................................ Patients Discharged on Multiple Antipsychotic Medications with Appropriate 

Justification. 

576 .......................... FUH ....................................................... Follow-up After Hospitalization for Mental Illness. 

1663 ........................ SUB–2 and SUB–2a .............................. Alcohol Use Brief Intervention Provided or Offered and SUB–2a Alcohol Use 

Brief Intervention. 

1664 ........................ SUB–3 and SUB–3a .............................. Alcohol and Other Drug Use Disorder Treatment Provided or Offered at Discharge and SUB–3a Alcohol and Other Drug Use Disorder Treatment at Discharge. 

1654 ........................ TOB–2 and TOB–2a .............................. Tobacco Use Treatment Provided or Offered and TOB–2a Tobacco Use Treatment. 

1656 ........................ TOB–3 and TOB–3a .............................. Tobacco Use Treatment Provided or Offered at Discharge and Tobacco Use 

Treatment at Discharge. 

1659 ........................ IMM–2 .................................................... Influenza Immunization. 

647 .......................... N/A ......................................................... Transition Record with Specified Elements Received by Discharged Patients 

(Discharges from an Inpatient Facility to Home/Self Care or Any Other Site of 

Care). 

648 .......................... N/A ......................................................... Timely Transmission of Transition Record (Discharges from an Inpatient Facility 

to Home/Self Care or Any Other Site of Care). 

N/A .......................... N/A ......................................................... Screening for Metabolic Disorders. 

2860 ........................ N/A ......................................................... Thirty-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an Inpatient Psychiatric Facility. 

H. Possible IPFQR Program Measures 

and Measure Topics for Future 

Consideration 

As we have previously indicated (79 

FR 45974 through 45975), we seek to 

develop a comprehensive set of quality 

measures to be available for widespread 

use for informed decision-making and 

quality improvement in the IPF setting. 

We are considering development of 

process and outcomes measures related 

to treatment and management of 

depression. In our assessment of the 

current IPFQR measure set under the 

Meaningful Measures Initiative, 

described in section VI.E of this final 

rule, we recognized the importance of 

developing a measure that fits into the 

meaningful measure areas of Prevention, 

Treatment, and Management of Mental 

Health and Patient Experience and 

Functional Outcomes, as we believe that 

the lack of such a measure indicates a 

gap in the current IPFQR Program 

measure set. 

Specifically, we are considering: (1) 

Future development and adoption of a 

process measure that measures 

administration of a standardized 

depression assessment instrument (for 

example, the Patient Health 

Questionnaire (PHQ)–9) 15 at admission 

and discharge for patients admitted with 

depression; and (2) future development 

and adoption of a patient reported 

outcome measure, which assesses 

change in patient reported function 

based on the change in results on the 

standardized depression assessment 

instrument between admission and 

discharge. 

We ultimately wish to adopt a patient 

reported outcome measure related to 

treatment and management of 

depression; however, such a measure 

would require consistent administration 

of a standardized assessment instrument 

at admission and discharge. To ensure 

that facilities are consistently using a 

standardized assessment instrument, we 

believe that it may be necessary to first 

adopt a process measure that assesses 

facility administration of a standardized 

depression assessment, such as the 

PHQ–9, at both admission and discharge 

for adult inpatient admissions, thereby, 

encouraging facilities that do not 

currently consistently use such an 

instrument to use one. In the future, we 

could replace this measure with a 

patient reported outcome measure that 

we would develop to compare the 

patient’s responses to the standardized 

depression assessment instrument at 

admission with the patient’s results on 

the same assessment instrument at 

discharge. We believe this potential 

future patient reported outcome 

measure for patients with depression 

would address the meaningful measure 

areas of Prevention, Treatment, and 

Management of Mental Health, and 

Patient Experience and Functional 

Outcomes. 

We solicited public comments on: (1) 

Future development and adoption of a 

process measure that measures the 

number of facilities that administer a 

standardized assessment instrument; (2) 

future development and adoption of an 

outcome measure related to treatment 

and management of depression; and (3) 

any other possible new measures or new 

measure topics. 

Comment: Several commenters 

supported the concept of developing a 

measure or measures for evaluation of 

treatment of depression; these 

commenters also provided suggestions 

for development of such measures. One 

suggestion was to coordinate with other 

measure developers to ensure alignment 

of measures. Some commenters 

expressed that IPFs already use 

standardized depression instruments 

and therefore a process measure to 

assess this would be topped-out almost 

immediately. Other commenters 

observed that the measure would need 

to be well-specified to ensure that it is 

clear which patients would be included 

and when a depression screening would 

be appropriate. Another commenter 

suggested development of an attestation 


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measure to determine any outcome 

measurement techniques already in use 

by facilities. Another commenter 

requested that CMS ensure that any 

assessment instrument selected for use 

in a measure program be available to all 

IPFs without imposing additional costs 

on IPFs. Some commenters 

recommended that CMS develop a 

depression measure that allows 

providers to select between several 

standardized depression assessment 

instruments to best meet the clinical 

needs of their specific patient 

population or to tailor the instrument to 

sub-populations. Some commenters 

recommended that CMS survey IPFs to 

determine the most appropriate 

assessment instrument, without using a 

process measure to collect this data. 

One commenter observed that there are 

several issues with the depression 

patient reported outcome measure that 

CMS described. These issues are: (1) 

There may not be sufficient time 

between admission and discharge for 

improvement of symptoms, therefore 

CMS should consider a minimum 

duration in the denominator; (2) 

discharge is a stressful time for patients 

which may lead to biased data, therefore 

CMS should consider a low burden 

method to collect data 2–4 weeks postdischarge; and (3) high acuity patients 

may not be able to be screened at 

admission therefore excluding data from 

a highly applicable patient population. 

These commenters therefore 

recommended that CMS should assess 

how to include patients with psychosis, 

agitation, and cognitive difficulties in 

any future measures for the evaluation 

of treatment of depression. 

Response: We thank these 

commenters and will consider their 

recommendations if we develop a 

process measure or a patient reported 

outcome measure for depression 

management. If we do develop such 

measures, we will follow our standard 

measure development process including 

seeking input through a technical expert 

panel (TEP), seeking public comment, 

placing the measure on the Measures 

Under Consideration (MUC) list to 

receive input from the Measure 

Application Partnership (MAP), and 

proposing the measure through notice 

and comment rulemaking. 

Comment: Commenters provided 

several recommendations regarding 

measures that would be appropriate to 

develop or adopt for the IPFQR 

Program. The topics suggested by 

commenters included: 

• Sexual assault screening; 

• Family and caregiver engagement; 

• Patient experience of care; 

• Clinical improvement outcomes; 

• Access to care; 

• Inpatient assaults and violence; 

• Suicide evaluation and reduction; 

• Additional indicators to decrease 

use of seclusion and physical restraints 

(such as patient surveys and assessment 

of staff ability to de-escalate); 

• eCQM versions of the tobacco use 

screening and treatment measures; 

• eCQM versions of the alcohol use 

screening and treatment measures; 

• eCQM version of Influenza 

Immunization measure (IMM–2); 

• Patient reported outcome measures 

that address specific conditions, 

comorbidities, or lengths of stay; 

• Safety planning for patients with 

suicidal ideation and/or impulsive selfdestructive tendencies; 

• Immunization focused measures 

including an immunization composite 

measure and a measure of 

Pneumococcal Vaccination for Older 

Adults; and 

• Measures that encourage facilities 

to identify community supports and 

help patients become more accountable 

for their own health. 

One commenter observed that CMS 

could expedite adoption of a 

standardized patient experience of care 

survey by collecting this data through a 

voluntary data collection prior to 

adopting such a measure in the 

program. Another commenter 

recommended that CMS not adopt 

structural measures in the future. Some 

commenters requested the CMS only 

adopt measures that have been endorsed 

by the NQF specifically for the IPF 

setting and that specifically address 

psychiatric care. One commenter also 

recommended that CMS engage in a 

collaborative measure development 

process, preferably modeled on the one 

undertaken in developing the HBIPS 

measures. 

Response: We thank these 

commenters for their recommendations 

and will consider this input as we 

develop and refine the IPFQR Program 

measure set. 

I. Public Display and Review 

Requirements 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53653 

through 53654), the FY 2014 IPPS/LTCH 

PPS final rule (78 FR 50897 through 

50898), and the FY 2017 IPPS/LTCH 

PPS final rule (81 FR 57248 through 

57249). In this final rule, we are not 

making any changes to these policies. 

However, we note that in section VI.D 

of this final rule, we discuss potential 

considerations to provide stratified data 

by patient dual eligibility status in IPF 

confidential feedback reports and 

considerations to make stratified data 

publicly available on the Hospital 

Compare website (https://

www.medicare.gov/hospitalcompare/ 

psych-measures.html) in the future. 

J. Form, Manner, and Timing of Quality 

Data Submission for the FY 2020 

Payment Determination and Subsequent 

Years 

1. Procedural Requirements for the FY 

2020 Payment Determination and 

Subsequent Years 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53654 

through 53655), the FY 2014 IPPS/LTCH 

PPS final rule (78 FR 50898 through 

50899), and the FY 2018 IPPS/LTCH 

PPS final rule (82 FR 38471 through 

38472) for our previously finalized 

procedural requirements. We did not 

propose any changes to these policies in 

the FY 2019 IPF PPS proposed rule. 

2. Data Submission Requirements for 

the FY 2020 Payment Determination 

and Subsequent Years 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53655 

through 53657), the FY 2014 IPPS/LTCH 

PPS final rule (78 FR 50899 through 

50900), and the FY 2018 IPPS/LTCH 

PPS final rule (82 FR 38472 through 

38473) for our previously finalized data 

submission requirements. We did not 

propose any changes to the data 

submission requirements in the FY 2019 

IPF PPS proposed rule. 

3. Reporting Requirements for the FY 

2020 Payment Determination and 

Subsequent Years 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53656 

through 53657), the FY 2014 IPPS/LTCH 

PPS final rule (78 FR 50900 through 

50901), and the FY 2015 IPF PPS final 

rule (79 FR 45976 through 45977) for 

our previously finalized reporting 

requirements. In this final rule, we are 

not making any changes to these 

policies; however, we requested public 

comment on our consideration to 

potentially require patient-level 

measure data in the future. This is 

discussed in more detail below. 

In the FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53655 through 53656), we 

finalized that for the FY 2014 payment 

determination and subsequent years, 

IPFs must submit aggregated numerator 

and denominator data for all age groups 

for all measures on an annual basis, and 

that the data input forms on the 

QualityNet website for such submission 

will require aggregate data for each 

separate quarter. In the FY 2016 IPF PPS 

final rule (80 FR 46715 through 46717), 

we finalized that for the FY 2017 


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16https://manual.jointcommission.org/releases/ 

TJC2017B2/. 

payment determination and subsequent 

years, facilities would only be required 

to report data for chart-abstracted 

measures on an aggregate basis by year, 

rather than by quarter. In addition, we 

finalized that facilities would no longer 

be required to report by age group. 

Although we are not making any 

changes to these requirements in this 

final rule, we recognize that reporting 

aggregate measure data increases the 

possibility of human error, such as 

making typographical errors while 

entering data, which cannot be detected 

by CMS or by data submission systems. 

Unlike patient-level data reporting, 

aggregate measure data reporting does 

not allow for data accuracy validation 

(77 FR 53655 through 53656). Therefore, 

the ability to detect error is lower for 

aggregate measure data reporting than 

for patient-level data reporting. For this 

reason, we are considering requiring 

patient-level data reporting (that is, data 

regarding each patient included in a 

measure and whether the patient was 

included in each the numerator and 

denominator of the measure) of IPFQR 

Program measure data in the future. We 

note that in the FY 2013 IPPS/LTCH 

PPS final rule, we previously indicated 

that we would consider requiring 

patient-level data in the future and that 

we would use notice and comment 

rulemaking to establish any 

requirements (77 FR 53656). 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21125) we solicited public 

comments on the consideration for 

requiring patient-level measure data in 

the future. 

Comment: Several commenters 

expressed support for patient-level data 

collection because it provides greater 

confidence in the data’s validity and 

reliability. Some commenters suggested 

that, as CMS explores patient-level data 

reporting, CMS should use a system that 

has already been tested and used for IPF 

data reporting to avoid creating 

additional burden. Another commenter 

recommended that CMS collaborate 

with IPFs to ensure that the system used 

to report patient-level data is not 

burdensome. 

Response: We thank these 

commenters for their support and 

recommendations. We will consider 

these suggestions as we explore patientlevel data reporting for the IPFQR 

Program. 

4. Quality Measure Sampling 

Requirements 

In the FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53657 through 53658), we 

finalized that participating IPFs must 

meet specific population, sample size, 

and minimum reporting case threshold 

requirements for individual measures as 

specified in TJC’s Specifications 

Manual 16 for the FY 2014 payment 

determination and subsequent years. 

The Specifications Manual is updated at 

least twice a year (and may be updated 

more often as necessary), and IPFs must 

follow the requirements in the most 

recent manual. We finalized that the 

target population for the measures 

includes all patients, not solely 

Medicare beneficiaries, to improve 

quality of care. We believe it is 

important to require IPFs to submit 

measures on all patients because quality 

improvement is of industry-wide 

importance and should not be focused 

exclusively on a certain subset of 

patients. We noted that the 

Specifications Manual gives IPFs the 

option of sampling their data quarterly 

or monthly. We also finalized our policy 

that IPFs that have no data to report for 

a given measure must enter zero for the 

population and sample counts. For 

example, an IPF that has no hours of 

physical restraint use to report for a 

given quarter is still required to submit 

a zero for its quarterly aggregate 

population for the Hours of Physical 

Restraint Use (HBIPS–2, NQF #0640) 

measure in order to meet the reporting 

requirement. We note that at the time 

we finalized this policy, the only 

measures in the IPFQR Program were 

HBIPS measures (77 FR 53652). 

In the FY 2014 IPPS/LTCH PPS final 

rule (78 FR 50901 through 50902), we 

stated that for the existing HBIPS 

measures, we continue to apply our 

finalized policies for population, 

sampling, and minimum case threshold 

as discussed above. However, in that 

rule, we finalized a new policy for new 

measures. For new measures finalized 

for the FY 2016 payment determination 

and subsequent years, we finalized that 

IPFs must follow sampling and 

population requirements as specified by 

the appropriate measure steward (78 FR 

50901 through 50902). 

In that rule, we also made clear that 

the Follow-Up After Hospitalization for 

Mental Illness (FUH, NQF #0576) 

measure is not eligible for sampling 

because CMS calculates the measure 

using administrative claims data, and 

sampling is not applicable to claimsbased measures. We finalized that IPFs 

must follow the population 

requirements outlined at: http://

www.ncqa.org/portals/0/Follow-Up

%20After%20Hospitalization%20for

%20Mental%20Illness.pdf. 

In the FY 2014 IPPS/LTCH PPS final 

rule, some commenters noted that 

different sampling requirements in the 

measures could increase burden on 

facilities because these differences will 

require IPFs to have varying policies 

and procedures in place for each 

measure (78 FR 50901). Therefore, in 

the FY 2016 IPF PPS final rule (80 FR 

46717 through 46719), in order to 

provide facilities greater flexibility, we 

expanded our sampling policy to allow 

sampling either through: (1) Previously 

finalized requirements for individual 

measures as discussed above; or (2) 

through the use of a uniform sampling 

methodology beginning with the FY 

2018 payment determination. We 

finalized a uniform sampling 

methodology that could be applied to 

both measures that allow sampling and 

for certain other measures (specifically 

measures not previously included in 

TJC’s Specifications Manuals, such as 

Screening for Metabolic Disorders, 

Patients Discharged on Multiple 

Antipsychotic Medications with 

Appropriate Justification, HBIPS–5). 

Specifically, we finalized use of The 

Joint Commission/CMS Global Initial 

Patient Population sampling 

methodology found at: https://

www.qualitynet.org/dcs/ 

BlobServer?blobkey=id&blobnocache=

true&blobwhere=1228890321190

&blobheader=multipart%2Foctetstream&blobheadername1=ContentDisposition&blobheadervalue1=

attachment%3Bfilename%3D2+9_

Global_v4_4.pdf&blobcol=urldata&

blobtable=MungoBlobs. This uniform 

sampling methodology allows IPFs to 

utilize one sampling methodology and 

apply it to all IPFQR Program measures 

for which sampling is allowed. The 

Joint Commission/CMS Global Initial 

Patient Population sampling 

methodology, as developed, ensures that 

enough data are represented in the 

sample to determine accurate measure 

rates (80 FR 46718). 

Therefore currently, IPFs can choose 

from two options to sample quality 

measures: (1) Sampling and population 

requirements as specified by the 

appropriate measure steward; or (2) a 

uniform sampling methodology (that is, 

The Joint Commission/CMS Global 

Initial Patient Population methodology). 

These population and sampling options 

currently apply to the following 

measures in the IPFQR Program 

measure set: 

• Patients Discharged on Multiple 

Antipsychotic Medications with 

Appropriate Justification (HBIPS–5, 

NQF #0560). 

• Alcohol Use Screening (SUB–1, 

NQF #1661) (removed in this final rule). 

• Alcohol Use Screening and Brief 

Intervention Provided or Offered and 


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Alcohol Use Brief Intervention (SUB–2 

and SUB–2a, NQF #1663). 

• Alcohol & Other Drug Use Disorder 

Treatment Provided or Offered at 

Discharge and Alcohol & Other Drug 

Use Disorder Treatment at Discharge 

(SUB–3 and SUB–3a, NQF #1664). 

• Tobacco Use Screening (TOB–1, 

NQF #1651) (removed in this final rule). 

• Tobacco Use Treatment Provided or 

Offered and Tobacco Use Treatment 

Provided (TOB–2 and TOB–2a, NQF 

#1654). 

• Tobacco Use Treatment Provided or 

Offered at Discharge and Tobacco Use 

Treatment at Discharge (TOB–3 and 

TOB–3a, NQF #1656). 

• Influenza Immunization (IMM–2, 

NQF #1659). 

• Transition Record with Specified 

Elements Received by Discharged 

Patients (Discharges from an Inpatient 

Facility to Home/Self Care or Any Other 

Site of Care) (NQF #0647). 

• Timely Transmission of Transition 

Record (Discharges from an Inpatient 

Facility to Home/Self Care or Any Other 

Site of Care) (NQF #0648). 

• Screening for Metabolic Disorders. 

We did not propose any changes to 

our quality measure sampling policies 

in the FY 2019 IPF PPS proposed rule. 

5. Non-Measure Data Collection 

In the FY 2015 IPF PPS final rule (79 

FR 45973), we finalized that IPFs must 

submit aggregate population counts for 

Medicare and non-Medicare discharges 

by age group, diagnostic group, and 

quarter for the FY 2017 payment 

determination and subsequent years. We 

also finalized that IPFs must report the 

sample size counts (that is, number of 

patients included in the sample) for 

measures for which sampling is 

performed. Because these data (that is, 

(1) the aggregate population counts for 

Medicare and non-Medicare discharges 

by age group, diagnostic group, and 

quarter, as well as (2) sample size count 

for sampled measures) relate to the IPF’s 

entire patient population, rather than 

the IPF’s performance on specific 

measures, we refer to this data 

collectively as ‘‘non-measure data.’’ 

When adopting this requirement we 

expressed our belief that it is vital for 

IPFs to accurately determine and submit 

this non-measure data to CMS in order 

for CMS to assess IPFs’ data reporting 

completeness for their total population, 

both Medicare and non-Medicare (79 FR 

45973). We also stated that in addition 

to helping to better assess the quality 

and completeness of measure data, we 

expected that this information would 

improve our ability to assess the 

relevance and impact of potential future 

measures. 

In the FY 2016 IPF PPS final rule (80 

FR 46717), we finalized a change to the 

frequency with which we collect this 

non-measure data, such that beginning 

with the FY 2017 payment 

determination and subsequent years, we 

require non-measure data to be 

submitted as an aggregate, yearly count 

rather than by quarter. Therefore, there 

are currently five components to the 

non-measure data that facilities are 

required to submit on an annual basis: 

(1) Total annual discharges; (2) annual 

discharges stratified by age; (3) annual 

discharges stratified by diagnostic 

category; (4) annual discharges stratified 

by Medicare versus non-Medicare payer; 

(5) the sample size counts for measures 

for which sampling is performed. 

However, the requirement to submit 

the sample size counts has created 

confusion for some facilities (for 

example, for facilities that used more 

than one sampling methodology such as 

applying the global sample to some 

measures and measure specific 

sampling procedures to others). In an 

effort to reduce confusion and 

information collection burden, and in 

line with our Meaningful Measures and 

Patients over Paperwork Initiatives, we 

proposed to no longer require facilities 

to report the sample size counts for 

measures for which sampling is 

performed (that is, item (5) listed above) 

beginning with the FY 2020 payment 

determination and subsequent years. 

Our data indicate that most facilities 

avail themselves of the global sampling 

option (as discussed in section VI.J.4 of 

this final rule). We believe that for most 

facilities which use sampling, the size of 

the global sample can be compiled by 

other means, since information on the 

global sample size can still be inferred 

from the denominator values that are 

already reported as part of measure data 

submission. This is because for 

measures in which the denominator 

represents the entire patient population 

(except for any denominator exclusions) 

the denominator is a good 

approximation for the global sample 

size count. Any denominator exclusions 

represent only a small proportion of the 

patient population and would not 

significantly affect the global sample 

size approximation. Since the global 

sample applies to all measures for 

which sampling is performed, the global 

sample size is consistent across all 

measures for which sampling is 

performed, and therefore, can be 

inferred from the denominator of any 

measure for which the denominator 

represents the entire patient population 

(such as the Transition Record with 

Specified Elements Received by 

Discharged Patients (Discharges from an 

Inpatient Facility to Home/Self Care or 

Any Other Site of Care) (NQF #0647) 

measure. We note that this proposal 

does not in any way change or affect our 

requirements concerning quality 

measure sampling outlined in section 

VI.J.4 of this final rule and would only 

change the information that IPFs report 

to CMS on the size of samples used. 

Therefore, we proposed to no longer 

require facilities to report sample size 

counts for measures for which sampling 

is performed as discussed above for the 

FY 2020 payment determination and 

subsequent years. 

Comment: One commenter supported 

our proposal to no longer require 

facilities to report sample size counts. 

Response: We thank this commenter 

for the support. 

Final Decision: After careful 

consideration of the comment we 

received, we are finalizing our proposal 

to no longer require facilities to report 

sample size counts for measures for 

which sampling is performed as 

discussed above for the FY 2020 

payment determination and subsequent 

years. 

6. Data Accuracy and Completeness 

Acknowledgement (DACA) 

Requirements 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53658) for 

our previously finalized DACA 

requirements. We did not propose any 

changes to the DACA requirements in 

the FY 2019 IPF PPS proposed rule. 

K. Reconsideration and Appeals 

Procedures 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53658 

through 53659) and the FY 2014 IPPS/ 

LTCH PPS final rule (78 FR 50903) for 

our previously finalized reconsideration 

and appeals procedures. We did not 

propose any changes to these 

procedures in the FY 2019 IPF PPS 

proposed rule. 

L. Extraordinary Circumstances 

Exceptions (ECE) Policy 

We refer readers to the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53659 

through 53660), the FY 2014 IPPS/LTCH 

PPS final rule (78 FR 50903), the FY 

2015 IPF PPS final rule (79 FR 45978), 

and the FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38473 through 38474) for 

our previously finalized ECE policies. 

We did not propose any changes to 

these policies in the FY 2019 IPF PPS 

proposed rule. 


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17http://www.bls.gov/oes/current/oes_nat.htm. 

18http://www.bls.gov/bls/infohome.htm. 

19https://www.bls.gov/oes/current/ 

oes292071.htm. 

20http://www.whitehouse.gov/omb/circulars_

a076_a76_incl_tech_correction. 

VII. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995 (PRA), we are required to 

publish a 30-day notice in the Federal 

Register and solicit public comment 

before a collection of information 

requirement is submitted to the Office of 

Management and Budget (OMB) for 

review and approval. 

To fairly evaluate whether an 

information collection should be 

approved by OMB, PRA section 

3506(c)(2)(A) 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 burden 

estimates. 

• The quality, utility, and clarity of 

the information to be collected. 

• Our effort to minimize the 

information collection burden on the 

affected public, including the use of 

automated collection techniques. 

We solicited public comment on each 

of the PRA section 3506(c)(2)(A)- 

required issues for the following 

information collection requirements 

(ICRs). 

We did not receive such comments. 

We note that we are updating the 

information collection estimates based 

on the policies we are finalizing in this 

final rule, specifically (1) the adoption 

of a new measure removal factor, (2) the 

removal of five (5) measures, and (3) the 

removal of the requirement that 

facilities report sample size counts. This 

differs from the policies proposed in the 

FY 2019 IPF PPS proposed rule, in 

which we proposed to remove eight (8) 

measures. 

A. Collection of Information 

Requirements for the IPFQR Program 

1. Wage Estimates 

Consistent with the FY 2017 IPPS/ 

LTCH PPS final rule (81 FR 57265 

through 57266) and our FY 2016 IPF 

PPS final rule (80 FR 46720), to derive 

average costs, we used data from the 

United States Bureau of Labor Statistics 

(BLS) National Occupational 

Employment and Wage Estimates for all 

salary estimates (in this case the May 

2016 report) and applied this wage rate 

to the year in which the savings would 

accrue (in this case FY 2018).17 The BLS 

is ‘‘the principal Federal agency 

responsible for measuring labor market 

activity, working conditions, and price 

changes in the economy.’’ 18 Acting as 

an independent agency, the BLS 

provides objective information for not 

only the government, but also for the 

public. The BLS describes Medical 

Records and Health Information 

Technicians as those responsible for 

organizing and managing health 

information data. We believe it is 

reasonable to assume that these 

individuals would be tasked with 

abstracting clinical data for these 

measures. The most recent data from the 

BLS reflects a median hourly wage of 

$18.29 for a Medical Records and Health 

Information Technician.19 We note that 

we have already incorporated this 

updated wage data into other quality 

reporting programs, for example the 

Hospital Inpatient Quality Reporting 

(IQR) Program uses this wage to 

calculate its burden estimates (82 FR 

38501). Therefore, in the FY 2019 IPF 

PPS proposed rule (83 FR 21127), we 

updated our wage estimate to reflect this 

hourly wage for the IPFQR Program. 

Table 9 presents the median hourly 

wage, the cost of fringe benefits and 

overhead (calculated at 100 percent of 

salary), and the adjusted hourly wage. 

TABLE 9—NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES

Occupation title Occupation 

code 

Median 

hourly wage 

($/hr) 

Fringe benefits 

and overhead 

($/hr) 

Adjusted 

hourly wage 

($/hr) 

Medical Records and Health Information Technician ...................................... 29–2071 18.29 18.29 36.58 

Under OMB Circular A–76, in 

calculating direct labor, agencies should 

not only include salaries and wages, but 

also ‘‘other entitlements’’ such as fringe 

benefits.20 As indicated in Table 9 and 

consistent with our past approach, we 

have chosen to calculate the cost of 

overhead at 100 percent of the median 

hourly wage (81 FR 57266). This is 

necessarily a rough adjustment, both 

because fringe benefits and overhead 

costs vary significantly from employer 

to employer, and methods of estimating 

these costs vary widely from study to 

study. We believe that doubling the 

hourly wage to estimate total cost is a 

reasonably accurate estimation method. 

2. ICRs Regarding the IPFQR Program 

For a detailed discussion of the 

information collection burden for the 

program requirements that we have 

previously adopted, we refer readers to 

the burden approved under OMB 

control number 0938–1171 (CMS– 

10432) and the following rules: 

• The FY 2013 IPPS/LTCH PPS final 

rule (77 FR 53673); 

• The FY 2014 IPPS/LTCH PPS final 

rule (78 FR 50964); 

• The FY 2015 IPF PPS final rule (79 

FR 45978 through 45980); 

• The FY 2016 IPF PPS final rule (80 

FR 46720 through 46721); 

• The FY 2017 IPPS/LTCH PPS final 

rule (81 FR 57265 through 57266); and 

• The FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38507 through 38508). 

The requirements and burden 

estimates were submitted to OMB for 

approval under control number 0938– 

1171 (CMS–10432). We solicited public 

comments for the information collection 

in its entirety in the FY 2019 IPF PPS 

proposed rule (83 FR 21128). That is, we 

solicited comments both for the 

proposed rule’s changes and for the 

requirements and burden that are 

currently approved under the 0938– 

1171 control number. Both can be found 

in the 0938–1171 PRA package’s 

Supporting Statement. 

In this final rule, we discuss only the 

changes in burden resulting from the 

provisions we are finalizing in this final 

rule. We will attribute the costs 

associated with the provisions in this 

final rule to the FY in which these costs 

begin; for the purposes of all of the 

provisions included here, that year is 

FY 2018. All of these provisions we 

discuss in section VI. of this final rule 

apply to data collected in CY 2018 and 

reported in FY 2019 for the FY 2020 

payment determination. 

a. Adoption of a New Measure Removal 

Factor 

In section VI.F.1. of this final rule, we 

are adopting a new measure removal 

factor, Factor 8, ‘‘the costs associated 

with a measure outweigh the benefit of 

its continued use in the program.’’ As 

discussed in the FY 2018 IPPS/LTCH 


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21 In the FY 2017 IPPS/LTCH PPS final rule we 

estimated 1,684 IPFs and are adjusting that estimate 

by +50 to account for more recent data. 

22 In the FY 2017 IPPS/LTCH PPS final rule we 

estimated 848 discharges per year and are adjusting 

that estimate by +365 to account for more recent 

data. 

PPS final rule (82 FR 38507 through 

38508), the adoption of measure 

removal factors does not affect the data 

submission requirements for IPFs. These 

factors are intended to improve 

transparency of our measure review and 

evaluation process, and have no effect 

on the data collection or submission 

requirements for IPFs. Therefore, we do 

not believe that there is any change of 

burden associated with the new 

measure removal factor. 

We solicited PRA-related comments 

in the FY 2019 IPF PPS proposed rule 

(83 FR 21128). We did not receive any 

comments on this estimate. 

Consequently we are finalizing our 

PRA-related estimates as proposed. 

b. Removal of Five Measures 

In the FY 2019 IPF PPS proposed rule 

(83 FR 21128 through 21129) we 

estimated the information collection 

burden for our proposals to remove 

eight measures. However, in section 

VI.F.2. of this final rule, we are only 

finalizing the removal of five measures. 

We are not finalizing our proposal to 

remove the Tobacco Use Treatment 

Provided or Offered at Discharge and 

Tobacco Use Treatment Provided at 

Discharge (TOB–3 and TOB–3a, NQF 

#1656) measure because the benefits of 

this measure are greater than we 

initially believed when we proposed to 

remove it. We are not finalizing our 

proposal to remove the Hours of 

Physical Restraint Use (HBIPS–2, NQF 

#0640) measure, and the Hours of 

Seclusion Use (HBIPS–3, NQF #0641) 

measure to allow these critical patient 

data to continue to be publicly reported 

for use by patients and their families/ 

caregivers in selecting an IPF for their 

care and by IPFs in quality 

improvement activities. Therefore here, 

we are updating our estimates for 

change in information collection burden 

to reflect our final policies. 

In section VI.F.2 of this final rule, we 

are finalizing our proposals to remove 

the following five measures for FY 2020 

payment determination and subsequent 

years: 

• Influenza Vaccination Coverage 

Among Healthcare Personnel (NQF 

#0431); 

• SUB–1—Alcohol Use Screening 

(NQF #1661); 

• Assessment of Patient Experience of 

Care; 

• Use of an Electronic Health Record; 

and 

• TOB–1—Tobacco Use Screening 

(NQF #1651). 

For the FY 2020 payment 

determination, CY 2018 data would be 

reported during the summer of CY 2019. 

Therefore, for the FY 2020 payment 

determination, we are correlating the 

burden reduction to the FY 2018 burden 

calculation. We believe that 

approximately 1,734 21 IPFs will 

participate in the IPFQR Program for 

requirements occurring in FY 2018 and 

subsequent years. Based on data from 

CY 2017, we believe that each IPF will 

submit measure data based on 

approximately 1,213 22 discharges per 

year. 

i. Chart-Abstracted Measures 

We previously estimated that the 

reporting burden for chart-abstracted 

measures is 15 minutes (0.25 hours) per 

measure per case (81 FR 57265). We 

based this estimate on data collected by 

other quality reporting programs (81 FR 

57265) and this data continues to 

indicate that the time required to chartabstract data is approximately 15 

minutes (0.25 hours) per measure per 

case; therefore, we continue to use that 

time estimate to calculate the burden 

pertaining to this final rule. Of the 

measures we are removing from the 

program, the following two are chartabstracted: 

• Alcohol Use Screening (SUB–1, 

NQF #1661) measure; and. 

• Tobacco Use Screening (TOB–1, 

NQF #1651) measure. 

Both measures fall under our 

previously finalized ‘‘global sample’’ (80 

FR 46717 through 46718) under which, 

we allow facilities to apply the same 

sampling methodology to all measures 

eligible for sampling. In the FY 2016 IPF 

PPS final rule (80 FR 46718), we 

finalized that facilities with between 

609 and 3,056 cases and choose to 

participate in the global sample would 

be required to report data for 609 cases. 

Because facilities are only required to 

submit data on a number specified by 

the global sampling methodology, rather 

than abstracting data for all patients or 

applying measure specific sampling 

methodologies, we believe that the 

number of cases under the global 

sample is a good approximation of 

facility burden associated with these 

measures. Therefore, for the average IPF 

discharge rate of 1,213 discharges, the 

global sample requires abstraction of 

609 records. We estimate that removing 

these two measures will result in a 

decrease of 304.5 hours per IPF (2 

measures × 609 cases/measure × 0.25 

hours/case) or 528,003 hours across all 

IPFs (304.5 hours/IPF × 1,734 IPFs). The 

decrease in costs is approximately 

$11,138 per IPF ($36.58/hour × 304.5 

hours) or $19,314,350 across all IPFs 

($11,138/IPF × 1,734 IPFs). 

We solicited PRA-related comments 

in the FY 2019 IPF PPS proposed rule 

(83 FR 21128). We did not receive any 

comments. Consequently, we are 

finalizing our amended estimates based 

on finalized policies (that is, based on 

removal of two chart-abstracted 

measures as opposed to five chart 

abstracted measures). 

ii. National Healthcare Safety Network 

(NHSN) Measure 

We previously estimated that the 

reporting burden for the one IPFQR 

measure for which data is collected via 

the NHSN, the Influenza Vaccination 

Coverage Among Healthcare Personnel 

(NQF #0431) measure, is 15 minutes 

(0.25 hours) per measure per case and 

that the average IPF will report on 40 

cases per year (79 FR 45979). Therefore, 

we estimate that removing this measure 

will result in a decrease in burden of 10 

hours per IPF (40 cases × 0.25 hours/ 

case) or 17,340 hours across all IPFs (40 

cases × 0.25 hours/case × 1,734 IPFs). 

The decrease in costs is approximately 

$366 per IPF (10 hours × $36.58/hour) 

or $634,297 across all IPFs ($366/IPF × 

1,734 IPFs). 

We also anticipate cost reduction 

unrelated to the information collection 

burden associated with these proposals, 

and refer readers to section IX.C.5.b of 

this final rule for a discussion of these 

costs. 

We solicited PRA-related comments 

in the FY 2019 IPF PPS proposed rule 

(83 FR 21128 through 21129). We did 

not receive any comments. 

Consequently, we are finalizing these 

estimates as proposed. 

iii. Attestation Measures 

We previously estimated that the 

Assessment of Patient Experience of 

Care measure and the Use of an 

Electronic Health Record (EHR) measure 

have no measurable information 

collection burden because both of these 

measures require only attestation (79 FR 

45979). Therefore, we do not anticipate 

a reduction in IPF information 

collection burden associated with the 

removal of these measures. However, we 

anticipate cost reduction unrelated to 

the information collection burden 

associated with these provisions, and 

refer readers to section IX.C.5.b of this 

final rule for a discussion. 

We solicited PRA-related comment in 

the FY 2019 IPF PPS proposed rule (83 

FR 21129). We did not receive any 

comments. Consequently, we are 

finalizing these estimates as proposed. 


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iv. Burden Related to the Removal of 

Five Measures 

In summary, the information 

collection burden reduction associated 

with the removal of these five measures 

would be 545,343 hours at a cost of 

$19,948,647 (total) or $11,504 (per IPF) 

as summarized in Table 10. 

TABLE 10—TOTAL INFORMATION COLLECTION BURDEN REDUCTION ASSOCIATED WITH THE REMOVAL OF FIVE MEASURES

Measure(s) 

Hourly burden 

reduction per 

IPF 

Total hourly 

burden 

reduction 

Cost burden 

reduction per 

IPF 

Total cost 

burden 

reduction 

• (1) Alcohol Use Screening (NQF #1661) ..................................................... 304.5 528,003 $11,138 $19,314,350 

• (2) Tobacco Use Screening (NQF #1651). ........................ ........................ ........................ ........................

• (3) Influenza Vaccination Coverage Among Healthcare Personnel (NQF 

#0431) .......................................................................................................... 10 17,340 366 634,297 

• (4) Remove Assessment of Patient Experience of Care ............................. 0 0 0 0 

• (5) Use of an Electronic Health Record (EHR). ........................ ........................ ........................ ........................

Total Burden Reduction ............................................................................ 314.5 545,343 11,504 19,948,647 

We did not receive comments on this 

burden reduction estimate. 

c. Removal of Sample Size Count 

Requirement 

In section VI.J.4 of this final rule, we 

are removing the requirement to report 

the sample size count for measures for 

which sampling is performed beginning 

with the FY 2020 payment 

determination and subsequent years 

(that is, data collected during CY 2018 

and reported during summer of CY 

2019). Previously, we estimated that the 

total burden of reporting non-measure 

data to be 2.5 hours per IPF (79 FR 

45979 through 45980). As discussed in 

section VI.J.5 of this final rule, the nonmeasure data encompasses five 

reporting requirements: (1) Total annual 

discharges; (2) annual discharges 

stratified by age; (3) annual discharges 

stratified by diagnostic category; (4) 

annual discharges stratified by Medicare 

versus non-Medicare payer; and (5) the 

sample size count for measures for 

which sampling is performed. 

We estimate that, because the sample 

size count is one-fifth of the nonmeasure data collection, removing this 

requirement will reduce the nonmeasure collection burden by one-fifth, 

(that is, 20 percent) or 0.5 hours per 

facility (0.20 × 2.5 hours). This results 

in a reduction of information collection 

burden of 867 hours across all IPFs (0.5 

hours per IPF × 1,734 IPFs). The 

decrease in costs is approximately $18 

per IPF (0.5 hours × $36.58/hour) or 

$31,715 across all IPFs ($18 per IPF × 

1,734 IPFs). 

We solicited public comments on the 

information collection burden reduction 

estimate of 867 hours and $31,714.86 

across all IPFs related to our proposal to 

no longer require facilities to report 

sample size counts beginning with the 

FY 2020 payment determination. 

We did not receive comments on this 

estimate. 

d. Summary of Annual Information 

Collection Burden Estimates for 

Requirements 

Our policies to adopt a new measure 

removal factor, to remove five measures 

from the IPFQR Program, and to no 

longer require IPFs to report the size of 

their sample lead to a burden reduction 

of approximately 546,210 hours and 

$19,980,362, as described in Table 11. 


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VIII. Regulatory Impact Analysis 

A. Statement of Need 

This final rule finalizes updates to the 

prospective payment rates for Medicare 

inpatient hospital services provided by 

IPFs for discharges occurring during FY 

2019 (October 1, 2018 through 

September 30, 2019). We are finalizing 

our proposal to apply the 2012-based 

IPF market basket increase of 2.9 

percent, less the productivity 

adjustment of 0.8 percentage point as 

required by 1886(s)(2)(A)(i) of the Act, 

and further reduced by 0.75 percentage 

point as required by sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the 

Act, for a final total FY 2019 payment 

rate update of 1.35 percent. In this final 

rule, we are updating the IPF laborrelated share and updating the IPF wage 

index for FY 2019. We are also 

finalizing our proposals to provide 

minor technical corrections to three IPF 

regulations, and making updates to the 

IPFQR Program. 

B. Overall Impact 

We have examined the impacts of this 

final rule as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993), 

Executive Order 13563 on Improving 

Regulation and Regulatory Review 

(January 18, 2011), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, section 202 of 

the Unfunded Mandates Reform Act of 

1995 (March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), the Congressional 

Review Act (5 U.S.C. 804(2)) and 

Executive Order 13771 on Reducing 

Regulation and Controlling Regulatory 

Costs (January 30, 2017). 

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). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule: (1) Having an annual 

effect on the economy of $100 million 

or more in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 


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referred to as ‘‘economically 

significant’’); (2) creating a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year). This 

final rule is not economically significant 

under Executive Order 12866. 

We estimate that the total impact of 

these changes for FY 2019 payments 

compared to FY 2018 payments will be 

a net increase of approximately $50 

million. This reflects a $60 million 

increase from the update to the payment 

rates (+$130 million from the second 

quarter 2018 IGI forecast of the 2012- 

based IPF market basket of 2.9 percent, 

¥$40 million for the productivity 

adjustment of 0.8 percentage point, and 

¥$30 million for the ‘‘other 

adjustment’’ of 0.75 percentage point), 

as well as a $10 million decrease as a 

result of the update to the outlier 

threshold amount. Outlier payments are 

estimated to decrease from 2.24 percent 

in FY 2018 to 2.00 percent of total 

estimated IPF payments in FY 2019. We 

also estimate a total decrease in burden 

of 315 hours per IPF or 546,210 hours 

across all IPFs (315 hours per IPF × 

1,734 IPFs), resulting in a total decrease 

in financial burden of $11,522.70 per 

IPF (315 hours × $36.58) or $19,980,362 

across all IPFs ($11,522.70 per IPF × 

1,734 IPFs). 

C. Anticipated Effects 

In this section, we discuss the 

historical background of the IPF PPS 

and the impact of this final rule on the 

Federal Medicare budget and on IPFs. 

1. Budgetary Impact 

As discussed in the November 2004 

and RY 2007 IPF PPS final rules, we 

applied a budget neutrality factor to the 

federal per diem base rate and ECT 

payment per treatment to ensure that 

total estimated payments under the IPF 

PPS in the implementation period 

would equal the amount that would 

have been paid if the IPF PPS had not 

been implemented. The budget 

neutrality factor includes the following 

components: Outlier adjustment, stoploss adjustment, and the behavioral 

offset. As discussed in the RY 2009 IPF 

PPS notice (73 FR 25711), the stop-loss 

adjustment is no longer applicable 

under the IPF PPS. 

As discussed in section III.D.1 of this 

rule, we are using the wage index and 

labor-related share in a budget neutral 

manner by applying a wage index 

budget neutrality factor to the federal 

per diem base rate and ECT payment per 

treatment. Therefore, the budgetary 

impact to the Medicare program of this 

rule will be due to the market basket 

update for FY 2019 of 2.9 percent (see 

section III.A.2 of this final rule) less the 

productivity adjustment of 0.8 

percentage point required by section 

1886(s)(2)(A)(i) of the Act; further 

reduced by the ‘‘other adjustment’’ of 

0.75 percentage point under sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the 

Act; and the update to the outlier fixed 

dollar loss threshold amount. 

We estimate that the FY 2019 impact 

will be a net increase of $50 million in 

payments to IPF providers. This reflects 

an estimated $60 million increase from 

the update to the payment rates and a 

$10 million decrease due to the update 

to the outlier threshold amount to set 

total estimated outlier payments at 2.0 

percent of total estimated payments in 

FY 2019. This estimate does not include 

the implementation of the required 2.0 

percentage point reduction of the 

market basket increase factor for any IPF 

that fails to meet the IPF quality 

reporting requirements (as discussed in 

section VI.A. of this final rule). 

The 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 IPFs 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or having revenues of $7.5 

million to $38.5 million or less in any 

1 year, depending on industry 

classification (for details, refer to the 

SBA Small Business Size Standards 

found at http://www.sba.gov/sites/ 

default/files/files/Size_Standards_

Table.pdf). Individuals and states are 

not included in the definition of a small 

entity. 

Because we lack data on individual 

hospital receipts, we cannot determine 

the number of small proprietary IPFs or 

the proportion of IPFs’ revenue derived 

from Medicare payments. Therefore, we 

assume that all IPFs are considered 

small entities. 

The Department of Health and Human 

Services generally uses a revenue 

impact of 3 to 5 percent as a significance 

threshold under the RFA. As shown in 

Table 12, we estimate that the overall 

revenue impact of this final rule on all 

IPFs is to increase estimated Medicare 

payments by approximately 1.10 

percent. As a result, since the estimated 

impact of this final rule is a net increase 

in revenue across almost all categories 

of IPFs, the Secretary has determined 

that this final rule will have a positive 

revenue impact on a substantial number 

of small entities. 

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 

section VIII.C.1. of this final rule, the 

rates and policies set forth in this final 

rule will not have an adverse impact on 

the rural hospitals based on the data of 

the 269 rural excluded psychiatric units 

and 67 rural psychiatric hospitals in our 

database of 1,622 IPFs for which data 

were available. Therefore, the Secretary 

has determined that this final rule will 

not have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

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 2018 that 

threshold is approximately $150 

million. This final rule does not impose 

spending costs on state, local, or tribal 

governments in the aggregate, or by the 

private sector of $150 million or more. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on state and local 

governments, preempts state law, or 

otherwise has Federalism implications. 

This final rule will not have a 

substantial effect on state and local 

governments. 

2. Impact on Providers 

To show the impact on providers of 

the changes to the IPF PPS discussed in 

this final rule, we compare estimated 

payments under the IPF PPS rates and 

factorsfor FY 2019 versus those under 

FY 2018. We determined the percent 

change of estimated FY 2019 IPF PPS 

payments compared to FY 2018 IPF PPS 

payments for each category of IPFs. In 


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addition, for each category of IPFs, we 

have included the estimated percent 

change in payments resulting from the 

update to the outlier fixed dollar loss 

threshold amount; the updated wage 

index data including the updated laborrelated share; and the market basket 

update for FY 2019, as adjusted by the 

productivity adjustment according to 

section 1886(s)(2)(A)(i) of the Act, and 

the ‘‘other adjustment’’ according to 

sections 1886(s)(2)(A)(ii) and 

1886(s)(3)(E) of the Act. 

To illustrate the impacts of the FY 

2019 changes in this final rule, our 

analysis begins with a FY 2018 baseline 

simulation model based on FY 2017 IPF 

payments inflated to the midpoint of FY 

2018 using IHS Global Inc.’s most recent 

forecast of the market basket update (see 

section III.A.2 of this final rule); the 

estimated outlier payments in FY 2018; 

the FY 2017 pre-floor, pre-reclassified 

hospital wage index; the FY 2018 laborrelated share; and the FY 2018 

percentage amount of the rural 

adjustment. During the simulation, total 

outlier payments are maintained at 2 

percent of total estimated IPF PPS 

payments. 

Each of the following changes is 

added incrementally to this baseline 

model in order for us to isolate the 

effects of each change: 

• The final update to the outlier fixed 

dollar loss threshold amount. 

• The FY 2018 pre-floor, prereclassified hospital wage index and the 

final FY 2019 labor-related share. 

• The final market basket update for 

FY 2019 of 2.9 percent less the 

productivity adjustment of 0.8 

percentage point in accordance with 

section 1886(s)(2)(A)(i) of the Act and 

further reduced by the ‘‘other 

adjustment’’ of 0.75 percentage point in 

accordance with sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the 

Act, for a final payment rate update of 

1.35 percent. 

Our final column comparison in Table 

12 illustrates the percent change in 

payments from FY 2018 (that is, October 

1, 2017, to September 30, 2018) to FY 

2019 (that is, October 1, 2018, to 

September 30, 2019) including all the 

payment policy changes in this final 

rule. 


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Table 12: IPF Impacts for FY 2019 

[Percent Change in columns 3 through 6] 

CBSA 

Wage 

Number Index& Total 

of Labor Payment Percent 

Facility by Type Facilities Outlier Share Update1 Change2 

(1) (2) (3) (4) (5) (6) 

All Facilities 1,622 -0.24 0.00 1.35 1.10 

Total Urban 1,286 -0.24 0.04 1.35 1.14 

Total Rural 336 -0.25 -0.27 1.35 0.83 

Urban unit 815 -0.36 0.04 1.35 1.03 

Urban hospital 471 -0.09 0.03 1.35 1.29 

Rural unit 269 -0.31 -0.23 1.35 0.80 

Rural hospital 67 -0.07 -0.35 1.35 0.92 

By Type of Ownership: 

Freestanding IPFs 

Urban Psychiatric 

Hospitals 

Government 126 -0.25 0.13 1.35 1.23 

Non-Profit 94 -0.09 0.08 1.35 1.34 

For-Profit 251 -0.06 0.00 1.35 1.29 

Rural Psychiatric 

Hospitals 

Government 32 -0.15 0.51 1.35 1.71 

Non-Profit 16 -0.20 -0.21 1.35 0.94 

For-Profit 19 -0.01 -0.81 1.35 0.53 

IPF Units 

Urban 

Government 116 -0.63 -0.01 1.35 0.70 

Non-Profit 529 -0.35 0.04 1.35 1.04 

For-Profit 170 -0.22 0.08 1.35 1.21 

Rural 

Government 71 -0.38 -0.12 1.35 0.84 

Non-Profit 141 -0.30 -0.29 1.35 0.76 
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For-Profit 57 -0.28 -0.24 1.35 0.83 

By Teaching Status: 

Non-teaching 1,429 -0.20 0.02 1.35 1.17 

Less than 1 0% interns and 

residents to beds 109 -0.38 -0.12 1.35 0.84 

1 0% to 3 0% interns and 

residents to beds 62 -0.59 -0.14 1.35 0.61 

More than 3 0% interns 

and residents to beds 22 -0.51 -0.24 1.35 0.59 

By Region: 

New England 105 -0.26 -0.05 1.35 1.04 

Mid-Atlantic 234 -0.33 0.05 1.35 1.06 

South Atlantic 246 -0.13 -0.05 1.35 1.16 

East North Central 271 -0.20 -0.19 1.35 0.96 

East South Central 162 -0.24 -0.07 1.35 1.04 

West North Central 125 -0.34 0.38 1.35 1.39 

West South Central 243 -0.23 0.10 1.35 1.22 

Mountain 106 -0.15 0.07 1.35 1.27 

Pacific 130 -0.34 -0.01 1.35 1.00 

By Bed Size: 

Psychiatric Hospitals 

Beds: 0-24 87 -0.13 -0.31 1.35 0.90 

Beds: 25-49 76 -0.05 0.03 1.35 1.33 

Beds: 50-75 88 -0.14 -0.37 1.35 0.84 

Beds: 76+ 287 -0.08 0.12 1.35 1.40 

Psychiatric Units 

Beds: 0-24 624 -0.37 0.01 1.35 0.99 

Beds: 25-49 287 -0.33 0.16 1.35 1.17 

Beds: 50-75 114 -0.32 -0.12 1.35 0.90 

Beds: 76+ 59 -0.39 -0.20 1.35 0.75 

1This column reflects the payment update impact of the fmallPF market basket update for FY 2019 of2.9 

percent, a 0.8 percentage point reduction for the productivity adjustment as required by section 

1886(s)(2)(A)(i) of the Act, and a 0.75 percentage point reduction in accordance with sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) ofthe Act. 2Percent changes in estimated payments from FY 2018 to FY 2019 include all ofthe changes presented in 

this fmal rule. Note, the products of these impacts may be different from the percentage changes shown 

here due to rounding effects. 
Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 38617 

3. Impact Results 

Table 12 displays the results of our 

analysis. The table groups IPFs into the 

categories listed here based on 

characteristics provided in the Provider 

of Services (POS) file, the IPF provider 

specific file, and cost report data from 

the Healthcare Cost Report Information 

System: 

• Facility Type. 

• Location. 

• Teaching Status Adjustment. 

• Census Region. 

• Size. 

The top row of the table shows the 

overall impact on the 1,622 IPFs 

included in this analysis. In column 3, 

we present the effects of the update to 

the outlier fixed dollar loss threshold 

amount. We estimate that IPF outlier 

payments as a percentage of total IPF 

payments are 2.24 percent in FY 2018. 

Thus, we are adjusting the outlier 

threshold amount in this final rule to set 

total estimated outlier payments equal 

to 2.0 percent of total payments in FY 

2019. The estimated change in total IPF 

payments for FY 2019, therefore, 

includes an approximate 0.24 percent 

decrease in payments because the 

outlier portion of total payments is 

expected to decrease from 

approximately 2.24 percent to 2.0 

percent. 

The overall impact of this outlier 

adjustment update (as shown in column 

3 of Table 12), across all hospital 

groups, is to decrease total estimated 

payments to IPFs by 0.24 percent. The 

largest decrease in payments is 

estimated to be 0.63 percent for urban 

government IPF units. 

In column 4, we present the effects of 

the budget-neutral update to the IPF 

wage index and the Labor-Related Share 

(LRS). This represents the effect of using 

the most recent wage data available and 

taking into account the updated OMB 

delineations. That is, the impact 

represented in this column reflects the 

update from the FY 2018 IPF wage 

index to the final FY 2019 IPF wage 

index, which includes updating the LRS 

from 75.0 percent in FY 2018 to 74.8 

percent in FY 2019. We note that there 

is no projected change in aggregate 

payments to IPFs, as indicated in the 

first row of column 4, however, there 

will be distributional effects among 

different categories of IPFs. For 

example, we estimate the largest 

increase in payments to be 0.51 percent 

for rural government psychiatric 

hospitals, and the largest decrease in 

payments to be 0.81 percent for forprofit rural psychiatric hospitals. 


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38618 Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 

In column 5, we present the estimated 

effects of the final update to the IPF PPS 

payment rates of 1.35 percent, which are 

based on the final FY 2019 IPF market 

basket update of 2.9 percent, less the 

productivity adjustment of 0.8 

percentage point in accordance with 

section 1886(s)(2)(A)(i) of the Act, and 

further reduced by 0.75 percentage 

point in accordance with sections 

1886(s)(2)(A)(ii) and 1886(s)(3)(E) of the 

Act. 

Finally, column 6 compares our 

estimates of the total final changes 

reflected in this final rule for FY 2019 

to the estimates for FY 2018 (without 

these changes). The average estimated 

increase for all IPFs is approximately 

1.10 percent. This estimated net 

increase includes the effects of the final 

2.9 percent market basket update 

reduced by the productivity adjustment 

of 0.8 percentage point, as required by 

section 1886(s)(2)(A)(i) of the Act and 

further reduced by the ‘‘other 

adjustment’’ of 0.75 percentage point, as 

required by sections 1886(s)(2)(A)(ii) 

and 1886(s)(3)(E) of the Act. It also 

includes the overall estimated 0.24 

percent decrease in estimated IPF 

outlier payments as a percent of total 

payments from the final update to the 

outlier fixed dollar loss threshold 

amount. 

IPF payments are estimated to 

increase by 1.14 percent in urban areas 

and 0.83 percent in rural areas. Overall, 

IPFs are estimated to experience a net 

increase in payments as a result of the 

updates in this final rule. The largest 

payment increase is estimated at 1.71 

percent for rural government psychiatric 

hospitals. 

4. Effect on Beneficiaries 

Under the IPF PPS, IPFs will receive 

payment based on the average resources 

consumed by patients for each day. We 

do not expect changes in the quality of 

care or access to services for Medicare 

beneficiaries under the FY 2019 IPF 

PPS, but we continue to expect that 

paying prospectively for IPF services 

will enhance the efficiency of the 

Medicare program. 

5. Effects of Updates to the IPFQR 

Program 

As discussed in section VI. of this 

final rule and in accordance with 

section 1886(s)(4)(A)(i) of the Act, we 

will implement a 2 percentage point 

reduction in the FY 2020 annual update 

to the standard Federal rate for IPFs that 

have failed to comply with the IPFQR 

Program requirements for FY 2020. In 

section VI of this final rule, we discuss 

how the 2 percentage point reduction 

will be applied. For FY 2018, of the 

1,758 IPFs eligible for the IPFQR 

Program, 59 IPFs (3.4 percent) did not 

receive the full market basket update for 

failure to meet program requirements; of 

those 59, 24 chose not to participate in 

the program. We anticipate that even 

fewer IPFs would receive the reduction 

for FY 2020 as IPFs become more 

familiar with the requirements. Thus, 

we estimate that the policy to apply a 

2 percentage point reduction to the 

annual update for the IPFs that have 

failed to comply with IPFQR Program 

requirements will have a negligible 

impact on overall IPF payments for FY 

2020. We believe that there will be 

additional effects of the policies related 

to cost reduction for providers and data 

simplification for beneficiaries. We 

discuss these effects in more detail in 

the following sections. 

a. Effects Related to Information 

Collection Burden 

Based on the proposals finalized in 

this final rule, we estimate the total 

decrease in information collection 

burden to be 315 hours per IPF or 

546,210 hours across all IPFs, resulting 

in a total decrease in financial burden 

of $11,522.70 per IPF or $19,980,362 

across all IPFs. As discussed in section 

VII of this final rule, we will attribute 

the savings associated with the 

proposals to the year in which these 

savings begin; for the purposes of all the 

proposals in this proposed rule, that 

year is FY 2018. Further information on 

these estimates can be found in section 

VII. of this final rule. 

b. Effects Other Than Burden Related to 

Information Collection 

As stated in section VI.F.1.a and VII.A 

of this final rule, we anticipate that in 

addition to the reduction in information 

collection burden discussed above, 

there will be unrelated cost reduction 

associated with some of our proposals. 

One example of this cost reduction is 

that IPFs will no longer have to register 

with and maintain accounts with 

NHSN. Because of the administrative 

complexity of NHSN participation, we 

believe this will be a substantial 

reduction in costs. Furthermore, we 

believe that costs related to reviewing 

and tracking measure information in 

feedback reports will be reduced. 

Finally, we believe that by no longer 

maintaining data submission 

mechanisms, public reporting 

infrastructure, and program materials 

for measures which are no longer 

providing significant benefit, we will be 

able to better utilize CMS’s resources to 

support quality reporting and quality 

improvement initiatives among IPFs. 

We intend to closely monitor the 

effects of this quality reporting program 

on IPFs and help facilitate successful 

reporting outcomes through ongoing 

stakeholder education, national 

trainings, and a technical help desk. 

6. Regulatory Review Costs 

If regulations impose administrative 

costs on private entities, such as the 

time needed to read and interpret this 

final rule, we should estimate the cost 

associated with regulatory review. Due 

to the uncertainty involved with 

accurately quantifying the number of 

entities that will review the final rule, 

we assume that the total number of 

unique commenters on the most recent 

IPF proposed rule from FY 2019 will be 

the number of reviewers of this final 

rule. We acknowledge that this 

assumption may understate or overstate 

the costs of reviewing this final rule. It 

is possible that not all commenters 

reviewed the FY 2019 IPF proposed rule 

in detail, and it is also possible that 

some reviewers chose not to comment 

on that proposed rule. For these reasons 

we thought that the number of past 

commenters would be a fair estimate of 

the number of reviewers of this final 

rule. We did not receive any comments 

on this assumption. 

We also recognize that different types 

of entities are in many cases affected by 

mutually exclusive sections of this final 

rule; therefore, for the purposes of our 

estimate, we assume that each reviewer 

reads approximately 50 percent of the 

final rule. We did not receive any 

comments on this assumption. 

Using the May, 2017 mean (average) 

wage information from the BLS for 

medical and health service managers 

(Code 11–9111), we estimate that the 

cost of reviewing this final rule is 

$107.38 per hour, including overhead 

and fringe benefits (https://www.bls.gov/ 

oes/current/oes119111.htm). Assuming 

an average reading speed of 250 words 

per minute, we estimate that it would 

take approximately 1.39 hours for the 

staff to review half of this final rule. For 

each IPF that reviews the final rule, the 

estimated cost is (1.39 hours × $107.38) 

or $149.26. Therefore, we estimate that 

the total cost of reviewing this final rule 

is $13,135 ($149.26 × 88 reviewers). 

D. Alternatives Considered 

The statute does not specify an update 

strategy for the IPF PPS and is broadly 

written to give the Secretary discretion 

in establishing an update methodology. 

Therefore, we are updating the IPF PPS 

using the methodology published in the 

November 2004 IPF PPS final rule; 

applying the final FY 2019 2012-based 

IPF PPS market basket update of 2.9 


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Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 38619 

percent, reduced by the statutorily 

required multifactor productivity 

adjustment of 0.8 percentage point and 

the ‘‘other adjustment’’ of 0.75 

percentage point, along with the final 

wage index budget neutrality 

adjustment to update the payment rates; 

finalizing a FY 2019 IPF wage index 

which is fully based upon the latest 

OMB CBSA designations; and 

implementing changes to the IPFQR 

Program. 

E. Accounting Statement 

As required by OMB Circular A–4 

(available at www.whitehouse.gov/sites/ 

whitehouse.gov/files/omb/circulars/A4/ 

a-4.pdf), in Table 13, we have prepared 

an accounting statement showing the 

classification of the expenditures 

associated with the final updates to the 

IPF wage index and payment rates in 

this final rule. Table 13 provides our 

best estimate of the decrease in provider 

costs and the increase in Medicare 

payments under the IPF PPS as a result 

of the changes presented in this final 

rule and based on the data for 1,622 

IPFs in our database. 

TABLE 13—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES

Category Costs 

Change in Estimated Impacts from FY 2018 IPF PPS to FY 2019 IPF PPS 

Annualized Monetized Costs .................................................................... ¥$20 million. 

Category Transfers 

Annualized Monetized Transfers .............................................................. $50 million. 

From Whom to Whom? ............................................................................ Federal Government to IPF Medicare Providers. 

F. Regulatory Reform Analysis Under 

Executive Order 13771 

Executive Order 13771, titled 

Reducing Regulation and Controlling 

Regulatory Costs, was issued on January 

30, 2017. This final rule is considered 

an Executive Order 13771 deregulatory 

action. We estimate that this final rule 

generates $17.5 million in annualized 

cost savings, discounted at 7 percent 

relative to year 2016, over a perpetual 

time horizon. This $17.5 million is 

equal to the estimated $20.0 million in 

annual cost savings which would begin 

in 2018, discounted to 2016 for 

Executive Order 13771 accounting 

purposes using a 7 percent discount 

rate. Details on the estimated costs of 

this final rule can be found in the 

preceding analysis, as shown in Table 

11. 

G. Conclusion 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

IX. Request for Information on 

Promoting Interoperability and 

Electronic Healthcare Information 

Exchange Through Possible Revisions 

to the CMS Patient Health and Safety 

Requirements for Hospitals and Other 

Medicare- and Medicaid-Participating 

Providers and Suppliers 

In the FY 2019 IPF PPS proposed rule, 

we included a Request for Information 

(RFI) related to promoting 

interoperability and electronic 

healthcare information exchange (83 FR 

21135 through 21138). We received 12 

comments on this RFI, and appreciate 

the input provided by commenters. 

List of Subjects in 42 CFR Part 412 

Administrative practice and 

procedure, Health facilities, Medicare, 

Puerto Rico, and Reporting and 

recordkeeping requirements. 

For reasons stated in the preamble of 

this document, the Centers for Medicare 

& Medicaid Services amends 42 CFR 

chapter IV as set forth below: 

PART 412—PROSPECTIVE PAYMENT 

SYSTEMS FOR INPATIENT HOSPITAL 

SERVICES 

■ 1. The authority citation for part 412 

is revised to read as follows: 

Authority: 42 U.S.C. 1302 and 1395hh. 

■ 2. Section 412.27 is amended by 

revising paragraph (a) to read as follows: 

§ 412.27 Excluded psychiatric units: 

Additional requirements. 

* * * * * 

(a) Admit only patients whose 

admission to the unit is required for 

active treatment, of an intensity that can 

be provided appropriately only in an 

inpatient hospital setting, of a 

psychiatric principal diagnosis that is 

listed in the International Classification 

of Diseases, Tenth Revision, Clinical 

Modification. 

* * * * * 

■ 3. Section 412.402 is amended by 

revising the definition of ‘‘Principal 

diagnosis’’ to read as follows: 

§ 412.402 Definitions. 

* * * * * 

Principal diagnosis means the 

condition established after study to be 

chiefly responsible for occasioning the 

admission of the patient to the inpatient 

psychiatric facility. Principal diagnosis 

is also referred to as the primary 

diagnosis. 

* * * * * 

■ 4. Section 412.428 is amended by 

revising the section heading, the 

introductory text, and paragraphs (a) 

and (b) to read as follows: 

§ 412.428 Publication of changes to the 

inpatient psychiatric facility prospective 

payment system. 

CMS will issue annually in the 

Federal Register information pertaining 

to changes to the inpatient psychiatric 

facility prospective payment system. 

This information includes: 

(a) A description of the methodology 

and data used to calculate the federal 

per diem base payment amount for the 

subsequent fiscal year. 

(b)(1) For discharges occurring on or 

after January 1, 2005 but before July 1, 

2006, the update, described in 

§ 412.424(a)(2)(iii), for the federal 

portion of the inpatient psychiatric 

facility’s payments is based on the 1997- 

based excluded hospital with capital 

market basket under the applicable 

percentage increase methodology 

described in section 1886(b)(3)(B)(ii) of 

the Act for each year. 

(2)(i) For discharges occurring on or 

after July 1, 2006 but before October 1, 

2015, the update for the federal portion 

of the inpatient psychiatric facility’s 

payment is based on the rehabilitation, 

psychiatric, and long-term care market 

basket. 

(ii) For discharges occurring on or 

after October 1, 2015, the update of the 

inpatient psychiatric facility’s payment 

is based on the inpatient psychiatric 

facility market basket. 

(3) For discharges occurring on or 

after January 1, 2005 but before October 


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38620 Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / Rules and Regulations 

1, 2005, the update, described in 

§ 412.424(a)(2)(iii), for the reasonable 

cost portion of the inpatient psychiatric 

facility’s payment is based on the 1997- 

based excluded hospital with capital 

market basket under the updated 

methodology described in section 

1886(b)(3)(B)(ii) of the Act for each year. 

(4) For discharges occurring on or 

after October 1, 2005 but before July 1, 

2008, the update for the reasonable cost 

portion of the inpatient psychiatric 

facility’s payment is based on the 2002- 

based excluded hospital market basket. 

* * * * * 

Dated: July 26, 2018. 

Seema Verma, 

Administrator,Centers for Medicare & 

Medicaid Services. 

Dated: July 27, 2018. 

Alex M. Azar II, 

Secretary,Department of Health and Human 

Services. 

[FR Doc. 2018–16518 Filed 7–31–18; 4:15 pm] 

BILLING CODE 4120–01–P 


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