`[Federal Register Volume 83, Number 151 (Monday, August 6, 2018)]
[Rules and Regulations]
[Pages 38576-38620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16518]



[[Page 38575]]

Vol. 83

Monday,

No. 151

August 6, 2018

Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; FY 2019 Inpatient Psychiatric Facilities Prospective 
Payment System and Quality Reporting Updates for Fiscal Year Beginning 
October 1, 2018 (FY 2019); Rules

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

[[Page 38576]]


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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.

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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 
[email protected] 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-Fee-for-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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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

[[Page 38577]]

    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/Long-Term 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-Service-Payment/InpatientPsychFacilPPS/index.html?redirect=/InpatientPsychFacilPPS/.

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-of-
living adjustment for IPFs located in Alaska and Hawaii, and an 
adjustment

[[Page 38578]]

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 labor-related 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: Labor-Related; 
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 budget-
neutrality 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 budget-neutrality 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

[[Page 38580]]

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 
budget-neutrality 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 Sec.  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-Service-Payment/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-and-Guidance/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 patient-
level 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

[[Page 38581]]

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-Conversion-Project.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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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-Service-Payment/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 
non-psychiatric 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-Service-Payment/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

[[Page 38582]]

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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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-Service-Payment/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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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 Sec.  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 IPF-specific 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 
pre-floor, 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)

[[Page 38583]]

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, pre-reclassified 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, pre-reclassified hospital wage index 
was finalized before the issuance of this Bulletin, the FY 2015 IPF 
wage index, which was based on the FY 2014 pre-floor, 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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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 post-acute 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, pre-
reclassified 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 population-density 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

[[Page 38584]]

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 non-application 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/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Reports/Research-Reports-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.
---------------------------------------------------------------------------

    \1\ Medicare 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.
---------------------------------------------------------------------------

    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 Sec.  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 budget-neutrality 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 budget-neutral 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 Sec.  412.424(d)(1)(iii) to establish a facility-level 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

[[Page 38585]]

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
------------------------------------------------------------------------
                                              FY 2015     FY 2018 and FY
                  Area                     through 2017        2019
------------------------------------------------------------------------
Alaska:
    City of Anchorage and 80-kilometer              1.23            1.25
     (50-mile) radius by road...........
    City of Fairbanks and 80-kilometer              1.23            1.25
     (50-mile) radius by road...........
    City of Juneau and 80-kilometer (50-            1.23            1.25
     mile) radius by road...............

[[Page 38586]]

 
    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-Fee-for-Service-Payment/InpatientPsychFacilPPS/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 full-
service 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 Sec.  
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 Sec.  
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 Sec.  
412.424(d)(3)(i) to provide a per-case 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 Sec.  
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

[[Page 38587]]

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-to-charge 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 Sec.  412.27(a), Sec.  412.402 and Sec.  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 (Sec.  412.27)

    At Sec.  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-CM-based MS-DRGs to ICD-
10-CM/PCS-based MS-DRGs. However, we neglected to make a conforming 
change to Sec.  412.27(a). Therefore, we proposed to correct Sec.  
412.27(a) to state that eligible patients must have a psychiatric 
principal diagnosis that is listed in ICD-10-CM.
    The revision to Sec.  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 Sec.  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

[[Page 38588]]

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 Sec.  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 Sec.  
412.27(a) with no change.

Definitions Sec.  412.402

    At Sec.  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 (Sec.  412.428)

    In the FY 2016 IPF PPS regulations, we proposed and finalized an 
IPF-specific 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 Long-Term 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 Sec.  412.428 
to reflect the adoption of the IPF-specific market basket. Therefore, 
we are updating Sec.  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/Regulations-and-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

[[Page 38589]]

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 all-inclusive 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.
---------------------------------------------------------------------------

    \2\ The 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).
---------------------------------------------------------------------------

    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 (Sec.  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 Sec.  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)

[[Page 38590]]

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.
---------------------------------------------------------------------------

    \3\ See, for example United States Department of Health and 
Human Services. ``Healthy People 2020: Disparities. 2014.'' 
Available at: http://www.healthypeople.gov/2020/about/foundation-health-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 
Value-Based Purchasing Programs.'' December 2016. Available at: 
https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \5\ Available at: http://www.qualityforum.org/SES_Trial_Period.aspx.
    \6\ Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86357.
---------------------------------------------------------------------------

    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,

[[Page 38591]]

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.
---------------------------------------------------------------------------

    \7\ Meaningful Measures web page: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    \8\ Remarks 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.
---------------------------------------------------------------------------

    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       Healthcare-Associated
 Caused in the Delivery of Care.          Infections.
                                         Preventable Healthcare Harm.
Strengthen Person and Family Engagement  Care is Personalized and
 as Partners in Their Care.               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      Medication Management.
 Coordination of Care.
                                         Admissions and Readmissions to
                                          Hospitals.
                                         Transfer of Health Information
                                          and Interoperability.
Promote Effective Prevention and         Preventive Care.
 Treatment of Chronic Disease.
                                         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    Equity of Care.
 Practices of Healthy Living.
                                         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;

[[Page 38592]]

     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 cost-benefit 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 high-
cost, 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

[[Page 38593]]

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

[[Page 38594]]

#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\
---------------------------------------------------------------------------

    \9\ https://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).
---------------------------------------------------------------------------

    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 chart-abstracted 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\
---------------------------------------------------------------------------

    \10\ CDC, Influenza Vaccination Information for Health Care 
Workers, Accessed at https://www.cdc.gov/flu/healthcareworkers.htm.
---------------------------------------------------------------------------

    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

[[Page 38595]]

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 Hospital-Acquired 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.
---------------------------------------------------------------------------

    \11\ CDC, Menu of State Hospital Influenza Vaccination Laws, 
Accessed at https://www.cdc.gov/phlp/docs/menu-shfluvacclaws.pdf.
---------------------------------------------------------------------------

    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 chart-abstract 
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 
chart-abstracted 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
----------------------------------------------------------------------------------------------------------------
                                                                                                     Truncated
                                                                       75th            90th       coefficient of
              Year                     Mean           Median        percentile      percentile       variation
                                                                                                       (TCV)
----------------------------------------------------------------------------------------------------------------
2014 (FY 2016 Payment                       74.8            86.8            97.0             100             .32
 Determination).................
2015 (FY 2017 Payment                       88.5            97.5            99.6             100             .13
 Determination).................
2016 (FY 2018 Payment                       92.4            98.4            99.7             100             .07
 Determination).................
----------------------------------------------------------------------------------------------------------------

    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 chart-abstracted 
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

[[Page 38596]]

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, 
topped-out, 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 ``topped-out'' 
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

[[Page 38597]]

     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 ``outcome-based where possible.'' As shown above, the Use of an EHR 
measure is a structural measure that tracks facility-level 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 non-certified 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

[[Page 38598]]

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 chart-
abstract 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 post-discharge 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

[[Page 38599]]

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 
FDA-approved 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 
post-discharge 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 
over-represented in the population of tobacco users and that these 
patients die earlier and more frequently from tobacco-related 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

[[Page 38600]]

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.
---------------------------------------------------------------------------

    \12\ NQF, Care Coordination Measures Technical Report, Pages 24-
26, Available at: http://www.qualityforum.org/Projects/c-d/Care_Coordination_2016-2017/Final_Report.aspx.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \13\ Centers 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.
---------------------------------------------------------------------------

    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 
topped-out.
i. Tobacco Use Screening (TOB-1, NQF #1651) Measure
    In the FY 2019 IPF PPS proposed rule (83 FR 21122), we proposed to 
remove

[[Page 38601]]

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 topped-out, 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

[[Page 38602]]

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 ``topped-out'' 
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      25th Percentile  10th Percentile
                                                                      measure results  measure results
                                                                           (75th            (90th
     Payment determination year            Mean           Median       percentile of    percentile of             TCV                   Topped-out
                                                                          facility         facility
                                                                        performance)     performance)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.

[[Page 38603]]



                                             Table 6--Topped-Out Analysis Results for Hours of Seclusion Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      25th Percentile  10th Percentile
                                                                      measure results  measure results
                                                                           (75th            (90th
     Payment determination year            Mean           Median       percentile of    percentile of             TCV                   Topped-out
                                                                          facility         facility
                                                                        performance)     performance)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 CMS-approved 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 case-by-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.
---------------------------------------------------------------------------

    \14\ For 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).
---------------------------------------------------------------------------

    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

[[Page 38604]]

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.
------------------------------------------------------------------------


[[Page 38605]]

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.
---------------------------------------------------------------------------

    \15\ The PHQ-9 is publicly available at: http://www.phqscreeners.com/sites/g/files/g10016261/f/201412/PHQ-9_English.pdf.
---------------------------------------------------------------------------

    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

[[Page 38606]]

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 post-discharge; 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 self-destructive 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

[[Page 38607]]

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 
patient-level 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).
---------------------------------------------------------------------------

    \16\ https://manual.jointcommission.org/releases/TJC2017B2/.
---------------------------------------------------------------------------

    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 claims-
based 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%2Foctet-stream&blobheadername1=Content-Disposition&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

[[Page 38608]]

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.

[[Page 38609]]

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.
---------------------------------------------------------------------------

    \17\ http://www.bls.gov/oes/current/oes_nat.htm.
    \18\ http://www.bls.gov/bls/infohome.htm.
    \19\ https://www.bls.gov/oes/current/oes292071.htm.
---------------------------------------------------------------------------

    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
----------------------------------------------------------------------------------------------------------------
                                                                                Fringe benefits      Adjusted
              Occupation title                Occupation code   Median  hourly    and overhead   hourly wage  ($/
                                                                 wage  ($/hr)        ($/hr)            hr)
----------------------------------------------------------------------------------------------------------------
Medical Records and Health Information               29-2071            18.29            18.29            36.58
 Technician.................................
----------------------------------------------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \20\ http://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction.
---------------------------------------------------------------------------

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

[[Page 38610]]

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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 chart-abstract 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 chart-abstracted:
     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 x 609 cases/measure x 0.25 hours/case) 
or 528,003 hours across all IPFs (304.5 hours/IPF x 1,734 IPFs). The 
decrease in costs is approximately $11,138 per IPF ($36.58/hour x 304.5 
hours) or $19,314,350 across all IPFs ($11,138/IPF x 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 x 0.25 hours/case) or 17,340 hours across all 
IPFs (40 cases x 0.25 hours/case x 1,734 IPFs). The decrease in costs 
is approximately $366 per IPF (10 hours x $36.58/hour) or $634,297 
across all IPFs ($366/IPF x 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.

[[Page 38611]]

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
----------------------------------------------------------------------------------------------------------------
                                                   Hourly burden   Total hourly     Cost burden     Total cost
                   Measure(s)                      reduction per      burden       reduction per      burden
                                                        IPF          reduction          IPF          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                   10          17,340             366         634,297
 Among Healthcare Personnel (NQF #0431).........
 (4) Remove Assessment of Patient                      0               0               0               0
 Experience of Care.............................
 (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 non-measure 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 
non-measure data collection, removing this requirement will reduce the 
non-measure collection burden by one-fifth, (that is, 20 percent) or 
0.5 hours per facility (0.20 x 2.5 hours). This results in a reduction 
of information collection burden of 867 hours across all IPFs (0.5 
hours per IPF x 1,734 IPFs). The decrease in costs is approximately $18 
per IPF (0.5 hours x $36.58/hour) or $31,715 across all IPFs ($18 per 
IPF x 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.

[[Page 38612]]

[GRAPHIC] [TIFF OMITTED] TR06AU18.000

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 labor-related 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

[[Page 38613]]

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 x 1,734 IPFs), resulting in a total decrease in financial 
burden of $11,522.70 per IPF (315 hours x $36.58) or $19,980,362 across 
all IPFs ($11,522.70 per IPF x 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, stop-loss 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

[[Page 38614]]

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 labor-related 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 labor-related 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, pre-reclassified 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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[GRAPHIC] [TIFF OMITTED] TR06AU18.002


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[GRAPHIC] [TIFF OMITTED] TR06AU18.003

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 for-profit rural psychiatric hospitals.

[[Page 38618]]

    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 x $107.38) or 
$149.26. Therefore, we estimate that the total cost of reviewing this 
final rule is $13,135 ($149.26 x 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

[[Page 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

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

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


0
2. Section 412.27 is amended by revising paragraph (a) to read as 
follows:


Sec.  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.
* * * * *

0
3. Section 412.402 is amended by revising the definition of ``Principal 
diagnosis'' to read as follows:


Sec.  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.
* * * * *

0
4. Section 412.428 is amended by revising the section heading, the 
introductory text, and paragraphs (a) and (b) to read as follows:


Sec.  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 Sec.  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

[[Page 38620]]

1, 2005, the update, described in Sec.  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`