The AHA Speaks, But Will CMS Listen? American Hospital Association Comments on CMS Proposed 2018 Rule

The Centers for Medicare & Medicaid Services (CMS) receives hundreds of comments when it proposes each new rule. And as a regulation nerd, I spend hours poring through those comments so you don’t have to do it. While many of the comments are copied and pasted from suggested comments distributed by professional societies and advocacy groups and are likely batched into two piles—those for the proposed rule change and those against it— the American Hospital Association’s (AHA’s) comments are certain to be carefully reviewed and considered by CMS.

As a service to the RACmonitor community, I will summarize those comments I feel are pertinent to our daily work and add a bit of commentary (because you expect that from me).

Commenting on the 2018 Outpatient Prospective Payment Proposed Rule, the AHA:

• Opposes a change to the 340B drug pricing program payment structure. The AHA not only argues on the potential financial impact to safety-net hospitals, but also argues that CMS does not have the statutory authority to make the change.
• Opposes removing total knee replacement from the inpatient-only list and allowing joint replacements in ambulatory surgery centers (ASCs). The Association’s argument mentions the clinical aspects of such a change, but stressed the financial effects on the bundled payment initiatives. I think AHA missed an opportunity to comment on the adverse effect of the three-day inpatient skilled nursing requirement and the worsening of that problem if these surgeries are removed from the inpatient-only list. I also anticipate rampant confusion on which patients can be inpatient and which outpatient, and the AHA should have asked CMS to address this (although CMS got an earful from me in my comments.)
• Supports the moratorium on direct supervision at critical access hospitals (CAHs) and rural hospitals. This is a no-brainer and should have no opposition. These hospitals provide a valuable service to millions of Americans, and limiting the care that can be provided in them is short-sighted.
• Supports continued dialogue by CMS with stakeholders on the two-midnight policy. Will we ever have a perfect system? I don’t think so; the complexity of medicine and the subjective nature of medical care make it such that there will always be differences in what can be considered appropriate care in the hospital and how it should be paid.
• Did not comment at all about the request for comments to allow cardiac cauterization and electrophysiology procedures to be performed in ASCs. I do not know if this was an oversight or if AHA has been in correspondence with CMS about this issue. As I reported on RACmonitor, this could have profound financial impacts on hospitals.

CMS also asked providers for suggestions on how to reduce the administrative burden on their operations. In their comments, the AHA:

• Suggests CMS suspend the hospital star rating program, citing the inaccuracy and misleading nature of the information provided to the public. I agree; how can a star rating possibly represent the multitude of factors affecting quality and safety?
• Suggests removing the 25 percent limitation on admissions to long-term, acute-care hospitals coming from a single hospital and reassessing the 60 percent rule for inpatient rehabilitation facilities (requiring 60 percent of patients to have one of 13 diagnoses specified by CMS). These are both reasonable, as payment models evolve and arbitrary rules have the potential to limit innovation.
• Suggests limiting validation surveys. These are surveys performed by CMS after a survey by an accreditation organization such as the Joint Commission or DNV to ensure that the accreditation organization is doing its job. We have all gone through those surveys and know how onerous and disruptive they can be. Now imagine doing two of them in a short period of time. That’s inhumane.
• Suggests Recovery Audit Contractors (RACs) be subjected to a financial penalty for poor performance in administrative law judge (ALJ) hearings. While CMS will be validating the RAC’s audit findings and potentially lowering their contingency fee, I do not foresee a penalty for ALJ overturns. But that does not mean I would not like to see it happen.
• Suggests CMS incorporate more information about the social determinants of health (SdoH) into readmission measures and other quality programs. The significance of this cannot be overstated. These determinants need to be documented, coded with the appropriate ICD-10 code, and used when calculating expected rates of readmission, mortality, length of stay, and all other measures. We all know that not every patient has the same resources or means, and those influence their health in so many ways.
• Suggests CMS make future bundled payment programs voluntary. CMS has already done this with the changes to the Comprehensive Care of Joint Replacement it announced last month. This is probably a good thing; the bundled payment programs are more than just sharing savings or paying back overages. The costs, technology, and personnel required to participate can be daunting for many smaller or resource-poor hospitals. On the other hand, making these programs voluntary also leads to self-selection, with those who are likely to succeed signing up. As a result, the results of the program would only be generalizable to providers that match the characteristics of the participants.
• Suggests expanding access to telehealth services. Another no-brainer; many hospitals have scant or no access to specialists in certain areas such as psychiatry. Increasing access to telehealth will help reduce burdens on almost every hospital in the country.
• Suggests rescinding the requirement for the “JW” modifier for drug wastage. No one liked this when introduced, and it continues to frustrate providers. No one will miss it if it goes away.
• Suggests permanently removing the direct supervision requirement for CAHs, along with small and rural hospitals. This is another one that makes so much sense.
• Suggests removing the 96-hour physician certification requirement for CAHs. CAHs are required to maintain annual average lengths of stay of less than 96 hours, but that does not mean that every patient must be discharged in under 96 hours. By requiring physicians to state that every admission is expected to be less than 96 hours, physicians may be forced to transfer patients who could be safely cared for in the CAH but are expected to need more than 96 hours. Removing this requirement makes sense.
• Suggests CMS remove the mandatory free-text field from the Medicare Outpatient Observation Notice (MOON). Boy, did AHA mess up this one. Based on its description, the mandatory free text field is not what is opposed, but the need to document on the MOON the clinical information specific to the patient that warrants observation services. And of course, I agree that the specific clinical information is unnecessary; but then again so is the whole MOON, since the two-midnight rule was introduced.
• Suggests eliminating observation carve-out hours. Now this is a fabulous idea. As most know, the comprehensive ambulatory payment classification for observation services is paid if there are eight or more hours of observation services. The average length of stay of an observation patient is generally over 24 hours. That means that all the effort put into carving out hours results in no change in payment, in the vast majority of cases. Of course the hour-counting does apply if there is an outlier payment and with cost reporting, but CMS could easily account for this with a simple adjustment to calculations.
• Suggests eliminating the second copy of the Important Message from Medicare. AHA states that it is confusing to patients and overwhelms them with paperwork. While no one will disagree with this, I can never envision CMS agreeing to eliminating it. They ended up in court once over this issue and aren’t likely to want to repeat that.
• Suggests CMS allow providers to recommend post-acute providers while still providing choice. This makes sense; patients want to know “where would you send your loved one?” So it would be great to be able to answer that question.

Now that the comment period has closed, we wait for the CMS staffers to pore over the comments, consider them, and develop the final rule. As I noted, I am most anxious for CMS to address the many concerns I have about total knee replacements and determination of status once the surgery is removed from the inpatient-only list.

We will know on or around Nov. 1 (although based on the past, the final rule will be released Friday, Nov. 3 at 5 p.m. Eastern time.)