Payment Rule
Summary
Proposed Rule
Medicare Outpatient
Prospective Payment System
Calendar Year 2012
Table of Contents
Overview .......................................................................................................................................................................................... 1
Updates to the Conversion Factor ..................................................................................................................................................... 1
Wage Index and Labor-Related Share ................................................................................................................................................ 2
Additions to the Outpatient Rate and Payments ................................................................................................................................ 3
Outlier Payments .................................................................................................................................................................................... 3
Continuation of the Rural SCH Adjustment ............................................................................................................................................ 3
Expiration of Hold-Harmless TOPs Payments to Small Rural and SCHs ................................................................................................... 4
Establishment of a Cancer Hospital Payment Adjustment...................................................................................................................... 4
Updates to the Hospital OQR Program .............................................................................................................................................. 5
CY 2013 Payment Determinations .......................................................................................................................................................... 5
CY 2014 Payment Determinations .......................................................................................................................................................... 6
CY 2015 Payment Determinations .......................................................................................................................................................... 6
Possible New Measures and topics for Future Years .............................................................................................................................. 7
Updates to the OQR Program Participation Policies ............................................................................................................................... 7
Updates to the APC Groups and Weights, Composite APCs, and the Packaging Threshold .................................................................. 7
Revisions to the APC Groups .................................................................................................................................................................. 7
Recalibration of the APC Weights ........................................................................................................................................................... 8
Updates to the Composite APCs ............................................................................................................................................................. 8
Packaging Threshold for Drugs, Biologicals, and Radiopharmaceuticals ................................................................................................ 9
Other Outpatient Payment and Policy Issues ..................................................................................................................................... 9
Physician Supervision Requirements for Outpatient Services ................................................................................................................ 9
Payment for PHP Services..................................................................................................................................................................... 10
Updates to the Inpatient List ................................................................................................................................................................ 11
Visit Codes for Clinic Visits, ED Visits, and Critical Care Services........................................................................................................... 12
Payment Reduction for No Cost/Full Credit and Partial Credit Devices ................................................................................................ 13
Beneficiary Copayments ....................................................................................................................................................................... 13
Updates to the Hospital VBP Program for FFY 2014 ......................................................................................................................... 13
Retainment of the FFY 2013 VBP Measures and Establishment of a New Process Measure ................................................................ 14
Minimum Number of Cases and Measures for the Outcomes Domain ................................................................................................ 14
Baseline and Performance Periods ....................................................................................................................................................... 15
National Performance Standards ......................................................................................................................................................... 15
Scoring Methodology for the HAC Measures ....................................................................................................................................... 17
Domain Weighting ................................................................................................................................................................................ 18
Review and Correction Process ............................................................................................................................................................ 18
Proposed Change to the Quality Reporting Requirements of the EHR Incentive Program and Establishment of a New Electronic Quality
Reporting Pilot ................................................................................................................................................................................ 18
Submission of Comments ................................................................................................................................................................ 19
Overview
On July 18, 2011, the Centers for Medicare and Medicaid Services (CMS) released the calendar year (CY) 2012
proposed payment rule for the Medicare Outpatient Prospective Payment System (OPPS). The proposed rule
updates outpatient payment rates and policies and implements provisions of the Affordable Care Act (ACA) of
2010.
In addition to updating outpatient payments for CY 2012, the rule includes new policy proposals related to the
second year (federal fiscal year (FFY) 2014) implementation of the ACA’s Medicare inpatient value-based
purchasing (VBP) Program. Complete program polices for the first year program (FFY 2013 program), and
several program policies for the FFY 2014 program have already been adopted by CMS.
CMS is also using the OPPS rule to propose changes to the quality reporting requirements of the Electronic
Health Record (EHR) Incentive Program authorized by the American Recovery and Reinvestment Act (ARRA) of
2009 and implemented by CMS last year.
A copy of the proposed rule Federal Register and other resources related to the OPPS are available on the CMS
Web site at http://www.cms.gov/HospitalOutpatientPPS/.
An online version of the proposed rule Federal Register is available at
http://www.federalregister.gov/articles/2011/07/18/2011-16949/medicare-and-medicaid-programs-hospitaloutpatient-prospective-payment-ambulatory-surgical-center.
Comments on the proposed rule are due to CMS by Tuesday, August 30. Instructions for submitting comments
are available on the last page of this summary. Proposed program changes, if adopted, would be effective for
discharges on or after January 1, 2011 unless otherwise noted.
Complete details of the proposed rule are provided below. Text in italics is from the July 18 Federal Register.
Updates to the Conversion Factor
Federal Register pages 42,209-42,211
CMS’ Proposal: The proposed CY 2012 conversion factor would be updated as follows:

Plus 2.8%: CMS is proposing to update the conversion factor by a marketbasket of 2.8%.

Minus 1.2 percentage points: Offsetting the marketbasket is an ACA-mandated productivity reduction
of 1.2 percentage points.

Minus 0.1 percentage points: Offsetting the marketbasket is an ACA-mandated pre-determined
reduction of 0.1 percentage points.

Minus 0.73%: CMS is proposing to reduce the outpatient conversion factor by 0.73% to ensure the
budget neutrality of the payment system based on the proposed implementation of a payment
adjustment that would increase outpatient payments to exempt cancer hospitals (see “Establishment
of a Cancer Hospital Payment Adjustment” section below).
The following table shows the proposed conversion factor for CY 2012 compared to the rate currently in effect.
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OPPS Conversion Factor
Final
CY 2011
Proposed
CY 2012
Percent
Change
$68.876
$69.420
+0.8%
Wage Index and Labor-Related Share
Federal Register pages 42,211-42,213
Background: The labor-related portion of the conversion factor is adjusted for differences in area wage levels
using a wage index. Currently, CMS applies to the OPPS, the wage index used under the Inpatient Prospective
Payment System (IPPS) with all reclassifications, adjustments, and application of the rural floor. CMS is not
required to use the IPPS wage index with all adjustments under the OPPS, but does so as the agency believes
use the IPPS wage index has been reasonable.
CMS’ Proposal: “. . . our longstanding policy for OPPS has been to adopt the final wage index used in IPPS.
Therefore, for calculating proposed OPPS payments in CY 2012, we use the proposed FY 2012 IPPS wage
indices.”
As established by the ACA, a wage index floor of 1.0 would continue to be applied to hospitals located in a
Frontier State (Montana, Nevada, North Dakota, South Dakota, and Wyoming). In addition, Section 508 wage
index reclassifications are set to expire on September 30, 2011. CMS does not have the authority to extend
these reclassifications without legislative action. Lastly, CMS would continue to allow non-IPPS hospitals paid
under the OPPS to qualify for the out-migration adjustment if they are located in a section 505 out-migration
county.
CMS would continue to apply the wage index to a labor-related share of 60%. A complete list of the proposed
wage indexes for FFY 2012 is available on the CMS Web site at
https://www.cms.gov/AcuteInpatientPPS/IPPS2012/.
Citing concerns about inflated wage indexes in certain states as a result of hospitals converting status under the
IPPS (i.e. converting from Critical Access Hospital (CAH) to PPS or urban status to rural status), CMS is
considering modifications to the wage index used under the OPPS. CMS is considering and seeking public
comment on the following options for modification of the OPPS wage index:
“(1) Adopt the IPPS wage index for the OPPS in its entirety including the rural floor, geographic reclassifications
and all other wage index adjustments;
(2) adopt the IPPS wage index for the OPPS in its entirety except when a small number of hospitals set the rural
floor for the benefit of all other hospitals in the State;
(3) adopt the IPPS wage index for the OPPS in its entirety except apply rural floor budget neutrality within each
State instead of nationally; or
(4) adopt another decision rule for when the rural floor should not be applied in the OPPS when we have
concerns about disproportionate impact.”
CMS is also requesting public comments on an option under consideration for both the IPPS and OPPS where
CMS would determine the applicable rural wage index floor using only data from hospitals that are
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geographically located in rural areas. Such a policy would ensure that a state’s rural floor wage index is based
on hospitals located in rural areas.
CMS did not propose moving forward with any of the options under consideration.
Additions to the Outpatient Rate and Payments
Outlier Payments
Federal Register pages 42,221-42,223
Background: Outlier payments are provided under OPPS for individual services or procedures with
extraordinarily high costs compared to the payment rates for their Ambulatory Payment Classification (APC)
group. The outlier threshold is met when the cost of a service or procedure exceeds both 1.75 times the APC
payment amount and the APC payment rate plus a fixed-dollar threshold. This dual test is intended to
eliminate outlier payments for low-cost services and provide higher outlier payments for more expensive
procedures. Currently, the projected target for aggregate outlier payments is set at 1.0% of aggregate total
OPPS payments, with a portion of that equal to 0.02% which is set aside to allocate partial hospitalization
program (PHP) outlier payments to community mental health centers (CMHCs).
CMS pays outlier payments under OPPS at 50% of the amount by which the cost of furnishing the service
exceeds 1.75 times the APC payment amount when both the 1.75 threshold and the fixed-dollar threshold are
met. For CY 2011, the outlier fixed-dollar threshold is $2,025. For CMHCs, if the cost for partial hospitalization
services exceeds 3.40 times the payment for APC 0173, the outlier payment is paid at 50% of the amount by
which the cost exceeds 3.40 times the APC 0173 payment rate.
CMS’ Proposal: “We are proposing for CY 2012 to continue our policy of estimating outlier payments to be 1.0
percent of the estimated aggregate total payments under the OPPS for outlier payments. We are proposing
that a portion of that 1.0 percent, specifically 0.14 percent, would be allocated to CMHCs for PHP outlier
payments.”
“To ensure that the estimated CY 2012 aggregate outlier payments would equal 1.0 percent of estimated
aggregate total payments under the OPPS, we are proposing that the hospital outlier threshold be set so that
outlier payments would be triggered when the cost of furnishing a service or procedure by a hospital exceeds
1.75 times the APC payment amount and exceeds the APC payment rate plus a $2,100 fixed-dollar threshold.”
The proposed threshold increase would reduce the number of cases eligible for outlier payments.
Continuation of the Rural SCH Adjustment
Federal Register page 42,216
Background: Since 2006, CMS has applied a 7.1% payment increase for rural sole community hospitals (SCHs)
for all services and procedures paid under the OPPS, excluding separately payable drugs and biologicals,
devices paid under the pass-through payment policy, and items paid at charges reduced to costs. In 2007, CMS
clarified that essential access community hospitals (EACHs) were eligible to receive this adjustment. This
payment increase is a result of a provision of the Medicare Modernization Act (MMA) of 2003 that gave the
Secretary authority to make an adjustment to OPPS payments for rural hospitals, if justified by a study of the
difference in costs by APC between hospitals in rural areas and hospitals in urban areas.
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CMS’ Proposal: “For the CY 2012 OPPS, we are proposing to continue our policy of a budget neutral 7.1 percent
payment adjustment for rural SCHs, including EACHs . . .”
“We intend to reassess the 7.1 percent adjustment in the near future by examining differences between urban
and rural hospitals’ costs using updated claims, cost reports, and provider information.”
Expiration of Hold-Harmless TOPs Payments to Small Rural and SCHs
Federal Register pages 42,215-42,216
Background: When OPPS was implemented, hold-harmless transitional outpatient payments (TOPs) were
established to provide relief to hospitals that would receive less in payments under the OPPS methodology
than they would have received under the prior payment system. TOPs payments for most hospitals expired at
the end of CY 2003. However, legislation has extended TOPs payments for small rural hospitals and
SCHs/EACHs. Most recently, the Medicare and Medicaid Extenders Act of 2010 extended TOPs for rural
hospitals with 100 or fewer beds and SCHs/EACHs through December 31, 2011. CMS does not have the
authority to extend these payments beyond CY 2011 without legislation. Cancer hospitals and children’s
hospitals are permanently held harmless from the impact of OPPS.
CMS’ Proposal: Effective for services provided on or after January 1, 2012, rural hospitals with 100 or fewer
beds and SCHs/EACHs will no longer be eligible for TOPs.
Establishment of a Cancer Hospital Payment Adjustment
Federal Register pages 42,216-42,221
Background: Since the inception of OPPS, Medicare has paid cancer hospitals under OPPS for covered
outpatient hospital services. There are 11 cancer hospitals nationwide. As described above, cancer hospitals
are permanently held harmless from the impact of OPPS.
A provision of the ACA requires CMS to study costs incurred by cancer hospitals for outpatient services to
determine if they exceed the costs of other OPPS hospitals. If appropriate, the law requires CMS to provide a
payment adjustment to cancer hospitals for outpatient services furnished on or after January 1, 2011. In the CY
2011 OPPS proposed rule, CMS put forward, but ultimately did not adopt a proposal that would have provided
hospital-specific payment adjustments to each of the 11 cancer hospitals. CMS noted that further study of this
issue was necessary.
CMS’ Proposal: As proposed last year, but ultimately not adopted, CMS is again proposing to increase
payments to 11 hospitals identified as exempt cancer hospitals. CMS is proposing a hospital-specific
adjustment under the OPPS for each cancer hospital if their outpatient costs are determined to be greater than
the costs of other hospitals paid under the OPPS.
“. . . for services furnished on and after January 1, 2012, we are proposing that, for a cancer hospital with an
individual [payment-to-cost ratio] PCR (as determined by the Secretary) below the weighted average PCR for
other hospitals . . . we would make a hospital-specific payment adjustment by adjusting the wage-adjusted
OPPS payment for covered OPD services (except for devices receiving pass-through status . . .by the percent
difference between the hospital’s individual PCR and the weighted average PCR of other hospitals . . . in the CY
2012 dataset.”
“For a cancer hospital with an individual PCR (as determined by the Secretary) above the weighted average PCR
for other hospitals . . . we are proposing a zero percent adjustment for covered hospital outpatient services
furnished on and after January 1, 2012.”
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This payment adjustment would be applied in a budget neutral manner; requiring CMS to reduce the
outpatient conversion factor by 0.73% (see “Updates to the Conversion Factor” section above). CMS is
proposing to update the cancer hospital payment adjustments and budget neutrality factor each year. Cancer
hospitals remain eligible to receive hold-harmless TOPS.
Table 13, on page 42,221 of the Federal Register lists the proposed cancer hospital payment adjustments by
hospital.
Updates to the Hospital OQR Program
Federal Register pages 42,313-42,334
Background: The Medicare Improvements and Extension Act (MIEA-TRHCA) of 2006 authorized the Health and
Human Services (HHS) Secretary to develop a quality data pay-for-reporting program for hospitals paid under
the OPPS. Hospitals that fail to successfully participate in what is now known as the Hospital Outpatient
Quality Reporting (OQR) Program receive reduced payments through a reduction of 2.0 percentage points to
the hospital marketbasket update. CMS makes these payment determinations each year.
Quality data collected under the OQR Program is made available to the public on the Hospital Compare Web
site at http://www.hospitalcompare.hhs.gov/.
Currently, CMS has adopted measures for the OQR Program through CY 2014. For CY 2012 payment
determinations, hospitals were required to successfully report on a total of 15 quality measures. For CY 2013
payment determinations, hospitals are currently reporting on a total of 23 quality measures. As previously
adopted, hospitals would report on these same 23 measures for CY 2014 payment determinations. A list of the
OQR Program measures previously adopted through CY 2014 payment determination is available on Federal
Register page 42,315. Each year, CMS updates the OQR measures and policies.
CY 2013 Payment Determinations
Federal Register page 42,315
CMS’ Proposal: CMS is proposing changes to how the agency would collect data on a chart-abstracted
measure adopted in the CY 2011 OPPS final rule for CY 2013 payment determinations; OP-22-Left Without
Being Seen.
“We are proposing that . . . hospitals would submit aggregate numerator and denominator counts once a year
using a Web-based form available through the QualityNet Web site for this measure.”
“We . . . are proposing that for the CY 2013 payment determination, the aggregate counts for the numerator
(the total number of patients who left without being evaluated by a physician/ advance practice
nurse/physician’s assistant) and the denominator (total number of patients who signed in to be evaluated for
emergency services) would . . . span the time period from January 1, 2011 through December 31, 2011.”
“We are proposing that . . . data submission for this measure would occur between July 1, 2012 and August 15,
2012.”
This proposed process is differs from other chart-abstracted measures collected under the OQR because it
would not require hospitals to submit patient-level information and would not require quarterly submission of
data.
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CY 2014 Payment Determinations
Federal Register pages 42,316-42,323
CMS’ Proposal: CMS is proposing to add the following measures to the OQR Program for CY 2014 payment
determinations:

1 Center for Disease Control and Prevention (CDC)/National Healthcare Safety Network (NHSN)-based
Healthcare-Associated Infection (HAI) measure:
o Surgical Site Infection (NQF #0299)
CMS is proposing that submission of data for this proposed measure would relate to infection
events occurring between January 1, 2013 and June 30, 2013.

6 chart-abstracted measures related to diabetes care and cardiac rehabilitation:
o Diabetes: Hemoglobin A1c Management (NQF #0059);
o Diabetes Measure Pair: A. Lipid Management: Low Density Lipoprotein Cholesterol (LDL–C) <
130, B. Lipid Management: LDL–C < 100 (NQF #0064);
o Diabetes: Blood Pressure Management (NQF #0061);
o Diabetes: Eye Exam (NQF #0055); and
o Diabetes: Urine Protein Screening (NQF #0062); and
o Cardiac Rehabilitation: Cardiac Rehabilitation Patient Referral from an Outpatient Setting
(NQF #0643)
CMS is proposing that submission of data for these proposed measures would begin with first
quarter CY 2013 (January 1, 2013 to March 31, 2013) encounters.

2 Web-based structural measures:
o Safe Surgery Checklist Use; and
o Hospital outpatient all-patient volume on selected outpatient surgical procedures for the
following procedure categories (gastrointestinal, eye, nervous system, musculoskeletal, skin,
genitourinary, cardiovascular, and respiratory).
CMS is proposing that submission of data for these proposed measures would be from July 1,
2013 through August 15, 2013 for the time period January 1, 2012 through December 31,
2012. These data will be collected via a Web-based tool available on the QualityNet Web site.
As proposed, these requirements would increase the number of measures hospitals would report for CY 2014
payment determinations from 23 to 32. A complete list of the proposed OQR Program measures for CY 2014
payment determinations is available on Federal Register pages 42,322-42,323.
CY 2015 Payment Determinations
Federal Register pages 42,323-42,325
CMS’ Proposal: CMS is proposing to retain all measures adopted for CY 2014 payment determinations and add
the following measure to the OQR Program for CY 2015 payment determinations:

1 Center for Disease Control and Prevention (CDC)/National Healthcare Safety Network (NHSN)-based
Healthcare-Associated Infection (HAI) measure:
o Influenza Vaccination Coverage among Healthcare Personnel (HCP) (NQF #0431)
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CMS is proposing that submission of data for this proposed measure would relate to
immunizations from October 1, 2013 through March 31, 2014. CMS is proposing that hospital
outpatient departments use the NHSN infrastructure and protocol to report the measure for
Hospital OQR purposes.
As proposed, hospitals would be required to report on a total of 33 measures for CY 2015 payment
determinations. A complete list of the proposed OQR Program measures for CY 2015 payment determinations
is available on Federal Register pages 42,324-42,325.
Possible New Measures and Topics for Future Years
Federal Register pages 42,325-42,326
CMS’ Proposal: CMS is seeking comment on the expansion of the OQR Program. CMS lists a number of quality
measures under a handful of topic areas for which it is considering expanding the OQR Program. CMS is
specifically seeking comment on the inclusion of patient experience of care measures in the OQR measure set.
A complete list of the measures under consideration by CMS for OQR expansion is available on Federal Register
pages 42,325-42,326.
Updates to the OQR Program Participation Policies
Federal Register pages 42,326-42,334
Background: Hospitals must follow a number of steps to satisfy the OQR Program requirements and qualify for
the full marketbasket update. These steps are continuously updated by CMS and available in detail on the
QualityNet Exchange Web site at https://www.qualitynet.org/.
CMS’ Proposal: CMS is proposing several changes to the OQR Program data submission deadlines and
procedures, chart validation requirements and methods, and other OQR-related procedures and processes.
Complete detail on these proposed changes is available on the Federal Register pages referenced above.
Updates to the APC Groups and Weights, Composite APCs,
and the Packaging Threshold
Revisions to the APC Groups
Federal Register pages 42,225-42,242
CMS’ Proposal: As required by law, the OPPS rule proposes revisions to the APC groups to take into account
drugs and medical devices that no longer qualify for pass-through status, new and deleted Healthcare Common
Procedure Coding System/Current Procedural Terminology (HCPCS/CPT) codes, changes in technologies, new
services, and new cost data.
A complete discussion of APC group changes can be found on the Federal Register pages referenced above.
The following table below shows the change in the number of APCs per category over a three-year period:
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APC Category
Clinic or Emergency Department Visit
Significant Procedures, Multiple Reduction Applies
Significant Procedures, No Multiple Reduction
Ancillary Services
Pass-Through Devices Categories
Non-Pass-Through Drugs/Biologicals
Partial Hospitalization
Blood and Blood Products
Brachytherapy Sources
Pass-Through Drugs and Biologicals
New Technology
Total
Status
Indicator
V
T
S
X
H
K
P
R
U
G
S/T
Final CY
2010
17
181
131
39
0
293
2
34
16
37
82
795
Final CY
2011
17
183
130
39
1
285
4
34
16
42
82
833
Proposed
CY 2012
17
185
132
39
1
287
4
34
16
26
82
823
Recalibration of the APC Weights
Federal Register pages 42,179-42,209
Background: CMS is required to review and revise the APC relative payment weights annually. The APC
relative weights are based on the median hospital costs for services in the APC groups.
CMS’ Proposal: “The proposed APC relative weights and payments for CY 2012 in Addenda A and B to this
proposed rule . . . were calculated using claims from CY 2010 that were processed before January 1, 2011, and
continue to be based on the median hospital costs for services in the APC groups. Under the proposed
methodology, we select claims for services paid under the OPPS and match these claims to the most recent cost
report filed by the individual hospitals represented in our claims data. We continue to believe that it is
appropriate to use the most current full calendar year claims data and the most recently submitted cost reports
to calculate the median costs underpinning the APC relative payment weights and the CY 2012 payment rates.”
The proposed APC relative weights and payments for CY 2012 are available in Addenda A and B of the proposed
rule and available on the CMS Web site at
http://www.cms.gov/apps/ama/license.asp?file=/HospitalOutpatientPPS/Downloads/CMS-1525P_NPRM_Addenda.zip.
Updates to the Composite APCs
Federal Register pages 42,197-42,206
Background: In CY 2008, CMS established a composite APC methodology to provide a single payment, rather
than paying for each service individually, when specified combinations of procedures (based on reported
HCPCS codes) are performed on the same date of service. Currently, CMS uses a composite APC payment
methodology for:





Extended Assessment and Management Services (APCs 8002 and 8003);
Low-Dose Rate (LDR) Prostate Brachytherapy (APC 8001);
Cardiac Electrophysiologic Evaluation and Ablation Services (APC 8000);
Mental Health Services (APC 0034); and
Multiple Imaging Services (APCs 8004, 8005, 8006, 8007, and 8008).
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CMS’ Proposal: “For CY 2012 . . . we are proposing to create a new composite APC 8009 (Cardiac
Resynchronization Therapy with Defibrillator [CRT-D] Composite) . . .”
“Specifically, we are proposing to create composite APC 8009, which would be used when CPT 33249 and CPT
33225 are performed on the same day . . .”
Using authority provided to CMS by the Social Security Act, the agency is proposing to cap the payment rate for
this new composite APC at the most comparable Medicare-severity diagnosis-related group (MS-DRG) payment
rate established under the IPPS that would be provided to acute care hospitals for providing CRT-D services to
hospital inpatients. The capped payment amount is estimated to be $26,364.93. Without this cap, the
payment rate based on median cost under the OPPS would be $38,854.
Packaging Threshold for Drugs, Biologicals, and Radiopharmaceuticals
Federal Register pages 42,245-42,268
Background: CMS pays for drugs, biologicals, and radiopharmaceuticals that do not have pass-through status
in one of two ways: packaged payment into the APC for the associated service; or separate payment (individual
APCs). Generally, packaging status is based on a comparison of CMS-calculated per-day cost of the item to a
packaging threshold. For CY 2011, the packaging threshold was set at $70.
CMS’ Proposal: “. . . we are proposing a packaging threshold for CY 2012 of $80.”
As proposed, drugs, biologicals, and radiopharmaceuticals that are above the $80 threshold and paid
separately using individual APCs will generally be paid at a rate of average sales price (ASP) + 4% in CY 2012.
CMS is proposing to continue its policy to package diagnostic radiopharmaceuticals, contrast agents, and
implantable biologicals regardless of cost.
A complete discussion of payment for separately payable drugs, biologicals, and can be found on the Federal
Register pages referenced above.
Other Outpatient Payment and Policy Issues
Physician Supervision Requirements for Outpatient Services
Federal Register pages 42,277-42,285
Background: For CY 2011, CMS adopted proposals that revised and further defined several policies related to
the physician supervision of outpatient services. Specifically, CMS adopted changes to the direct and general
supervision requirements for outpatient therapeutic services and the direct supervision requirements for both
outpatient therapeutic and diagnostic services. Based on comment from the industry, the new direct
supervision requirements were not applied to CAHs and small rural hospitals with 100 or fewer beds in CY
2011.
Due to the increased interest in supervision requirements from the industry, in the CY 2011 final rule, CMS
stated its intent to establish, during the CY 2012 rulemaking cycle, an independent review process that would
allow for an assessment of the appropriate supervision levels for individual hospital outpatient therapeutic
services.
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CMS’ Proposal: “. . . we are proposing to establish the Federal Advisory APC Panel as an independent review
body that would evaluate individual outpatient therapeutic services for potential assignment by CMS of general
(lower) or personal (higher) supervision.”
“We are proposing to charge the Panel with recommending a supervision level (general, direct, or personal) to
ensure an appropriate level of quality and safety for delivery of a given service, as defined by a CPT code. The
Panel should take into consideration the context in which the service is delivered, that is, the clinical, payment,
and quality context of a patient encounter. In recommending a supervision level to CMS, we are proposing that
the Panel assess whether there is a significant likelihood that the supervisory practitioner would need to
reassess the patient and modify treatment during or immediately following the therapeutic intervention, or
provide guidance or advice to the individual who provides the service.”
To begin evaluating services in CY 2012, CMS is proposing to solicit services or categories of services from
stakeholders for APC Panel review. As proposed, CMS would have the authority to independently ask the Panel
to review the supervision levels for one or more services as necessary. If a significant number of requests were
made by stakeholders, CMS would prioritize requests using defined criteria.
CMS is proposing to issue decisions based on the APC Panel’s recommendations on the assignment of
supervisions levels for outpatient therapeutic services using a sub-regulatory process rather than the
traditional rulemaking process. This process would allow for public review and comment of CMS’ decisions
after the decisions are posted to the OPPS section of the CMS Web site.
Because the initial work of the APC Panel would not be completed before CY 2012, CMS anticipates extending
the non-enforcement of the direct supervision requirement provided in CY 2011 to CAHs and small rural
hospitals with 100 or fewer beds through CY 2012.
Payment for PHP Services
Federal Register pages 42,272-42,275
Background: Partial hospitalization is an intensive outpatient psychiatric program of services provided to
patients in place of inpatient psychiatric care. A PHP may be provided by a hospital to its outpatients or by a
freestanding CMHC. Under OPPS, providers are paid on a per diem basis for partial hospitalization services.
Generally, CMS is required to establish relative payment weights based on median costs. Historically, the
median per diem cost for CMHCs has greatly exceeded the median per diem cost for hospital-based PHPs.
Over the years, CMS has implemented refinements to the methodology used for computing the PHP median, to
control median per diem costs.
In CY 2009, CMS began using a two-tiered approach for PHP services in which CMS paid one amount for days
with three units of service (Level I, APC 0172) and a slightly higher amount for days with four or more units of
service (Level II, APC 0173). For CY 2011, CMS established four separate PHP APC per diem payment rates, two
for CMHC PHPs (for Level I and Level II services) and two for hospital-based PHPs (Level I and Level II services).
CMS also adopted a policy to calculate these rates for CMHCs based only on CMHC data and hospital-based
rate based only on hospital-based data, providing a two-year transition to the new methodology for CMHCs.
CMS’ Proposal: “For CY 2012 . . . we are proposing to determine the relative payment weights for PHP services
by CMHCs based on cost data derived solely from CMHCs and the relative payment weights for hospital-based
PHP services based exclusively on hospital cost data.”
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CMS’ proposal fully implements the two-year transition for calculating the relative payment weights for CMHCs
adopted by the agency last year. As shown in the table below, the proposed PHP per diem payment rates for
both CMHCs and hospitals are substantially lower than the rates currently provided for these services.
APC
0172
0173
0175
0176
Group Title
Level I Partial Hospitalization (3 services) for
CMHCs
Level II Partial Hospitalization (4 or more services)
for CMHCs
Level I Partial Hospitalization (3 services) for
Hospital-Based PHPs
Level II Partial Hospitalization (4 or more services)
for Hospital-Based PHPs
Final CY 2011
Payment Rate
Proposed CY
2012 Payment
Rate
Percent
Change
$129.64
$94.38
-27%
$164.43
$109.67
-33%
$204.89
$156.69
-24%
$238.33
$183.27
-23%
Updates to the Inpatient List
Federal Register pages 42,276-42,277
Background: Under OPPS, CMS identifies procedures that are typically provided only in an inpatient setting,
and therefore would not be paid under OPPS. These procedures comprise what is referred to as the “inpatient
list.” The inpatient list specifies those services that only will be paid when provided in an inpatient setting
because of the nature of the procedure and the need for at least 24 hours of post-operative recovery time or
monitoring before the patient can be safely discharged. These procedures are assigned a status code of “C”
and hospitals are advised to admit beneficiaries requiring these procedures to receive payment. Each year,
CMS, with input from the APC Panel, reviews the inpatient list using specific criteria to determine whether any
procedures should be moved from the inpatient list and paid under OPPS.
CMS’ Proposal: “For CY 2012, we are proposing to accept the APC Panel’s recommendations to remove the
procedures described by CPT codes 21346, 35045, and 54650 from the inpatient list because we agree with the
APC Panel that the procedures may be appropriately provided as hospital outpatient procedures for some
Medicare beneficiaries . . .”
As described through the CPT codes above, CMS is proposing to remove the following three procedures from
the inpatient list:

CPT Code 21346: Open treatment of nasomaxillary complex fracture (Lefort II type); with wiring
and/or local fixation;

CPT Code 35045: Direct repair of aneurysm, pseudoaneurysm, or excision (partial or total) and graft
insertion, with or without patch graft; for aneurysm, pseudoaneurysm, and associated occlusive
disease, radial or ulnar artery; and

CPT Code 54650: Orchiopexy, abdominal approach, for intra-abdominal testis (eg, Fowler-Stephens)
The list of codes that CMS is proposing to be paid by Medicare in CY 2012 only as inpatient procedures is
available in Addendum E of the proposed rule and available on the CMS Web site at
http://www.cms.gov/apps/ama/license.asp?file=/HospitalOutpatientPPS/Downloads/CMS-1525P_NPRM_Addenda.zip.
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Visit Codes for Clinic Visits, ED Visits, and Critical Care Services
Federal Register pages 42,268-42,272
Background: Currently, CMS instructs hospitals to report visit codes for three types of OPPS services: clinic
visits, emergency department (ED) visits, and critical care services. Under OPPS, CMS recognizes:

Clinic Visit Codes: Codes defined in the CPT code book to report evaluation and management (E/M)
services provided in the physician’s office or in an outpatient or other ambulatory facility.

ED Visit Codes: Codes used to report E/M services provided in the ED. ED visit codes consist of five
CPT codes that apply to Type A EDs and five Level II HCPCS codes that apply to Type B EDs.

Critical Care Codes: CPT codes used by hospitals to report critical care services that involve the “direct
delivery by a physician(s) of medical care for a critically ill or critically injured patient,” as defined by
the CPT code book. CMS also recognizes HCPCS code G0390 (Trauma response team associated with
hospital critical care service) for the reporting of a trauma response in association with critical care
services.
CMS believes that CPT E/M codes were defined to reflect the activities of physicians and do not describe well
the range and mix of services provided by hospitals during visits of clinic and ED patients and critical care
encounters. Because national guidelines to determine the assignment of E/M codes do not exist, CMS, since
2000, has instructed hospitals to report facility resources for clinic and ED visits using CPT E/M codes and to
develop internal hospital guidelines to determine what level of visit to report for each patient. CMS has
advised that each hospital’s internal guidelines should follow the intent of the CPT code descriptors, in that the
guidelines should be designed to reasonably relate the intensity of hospital resources to the different levels of
effort represented by the codes. Due to the complexity and challenges in developing national guidelines, CMS
has evaluated both clinic and ED visit distributions and found that hospitals were billing in an appropriate and
consistent manner between visit levels, resulting in normal distributions nationally under OPPS.
CMS’ Proposal: CMS is not proposing any changes as to how hospitals should report visits in CY 2012.
“As we have done since publication of the CY 2008 OPPS/ASC final rule . . . we again examined the distribution
of clinic and Type A emergency department visit levels based upon updated CY 2010 claims data available for
the CY 2012 proposed rule. Analysis of this data confirmed that we continue to observe a normal and relatively
stable distribution of clinic and emergency department visit levels in hospital claims compared to CY 2009 data.”
While CMS analysis confirms a normal and stable distribution of clinic and ED visit levels, CMS notes that it has
observed a slight shift toward higher numbers of level 4 and 5 visits relative to the lower level visits. CMS also
indicates that in aggregate, hospitals’ charges for the higher level ED visits seem to be trending upward year
over year.
CMS states that in general, it believes that hospitals are billing in an appropriate and consistent manner that
distinguishes among different levels of visits based on their required hospital resources. CMS further states
that it expects that hospitals would not purposely change their visit guidelines or otherwise upcode clinic and
emergency department visits for purposes of extended assessment and management composite APC payment.
CMS encourages hospitals to continue to report visits during CY 2012 according to their own internal hospital
guidelines.
The proposed CPT and HCPCS codes for reporting clinic and ED visits, and critical care services are listed in
Table 35 on Federal Register pages 42,268-42,269.
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Payment Reduction for No Cost/Full Credit and Partial Credit Devices
Federal Register pages 42,243-42,245
Background: In CY 2007, CMS implemented a policy to reduce OPPS payment for specified APCs by 100% of
the device offset amount (the device cost) when a hospital furnishes a specified device with no cost or with a
full credit from the manufacturer. CMS expanded this policy in 2007 to include cases in which a hospital
receives partial credit of 50% or more. Hospitals are required to report an “FB” (in the case of no cost/full
credit) or “FC” modifier (in the case of partial credit) on the line with the procedure code in which the device is
used.
CMS’ Proposal: CMS is proposing to continue its existing policy related to payment reductions for no cost/full
credit and partial credit devices. The APCs and devices that would be affected by this policy in CY 2012 are
listed in Tables 24 and 25 on Federal Register page 42,245.
Beneficiary Copayments
Federal Register pages 42,224-42,225
Background: The Medicare, Medicaid, and SCHIP (State Children’s Health Insurance Program) Balanced Budget
Refinement Act (BBRA) of 1999 mandated rules for determining copayment amounts to be paid by
beneficiaries for covered outpatient services. The national unadjusted copayment amount for a covered
outpatient service provided in a year must be reduced so that the effective copayment rate for that service
does not exceed a specified percentage. The national unadjusted copayment amount cannot be less than 20%
of the outpatient fee schedule amount and is limited to the amount of the inpatient deductible. Beginning
January 1, 2011, provisions of the ACA eliminated the copayment for preventive services that meet certain
requirements, including screening flexible sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during the procedure.
CMS’ Proposal: The proposed national unadjusted copayment amounts for CY 2012 are available in Addenda A
and B of the proposed rule and available on the CMS Web site at
http://www.cms.gov/apps/ama/license.asp?file=/HospitalOutpatientPPS/Downloads/CMS-1525P_NPRM_Addenda.zip.
Updates to the Hospital VBP Program for FFY 2014
Federal Register pages 42,354-42,365
Background: Included as part of the OPPS rule are proposals related to the FFY 2014 (second year) inpatient
hospital VBP Program established by the ACA. Complete program polices for the FFY 2013 program (first year
program), and several program policies for the FFY 2014 program have already been adopted by CMS. Using
measures reported under the Hospital Inpatient Quality Reporting (IQR) Program, the VBP Program will
redistribute Medicare inpatient fee-for-service (FFS) payments to hospitals based on quality performance
beginning October 1, 2012 (FFY 2013). CAHs are not subject to this program.
As required by the ACA, a pool of funds to be redistributed to hospitals based on quality performance under
the FFY 2014 VBP Program will be created by reducing Medicare IPPS payments for all participating hospitals by
1.25%.
For the FFY 2014 VBP Program, CMS has already adopted 13 outcomes measures comprised of 3 mortality
measures, 2 Agency for Healthcare Research and Quality (AHRQ) composite measures, and 8 hospital-acquired
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condition (HAC) measures. CMS has also proposed, using the FFY 2012 IPPS proposed rule, to add a new
efficiency measure to the FFY 2014 program.
Taking into consideration proposed and adopted polices, CMS would implement a VBP Program for FFY 2014
that would assess hospital quality performance using quality measures from four domains (categories of quality
measures):




clinical process of care;
patient experience of care;
patient outcomes; and
efficiency (as proposed by CMS in the FFY 2012 IPPS proposed rule)
The OPPS rule proposes the following related to the FFY 2014 VBP Program:
Retainment of the FFY 2013 VBP Measures and Establishment of a New Process Measure
Federal Register pages 42,354-42,356
CMS’ Proposal: For the FFY 2014 VBP Program, CMS is proposing to retain the 12 process of care measures
and the 1 patient experience of care measure (consisting of 8 Hospital Consumer Assessment of Healthcare
Providers and Systems (HCAHPS) survey dimensions) adopted for the FFY 2013 VBP Program. CMS is also
proposing to add the following new process of care measure:

SCIP-Inf-9: Postoperative Urinary Catheter Removal on Postoperative Day 1 or 2.
CMS states that they will continue to monitor the process and HCAHPS measures to ensure these measures
remain appropriate for inclusion in the VBP Program. A complete list of the proposed process and patient
experience of care measures for the FFY 2014 VBP Program is provided below and available on Federal Register
page 42,356.
Minimum Number of Cases and Measures for the Outcomes Domain
Federal Register pages 42,356-42,357
CMS’ Proposal: As required by the ACA and as determined by CMS, hospitals that do not meet minimum case
counts related to a VBP measure are not scored for that particular measure. Hospitals that do not meet
minimum measure counts are excluded from the VBP Program completely. CMS has already adopted the
minimum case/measure counts for the process and patient experience of care measures. Based on an
independent analyses described in detail in the proposed rule, CMS, for the FFY 2014 VBP Program is proposing
the following related to the minimum number of cases and measures for the outcomes domain:



mortality measures: 10 case minimum;
AHRQ composite measures: 3 case minimum; and
HAC measures: 1 case minimum
Hospitals that do not meet these minimum case counts for a measure would not achieve a score for that
measure.
CMS is also proposing that a domain score would not be calculated for the outcomes domain if a hospital has
usable data for less than 10 of the 13 outcomes measures. CMS is proposing that the 10 measures must be
comprised of 7 of the 8 HAC measures (all but the Foreign Object Retained After Surgery measure), along with
3 other measures comprised of any 3 of the other outcome measures (for example, 2 AHRQ composite
measures and 1 mortality measure, or 3 mortality measures).
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Hospitals that do not meet the minimum measure counts for any of the adopted domains (process, patient
experience of care, patient outcomes, or efficiency) would be excluded from the FFY 2014 VBP Program.
Excluded hospitals would not be subject to the VBP pool contribution reductions and would not be eligible for
VBP payment incentives.
Baseline and Performance Periods
Federal Register pages 42,357-42,358
CMS’ Proposal: VBP scores will be calculated for each hospital based on its performance on the selected
quality measures during two specific time periods. These time periods are defined by CMS as “baseline
periods” and “performance periods.” Below are the proposed baseline and performance periods for the FFY
2014 VBP Program by domain:

Process of Care and Patient Experience of Care Domains:
o Baseline Period: April 1, 2010 through December 31, 2010 (9-months)
o Performance Period: April 1, 2012 through December 31, 2012 (9-months)

Outcomes Domain – Mortality Measures (previously adopted by CMS as final):
o Baseline Period: July 1, 2009 through June 30, 2010 (12-months)
o Performance Period: July 1, 2011 through June 30, 2012 (12-months)

Outcomes Domain – AHRQ composite and HAC Measures:
o Baseline Period: March 3, 2010 through September 30, 2010 (7-months)
o Performance Period: March 3, 2012 through September 30, 2012 (7-months)

Efficiency Domain (previously proposed by CMS):
o Baseline Period: May 15, 2010 through 90 days prior to February 14, 2011 (9-months)
o Performance Period: May 15, 2012 through February 14, 2013 (9-months)
National Performance Standards
Federal Register pages 42,358-42,361
CMS’ Proposal: Under the VBP Program, the benchmarks represent the highest achievement levels on quality
measures; the thresholds represent the minimum achievement levels. Hospitals’ performance on individual
quality measures will be compared to these national performance standards to calculate VBP “achievement”
and “improvement” scores. The ACA requires CMS to take both achievement and improvement into
consideration when determining hospitals’ overall VBP score.
CMS, in the OPPS proposed rule, reiterates adopted and proposes new national benchmarks and thresholds for
the FFY 2014 VBP Program.
For the AHRQ composite measures, CMS is proposing to set the thresholds and benchmarks using the same
methodology as the process of care, patient experience of care, and mortality measures. That is, for each
AHRQ measure, CMS is proposing to set the threshold at the median of hospital performance (50th percentile)
and the benchmark at the mean of the top decile of hospital performance during the proposed baseline period
(period noted above).
For the HAC measures, CMS would not calculate thresholds and benchmarks for each individual HAC measures.
Instead, CMS is proposing to calculate an aggregate HAC rate for each hospital before calculating the national
15 | P a g e
performance standards (see “Scoring Methodology for the HAC Measures” section below). Using the hospitalspecific aggregate HAC rates, CMS is proposing to set the threshold at the median of hospital performance
(50th percentile) and the benchmark at the mean of the top decile of hospital performance during the
proposed baseline period (period noted above). Because all hospitals do not perform surgeries, CMS would
establish two sets of national performance standards for the HAC measures; one set that reflects the aggregate
all 8 HAC measures, and one set that reflects the aggregate of 7 of the 8 HAC measures for hospitals that do
not perform surgeries.
The previously adopted and newly proposed national performance standards for the four domains, by
measure, are provided in the table below:
Measure ID
Measure
National
Threshold
National
Benchmark
Process of Care Domain (newly proposed)
AMI–7a
Fibrinolytic Therapy Received Within 30 Minutes of
Hospital Arrival
0.8066
0.9630
AMI–8a
Primary PCI Received Within 90 Minutes of Hospital Arrival
0.9344
1.0000
HF–1
Discharge Instructions
0.9266
1.0000
0.9730
1.0000
0.9446
1.0000
0.9807
1.0000
0.9813
1.0000
0.9663
0.9996
0.9634
1.0000
0.9286
0.9989
0.9565
1.0000
0.9462
1.0000
0.9492
0.9983
Communication with Nurses
Communication with Doctors
75.79%
79.57%
84.99%
88.45%
Responsiveness of Hospital Staff
Pain Management
Communication about Medicines
Hospital Cleanliness & Quietness
Discharge Information
Overall Rating of Hospital
62.21%
68.99%
59.85%
63.54%
82.72%
67.33%
78.08%
77.92%
71.54%
78.10%
89.24%
82.55%
PN–3b
PN–6
SCIP–Inf–1
SCIP–Inf–2
SCIP–Inf–3
SCIP–Inf–4
SCIP–Inf–9
SCIP–Card–2
SCIP–VTE–1
SCIP–VTE–2
Blood Cultures Performed in the Emergency Department
Prior to Initial Anti-biotic Received in Hospital
Initial Antibiotic Selection for CAP in Immunocompetent
Patient
Prophylactic Antibiotic Received Within One Hour Prior to
Surgical Incision
Prophylactic Antibiotic Selection for Surgical Patients
Prophylactic Antibiotics Discontinued Within 24 Hours
After Surgery End Time
Cardiac Surgery Patients with Controlled 6AM
Postoperative Serum Glucose
Postoperative Urinary Catheter Removal on Post Operative
Day 1 or 2
Surgery Patients on a Beta Blocker Prior to Arrival That
Received a Beta Blocker During the Perioperative Period
Surgery Patients with Recommended Venous
Thromboembolism Prophylaxis Ordered
Surgery Patients Who Received Appropriate Venous
Thromboembolism Prophylaxis Within 24 Hours Prior to
Surgery to 24 Hours After Surgery
Patient Experience of Care Domain (newly proposed)
HCAHPS
Dimension
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Patient Outcomes Domain (previously adopted and newly proposed)
MORT–30–AMI
MORT–30–HF
MORT–30 PN
HACs *
AHRQ Composite
AHRQ Composite
Acute Myocardial Infarction (AMI) 30-Day Mortality Rate
(shown as survival rate)
Heart Failure (HF) 30-Day Mortality Rate (shown as survival
rate)
Pneumonia (PN) 30-Day Mortality Rate (shown as survival
rate)
HACs per 1,000 (aggregated)
Complication/patient safety for selected indicators
(composite)
Mortality for selected medical conditions (composite)
0.8477
0.8673
0.8861
0.9042
0.8818
0.9021
0 .00109
0.0000
0 .4006
0.2754
0 .7542
0.6130
1.0 (median
Medicare
spending per
beneficiary
ratio across
all hospitals
during the
performance
period)
Mean of the
lowest decile
of Medicare
spending
during the
performance
period
Efficiency Domain (previously proposed)
Efficiency
Measure
Medicare Spending per Beneficiary (calculated as a ratio of
the Medicare spending per beneficiary amount for each
hospital to the median Medicare spending per beneficiary
amount across all hospitals)
* The national performance standards for the HAC aggregate score reflect a score composed of all eight individual HAC measures. A small
number of hospitals do not report on the Foreign Object Removal after Surgery HAC measure. CMS will include in the final rule the
performance standards for hospital reporting on 7 of the 8 HAC measures.
Scoring Methodology for the HAC Measures
Federal Register pages 42,361-42,362
CMS’ Proposal: CMS in prior rulemaking has either adopted or proposed a complete VBP scoring methodology
for all measures except the HAC measures. CMS is proposing to use these previously adopted/proposed
scoring methodologies for the FFY 2014 VBP Program.
As previously adopted by CMS, the HAC measures within the outcomes domain would be scored using the
same methodology used to score the process of care measures. A complete description of the process of care
measure scoring methodology is available in the VBP final rule available online at
http://www.gpo.gov/fdsys/pkg/FR-2011-05-06/pdf/2011-10568.pdf.
To use this methodology, CMS must establish a process for calculating hospital performance on the HAC
measures and national performance standards for these measures. As described above (see “National
Performance Standards” section above), CMS is proposing a scoring methodology for the HAC measures using a
single HAC score calculated as the equally-weighted average of the individual HAC rates. For most hospitals,
the score would reflect the average rate for all 8 HAC measures. For hospitals that do not perform surgeries,
the scores would reflect the average rate for 7 of the 8 HAC measures. Like the process of care domain scoring
methodology, hospitals could earn up to 10 achievement points and up to 9 improvement points for
performance on the aggregate HAC rate measure.
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Domain Weighting
Federal Register pages 42,362-42,363
CMS’ Proposal: A hospital’s overall VBP score, or Total Performance Score, will determine its payments from
the VBP incentive pool. CMS will calculate a Total Performance Score for each hospital by combining the four
domain scores. CMS is required by the ACA to assign weights to each domain. For the FFY 2014 VBP Program,
CMS is proposing to apply the following weights by domain:




clinical process of care: 20% (set at 70% for the FFY 2013 program)
patient experience of care: 30% (set at 30% for the FFY 2013 program)
patient outcomes: 30%
efficiency: 20%
CMS is seeking comment on the proposed weighting for the four VBP domains.
Review and Correction Process
Federal Register pages 42,363-42,365
CMS’ Proposal: The ACA requires the Secretary to ensure that hospitals have the opportunity to review and
submit corrections to information that will be made available to the public related to the VBP Program. In the
OPPS rule, CMS is proposing a review and correction process for chart-abstracted process of care measures and
HCAHPS measures. CMS intends to propose review and correction processes for the VBP outcomes measures,
efficiency measures, and domain, condition, and total performance scores in future rulemaking.
For the process measures, is proposing to use the existing Hospital IQR Program’s data submission, review, and
correction processes under the VBP Program. As proposed, hospitals would have no further opportunity to
review or correct data other than the opportunity provided under the IQR Program’s policies.
For the HCAHPS measures, CMS is proposing a new “two-phase” process for review and correction. In the first
phase, hospitals would have the opportunity to review and correct data submitted on all HCAHPS items used
under the IQR Program, regardless of whether these items are part of the VBP Program. In the second phase,
hospitals would have the opportunity to review the patient-mix and mode adjusted HCAHPS scores on the
HCACHPS dimensions specifically used under the VBP Program. As proposed, hospitals would be provided with
two, one-week periods to review and make any corrections to their HCAHPS data; one week for phase one and
one week for phase two.
Proposed Change to the Quality Reporting Requirements of
the EHR Incentive Program and Establishment of a New
Electronic Quality Reporting Pilot
Background: Included as part of the OPPS rule is a proposed change to the quality reporting requirements of
the EHR Incentive Program. The program, authorized by the ARRA of 2009, provides incentive payments to
hospitals and doctors that successfully adopt and “meaningfully use” EHR systems under rules established by
CMS.
Among other required objectives, hospitals and CAHs seeking to achieve meaningful use status in the first
payment year (FFY 2011) are required to report specified quality measure data as calculated by certified EHR
18 | P a g e
technology through attestation rather than electronic submission to CMS. For the second payment year (FFY
2012), CMS adopted a policy that would have required eligible hospitals and CAHs to submit the specified
quality data electronically.
CMS’ Proposal: Because CMS is not yet capable of accepting the submission of quality data electronically, the
agency is proposing that eligible hospitals and CAHs seeking to achieve meaningful use status in payment year
2012 and subsequent years can continue to report quality measure results as calculated by certified EHR
technology through attestation rather than electronic submission to CMS.
As an alternative, CMS is proposing the establishment of a new Electronic Reporting Pilot program. For
payment year 2012, CMS is proposing that eligible hospitals and CAHs participating in the Medicare EHR
Incentive Program may meet the quality reporting requirements of the program by participating in the
proposed Electronic Reporting Pilot.
CMS is proposing that participation in this Electronic Reporting Pilot would be voluntary and that eligible
hospitals and CAHs may continue to attest to the quality measure results calculated by certified EHR
technology. The rules for participation in the pilot program are described detail in Federal Register pages
referenced above. Additional details including educational materials about participation in the proposed pilot
will be provided on the QualityNet Web site at http://www.qualitynet.org.
Submission of Comments
Federal Register page 42,170
Comments on the proposed rule must be submitted by Tuesday, August 30 at 5 p.m. CMS requests that
comments reference the file code CMS-1525-P.
Comments can be submitted electronically at http://www.regulations.gov. Follow the instructions for
“Comment or Submission” and enter the file code CMS-1525-P to submit comments on this proposed rule.
-ORRegular Mail (an original and two copies):
Express/Overnight Mail (an original and two copies):
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1525-P
P.O. Box 8013
Baltimore, MD 21244-1850
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1525-P
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, MD 21244-1850
-ORHand-Delivered (an original and two copies):
Room 445-G
Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201
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7500 Security Boulevard
Baltimore, MD 21244-1850
Note: Call (410) 786-7195 to schedule the delivery if
you use the Baltimore address