July 31, 2018

IPPS: Not One Rule but Many Payment System Rules

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More than physician payment rules in the CMS IPPS proposal

The physician fee schedule rule is one of many payment system rules that the Centers for Medicare & Medicaid Services (CMS) issues each year.

There are also rules for the Inpatient Prospective Payment System (IPPS), Outpatient PPS, Skilled Nursing Facilities (SNFs), home health, and durable medical equipment (DME) payments. This year brings a common theme to these proposed rules.

Each rule includes three items that should catch our attention – interoperability requirements, reductions in paperwork, and reduced/improved quality measures.

CMS has changed the electronic health record (EHR) requirements for hospitals and physicians to focus on achieving interoperability, both with other EHRs and in providing data directly to patients. This builds on CMS efforts accomplished through the Blue Button 2.0 initiative to ensure that not only claims data but clinical data is available through application programming interfaces (APIs) and other tools, enabling both patients and providers to have access to the widest possible range of data for treatment purposes. In addition to payment and policy proposals, CMS is releasing a request for information to obtain feedback on solutions to better achieve interoperability or the sharing of healthcare data between providers. In the IPPS rule, specifically, CMS is requesting stakeholder feedback through a request for information on the possibility of revising Conditions of Participation related to interoperability as a way to increase electronic sharing of data by hospitals.

CMS is also focusing on providing paperwork reductions for a variety of providers. The new proposed Physician Fee Schedule rule recommends a significant reduction in the documentation requirements for evaluation and management (E&M) services by eliminating the different levels for E&M and instituting a single payment. In another example, as part of the SNF PPS, the agency is proposing a Patient-Driven Payment Model (PDPM), an innovative new system for SNF payment that ties payment to patients’ conditions and care needs rather than volume of services provided. PDPM would simplify complicated paperwork requirements for performing patient assessments by significantly reducing reporting burdens, saving facilities approximately $2 billion over 10 years. A similar model is being proposed for home health.

CMS has reviewed many of the quality measures for providers and is moving to eliminate many process measures, instead focusing on measures that are better linked to successful outcomes.  One example for hospitals is that CMS removed the Hospital Survey on Patient Safety Culture and the Safe Surgery Checklist Use due to cost and outcome concerns. For home health, CMS is proposing the elimination of seven quality measures in the Home Health Quality Reporting Program (HHQRP) by 2022.

All these changes have been published as proposed rules, allowing for public comment. The public comment period has closed for inpatient and outpatient hospital proposed rules, but is still open for the physician rule, the DME rules, and the home health agency rules. For the rules that are still open for public comment, I highly recommend reviewing them and providing relevant comments to CMS, whether you agree or disagree with the proposals. CMS takes public comments seriously and is obligated to review each one they receive. Many proposed rules have been modified when published as final rules due to public comments.

As these are all proposed and not final rules, no significant action should be taken to meet the stated requirements until they become final for the 2019 payment year. 


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Stanley Nachimson

Stanley Nachimson is principal of Nachimson Advisors, a health IT consulting firm dedicated to finding innovative uses for health information technology and encouraging its adoption.   The firm serves a number of clients, including WEDI, EHNAC, the Cooperative Exchange, the Association of American Medical Colleges, and No World Borders.  Stanley is focusing on assisting health care providers and plans with their ICD-10 implementation, and is the director of the NCHICA-WEDI Timeline Initiative.  He serves on the Board of Advisors for QualEDIx Corporation.

Stanley served for over 30 years in the US Department of Health and Human Services in a variety of statistical, management, and health technology positions.  His last ten years prior to his 2007 retirement were spent in developing HIPAA policy, regulations, and implementation planning and monitoring, beginning CMS’s work on Personal Health Records, and serving as the CMS liaison with several industry organizations, including WEDI and HITSP.  He brings a wealth of experience and information regarding the use of standards and technology in the health care industry.

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