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Comment Letter to CMS on Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates
Regulatory Advocacy
Last Updated: 6/10/2008
June 10, 2008
Kerry N. Weems
Acting Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201
RE: CMS-1390-P, Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates; Proposed Rule (Vol. 73, No. 84), April 30, 2008
Dear Mr. Weems:
On behalf of Pennsylvania’s nearly 250 member hospitals and health systems, The Hospital & Healthsystem Association of Pennsylvania (HAP) welcomes the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) proposed rule for the fiscal year (FY) 2009 hospital inpatient prospective payment system (IPPS).
We have comprehensive comments, which are detailed in the attached. Following are areas of significant concern.
Hospital Quality Issues
HAP recommends that CMS significantly reduce those conditions that it has identified for inclusion in its hospital-acquired conditions payment policy and that CMS convene an expert panel of clinicians and researchers to provide CMS with guidance on which conditions are appropriate for inclusion under this payment policy.
HAP encourages CMS to consider the unintended consequences that might arise from implementing the hospital-acquired conditions policy. Trying to accurately code for some of these conditions that are present on admission may lead to excessive testing for patients entering the hospital. The necessity to complete diagnostic tests before a patient is admitted to confirm whether a condition was present on admission could lead to delayed admissions for some patients and disrupt efficient patient flow. Also, treating large numbers of patients with a false-positive diagnosis identified on admission screening will decrease the quality of care and increase costs.
With respect to quality reporting requirements, HAP does not believe that CMS had adhered to the provisions in the Deficit Reduction Act of 2005 that require CMS to select measures that represent a “consensus among affected stakeholders” as CMS is proposing measures that have not been either endorsed by the National Quality Forum and/or adopted by the Hospital Quality Alliance. HAP also views the opportunity for public comment as another mechanism for hospitals and health systems to provide real world feedback on measures that have been endorsed by the National Quality Forum and adopted by the Hospital Quality Alliance, particularly since few hospitals are member organizations in the National Quality Forum and have limited ability to participate in the Hospital Quality Alliance discussions.
Adding 42 disparate quality measures in one year represents an unfocused approach to quality reporting that will be detrimental to quality improvement. With the broad list of disparate measures being proposed, there is no indication that CMS though carefully or strategically about identifying the most important areas where resources and attention should be focused to advance quality and patient care.
Value-based Purchasing
If CMS is going to engage in a large, national experiment with value-based purchasing, one that has the potential for substantial intended and unintended consequences, as much knowledge as possible about the predicted impact of the system should be developed and shared so that wise public and institutional policies can be adapted. This is far too important a change in payment policy to make without fully exploring its potential ramifications. HAP urges CMS to employ the following strategies articulated below to more completely understand the potential impact of value-based purchasing:
- Hospitals should see their own data and comments should be solicited.
- Simulation results should be made publicly available by various categories of hospitals.
- CMS should bring together a technical advisory panel to enhance understanding of proposed value-based purchasing system.
MS-DRGs
With respect to changes in case-mix, HAP believes that a number of significant CMS policy changes occurring simultaneously with the implementation of the MS-DRGs has likely accelerated the case-mix growth, and while the plan for analysis as proposed by CMS is a good start, HAP does not believe it is sufficient to evaluate and quantify the various sources of case-mix change.
Area Wage Index
In addition, HAP opposes CMS’ proposal to recalibrate the average hourly wage criteria, both now and in the future, and instead urge the agency to continue its study of the wage index in favor of future changes that create a more equitable system and adequately reimburse hospitals for providing quality care to beneficiaries.
HAP also opposed CMS’ proposal to apply budget neutrality on a statewide basis. We also remain very concerned that CMS is continuing to introduce additional intricacies and changes to a system that is already burdensome, inequitable, and volatile. HAP opposes statewide budget neutrality related to geographic reclassifications for the same reasons that we oppose statewide budget neutrality related to the rural floor.
It is also important to note that with respect to the wage index, MedPAC has recommended using wage data from all employers and industry-specific occupational weights, as well as adjusting for geographic differences in the ratio of benefits to wages. MedPAC used an analysis of the Bureau of Labor Statistics (BLS) data to support these recommendations. Therefore, our comments pertain to using BLS data rather than hospital-reported data collected on CMS’ Medicare cost reports that are current used. While using BLS data may be less burdensome for hospitals, there are critical differences between the data sets that must be carefully evaluated. The new data sources are the cornerstone of the MedPAC approach and represent a fundamental change. HAP also has concerns regarding the approach proposed by MedPAC:
- Geographic boundaries and smoothing
- Use of Census data
- Rural area wage index
- Year-to-year volatility
- Exceptions process
Other Hospital Payment Issues
With regard to capital-related costs of inpatient hospital services, it is estimated that CMS’ elimination of the add-on payment for hospitals in large urban areas will cut payments to hospitals by $600 million from FY 2008 through FY 2012. It is estimated that Pennsylvania will be negatively impacted by approximately $6 million per year.
In addition, elimination of the inpatient medical education payment will reduce payments to teaching hospitals by an additional $1.3 billion over five years. For Pennsylvania, this will result in of $25 million in payment cuts. HAP contends that these cuts are based solely on the discretion of the administration with no congressional direction and are unprecedented. HAP wishes to reiterate its opposition to these unnecessary cuts, which ignore how vital these capital payments are to investments in the latest medical technology, ongoing maintenance and improvement of hospitals’ facilities and medical education.
Post-Acute Care Transfer Policy
HAP opposes expanding the post-acute transfer provision to include patients receiving home health care services within seven days – rather than three days of discharge, as it inappropriately penalizes hospitals for efficient treatment and ensuring that patients receive the right care at the right time in the right place.
Outlier Payments
HAP recommends that CMS re-evaluate its calculation to ensure that the capital outlier percentage is correct. HAP contends that the CMS outlier threshold estimates continue to be overstated, resulting in significant and unreasonable payment cuts to hospitals. Using the proposed CCR-inflation methodology will continue to generate an inappropriately high outlier threshold as has occurred repeatedly in the past. HAP urges CMS to address the flaws in the methodology for estimating the outlier threshold.
Other Issues
EMTALA
HAP believes that this proposal represents a substantial change in policy, not merely a clarification of current regulation as CMS suggests. Specifically, this policy change contradicts the current regulation regarding the non-applicability of EMTALA to inpatients that was finalized in September 2003. The regulation at 42 CFR 489.24 (d)(2)(i) clearly sets out that once an individual presenting to the hospital’s emergency department has been screened and admitted as an inpatient in good faith in order to stabilize the emergency medical condition, the hospital has satisfied its EMTALA obligations for that individual that the EMTALA proposal represents a substantial change in policy, not merely a clarification of current regulations as CMS suggests.
Physician Self-Referral
HAP urges CMS to view the application of physician self-referral prohibitions not only from the perspective of controlling abusive behavior, but also from the perspective of encouraging care improvement initiatives that would benefit patients, hospitals, and physicians.
In addition, HAP urges CMS to consider development of publishing of a comprehensive regulatory proposal that will allow organizations to consider the full impact of any proposed changes. In developing such a proposal, CMS should work together with the Office of Inspector General (OIG) to coordinate efforts to address the full range of concerns.
Financial Relationships Between Hospitals and Physicians
CMS for the third time proposes an “information collection request” that would require approximately 500 hospitals to report information, supply documents, and make certain legal certifications regarding their relationships with physicians. HAP objects this proposed information request, as it affects community hospitals that would be subject to the intrusive and burdensome demand for information regarding compensation arrangements. Further, HAP contends that there is nothing in the regulations to support imposition of the broad-based, all-encompassing demand of the disclosure of financial relationship report. CMS should not proceed with this intrusive, costly, and very burdensome demand on community hospitals.
Again, thank you for the opportunity to provided comments on the proposed rule for the fiscal year 2009 hospital inpatient prospective payment system. If you have any questions regarding our detailed comment, please feel free to contact Melissa Speck, senior director, regulatory advocacy at (717) 561-5356 or mspeck@haponline.org.
Sincerely,
CAROLYN F. SCANLAN
President & Chief Executive Officer
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