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The Centers for Medicare & Medicaid Services late today issued its hospital inpatient prospective payment system  for fiscal year 2019. The rule would increase rates by 1.75% in FY 2019 compared to FY 2018, after accounting for inflation and other adjustments required by law. The proposed rule includes an initial market-basket update of 2.8% for those hospitals that were meaningful users of electronic health records in FY 2017 and that submit data on quality measures, less a productivity cut of 0.8% and an additional market-basket cut of 0.75%, as mandated by the Affordable Care Act. CMS also proposes an increase of 0.5% to partially restore cuts made as a result of the American Taxpayer Relief Act of 2012 requirement that the agency recoup what it claims is the effect of documentation and coding changes from FYs 2010-2012, which CMS says do not reflect real changes in case mix. In addition, CMS proposes to continue its three-year transition to using Worksheet S-10 data to determine the amounts and distribution of uncompensated care payments, which began in FY 2018. The agency estimates that Disproportionate Share Hospital payments would increase by $1.5 billion in FY 2019 compared to FY 2018 due to, among other things, an increase in the percentage of the uninsured. In this rule, the agency also proposes to begin implementing its Meaningful Measures initiative across its hospital quality reporting and pay-for-performance programs. CMS’s proposal would result in the removal of 18 measures from the inpatient quality reporting program that are “topped out” or no longer relevant, or where the burden of data collection outweighs the value. The agency also would “de-duplicate” 21 measures, meaning that they would be used in only one program rather than multiple programs. They also would update the scoring approach for the hospital-acquired conditions, readmissions, and value-based purchasing programs. In addition, CMS proposes to rename the EHR Incentive Programs as the “Promoting Interoperability Programs” and introduce a more flexible, performance-based approach to determining whether a hospital has met the requirements to avoid a payment penalty under Medicare. Hospitals would have to use 2015 Edition Certified EHR Technology and report performance for a 90-day reporting period in both 2019 and 2020. CMS proposes to require that hospitals report only four electronic clinical quality measures for one quarter, and reduce the number of eligible eCQMs. The new scoring mechanism would allow hospitals to receive points on measures under four objectives – e-prescribing, health information exchange, provider to patient exchange, and public health and clinical data exchange. CMS proposes to retain some measures from Stage 3, modify others, and remove six measures. The agency also proposes to add two measures related to opioid treatment. “CMS today took several steps that would help deliver on its promise to ease regulatory barriers and allow America’s hospitals and health systems to better provide high-quality, efficient patient care,” said AHA Executive Vice President Tom Nickels, noting that AHA “appreciates the Administration working with the hospital field to reduce the administrative complexity of health care and allow providers to spend more time on patients, not paperwork.” For example, he said AHA was encouraged that the rule “begins to implement the Administration’s ‘meaningful measures’ initiative, a streamlined approach to quality measurement that can help ensure programs are focused on those core issues that are most critical to providing high-quality care and improving patient outcomes,” and proposed a “more flexible, performance-based approach” to determine whether a hospital has met meaningful use requirements. “CMS has also reduced burden by limiting the reporting periods to 90 days in 2019 and 2020,” he said. “We are disappointed, however, that the agency will require use of 2015 Edition Certified EHR Technology beginning in 2019.” The proposed rule will be published in the May 7 Federal Register and comments will be accepted through June 25.