In a letter to the Centers for Medicare & Medicaid Services, the National Association of Urban Hospitals has offered extensive comments on CMS’s proposed regulation describing how it intends to pay hospitals for Medicare-covered services in FY 2019.  NAUH offered these comments in response to CMS’s request for stakeholder input.

In this space yesterday NAUH presented its comments to CMS regarding how the agency proposes calculating Medicare disproportionate share (Medicare DSH) payments in the coming fiscal year.  Today, NAUH shares its views on aspects of the proposed regulation that address the Medicare hospital readmissions reduction program, Medicare’s quality reporting program, multi-campus hospitals, and documentation required when filing Medicare cost reports.

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The Medicare Hospital Readmissions Reduction Program

NAUH appreciates the changes CMS has introduced in the Medicare Hospital Readmissions Reduction Program.  Specifically, we support the change to organizing hospitals into peer groups and evaluating their performance in comparison to similar hospitals.

At the same time, however, we are concerned that this program may soon reach a point of diminishing returns where hospitals have done everything they might reasonably be expected to do to prevent avoidable readmissions but still find themselves penalized for their performance compared to that of their peers for circumstances that are simply beyond their control.  The introduction of this program appears to have been valuable, but it has raised the bar on avoidable readmissions to a level where, at some point in the near future, it may no longer be possible to improve performance more than very marginally, leaving a few hospitals that fall just slightly below the level of performance of their peers – yet performing at levels far superior to those prior to the readmissions reduction program’s introduction – subject to significant financial penalties.

NAUH also urges CMS to assess whether five peer groups is the appropriate number of groups or whether the objective of treating hospitals fairly might better be served by introducing more peer groups that do a better job of distinguishing between different types of hospitals.

In addition, a number of studies have raised legitimate questions about the true value of the readmissions reduction program.  NAUH encourages CMS to include the readmissions reduction program in a broader review of all of its quality improvement programs and to consider first, whether the readmissions reduction program is worth retaining, and second, whether these programs as a group have achieved their objectives and perhaps should give way to other approaches to achieving quality-related objectives.

NAUH would welcome an opportunity to work with CMS to address these questions.

Quality Reporting

NAUH wishes to thank CMS for proposing to reduce the paperwork burden on hospitals through changes in the quality reporting program.

NAUH also appreciates that CMS is taking steps to recognize the impact of social risk factors in quality measurement and wishes to address briefly accounting for those risk factors in Medicare’s quality program.  In the proposed rule, CMS advances two possible means of accounting for social risk factors:  calculating differences in outcome rates among patient groups within a hospital while accounting for their clinical risk factors, which would permit comparison of those differences across hospitals; and assessing outcome rates across hospitals for subgroups of patients, such as dually eligible patients, thereby facilitating comparisons among hospitals on their performance in caring for their patients with social risk factors.  As a first step, CMS proposes including stratified data on Pneumonia Readmission measure data for dually eligible patients in hospitals’ confidential feedback reports beginning in the fall of 2018 and using both methodologies identified above.

NAUH supports the use of social risk adjustment, including adjustment for sociodemographic status.  Research continues to suggest that sociodemographic factors beyond providers’ control – the availability of primary care and physical therapy, easy access to medications, appropriate food and other supportive services, and others – influence patient outcomes.  For example, a January 2016 report from the National Academy of Medicine found evidence that a wide variety of social risk factors may influence performance on certain health care outcome measures, such as readmissions, costs, and patient experience of care.

In addition, the Improving Medicare Post-Acute Care Transformation (IMPACT) Act required the Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation to perform a study of risk adjustment for sociodemographic status based on quality and resource use measures and to incorporate its findings in future rule-making.  Its report found that clinicians, hospitals, and post-acute providers are more likely to score worse in CMS pay-for-performance programs when they care for large numbers of poor patients.

Together, these reports provide evidence of what urban safety-net hospitals and other providers have long known:  that patients’ sociodemographic and other social risk factors matter greatly when trying to assess the performance of health care providers.  NAUH urges CMS to incorporate sociodemographic adjustment into any quality or cost measures it uses to assess hospital performance.

Multi-Campus Hospitals

NAUH wishes to thank CMS for its proposed rule defining how multi-campus hospitals would be treated by Medicare for special purposes.  This is an important acknowledgement of the changing nature of the

hospital industry and we believe this proposed regulation, if implemented, would give hospitals a clearer understanding of the implications of combining with other hospitals as the consolidation of the industry continues.

Submitting Documentation as Part of a Complete Cost Report

In the proposed regulation, CMS calls for requiring hospitals to submit detailed documentation underlying various components of their Medicare cost reports:  bad debt, Medicaid days associated with their DSH adjustment, and charity care and uninsured discounts.  NAUH does not object to this new requirement.

We are, however, concerned about the timing of these requirements and urban safety-net hospitals’ future ability to revise their cost reports based on more recent data.  Currently, hospitals have six months to file their cost reports with their MACs and up to 12 months thereafter to revise them.  In some cases, however – retroactive determinations of Medicaid eligibility are an excellent example – the final disposition of some of the data elements to be required of hospitals may change well after even this extended deadline for filing and revising Medicare cost reports.  For this reason, NAUH asks CMS to explicitly confirm in the final regulation that hospitals will have ample opportunity to update and revise their Medicare cost reports as those reports move closer to final settlement – time even beyond the current parameters for filing and revising the reports.

Tomorrow:  NAUH’s response to CMS’s request for comments about the Medicare area wage index system.