21014 Federal Register / Vol. 82, No. 85 / Thursday, May 4, 2017 / Proposed Rules

DEPARTMENT OF HEALTH AND ADDRESSES: In commenting, please refer For information on viewing public HUMAN SERVICES to file code CMS–1679–P. Because of comments, see the beginning of the staff and resource limitations, we cannot SUPPLEMENTARY INFORMATION section. Centers for Medicare & Medicaid accept comments by facsimile (FAX) FOR FURTHER INFORMATION CONTACT: Services transmission. Penny Gershman, (410) 786–6643, for You may submit comments in one of information related to SNF PPS clinical 42 CFR Parts 409, 411, 413, 424, and four ways (please choose only one of the issues. 488 ways listed): John Kane, (410) 786–0557, for 1. Electronically. You may submit information related to the development [CMS–1679–P] electronic comments on this regulation of the payment rates and case-mix to http://www.regulations.gov. Within indexes. RIN 0938–AS96 the search bar, enter the Regulation Kia Sidbury, (410) 786–7816, for Medicare Program; Prospective Identifier Number associated with this information related to the wage index. Payment System and Consolidated regulation, 0938–AS96, and then click Bill Ullman, (410) 786–5667, for Billing for Skilled Nursing Facilities for on the ‘‘Comment Now’’ box information related to level of care FY 2018, SNF Value-Based Purchasing 2. By regular mail. You may mail determinations, consolidated billing, Program, SNF Quality Reporting written comments to the following and general information. Program, Survey Team Composition, address ONLY: Centers for Medicare & Charlayne Van, (410) 786–8659, for and Proposal To Correct the Medicaid Services, Department of information related to skilled nursing Performance Period for the NHSN HCP Health and Human Services, Attention: facility quality reporting. Influenza Vaccination Immunization CMS–1679–P, P.O. Box 8016, Baltimore, James Poyer, (410) 786–2261 and Reporting Measure in the ESRD QIP for MD 21244–8016. Stephanie Frilling, (410) 786–4507, for PY 2020 Please allow sufficient time for mailed information related to the skilled comments to be received before the nursing facility value-based purchasing AGENCY: Centers for Medicare & close of the comment period. program. Medicaid Services (CMS), HHS. 3. By express or overnight mail. You Delia Houseal, (410) 786–2724, for ACTION: Proposed rule. may send written comments to the information related to the end-stage following address ONLY: Centers for renal disease quality incentive program. SUMMARY: This proposed rule would Medicare & Medicaid Services, Rebecca Ward, (410) 786–1732 and update the payment rates used under Department of Health and Human Caecilia Blondiaux, (410) 786–2190, for the prospective payment system (PPS) Services, Attention: CMS–1679–P, Mail survey type definitions. for skilled nursing facilities (SNFs) for Stop C4–26–05, 7500 Security SUPPLEMENTARY INFORMATION: Inspection fiscal year (FY) 2018. It also proposes to Boulevard, Baltimore, MD 21244–1850. of Public Comments: All comments revise and rebase the market basket 4. By hand or courier. If you prefer, received before the close of the index by updating the base year from you may deliver (by hand or courier) comment period are available for 2010 to 2014, and by adding a new cost your written comments before the close viewing by the public, including any category for Installation, Maintenance, of the comment period to either of the personally identifiable or confidential and Repair Services. The rule also following addresses: business information that is included in includes proposed revisions to the SNF a. Centers for Medicare & Medicaid a comment. We post all comments Quality Reporting Program (QRP), Services, Department of Health and received before the close of the including measure and standardized Human Services, Room 445–G, Hubert comment period on the following Web patient assessment data proposals and H. Humphrey Building, 200 site as soon as possible after they have proposals related to public display. In Independence Avenue SW., been received: http:// addition, it includes proposals for the Washington, DC 20201. www.regulations.gov. Follow the search Skilled Nursing Facility Value-Based (Because access to the interior of the instructions on that Web site to view Purchasing Program that will affect Hubert H. Humphrey Building is not public comments. Medicare payment to SNFs beginning in readily available to persons without Comments received timely will also FY 2019 and clarification on the Federal Government identification, be available for public inspection as requirements regarding the composition commenters are encouraged to leave they are received, generally beginning of professionals for the survey team. The their comments in the CMS drop slots approximately 3 weeks after publication proposed rule also seeks to clarify the located in the main lobby of the of a document, at the headquarters of regulatory requirements for team building. A stamp-in clock is available the Centers for Medicare & Medicaid composition for surveys conducted for for persons wishing to retain a proof of Services, 7500 Security Boulevard, investigating a complaint and to align filing by stamping in and retaining an Baltimore, Maryland 21244, Monday regulatory provisions for investigation extra copy of the comments being filed.) through Friday of each week from 8:30 of complaints with the statutory b. Centers for Medicare & Medicaid a.m. to 4 p.m. To schedule an requirements. The proposed rule also Services, Department of Health and appointment to view public comments, includes one proposal related to the Human Services, 7500 Security phone 1–800–743–3951. performance period for the National Boulevard, Baltimore, MD 21244–1850. Healthcare Safety Network (NHSN) If you intend to deliver your Availability of Certain Tables Healthcare Personnel (HCP) Influenza comments to the Baltimore address, Exclusively Through the Internet on the Vaccination Reporting Measure please call telephone number (410) 786– CMS Web site included in the End-Stage Renal Disease 7195 in advance to schedule your As discussed in the FY 2014 SNF PPS (ESRD) Quality Incentive Program (QIP). arrival with one of our staff members. final rule (78 FR 47936), tables setting DATES: To be assured consideration, Comments mailed to the addresses forth the Wage Index for Urban Areas comments must be received at one of indicated as appropriate for hand or Based on CBSA Labor Market Areas and the addresses provided below, no later courier delivery may be delayed and the Wage Index Based on CBSA Labor than 5 p.m. on June 26, 2017. received after the comment period. Market Areas for Rural Areas are no

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longer published in the Federal BBA Balanced Budget Act of 1997, Public RFA Regulatory Flexibility Act, Public Law Register. Instead, these tables are Law 105–33 96–354 available exclusively through the BBRA Medicare, Medicaid, and SCHIP RIA Regulatory impact analysis Internet on the CMS Web site. The wage Balanced Budget Refinement Act of 1999, RUG–III Resource Utilization Groups, Public Law 106–113 Version 3 index tables for this proposed rule can BIPA Medicare, Medicaid, and SCHIP RUG–IV Resource Utilization Groups, be accessed on the SNF PPS Wage Index Benefits Improvement and Protection Act Version 4 home page, at http://www.cms.gov/ of 2000, Public Law 106–554 RUG–53 Refined 53-Group RUG–III Case- Medicare/Medicare-Fee-for-Service- CAH Critical access hospital Mix Classification System Payment/SNFPPS/WageIndex.html. CARE Continuity Assessment Record and SCHIP State Children’s Health Insurance Readers who experience any problems Evaluation Program accessing any of these online SNF PPS CASPER Certification and Survey Provider SNF Skilled nursing facility Enhanced Reporting SNF PMR Skilled Nursing Facility Payment wage index tables should contact Kia Models Research Sidbury at (410) 786–7816. CBSA Core-based statistical area CCN CMS Certification Number SNF QRP Skilled Nursing Facility Quality To assist readers in referencing CFR Code of Federal Regulations Reporting Program sections contained in this document, we CMI Case-mix index SNF VBP Skilled Nursing Facility Value- are providing the following Table of CMS Centers for Medicare & Medicaid Based Purchasing Program Contents. Services SNFPPR Skilled Nursing Facility DTI Deep tissue injuries Potentially Preventable Readmission Table of Contents FFS Fee-for-service Measure I. Executive Summary FR Federal Register SNFRM Skilled Nursing Facility 30-Day II. Background on SNF PPS FY Fiscal year All-Cause Readmission Measure A. Statutory Basis and Scope HCPCS Healthcare Common Procedure STM Staff time measurement B. Initial Transition for the SNF PPS Coding System STRIVE Staff time and resource intensity C. Required Annual Rate Updates HIQR Hospital Inpatient Quality Reporting verification III. SNF PPS Rate Setting Methodology and HOQR Hospital Outpatient Quality TEP Technical expert panel FY 2018 Update Reporting UMRA Unfunded Mandates Reform Act, A. Federal Base Rates HRRP Hospital Readmissions Reduction Public Law 104–4 B. SNF Market Basket Update Program VBP Value-based purchasing C. Case-Mix Adjustment HVBP Hospital Value-Based Purchasing D. Wage Index Adjustment ICD–10–CM International Classification of I. Executive Summary E. Adjusted Rate Computation Example Diseases, 10th Revision, Clinical A. Purpose IV. Additional Aspects of the SNF PPS Modification A. SNF Level of Care—Administrative IGI IHS (Information Handling Services) This proposed rule would update the Presumption Global Insight, Inc. SNF prospective payment rates for FY B. Consolidated Billing IMPACT Improving Medicare Post-Acute 2018 as required under section C. Payment for SNF-Level Swing-Bed Care Transformation Act of 2014, Public 1888(e)(4)(E) of the Social Security Act Services Law 113–185 (the Act). It would also respond to V. Other Issues IPPS Inpatient prospective payment system section 1888(e)(4)(H) of the Act, which A. Revising and Rebasing the SNF Market IRF Inpatient Rehabilitation Facility Basket Index IRF–PAI Inpatient Rehabilitation Facility requires the Secretary to provide for B. Skilled Nursing Facility (SNF) Quality Patient Assessment Instrument publication in the Federal Register, Reporting Program (QRP) LTC Long-term care before the August 1 that precedes the C. Skilled Nursing Facility Value-Based LTCH Long-term care hospital start of each fiscal year (FY), certain Purchasing Program (SNF VBP) MACRA Medicare Access and CHIP specified information relating to the D. Survey Team Composition Reauthorization Act of 2015, Public Law payment update (see section II.C. of this E. Proposal to Correct the Performance 114–10 proposed rule). This proposed rule also Period for the National Healthcare Safety MAP Measures Application Partnership includes proposals that would update Network (NHSN) Healthcare Personnel MDS Minimum data set the requirements for the Skilled Nursing (HCP) Influenza Vaccination MFP Multifactor productivity Immunization Reporting Measure in the MMA Medicare Prescription Drug, Facility Quality Reporting Program End-Stage Renal Disease (ESRD) Quality Improvement, and Modernization Act of (SNF QRP), additional proposals for the Incentive Program (QIP) for Payment 2003, Public Law 108–173 Skilled Nursing Facility Value-Based Year (PY) 2020 MSA Metropolitan statistical area Purchasing Program (SNF VBP), and VI. Possible Burden Reduction in the Long- NF Nursing facility clarification of requirements related to Term Care Requirements NQF National Quality Forum survey team composition and VII. CMMI Solicitation OASIS Outcome and Assessment investigation of complaints under VIII. Request for Information on CMS Information Set §§ 488.30, 488.301, 488.314, and Flexibilities and Efficiencies OBRA 87 Omnibus Budget Reconciliation 488.308. The proposed rule also IX. Collection of Information Requirements Act of 1987, Public Law 100–203 X. Response to Comments OMB Office of Management and Budget includes one proposal related to the XI. Economic Analyses PAC Post-acute care performance period for the National Regulation Text PAMA Protecting Access to Medicare Act of Healthcare Safety Network (NHSN) 2014, Public Law 113–93 Healthcare Personnel (HCP) Influenza Acronyms PPS Prospective Payment System Vaccination Reporting Measure In addition, because of the many PQRS Physician Quality Reporting System included in the End-Stage Renal Disease terms to which we refer by acronym in QIES Quality Improvement and Evaluation (ESRD) Quality Incentive Program (QIP). this proposed rule, we are listing these System Finally, in this proposed rule we will be abbreviations and their corresponding QIES ASAP Quality Improvement and soliciting comments regarding potential Evaluation System Assessment Submission terms in alphabetical order below: and Processing changes to the recently finalized AIDS Acquired Immune Deficiency QRP Quality Reporting Program Requirements for Long-Term Care Syndrome RAI Resident assessment instrument Facilities that would result in a burden ALJ Administrative Law Judge RAVEN Resident assessment validation reduction if modified or eliminated, as ARD Assessment reference date entry well as potential CMMI models or other

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demonstration projects that would C. Summary of Cost and Benefits requiring the Secretary to implement a reduce cost and increase quality of care VBP program for SNFs. Finally, section for SNF, or more generally Post-Acute Provision 2(a) of the Improving Medicare Post- description Total transfers Care patients. Acute Care Transformation Act of 2014 (Pub. L. 113–185, enacted October 6, B. Summary of Major Provisions Proposed FY The overall economic impact 2018 SNF of this proposed rule 2014) (IMPACT Act) added section In accordance with sections PPS pay- would be an estimated in- 1899B to the Act that, among other things, requires SNFs to report 1888(e)(4)(E)(ii)(IV) and 1888(e)(5) of ment rate crease of $390 million in update. aggregate payments to standardized assessment data including the Act, the federal rates in this SNFs during FY 2018. such data on quality measures in proposed rule would reflect an update Proposed FY The overall cost for SNFs to specified quality measure domains, as to the rates that we published in the 2018 Cost to submit data for the Quality well as data on resource use and other SNF PPS final rule for FY 2017 (81 FR Updating the Reporting Program for the domains. In addition, the IMPACT Act Quality Re- provisions in this proposed 51970), which reflects the SNF market added section 1888(e)(6) to the Act, basket update, as required by section porting Pro- rule is $60 million. gram. which requires the Secretary to 1888(e)(5)(B)(iii) of the Act for FY 2018. implement a quality reporting program Additionally, in section V.A. of this II. Background on SNF PPS for SNFs, which includes a requirement proposed rule, we propose to revise and that SNFs report certain data to receive rebase the market basket index for FY A. Statutory Basis and Scope their full payment under the SNF PPS. 2018 and subsequent FYs by updating As amended by section 4432 of the B. Initial Transition for the SNF PPS the base year from 2010 to 2014, and by Balanced Budget Act of 1997 (BBA, Pub. adding a new cost category for L. 105–33, enacted on August 5, 1997), Under sections 1888(e)(1)(A) and Installation, Maintenance, and Repair section 1888(e) of the Act provides for 1888(e)(11) of the Act, the SNF PPS Services. We are also proposing the implementation of a PPS for SNFs. included an initial, three-phase additional polices, measures and data This methodology uses prospective, transition that blended a facility-specific reporting requirements for the Skilled case-mix adjusted per diem payment rate (reflecting the individual facility’s Nursing Facility Quality Reporting rates applicable to all covered SNF historical cost experience) with the Program (SNF QRP) and requirements services defined in section 1888(e)(2)(A) federal case-mix adjusted rate. The for the SNF VBP Program, including an of the Act. The SNF PPS is effective for transition extended through the exchange function to translate SNF cost reporting periods beginning on or facility’s first 3 cost reporting periods performance scores calculated using the after July 1, 1998, and covers all costs under the PPS, up to and including the program’s scoring methodology into of furnishing covered SNF services one that began in FY 2001. Thus, the SNF PPS is no longer operating under value-based incentive payments. (routine, ancillary, and capital-related costs) other than costs associated with the transition, as all facilities have been We also propose to clarify the approved educational activities and bad paid at the full federal rate effective regulatory requirements for team debts. Under section 1888(e)(2)(A)(i) of with cost reporting periods beginning in composition for surveys conducted for the Act, covered SNF services include FY 2002. As we now base payments for the purposes of investigating a post-hospital extended care services for SNFs entirely on the adjusted federal complaint and on-site monitoring of which benefits are provided under Part per diem rates, we no longer include compliance, and to align the regulatory A, as well as those items and services adjustment factors under the transition provisions for special surveys and (other than a small number of excluded related to facility-specific rates for the investigation of complaints with the services, such as physicians’ services) upcoming FY. statute. The proposed changes clarify for which payment may otherwise be C. Required Annual Rate Updates that the requirement for an made under Part B and which are interdisciplinary team that must include furnished to Medicare beneficiaries who Section 1888(e)(4)(E) of the Act registered nurse is applicable to surveys are residents in a SNF during a covered requires the SNF PPS payment rates to conducted under sections 1819(g)(2) Part A stay. A comprehensive be updated annually. The most recent and 1919(g)(2) of the Act, and not to discussion of these provisions appears annual update occurred in a final rule those surveys conducted to investigate in the May 12, 1998 interim final rule that set forth updates to the SNF PPS complaints or to monitor compliance (63 FR 26252). In addition, a detailed payment rates for FY 2017 (81 FR 51970, August 5, 2016). on-site under sections 1819(g)(4) and discussion of the legislative history of Section 1888(e)(4)(H) of the Act 1919(g)(4) of the Act. Revising the the SNF PPS is available online at specifies that we provide for publication regulatory language under §§ 488.30, http://www.cms.gov/Medicare/ annually in the Federal Register of the 488.301, 488.308, and 488.314 to Medicare-Fee-for-Service-Payment/ _ following: correspond to the statutory SNFPPS/Downloads/Legislative _ • The unadjusted federal per diem requirements found in sections 1819(g) History 04152015.pdf. Section 215(a) of Protecting Access to rates to be applied to days of covered and 1919(g) of the Act will add clarity Medicare Act of 2014 (Pub. L. 113–93, SNF services furnished during the to these requirements by making them enacted on April 1, 2014) (PAMA) upcoming FY. more explicit. We also propose to revise added section 1888(g) to the Act • The case-mix classification system the performance period for the National requiring the Secretary to specify an all- to be applied for these services during Healthcare Safety Network (NHSN) cause all-condition hospital readmission the upcoming FY. Healthcare Personnel (HCP) Influenza measure and a resource use measure, an • The factors to be applied in making Vaccination Reporting Measure all-condition risk-adjusted potentially the area wage adjustment for these included in the End-Stage Renal Disease preventable hospital readmission services. (ESRD) Quality Incentive Program (QIP). measure, for the SNF setting. Along with other proposed revisions Additionally, section 215(b) of PAMA discussed later in this preamble, this added section 1888(h) to the Act proposed rule would provide the

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required annual updates to the per diem included updating the base year from proposed revision and rebasing of the payment rates for SNFs for FY 2018. FY 2004 to FY 2010. For FY 2018, as SNF market basket discussed in section discussed in section V.A. of this V.A. of this proposed rule, this factor III. SNF PPS Rate Setting Methodology proposed rule, we are proposing to would be based on the IGI first quarter and FY 2018 Update rebase and revise the SNF market 2017 forecast (with historical data A. Federal Base Rates basket, updating the base year from FY through the fourth quarter 2016) of the Under section 1888(e)(4) of the Act, 2010 to 2014. FY 2018 percentage increase in the the SNF PPS uses per diem federal The SNF market basket index is used proposed 2014-based SNF market basket payment rates based on mean SNF costs to compute the market basket index reflecting routine, ancillary, and in a base year (FY 1995) updated for percentage change that is used to update capital-related expenses. As discussed inflation to the first effective period of the SNF federal rates on an annual in sections III.B.3. and III.B.4. of this the PPS. We developed the federal basis, as required by section proposed rule, this market basket payment rates using allowable costs 1888(e)(4)(E)(ii)(IV) of the Act. This percentage change would be reduced by from hospital-based and freestanding market basket percentage update is the applicable forecast error correction SNF cost reports for reporting periods adjusted by a forecast error correction, (as described in § 413.337(d)(2)) and by beginning in FY 1995. The data used in if applicable, and then further adjusted the MFP adjustment as required by developing the federal rates also by the application of a productivity section 1888(e)(5)(B)(ii) of the Act. As incorporated a Part B add-on, which is adjustment as required by section noted previously, section an estimate of the amounts that, prior to 1888(e)(5)(B)(ii) of the Act and 1888(e)(5)(B)(iii) of the Act, added by the SNF PPS, would have been payable described in section III.B.4. of this section 411(a) of the MACRA, requires under Part B for covered SNF services proposed rule. For FY 2018, the growth us to use a 1.0 percent market basket furnished to individuals during the rate of the proposed 2014-based SNF percentage instead of the estimated 2.7 course of a covered Part A stay in a SNF. market basket is estimated to be 2.7 percent market basket percentage, In developing the rates for the initial percent, which is based on the IHS adjusted as described below, to adjust period, we updated costs to the first Global Insight, Inc. (IGI) first quarter the SNF PPS federal rates for FY 2018. effective year of the PPS (the 15-month 2017 forecast with historical data Additionally, as discussed in section period beginning July 1, 1998) using a through fourth quarter 2016. II.B. of this proposed rule, we no longer SNF market basket index, and then However, we note that section 411(a) compute update factors to adjust a standardized for geographic variations of the Medicare Access and CHIP facility-specific portion of the SNF PPS in wages and for the costs of facility Reauthorization Act of 2015 (Pub. L. rates, because the initial three-phase differences in case mix. In compiling 114–10, enacted on April 16, 2015) transition period from facility-specific the database used to compute the (MACRA) amended section 1888(e) of to full federal rates that started with cost the Act to add section 1888(e)(5)(B)(iii) federal payment rates, we excluded reporting periods beginning in July 1998 of the Act. Section 1888(e)(5)(B)(iii) of those providers that received new has expired. provider exemptions from the routine the Act establishes a special rule for FY cost limits, as well as costs related to 2018 that requires the market basket 3. Forecast Error Adjustment payments for exceptions to the routine percentage, after the application of the productivity adjustment, to be 1.0 As discussed in the June 10, 2003 cost limits. Using the formula that the supplemental proposed rule (68 FR BBA prescribed, we set the federal rates percent. In accordance with section 1888(e)(5)(B)(iii) of the Act, we will use 34768) and finalized in the August 4, at a level equal to the weighted mean of a market basket percentage of 1.0 2003 final rule (68 FR 46057 through freestanding costs plus 50 percent of the percent to update the federal rates set 46059), § 413.337(d)(2) provides for an difference between the freestanding forth in this proposed rule. In section adjustment to account for market basket mean and weighted mean of all SNF III.B.5. of this proposed rule, we discuss forecast error. The initial adjustment for costs (hospital-based and freestanding) the specific application of the MACRA- market basket forecast error applied to combined. We computed and applied specified market basket adjustment to the update of the FY 2003 rate for FY separately the payment rates for the forthcoming annual update of the 2004, and took into account the facilities located in urban and rural SNF PPS payment rates. In addition, in cumulative forecast error for the period areas, and adjusted the portion of the section V.B.1. of this proposed rule, we from FY 2000 through FY 2002, federal rate attributable to wage-related discuss the 2 percent reduction applied resulting in an increase of 3.26 percent costs by a wage index to reflect to the market basket update for those to the FY 2004 update. Subsequent geographic variations in wages. SNFs that fail to submit measures data adjustments in succeeding FYs take into B. SNF Market Basket Update as required by section 1888(e)(6)(A) of account the forecast error from the most the Act. recently available FY for which there is 1. SNF Market Basket Index final data, and apply the difference Section 1888(e)(5)(A) of the Act 2. Use of the SNF Market Basket between the forecasted and actual requires us to establish a SNF market Percentage change in the market basket when the basket index that reflects changes over Section 1888(e)(5)(B) of the Act difference exceeds a specified threshold. time in the prices of an appropriate mix defines the SNF market basket We originally used a 0.25 percentage of goods and services included in percentage as the percentage change in point threshold for this purpose; covered SNF services. Accordingly, we the SNF market basket index from the however, for the reasons specified in the have developed a SNF market basket midpoint of the previous FY to the FY 2008 SNF PPS final rule (72 FR index that encompasses the most midpoint of the current FY. Absent the 43425, August 3, 2007), we adopted a commonly used cost categories for SNF addition of section 1888(e)(5)(B)(iii) of 0.5 percentage point threshold effective routine services, ancillary services, and the Act, added by section 411(a) of for FY 2008 and subsequent FYs. As we capital-related expenses. In the SNF PPS MACRA, we would have used the stated in the final rule for FY 2004 that final rule for FY 2014 (78 FR 47939 percentage change in the SNF market first issued the market basket forecast through 47946), we revised and rebased basket index to compute the update error adjustment (68 FR 46058, August the market basket index, which factor for FY 2018. Based on the 4, 2003), the adjustment will reflect both

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upward and downward adjustments, as 2016 was 2.3 percentage points, threshold, the FY 2018 market basket appropriate. resulting in the actual increase being the percentage change of 2.7 percent would For FY 2016 (the most recently same as the estimated increase. not have been adjusted to account for available FY for which there is final Accordingly, as the difference between the forecast error correction. Table 1 data), the estimated increase in the the estimated and actual amount of shows the forecasted and actual market market basket index was 2.3 percentage change in the market basket index does basket amounts for FY 2016. points, while the actual increase for FY not exceed the 0.5 percentage point

TABLE 1—DIFFERENCE BETWEEN THE FORECASTED AND ACTUAL MARKET BASKET INCREASES FOR FY 2016

Forecasted Actual Index FY 2016 FY 2016 FY 2016 increase * increase ** difference

SNF ...... 2.3 2.3 0.0 * Published in Federal Register; based on second quarter 2015 IGI forecast (2010-based index). ** Based on the first quarter 2017 IGI forecast, with historical data through the fourth quarter 2016 (2010-based index).

4. Multifactor Productivity Adjustment our Web site at http://www.cms.gov/ accordance with section 1888(e)(5)(B)(ii) Section 1888(e)(5)(B)(ii) of the Act, as Research-Statistics-Data-and-Systems/ of the Act (as added by section 3401(b) added by section 3401(b) of the Patient Statistics-Trends-and-Reports/ of the Affordable Care Act) and Protection and Affordable Care Act MedicareProgramRatesStats/ § 413.337(d)(3), this market basket (Pub. L. 111–148, enacted on March 23, MarketBasketResearch.html. percentage would then be reduced by the MFP adjustment (the 10-year 2010) (Affordable Care Act) requires a. Incorporating the MFP Adjustment moving average of changes in MFP for that, in FY 2012 and in subsequent FYs, Into the Market Basket Update the market basket percentage under the the period ending September 30, 2018) SNF payment system (as described in Per section 1888(e)(5)(A) of the Act, of 0.4 percent, which would be section 1888(e)(5)(B)(i) of the Act) is to the Secretary shall establish a SNF calculated as described above and based be reduced annually by the multifactor market basket index that reflects on IGI’s first quarter 2017 forecast. productivity (MFP) adjustment changes over time in the prices of an Absent the enactment of section 411(a) described in section 1886(b)(3)(B)(xi)(II) appropriate mix of goods and services of MACRA, the resulting MFP-adjusted of the Act. Section 1886(b)(3)(B)(xi)(II) included in covered SNF services. SNF market basket update would have of the Act, in turn, defines the MFP Section 1888(e)(5)(B)(ii) of the Act, been equal to 2.3 percent, or 2.7 percent adjustment to be equal to the 10-year added by section 3401(b) of the less 0.4 percentage point. However, as moving average of changes in annual Affordable Care Act, requires that for FY discussed above, section economy-wide private nonfarm business 2012 and each subsequent FY, after 1888(e)(5)(B)(iii) of the Act, added by multi-factor productivity (as projected determining the market basket section 411(a) of the MACRA, requires by the Secretary for the 10-year period percentage described in section us to apply a 1.0 percent positive market ending with the applicable FY, year, 1888(e)(5)(B)(i) of the Act, the Secretary basket adjustment in determining the cost-reporting period, or other annual shall reduce such percentage by the FY 2018 SNF payment rates set forth in period). The Bureau of Labor Statistics productivity adjustment described in this proposed rule, without regard to the (BLS) is the agency that publishes the section 1886(b)(3)(B)(xi)(II) of the Act market basket update as adjusted by the official measure of private nonfarm (which we refer to as the MFP MFP adjustment described above. adjustment). Section 1888(e)(5)(B)(ii) of business MFP. We refer readers to the 5. Market Basket Update Factor for FY the Act further states that the reduction BLS Web site at http://www.bls.gov/mfp 2018 for the BLS historical published MFP of the market basket percentage by the data. MFP adjustment may result in the Sections 1888(e)(4)(E)(ii)(IV) and MFP is derived by subtracting the market basket percentage being less than 1888(e)(5)(i) of the Act require that the contribution of labor and capital inputs zero for a FY, and may result in update factor used to establish the FY growth from output growth. The payment rates under section 1888(e) of 2018 unadjusted federal rates be at a projections of the components of MFP the Act being less than such payment level equal to the market basket index are currently produced by IGI, a rates for the preceding fiscal year. percentage change. Accordingly, we nationally recognized economic If not for the enactment of section determined the total growth from the forecasting firm with which CMS 411(a) of the MACRA, the FY 2018 average market basket level for the contracts to forecast the components of update would include a calculation of period of October 1, 2016, through the market baskets and MFP. To the MFP adjustment as the 10-year September 30, 2017 to the average generate a forecast of MFP, IGI moving average of changes in MFP for market basket level for the period of replicates the MFP measure calculated the period ending September 30, 2018, October 1, 2017, through September 30, by the BLS, using a series of proxy which is estimated to be 0.4 percent. 2018. This process yields a percentage variables derived from IGI’s U.S. Also, if not for the enactment of section change in the proposed 2014-based SNF macroeconomic models. For a 411(a) of the MACRA, consistent with market basket of 2.7 percent. discussion of the MFP projection section 1888(e)(5)(B)(i) of the Act and As further explained in section III.B.3. methodology, we refer readers to the FY § 413.337(d)(2) of the regulations, the of this proposed rule, as applicable, we 2012 SNF PPS final rule (76 FR 48527 market basket percentage for FY 2018 adjust the market basket percentage through 48529) and the FY 2016 SNF for the SNF PPS would be based on IGI’s change by the forecast error from the PPS final rule (80 FR 46395). A first quarter 2017 forecast of the SNF most recently available FY for which complete description of the MFP market basket update, which is there is final data and apply this projection methodology is available on estimated to be 2.7 percent. In adjustment whenever the difference

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between the forecasted and actual percentage change by the MFP Historically, we have used the SNF percentage change in the market basket adjustment (the 10-year moving average market basket, adjusted as described exceeds a 0.5 percentage point of changes in MFP for the period ending above, to adjust each per diem threshold. Since the difference between September 30, 2018) of 0.4 percent, as component of the federal rates forward the forecasted FY 2016 SNF market described in section III.B.4. of this to reflect the change in the average basket percentage change and the actual proposed rule. Thus, absent the prices from one year to the next. FY 2016 SNF market basket percentage enactment of MACRA, the resulting net However, section 1888(e)(5)(B)(iii) of change (FY 2016 is the most recently SNF market basket update would equal the Act, as added by section 411(a) of available FY for which there is 2.3 percent, or 2.7 percent less the 0.4 the MACRA, requires us to use a market historical data) did not exceed the 0.5 percentage point MFP adjustment. We basket percentage of 1.0 percent, after percentage point threshold, the FY 2018 note that our policy has been that, if application of the MFP to adjust the market basket percentage change of 2.7 more recent data becomes available (for federal rates for FY 2018. Under section percent would not be adjusted by the example, a more recent estimate of the 1888(e)(5)(B)(iii) of the Act, the market forecast error correction. SNF market basket and/or MFP basket percentage increase used to If not for the enactment of section adjustment), we would use such data, if determine the federal rates set forth in 411(a) of the MACRA, the SNF market appropriate, to determine the SNF this proposed rule will be 1.0 percent basket for FY 2018 would be determined market basket percentage change, labor- for FY 2018. Tables 2 and 3 reflect the in accordance with section related share relative importance, updated components of the unadjusted 1888(e)(5)(B)(ii) of the Act, which forecast error adjustment, and MFP federal rates for FY 2018, prior to requires us to reduce the market basket adjustment in the SNF PPS final rule. adjustment for case-mix.

TABLE 2—FY 2018 UNADJUSTED FEDERAL RATE PER DIEM—URBAN

Nursing— Therapy— Therapy— Rate component case-mix case-mix non-case-mix Non-case-mix

Per Diem Amount ...... $177.16 $133.44 $17.58 $90.42

TABLE 3—FY 2018 UNADJUSTED FEDERAL RATE PER DIEM—RURAL

Nursing— Therapy— Therapy— Rate component case-mix case-mix non-case-mix Non-case-mix

Per Diem Amount ...... $169.24 $153.87 $18.78 $92.09

In addition, we note that section manner, so that any reduction made § 413.337 by adding a new paragraph 1888(e)(6)(A)(i) of the Act provides that, under section 1888(e)(6)(A)(i) of the Act (d)(4) that would implement this beginning in FY 2018, SNFs that fail to shall apply only for the fiscal year statutory 2 percent reduction. We invite submit data, as applicable, in involved, and the Secretary shall not comments on these proposals. take into account such reduction in accordance with sections C. Case-Mix Adjustment 1888(e)(6)(B)(i)(II) and (III) of the Act for computing the payment amount for a a fiscal year will receive a 2.0 subsequent fiscal year. Under section 1888(e)(4)(G)(i) of the percentage point reduction to their Accordingly, we propose that Act, the federal rate also incorporates an adjustment to account for facility case- market basket update for the fiscal year beginning with FY 2018, for SNFs that mix, using a classification system that involved, after application of section do not satisfy the reporting accounts for the relative resource 1888(e)(5)(B)(ii) of the Act (the MFP requirements for the FY 2018 SNF QRP, utilization of different patient types. adjustment) and section we would apply a penalty of a 2.0 percentage point reduction to the SNF The statute specifies that the adjustment 1888(e)(5)(B)(iii) of the Act (the 1 market basket percentage change for that is to reflect both a resident classification percent market basket increase for FY fiscal year, after application of any system that the Secretary establishes to 2018) (for additional information on the applicable forecast error adjustment as account for the relative resource use of SNF QRP, including the statutory specified in § 413.337(d)(2), MFP different patient types, as well as authority and the selected measures, we adjustment as specified in resident assessment data and other data refer readers to section V.B of this § 413.337(d)(3), and the 1 percent SNF that the Secretary considers appropriate. proposed rule). In addition, section market basket percentage change for FY In the interim final rule with comment 1888(e)(6)(A)(ii) of the Act states that 2018 required by section period that initially implemented the application of the 2.0 percentage point 1888(e)(5)(B)(iii) of the Act. We note SNF PPS (63 FR 26252, May 12, 1998), reduction (after application of section that in FY 2018, the application of this we developed the RUG–III case-mix 1888(e)(5)(B)(ii) and (iii) of the Act) may penalty to those SNFs that do not meet classification system, which tied the result in the market basket index the requirements for the FY 2018 SNF amount of payment to resident resource percentage change being less than 0.0 QRP would produce a market basket use in combination with resident for a fiscal year, and may result in index percentage change for that FY that characteristic information. Staff time payment rates for a fiscal year being less is less than zero (specifically, a net measurement (STM) studies conducted than such payment rates for the update of negative 1.0 percentage point), in 1990, 1995, and 1997 provided preceding fiscal year. Section and would also result in FY 2018 information on resource use (time spent 1888(e)(6)(A)(iii) of the Act further payment rates that are less than such by staff members on residents) and specifies that the 2.0 percentage point payment rates for the preceding FY. We resident characteristics that enabled us reduction is applied in a noncumulative also propose to amend the regulations at not only to establish RUG–III, but also

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to create case-mix indexes (CMIs). The the MDS assessment must be completed data (which still used ICD–9–CM original RUG–III grouper logic was in compliance with the instructions in coding), we identified fewer than 5085 based on clinical data collected in 1990, the RAI Manual in effect at the time the SNF residents with a diagnosis code of 1995, and 1997. As discussed in the assessment is completed. For payment 042 (Human Immunodeficiency Virus SNF PPS proposed rule for FY 2010 (74 and quality monitoring purposes, the (HIV) Infection). As explained in the FY FR 22208), we subsequently conducted RAI Manual consists of both the Manual 2016 SNF PPS final rule (80 FR 46397 a multi-year data collection and analysis instructions and the interpretive through 46398), on October 1, 2015 under the Staff Time and Resource guidance and policy clarifications (consistent with section 212 of PAMA), Intensity Verification (STRIVE) project posted on the appropriate MDS Web site we converted to using ICD–10–CM code to update the case-mix classification at http://www.cms.gov/Medicare/ B20 to identify those residents for system for FY 2011. The resulting Quality-Initiatives-Patient-Assessment- whom it is appropriate to apply the Resource Utilization Groups, Version 4 Instruments/NursingHomeQualityInits/ AIDS add-on established by section 511 (RUG–IV) case-mix classification system MDS30RAIManual.html. of the MMA. For FY 2018, an urban reflected the data collected in 2006– In addition, we note that section 511 facility with a resident with AIDS in 2007 during the STRIVE project, and of the Medicare Prescription Drug, RUG–IV group ‘‘HC2’’ would have a was finalized in the FY 2010 SNF PPS Improvement, and Modernization Act of case-mix adjusted per diem payment of final rule (74 FR 40288) to take effect in 2003 (Pub. L. 108–173, enacted $442.50 (see Table 4) before the FY 2011 concurrently with an updated December 8, 2003) (MMA) amended application of the MMA adjustment. new resident assessment instrument, section 1888(e)(12) of the Act to provide After an increase of 128 percent, this version 3.0 of the Minimum Data Set for a temporary increase of 128 percent urban facility would receive a case-mix (MDS 3.0), which collects the clinical in the PPS per diem payment for any adjusted per diem payment of data used for case-mix classification SNF residents with Acquired Immune approximately $1,008.90. under RUG–IV. Deficiency Syndrome (AIDS), effective with services furnished on or after Under section 1888(e)(4)(H), each We note that case-mix classification is October 1, 2004. This special add-on for update of the payment rates must based, in part, on the beneficiary’s need SNF residents with AIDS was to remain include the case-mix classification for skilled nursing care and therapy in effect only until the Secretary methodology applicable for the services. The case-mix classification certifies that there is an appropriate upcoming FY. The FY 2018 payment system uses clinical data from the MDS adjustment in the case mix to rates set forth in this proposed rule to assign a case-mix group to each compensate for the increased costs reflect the use of the RUG–IV case-mix patient that is then used to calculate a associated with such residents. The add- classification system from October 1, per diem payment under the SNF PPS. on for SNF residents with AIDS is also 2017, through September 30, 2018. We As discussed in section IV.A. of this discussed in Program Transmittal #160 list the proposed case-mix adjusted proposed rule, the clinical orientation of (Change Request #3291), issued on April RUG–IV payment rates for FY 2018, the case-mix classification system 30, 2004, which is available online at provided separately for urban and rural supports the SNF PPS’s use of an www.cms.gov/transmittals/downloads/ SNFs, in Tables 4 and 5 with administrative presumption that r160cp.pdf. In the SNF PPS final rule for corresponding case-mix values. We use considers a beneficiary’s initial case-mix FY 2010 (74 FR 40288), we did not the revised OMB delineations adopted classification to assist in making certain address this certification in that final in the FY 2015 SNF PPS final rule (79 SNF level of care determinations. rule’s implementation of the case-mix FR 45632, 45634) to identify a facility’s Further, because the MDS is used as a refinements for RUG–IV, thus allowing urban or rural status for the purpose of basis for payment, as well as a clinical the add-on payment required by section determining which set of rate tables assessment, we have provided extensive 511 of the MMA to remain in effect for would apply to the facility. Tables 4 and training on proper coding and the time the time being. 5 do not reflect the add-on for SNF frames for MDS completion in our For the limited number of SNF residents with AIDS enacted by section Resident Assessment Instrument (RAI) residents that qualify for this add-on, 511 of the MMA, which we apply only Manual. For an MDS to be considered there is a significant increase in after making all other adjustments (such valid for use in determining payment, payments. For example, using FY 2015 as wage index and case-mix).

TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES [Urban]

Non-case RUG–IV category Nursing Therapy Nursing Therapy mix therapy Non-case mix Total rate index index component component comp component

RUX ...... 2.67 1.87 $473.02 $249.53 ...... $90.42 $812.97 RUL ...... 2.57 1.87 455.30 249.53 ...... 90.42 795.25 RVX ...... 2.61 1.28 462.39 170.80 ...... 90.42 723.61 RVL ...... 2.19 1.28 387.98 170.80 ...... 90.42 649.20 RHX ...... 2.55 0.85 451.76 113.42 ...... 90.42 655.60 RHL ...... 2.15 0.85 380.89 113.42 ...... 90.42 584.73 RMX ...... 2.47 0.55 437.59 73.39 ...... 90.42 601.40 RML ...... 2.19 0.55 387.98 73.39 ...... 90.42 551.79 RLX ...... 2.26 0.28 400.38 37.36 ...... 90.42 528.16 RUC ...... 1.56 1.87 276.37 249.53 ...... 90.42 616.32 RUB ...... 1.56 1.87 276.37 249.53 ...... 90.42 616.32 RUA ...... 0.99 1.87 175.39 249.53 ...... 90.42 515.34 RVC ...... 1.51 1.28 267.51 170.80 ...... 90.42 528.73 RVB ...... 1.11 1.28 196.65 170.80 ...... 90.42 457.87 RVA ...... 1.10 1.28 194.88 170.80 ...... 90.42 456.10

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TABLE 4—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—Continued [Urban]

Non-case RUG–IV category Nursing Therapy Nursing Therapy mix therapy Non-case mix Total rate index index component component comp component

RHC ...... 1.45 0.85 256.88 113.42 ...... 90.42 460.72 RHB ...... 1.19 0.85 210.82 113.42 ...... 90.42 414.66 RHA ...... 0.91 0.85 161.22 113.42 ...... 90.42 365.06 RMC ...... 1.36 0.55 240.94 73.39 ...... 90.42 404.75 RMB ...... 1.22 0.55 216.14 73.39 ...... 90.42 379.95 RMA ...... 0.84 0.55 148.81 73.39 ...... 90.42 312.62 RLB ...... 1.50 0.28 265.74 37.36 ...... 90.42 393.52 RLA ...... 0.71 0.28 125.78 37.36 ...... 90.42 253.56 ES3 ...... 3.58 ...... 634.23 ...... $17.58 90.42 742.23 ES2 ...... 2.67 ...... 473.02 ...... 17.58 90.42 581.02 ES1 ...... 2.32 ...... 411.01 ...... 17.58 90.42 519.01 HE2 ...... 2.22 ...... 393.30 ...... 17.58 90.42 501.30 HE1 ...... 1.74 ...... 308.26 ...... 17.58 90.42 416.26 HD2 ...... 2.04 ...... 361.41 ...... 17.58 90.42 469.41 HD1 ...... 1.60 ...... 283.46 ...... 17.58 90.42 391.46 HC2 ...... 1.89 ...... 334.83 ...... 17.58 90.42 442.83 HC1 ...... 1.48 ...... 262.20 ...... 17.58 90.42 370.20 HB2 ...... 1.86 ...... 329.52 ...... 17.58 90.42 437.52 HB1 ...... 1.46 ...... 258.65 ...... 17.58 90.42 366.65 LE2 ...... 1.96 ...... 347.23 ...... 17.58 90.42 455.23 LE1 ...... 1.54 ...... 272.83 ...... 17.58 90.42 380.83 LD2 ...... 1.86 ...... 329.52 ...... 17.58 90.42 437.52 LD1 ...... 1.46 ...... 258.65 ...... 17.58 90.42 366.65 LC2 ...... 1.56 ...... 276.37 ...... 17.58 90.42 384.37 LC1 ...... 1.22 ...... 216.14 ...... 17.58 90.42 324.14 LB2 ...... 1.45 ...... 256.88 ...... 17.58 90.42 364.88 LB1 ...... 1.14 ...... 201.96 ...... 17.58 90.42 309.96 CE2 ...... 1.68 ...... 297.63 ...... 17.58 90.42 405.63 CE1 ...... 1.50 ...... 265.74 ...... 17.58 90.42 373.74 CD2 ...... 1.56 ...... 276.37 ...... 17.58 90.42 384.37 CD1 ...... 1.38 ...... 244.48 ...... 17.58 90.42 352.48 CC2 ...... 1.29 ...... 228.54 ...... 17.58 90.42 336.54 CC1 ...... 1.15 ...... 203.73 ...... 17.58 90.42 311.73 CB2 ...... 1.15 ...... 203.73 ...... 17.58 90.42 311.73 CB1 ...... 1.02 ...... 180.70 ...... 17.58 90.42 288.70 CA2 ...... 0.88 ...... 155.90 ...... 17.58 90.42 263.90 CA1 ...... 0.78 ...... 138.18 ...... 17.58 90.42 246.18 BB2 ...... 0.97 ...... 171.85 ...... 17.58 90.42 279.85 BB1 ...... 0.90 ...... 159.44 ...... 17.58 90.42 267.44 BA2 ...... 0.70 ...... 124.01 ...... 17.58 90.42 232.01 BA1 ...... 0.64 ...... 113.38 ...... 17.58 90.42 221.38 PE2 ...... 1.50 ...... 265.74 ...... 17.58 90.42 373.74 PE1 ...... 1.40 ...... 248.02 ...... 17.58 90.42 356.02 PD2 ...... 1.38 ...... 244.48 ...... 17.58 90.42 352.48 PD1 ...... 1.28 ...... 226.76 ...... 17.58 90.42 334.76 PC2 ...... 1.10 ...... 194.88 ...... 17.58 90.42 302.88 PC1 ...... 1.02 ...... 180.70 ...... 17.58 90.42 288.70 PB2 ...... 0.84 ...... 148.81 ...... 17.58 90.42 256.81 PB1 ...... 0.78 ...... 138.18 ...... 17.58 90.42 246.18 PA2 ...... 0.59 ...... 104.52 ...... 17.58 90.42 212.52 PA1 ...... 0.54 ...... 95.67 ...... 17.58 90.42 203.67

TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES [Rural]

Non-case mix RUG–IV category Nursing Therapy Nursing Therapy therapy Non-case mix Total rate index index component component comp component

RUX ...... 2.67 1.87 $451.87 $287.74 ...... $92.09 $831.70 RUL ...... 2.57 1.87 434.95 287.74 ...... 92.09 814.78 RVX ...... 2.61 1.28 441.72 196.95 ...... 92.09 730.76 RVL ...... 2.19 1.28 370.64 196.95 ...... 92.09 659.68 RHX ...... 2.55 0.85 431.56 130.79 ...... 92.09 654.44 RHL ...... 2.15 0.85 363.87 130.79 ...... 92.09 586.75 RMX ...... 2.47 0.55 418.02 84.63 ...... 92.09 594.74 RML ...... 2.19 0.55 370.64 84.63 ...... 92.09 547.36 RLX ...... 2.26 0.28 382.48 43.08 ...... 92.09 517.65

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TABLE 5—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—Continued [Rural]

Non-case mix RUG–IV category Nursing Therapy Nursing Therapy therapy Non-case mix Total rate index index component component comp component

RUC ...... 1.56 1.87 264.01 287.74 ...... 92.09 643.84 RUB ...... 1.56 1.87 264.01 287.74 ...... 92.09 643.84 RUA ...... 0.99 1.87 167.55 287.74 ...... 92.09 547.38 RVC ...... 1.51 1.28 255.55 196.95 ...... 92.09 544.59 RVB ...... 1.11 1.28 187.86 196.95 ...... 92.09 476.90 RVA ...... 1.10 1.28 186.16 196.95 ...... 92.09 475.20 RHC ...... 1.45 0.85 245.40 130.79 ...... 92.09 468.28 RHB ...... 1.19 0.85 201.40 130.79 ...... 92.09 424.28 RHA ...... 0.91 0.85 154.01 130.79 ...... 92.09 376.89 RMC ...... 1.36 0.55 230.17 84.63 ...... 92.09 406.89 RMB ...... 1.22 0.55 206.47 84.63 ...... 92.09 383.19 RMA ...... 0.84 0.55 142.16 84.63 ...... 92.09 318.88 RLB ...... 1.50 0.28 253.86 43.08 ...... 92.09 389.03 RLA ...... 0.71 0.28 120.16 43.08 ...... 92.09 255.33 ES3 ...... 3.58 ...... 605.88 ...... $18.78 92.09 716.75 ES2 ...... 2.67 ...... 451.87 ...... 18.78 92.09 562.74 ES1 ...... 2.32 ...... 392.64 ...... 18.78 92.09 503.51 HE2 ...... 2.22 ...... 375.71 ...... 18.78 92.09 486.58 HE1 ...... 1.74 ...... 294.48 ...... 18.78 92.09 405.35 HD2 ...... 2.04 ...... 345.25 ...... 18.78 92.09 456.12 HD1 ...... 1.60 ...... 270.78 ...... 18.78 92.09 381.65 HC2 ...... 1.89 ...... 319.86 ...... 18.78 92.09 430.73 HC1 ...... 1.48 ...... 250.48 ...... 18.78 92.09 361.35 HB2 ...... 1.86 ...... 314.79 ...... 18.78 92.09 425.66 HB1 ...... 1.46 ...... 247.09 ...... 18.78 92.09 357.96 LE2 ...... 1.96 ...... 331.71 ...... 18.78 92.09 442.58 LE1 ...... 1.54 ...... 260.63 ...... 18.78 92.09 371.50 LD2 ...... 1.86 ...... 314.79 ...... 18.78 92.09 425.66 LD1 ...... 1.46 ...... 247.09 ...... 18.78 92.09 357.96 LC2 ...... 1.56 ...... 264.01 ...... 18.78 92.09 374.88 LC1 ...... 1.22 ...... 206.47 ...... 18.78 92.09 317.34 LB2 ...... 1.45 ...... 245.40 ...... 18.78 92.09 356.27 LB1 ...... 1.14 ...... 192.93 ...... 18.78 92.09 303.80 CE2 ...... 1.68 ...... 284.32 ...... 18.78 92.09 395.19 CE1 ...... 1.50 ...... 253.86 ...... 18.78 92.09 364.73 CD2 ...... 1.56 ...... 264.01 ...... 18.78 92.09 374.88 CD1 ...... 1.38 ...... 233.55 ...... 18.78 92.09 344.42 CC2 ...... 1.29 ...... 218.32 ...... 18.78 92.09 329.19 CC1 ...... 1.15 ...... 194.63 ...... 18.78 92.09 305.50 CB2 ...... 1.15 ...... 194.63 ...... 18.78 92.09 305.50 CB1 ...... 1.02 ...... 172.62 ...... 18.78 92.09 283.49 CA2 ...... 0.88 ...... 148.93 ...... 18.78 92.09 259.80 CA1 ...... 0.78 ...... 132.01 ...... 18.78 92.09 242.88 BB2 ...... 0.97 ...... 164.16 ...... 18.78 92.09 275.03 BB1 ...... 0.90 ...... 152.32 ...... 18.78 92.09 263.19 BA2 ...... 0.70 ...... 118.47 ...... 18.78 92.09 229.34 BA1 ...... 0.64 ...... 108.31 ...... 18.78 92.09 219.18 PE2 ...... 1.50 ...... 253.86 ...... 18.78 92.09 364.73 PE1 ...... 1.40 ...... 236.94 ...... 18.78 92.09 347.81 PD2 ...... 1.38 ...... 233.55 ...... 18.78 92.09 344.42 PD1 ...... 1.28 ...... 216.63 ...... 18.78 92.09 327.50 PC2 ...... 1.10 ...... 186.16 ...... 18.78 92.09 297.03 PC1 ...... 1.02 ...... 172.62 ...... 18.78 92.09 283.49 PB2 ...... 0.84 ...... 142.16 ...... 18.78 92.09 253.03 PB1 ...... 0.78 ...... 132.01 ...... 18.78 92.09 242.88 PA2 ...... 0.59 ...... 99.85 ...... 18.78 92.09 210.72 PA1 ...... 0.54 ...... 91.39 ...... 18.78 92.09 202.26

D. Wage Index Adjustment used hospital inpatient wage data in explained in the update notice for FY developing a wage index to be applied 2005 (69 FR 45786), the SNF PPS does Section 1888(e)(4)(G)(ii) of the Act to SNFs. We propose to continue this not use the hospital area wage index’s requires that we adjust the federal rates practice for FY 2018, as we continue to occupational mix adjustment, as this to account for differences in area wage believe that in the absence of SNF- adjustment serves specifically to define levels, using a wage index that the specific wage data, using the hospital the occupational categories more clearly Secretary determines appropriate. Since inpatient wage index data is appropriate in a hospital setting; moreover, the the inception of the SNF PPS, we have and reasonable for the SNF PPS. As collection of the occupational wage data

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also excludes any wage data related to this methodology due to the distinct OMB issued OMB Bulletin No. 15–01, SNFs. Therefore, we believe that using economic circumstances that exist there which provides minor updates to and the updated wage data exclusive of the (for example, due to the close proximity supersedes OMB Bulletin No. 13–01 occupational mix adjustment continues to one another of almost all of Puerto that was issued on February 28, 2013. to be appropriate for SNF payments. For Rico’s various urban and non-urban The attachment to OMB Bulletin No. FY 2018, the updated wage data are for areas, this methodology would produce 15–01 provides detailed information on hospital cost reporting periods a wage index for rural Puerto Rico that the update to statistical areas since beginning on or after October 1, 2013 is higher than that in half of its urban February 28, 2013. The updates and before October 1, 2014 (FY 2014 areas); instead, we would continue to provided in OMB Bulletin No. 15–01 are cost report data). use the most recent wage index based on the application of the 2010 We note that section 315 of the previously available for that area. For Standards for Delineating Metropolitan Medicare, Medicaid, and SCHIP urban areas without specific hospital and Micropolitan Statistical Areas to Benefits Improvement and Protection wage index data, we would use the Census Bureau population estimates for Act of 2000 (Pub. L. 106–554, enacted average wage indexes of all of the urban July 1, 2012 and July 1, 2013. As we on December 21, 2000) (BIPA) areas within the state to serve as a previously stated in the FY 2008 SNF authorized us to establish a geographic reasonable proxy for the wage index of PPS proposed and final rules (72 FR reclassification procedure that is that urban CBSA. For FY 2018, the only 25538 through 25539, and 72 FR 43423), specific to SNFs, but only after urban area without wage index data we again wish to clarify that this and all collecting the data necessary to establish available is CBSA 25980, Hinesville- subsequent SNF PPS rules and notices a SNF wage index that is based on wage Fort Stewart, GA. The proposed wage are considered to incorporate any data from nursing homes. However, to index applicable to FY 2018 is set forth updates and revisions set forth in the date, this has proven to be unfeasible in Tables A and B available on the CMS most recent OMB bulletin that applies due to the volatility of existing SNF Web site at http://www.cms.gov/ to the hospital wage data used to wage data and the significant amount of Medicare/Medicare-Fee-for-Service- determine the current SNF PPS wage resources that would be required to Payment/SNFPPS/WageIndex.html. index. As noted above, the proposed improve the quality of that data. More In the SNF PPS final rule for FY 2006 wage index applicable to FY 2018 is set specifically, we believe auditing all SNF (70 FR 45026, August 4, 2005), we forth in Tables A and B available on the cost reports, similar to the process used adopted the changes discussed in the CMS Web site at http://www.cms.gov/ to audit inpatient hospital cost reports OMB Bulletin No. 03–04 (June 6, 2003), Medicare/Medicare-Fee-for-Service- for purposes of the Inpatient Prospective which announced revised definitions Payment/SNFPPS/WageIndex.html. Payment System (IPPS) wage index, for MSAs and the creation of Once calculated, we would apply the would place a burden on providers in micropolitan statistical areas and wage index adjustment to the labor- terms of recordkeeping and completion combined statistical areas. related portion of the federal rate. Each of the cost report worksheet. We also In adopting the CBSA geographic year, we calculate a revised labor- believe that adopting such an approach designations, we provided for a one-year related share, based on the relative would require a significant commitment transition in FY 2006 with a blended importance of labor-related cost of resources by CMS and the Medicare wage index for all providers. For FY categories (that is, those cost categories Administrative Contractors, potentially 2006, the wage index for each provider that are labor-intensive and vary with far in excess of those required under the consisted of a blend of 50 percent of the the local labor market) in the input price IPPS given that there are nearly five FY 2006 MSA-based wage index and 50 index. In the SNF PPS final rule for FY times as many SNFs as there are percent of the FY 2006 CBSA-based 2014 (78 FR 47944 through 47946), we inpatient hospitals. Therefore, while we wage index (both using FY 2002 finalized a proposal to revise the labor- continue to believe that the hospital data). We referred to the related share to reflect the relative development of such an audit process blended wage index as the FY 2006 SNF importance of the FY 2010-based SNF could improve SNF cost reports in such PPS transition wage index. As discussed market basket cost weights for the a manner as to permit us to establish a in the SNF PPS final rule for FY 2006 following cost categories: Wages and SNF-specific wage index, we do not (70 FR 45041), since the expiration of Salaries; Employee Benefits; regard an undertaking of this magnitude this one-year transition on September Professional fees: Labor-related; as being feasible within the current level 30, 2006, we have used the full CBSA- Administrative and Facilities Support of programmatic resources. based wage index values. Services; All other—Labor-Related In addition, we propose to continue to In the FY 2015 SNF PPS final rule (79 Services; and a proportion of Capital- use the same methodology discussed in FR 45644 through 45646), we finalized Related expenses. Effective beginning the SNF PPS final rule for FY 2008 (72 changes to the SNF PPS wage index FY 2018, as discussed in section V.A. of FR 43423) to address those geographic based on the newest OMB delineations, this proposed rule, we are proposing to areas in which there are no hospitals, as described in OMB Bulletin No. 13– revise the labor-related share to reflect and thus, no hospital wage index data 01, beginning in FY 2015, including a 1- the relative importance of the proposed on which to base the calculation of the year transition with a blended wage 2014-based SNF market basket cost FY 2018 SNF PPS wage index. For rural index for FY 2015. OMB Bulletin No. weights for the following cost geographic areas that do not have 13–01 established revised delineations categories: Wages and Salaries; hospitals, and therefore, lack hospital for Metropolitan Statistical Areas, Employee Benefits; Professional fees: wage data on which to base an area Micropolitan Statistical Areas, and Labor-related; Administrative and wage adjustment, we would use the Combined Statistical Areas in the Facilities Support services; Installation, average wage index from all contiguous United States and Puerto Rico based on Maintenance, and Repair services; All Core-Based Statistical Areas (CBSAs) as the 2010 Census, and provided guidance Other: Labor-Related Services; and a a reasonable proxy. For FY 2018, there on the use of the delineations of these proportion of Capital-Related expenses. are no rural geographic areas that do not statistical areas using standards We calculate the labor-related relative have hospitals, and thus, this published on June 28, 2010 in the importance from the SNF market basket, methodology would not be applied. For Federal Register (75 FR 37246 through and it approximates the labor-related rural Puerto Rico, we would not apply 37252). Subsequently, on July 15, 2015, portion of the total costs after taking

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into account historical and projected Accordingly, the relative importance this proposed rule and the proposed price changes between the base year and figure more closely reflects the cost labor-related share is provided in Table FY 2018. The price proxies that move share weights for FY 2018 than the base 15. the different cost categories in the year weights from the SNF market Tables 6 and 7 show the proposed market basket do not necessarily change basket. The proposed methodology for RUG–IV case-mix adjusted federal rates at the same rate, and the relative calculating the labor-related portion for for FY 2018 by labor-related and non- importance captures these changes. FY 2018 is discussed in section V.A. of labor-related components.

TABLE 6—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT

Total Labor Non-labor RUG–IV category rate portion portion

RUX ...... 812.97 $575.58 $237.39 RUL ...... 795.25 563.04 232.21 RVX ...... 723.61 512.32 211.29 RVL ...... 649.20 459.63 189.57 RHX ...... 655.60 464.16 191.44 RHL ...... 584.73 413.99 170.74 RMX ...... 601.40 425.79 175.61 RML ...... 551.79 390.67 161.12 RLX ...... 528.16 373.94 154.22 RUC ...... 616.32 436.35 179.97 RUB ...... 616.32 436.35 179.97 RUA ...... 515.34 364.86 150.48 RVC ...... 528.73 374.34 154.39 RVB ...... 457.87 324.17 133.70 RVA ...... 456.10 322.92 133.18 RHC ...... 460.72 326.19 134.53 RHB ...... 414.66 293.58 121.08 RHA ...... 365.06 258.46 106.60 RMC ...... 404.75 286.56 118.19 RMB ...... 379.95 269.00 110.95 RMA ...... 312.62 221.33 91.29 RLB ...... 393.52 278.61 114.91 RLA ...... 253.56 179.52 74.04 ES3 ...... 742.23 525.50 216.73 ES2 ...... 581.02 411.36 169.66 ES1 ...... 519.01 367.46 151.55 HE2 ...... 501.30 354.92 146.38 HE1 ...... 416.26 294.71 121.55 HD2 ...... 469.41 332.34 137.07 HD1 ...... 391.46 277.15 114.31 HC2 ...... 442.83 313.52 129.31 HC1 ...... 370.20 262.10 108.10 HB2 ...... 437.52 309.76 127.76 HB1 ...... 366.65 259.59 107.06 LE2 ...... 455.23 322.30 132.93 LE1 ...... 380.83 269.63 111.20 LD2 ...... 437.52 309.76 127.76 LD1 ...... 366.65 259.59 107.06 LC2 ...... 384.37 272.13 112.24 LC1 ...... 324.14 229.49 94.65 LB2 ...... 364.88 258.34 106.54 LB1 ...... 309.96 219.45 90.51 CE2 ...... 405.63 287.19 118.44 CE1 ...... 373.74 264.61 109.13 CD2 ...... 384.37 272.13 112.24 CD1 ...... 352.48 249.56 102.92 CC2 ...... 336.54 238.27 98.27 CC1 ...... 311.73 220.70 91.03 CB2 ...... 311.73 220.70 91.03 CB1 ...... 288.70 204.40 84.30 CA2 ...... 263.90 186.84 77.06 CA1 ...... 246.18 174.30 71.88 BB2 ...... 279.85 198.13 81.72 BB1 ...... 267.44 189.35 78.09 BA2 ...... 232.01 164.26 67.75 BA1 ...... 221.38 156.74 64.64 PE2 ...... 373.74 264.61 109.13 PE1 ...... 356.02 252.06 103.96 PD2 ...... 352.48 249.56 102.92 PD1 ...... 334.76 237.01 97.75 PC2 ...... 302.88 214.44 88.44 PC1 ...... 288.70 204.40 84.30 PB2 ...... 256.81 181.82 74.99

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TABLE 6—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT— Continued

Total Labor Non-labor RUG–IV category rate portion portion

PB1 ...... 246.18 174.30 71.88 PA2 ...... 212.52 150.46 62.06 PA1 ...... 203.67 144.20 59.47

TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFSBYLABOR AND NON-LABOR COMPONENT

Total Labor Non-labor RUG–IV category rate portion portion

RUX ...... 831.70 $588.84 $242.86 RUL ...... 814.78 576.86 237.92 RVX ...... 730.76 517.38 213.38 RVL ...... 659.68 467.05 192.63 RHX ...... 654.44 463.34 191.10 RHL ...... 586.75 415.42 171.33 RMX ...... 594.74 421.08 173.66 RML ...... 547.36 387.53 159.83 RLX ...... 517.65 366.50 151.15 RUC ...... 643.84 455.84 188.00 RUB ...... 643.84 455.84 188.00 RUA ...... 547.38 387.55 159.83 RVC ...... 544.59 385.57 159.02 RVB ...... 476.90 337.65 139.25 RVA ...... 475.20 336.44 138.76 RHC ...... 468.28 331.54 136.74 RHB ...... 424.28 300.39 123.89 RHA ...... 376.89 266.84 110.05 RMC ...... 406.89 288.08 118.81 RMB ...... 383.19 271.30 111.89 RMA ...... 318.88 225.77 93.11 RLB ...... 389.03 275.43 113.60 RLA ...... 255.33 180.77 74.56 ES3 ...... 716.75 507.46 209.29 ES2 ...... 562.74 398.42 164.32 ES1 ...... 503.51 356.49 147.02 HE2 ...... 486.58 344.50 142.08 HE1 ...... 405.35 286.99 118.36 HD2 ...... 456.12 322.93 133.19 HD1 ...... 381.65 270.21 111.44 HC2 ...... 430.73 304.96 125.77 HC1 ...... 361.35 255.84 105.51 HB2 ...... 425.66 301.37 124.29 HB1 ...... 357.96 253.44 104.52 LE2 ...... 442.58 313.35 129.23 LE1 ...... 371.50 263.02 108.48 LD2 ...... 425.66 301.37 124.29 LD1 ...... 357.96 253.44 104.52 LC2 ...... 374.88 265.42 109.46 LC1 ...... 317.34 224.68 92.66 LB2 ...... 356.27 252.24 104.03 LB1 ...... 303.80 215.09 88.71 CE2 ...... 395.19 279.79 115.40 CE1 ...... 364.73 258.23 106.50 CD2 ...... 374.88 265.42 109.46 CD1 ...... 344.42 243.85 100.57 CC2 ...... 329.19 233.07 96.12 CC1 ...... 305.50 216.29 89.21 CB2 ...... 305.50 216.29 89.21 CB1 ...... 283.49 200.71 82.78 CA2 ...... 259.80 183.94 75.86 CA1 ...... 242.88 171.96 70.92 BB2 ...... 275.03 194.72 80.31 BB1 ...... 263.19 186.34 76.85 BA2 ...... 229.34 162.37 66.97 BA1 ...... 219.18 155.18 64.00 PE2 ...... 364.73 258.23 106.50 PE1 ...... 347.81 246.25 101.56 PD2 ...... 344.42 243.85 100.57 PD1 ...... 327.50 231.87 95.63

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TABLE 7—RUG–IV CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFSBYLABOR AND NON-LABOR COMPONENT— Continued

Total Labor Non-labor RUG–IV category rate portion portion

PC2 ...... 297.03 210.30 86.73 PC1 ...... 283.49 200.71 82.78 PB2 ...... 253.03 179.15 73.88 PB1 ...... 242.88 171.96 70.92 PA2 ...... 210.72 149.19 61.53 PA1 ...... 202.26 143.20 59.06

Section 1888(e)(4)(G)(ii) of the Act factor for FY 2017 to the weighted the federal per diem rates to compute also requires that we apply this wage average wage adjustment factor for FY the provider’s actual per diem PPS index in a manner that does not result 2018. For this calculation, we would use payment for FY 2018. We derive the in aggregate payments under the SNF the same FY 2016 claims utilization Labor and Non-labor columns from PPS that are greater or less than would data for both the numerator and Table 6. The wage index used in this otherwise be made if the wage denominator of this ratio. We define the example is based on the proposed wage adjustment had not been made. For FY wage adjustment factor used in this index, which may be found in Table A 2018 (federal rates effective October 1, calculation as the labor share of the rate available on the CMS Web site at http:// 2017), we would apply an adjustment to component multiplied by the wage www.cms.gov/Medicare/Medicare-Fee- index plus the non-labor share of the fulfill the budget neutrality requirement. for-Service-Payment/SNFPPS/ rate component. The budget neutrality We would meet this requirement by WageIndex.html. As illustrated in Table factor for FY 2018 would be 1.0003. multiplying each of the components of 8, SNF XYZ’s total PPS payment for FY the unadjusted federal rates by a budget E. Adjusted Rate Computation Example 2018 would equal $47,647.74. neutrality factor equal to the ratio of the Using the hypothetical SNF XYZ, weighted average wage adjustment Table 8 shows the adjustments made to

TABLE 8—ADJUSTED RATE COMPUTATION EXAMPLE SNF XYZ: LOCATED IN FREDERICK, MD (URBAN CBSA 43524) WAGE INDEX: 0.9886 [See Proposed Wage Index in Table A] 1

Adjusted Adjusted Percent Medicare RUG–IV group Labor Wage index labor Non-labor rate adjustment days Payment

RVX ...... $512.32 0.9886 $506.48 $211.29 $717.77 $717.77 14 $10,048.78 ES2 ...... 411.36 0.9886 406.67 169.66 576.33 576.33 30 17,289.90 RHA ...... 258.46 0.9886 255.51 106.60 362.11 362.11 16 5,793.76 CC2 * ...... 238.27 0.9886 235.55 98.27 333.82 761.11 10 7,611.10 BA2 ...... 164.26 0.9886 162.39 67.75 230.14 230.14 30 6,904.20

...... 100 47,647.74 * Reflects a 128 percent adjustment from section 511 of the MMA. 1 Available on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.

IV. Additional Aspects of the SNF PPS making certain SNF level of care A beneficiary assigned to any of the determinations. lower 14 RUG–IV groups is not A. SNF Level of Care—Administrative automatically classified as either Presumption In accordance with the regulations at § 413.345, we include in each update of meeting or not meeting the definition, The establishment of the SNF PPS did the federal payment rates in the Federal but instead receives an individual level not change Medicare’s fundamental Register the designation of those of care determination using the existing requirements for SNF coverage. specific RUGs under the classification administrative criteria. This However, because the case-mix system that represent the required SNF presumption recognizes the strong classification is based, in part, on the level of care, as provided in § 409.30. As likelihood that beneficiaries assigned to beneficiary’s need for skilled nursing set forth in the FY 2011 SNF PPS update one of the upper 52 RUG–IV groups care and therapy, we have attempted, notice (75 FR 42910), this designation during the immediate post-hospital where possible, to coordinate claims reflects an administrative presumption period require a covered level of care, review procedures with the existing under the 66-group RUG–IV system that which would be less likely for those resident assessment process and case- beneficiaries who are correctly assigned beneficiaries assigned to one of the mix classification system discussed in to one of the upper 52 RUG–IV groups lower 14 RUG–IV groups. section III.C. of this proposed rule. This on the initial five-day, Medicare- In the July 30, 1999 final rule (64 FR approach includes an administrative required assessment are automatically 41670), we indicated that we would presumption that utilizes a beneficiary’s classified as meeting the SNF level of announce any changes to the guidelines initial classification in one of the upper care definition up to and including the for Medicare level of care 52 RUGs of the 66-group RUG–IV case- assessment reference date (ARD) on the determinations related to modifications mix classification system to assist in 5-day Medicare-required assessment. in the case-mix classification structure.

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In this proposed rule, for FY 2018, we conform the text of these regulations § 413.333 to replace ‘‘Resource would continue to designate the upper more closely to that of the Utilization Groups’’ with ‘‘resident 52 RUG–IV groups for purposes of this corresponding statutory language at classification system’’, as well as in the administrative presumption, consisting section 1888(e)(4)(H)(ii) of the Act, material in § 424.20(a)(1)(ii) on SNF of all groups encompassed by the which refers in more general terms to level of care certifications to replace the following RUG–IV categories: the applicable ‘‘case mix classification phrase ‘‘one of the Resource Utilization • Rehabilitation plus Extensive system.’’ Moreover, we note that the Groups designated’’ with ‘‘one of the Services. recurring announcements in the Federal case-mix classifiers that CMS • Ultra High Rehabilitation. Register of the administrative designates,’’ in both cases to conform • Very High Rehabilitation. presumption’s designated groups as part more closely with the statutory language • High Rehabilitation. of each annual update of the SNF PPS in section 1888(e)(4)(G) and (H) of the • Medium Rehabilitation. Act, as discussed in this proposed rule, • rates has in actual practice proven to be Low Rehabilitation. which refers in more general terms to • largely a formality, resulting in exactly Extensive Services. the same designated groups repetitively the ‘‘resident classification system’’ or • Special Care High. being promulgated routinely year after ‘‘case mix classification system,’’ and to • Special Care Low. • year. Accordingly, we now propose clarify in § 424.20(a)(1)(ii) that ‘‘CMS’’ Clinically Complex. designates these case-mix classifiers. However, we note that this instead to disseminate this standard Finally, regarding the § 424.20, we also administrative presumption policy does description of the administrative presumption’s designated groups propose to revise paragraph not supersede the SNF’s responsibility (e)(2)(ii)(B)(2) by updating its existing to ensure that its decisions relating to exclusively through the SNF PPS Web site, and to announce such designations cross-reference to the provision at level of care are appropriate and timely, § 483.40(e) on delegating physician including a review to confirm that the in rulemaking only in the event that we are actually proposing to make changes tasks in SNFs, which was recently services prompting the beneficiary’s redesignated as new § 483.30(e) under assignment to one of the upper 52 RUG– in them. Along with this proposed revision, we the revised long-term care facility IV groups (which, in turn, serves to requirements for participation (81 FR also propose to make appropriate trigger the administrative presumption) 68861, October 4, 2016). are themselves medically necessary. As conforming revisions in other portions we explained in the FY 2000 SNF PPS of the regulations text. Specifically, we B. Consolidated Billing final rule (64 FR 41667), the propose to remove from the Sections 1842(b)(6)(E) and 1862(a)(18) administrative presumption: introductory text of § 409.30, the of the Act (as added by section 4432(b) ‘‘. . . is itself rebuttable in those parenthetical phrase ‘‘(in the annual of the BBA) require a SNF to submit individual cases in which the services publication of Federal prospective consolidated Medicare bills to its actually received by the resident do not payment rates described in § 413.345 of Medicare Administrative Contractor meet the basic statutory criterion of this chapter)’’ for the same reasons we (MAC) for almost all of the services that being reasonable and necessary to propose to remove the parenthetical its residents receive during the course of diagnose or treat a beneficiary’s phrase from § 413.345 as discussed in a covered Part A stay. In addition, condition (according to section this proposed rule. In addition, we section 1862(a)(18) of the Act places the 1862(a)(1) of the Act). Accordingly, the propose to replace the phrase to ‘‘one of responsibility with the SNF for billing presumption would not apply, for the Resource Utilization Groups that is Medicare for physical therapy, example, in those situations in which a designated’’ in § 409.30 introductory occupational therapy, and speech- resident’s assignment to one of the text with the phrase ‘‘one of the case- language pathology services that the upper . . . groups is itself based on the mix classifiers CMS designates’’ to resident receives during a noncovered receipt of services that are subsequently conform more closely with the statutory stay. Section 1888(e)(2)(A) of the Act determined to be not reasonable and language in section 1888(e)(4)(G) and excludes a small list of services from the necessary.’’ (H) of the Act, which refers in more consolidated billing provision Moreover, we want to stress the general terms to the ‘‘resident (primarily those services furnished by importance of careful monitoring for classification system’’ or ‘‘case mix physicians and certain other types of changes in each patient’s condition to classification system,’’ and to clarify practitioners), which remain separately determine the continuing need for Part that ‘‘CMS’’ makes these designations. billable under Part B when furnished to A SNF benefits after the ARD of the 5- We additionally propose to revise a SNF’s Part A resident. These excluded day assessment. § 409.30 to reflect more clearly our service categories are discussed in In connection with the administrative longstanding policy that the assignment greater detail in section V.B.2. of the level of care presumption, we now of a designated case-mix classifier May 12, 1998 interim final rule (63 FR propose to amend the existing would serve to trigger the administrative 26295 through 26297). regulations text at § 413.345 by presumption only when that assignment A detailed discussion of the removing the parenthetical phrase is itself correct. As we noted in the FY legislative history of the consolidated ‘‘(including the designation of those 2000 SNF PPS final rule (64 FR 41667, billing provision is available on the SNF specific Resource Utilization Groups July 30, 1999), ‘‘. . . the presumption PPS Web site at http://www.cms.gov/ under the resident classification system would not apply, for example, in those Medicare/Medicare-Fee-for-Service- that represent the required SNF level of situations in which a resident’s Payment/SNFPPS/Downloads/ care, as provided in § 409.30 of this assignment to one of the upper . . . Legislative_History_04152015.pdf. In chapter)’’ that currently appears in the groups is itself based on the receipt of particular, section 103 of the Medicare, second sentence of § 413.345. The services that are subsequently Medicaid, and SCHIP Balanced Budget proposed deletion of the current determined to be not reasonable and Refinement Act of 1999 (Pub. L. 106– reference to publishing such material necessary.’’ We also propose to make 113, enacted on November 29, 1999) annually in the Federal Register, along similar conforming revisions in the (BBRA) amended section 1888(e)(2)(A) with the specific reference to ‘‘Resource ‘‘resident classification system’’ of the Act by further excluding a Utilization Groups,’’ would serve to definition that currently appears in number of individual high-cost, low

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probability services, identified by Conference report. Accordingly, we services that we specifically identify as Healthcare Common Procedure Coding characterized this statutory authority to being beyond the scope of SNF care System (HCPCS) codes, within several identify additional service codes for plans generally’’ (64 FR 41676, July 30, broader categories (chemotherapy items, exclusion as essentially affording the 1999, emphasis added). To further chemotherapy administration services, flexibility to revise the list of excluded clarify this longstanding policy noted radioisotope services, and customized codes in response to changes of major above that the outpatient hospital prosthetic devices) that otherwise significance that may occur over time exclusion applies solely to those remained subject to the provision. We (for example, the development of new services that we specifically designate discuss this BBRA amendment in medical technologies or other advances for this purpose, we are proposing to greater detail in the SNF PPS proposed in the state of medical practice) (65 FR revise § 411.15(p)(3)(iii) to state this and final rules for FY 2001 (65 FR 19231 46791). In this proposed rule, we more explicitly. In addition, we note through 19232, April 10, 2000, and 65 specifically invite public comments that recent revisions in the long-term FR 46790 through 46795, July 31, 2000), identifying HCPCS codes in any of these care facility requirements for as well as in Program Memorandum four service categories (chemotherapy participation (81 FR 68858, October 4, AB–00–18 (Change Request #1070), items, chemotherapy administration 2016) have moved the comprehensive issued March 2000, which is available services, radioisotope services, and care plan regulations from their online at www.cms.gov/transmittals/ customized prosthetic devices) previous location at § 483.20(k) to a downloads/ab001860.pdf. representing recent medical advances new, redesignated § 483.21(b); As explained in the FY 2001 proposed that might meet our criteria for accordingly, we also propose to make a rule (65 FR 19232), the amendments exclusion from SNF consolidated conforming revision in the existing enacted in section 103 of the BBRA not billing. We may consider excluding a cross-reference to that provision that only identified for exclusion from this particular service if it meets our criteria appears in the regulations text at provision a number of particular service for exclusion as specified above. § 411.15(p)(3)(iii). codes within four specified categories Commenters should identify in their C. Payment for SNF-Level Swing-Bed (that is, chemotherapy items, comments the specific HCPCS code that Services chemotherapy administration services, is associated with the service in radioisotope services, and customized question, as well as their rationale for Section 1883 of the Act permits prosthetic devices), but also gave the requesting that the identified HCPCS certain small, rural hospitals to enter Secretary the authority to designate code(s) be excluded. into a Medicare swing-bed agreement, additional, individual services for We note that the original BBRA under which the hospital can use its exclusion within each of the specified amendment (as well as the beds to provide either acute- or SNF- service categories. In the proposed rule implementing regulations) identified a level care, as needed. For critical access for FY 2001, we also noted that the set of excluded services by means of hospitals (CAHs), Part A pays on a BBRA Conference report (H.R. Rep. No. specifying HCPCS codes that were in reasonable cost basis for SNF-level 106–479 at 854 (1999) (Conf. Rep.)) effect as of a particular date (in that services furnished under a swing-bed characterizes the individual services case, as of July 1, 1999). Identifying the agreement. However, in accordance that this legislation targets for exclusion excluded services in this manner made with section 1888(e)(7) of the Act, SNF- as high-cost, low probability events that it possible for us to utilize program level services furnished by non-CAH could have devastating financial issuances as the vehicle for rural hospitals are paid under the SNF impacts because their costs far exceed accomplishing routine updates of the PPS, effective with cost reporting the payment SNFs receive under the excluded codes, to reflect any minor periods beginning on or after July 1, PPS. According to the conferees, section revisions that might subsequently occur 2002. As explained in the FY 2002 final 103(a) of the BBRA is an attempt to in the coding system itself (for example, rule (66 FR 39562), this effective date is exclude from the PPS certain services the assignment of a different code consistent with the statutory provision and costly items that are provided number to the same service). to integrate swing-bed rural hospitals infrequently in SNFs. By contrast, the Accordingly, in the event that we into the SNF PPS by the end of the amendments enacted in section 103 of identify through the current rulemaking transition period, June 30, 2002. the BBRA do not designate for exclusion cycle any new services that would Accordingly, all non-CAH swing-bed any of the remaining services within actually represent a substantive change rural hospitals have now come under those four categories (thus, leaving all of in the scope of the exclusions from SNF the SNF PPS. Therefore, all rates and those services subject to SNF consolidated billing, we would identify wage indexes outlined in earlier consolidated billing), because they are these additional excluded services by sections of this proposed rule for the relatively inexpensive and are furnished means of the HCPCS codes that are in SNF PPS also apply to all non-CAH routinely in SNFs. effect as of a specific date (in this case, swing-bed rural hospitals. A complete As we further explained in the final as of October 1, 2017). By making any discussion of assessment schedules, the rule for FY 2001 (65 FR 46790), and as new exclusions in this manner, we MDS, and the transmission software is consistent with our longstanding could similarly accomplish routine (RAVEN–SB for Swing Beds) appears in policy, any additional service codes that future updates of these additional codes the FY 2002 final rule (66 FR 39562) we might designate for exclusion under through the issuance of program and in the FY 2010 final rule (74 FR our discretionary authority must meet instructions. 40288). As finalized in the FY 2010 SNF the same statutory criteria used in In addition, we note that one category PPS final rule (74 FR 40356 through identifying the original codes excluded of services which consolidated billing 40357), effective October 1, 2010, non- from consolidated billing under section excludes under the regulations at CAH swing-bed rural hospitals are 103(a) of the BBRA: They must fall § 411.15(p)(3) consists of certain required to complete an MDS 3.0 swing- within one of the four service categories exceptionally intensive types of bed assessment which is limited to the specified in the BBRA; and they also outpatient hospital services. As we required demographic, payment, and must meet the same standards of high explained in the FY 2000 SNF PPS final quality items. The latest changes in the cost and low probability in the SNF rule, this exclusion applies to ‘‘. . . MDS for swing-bed rural hospitals setting, as discussed in the BBRA those types of outpatient hospital appear on the SNF PPS Web site at

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http://www.cms.gov/Medicare/ Effective for cost reporting periods base year of the market basket as ‘‘2014- Medicare-Fee-for-Service-Payment/ beginning on or after July 1, 1998, we based’’ instead of ‘‘FY 2014-based’’. SNFPPS/index.html. revised and rebased our 1977 routine Specifically, we are proposing to costs input price index and adopted a V. Other Issues develop cost category weights for the total expenses SNF input price index 2014-based SNF market basket in two A. Revising and Rebasing the SNF using FY 1992 as the base year. In the stages. First, we are proposing to derive Market Basket Index FY 2002 SNF PPS final rule (66 FR eight major expenditures or cost weights 39582), we rebased and revised the Section 1888(e)(5)(A) of the Act market basket to a base year of FY 1997. from the 2014 MCR data (CMS Form requires the Secretary to establish a In the FY 2008 SNF PPS final rule (72 2540–10) for freestanding SNFs: Wages market basket index that reflects the FR 43425), we rebased and revised the and Salaries; Employee Benefits; changes over time in the prices of an market basket to a base year of FY 2004. Contract Labor; Pharmaceuticals; appropriate mix of goods and services In the FY 2014 SNF PPS final rule (78 Professional Liability Insurance; Home included in covered SNF services. FR 47939), we last revised and rebased Office Contract Labor; Capital-related; Accordingly, we have developed a SNF the SNF market basket, which included and a residual ‘‘All Other’’. With the market basket index that encompasses updating the base year from FY 2004 to exception of the Home Office Contract the most commonly used cost categories FY 2010. For FY 2018, we are proposing Labor cost weight, these are the same for SNF routine services, ancillary to rebase the market basket to reflect cost categories calculated using the 2010 services, and capital-related expenses. 2014 Medicare-allowable total cost data MCR data for the FY 2010-based SNF We use the SNF market basket index, (routine, ancillary, and capital-related) market basket. We provide a detailed adjusted in the manner described in from freestanding SNFs and to revise discussion of our proposal to use the section III.B of this proposed rule, to applicable cost categories and price 2014 MCR data to determine the Home update the SNF PPS per diem rates and proxies used to determine the market Office Contract Labor cost weight in to determine the labor-related share on basket. We propose to maintain our section IV.A.1.a of this preamble. The an annual basis. policy of using data from freestanding residual ‘‘All Other’’ category would The SNF market basket is a fixed- SNFs, which represent 93 percent of the reflect all remaining costs that are not weight, Laspeyres-type price index. A total SNFs shown in Table 25. We captured in the other seven cost Laspeyres price index measures the believe using freestanding MCR data, as categories. Second, we are proposing to change in price, over time, of the same opposed to the hospital-based SNF MCR divide the residual ‘‘All Other’’ cost mix of goods and services purchased in data, for the proposed cost weight category into subcategories, using U.S. the base period. Any changes in the calculation is most appropriate because Department of Commerce Bureau of quantity or mix of goods and services of the complexity of hospital-based data Economic Analysis’ (BEA) 2007 (that is, intensity) purchased over time and the representativeness of the Benchmark Input-Output (I–O) ‘‘use relative to a base period are not freestanding data. Hospital-based SNF table before redefinitions, purchaser’s measured. expenses, are embedded in the hospital cost report. Any attempt to incorporate value’’ for the Nursing and Community The index itself is constructed in Care Facilities industry (NAICS 623A00) three steps. First, a base period is data from hospital-based facilities aged forward to 2014 using price selected (in this proposed rule, the base requires more complex calculations and changes. Furthermore, we are proposing period is 2014) and total base period assumptions regarding the ancillary to continue to use the same overall expenditures are estimated for a set of costs related to the hospital-based SNF mutually exclusive and exhaustive unit. We believe the use of freestanding methodology as was used for the FY spending categories with the proportion SNF cost report data is technically 2010-based SNF market basket to of total costs that each category appropriate for reflecting the cost develop the capital related cost weights represents being calculated. These structures of SNFs serving Medicare of the 2014-based SNF market basket. proportions are called cost or beneficiaries. We note that we are no longer referring expenditure weights. Second, each We are proposing to use 2014 as the to the market basket as a ‘‘FY based’’ expenditure category is matched to an base year. We believe that the 2014 market basket and instead refer to the appropriate price or wage variable, Medicare cost reports represent the most proposed market basket as simply referred to as a price proxy. In nearly recent, complete set of Medicare cost ‘‘2014-based.’’ We are proposing this every instance, these price proxies are report (MCR) data available to develop change in naming convention for the derived from publicly available cost weights for SNFs at the time of market basket because the base year cost statistical series that are published on a rulemaking. The 2014 Medicare cost weight data for the proposed market consistent schedule (preferably at least reports are for cost reporting periods basket does not reflect strictly fiscal year on a quarterly basis). Finally, the beginning on and after October 1, 2013 data. For example, the proposed 2014- expenditure weight for each cost and before October 1, 2014. While these based SNF market basket uses Medicare category is multiplied by the level of its dates appear to reflect fiscal year data, cost report data and other government respective price proxy. The sum of these we note that a Medicare cost report that data that reflects fiscal year 2014, products (that is, the expenditure begins in this timeframe is generally calendar year 2014, and state fiscal year weights multiplied by their price levels) classified as a ‘‘2014 cost report.’’ For 2014 expenses to determine the base for all cost categories yields the example, we found that of the available year cost weights. Given that it is based composite index level of the market 2014 Medicare cost reports for SNFs, on a mix of classifications of 2014 data, basket in a given period. Repeating this approximately 7 percent had an October we are proposing to refer to the market 1, 2013 begin date, approximately 70 step for other periods produces a series basket simply as ‘‘2014-based’’ as of market basket levels over time. percent of the reports had a January 1, opposed to a ‘‘FY 2014-based’’ or ‘‘CY Dividing an index level for a given 2014 begin date, and approximately 12 2014-based’’. period by an index level for an earlier percent had a July 1, 2014 begin date. period produces a rate of growth in the For this reason, and for the reasons input price index over that timeframe. explained below, we are defining the

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1. Development of Cost Categories and weights and other PPS market basket salaries attributable to these excluded Weights cost weights. areas. Excluded area wages and salaries As stated above, the major cost a. Use of Medicare Cost Report Data To are equal to wages and salaries as weights of the proposed 2014-based Develop Major Cost Weights reported on Worksheet S–3, part II, SNF market basket are derived from column 3, lines 3, 4, and 7 through 11 In order to create a market basket that 2014 MCR data that is reported on CMS plus nursing facility and non- is representative of freestanding SNF Form 2540–10, effective for freestanding reimbursable salaries from Worksheet A, providers serving Medicare patients and SNFs with a cost reporting period column 1, lines 31, 32, 50, and 60 to help ensure accurate major cost beginning on or after December 1, 2010. through 63. weights (which is the percent of total The major cost weights for the FY 2010- Overhead wages and salaries are Medicare allowable costs, as defined based SNF market basket were derived attributable to the entire SNF facility; below), we propose to apply edits to from the 2010 MCR data that is reported therefore, we are proposing to include remove reporting errors and outliers. on CMS Form 2540–96. CMS Form only the proportion attributable to the Specifically, the SNF Medicare Cost 2540–96 was effective for freestanding Medicare-allowable cost centers. We are Reports used to calculate the market SNFs with cost reporting periods proposing to estimate the proportion of basket cost weights excluded any beginning on and after October 1, 1997. overhead wages and salaries that is providers that reported costs less than The OMB control number for both Form attributable to the non-Medicare- or equal to zero for the following 2549–10 and Form 2540–96 is 0938– allowable costs centers (that is, categories: Total facility costs; total 0463. excluded areas) by multiplying the ratio operating costs; Medicare general For all of the cost weights, we use of excluded area wages and salaries (as inpatient routine service costs; and Medicare allowable-total costs as the defined above) to total wages and Medicare PPS payments. The final denominator (that is, Wages and salaries as reported on Worksheet S–3, sample used included roughly 96 Salaries cost weight = Wages and part II, column 3, line 1 by total percent of those providers who Salaries costs divided by Medicare- overhead wages and salaries as reported submitted a Medicare cost report for allowable total costs). Medicare- on Worksheet S3, Part III, column 3, line 2014. allowable total costs were equal to total 14. We used a similar methodology to costs (after overhead allocation) from Additionally, for each of the major derive wages and salaries costs in the Worksheet B part 1, column 18, for lines cost weights (Wages and Salaries, FY 2010-based SNF market basket. 30, 40 through 49, 51, 52, and 71 plus (2) Employee Benefits: Medicare- Employee Benefits, Contract Labor, Medicaid drug costs as defined below. allowable employee benefits are equal to Pharmaceuticals, Professional Liability We included estimated Medicaid drug total benefits as reported on Worksheet Insurance, Home Office Contract Labor, costs in the pharmacy cost weight, as S–3, part II, column 3, lines 17 through and Capital-related Expenses) the data well as the denominator for total 19 minus non-Medicare-allowable (that are trimmed to remove outliers (a Medicare-allowable costs. This is the is, excluded area) employee benefits and standard statistical process) by: (1) same methodology used for the FY minus a portion of overhead benefits Requiring that major expenses (such as 2010-based SNF market basket and the attributable to these excluded areas. Wages and Salaries costs) and total FY 2004-based SNF market basket. The Non-Medicare-allowable employee Medicare-allowable costs are greater inclusion of Medicaid drug costs was benefits are derived by multiplying total than zero; and (2) excluding the top and finalized in the FY 2008 SNF PPS final excluded wages and salaries (as defined bottom five percent of the major cost rule (72 FR 43425 through 43430), and above in the ‘Wages and Salaries’ weight (for example, Wages and Salaries for the same reasons set forth in that section) times the ratio of total benefit costs as a percent of total Medicare- final rule, we are proposing to continue costs as reported on Worksheet S–3, part allowable costs). This trimming process to use this methodology in the proposed II, column 3, lines 17 through 19 to total is done for each cost weight 2014-based SNF market basket. wages and salary costs as reported on individually and, therefore, providers We are proposing that for the 2014- Worksheet S3, part II, column 3, line 1. excluded from one cost weight based SNF market basket we obtain Likewise, the portion of overhead calculation are not automatically costs for one additional major cost benefits attributable to the excluded excluded from other cost weight category from the Medicare cost reports areas is derived by multiplying calculations. These are the same types that was not used in the FY 2010-based overhead wages and salaries attributable of edits utilized for the FY 2010-based SNF market basket—Home Office to the excluded areas (as defined in the SNF market basket, as well as other PPS Contract Labor Costs. We describe the ‘Wages and Salaries’ section) times the market baskets (including but not detailed methodology for obtaining ratio of total benefit costs to total wages limited to IPPS market basket and HHA costs for each of these eight cost and salary costs (as defined above). We market basket). We believe this categories below. The methodology used used a similar methodology in the FY trimming process improves the accuracy is similar to the methodology used in 2010-based SNF market basket. of the data used to compute the major the FY 2010-based SNF market basket, (3) Contract Labor: We are proposing cost weights by removing possible data as described in the FY 2014 SNF PPS to derive Medicare-allowable contract misreporting. final rule (78 FR 47940 through 47942). labor costs from Worksheet S–3, part II, Finally, the final weights of the (1) Wages and Salaries: To derive column 3, line 17, which reflects costs proposed 2014-based SNF market basket Wages and Salaries costs for the for contracted direct patient care are based on weighted means. For Medicare-allowable cost centers, we are services, that is, nursing, therapeutic, example, the final Wages and Salaries proposing first to calculate total rehabilitative, or diagnostic services cost weight after trimming is equal to unadjusted wages and salaries costs as furnished under contract rather than by the sum of total Medicare-allowable reported on Worksheet S–3, part II, employees and management contract wages and salaries divided by the sum column 3, line 1. We are then proposing services. of total Medicare-allowable costs. This to remove the wages and salaries (4) Pharmaceuticals: We are methodology is consistent with the attributable to non-Medicare-allowable proposing to calculate pharmaceuticals methodology used to calculate the FY cost centers (that is, excluded areas), as costs using the non-salary costs from the 2010-based SNF market basket cost well as a portion of overhead wages and Pharmacy cost center (Worksheet B, part

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I, column 0, line 11 less Worksheet A, estimated by multiplying Medicaid insurance (Worksheet S–2, column 1 column 1, line 11) and the Drugs dual-eligible drug costs per day times through 3, line 41). Charged to Patients’ cost center the number of Medicaid days as (6) Capital-Related: We are proposing (Worksheet B, part I, column 0, line 49 reported in the Medicare-allowable to derive the Medicare-allowable less Worksheet A, column 1, line 49). skilled nursing cost center (Worksheet capital-related costs from Worksheet B, Since these drug costs were attributable S3, part I, column 5, line 1) in the SNF part II, column 18 for lines 30, 40 to the entire SNF and not limited to MCR. Medicaid dual-eligible drug costs through 49, 51, 52, and 71. Medicare-allowable services, we per day (where the day represents an (7) Home Office Contract Labor Costs: adjusted the drug costs by the ratio of unduplicated drug supply day) were We are proposing to calculate Medicare- Medicare-allowable pharmacy total estimated using a sample of 2014 Part D allowable home office contract labor costs (Worksheet B, part I, column 11, claims for those dual-eligible costs by multiplying total home office for lines 30, 40 through 49, 51, 52, and beneficiaries who had a Medicare SNF contract labor costs (as reported on 71) to total pharmacy costs from stay during the year. Medicaid dual- Worksheet S3, part 2, column 3, line 16) Worksheet B, part I, column 11, line 11. eligible beneficiaries would receive times the ratio of Medicare-allowable Worksheet B, part I allocates the general their drugs through the Medicare Part D operating costs (Medicare-allowable service cost centers, which are often benefit, which would work directly with total costs less Medicare-allowable referred to as ‘‘overhead costs’’ (in the pharmacy and, therefore, these costs capital costs) to total operating costs which pharmacy costs are included) to would not be represented in the (equal to Worksheet B, part I, column the Medicare-allowable and non- 18, line 100 less Worksheet B, part I, Medicare SNF MCRs. A random twenty Medicare-allowable cost centers. column 0, line 1 and 2). percent sample of Medicare Part D Second, similar to the FY 2010-based (8) All Other (residual): The ‘‘All claims data yielded a Medicaid drug SNF market basket, we propose to Other’’ cost weight is a residual, cost per day of $19.62. We note that the continue to adjust the drug expenses calculated by subtracting the major cost FY 2010-based SNF market basket also reported on the MCR to include an weights (Wages and Salaries, Employee estimate of total Medicaid drug costs, relied on data from the Part D claims, Benefits, Contract Labor, which are not represented in the which yielded a dual-eligible Medicaid Pharmaceuticals, Professional Liability Medicare-allowable drug cost weight. drug cost per day of $17.39 for 2010. Insurance, Home Office Contract Labor, Similar to the FY 2010-based SNF (5) Professional Liability Insurance: and Capital-Related) from 100. market basket, we are estimating We are proposing to calculate the Table 9 shows the major cost Medicaid drug costs based on data professional liability insurance costs categories and their respective cost representing dual-eligible Medicaid from Worksheet S–2 of the MCRs as the weights as derived from the Medicare beneficiaries. Medicaid drug costs are sum of premiums; paid losses; and self- cost reports for this proposed rule.

TABLE 9—MAJOR COST CATEGORIES AS DERIVED FROM THE MEDICARE COST REPORTS

Proposed FY Major cost categories 2014-based 2010-based

Wages and Salaries ...... 44.3 46.1 Employee Benefits ...... 9.3 10.5 Contract Labor ...... 6.8 5.5 Pharmaceuticals ...... 7.3 7.9 Professional Liability Insurance ...... 1.1 1.1 Home Office Contract Labor * ...... 0.7 n/a Capital-related ...... 7.9 7.4 All other (residual) ...... 22.6 21.5 * Home office contract labor costs were included in the residual ‘‘All Other’’ cost weight of the FY 2010-based SNF market basket.

The Wages and Salaries and As we did for the FY 2010-based SNF percent; therefore, we are proposing to Employee Benefits cost weights as market basket (78 FR 26452), we are allocate approximately 83 percent of the calculated directly from the Medicare proposing to allocate contract labor Contract Labor cost weight to the Wages cost reports decreased by 1.8 and 1.2 costs to the Wages and Salaries and and Salaries cost weight and 17 percent percentage points, respectively, while Employee Benefits cost weights based to the Employee Benefits cost weight. the Contract Labor cost weight increased on their relative proportions under the For the FY 2010-based SNF market 1.3 percentage points between the FY assumption that contract labor costs are basket, the wages and salaries to 2010-based SNF market basket and comprised of both wages and salaries employee benefit ratio was 81/19 2014-based SNF market basket. The and employee benefits. The contract percent. decrease in the Wages and Salaries labor allocation proportion for wages occurred among most cost centers and and salaries is equal to the Wages and Table 10 shows the Wages and in aggregate for the General Service Salaries cost weight as a percent of the Salaries and Employee Benefits cost (overhead) and Inpatient Routine sum of the Wages and Salaries cost weights after contract labor allocation Service cost centers, which together weight and the Employee Benefits cost for the FY 2010-based SNF market account for about 80 percent of total weight. Using the 2014 Medicare cost basket and the proposed 2014-based facility costs. report data, this percentage is 83 SNF market basket.

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TABLE 10—WAGES AND SALARIES AND EMPLOYEE BENEFITS COST WEIGHTS AFTER CONTRACT LABOR ALLOCATION

Proposed FY Major cost categories 2014-based 2010-based market basket market basket

Wages and Salaries ...... 50.0 50.6 Employee Benefits ...... 10.5 11.5

b. Derivation of the Detailed Operating percent of the proposed 2014-based SNF Installation, Maintenance, and Repair Cost Weights market basket’s ‘‘All Other’’ cost Services in order to proxy these costs by × To further divide the ‘‘All Other’’ category (0.137 22.6 percent = 3.1 a price index that better reflects the residual cost weight estimated from the percent). For the FY 2010-based SNF price changes of labor associated with 2014 Medicare cost report data into market basket (78 FR 26456), we used maintenance-related services. more detailed cost categories, we are the same methodology utilizing the Previously these costs were included in proposing to use the 2007 Benchmark I– 2002 Benchmark I–O data (aged to FY the All Other: Labor-Related Services O ‘‘Use Tables/Before Redefinitions/ 2010). category of the FY 2010-based SNF Purchaser Value’’ for Nursing and Using this methodology, we are market basket. Community Care Facilities industry proposing to derive 21 detailed SNF market basket operating cost category c. Derivation of the Detailed Capital (NAICS 623A00), published by the Cost Weights Census Bureau’s Bureau of Economic weights from the proposed 2014-based Analysis (BEA). These data are publicly SNF market basket ‘‘All Other’’ residual Similar to the FY 2010-based SNF available at the following Web site: cost weight (22.6 percent). These market basket, we further divided the http://www.bea.gov/industry/io_ categories are: (1) Fuel: Oil and Gas; (2) Capital-related cost weight into: annual.htm. The BEA Benchmark I–O Electricity; (3) Water and Sewerage; (4) Depreciation, Interest, Lease and Other data are generally scheduled for Food: Direct Purchases; (5) Food: Capital-related cost weights. publication every 5 years with the most Contract Services; (6) Chemicals; (7) We calculated the depreciation cost recent data available for 2007. The 2007 Medical Instruments and Supplies; (8) weight (that is, depreciation costs Benchmark I–O data are derived from Rubber and Plastics; (9) Paper and excluding leasing costs) using the 2007 Economic Census and are the Printing Products; (10) Apparel; (11) depreciation costs from Worksheet S–2, building blocks for BEA’s economic Machinery and Equipment; (12) column 1, lines 20 and 21. Since the accounts. Therefore, they represent the Miscellaneous Products; (13) depreciation costs reflect the entire SNF most comprehensive and complete set Professional Fees: Labor-Related; (14) facility (Medicare and non-Medicare- of data on the economic processes or Administrative and Facilities Support allowable units), we used total facility mechanisms by which output is Services; (15) Installation, Maintenance, capital costs as the denominator. This produced and distributed.1 BEA also and Repair Services; (16) All Other: methodology assumes that the produces Annual I–O estimates. Labor-Related Services; (17) depreciation of an asset is the same However, while based on a similar Professional Fees: Nonlabor-Related; regardless of whether the asset was used methodology, these estimates reflect less (18) Financial Services; (19) Telephone for Medicare or non-Medicare patients. comprehensive and less detailed data Services; (20) Postage; and (21) All This methodology yielded depreciation sources and are subject to revision when Other: Nonlabor-Related Services. as a percent of capital costs of 27.3 benchmark data become available. We note that the machinery and percent for 2014. We then apply this Instead of using the less detailed equipment expenses are for equipment percentage to the proposed 2014-based Annual I–O data, we are proposing to that is paid for in a given year and not SNF market basket Medicare-allowable inflate the 2007 Benchmark I–O data depreciated over the asset’s useful life. Capital-related cost weight of 7.9 aged forward to 2014 by applying the Depreciation expenses for movable percent, yielding a Medicare-allowable annual price changes from the equipment are reflected in the capital depreciation cost weight (excluding respective price proxies to the component of the proposed 2014-based leasing expenses, which is described in appropriate market basket cost SNF market basket (described in section more detail below) of 2.2 percent. To categories that are obtained from the IV.A.1.c. of this proposed rule). further disaggregate the Medicare- 2007 Benchmark I–O data. We repeated We would also note that for ease of allowable depreciation cost weight into this practice for each year. We then reference we are renaming the fixed and moveable depreciation, we are calculated the cost shares that each cost Nonmedical Professional Fees: Labor- proposing to use the 2014 SNF MCR category represents of the 2007 data Related and Nonmedical Professional data for end-of-the-year capital asset inflated to 2014. These resulting 2014 Fees: Nonlabor-related cost categories balances as reported on Worksheet A7. cost shares were applied to the ‘‘All (as labeled in the FY 2010-based SNF The 2014 SNF MCR data showed a Other’’ residual cost weight to obtain market basket) to be Professional Fees: fixed/moveable split of 83/17. The FY the detailed cost weights for the Labor-Related and Professional Fees: 2010-based SNF market basket, which proposed 2014-based SNF market Nonlabor-Related in the proposed 2014- utilized the same data from the FY 2010 basket. For example, the cost for Food: based SNF market basket. These cost MCRs, had a fixed/moveable split of 85/ Direct Purchases represents 13.7 percent categories still represent the same 15. of the sum of the ‘‘All Other’’ 2007 nonmedical professional fees that were We also derived the interest expense Benchmark I–O Expenditures inflated to included in the FY 2010-based SNF share of capital-related expenses from 2014. Therefore, the Food: Direct market basket, which we describe in 2014 SNF MCR data, specifically from Purchases cost weight represents 3.1 section IV.A.4. of this proposed rule. Worksheet A, column 2, line 81. Similar For the proposed 2014-based SNF to the depreciation cost weight, we 1 http://www.bea.gov/papers/pdf/IOmanual_ market basket, we also are proposing to calculated the interest cost weight using 092906.pdf. include a separate cost category for total facility capital costs. This

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methodology yielded interest as a expenses. The FY 2010-based SNF among the cost categories of percent of capital costs of 27.4 percent market basket used the 2010 SAS data. depreciation, interest, and other capital- for 2014. We then apply this percentage Based on the 2014 SAS data, we related expenses, reflecting the to the proposed 2014-based SNF market determined that leasing expenses are 63 assumption that the underlying cost basket Medicare-allowable Capital- percent of total leasing and capital- structure and price movement of leasing related cost weight of 7.9 percent, related expenses costs. In the FY 2010- expenses is similar to capital costs in yielding a Medicare-allowable interest based SNF market basket, leasing costs general. As was done with past SNF cost weight (excluding leasing expenses) represent 62 percent of total leasing and market baskets and other PPS market of 2.2 percent. As done with the last capital-related expenses costs. We then baskets, we assumed 10 percent of lease rebasing (78 FR 26454), we are apply this percentage to the proposed expenses are overhead and assigned proposing to determine the split of 2014-based SNF market basket residual them to the other capital-related interest expense between for-profit and Medicare-allowable capital costs of 3.6 expenses cost category. This is based on not-for-profit facilities based on the percent derived from subtracting the the assumption that leasing expenses distribution of long-term debt Medicare-allowable depreciation cost include not only depreciation, interest, outstanding by type of SNF (for-profit or weight and Medicare-allowable interest and other capital-related costs but also not-for-profit/government) from the cost weight from the 2014-based SNF additional costs paid to the lessor. We 2014 SNF MCR data. We estimated the market basket of total Medicare- distributed the remaining lease split between for-profit and not-for- allowable capital cost weight (7.9 expenses to the three cost categories profit interest expense to be 27/73 percent¥2.2 percent¥2.2 percent = 3.6 based on the proportion of depreciation, percent compared to the FY 2010-based percent). This produces the proposed interest, and other capital-related SNF market basket with 41/59 percent. 2014-based SNF Medicare-allowable expenses to total capital costs, Because the detailed data were not leasing cost weight of 2.3 percent and excluding lease expenses. available in the MCRs, we used the most all-other capital-related cost weight of Table 11 shows the capital-related recent 2014 Census Bureau Service 1.3 percent. expense distribution (including Annual Survey (SAS) data to derive the Lease expenses are not broken out as expenses from leases) in the proposed capital-related expenses attributable to a separate cost category in the SNF 2014-based SNF market basket and the leasing and other capital-related market basket, but are distributed FY 2010-based SNF market basket.

TABLE 11—COMPARISON OF THE CAPITAL-RELATED EXPENSE DISTRIBUTION OF THE 2014-BASED SNF MARKET BASKET AND THE FY 2010-BASED SNF MARKET BASKET

Proposed FY 2014-based 2010-based Cost category SNF market SNF market basket basket

Capital-related Expenses ...... 7.9 7.4 Total Depreciation ...... 2.9 3.2 Total Interest ...... 3.0 2.1 Other Capital-related Expenses ...... 2.0 2.1 Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and therefore, the detail capital cost weights may not add to the total capital-related expenses cost weight due to rounding.

Table 12 presents the proposed 2014- based SNF market basket and the FY 2010-based SNF market basket.

TABLE 12—PROPOSED 2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET

Proposed FY 2014-based 2010-based Cost category SNF market SNF market basket basket

Total ...... 100.0 100.0 Compensation ...... 60.4 62.1 Wages and Salaries 1 ...... 50.0 50.6 Employee Benefits 1 ...... 10.5 11.5 Utilities ...... 2.6 2.2 Electricity ...... 1.2 1.4 Fuel: Oil and Gas ...... 1.3 0.7 Water and Sewerage ...... 0.2 0.1 Professional Liability Insurance ...... 1.1 1.1 All Other ...... 27.9 27.2 Other Products ...... 14.3 16.1 Pharmaceuticals ...... 7.3 7.9 Food: Direct Purchase ...... 3.1 3.7 Food: Contract Purchase ...... 0.7 1.2 Chemicals ...... 0.2 0.2 Medical Instruments and Supplies ...... 0.6 0.8 Rubber and Plastics ...... 0.8 1.0

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TABLE 12—PROPOSED 2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET—Continued

Proposed FY 2014-based 2010-based Cost category SNF market SNF market basket basket

Paper and Printing Products ...... 0.8 0.8 Apparel ...... 0.3 0.2 Machinery and Equipment ...... 0.3 0.2 Miscellaneous Products ...... 0.3 0.3 All Other Services ...... 13.6 11.0 Labor-Related Services ...... 7.4 6.2 Professional Fees: Labor-related ...... 3.8 3.4 Installation, Maintenance, and Repair Services ...... 0.6 n/a Administrative and Facilities Support ...... 0.5 0.5 All Other: Labor-Related Services ...... 2.5 2.3 Non Labor-Related Services ...... 6.2 4.8 Professional Fees: Nonlabor-Related ...... 1.8 2.0 Financial Services ...... 2.0 0.9 Telephone Services ...... 0.5 0.6 Postage ...... 0.2 0.2 All Other: Nonlabor-Related Services ...... 1.8 1.1 Capital-Related Expenses ...... 7.9 7.4 Total Depreciation ...... 2.9 3.2 Building and Fixed Equipment ...... 2.5 2.7 Movable Equipment ...... 0.4 0.5 Total Interest ...... 3.0 2.1 For-Profit SNFs ...... 0.8 0.9 Government and Nonprofit SNFs ...... 2.1 1.2 Other Capital-Related Expenses ...... 2.0 2.1 Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and therefore, the detailed cost weights may not add to the aggregate cost weights or to 100.0 due to rounding. 1 Contract labor is distributed to wages and salaries and employee benefits based on the share of total compensation that each category represents.

2. Price Proxies Used To Measure • Producer Price Indexes: Producer date, reflecting the most recent data Operating Cost Category Growth Price Indexes (PPIs) measure price available. We believe that using proxies changes for goods sold in other than that are published regularly (at least After developing the 30 cost weights retail markets. PPIs are used when the quarterly, whenever possible) helps to for the proposed 2014-based SNF purchases of goods or services are made ensure that we are using the most recent market basket, we selected the most at the wholesale level. data available to update the market • appropriate wage and price proxies Consumer Price Indexes: Consumer basket. We strive to use publications currently available to represent the rate Price Indexes (CPIs) measure change in that are disseminated frequently, of change for each expenditure category. the prices of final goods and services because we believe that this is an With four exceptions (three for the bought by consumers. CPIs are only optimal way to stay abreast of the most capital-related expenses cost categories used when the purchases are similar to current data available. Availability and one for Professional Liability those of retail consumers rather than means that the proxy is publicly Insurance (PLI)), we base the wage and purchases at the wholesale level, or if available. We prefer that our proxies are price proxies on Bureau of Labor no appropriate PPI were available. publicly available because this will help We evaluated the price proxies using Statistics (BLS) data, and group them ensure that our market basket updates the criteria of reliability, timeliness, into one of the following BLS categories: are as transparent to the public as availability, and relevance. Reliability • possible. In addition, this enables the Employment Cost Indexes: indicates that the index is based on public to be able to obtain the price Employment Cost Indexes (ECIs) valid statistical methods and has low proxy data on a regular basis. Finally, measure the rate of change in sampling variability. Widely accepted relevance means that the proxy is employment wage rates and employer statistical methods ensure that the data costs for employee benefits per hour were collected and aggregated in a way applicable and representative of the cost worked. These indexes are fixed-weight that can be replicated. Low sampling category weight to which it is applied. indexes and strictly measure the change variability is desirable because it The CPIs, PPIs, and ECIs that we have in wage rates and employee benefits per indicates that the sample reflects the selected to propose in this regulation hour. ECIs are superior to Average typical members of the population. meet these criteria. Therefore, we Hourly Earnings (AHE) as price proxies (Sampling variability is variation that believe that they continue to be the best for input price indexes because they are occurs by chance because only a sample measure of price changes for the cost not affected by shifts in occupation or was surveyed rather than the entire categories to which they would be industry mix, and because they measure population.) Timeliness implies that the applied. pure price change and are available by proxy is published regularly, preferably Table 12 lists all price proxies for the both occupational group and by at least once a quarter. The market proposed 2014-based SNF market industry. The industry ECIs are based baskets are updated quarterly, and basket. Below is a detailed explanation on the 2004 North American therefore, it is important for the of the price proxies used for each Classification System (NAICS). underlying price proxies to be up-to- operating cost category.

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• Wages and Salaries: We are PPI Commodity for Natural Gas (BLS • Food: Wholesale Purchases: We are proposing to use the ECI for Wages and series code WPU0531). Our analysis of proposing to use the PPI Commodity for Salaries for Private Industry Workers in the Bureau of Economic Analysis’ 2007 Processed Foods and Feeds (BLS series Nursing Care Facilities (NAICS 6231; Benchmark I–O data for Nursing and code WPU02) to measure the price BLS series code CIU2026231000000I) to Community Care Facilities shows that growth of this cost category. This is the measure price growth of this category. petroleum refineries expenses accounts same index used in the FY 2010-based NAICS 623 includes facilities that for approximately 65 percent and SNF market basket. provide a mix of health and social natural gas accounts for approximately • Food: Retail Purchase: We are services, with many of the health 35 percent of the fuel: Oil and gas proposing to use the CPI All Urban for services being largely some level of expenses. Therefore, we are proposing a Food Away From Home (All Urban nursing services. Within NAICS 623 is blended proxy of 65 percent of the PPI Consumers) (BLS series code NAICS 6231, which includes nursing Industry for Petroleum Refineries (BLS CUUR0000SEFV) to measure the price care facilities primarily engaged in series code PCU32411–32411) and 35 growth of this cost category. This is the providing inpatient nursing and percent of the PPI Commodity for same index used in the FY 2010-based rehabilitative services. These facilities, Natural Gas (BLS series code SNF market basket. which are most comparable to WPU0531). We believe that these two • Chemicals: For measuring price Medicare-certified SNFs, provide skilled price proxies are the most technically change in the Chemicals cost category, nursing and continuous personal care appropriate indices available to measure we are proposing to use a blended PPI services for an extended period of time, the price growth of the Fuel: Oil and composed of the Industry PPIs for Other and, therefore, have a permanent core Gas category in the proposed 2014- Basic Organic Chemical Manufacturing staff of registered or licensed practical based SNF market basket. (NAICS 325190) (BLS series code nurses. This is the same index used in • Water and Sewerage: We are PCU32519–32519), Soap and Cleaning the FY 2010-based SNF market basket. proposing to use the CPI All Urban for Compound Manufacturing (NAICS • Employee Benefits: We are Water and Sewerage Maintenance (BLS 325610) (BLS series code PCU32561– proposing to use the ECI for Benefits for series code CUUR0000SEHG01) to 32561), and Other Miscellaneous Nursing Care Facilities (NAICS 6231) to measure the price growth of this cost Chemical Product Manufacturing measure price growth of this category. category. This is the same index used in (NAICS 3259A0) (BLS series code The ECI for Benefits for Nursing Care the FY 2010-based SNF market basket. PCU325998325998). Facilities is calculated using BLS’s total • Professional Liability Insurance: We Using the 2007 Benchmark I–O data, compensation (BLS series ID are proposing to use the CMS Hospital we found that these three NAICS CIU2016231000000I) for nursing care Professional Liability Insurance Index to industries accounted for approximately facilities series and the relative measure price growth of this category. 96 percent of SNF chemical expenses. importance of wages and salaries within We were unable to find a reliable data The remaining four percent of SNF total compensation. We believe this source that collects SNF-specific PLI chemical expenses are for three other constructed ECI series is technically data. Therefore, we are proposing to use incidental NAICS chemicals industries appropriate for the reason stated above the CMS Hospital Professional Liability such as Paint and Coating in the Wages and Salaries price proxy Index, which tracks price changes for Manufacturing. We are proposing to section. This is the same index used in commercial insurance premiums for a create a blended index based on those the FY 2010-based SNF market basket. fixed level of coverage, holding non- three NAICS chemical expenses listed • Electricity: We are proposing to use price factors constant (such as a change above that account for 96 percent of the PPI Commodity for Commercial in the level of coverage). This is the SNF chemical expenses. We are Electric Power (BLS series code same index used in the FY 2010-based proposing to create this blend based on WPU0542) to measure the price growth SNF market basket. We believe this is an each NAICS’ expenses as a share of their of this cost category. This is the same appropriate proxy to measure the price sum. These expenses as a share of their index used in the FY 2010-based SNF growth associated of SNF professional sum are listed in Table 13. market basket. liability insurance as it captures the The FY 2010-based SNF market • Fuel: Oil and Gas: We are proposing price inflation associated with other basket also used a blended chemical to change the proxy used for the Fuel: medical institutions that serve Medicare proxy that was based on 2002 Oil and Gas cost category. The FY 2010- patients. Benchmark I–O data. We believe our based SNF market basket uses the PPI • Pharmaceuticals: We are proposing proposed chemical blended index for Commodity for Commercial Natural Gas to use the PPI Commodity for the 2014-based SNF market basket is (BLS series code WPU0552) to proxy Pharmaceuticals for Human Use, technically appropriate as it reflects these expenses. For the proposed 2014- Prescription (BLS series code more recent data on SNFs purchasing based SNF market basket, we are WPUSI07003) to measure the price patterns. Table 13 provides the weights proposing to use a blend of the PPI growth of this cost category. This is the for the proposed 2014-based blended Industry for Petroleum Refineries (BLS same index used in the FY 2010-based chemical index and the FY 2010-based series code PCU32411–32411) and the SNF market basket. blended chemical index.

TABLE 13—PROPOSED CHEMICAL BLENDED INDEX WEIGHTS

2014-based 2010-based NAICS Industry description index index (percent) (percent)

325190 ...... Other basic organic chemical manufacturing ...... 22 7 25510 ...... Paint and coating manufacturing ...... n/a 12 325610 ...... Soap and cleaning compound manufacturing ...... 37 49 3259A0 ...... Other miscellaneous chemical product manufacturing ...... 41 32

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TABLE 13—PROPOSED CHEMICAL BLENDED INDEX WEIGHTS—Continued

2014-based 2010-based NAICS Industry description index index (percent) (percent)

Total ...... 100 100

• Medical Instruments and Supplies: also be reflected in this cost category. the Nonmedical Professional Fees: We are proposing to use a blend for the This is the same index used in the FY Nonlabor-Related cost category). Medical Instruments and Supplies cost 2010-based SNF market basket. • Financial Services: We are category. The 2007 Benchmark I–O data • Professional Fees: Labor-Related: proposing to use the ECI for Total shows an approximate 60/40 split We are proposing to use the ECI for Compensation for Private Industry between ‘Medical and Surgical Total Compensation for Private Industry Workers in Financial Activities (BLS Appliances and Supplies’ and ‘Surgical Workers in Professional and Related series code CIU201520A000000I) to and Medical Instruments’. Therefore, we (BLS series code CIU2010000120000I) to measure the price growth of this cost are proposing a blend composed of 60 measure the price growth of this category. This is the same index used in percent of the PPI Commodity for category. This is the same index used in the FY 2010-based SNF market basket. Medical and Surgical Appliances and the FY 2010-based SNF market basket • Telephone Services: We are Supplies (BLS series code WPU1563) (which was called the Nonmedical proposing to use the CPI All Urban for and 40 percent of the PPI Commodity Professional Fees: Labor-Related cost Telephone Services (BLS series code for Surgical and Medical Instruments category). CUUR0000SEED) to measure the price (BLS series code WPU1562). • Administrative and Facilities growth of this cost category. This is the The FY 2010-based SNF market Support Services: We are proposing to same index used in the FY 2010-based basket used the single, higher level PPI use the ECI for Total Compensation for SNF market basket. Commodity for Medical, Surgical, and Private Industry Workers in Office and • Postage: We are proposing to use Personal Aid Devices (BLS series code Administrative Support (BLS series the CPI All Urban for Postage (BLS WPU156). We believe that the proposed code CIU2010000220000I) to measure series code CUUR0000SEEC) to measure price proxy better reflects the mix of the price growth of this category. This the price growth of this cost category. expenses for this cost category as is the same index used in the FY 2010- This is the same index used in the FY obtained from the 2007 Benchmark I–O based SNF market basket. 2010-based SNF market basket. data. • Installation, Maintenance and • All Other: NonLabor-Related • Rubber and Plastics: We are Repair Services: We are proposing to Services: We are proposing to use the proposing to use the PPI Commodity for include a separate cost category for CPI All Urban for All Items Less Food Rubber and Plastic Products (BLS series Installation, Maintenance, and Repair and Energy (BLS series code code WPU07) to measure price growth Services in order to proxy these costs by CUUR0000SA0L1E) to measure the of this cost category. This is the same a price index that better reflects the price growth of this cost category. This index used in the FY 2010-based SNF price changes of labor associated with is the same index used in the FY 2010- market basket. maintenance-related services. We are based SNF market basket. • Paper and Printing Products: We proposing to use the ECI for Total 3. Price Proxies Used To Measure are proposing to use the PPI Commodity Compensation for All Civilian Workers Capital Cost Category Growth for Converted Paper and Paperboard in Installation, Maintenance, and Repair Products (BLS series code WPU0915) to (BLS series code CIU1010000430000I) to We are proposing to apply the same measure the price growth of this cost measure the price growth of this new price proxies as were used in the FY category. This is the same index used in cost category. Previously these costs 2010-based SNF market basket, and the FY 2010-based SNF market basket. were included in the All Other: Labor- below is a detailed explanation of the • Apparel: We are proposing to use Related Services category and were price proxies used for each capital cost the PPI Commodity for Apparel (BLS proxied by the ECI for Total category. We also are proposing to series code WPU0381) to measure the Compensation for Private Industry continue to vintage weight the capital price growth of this cost category. This Workers in Service Occupations (BLS price proxies for Depreciation and is the same index used in the FY 2010- series code CIU2010000300000I). Interest to capture the long-term based SNF market basket. • All Other: Labor-Related Services: consumption of capital. This vintage • Machinery and Equipment: We are We are proposing to use the ECI for weighting method is the same method proposing to use the PPI Commodity for Total Compensation for Private Industry that was used for the FY 2010-based Machinery and Equipment (BLS series Workers in Service Occupations (BLS SNF market basket and is described code WPU11) to measure the price series code CIU2010000300000I) to below. growth of this cost category. This is the measure the price growth of this cost • Depreciation—Building and Fixed same index used in the FY 2010-based category. This is the same index used in Equipment: We are proposing to use the SNF market basket. the FY 2010-based SNF market basket. BEA Chained Price Index for Private • Miscellaneous Products: For • Professional Fees: NonLabor- Fixed Investment in Structures, measuring price change in the Related: We are proposing to use the ECI Nonresidential, Hospitals and Special Miscellaneous Products cost category, for Total Compensation for Private Care (BEA Table 5.4.4. Price Indexes for we are proposing to use the PPI Industry Workers in Professional and Private Fixed Investment in Structures Commodity for Finished Goods less Related (BLS series code by Type). This BEA index is intended to Food and Energy (BLS series code CIU2010000120000I) to measure the capture prices for construction of WPUFD4131). Both food and energy are price growth of this category. This is the facilities such as hospitals, nursing already adequately represented in same index used in the FY 2010-based homes, hospices, and rehabilitation separate cost categories and should not SNF market basket (which was called centers.

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• Depreciation—Movable Equipment: industry-specific current cost net stocks fixed and movable vintage weights (23 We are proposing to use the PPI of assets. years and 10 years, respectively) by the Commodity for Machinery and BEA current-cost and historical-cost fixed and movable split (87 percent and Equipment (BLS series code WPU11). average age data by asset type are not 13 percent, respectively). This is the This price index reflects price inflation available by industry but are published same methodology used for the FY associated with a variety of machinery at the aggregate level for all industries. 2010-based SNF market basket which and equipment that would be utilized The BEA does publish current-cost net had useful lives of 22 years and 6 years by SNFs including but not limited to capital stocks at the detailed asset level for fixed and moveable assets, medical equipment, communication for specific industries. There are 61 respectively. The impact of revising the equipment, and computers. detailed movable assets (including useful life for moveable assets from 6 • Nonprofit Interest: We are intellectual property) and there are 32 years to 10 years had little to no impact proposing to use the average yield on detailed fixed assets in the BEA on the growth rate of the proposed 2014- Municipal Bonds (Bond Buyer 20-bond estimates. Since we seek aggregate based SNF market basket capital cost index). useful life estimates applicable to SNFs, weight. Over the 2014 to 2026 time • For-Profit Interest: We are we developed a methodology to period, the impact on the growth rate of proposing to use the average yield on approximate movable and fixed asset the capital cost weight was no larger Moody’s AAA corporate bonds (Federal ages for nursing and residential care than 0.01 percent in absolute terms. Reserve). We are proposing different services (NAICS 623) using the proxies for the interest categories published BEA data. For the proposed b. Constructing Vintage Weights because we believe interest price FY 2014 SNF market basket, we use the Given the expected useful life of pressures differ between nonprofit and current-cost average age for each asset capital (fixed and moveable assets) and for-profit facilities. type from the BEA fixed assets Table 2.9 debt instruments, we must determine • Other Capital: Since this category for all assets and weight them using the proportion of capital expenditures includes fees for insurances, taxes, and current-cost net stock levels for each of attributable to each year of the expected other capital-related costs, we are these asset types in the nursing and useful life for each of the three asset proposing to use the CPI All Urban for residential care services industry, types: Building and fixed equipment, Owners’ Equivalent Rent of Primary NAICS 6230. (For example, nonelectro moveable equipment, and interest. Residence (BLS series code medical equipment current-cost net These proportions represent the vintage CUUR0000SEHC01), which would stock (accounting for about 37 percent weights. We were not able to find a reflect the price growth of these costs. of total moveable equipment current- historical time series of capital We believe that these price proxies cost net stock in 2014) is multiplied by expenditures by SNFs. Therefore, we continue to be the most appropriate an average age of 4.7 years. Current-cost approximated the capital expenditure proxies for SNF capital costs that meet net stock levels are available for patterns of SNFs over time, using our selection criteria of relevance, download from the BEA Web site at alternative SNF data sources. For timeliness, availability, and reliability. http://www.bea.gov/national/FA2004/ building and fixed equipment, we used As stated above, we are proposing to Details/Index.html. We then aggregate the stock of beds in nursing homes from continue to vintage weight the capital the ‘‘weighted’’ current-cost net stock the National Nursing Home Survey price proxies for Depreciation and levels (average age multiplied by (NNHS) conducted by the National Interest to capture the long-term current-cost net stock) into moveable Center for Health Statistics (NCHS) for consumption of capital. To capture the and fixed assets for NAICS 6230. We 1962 through 1999. For 2000 through long-term nature, the price proxies are then adjust the average ages for 2010, we extrapolated the 1999 bed data vintage-weighted; and the vintage moveable and fixed assets by the ratio forward using a 5-year moving average weights are calculated using a two-step of historical-cost average age (Table of growth in the number of beds from process. First, we determine the 2.10) to current-cost average age (Table the SNF MCR data. For 2011 to 2014, we expected useful life of capital and debt 2.9). propose to extrapolate the 2010 bed data instruments held by SNFs. Second, we This produces historical cost average forward using the average growth in the identify the proportion of expenditures age data for movable (equipment and number of beds over the 2011 to 2014 within a cost category that is intellectual property) and fixed time period. We then used the change attributable to each individual year over (structures) assets specific to NAICS in the stock of beds each year to the useful life of the relevant capital 6230 of 4.8 and 11.6 years, respectively. approximate building and fixed assets, or the vintage weights. The average age reflects the average age equipment purchases for that year. This We rely on Bureau of Economic of an asset at a given point in time, procedure assumes that bed growth Analysis (BEA) fixed asset data to derive whereas we want to estimate a useful reflects the growth in capital-related the useful lives of both fixed and life of the asset, which would reflect the costs in SNFs for building and fixed movable capital, which is the same data average over all periods an asset is used. equipment. We believe that this source used to derive the useful lives for To do this, we multiply each of the assumption is reasonable because the the FY 2010-based SNF market basket. average age estimates by two to convert number of beds reflects the size of a The specifics of the data sources used to average useful lives with the SNF, and as a SNF adds beds, it also are explained below. assumption that the average age is likely adds fixed capital. normally distributed (about half of the As was done for the FY 2010-based a. Calculating Useful Lives for Moveable assets are below the average at a given SNF market basket (as well as prior and Fixed Assets point in time, and half above the market baskets), we are proposing to Estimates of useful lives for movable average at a given point in time). This estimate moveable equipment purchases and fixed assets for the proposed 2014- produces estimates of likely useful lives based on the ratio of ancillary costs to based SNF market basket are 10 and 23 of 9.6 and 23.2 years for movable and routine costs. The time series of the years, respectively. These estimates are fixed assets, which we round to 10 and ratio of ancillary costs to routine costs based on three data sources from the 23 years, respectively. We are proposing for SNFs measures changes in intensity BEA: (1) Current-cost average age; (2) an interest vintage weight time span of in SNF services, which are assumed to historical-cost average age; and (3) 21 years, obtained by weighting the be associated with movable equipment

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purchase patterns. The assumption here 1963 through 2014 determined above to for interest, we averaged 32, 21-year is that as ancillary costs increase nominal capital purchase series using periods. We calculate the vintage weight compared to routine costs, the SNF their respective price proxies (the BEA for a given year by dividing the capital caseload becomes more complex and Chained Price Index for Nonresidential purchase amount in any given year by would require more movable Construction for Hospitals & Special the total amount of purchases during the equipment. The lack of movable Care Facilities and the PPI for expected useful life of the equipment or equipment purchase data for SNFs over Machinery and Equipment). We then debt instrument. To provide greater time required us to use alternative SNF combined the two nominal series into transparency, we posted on the CMS data sources. A more detailed one nominal capital purchase series for market basket Web site at http:// discussion of this methodology was 1963 through 2014. Nominal capital www.cms.gov/Research-Statistics-Data- published in the FY 2008 SNF final rule purchases are needed for interest and-Systems/Statistics-Trends-and- (72 FR 43428). We believe the resulting vintage weights to capture the value of Reports/MedicareProgramRatesStats/ two time series, determined from beds debt instruments. MarketBasketResearch.html, an Once we created these capital and the ratio of ancillary to routine illustrative spreadsheet that contains an costs, reflect real capital purchases of purchase time series for 1963 through example of how the vintage-weighted building and fixed equipment and 2014, we averaged different periods to price indexes are calculated. movable equipment over time. obtain an average capital purchase To obtain nominal purchases, which pattern over time: (1) For building and The vintage weights for the proposed are used to determine the vintage fixed equipment, we averaged 30, 23- 2014-based SNF market basket and the weights for interest, we converted the year periods; (2) for movable equipment, FY 2010-based SNF market basket are two real capital purchase series from we averaged 43, 10-year periods; and (3) presented in Table 14.

TABLE 14—PROPOSED 2014-BASED VINTAGE WEIGHTS AND FY 2010-BASED VINTAGE WEIGHTS

Building and fixed equipment Movable equipment Interest

Year 1 Proposed FY 2010- Proposed FY 2010- Proposed FY 2010- 2014-based based 2014-based based 2014-based based 23 years 25 years 10 years 6 years 21 years 22 years

1 ...... 056 .061 .085 .165 .032 .030 2 ...... 055 .059 .087 .160 .033 .030 3 ...... 054 .053 .091 .167 .034 .032 4 ...... 052 .050 .097 .167 .036 .033 5 ...... 049 .046 .099 .169 .037 .035 6 ...... 046 .043 .102 .171 .039 .037 7 ...... 044 .041 .108 ...... 041 .039 8 ...... 043 .039 .109 ...... 043 .040 9 ...... 040 .036 .110 ...... 044 .041 10 ...... 038 .034 .112 ...... 045 .043 11 ...... 038 .034 ...... 048 .045 12 ...... 039 .034 ...... 052 .047 13 ...... 039 .033 ...... 056 .048 14 ...... 039 .032 ...... 058 .048 15 ...... 039 .031 ...... 060 .050 16 ...... 039 .031 ...... 059 .052 17 ...... 040 .032 ...... 057 .055 18 ...... 041 .034 ...... 057 .058 19 ...... 043 .035 ...... 056 .060 20 ...... 042 .036 ...... 056 .060 21 ...... 042 .038 ...... 057 .058 22 ...... 042 .039 ...... 058 23 ...... 042 .042 ...... 24 ...... 043 ...... 25 ...... 044 ...... 26 ......

Total ...... 1.000 1.000 1.000 1.000 1.000 1.000 Note: The vintage weights are calculated using thirteen decimals. For presentational purposes, we are displaying three decimals and there- fore, the detail vintage weights may not add to 1.000 due to rounding. 1 Year 1 represents the vintage weight applied to the farthest year while the vintage weight for year 23, for example, would apply to the most recent year.

Table 15 shows all the price proxies for the proposed 2014-based SNF market basket.

TABLE 15—PROPOSED PRICE PROXIES FOR THE PROPOSED 2014-BASED SNF MARKET BASKET

Cost category Weight Proposed price proxy

Total ...... 100.0

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TABLE 15—PROPOSED PRICE PROXIES FOR THE PROPOSED 2014-BASED SNF MARKET BASKET—Continued

Cost category Weight Proposed price proxy

Compensation ...... 60.4 Wages and Salaries 1 ...... 50.0 ECI for Wages and Salaries for Private Industry Workers in Nursing Care Facilities. Employee Benefits 1 ...... 10.5 ECI for Total Benefits for Private Industry Workers in Nursing Care Facilities. Utilities ...... 2.6 Electricity ...... 1.2 PPI Commodity for Commercial Electric Power. Fuel: Oil and Gas ...... 1.3 Blend of Fuel PPIs. Water and Sewerage ...... 0.2 CPI for Water and Sewerage Maintenance (All Urban Con- sumers). Professional Liability Insurance ...... 1.1 CMS Professional Liability Insurance Premium Index. All Other ...... 27.9 Other Products ...... 14.3 Pharmaceuticals ...... 7.3 PPI Commodity for Pharmaceuticals for Human Use, Prescrip- tion. Food: Direct Purchase ...... 3.1 PPI Commodity for Processed Foods and Feeds. Food: Contract Purchase ...... 0.7 CPI for Food Away From Home (All Urban Consumers). Chemicals ...... 0.2 Blend of Chemical PPIs. Medical Instruments and Supplies ...... 0.6 Blend of Medical Instruments and Supplies PPIs. Rubber and Plastics ...... 0.8 PPI Commodity for Rubber and Plastic Products. Paper and Printing Products ...... 0.8 PPI Commodity for Converted Paper and Paperboard Prod- ucts. Apparel ...... 0.3 PPI Commodity for Apparel. Machinery and Equipment ...... 0.3 PPI Commodity for Machinery and Equipment. Miscellaneous Products ...... 0.3 PPI Commodity for Finished Goods Less Food and Energy. All Other Services ...... 13.6 Labor-Related Services ...... 7.4 Professional Fees: Labor-related ...... 3.8 ECI for Total Compensation for Private Industry Workers in Professional and Related. Installation, Maintenance, and Repair Services ...... 0.6 ECI for Total Compensation for All Civilian workers in Installa- tion, Maintenance, and Repair. Administrative and Facilities Support ...... 0.5 ECI for Total Compensation for Private Industry Workers in Office and Administrative Support. All Other: Labor-Related Services ...... 2.5 ECI for Total Compensation for Private Industry Workers in Service Occupations. Non Labor-Related Services ...... 6.2 Professional Fees: Nonlabor-related ...... 1.8 ECI for Total Compensation for Private Industry Workers in Professional and Related. Financial Services ...... 2.0 ECI for Total Compensation for Private Industry Workers in Fi- nancial Activities. Telephone Services ...... 0.5 CPI for Telephone Services. Postage ...... 0.2 CPI for Postage. All Other: Nonlabor-Related Services ...... 1.8 CPI for All Items Less Food and Energy. Capital-Related Expenses ...... 7.9 Total Depreciation ...... 2.9 Building and Fixed Equipment ...... 2.5 BEA’s Chained Price Index for Private Fixed Investment in Structures, Nonresidential, Hospitals and Special Care—vin- tage weighted 23 years. Movable Equipment...... 0.4 PPI Commodity for Machinery and Equipment—vintage weighted 10 years. Total Interest ...... 3.0 For-Profit SNFs ...... 0.8 Moody’s—Average yield on Aaa bonds, vintage weighted 21 years. Government and Nonprofit SNFs ...... 2.1 Moody’s—Average yield on Domestic Municipal Bonds—vin- tage weighted 21 years. Other Capital-Related Expenses ...... 2.0 CPI for Owners’ Equivalent Rent of Primary Residence. Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying one decimal and, therefore, the detailed cost weights may not add to the aggregate cost weights or to 100.0 due to rounding. 1 Contract labor is distributed to wages and salaries and employee benefits based on the share of total compensation that each category represents.

4. Labor-Related Share categories in the input price index. For the proposed 2014-based SNF We define the labor-related share Effective for FY 2018, we are proposing market basket these are: (1) Wages and (LRS) as those expenses that are labor- to revise and update the labor-related Salaries (including allocated contract intensive and vary with, or are share to reflect the relative importance labor costs as described above); (2) influenced by, the local labor market. of the proposed 2014-based SNF market Employee Benefits (including allocated Each year, we calculate a revised labor- basket cost categories that we believe contract labor costs as described above); related share based on the relative are labor-intensive and vary with, or are (3) Professional fees: Labor-related; (4) importance of labor-related cost influenced by, the local labor market. Administrative and Facilities Support

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Services; (5) Installation, Maintenance, (included in the proposed 2014-based contract labor costs that should be and Repair services; (6) All Other: SNF market basket Professional Fees allocated to the labor-related share Labor-Related Services; and (7) a cost categories) that should be included based on the percent of total SNF home proportion of capital-related expenses. in the labor-related share, we surveyed office contract labor costs as reported in We propose to continue to include a SNFs regarding the proportion of those Worksheet S–3, Part II attributable to proportion of capital-related expenses fees that are attributable to local firms those SNFs that had home offices because a portion of these expenses are and the proportion that are purchased located in their respective local labor deemed to be labor-intensive and vary from national firms. Based on these markets—defined as being in the same with, or are influenced by, the local weighted results, we determined that Metropolitan Statistical Area (MSA). We labor market. For example, a proportion SNFs purchase, on average, the determined a SNF’s and home office’s of construction costs for a medical following portions of contracted MSAs using their zip code information building would be attributable to local professional services inside their local from the Medicare cost reports. labor market: construction workers’ compensation Using this methodology, we expenses. • 78 percent of legal services. • 86 percent of accounting and determined that 28 percent of SNFs’ Consistent with previous SNF market home office contract labor costs were for basket revisions and rebasings, the All auditing services. • 89 percent of architectural, home offices located in their respective Other: Labor-related services cost local labor markets. Therefore, we are category is mostly comprised of engineering services. • 87 percent of management proposing to allocate 28 percent of building maintenance and security consulting services. home office expenses to the labor- services (including, but not limited to, Together, these four categories related share. The FY 2010-based SNF landscaping services, janitorial services, represent 3.3 percentage points of the market basket allocated 32 percent of waste management services, and total costs for the proposed 2014-based home office expenses to the labor- investigation and security services). SNF market basket. We applied the related share. Because these services tend to be labor- percentages from this special survey to intensive and are mostly performed at In the proposed 2014-based SNF their respective SNF market basket market basket, home office expenses the SNF facility (and therefore, unlikely weights to separate them into labor- to be purchased in the national market), that were subject to allocation based on related and nonlabor-related costs. As a the home office allocation methodology we believe that they meet our definition result, we are designating 2.8 of the 3.3 of labor-related services. represent 0.7 percent of the proposed total to the labor-related share, with the 2014-based SNF market basket. Based The proposed inclusion of the remaining 0.5 categorized as nonlabor- Installation, Maintenance, and Repair on the home office results, we are related. apportioning 0.2 percentage point of the Services cost category into the labor- For the proposed 2014-based SNF 0.7 percentage point figure into the related share remains consistent with market basket, we conducted a similar labor-related share (0.7 × 0.28 = 0.193, the current labor-related share, since analysis of home office data. The or 0.2) and designating the remaining this cost category was previously Medicare cost report CMS Form 2540– included in the FY 2010-based SNF 10 requires a SNF to report information 0.5 percentage point as nonlabor- market basket All Other: Labor-related regarding their home office provider. related. In sum, based on the two Services cost category. We proposed to Approximately 57 percent of SNFs allocations mentioned above, we establish a separate Installation, reported some type of home office apportioned 3.0 percentage points into Maintenance, and Repair Services cost information on their Medicare cost the labor-related share. This amount is category so that we can use the ECI for report for 2014 (for example, city, state, added to the portion of professional fees Total Compensation for All Civilian zip code). Using the data reported on that we continue to identify as labor- Workers in Installation, Maintenance, the Medicare cost report, we compared related using the I–O data such as and Repair to reflect the specific price the location of the SNF with the contracted advertising and marketing changes associated with these services. location of the SNF’s home office. For costs (0.8 percentage point of total We also use this cost category in the the FY 2010-based SNF market basket, operating costs) resulting in a 2012-based IRF market basket (80 FR we used the Medicare HOMER database Professional Fees: Labor-Related cost 47059), 2012-based IPF market basket to determine the location of the weight of 3.8 percent. (80 FR 46667), and 2013-based LTCH provider’s home office as this Table 16 compares the proposed market basket (81 FR 57091). information was not available on the 2014-based labor-related share and the As discussed in the FY 2014 SNF PPS Medicare cost report CMS Form 2540– FY 2010-based labor-related share based proposed rule (78 FR 26462), in an effort 96. For the proposed 2014-based SNF on the relative importance of IGI’s first to determine more accurately the share market basket, we are proposing to quarter 2017 forecast with historical of nonmedical professional fees determine the proportion of home office data through the fourth quarter of 2016.

TABLE 16—FY 2018 AND FY 2017 SNF LABOR-RELATED SHARE

Relative importance, Relative importance, labor-related, labor-related, FY 2018 FY 2017 (2014-based index) (FY 2010-based index) 2017:Q1 forecast 2016:Q2 forecast

Wages and Salaries 1 ...... 50.3 48.8 Employee Benefits 1 ...... 10.3 11.3 Professional fees: Labor-related ...... 3.7 3.5 Administrative and Facilities Support Services ...... 0.5 0.5 Installation, Maintenance and Repair Services 2 ...... 0.6 n/a All Other: Labor-related Services ...... 2.5 2.3

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TABLE 16—FY 2018 AND FY 2017 SNF LABOR-RELATED SHARE—Continued

Relative importance, Relative importance, labor-related, labor-related, FY 2018 FY 2017 (2014-based index) (FY 2010-based index) 2017:Q1 forecast 2016:Q2 forecast

Capital-related (.391) ...... 2.9 2.7

Total ...... 70.8 69.1 1 The Wages and Salaries and Employee Benefits cost weight reflect contract labor costs as described above. 2 Previously classified in the All Other: Labor-related services cost category in the FY 2010-based SNF market basket.

The FY 2018 SNF labor-related share deemed to be labor-intensive and vary financial forecasting firm that contracts (LRS) is 1.7 percentage points higher with, or are influenced by, the local with CMS to forecast the components of than the FY 2017 SNF LRS, which is labor market. CMS’ market baskets. based on the FY 2010-based SNF market Table 17 compares the proposed 5. Proposed Market Basket Estimate for basket relative importance. This implies 2014-based SNF market basket and the the FY 2018 SNF PPS Update an increase in the quantity of the labor- FY 2010-based SNF market basket related services because rebasing the As discussed previously in this percent changes. For the historical index contributed significantly to the proposed rule, beginning with the FY period between FY 2013 and FY 2016, increase. Also contributing to the higher 2018 SNF PPS update, we are proposing the average difference between the two labor-related share is a higher capital- to adopt the 2014-based SNF market market baskets is ¥0.3 percentage related cost weight in the proposed basket as the appropriate market basket point. This is primarily the result of the 2014-based SNF market basket of goods and services for the SNF PPS. lower pharmaceuticals cost category compared to the FY 2010-based SNF Based on IGI’s first quarter 2017 forecast weight, increased Fuel: Oil and Gas cost market basket. As stated above, we with historical data through the fourth category weight, and the change in the include a proportion of capital-related quarter of 2016, the most recent estimate Fuels price proxy. For the forecasted expenses in the labor-related share as of the proposed 2014-based SNF market period between FY 2017 and FY 2019, we believe a portion of these expenses basket for FY 2018 is 2.7 percent. IGI is there is no difference in the average (such as construction labor costs) are a nationally recognized economic and growth rate.

TABLE 17—PROPOSED 2014-BASED SNF MARKET BASKET AND FY 2010-BASED SNF MARKET BASKET, PERCENT CHANGES: 2013–2019

Proposed FY 2014-based 2010-based Fiscal year (FY) SNF market SNF market basket basket

Historical data: FY 2013 ...... 1.6 1.8 FY 2014 ...... 1.6 1.7 FY 2015 ...... 1.8 2.3 FY 2016 ...... 1.9 2.3 Average FY 2013–2016 ...... 1.7 2.0 Forecast: FY 2017 ...... 2.9 2.9 FY 2018 ...... 2.7 2.7 FY 2019 ...... 2.7 2.7 Average FY 2017–2019 ...... 2.8 2.8 Source: IHS Global Insight, Inc. 1st quarter 2017 forecast with historical data through 4thd quarter 2016.

While we ordinarily would propose to percent to update the federal rates set B. Skilled Nursing Facility (SNF) use this 2014-based SNF market basket forth in this proposed rule. Effective for Quality Reporting Program (QRP) percentage to update the SNF PPS per FY 2019, we are proposing to use the 1. Background and Statutory Authority diem rates for FY 2018, we note that proposed 2014-based SNF market basket section 411(a) of the MACRA amended to determine the market basket Section 1888(e)(6)(A)(i) of the Act, as section 1888(e) of the Act to add section percentage update for the SNF PPS per added by section 2(c)(4) of the 1888(e)(5)(B)(iii) of the Act. Section diem rates. As stated in section V.A.4. Improving Medicare Post-Acute Care 1888(e)(5)(B)(iii) of the Act establishes a in this preamble, we are proposing to Transformation Act of 2014 (IMPACT special rule for FY 2018 that requires use the proposed 2014-based SNF Act), requires that for fiscal years the market basket percentage, after the market basket to determine the labor- beginning with FY 2018, in the case of application of the productivity related share effective for FY 2018. a SNF that does not submit data as adjustment, to be 1.0 percent. In applicable in accordance with sections accordance with section 1888(e)(6)(B)(i)(II)–(III) of the Act for a 1888(e)(5)(B)(iii) of the Act, we will use fiscal year, the Secretary reduce the a market basket percentage of 1.0 market basket percentage described in

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section 1888(e)(5)(B)(i) of the Act for to allow for the exchange of the support (certain factors of which are payment rates during that fiscal year by information among PAC providers and also sometimes referred to as two percentage points. In section III.B of other providers and the use of such data socioeconomic status (SES) factors or this proposed rule, we discuss proposed in order to enable access to longitudinal socio-demographic status (SDS) factors) revisions in the market basket update information and to facilitate coordinated play a major role in health. One of our regulations at § 413.337(d) that would care. We refer readers to the FY 2016 core objectives is to improve beneficiary implement this provision. In accordance SNF PPS final rule (80 FR 46427 outcomes including reducing health with this statutory mandate, we have through 46429) for additional disparities, and we want to ensure that implemented a SNF Quality Reporting information on the IMPACT Act and its all beneficiaries, including those with Program (QRP), which we believe applicability to SNFs. social risk factors, receive high quality promotes higher quality and more care. In addition, we seek to ensure that 2. General Considerations Used for efficient health care for Medicare the quality of care furnished by Selection of Quality Measures for the beneficiaries. The SNF QRP applies to providers and suppliers is assessed as SNF QRP freestanding SNFs, SNFs affiliated with fairly as possible under our programs acute care facilities, and all non-CAH We refer readers to the FY 2016 SNF while ensuring that beneficiaries have swing-bed rural hospitals. We refer PPS final rule (80 FR 46429 through adequate access to excellent care. readers to the FY 2016 SNF PPS final 46431) for a detailed discussion of the We have been reviewing reports rule (80 FR 46427 through 46429) for a considerations we apply in measure prepared by HHS’ Office of the Assistant full discussion of the statutory selection for the LTCH QRP, such as Secretary for Planning and Evaluation background and policy considerations alignment with the CMS Quality (ASPE) and the National Academies of that have shaped the SNF QRP. Strategy,2 which incorporates the three Sciences, Engineering, and Medicine on Please note, the term ‘‘FY (year) SNF broad aims of the National Quality the issue of measuring and accounting QRP’’ means the fiscal year for which Strategy.3 for social risk factors in CMS’ value- the SNF QRP requirements applicable to As part of our consideration for based purchasing and quality reporting that fiscal year must be met in order for measures for use in the SNF QRP, we programs, and considering options on a SNF to receive the full market basket review and evaluate measures that have how to address the issue in these percentage when calculating the been implemented in other programs programs. On December 21, 2016, ASPE payment rates applicable to it for that and take into account measures that submitted a Report to Congress on a fiscal year. have been endorsed by NQF for study it was required to conduct under The IMPACT Act (Pub. L. 113–185) provider settings other than the SNF section 2(d) of the Improving Medicare amended Title XVIII of the Act, in part, setting. We have previously adopted Post-Acute Care Transformation by adding a new section 1899B, entitled measures that we referred to as (IMPACT) Act of 2014. The study ‘‘Standardized Post-Acute Care ‘‘applications’’ of those measures. We analyzed the effects of certain social risk Assessment Data for Quality, Payment have received questions pertaining to factors of Medicare beneficiaries on and Discharge Planning,’’ and by the term ‘‘application’’ and want to quality measures and measures of enacting new data reporting clarify that when a proposed or resource use used in one or more of nine requirements for certain post-acute care implemented measure is referred to as Medicare value-based purchasing (PAC) providers, including SNFs. an, ‘‘application of’’ the measure it programs.4 The report also included Specifically, new sections means that the measure will be used in considerations for strategies to account 1899B(a)(1)(A)(ii) and (iii) of the Act the SNF setting, rather than the setting for social risk factors in these programs. require SNFs, inpatient rehabilitation for which it was endorsed by the NQF. In a January 10, 2017 report released by facilities (IRFs), Long Term Care For example, in the FY 2016 SNF PPS The National Academies of Sciences, Hospitals (LTCHs) and home health final rule (80 FR 46440 through 46444) Engineering, and Medicine, that body agencies (HHAs), under each of their we adopted an Application of Percent of provided various potential methods for respective quality reporting program Residents Experiencing One or More measuring and accounting for social risk (which, for SNFs, is found at section Falls With Major Injury (Long Stay) factors, including stratified public 1888(e)(6) of the Act), to report data on (NQF #0674) which is endorsed for the reporting.5 quality measures specified under nursing home setting but not the SNF As discussed in the FY 2017 SNF PPS section 1899B(c)(1) of the Act for at least setting. For such measures, we would final rule, the NQF has undertaken a 2- five domains, and data on resource use then intend to seek NQF endorsement year trial period in which new and other measures specified under for the SNF setting, and the NQF measures, measures undergoing section 1899B(d)(1) of the Act for at endorses one or more of them, we will maintenance review, and measures least three domains. Section update the title of the measure to endorsed with the condition that they 1899B(a)(1)(A)(i) of the Act further remove the reference to ‘‘application’’. enter the trial period can be assessed to requires each of these PAC providers to determine whether risk adjustment for a. Measuring and Accounting for Social report under their respective quality selected social risk factors is appropriate Risk Factors in the SNF QRP reporting program standardized patient for these measures. This trial entails assessment data in accordance with We consider related factors that may temporarily allowing inclusion of social subsection (b) for at least the quality affect measures in the SNF QRP. We risk factors in the risk-adjustment measures specified under subsection understand that social risk factors such (c)(1) and that is for five specific as income, education, race and 4 Office of the Assistant Secretary for Planning categories: Functional status; cognitive ethnicity, employment, disability, and Evaluation. 2016. Report to Congress: Social community resources, and social Risk Factors and Performance Under Medicare’s function and mental status; special Value-Based Purchasing Programs. Available at services, treatments, and interventions; https://aspe.hhs.gov/pdf-report/report-congress- medical conditions and co-morbidities; 2 http://www.cms.gov/Medicare/Quality- social-risk-factors-and-performance-under- and impairments. All of the data that Initiatives-Patient-Assessment-Instruments/ medicares-value-based-purchasing-programs. QualityInitiativesGenInfo/CMS-Quality- 5 must be reported in accordance with National Academies of Sciences, Engineering, Strategy.html. and Medicine. 2017. Accounting for social risk section 1899B(a)(1)(A) of the Act must 3 http://www.ahrq.gov/workingforquality/nqs/ factors in Medicare payment. Washington, DC: The be standardized and interoperable so as nqs2011annlrpt.htm. National Academies Press.

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approach for these measures. At the data calculations, among others), so we In this rule, we are proposing to conclusion of the trial, NQF will issue also welcome comment on operational define the standardized patient recommendations on the future considerations. CMS is committed to assessment data that SNFs must report inclusion of social risk factors in risk ensuring that its beneficiaries have to comply with section 1888(e)(6) of the adjustment for quality measures. access to and receive excellent care, and Act, as well as the requirements for the As we continue to consider the that the quality of care furnished by reporting of these data. The collection of analyses and recommendations from providers and suppliers is assessed standardized patient assessment data is these reports and await the results of the fairly in CMS programs. critical to our efforts to drive NQF trial on risk adjustment for quality improvement in health care quality 3. Proposed Collection of Standardized measures, we are continuing to work across the four post-acute care (PAC) Resident Assessment Data Under the with stakeholders in this process. As we settings to which the IMPACT Act SNF QRP have previously communicated, we are applies. We intend to use these data for concerned about holding providers to a. Proposed Definition of Standardized a number of purposes, including different standards for the outcomes of Resident Assessment Data facilitating their exchange and their patients with social risk factors Section 1888(e)(6)(B)(i)(III) of the Act longitudinal use among health care because we do not want to mask requires that for fiscal year 2019 and providers to enable high quality care potential disparities or minimize each subsequent year, SNFs report and outcomes through care incentives to improve the outcomes for standardized patient assessment data coordination, as well as for quality disadvantaged populations. Keeping required under section 1899B(b)(1) of measure calculation, and identifying this concern in mind, while we sought the Act. For purposes of meeting this comorbidities that might increase the input on this topic previously, we requirement, section 1888(e)(6)(B)(ii) of medical complexity of a particular continue to seek public comment on the Act requires a SNF to submit the admission. whether we should account for social standardized resident assessment data SNFs are currently required to report risk factors in measures in the SNF QRP, required under section 1819(b)(3) of the resident assessment data through the and if so, what method or combination Act using the standard instrument MDS by responding to an identical set of methods would be most appropriate designated by the state under section of assessment questions using an for accounting for social risk factors. 1819(e)(5) of the Act. identical set of response options (we Examples of methods include: For purposes of the SNF QRP, we refer to each solitary question/response Confidential reporting to providers of refer to beneficiaries who receive option as a data element and we refer to measure rates stratified by social risk services from SNFs as ‘‘residents,’’ and a group of questions/response options factors; public reporting of stratified we collect certain information about the on a single topic as a data element), both measure rates; and potential risk SNF services they receive using the of which incorporate an identical set of adjustment of a particular measure as Resident Assessment Instrument definitions and standards. The primary appropriate based on data and evidence. Minimum Data Set (MDS). purpose of the identical questions and In addition, we are also seeking Section 1899B(b)(1)(B) of the Act response options is to ensure that we public comment on which social risk describes standardized patient collect a set of standardized data factors might be most appropriate for assessment data as data required for at elements across SNFs which we can reporting stratified measure scores and/ least the quality measures described in then use for a number of purposes, or potential risk adjustment of a sections 1899B(c)(1) of the Act and that including SNF payment and measure particular measure. Examples of social is for the following categories: calculation for the SNF QRP. risk factors include, but are not limited • Functional status, such as mobility LTCHs, IRFs, and HHAs are also to, dual eligibility/low-income subsidy, and self-care at admission to a PAC required to report patient assessment race and ethnicity, and geographic area provider and before discharge from a data through their applicable PAC of residence. We are seeking comments PAC provider; assessment instruments, and they do so on which of these factors, including • Cognitive function, such as ability by responding to identical assessment current data sources where this to express ideas and to understand and questions developed for their respective information would be available, could mental status, such as depression and settings using an identical set of be used alone or in combination, and dementia; response options (which incorporate an whether other data should be collected • Special services, treatments and identical set of definitions and to better capture the effects of social interventions such as the need for standards). Like the MDS, the questions risk. We will take commenters’ input ventilator use, dialysis, chemotherapy, and response options for each of these into consideration as we continue to central line placement and total other PAC assessment instruments are assess the appropriateness and parenteral nutrition; standardized across the PAC provider feasibility of accounting for social risk • Medical conditions and type to which the PAC assessment factors in the SNF QRP. We note that comorbidities such as diabetes, instrument applies. However, the any such changes would be proposed congestive heart failure and pressure assessment questions and response through future notice and comment ulcers; options in the four PAC assessment rulemaking. • Impairments, such as incontinence instruments are not currently We look forward to working with and an impaired ability to hear, see or standardized with each other. As a stakeholders as we consider the issue of swallow; and result, questions and response options accounting for social risk factors and • Other categories deemed necessary that appear on the MDS cannot be reducing health disparities in CMS and appropriate. readily compared with questions and programs. Of note, implementing any of As required under section response options that appear, for the above methods would be taken into 1899B(b)(1)(A) of the Act, the example, on the Inpatient Rehabilitation consideration in the context of how this standardized patient assessment data Facility-Patient Assessment Instrument and other CMS programs operate (for must be reported at least for SNF (IRF–PAI) the PAC assessment example, data submission methods, admissions and discharges, but the instrument used by IRFs. This is true availability of data, statistical Secretary may require the data to be even when the questions and response considerations relating to reliability of reported more frequently. options are similar. This lack of

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standardization across the four PAC Report is available at https:// the public comments (summarized and provider types has limited our ability to www.cms.gov/Medicare/Quality- verbatim) and our responses, is compare one PAC provider type with Initiatives-Patient-Assessment- available at https://www.cms.gov/ another for purposes such as care Instruments/Post-Acute-Care-Quality- Medicare/Quality-Initiatives-Patient- coordination and quality improvement. Initiatives/IMPACT-Act-of-2014/ Assessment-Instruments/Post-Acute- To achieve a level of standardization IMPACT-Act-Downloads-and- Care-Quality-Initiatives/IMPACT-Act-of- across SNFs, LTCHs, IRFs, and HHAs Videos.html. 2014/IMPACT-Act-Downloads-and- that enables us to make comparisons Our data element contractor also Videos.html. between them, we are proposing to assembled a 16-member TEP that met on We specifically sought to identify define ‘‘standardized patient assessment April 7 and 8, 2016, and January 5 and standardized patient assessment data data’’ as patient or resident assessment 6, 2017, in Baltimore, Maryland, to that we could feasibly incorporate into questions and response options that are provide expert input on data elements the LTCH, IRF, SNF, and HHA identical in all four PAC assessment that are currently in each PAC assessment instruments and that have instruments, and to which identical assessment instrument, as well as data the following attributes: (1) Being standards and definitions apply. elements that could be standardized. supported by current science; (2) testing Standardizing the questions and The Development and Maintenance of well in terms of their reliability and response options across the four PAC Post-Acute Care Cross-Setting validity, consistent with findings from assessment instruments will also enable Standardized Patient Assessment Data the Post-Acute Care Payment Reform the data to be interoperable allowing it TEP Summary Reports are available at Demonstration (PAC PRD); (3) the to be shared electronically, or otherwise, https://www.cms.gov/Medicare/Quality- potential to be shared (for example, between PAC provider types. It will Initiatives-Patient-Assessment- through interoperable means) among enable the data to be comparable for Instruments/Post-Acute-Care-Quality- PAC and other provider types to various purposes, including the Initiatives/IMPACT-Act-of-2014/ facilitate efficient care coordination and development of cross-setting quality IMPACT-Act-Downloads-and- improved beneficiary outcomes; (4) the measures and to inform payment Videos.html. potential to inform the development of models that take into account patient As part of the environmental scan, quality, resource use and other characteristics rather than setting, as data elements currently in the four measures, as well as future payment described in the IMPACT Act. existing PAC assessment instruments methodologies that could more directly We are inviting public comment on were examined to see if any could be take into account individual beneficiary this proposed definition. considered for proposal as standardized health characteristics; and (5) the ability patient assessment data. Specifically, b. General Considerations Used for the to be used by practitioners to inform this evaluation included consideration Selection of Proposed Standardized their clinical decision and care planning of data elements in OASIS–C2 (effective Resident Assessment Data activities. We also applied the same January 2017); IRF–PAI, v1.4 (effective considerations that we apply with As part of our effort to identify October 2016); LCDS, v3.00 (effective quality measures, including the CMS appropriate standardized patient April 2016); and MDS 3.0, v1.14 Quality Strategy which is framed using assessment data for purposes of (effective October 2016). Data elements the three broad aims of the National collecting under the SNF QRP, we in the standardized assessment Quality Strategy. sought input from the general public, instrument that we tested in the Post- stakeholder community, and subject Acute Care Payment Reform 4. Policy for Retaining SNF QRP matter experts on items that would Demonstration (PAC PRD)—the Measures and Proposal To Apply That enable person-centered, high quality Continuity Assessment Record and Policy to Standardized Patient health care, as well as access to Evaluation (CARE) were also Assessment Data longitudinal information to facilitate considered. A literature search was also In the FY 2016 SNF PPS final rule (80 coordinated care and improved conducted to determine whether FR 46431 through 46432), we finalized beneficiary outcomes. additional data elements to propose as our policy for measure removal and also To identify optimal data elements for standardized patient assessment data finalized that when we initially adopt a standardization, our data element could be identified. measure for the SNF QRP, this measure contractor organized teams of We additionally held four Special will be automatically retained in the researchers for each category, and each Open Door Forums (SODFs) on October SNF QRP for all subsequent payment team worked with a group of advisors 27, 2015; May 12, 2016; September 15, determinations unless we propose to made up of clinicians and academic 2016; and December 8, 2016, to present remove, suspend, or replace the researchers with expertise in PAC. data elements we were considering and measure. We propose to apply this Information-gathering activities were to solicit input. At each SODF, some policy to the standardized patient used to identify data elements, as well stakeholders provided immediate input, assessment data that we adopt for the as key themes related to the categories and all were invited to submit SNF QRP. described in section 1899B(b)(1)(B) of additional comments via the CMS We are inviting public comment on the Act. In January and February 2016, IMPACT Mailbox at our proposal. our data element contractor also [email protected]. conducted provider focus groups for We also convened a meeting with 5. Policy for Adopting Changes to SNF each of the four PAC provider types, federal agency subject matter experts QRP Measures and Proposal To Apply and a focus group for consumers that (SMEs) on May 13, 2016. In addition, a That Policy to Standardized Patient included current or former PAC patients public comment period was open from Assessment Data and residents, caregivers, ombudsmen, August 12, to September 12, 2016, to In the FY 2016 SNF PPS final rule (80 and patient advocacy group solicit comments on detailed candidate FR 46432), we finalized our policy representatives. The Development and data element descriptions, data pertaining to the process for adoption of Maintenance of Post-Acute Care Cross- collection methods, and coding non-substantive and substantive Setting Standardized Patient methods. The IMPACT Act Public changes to SNF QRP measures. We did Assessment Data Focus Group Summary Comment Summary Report containing not propose to make any changes to this

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policy. We propose to apply this policy 6. Quality Measures Currently Adopted to the standardized patient assessment for the SNF QRP data that we adopt for the SNF QRP. The SNF QRP currently has seven We are inviting public comment on adopted measures as outlined in Table our proposal. 18.

TABLE 18—QUALITY MEASURES CURRENTLY ADOPTED FOR THE SNF QRP

Short name Measure name & data source

Resident Assessment Instrument Minimum Data Set

Pressure Ulcers ...... Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short Stay) (NQF #0678) Application of Falls ...... Application of the NQF-endorsed Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) Application of Functional Assessment/Care Plan ...... Application of Percent of LTCH Patients with an Admission and Dis- charge Functional Assessment and a Care Plan That Addresses Function (NQF #2631) DRR ...... Drug Regimen Review Conducted with Follow-Up for Identified Issues- Post Acute Care (PAC) Skilled Nursing Facility Quality Reporting Program *

Claims-based

MSPB ...... Total Estimated Medicare Spending Per Beneficiary (MSPB)—Post Acute Care (PAC) Skilled Facility (SNF) Quality Reporting Program (QRP) * DTC ...... Discharge to Community-Post Acute Care (PAC) Skilled Nursing Facil- ity (SNF) Quality Reporting Program (QRP) * PPR ...... Potentially Preventable 30-Day Post-Discharge Readmission Measure for Skilled Nursing Facility Quality Reporting Program * * Not currently NQF-endorsed for the SNF Setting.

7. SNF QRP Quality Measures Proposed • Application of IRF Functional because it includes new or worsened Beginning With the FY 2020 SNF QRP Outcome Measure: Discharge Self-Care unstageable pressure ulcers, including Beginning with the FY 2020 SNF Score for Medical Rehabilitation deep tissue injuries (DTIs), in the Patients (NQF #2635). measure numerator. The modified QRP, in addition to the quality measures • we are retaining under our policy Application of IRF Functional version of the measure would satisfy the described in section V.B.6. of this Outcome Measure: Discharge Mobility IMPACT Act domain of skin integrity proposed rule, we are proposing to Score for Medical Rehabilitation and changes in skin integrity. remove the current pressure ulcer Patients (NQF #2636). We note that the technical measure entitled Percent of Residents or The measures are described in more specifications for the pressure ulcer Patients with Pressure Ulcers That Are detail below. measure were updated in August 2016 New or Worsened (Short Stay) (NQF a. Proposal To Replace the Current through a subregulatory process to #0678) and to replace it with a modified Pressure Ulcer Quality Measure, Percent ensure technical alignment of the SNF version of the measure entitled Changes of Residents or Patients With Pressure measure specifications with the LTCH, in Skin Integrity Post-Acute Care: Ulcers That Are New or Worsened IRF, and HH specifications. The Pressure Ulcer/Injury and to adopt four (Short Stay) (NQF #0678), With a technical updates were added to ensure function outcome measures on resident Modified Pressure Ulcer Measure, clarity in how the measure is calculated, functional status. We are also proposing Changes in Skin Integrity Post-Acute and to avoid possible over counting of to characterize the data elements Care: Pressure Ulcer/Injury pressure ulcers in the numerator. In described below as standardized patient summary, we corrected the technical assessment data under section (1) Measure Background specifications to mitigate the risk of over 1899B(b)(1)(B) of the Act that must be In this proposed rule, we are counting new or worsened pressure reported by SNFs under the SNF QRP proposing to remove the current ulcers and to reflect the actual unit of through the MDS pressure ulcer measure, Percent of analysis as finalized in the rule, which The proposed measures are as Residents or Patients with Pressure is a stay (Medicare Part A stay) for SNF follows: Ulcers That Are New or Worsened QRP, consistent with the IRF, and LTCH • Changes in Skin Integrity Post- (Short Stay) (NQF #0678) from the SNF QRPs, rather than an episode (which Acute Care: Pressure Ulcer/Injury QRP measure set and to replace it with could include multiple stays) as is used • Application of IRF Functional a modified version of that measure, in the case of Nursing Home Compare. Outcome Measure: Change in Self-Care Changes in Skin Integrity Post-Acute Thus, we updated the SNF measure Score for Medical Rehabilitation Care: Pressure Ulcer/Injury, beginning specifications to reflect all resident Patients (NQF #2633). with the FY 2020 SNF QRP. The change stays, rather than the most-recent • Application of IRF Functional in the measure name is to reduce episode in a quarter, which is Outcome Measure: Change in Mobility confusion about the new modified comprised of one or more stays in that Score for Medical Rehabilitation measure. The modified version differs measure calculation. Also to ensure Patients (NQF #2634). from the current version of the measure alignment, we corrected our

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specifications to ensure that healed While DTIs are a subset of unstageable through Quarter 3 2016 reveals that (the wounds are not incorrectly captured in pressure ulcers, we collect DTI data SNF mean score is 1.75 percent; the the measure. Further, we corrected the elements separately and analyze them 25th and 75th percentiles are 0.0 specifications to ensure the exclusion of both separately and with other percent and 2.53 percent, respectively; residents who expire during their SNF unstageable pressure ulcer item and 29.11 percent of facilities have stay. The SNF specifications can be categories in our analysis below. We perfect scores. In the proposed measure, reviewed on our Web site at https:// note that DTIs are categorized as a type Changes in Skin Integrity Post-Acute www.cms.gov/Medicare/Quality- of unstageable pressure ulcer on the Care: Pressure Ulcer/Injury, during the Initiatives-Patient-Assessment- MDS and other post-acute care item same timeframe, the SNF mean score is Instruments/NursingHomeQualityInits/ sets. 2.58 percent; the 25th and 75th Skilled-Nursing-Facility-Quality- While there are few studies that percentiles are 0.65 percent and 3.70 Reporting-Program/SNF-Quality- provide information regarding the percent, respectively; and 20.32 percent Reporting-Program-Measures-and- incidence of unstageable pressure ulcers of facilities have perfect scores. Technical-Information.html. in PAC settings, an analysis conducted by a contractor suggests the incidence of (3) Stakeholder Feedback (2) Measure Importance unstageable pressure ulcers varies Our measure development contractor As described in the FY 2016 SNF PPS according to the type of unstageable sought input from subject matter final rule (80 FR 46433), pressure ulcers pressure ulcer and setting. This analysis experts, including Technical Expert are high-cost adverse events and are an examined the national incidence of new Panels (TEPs), over the course of several important measure of quality. For unstageable pressure ulcers in SNFs at years on various skin integrity topics information on the history and rationale discharge compared with admission and specifically those associated with for the relevance, importance, and using SNF discharges from January the inclusion of unstageable pressure applicability of having a pressure ulcer through December 2015. The contractor ulcers, including DTIs. Most recently, measure in the SNF QRP, we refer found a national incidence of 0.40 on July 18, 2016, a TEP convened by our readers to the FY 2016 SNF PPS final percent of new unstageable pressure measure development contractor rule (80 FR 46433 through 46434). ulcers due to slough and/or eschar, 0.02 provided input on the technical We are proposing to adopt a modified percent of new unstageable pressure specifications of this proposed quality version of the current pressure ulcer ulcers due to non-removable dressing/ measure, including the feasibility of measure because unstageable pressure device, and 0.57 percent of new DTIs. In implementing the proposed measure’s ulcers, including DTIs, are similar to addition, an international study updates related to the inclusion of Stage 2, Stage 3, and Stage 4 pressure spanning the time period 2006 to 2009, unstageable ulcers, including DTIs, ulcers in that they represent poor provides some evidence to suggest that across PAC settings. The TEP supported outcomes, are a serious medical the proportion of pressure ulcers the updates to the measure across PAC condition that can result in death and identified as DTI has increased over settings, including the inclusion in the disability, are debilitating and painful, time. The study found DTIs increased numerator of unstageable pressure and are often an avoidable outcome of by three fold, to nine percent of all ulcers due to slough and/or eschar that medical care.67891011 Studies show that observed ulcers in 2009, and that DTIs are new or worsened, new unstageable most pressure ulcers can be avoided and were more prevalent than either Stage 3 pressure ulcers due to a non-removable can also be healed in acute, post-acute, or 4 ulcers. During the same time dressing or device, and new DTIs. The and long-term care settings with period, the proportion of Stage 1 and 2 TEP recommended supplying additional appropriate medical care.12 ulcers decreased, and the proportion of guidance to providers regarding each Furthermore, some studies indicate that Stage 3 and 4 ulcers remained type of unstageable pressure ulcer. This DTIs, if managed using appropriate care, constant.15 support was in agreement with earlier can be resolved without deteriorating The inclusion of unstageable pressure TEP meetings, held on June 13, and into a worsened pressure ulcer.13 14 ulcers, including DTIs, in the numerator November 15, 2013, which had of this measure is expected to increase recommended that CMS update the 6 Casey, G. (2013). ‘‘Pressure ulcers reflect quality measure scores and variability in specifications for the pressure ulcer of nursing care.’’ Nurs N Z 19(10): 20–24. measure scores, thereby improving the measure to include unstageable pressure 7 Gorzoni, M.L. and S.L. Pires (2011). ‘‘Deaths in ability to discriminate among poor- and ulcers in the numerator.16 17 Exploratory nursing homes.’’ Rev Assoc Med Bras 57(3): 327– high-performing SNFs. In the currently 331. implemented pressure ulcer measure, 16 Schwartz, M., Nguyen, K.H., Swinson Evans, 8 Thomas, J.M., et al. (2013). ‘‘Systematic review: T.M., Ignaczak, M.K., Thaker, S., and Bernard, S.L.: Health-related characteristics of elderly Percent of Residents or Patients with Development of a Cross-Setting Quality Measure for hospitalized adults and nursing home residents Pressure Ulcers That Are New or Pressure Ulcers: OY2 Information Gathering, Final associated with short-term mortality.’’ J Am Geriatr Worsened (Short Stay) (NQF #0678), Report. Centers for Medicare & Medicaid Services, Soc 61(6): 902–911. analysis using data from Quarter 4 2015 November 2013. Available: https://www.cms.gov/ 9 White-Chu, E.F., et al. (2011). ‘‘Pressure ulcers Medicare/Quality-Initiatives-Patient-Assessment- in long-term care.’’ Clin Geriatr Med 27(2): 241–258. Instruments/Post-Acute-Care-Quality-Initiatives/ 10 Management 59(9) http://www.o-wm.com/article/ Bates-Jensen B.M. Quality indicators for two-year-retrospective-review-suspected-deep- Downloads/Development-of-a-Cross-Setting- prevention and management of pressure ulcers in tissue-injury-evolution-adult-acute-care-patien Quality-Measure-for-Pressure-Ulcers-Information- vulnerable elders. Ann Int Med. 2001;135 (8 Part 2), 14 Posthauer, M.E., Zulkowski, K. (2005). Special Gathering-Final-Report.pdf. 744–51. to OWM: The NPUAP Dual Mission Conference: 17 Schwartz, M., Ignaczak, M.K., Swinson Evans, 11 Bennet, G., Dealy, C. Posnett, J. (2004). The cost Reaching Consensus on Staging and Deep Tissue T.M., Thaker, S., and Smith, L.: The Development of pressure ulcers in the UK, Age and Aging, Injury. Ostomy Wound Management 51(4) http:// of a Cross-Setting Pressure Ulcer Quality Measure: 33(3):230–235. www.o-wm.com/content/the-npuap-dual-mission- Summary Report on November 15, 2013, Technical 12 Black, Joyce M., et al. ‘‘Pressure ulcers: conference-reaching-consensus-staging-and-deep- Expert Panel Follow-Up Webinar. Centers for Avoidable or unavoidable? Results of the national tissue-injury Medicare & Medicaid Services, January 2014. pressure ulcer advisory panel consensus 15 VanGilder, C., MacFarlane, G.D., Harrison, P., Available: https://www.cms.gov/Medicare/Quality- conference.’’ Ostomy-Wound Management 57.2 Lachenbruch, C., Meyer, S. (2010). The Initiatives-Patient-Assessment-Instruments/Post- (2011): 24. Demographics of Suspected Deep Tissue Injury in Acute-Care-Quality-Initiatives/Downloads/ 13 Sullivan, R. (2013). A Two-year Retrospective the United States: An Analysis of the International Development-of-a-Cross-Setting-Pressure-Ulcer- Review of Suspected Deep Tissue Injury Evolution Pressure Ulcer Prevalence Survey 2006–2009. Quality-Measure-Summary-Report-on-November- in Adult Acute Care Patients. Ostomy Wound Advances in Skin & Wound Care. 23(6): 254–261. 15-2013-Technical-Expert-Pa.pdf.

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data analysis conducted by our measure proposed measure in order to SNFs for the proposed measure. To view development contractor suggests that investigate unexpected results reported the updated MDS, with the proposed the addition of unstageable pressure in public comment. We intend to fulfill changes, we refer to the reader to ulcers, including DTIs, will increase the these conditions by offering additional https://www.cms.gov/medicare/quality- observed incidence and variation in the training opportunities and educational initiatives-patient-assessment- rate of new or worsened pressure ulcers materials in advance of public reporting, instruments/nursinghomequalityinits/ at the facility level, which may improve and by continuing to monitor and mds30raimanual.html For more the ability of the proposed quality analyze the proposed measure. More information on MDS submission using measure to discriminate between poor- information about the MAP’s the QIES ASAP System, we refer readers and high-performing facilities. recommendations for this measure is to http://www.cms.gov/Medicare/ We solicited stakeholder feedback on available at http:// Quality-Initiatives-Patient-Assessment- this proposed measure by means of a www.qualityforum.org/WorkArea/ Instruments/NursingHomeQualityInits/ public comment period held from linkit.aspx?LinkIdentifier NHQIMDS30Technical October 17 through November 17, 2016. =id&ItemID=84452. Information.html. In general, we received considerable We reviewed the NQF’s consensus For technical information about this support for the proposed measure. A endorsed measures and were unable to proposed measure, including few commenters supported all of the identify any NQF-endorsed pressure information about the measure changes to the current pressure ulcer ulcer quality measures for PAC settings calculation and the standardized patient measure that resulted in the proposed that are inclusive of unstageable assessment data elements used to measure, with one commenter noting pressure ulcers. There are related calculate this measure, we refer readers the significance of the work to align the measures, but after careful review, we to the document titled, Proposed pressure ulcer quality measure determined these measures are not Measure Specifications for SNF QRP specifications across the PAC settings. applicable for use in SNFs based on the Measures in the FY 2018 SNF PPS Many commenters supported the populations addressed or other aspects proposed rule, available at https:// inclusion of unstageable pressure ulcers of the specifications. We are unaware of www.cms.gov/Medicare/Quality- due to slough/eschar, due to non- any other such quality measures that Initiatives-Patient-Assessment- removable dressing/device, and DTIs in have been endorsed or adopted by Instruments/NursingHomeQualityInits/ the proposed quality measure. Other another consensus organization for the Skilled-Nursing-Facility-Quality- commenters did not support the SNF setting. Therefore, based on the Reporting-Program/SNF-Quality- inclusion of DTIs in the proposed evidence discussed above, we are Reporting-Program-Measures-and- quality measure because they stated that proposing to adopt the quality measure Technical-Information.html. there is no universally accepted entitled, Changes in Skin Integrity Post- We are proposing that SNFs begin definition for this type of skin injury. Acute Care: Pressure Ulcer/Injury, for reporting the proposed pressure ulcer The public comment summary report the SNF QRP beginning with the FY measure, Changes in Skin Integrity Post- for the proposed measure is available on 2020 SNF QRP. We plan to submit the Acute Care: Pressure Ulcer/Injury, the CMS Web site at https:// proposed measure to the NQF for which will replace the current pressure www.cms.gov/Medicare/Quality- endorsement consideration as soon as ulcer measure, with data collection Initiatives-Patient-Assessment- feasible. beginning October 1, 2018 for Instruments/Post-Acute-Care-Quality- admissions as well as discharges. Initiatives/IMPACT-Act-of-2014/ (4) Data Collection We are inviting public comment on IMPACT-Act-Downloads-and- The data for this quality measure our proposal to replace the current Videos.html. This summary includes would be collected using the MDS, pressure ulcer measure, Percent of further detail about our responses to which is currently submitted by SNFs Residents or Patients with Pressure various concerns and ideas stakeholders through the Quality Improvement and Ulcers That Are New or Worsened raised at that time. Evaluation System (QIES) Assessment (Short Stay) (NQF #0678), with a The NQF-convened Measures Submission and Processing (ASAP) modified version of that measure, Application Partnership (MAP) Post- System. The proposed standardized entitled Changes in Skin Integrity Post- Acute Care/Long-Term Care (PAC/LTC) resident assessment data applicable to Acute Care: Pressure Ulcer/Injury, Workgroup met on December 14 and 15, this measure that must be reported by beginning with the FY 2020 SNF QRP. 2016, and provided input to us about SNFs for admissions, as well as this proposed measure. The workgroup discharges occurring on or after October b. Proposed Functional Outcome provided a recommendation of ‘‘support 1, 2018 is described in section V.B.11.d. Measures for rulemaking’’ for use of the proposed of this proposed rule. SNFs are already In this proposed rule, we propose to measure in the SNF QRP. The MAP required to complete unstageable adopt for the SNF QRP four measures Coordinating Committee met on January pressure ulcer data elements on the that we are specifying under section 24 and 25, 2017, and provided a MDS. While the inclusion of 1899B(c)(1) of the Act for purposed of recommendation of ‘‘conditional unstageable wounds in the proposed meeting the functional status, cognitive support for rulemaking’’ for use of the measure results in a measure calculation function, and changes in function and proposed measure in the SNF QRP. The methodology that is different from the cognitive function domain: (1) MAP’s conditions of support include methodology used to calculate the Application of the IRF Functional that, as a part of measure current pressure ulcer measure, the data Outcome Measure: Change in Self-Care implementation, CMS provide guidance elements needed to calculate the Score for Medical Rehabilitation on the correct collection and calculation proposed measure are already included Patients (NQF #2633); (2) Application of of the measure result, as well as in the MDS. In addition, this proposed the IRF Function Outcome Measure: guidance on public reporting Web sites measure will further standardize the Change in Mobility Score for Medical explaining the impact of the data elements used in risk adjustment of Rehabilitation Patients (NQF #2634); (3) specification changes on the measure this measure. Our proposal to eliminate Application of the IRF Function result. The MAP’s conditions also duplicative data elements will result in Outcome Measure: Discharge Self-Care specify that CMS continue analyzing the an overall reduced reporting burden for Score for Medical Rehabilitation

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Patients (NQF #2635); and (4) achieve (that is, functional outcomes).18 SNFs optimally target quality Application of the IRF Function Several studies found patients’ improvement efforts. Outcome Measure: Discharge Mobility functional outcomes vary based on MedPAC 25 noted that while there was Score for Medical Rehabilitation treatment by physical and occupational an overall increase in the share of Patients (NQF #2636). We finalized the therapists. Specifically, therapy was intensive therapy days between 2002 same functional outcome measures for associated with significantly greater and 2012, the for-profit and urban the IRF QRP in the FY 2016 IRF PPS odds of improving mobility and self- facilities had higher shares of intensive final rule (80 FR 47111 through 47117). care functional independence,19 shorter therapy than not-for-profit facilities and These measures are: (1) IRF Functional length of stay,20 and a greater likelihood those located in rural areas. Data from Outcome Measure: Change in Self-Care of discharge to community.21 2011 to 2014 indicate that this variation for Medical Rehabilitation Patients Furthermore, Jung et al.22 found that an is not explained by patient (NQF #2633); (2) IRF Functional additional hour of therapy treatment per characteristics, such as activities of outcome Measure: Change in Mobility week was associated with daily living, comorbidities and age, as Score for Medical Rehabilitation (NQF approximately a 3.1 percentage-point SNF residents with stays in 2011 were #2634); (3) IRF Functional Outcome increase in the likelihood of returning to more independent on average than the Measure: Discharge Self-Care Score for the community among residents with a average SNF resident with stays in 2014. Medical Rehabilitation Patients (NQF hip fracture. Achieving these targeted Because more intense therapy is #2635); and (4) IRF Functional Outcome resident outcomes, including improved associated with more functional improvement for certain beneficiaries, Measure: Discharge Mobility Score for self-care and mobility functional this variation in rehabilitation services Medical Rehabilitation Patients (NQF independence, reduced length of stay, supports the need to monitor SNF #2636). We believe these measures and increased discharges to the residents’ functional outcomes. satisfy section 1899B(c)(1)(A) of the Act community, is a core goal of SNFs. because they address functional status, Therefore, we believe there is an cognitive function, and changes in Among SNF residents receiving opportunity for improvement in this function and cognitive function domain. rehabilitation services, the amount of area. We intend to propose functional treatment received can vary. For In addition, a recent analysis that outcome measures for the home health example, the amount of therapy examined the incidence, prevalence, and long-term care hospital settings in treatment provided varies by type (that and costs of common rehabilitation the future. is, for-profit versus not-for-profit) and conditions found that back pain, In developing these SNF functional location (that is, urban versus rural) of osteoarthritis, and rheumatoid arthritis 23 24 outcome quality measures, we sought to facility. Measuring residents’ are the most common and costly build on our cross-setting function work functional improvement across all SNFs conditions affecting more than 100 million individuals and costing more by leveraging data elements currently on an ongoing basis would permit than $200 billion per year.26 Persons collected in the MDS section GG, which identification of SNF characteristics, with these medical conditions are would minimize additional data such as ownership types or locations, admitted to SNFs for rehabilitation collection burden while increasing the associated with better or worse resident risk adjusted outcomes and thus help treatment. feasibility of cross-setting item The use of standardized mobility and comparisons. 18 Jette, D.U., R.L. Warren, & C. Wirtalla. (2005). self-care data elements would SNFs provide skilled services, such as standardize the collection of functional skilled nursing or therapy services. The relation between therapy intensity and outcomes of rehabilitation in skilled nursing status data, which could improve Residents receiving care in SNFs facilities. Archives of Physical Medicine and communication when residents are include those whose illness, injury, or Rehabilitation, 86 (3), 373–9. 19 transferred between providers. Most condition has resulted in a loss of Lenze, E.J., Host, H.H., Hildebrand, M.W., SNF residents receive care in an acute function, and for whom rehabilitative Morrow-Howell, N., Carpenter, B., Freedland, K.E., . . . & Binder, E.F. (2012). Enhanced medical care hospital prior to the SNF stay, and care is expected to help regain that rehabilitation increases therapy intensity and many SNF residents receive care from function. Treatment goals may include engagement and improves functional outcomes in another provider after the SNF stay. fostering residents’ ability to manage post acute rehabilitation of older adults: A Recent research provides empirical their daily activities so that they can randomized-controlled trial. Journal of the American Medical Directors Association, 13(8), support for the risk adjustment variables complete self-care and mobility 708–712. for these quality measures. In a study of activities as independently as possible, 20 Medicare Payment Advisory Commission (US). resident functional improvement in and, if feasible, return to a safe, active, (2016). Report to the Congress: Medicare payment SNFs, Wysocki et al.27 found that and productive life in a community- policy. Medicare Payment Advisory Commission. several resident conditions were based setting. Given that the primary 21 Cary, M.P., Pan, W., Sloane, R., Bettger, J.P., Hoenig, H., Merwin, E.I., & Anderson, R.A. (2016). significantly related to resident goal of many SNF residents is Self-Care and Mobility Following Postacute improvement in function, SNF Rehabilitation for Older Adults With Hip Fracture: 25 Medicare Payment Advisory Commission (US). clinicians assess and document A Multilevel Analysis. Archives of Physical (2016). Report to the Congress: Medicare payment residents’ functional status at admission Medicine and Rehabilitation. http://doi.org/ policy. Medicare Payment Advisory Commission. 10.1016/j.apmr.2016.01.012. 26 and at discharge to evaluate not only the Ma V.Y., Chan L., Carruthers K.J. Incidence, 22 Jung, H.Y., Trivedi, A.N., Grabowski, D.C., & Prevalence, Costs, and Impact on Disability of effectiveness of the rehabilitation care Mor, V. (2016). Does More Therapy in Skilled Common Conditions Requiring Rehabilitation in the provided to individual residents but Nursing Facilities Lead to Better Outcomes in United States: Stroke, Spinal Cord Injury, also the effectiveness of the SNF. Patients With Hip Fracture? Physical therapy, 96(1), Traumatic Brain Injury, Multiple Sclerosis, Examination of SNF data shows that 81–89. Osteoarthritis, Rheumatoid Arthritis, Limb Loss, 23 Grabowski, D.C., Feng, Z., Hirth, R., Rahman, and Back Pain. Archives of Phys Med and Rehab SNF treatment practices directly M., & Mor, V. (2013). Effect of nursing home 2014 influence resident outcomes. For ownership on the quality of post-acute care: An 27 Wysocki, A., Thomas, K.S., & Mor, V. (2015). example, therapy services provided to instrumental variables approach. Journal of Health Functional Improvement Among Short-Stay SNF residents have been found to be Economics, 32(1), 12–21. Nursing Home Residents in the MDS 3.0. Journal of 24 Medicare Payment Advisory Commission (US). the American Medical Directors Association, 16(6), correlated with the functional (2016). Report to the Congress: Medicare payment 470–474. http://doi.org/10.1016/ improvement that SNF residents policy. Medicare Payment Advisory Commission. j.jamda.2014.11.018.

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functional improvement, including requires the collection of admission and Continuity Assessment Record And cognitive impairment, delirium, discharge functional status data by Evaluation (CARE) Item Set: Final dementia, heart failure, and stroke. trained clinicians using standardized Report on Care Item Set and Current Also, Cary et al. found that several patient data elements that assess Assessment Comparisons: Volume 3 of resident characteristics were specific functional self-care activities 3.’’ 32 The reports are available on CMS’ significantly related to resident such as shower/bathe self, dressing Post-Acute Care Quality Initiatives Web functional improvement, including age, upper body and dressing lower body. page at http://www.cms.gov/Medicare/ cognitive function, self-care function at These self-care items are daily activities Quality-Initiatives-Patient-Assessment- admission, and comorbidities.28 that clinicians typically assess at the Instruments/Post-Acute-Care-Quality- These proposed outcome-based time of admission and/or discharge to Initiatives/CARE-Item-Set-and-B- quality measures could inform SNF determine residents’ needs, evaluate CARE.html. providers about opportunities to resident progress, and/or prepare (i) Stakeholder Input improve care in the area of function and residents and families for a transition to strengthen incentives for quality home or to another provider. The A cross-setting function TEP improvement related to resident standardized self-care function data convened by our measure development function. elements are coded using a 6-level contractor on September 9, 2013 We describe each of the four proposed rating scale that indicates the resident’s provided input on the initial technical functional outcome quality measures level of independence with the activity; specifications of this proposed quality below. We note that the outcome-based higher scores indicate more measure, Application of IRF Functional quality measures we are proposing in independence. The proposed outcome Outcome Measure: Change in Self-Care this proposed rule assess self-care and quality measure also requires the Score for Medical Rehabilitation mobility activities. We recognize that collection of risk factor data, such as Patients (NQF #2633). The TEP was SNFs can focus on recovery across many resident functioning prior to the current supportive of the implementation of this areas of resident functioning related to reason for admission, bladder measure and supported CMS’s efforts to body structure and function, activities, continence, communication ability and standardize patient/resident assessment and participation; however, additional cognitive function, at the time of data elements. The TEP summary report research is warranted to develop quality admission. is available at https://www.cms.gov/ measures for other areas of functioning. The data elements included in the Medicare/Quality-Initiatives-Patient- proposed quality measure were Assessment-Instruments/Post-Acute- (a) Application of IRF Functional originally developed and tested as part Care-Quality-Initiatives/IMPACT-Act-of- Outcome Measure: Change in Self-Care of the PAC PRD version of the 2014/IMPACT-Act-Downloads-and- Score for Medical Rehabilitation Continuity Assessment Record and Videos.html. Patients (NQF #2633) Evaluation (CARE) Item Set,29 which The MAP met on December 14 and The proposed outcome quality was designed to standardize assessment 15, 2015, and provided input on the measure, Application of IRF Functional of patients’ and residents’ status across proposed measure, Application of IRF Outcome Measure: Change in Self-Care acute and post-acute providers, Functional Outcome Measure: Change Score for Medical Rehabilitation including IRFs, SNFs, HHAs and in Self-Care Score for Medical Patients (NQF #2633), is an application LTCHs. The development of the CARE Rehabilitation Patients (NQF #2633) for of the outcome measure finalized in the Item Set and a description and rationale use in the SNF QRP. The MAP IRF QRP entitled, IRF Functional for each item is described in a report recognized that this proposed quality Outcome Measure: Change in Self-Care entitled ‘‘The Development and Testing outcome measure is an adaptation of a Score for Medical Rehabilitation of the Continuity Assessment Record currently endorsed measure for the IRF Patients (NQF #2633). The proposed and Evaluation (CARE) Item Set: Final population, and encouraged continued quality measure estimates the mean Report on the Development of the CARE development to ensure alignment of this risk-adjusted improvement in self-care Item Set: Volume 1 of 3.’’ 30 Reliability measure across PAC settings. The MAP score between admission and discharge and validity testing were conducted as noted there should be some caution in among SNF residents. A summary of the part of CMS’ Post-Acute Care Payment the interpretation of measure results due NQF-endorsed quality measure Reform Demonstration, and we to resident differentiation between specifications can be accessed on the concluded that the functional status facilities. The MAP also noted possible NQF Web site: http:// items have acceptable reliability and duplication as the MDS already www.qualityforum.org/qps/2633. validity. A description of the testing includes function data elements. We Detailed specifications for the NQF- methodology and results are available in note that the data elements for the endorsed quality measure can be several reports, including the report proposed measure are similar, but not accessed at http:// entitled ‘‘The Development and Testing the same as the existing MDS Section G www.qualityforum.org/ of the Continuity Assessment Record function data elements. The data ProjectTemplateDownload. And Evaluation (CARE) Item Set: Final elements for the proposed measure aspx?SubmissionID=2633. Report On Reliability Testing: Volume 2 include those that are the proposed The proposed functional outcome of 3 31 and the report entitled ‘‘The standardized patient assessment data for measure, the Application of IRF Development and Testing of The functional status under section Functional Outcome Measure: Change 1899B(b)(1)(B)(i) of the Act. The MAP in Self-Care Score for Medical 29 Barbara Gage et al., ‘‘The Development and also stressed the importance of Testing of the Continuity Assessment Record and considering burden on providers when Rehabilitation Patients (NQF #2633), Evaluation (CARE) Item Set: Final Report on the Development of the CARE Item Set’’ (RTI measures are considered for 28 Cary, M.P., Pan, W., Sloane, R., Bettger, J.P., International, 2012). implementation. The MAP’s overall Hoenig, H., Merwin, E.I., & Anderson, R.A. (2016). 30 Barbara Gage et al., ‘‘The Development and recommendation was for ‘‘encourage Self-Care and Mobility Following Postacute Testing of the Continuity Assessment Record and further development.’’ More information Rehabilitation for Older Adults With Hip Fracture: Evaluation (CARE) Item Set: Final Report on the A Multilevel Analysis. Archives of Physical Development of the CARE Item Set’’ (RTI about the MAP’s recommendations for Medicine and Rehabilitation. http://doi.org/ International, 2012). 10.1016/j.apmr.2016.01.012. 31 Ibid. 32 Ibid.

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this proposed measure is available at endorsed measures that are competing Prior functioning, prior device use, age, http://www.qualityforum.org/WorkArea/ and/or related to the proposed quality functional status at admission, primary linkit.aspx? measures. We identified six competing diagnosis, and comorbidities. These risk LinkIdentifier=id&ItemID=81593. and related quality measures focused on factors are key predictors of functional Since the MAP’s review and self-care functional improvement for performance and should be accounted recommendation for further residents in the SNF setting entitled: (1) for in any facility-level comparison of development, we have continued to CARE: Improvement in Self Care (NQF functional outcomes. develop this measure by soliciting input #2613); (2) Functional Change: Change Another key feature of the proposed via a TEP, providing a public comment in Self-Care Score for Skilled Nursing measure, the Application of IRF opportunity, and providing an update Facilities (NQF #2769); (3) Functional Functional Outcome Measure: Change on measure development to the MAP Status Change for Patients with in Self-Care Score for Medical via the feedback loop. More specifically, Shoulder Impairments (NQF #0426); (4) Rehabilitation Patients (NQF #2633), is our measure development contractor Functional Status Change for Patients that it uses the functional assessment convened a SNF-specific function TEP with Elbow, Wrist and Hand data elements and the associated rating on May 5, 2016, to provide further input Impairments (NQF #0427); (5) scale that were developed and tested for on the technical specifications of this Functional Status Change for Patients cross-setting use. The measure uses proposed quality measure by reviewing with General Orthopedic Impairments functional assessment items from the the IRF specifications and the (NQF #0428); and (6) Change in Daily CARE Item Set, which were developed specifications of competing and related Activity Function as Measures by the and tested as part of the PAC–PRD function quality measures. Overall, the AM–PAC (NQF #0430). We reviewed between 2006 and 2010. The items were TEP was supportive of the measure and the technical specifications for these six designed to build on the existing supported our efforts to standardize quality measures and compared these science for functional assessment patient assessment data elements. The specifications to those of our proposed instruments, and included a review of SNF-specific function TEP summary outcome-based quality measure, the the strengths and limitations of existing report is available at https:// Application of IRF Functional Outcome functional assessment instruments. An www.cms.gov/Medicare/Quality- Measure: Change in Self-Care Score for important strength of the standardized Initiatives-Patient-Assessment- Medical Rehabilitation Patients (NQF function items from the CARE Instruments/Post-Acute-Care-Quality- #2633), and have noted the following instrument is that they allow Initiatives/IMPACT-Act-of-2014/ differences in the technical comparison and tracking of patients’ IMPACT-Act-Downloads-and- specifications: (1) The number of risk and residents’ functional outcomes as Videos.html. adjustors and variance explained by they move across post-acute settings. We also solicited stakeholder these risk adjustors in the regression Specifically, the CARE Item Set was feedback on the development of this models; (2) the use of functional designed to standardize assessment of measure by means of a public comment assessment items that were developed patients’ status across acute and post- period that was open from October 7, and tested for cross-setting use; (3) the acute settings, including SNFs, IRFs, 2016, until November 4, 2016. There use of items that are already on the MDS LTCHs, and HHAs. The risk-adjustors was general support of the measure 3.0 and what this means for burden; (4) for various setting-specific versions of concept and the importance of the handling of missing functional this measure differ by the inclusion of functional improvement. Comments on adjustors such as comorbidities in the status data; and (5) the use of exclusion the measure varied, with some IRF measure. However, we believe that criteria that are baseline clinical commenters supportive of the measure, the differences in risk adjustment will conditions. We describe these key while others were either not in favor of not hinder future comparability across specifications of the proposed outcome the measure, or in favor of suggested settings. Agencies such as MedPAC measure, Application of IRF Functional potential modifications to the measure have supported a coordinated approach Outcome Measure: Change in Self-Care specifications. The public comment to measurement across settings using Score for Medical Rehabilitation summary report for the proposed standardized patient data elements. Patients (NQF #2633), in detail below. measure is available on the CMS Web A third important consideration is site at https://www.cms.gov/Medicare/ Our literature review, input from that some of the data elements Quality-Initiatives-Patient-Assessment- technical expert panels, public associated with the proposed measure Instruments/Post-Acute-Care-Quality- comment feedback, and data analyses are already included on the MDS in Initiatives/IMPACT-Act-of-2014/ demonstrated the importance of Section GG, because we adopted a cross- IMPACT-Act-Downloads-and- adequate risk adjustment of admission setting function process measure in the Videos.html. case mix factors for functional outcome SNF QRP FY 2016 Final Rule (FR 80 Further, we engaged with measures. Inadequate risk adjustment of 46444 through 46453). Three of the self- stakeholders when we presented an admission case mix factors may lead to care data elements necessary to update on the development of this erroneous conclusions about the quality calculate that quality measure, an quality measure to the MAP on October of care delivered within the facility, and Application of the Percent of Long-Term 19, 2016, during a MAP feedback loop thus is a potential threat to the validity Care Hospital Patient with a Functional meeting. Slides from that meeting are of a quality measure that examines Assessment and a Care Plan that available at http:// outcomes of care, such as functional Addresses Function (NQF #2631) are www.qualityforum.org/WorkArea/ outcomes. The proposed quality used to calculate the proposed quality linkit.aspx?LinkIdentifier measure, the Application of IRF measure. Provider burden of reporting =id&ItemID=83640. Functional Outcome Measure: Change on multiple items was a key in Self-Care Score for Medical consideration discussed by stakeholders (ii) Competing and Related Measures Rehabilitation Patients (NQF #2633) risk in our recent TEP is available at https:// and Measure Justification adjusts for more than 60 risk factors, www.cms.gov/Medicare/Quality- During the development of this explaining approximately 25 percent of Initiatives-Patient-Assessment- proposed functional outcome measure, the variance in change in function, and Instruments/Post-Acute-Care-Quality- we have monitored and reviewed NQF- includes all of the following risk factors: Initiatives/IMPACT-Act-of-2014/

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IMPACT-Act-Downloads-and- addressed all of the following risk Instruments/Post-Acute-Care-Quality- Videos.html. factors: Prior functioning, admission Initiatives/IMPACT-Act-of-2014/ We believe it is important to include functioning, prior diagnosis and IMPACT-Act-Downloads-and- the records of residents with missing comorbidities. In addition, they Videos.htmll. functional assessment data when supported exclusion criteria that would We invite public comments on our calculating a facility-level functional address functional improvement proposal to adopt the quality measure outcome quality measure for SNFs. The expectations of residents. entitled, the Application of IRF proposed measure, the Application of Therefore, based on the evidence Functional Outcome Measure: Change IRF Functional Outcome Measure: provided above, we are proposing to in Self-Care Score for Medical Change in Self-Care Score for Medical adopt the quality measure entitled, Rehabilitation Patients (NQF #2633) for Rehabilitation Patients (NQF #2633), Application of IRF Functional Outcome the SNF QRP, beginning with the FY incorporates a method to address Measure: Change in Self-Care Score for 2020 SNF QRP, with data collection for missing functional assessment data. Medical Rehabilitation Patients (NQF residents admitted and discharged We believe certain clinically-defined #2633), beginning with the FY 2020 starting on October 1, 2018. exclusion criteria are important to SNF QRP. specify in a functional outcome quality (b) Application of IRF Functional measure in order to maintain the (iii) Proposed Data Collection Outcome Measure: Change in Mobility validity of the quality measure. Mechanism Score for Medical Rehabilitation Exclusions for the proposed quality Data for the proposed quality Patients (NQF #2634) measure, Application of IRF Functional measure, the Application of IRF This quality measure is an application Outcome Measure: Change in Self-Care Functional Outcome Measure: Change of the outcome measure finalized in the Score for Medical Rehabilitation in Self-Care Score for Medical IRF QRP entitled, IRF Functional Patients (NQF #2633), were selected Rehabilitation Patients (NQF #2633), Outcome Measure: Change in Mobility through a review of the literature, input would be collected using the MDS, with Score for Medical Rehabilitation from Technical Expert Panels, and input the submission through the QIES ASAP Patients (NQF #2634). This proposed from the public comment process. The system. For more information on SNF quality measure estimates the risk- quality measure, Application of IRF QRP reporting through the QIES ASAP adjusted mean improvement in mobility Functional Outcome Measure: Change system, refer to CMS Web site at https:// score between admission and discharge in Self-Care Score for Medical www.cms.gov/Medicare/Quality- among SNF residents. A summary of Rehabilitation Patients (NQF #2633) is Initiatives-Patient-Assessment- this quality measure can be accessed on intended to capture improvement in Instruments/NursingHomeQualityInits/ the NQF Web site: http:// self-care function from admission to Skilled-Nursing-Facility-Quality- www.qualityforum.org/qps/2634. discharge for residents who are Reporting-Program/SNF-Quality- Detailed specifications for this quality admitted with an expectation of Reporting-Program-Measures-and- measure can be accessed at http:// functional improvement. Therefore, we Technical-Information.html. www.qualityforum.org/ exclude residents with certain The calculation of the proposed ProjectTemplateDownload conditions, for example progressive quality measure would be based on the .aspx?SubmissionID=2634. neurologic conditions, because these data collection of standardized items to As previously noted, residents residents are typically not expected to be included in the MDS. The function seeking care in SNFs include those improve on self-care skills for activities items used to calculate this measure are whose illness, injury, or condition has such as lower body dressing. the same set of functional status data resulted in a loss of function, and for Furthermore, we exclude residents who items that have been added to the IRF– whom rehabilitative care is expected to are independent on all self-care items at PAI version 1.4, for the purpose of help regain that function. Several the time of admission, because no providing standardized data elements studies found patients’ functional improvement in self-care can be under the domain of functional status, outcomes vary based on treatment. measured with the selected set of items which is required by the IMPACT Act. Physical and occupational therapy by discharge. Including residents with If finalized for implementation into treatment was associated with greater limited expectation for improvement the SNF QRP, the MDS would be functional gains, shorter stays, and a could introduce incentives for SNF modified so as to enable us to calculate greater likelihood of a discharge to a providers to restrict access to these this proposed quality measure using community. Among SNF residents residents. additional data elements that are receiving rehabilitation services, the We would like to note that our standardized with the IRF–PAI and such amount of therapy prescribed can vary measure developer presented and data would be obtained at the time of widely, and this variation is not always discussed these technical specification admission and discharge for all SNF associated with resident characteristics. differentiations with TEP members residents covered under a Part A stay. This variation in rehabilitation services during the May 6, 2016 TEP meeting in The standardized items used to supports the need to monitor SNF order to obtain TEP input on preferred calculate this proposed quality measure resident’s functional outcomes, as we specifications for valid functional do not duplicate existing Section G believe there is an opportunity for outcome quality measures. The items currently used for data collection improvement in this area. differences in measure specifications within the MDS. The quality measure The proposed functional outcome and the TEP feedback are presented in and standardized data element measure, the Application of IRF the TEP Summary Report, which is specifications for the Application of IRF Functional Outcome Measure: Change available at https://www.cms.gov/ Functional Outcome Measure: Change in Mobility Score for Medical Medicare/Quality-Initiatives-Patient- in Self-Care Score for Medical Rehabilitation Patients (NQF #2634), Assessment-Instruments/Post-Acute- Rehabilitation Patients (NQF #2633) can requires the collection of admission and Care-Quality-Initiatives/IMPACT-Act-of- be found on the SNF QRP Measures and discharge functional status data by 2014/IMPACT-Act-Downloads-and- Technical Information Web site at trained clinicians using standardized Videos.html. Overall, the TEP supported https://www.cms.gov/Medicare/Quality- data elements that assess specific the use of a risk adjustment model that Initiatives-Patient-Assessment- functional mobility activities such as

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toilet transfer and walking. These available at http:// convened a SNF-specific TEP on May 5, mobility items are daily activities that www.qualityforum.org/Setting_ 2016 to provide further input on the clinicians typically assess at the time of Priorities/Partnership/MAP_Final_ technical specifications of this proposed admission and/or discharge to Reports.aspx. The MAP recognized that quality measure by reviewing the IRF determine resident’s needs, evaluate this measure is an adaptation of specifications and the specifications of resident progress, and prepare residents currently endorsed measures for the IRF competing and related function quality and families for a transition to home or population, and encouraged continued measures. Overall, the TEP was to another care provider. The development to ensure alignment across supportive of the measure and standardized mobility function items PAC settings. They also noted there supported our efforts to standardize are coded using a 6-level rating scale should be some caution in the patient/resident assessment data that indicates the resident’s level of interpretation of measure results due to elements. The SNF-specific function independence with the activity; higher patient/resident differentiation between TEP summary report is available at scores indicate more independence. facilities. With regard to alignment https://www.cms.gov/Medicare/Quality- The functional assessment items across PAC settings, the self-care items Initiatives-Patient-Assessment- included in the proposed outcome included in the proposed quality Instruments/Post-Acute-Care-Quality- quality measures were originally measure are the same self-care items Initiatives/IMPACT-Act-of-2014/ developed and tested as part of the Post- that are included in the IRF–PAI IMPACT-Act-Downloads-and- Acute Care Payment Reform Version 1.4. We agree with the MAP Videos.html. Demonstration version of the CARE Item that patient/resident populations can We also solicited stakeholder Set, which was designed to standardize vary across IRFs and SNFs, and we have feedback on the development of this assessment of patients’ status across taken this issue into consideration while measure by means of a public comment acute and post-acute providers, selecting and testing the risk adjustors, period open from October 7, until including SNFs, HHAs, IRFs, and which include medical conditions, November 4, 2016. There was general LTCHs. admission function, prior functioning support of the measure concept and the This proposed outcome quality and comorbidities. The risk-adjustors importance of functional improvement. measure also requires the collection of for the IRF and the SNF versions of this Comments on the measure varied, with risk factors data, such as resident measure differ by the inclusion of some commenters supportive of the functioning prior to the current reason adjustors such as comorbidities in the measure, while others were either not in for admission, history of falls, bladder IRF measure. As noted, though there are favor of the measure, or in favor of continence, communication ability and differences between the measures we suggested potential modifications to the cognitive function, at the time of believe that the differences in risk measure specifications. The public admission. adjustment will not hinder future comment summary report for the A cross-setting function TEP comparability across measures. The proposed measure is available on the convened by our measure development MAP also noted possible duplication as CMS Web site at https://www.cms.gov/ contractor on September 9, 2013, the MDS already includes function data Medicare/Quality-Initiatives-Patient- provided input on the initial technical elements. The data elements for the Assessment-Instruments/Post-Acute- specifications of this proposed quality proposed measure are similar, but not Care-Quality-Initiatives/IMPACT-Act-of- measure, the Application of IRF the same as the existing MDS Section G 2014/IMPACT-Act-Downloads-and- Functional Outcome Measure: Change function data elements. The data Videos.html. in Mobility Score for Medical elements for the proposed measures We also engaged with the NQF Rehabilitation Patients (NQF #2634). include those that are the proposed convened MAP when we presented an The TEP was supportive of the standardized data elements for function. update on the development of this implementation of this measure and The MAP also stressed the importance quality measure on October 19, 2016, supported our efforts to standardize of considering burden on providers during a MAP feedback loop meeting. patient/resident assessment data when measures are considered for Slides from that meeting are available at elements. The TEP summary report is implementation. We appreciate the http://www.qualityforum.org/WorkArea/ available at https://www.cms.gov/ issue of burden and have taken that into linkit.aspx?LinkIdentifier= Medicare/Quality-Initiatives-Patient- consideration in developing the id&ItemID=83640. Assessment-Instruments/Post-Acute- measure. Please refer to the FY 2016 During the development of this Care-Quality-Initiatives/IMPACT-Act-of- SNF PPS final rule (80 FR 46428) for measure, we have monitored and 2014/IMPACT-Act-Downloads-and- more information on the MAP. reviewed NQF-endorsed measures that Videos.html. The MAP’s overall recommendation are competing and related. We The list of measures under was for ‘‘encourage further identified seven competing and related consideration for the SNF QRP, development.’’ More information about quality measures focused on including this quality measure, was the MAP’s recommendations for this improvement in mobility for residents released to the public on November 27, proposed measure is available at http:// in the SNF setting entitled: (1) CARE: 2015, and early comments were www.qualityforum.org/WorkArea/ Improvement in Mobility (NQF #2612); submitted between December 1 and linkit.aspx?LinkIdentifie (2) Functional Change: Change in December 7, 2015. The MAP met on r=id&ItemID=81593. Mobility Score (NQF 2774); (3) December 14 and 15, 2015, sought Since the MAP’s review and Functional Status Change for Patients public comment on this measure from recommendation for further with Knee Impairments (NQF #0422); December 23, 2015, to January 13, 2015, development, we have continued to (4) Functional Status Change for and met on January 26 and 27, 2016. develop this measure including Patients with Hip Impairments (NQF The NQF provided the MAP’s input to soliciting input from a TEP, providing a #0423); (5) Functional Status Change for us as required under section 1890A(a)(3) public comment opportunity, and Patients with Foot and Ankle of the Act in the final report, MAP 2016 providing an update on measure Impairments (NQF #0424); (6) Considerations for Selection of development to the MAP via the Functional Status Change for Patients Measures for Federal Programs: Post- feedback loop. More specifically, our with Lumbar Impairments (NQF #0425); Acute/Long-Term Care, which is measure development contractor and (7) Change in Basic Mobility as

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Measures by the AM–PAC (NQF #0429). 2010. The items were designed to build The Application of IRF Functional We reviewed the technical on the existing science for functional Outcome Measure: Change in Mobility specifications for these seven measures assessment instruments, and included a Score for Medical Rehabilitation carefully and compared them with the review of the strengths and limitations Patients (NQF #2634) is intended to specifications of the proposed quality of existing functional assessment capture improvement in mobility from measure, the Application of IRF instruments. An important strength of admission to discharge for residents Functional Outcome Measure: Change the cross-setting function items from the who are admitted with an expectation of in Mobility Score for Medical CARE instrument is that they allow functional improvement. Therefore, we Rehabilitation Patients (NQF #2634) and tracking of patients’ and residents’ exclude patients with certain have noted the following differences in functional outcomes as they move conditions, for example progressive the technical specifications: (1) The across post-acute settings. Specifically, neurologic conditions, because these number of risk adjustors and variance the CARE Item Set was designed to residents are typically not expected to explained by these risk adjustors in the standardize assessment of patients’ and improve on mobility skills for activities regression models; (2) the use of residents’ status across acute and post- such as walking. Furthermore, we functional assessment items that were acute settings, including SNFs, IRFs, exclude residents who are independent developed and tested for cross-setting LTCHs, and HHAs. The MedPAC has on all mobility items at the time of use; (3) the use of items that are already publicly supported a coordinated admission, because no improvement can on the MDS 3.0 and what this means for approach to measurement across be measured with the selected set of burden; (4) the handling of missing settings using standardized data items by discharge. Inclusion of functional status data; and (5) the use of elements. residents with limited expectation for exclusion criteria that are baseline A third important consideration is improvement could introduce clinical conditions. We describe these that some of the data elements incentives for SNF providers to limited key specifications of the proposed associated with the proposed measure, access to these residents. outcome measure, the Application of Application of IRF Functional Outcome Our measure developer contractor IRF Functional Outcome Measure: Measure: Change in Mobility Score for presented and discussed these technical Change in Mobility Score for Medical Medical Rehabilitation Patients (NQF specification differentiations during the Rehabilitation Patients (NQF #2634), #2634) are already included on the MDS May 6, 2016 TEP meeting in order to below in more detail. in Section GG, because we adopted a obtain TEP input on preferred Our literature review, input from cross-setting function process measure specifications for valid functional technical expert panels, public in the SNF QRP FY 2016 Final Rule (FR outcome quality measures. The comment feedback, and analyses 80 46444 through 46453), and seven of differences in measure specifications demonstrated the importance of the mobility data elements necessary to and the TEP feedback are presented in adequate risk adjustment of admission calculate that quality measure, an the TEP Summary Report, which is case mix factors for functional outcome Application of the Percent of Long-Term available at https://www.cms.gov/ measures. Inadequate risk adjustment of Care Hospital Patient with a Functional Medicare/Quality-Initiatives-Patient- admission case mix factors may lead to Assessment and a Care Plan that Assessment-Instruments/Post-Acute- erroneous conclusions about the quality Addresses Function (NQF #2631) are Care-Quality-Initiatives/IMPACT-Act-of- of care delivered within the facility, and used to calculate the proposed quality 2014/IMPACT-Act-Downloads-and- thus is a potential threat to the validity measure. Provider burden of reporting Videos.html. of a quality measure that examines on multiple measures was a key Therefore, based on the evidence outcomes of care, such as functional consideration discussed by stakeholders provided above, we are proposing to status. The proposed quality measure, in our recent TEP: https://www.cms.gov/ adopt the quality measure entitled, the Application of IRF Functional Medicare/Quality-Initiatives-Patient- Application of IRF Functional Outcome Outcome Measure: Change in Mobility Assessment-Instruments/Post-Acute- Measure: Change in Mobility Score for Score for Medical Rehabilitation Care-Quality-Initiatives/IMPACT-Act-of- Medical Rehabilitation Patients (NQF Patients (NQF #2634) risk adjusts for 2014/IMPACT-Act-Downloads-and- #2634), for use beginning with the FY more than 60 risk factors, explaining Videos.html. 2020 SNF QRP. approximately 23 percent of the We believe it is important to include Data for the proposed quality variance in change in function, and the records of residents with missing measure, the Application of IRF includes all of the following risk functional assessment data in the Functional Outcome Measure: Change adjusters: Prior functioning, prior device calculating a facility-level functional in Mobility Score for Medical use, age, functional status at admission, outcome quality measure for SNFs. The Rehabilitation Patients (NQF #2634), primary diagnosis and comorbidities. proposed measure, Application of IRF would be collected using the MDS, with These are key predictors of functional Functional Outcome Measure: Change the submission through the QIES ASAP performance and need to be accounted in Mobility Score for Medical system. For more information on SNF for in any facility-level functional Rehabilitation Patients (NQF #2634), QRP reporting through the QIES ASAP outcome quality measure. incorporates a method to address system, refer to https://www.cms.gov/ Another key feature of the proposed missing functional assessment data. Medicare/Quality-Initiatives-Patient- measure, Application of IRF Functional We believe certain clinically-defined Assessment-Instruments/ Outcome Measure: Change in Mobility exclusion criteria are important to NursingHomeQualityInits/Skilled- Score for Medical Rehabilitation specify in a functional outcome quality Nursing-Facility-Quality-Reporting- Patients (NQF #2634), is that it uses the measure in order to maintain the Program/SNF-Quality-Reporting- functional assessment data elements validity of the quality measure. Program-Measures-and-Technical- and the associated rating scale that were Exclusions for the proposed quality Information.html. developed and tested for cross-setting measure, Change in Mobility Score for The calculation of the proposed use. The measure uses functional Medical Rehabilitation Patients (NQF quality measure would be based on the assessment items from the CARE Item #2634), were selected through a data collection of standardized items to Set, which were developed and tested as literature review, input from TEPs, and be included in the MDS. The function part of the PAC PRD between 2006 and input from the public comment process. items used to calculate this measure are

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the same set of functional status data treatment by physical and occupational Medicare/Quality-Initiatives-Patient- items that have been added to the IRF– therapists. Therapy was associated with Assessment-Instruments/Post-Acute- PAI version 1.4, for the purpose of greater functional gains, shorter stays, Care-Quality-Initiatives/IMPACT-Act-of- providing standardized data elements and a greater likelihood of discharge to 2014/IMPACT-Act-Downloads-and- under the domain of functional status. community. Among SNF residents Videos.html. If this proposed quality measure is receiving rehabilitation services, the The MAP met on December 14 and finalized for implementation in the SNF amount of treatment prescribed can vary 15, 2015, and provided input on the QRP, the MDS would be modified so as widely, and this variation is not proposed measure, Application of IRF to enable the calculation of these associated with resident characteristics. Functional Outcome Measure: Discharge standardized items that are used to This variation in rehabilitation services Self-Care Score for Medical calculate this proposed quality measure. supports the need to monitor SNF Rehabilitation Patients (NQF #2635) for The collection of data by means of the resident’s functional outcomes, as we use in the SNF QRP. The MAP standardized items would be obtained at believe there is an opportunity for recognized that this proposed quality admission and discharge. The improvement in this area. measure is an adaptation of a currently standardized items used to calculate The proposed outcome quality endorsed measure for the IRF this proposed quality measure do not measure, Application of IRF Functional population, and encouraged continued duplicate existing items currently used Outcome Measure: Discharge Self-Care development to ensure alignment of this for data collection within the MDS. The Score or Medical Rehabilitation Patients measure across PAC settings. The MAP quality measure and standardized data (NQF #2635), requires the collection of also noted there should be some caution element specifications for the functional status data at admission and in the interpretation of measure results Application of IRF Functional Outcome discharge by trained clinicians using due to patient/resident differentiation Measure: Change in Mobility Score for standardized patient assessment data between facilities. The MAP also Medical Rehabilitation Patients (NQF elements such as eating, oral hygiene, stressed the importance of considering #2634) is available on the SNF QRP and lower body dressing. These self-care burden on providers when measures are Measures and Technical Information items are daily activities that clinicians considered for implementation. The Web site at https://www.cms.gov/ typically assess at the time of admission MAP also noted possible duplication as Medicare/Quality-Initiatives-Patient- and discharge to determine residents’ the MDS already includes function data Assessment-Instruments/Post-Acute- needs, evaluate resident progress, and elements. The data elements for the Care-Quality-Initiatives/IMPACT-Act-of- prepare residents and families for a proposed measure are similar, but not 2014/IMPACT-Act-Downloads-and- transition to home or to another the same as the existing MDS function Videos.html. provider. The self-care function data data elements. The data elements for the We invite public comments on our elements are coded using a 6-level proposed measures include those that proposal to adopt the quality measure, rating scale that indicates the resident’s are the proposed standardized patient entitled Application of IRF Functional level of independence with the activity; data elements for function. The MAP’s Outcome Measure: Change in Mobility higher scores indicate more overall recommendation was to Score for Medical Rehabilitation independence. ‘‘encourage further development.’’ More Patients (NQF #2634) beginning with The functional assessment items information about the MAP’s the FY 2020 SNF QRP. included in the proposed outcome recommendations for this proposed quality measures were originally measure is available at http:// (c) Application of IRF Functional developed and tested as part of the Post- www.qualityforum.org/WorkArea/ Outcome Measure: Discharge Self-Care Acute Care Payment Reform linkit.aspx?LinkIdentifier Score for Medical Rehabilitation Demonstration version of the CARE Item =id&ItemID=81593. Patients (NQF #2635) Set, which was designed to standardize Since the 2015 MAP’s review and This quality measure is an application assessment of patients’ status across recommendation for further of the outcome quality measure acute and post-acute providers, development, we have continued to finalized in the IRF QRP entitled, IRF including SNFs, HHAs, IRFs, and develop this measure including Functional Outcome Measure: Discharge LTCHs soliciting input via a TEP, proving a Self-Care Score for Medical This proposed outcome quality public comment opportunity and Rehabilitation Patients (NQF #2635). measure also requires the collection of providing an update on measure The proposed quality measure estimates risk factors data, such as resident development to the MAP via the the percentage of SNF residents who functioning prior to the current reason feedback loop. More specifically, our meet or exceed an expected discharge for admission, bladder continence, measure development contractor self-care score. A summary of this communication ability, and cognitive convened a SNF-specific TEP on May 5, quality measure can be accessed on the function at the time of admission. 2016 to provide further input on the NQF Web site at http:// A cross-setting function TEP technical specifications of this proposed www.qualityforum.org/qps/2635. convened by our measure development quality measure by reviewing the IRF Detailed specifications for the quality contractor on September 9, 2013 specifications and the specifications of measure can be accessed at http:// provided input on the initial technical competing and related function quality www.qualityforum.org/ specifications of this proposed quality measures. Overall, the TEP was ProjectTemplateDownload. measure, the Application of IRF supportive of the measure. Specifically, aspx?SubmissionID=2635. Functional Outcome Measure: Discharge they supported the risk adjustors, As previously noted, residents Self-Care Score for Medical suggested some additional risk seeking care in SNFs include Rehabilitation Patients (NQF #2635). adjustors, supported the exclusion individuals whose illness, injury, or The TEP was supportive of the criteria and supported CMS’s efforts to condition has resulted in a loss of implementation of this measure and standardize patient/resident assessment function, and for whom rehabilitative supported CMS’s efforts to standardize data elements. The SNF-specific care is expected to help regain that patient/resident assessment data function TEP summary report is function. Several studies found patients’ elements. The TEP summary report is available at https://www.cms.gov/ functional outcomes vary based on available at https://www.cms.gov/ Medicare/Quality-Initiatives-Patient-

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Assessment-Instruments/Post-Acute- of risk adjustors and variance explained Reporting-Program/SNF-Quality- Care-Quality-Initiatives/IMPACT-Act-of- by these risk adjustors in the regression Reporting-Program-Measures-and- 2014/IMPACT-Act-Downloads-and- models; (2) the use of functional Technical-Information.html. Videos.html. assessment items that were developed The calculation of the proposed We also solicited stakeholder and tested for cross-setting use; (3) the quality measure would be based on the feedback on the development of this use of items that are already on the MDS data collection of standardized items to measure by means of a public comment 3.0 and what this means for burden; (4) be included in the MDS. The function period open from October 7, 2016 until the handling of missing functional items used to calculate this measure are November 4, 2016. There was general status data; and (5) the use of exclusion the same set of functional status data support of the measure concept and the criteria that are baseline clinical items that have been added to the IRF– importance of functional improvement. conditions. PAI version 1.4, for the purpose of Comments on the measure varied, with Consistent with the other functional providing standardized data elements some commenters supportive of the outcome measures, the specifications for under the domain of functional status. measure, while others were either not in this proposed quality measure, The collection of data by means of the favor of the measure, or in favor of Application of IRF Functional Outcome standardized items would be obtained at suggested potential modifications to the Measure: Discharge Self-Care Score for admission and discharge. The measure specifications. Some comments Medical Rehabilitation Patients (NQF standardized items used to calculate focused on suggestions for additional #2635), were developed based on our this proposed quality measure do not risk adjustors, and the data elements. literature review, input from technical duplicate existing items currently used The public comment summary report expert panels, public comment feedback for data collection within the MDS. The for the proposed measure is available on and data analyses. The details about the quality measure and standardized data the CMS Web site at https:// specifications for the measures element specifications for the www.cms.gov/Medicare/Quality- described above also apply to this Application of IRF Functional Outcome Initiatives-Patient-Assessment- proposed quality measure. Overall, the Measure: Discharge Self-Care Score for Instruments/Post-Acute-Care-Quality- TEP supported the use of a risk Medical Rehabilitation Patients (NQF Initiatives/IMPACT-Act-of-2014/ adjustment model that addressed prior #2635) can be found on the SNF QRP IMPACT-Act-Downloads-and- functioning, admission functioning, Measures and Technical Information Videos.html. prior diagnosis and comorbidities. In Web site at https://www.cms.gov/ We also engaged with stakeholders addition, they supported exclusion Medicare/Quality-Initiatives-Patient- when we presented an update on the criteria that would address functional Assessment-Instruments/ development of this quality measure to improvement expectations of residents. NursingHomeQualityInits/Skilled- the MAP on October 19, 2016, during a Our measure developer contractor Nursing-Facility-Quality-Reporting- MAP feedback loop meeting. Slides presented and discussed these technical Program/SNF-Quality-Reporting- from that meeting are available at http:// specification differentiations during the Program-Measures-and-Technical- www.qualityforum.org/WorkArea/ May 6, 2016 TEP meeting in order to Information.html. linkit.aspx?LinkIdentifier obtain TEP input on preferred If finalized for implementation into =id&ItemID=83640. specifications for valid functional the SNF QRP, the MDS would be During the development of this outcome quality measures. The modified so as to enable us to calculate measure, we have monitored and differences in measure specifications the proposed measure using additional reviewed NQF-endorsed measures that and the TEP feedback are presented in data elements that are standardized with are competing and related. We the TEP Summary Report, which is the IRF–PAI and such data would be identified six competing and related available at https://www.cms.gov/ obtained at the time of admission and quality measures focused on self-care Medicare/Quality-Initiatives-Patient- discharge for all SNF residents covered functional improvement for residents in Assessment-Instruments/Post-Acute- under a Part A stay. the SNF setting entitled: (1) CARE: Care-Quality-Initiatives/IMPACT-Act-of- We invite public comments on our Improvement in Self Care (NQF #2613); 2014/IMPACT-Act-Downloads-and- proposal to adopt the quality measure (2) Functional Change: Change in Self- Videos.html. entitled, the Application of IRF Care Score (NQF #2286); (3) Functional Therefore, based on the evidence Functional Outcome Measure: Discharge Status Change for Patients with provided above, we are proposing to Self-Care Score for Medical Shoulder Impairments (NQF #0426); (4) adopt the quality measure entitled, the Rehabilitation Patients (NQF #2635) Functional Status Change for Patients Application of IRF Functional Outcome beginning with the FY 2020 SNF QRP. with Elbow, Wrist and Hand Measure: Discharge Self-Care Score for Impairments (NQF #0427); (5) Medical Rehabilitation Patients (NQF (d) Application of IRF Functional Functional Status Change for Patients #2635), for use in the SNF QRP Outcome Measure: Discharge Mobility with General Orthopedic Impairments beginning with the FY 2020 program. Score for Medical Rehabilitation (NQF #0428); and (6) Change in Daily Data for the proposed quality Patients (NQF #2636) Activity Function as Measures by the measure, the Application of IRF This proposed quality measure is an AM–PAC (NQF #0430). Functional Outcome Measure: Discharge application of the outcome quality As described above, we reviewed the Self-Care Score for Medical measure finalized in the IRF QRP technical specifications for these six Rehabilitation Patients (NQF #2635), entitled, IRF Functional Outcome measures and compared them with the would be collected using the MDS, with Measure: Discharge Mobility Score for specifications for the proposed the the submission through the QIES ASAP Medical Rehabilitation Patients (NQF quality measure, Application of IRF system. For more information on SNF #2636). This proposed quality measure Functional Outcome Measure: Discharge QRP reporting through the QIES ASAP estimates the percentage of SNF Self-Care Score for Medical system, refer to CMS Web site at https:// residents who meet or exceed an Rehabilitation Patients (NQF #2635) www.cms.gov/Medicare/Quality- expected discharge mobility score. A and, as described in detail above, we Initiatives-Patient-Assessment- summary of this quality measure can be noted the following differences in the Instruments/NursingHomeQualityInits/ accessed on the NQF Web site: http:// technical specifications: (1) The number Skilled-Nursing-Facility-Quality- www.qualityforum.org/qps/2636.

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Detailed specifications for this quality Initiatives/CARE-Item-Set-and-B- soliciting input via a TEP, proving a measure can be accessed at http:// CARE.html. public comment opportunity and www.qualityforum.org/ This proposed quality measure providing an update on measure ProjectTemplateDownload requires the collection of risk factors development to the MAP via the .aspx?SubmissionID=2636. data, such as resident functioning prior feedback loop. More specifically, our As previously noted, residents to the current reason for admission, measure development contractor seeking care in SNFs include history of falls, bladder continence, convened a SNF-specific TEP on May 5, individuals whose illness, injury, or communication ability and cognitive 2016, to provide further input on the condition has resulted in a loss of function, at the time of admission. technical specifications of this proposed function, and for whom rehabilitative A cross-setting function TEP quality measure by reviewing the IRF care is expected to help regain that convened by our measure development specifications and the specifications of function. Several studies found patients’ contractor on September 9, 2013 competing and related function quality functional outcomes vary based on provided input on the initial technical measures. Overall, the TEP was treatment by physical and occupational specifications of this proposed quality supportive of the measure and therapists. Therapy was associated with measure, Application of IRF Functional supported our efforts to standardize greater functional gains, shorter stays, Outcome Measure: Discharge Mobility patient/resident assessment data and a greater likelihood of discharge to Score for Medical Rehabilitation elements. The SNF-specific function community. Among SNF residents Patients (NQF #2636). The TEP was TEP summary report is available at receiving rehabilitation services, the supportive of the implementation of this https://www.cms.gov/Medicare/Quality- amount of treatment prescribed can vary measure and supported our efforts to Initiatives-Patient-Assessment- widely, and this variation is not standardize patient assessment data Instruments/Post-Acute-Care-Quality- associated with resident characteristics. elements. The TEP summary report is Initiatives/IMPACT-Act-of-2014/ This variation in rehabilitation services available at https://www.cms.gov/ IMPACT-Act-Downloads-and- supports the need to monitor SNF Medicare/Quality-Initiatives-Patient- Videos.html. resident’s functional outcomes, as we Assessment-Instruments/Post-Acute- We also solicited stakeholder believe there is an opportunity for Care-Quality-Initiatives/IMPACT-Act-of- feedback on the development of this improvement in this area. 2014/IMPACT-Act-Downloads-and- measure by means of a public comment The proposed functional outcome Videos.html. period open from October 7, 2016, until measure, Application of IRF Functional The MAP met on December 14 and November 4, 2016. There was general Outcome Measure: Discharge Mobility 15, 2015, and provided input on the support of the measure concept and the Score for Medical Rehabilitation proposed measure, Application of IRF importance of functional improvement. Patients (NQF #2636), requires the Functional Outcome Measure: Discharge Comments on the measure varied, with collection of admission and discharge Mobility Score for Medical some commenters supportive of the functional status data by trained Rehabilitation Patients (NQF #2636), for measure, while others were either not in clinicians using standardized data use in the SNF QRP. The MAP favor of the measure, or suggested elements that assess specific functional recognized that this proposed quality potential modifications to the measure mobility activities such as bed mobility measure is an adaptation of a currently specifications. and walking. These standardized endorsed measure for the IRF The public comment summary report mobility items are daily activities that population, and encouraged continued for the proposed measure is available on clinicians typically assess at the time of development to ensure alignment of this the CMS Web site at https:// admission and/or discharge to measure across PAC settings. The MAP www.cms.gov/Medicare/Quality- determine residents’ needs, evaluate noted there should be some caution in Initiatives-Patient-Assessment- resident progress and prepare residents the interpretation of measure results due Instruments/Post-Acute-Care-Quality- and families for a transition to home or to patient/resident differentiation Initiatives/IMPACT-Act-of-2014/ to another care provider. The between facilities. The MAP also IMPACT-Act-Downloads-and- standardized mobility function items stressed the importance of considering Videos.html. are coded using a 6-level rating scale burden on providers when measures are We also engaged with stakeholders that indicates the resident’s level of considered for implementation. The when we presented an update on the independence with the activity; higher MAP also noted possible duplication as development of this quality measure to scores indicate more independence. the MDS already includes function data the MAP on October 19, 2016, during a The functional assessment items elements. The data elements for the MAP feedback loop meeting. Slides included in the proposed outcome proposed measure are similar, but not from that meeting are available at http:// quality measures were originally the same as the existing MDS function www.qualityforum.org/WorkArea/ developed and tested as part of the Post- data elements. The data elements for the linkit.aspx? Acute Care Payment Reform proposed measure include those that are LinkIdentifier=id&ItemID=83640. Demonstration version of the CARE Item the proposed standardized patient data During the development of this Set, which was designed to standardize elements for function. The MAP’s measure, we have monitored and assessment of patients’ status across overall recommendation was to reviewed the NQF-endorsed measures acute and post-acute providers, ‘‘encourage further development.’’ More that are competing and related. We including SNFs, HHAs, IRFs, and information about the MAP’s identified seven competing and related LTCHs and Current Assessment recommendations for this proposed quality measures focused on mobility Comparisons: Volume 3 of 3.’’ 33 The measure is available at http:// functional improvement for residents in reports are available on CMS’ Post- www.qualityforum.org/WorkArea/ the SNF setting entitled: (1) CARE: Acute Care Quality Initiatives Web page linkit.aspx?LinkIdentifier Improvement in Mobility (NQF #2612); at http://www.cms.gov/Medicare/ =id&ItemID=81593. (2) Functional Change: Change in Quality-Initiatives-Patient-Assessment- Since the MAP’s review and Mobility Score (NQF #2774); (3) Instruments/Post-Acute-Care-Quality- recommendation for further Functional Status Change for Patients development, we have continued to with Knee Impairments (NQF #0422); 33 Ibid. develop this measure including (4) Functional Status Change for

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Patients with Hip Impairments (NQF Data for the proposed quality 8. Proposed Modifications to Potentially #0423); (5) Functional Status Change for measure, the Application of IRF Preventable 30-Days Post-Discharge Patients with Foot and Ankle Functional Outcome Measure: Discharge Readmission Measure for Skilled Impairments (NQF #0424); (6) Mobility Score for Medical Nursing Facility (SNF) Quality Functional Status Change for Patients Rehabilitation Patients (NQF #2636), Reporting Program (QRP) with Lumbar Impairments (NQF #0425); would be collected using the MDS, with and (7) Change in Basic Mobility as the submission through the QIES ASAP In the FY 2017 SNF PPS final rule (81 Measures by the AM–PAC (NQF #0429). system. Additional information on SNF FR 52030 through 52034), we adopted the Potentially Preventable 30-Day Post- As described above, we reviewed the QRP reporting through the QIES ASAP Discharge Readmission Measure for SNF technical specifications for these seven system can be found on the CMS Web QRP. This measure was developed to measures carefully and compared them site at https://www.cms.gov/Medicare/ meet section 1899B(d)(1)(C) of the Act, with the specifications of the proposed Quality-Initiatives-Patient-Assessment- quality measure, Application of IRF which calls for measures to reflect all- Instruments/NursingHomeQualityInits/ Functional Outcome Measure: Discharge condition risk-adjusted potentially Skilled-Nursing-Facility-Quality- Mobility Score for Medical preventable hospital readmission rates Rehabilitation Patients (NQF #2636) and Reporting-Program/SNF-Quality- for PAC providers, including SNFs. have noted the following differences in Reporting-Program-Measures-and- Technical-Information.html. This measure was specified to be the technical specifications: (1) The calculated using 1 year of Medicare FFS number of risk adjustors and variance The calculation of the proposed claims data; however, we are proposing explained by these risk adjustors in the quality measure would be based on the to increase the measurement period to 2 regression models; (2) the use of data collection of standardized items to years of claims data. The rationale for functional assessment items that were be included in the MDS. The function this proposed change is to expand the developed and tested for cross-setting items used to calculate this measure are number of SNFs with 25 stays or more, use; (3) the use of items that are already the same set of functional status data which is the minimum number of stays on the MDS 3.0 and what this means for items that have been added to the IRF– that we require for public reporting. burden; (4) the handling of missing PAI version 1.4, for the purpose of Furthermore, this modification will functional status data; and (5) the use of providing standardized data elements align the SNF measure more closely exclusion criteria that are baseline under the domain of functional status. with other potentially preventable clinical conditions. The collection of data by means of the hospital readmission measures Consistent with the other functional standardized items would be obtained at developed to meet the IMPACT Act outcome measures, the specifications for admission and discharge. The requirements and adopted for the IRF this proposed quality measure, standardized items used to calculate and LTCH QRPs, which are calculated Application of IRF Functional Outcome this proposed quality measure do not Measure: Discharge Mobility Score for using 2 consecutive years of data. duplicate existing items currently used Medical Rehabilitation Patients (NQF We also propose to update the dates for data collection within the MDS. The #2636), were developed based on our associated with public reporting of SNF literature review, input from technical quality measure and standardized data performance on this measure. In the FY expert panels, public comment feedback element specifications for the 2017 SNF PPS final rule (81 FR 52030 and data analyses. The details about Application of IRF Functional Outcome through 52034), we finalized initial how the specifications for the measures Measure: Discharge Change in Mobility confidential feedback reports by October differ as described in the previous Score for Medical Rehabilitation 2017 for this measure based on 1 functional outcome measure sections, Patients (NQF #2636) can be found on calendar year of claims data from also apply to this proposed quality the SNF QRP Measures and Technical discharges during CY 2016 and public measure. Information Web site at https:// reporting by October 2018 based on data Our measure developer contractor www.cms.gov/Medicare/Quality- from CY 2017. However, to make these presented and discussed these technical Initiatives-Patient-Assessment- measure data publicly available by specification differentiations during the Instruments/NursingHomeQualityInits/ October 2018, we propose to shift this May 6, 2016 TEP meeting in order to Skilled-Nursing-Facility-Quality- measure from calendar year to fiscal obtain TEP input on preferred Reporting-Program/SNF-Quality- year, beginning with publicly reporting specifications for valid functional Reporting-Program-Measures-and- on claims data for discharges in fiscal outcome quality measures. The Technical-Information.html. years 2016 and 2017. differences in measure specifications If finalized for implementation into Additional information regarding the and the TEP feedback are presented in the SNF QRP, the MDS would be Potentially Preventable 30-Day Post- the TEP Summary Report, which is modified so as to enable us to calculate Discharge Readmission Measure for SNF available at https://www.cms.gov/ the proposed measure using additional QRP can be found at https:// Medicare/Quality-Initiatives-Patient- data elements that are standardized with www.cms.gov/Medicare/Quality- Assessment-Instruments/Post-Acute- the IRF–PAI and such data would be Care-Quality-Initiatives/IMPACT-Act-of- Initiatives-Patient-Assessment- obtained at the time of admission and 2014/IMPACT-Act-Downloads-and- Instruments/NursingHomeQualityInits/ discharge for all SNF residents covered Videos.html. Skilled-Nursing-Facility-Quality- under a Part A stay. Therefore, based on the evidence Reporting-Program/SNF-Quality- provided above, we are proposing to We invite public comments on our Reporting-Program-Measures-and- adopt the quality measure entitled, the proposal to adopt the quality measure Technical-Information.html. Application of IRF Functional Outcome entitled, the Application of IRF We are inviting public comment on Measure: Discharge Mobility Score for Functional Outcome Measure: Discharge our proposal to increase the length of Medical Rehabilitation Patients (NQF Mobility Score for Medical the measurement period and to update #2636), for use beginning with the FY Rehabilitation Patients (NQF #2636) the public reporting dates for this 2020 SNF QRP. beginning with the FY 2020 SNF QRP. measure.

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9. SNF QRP Quality Measures Under 31 days following discharge from the otherwise be excluded from public Consideration for Future Years SNF. We received public comments (see reporting. This modification would also We are inviting comment on the 81 FR 52025 through 52026) align the measurement period with that importance, relevance, appropriateness, recommending exclusion of baseline of the discharge to community measures and applicability of each of the quality nursing facility residents from the adopted for the IRF and LTCH Quality measures listed in Table 19 for future measure, as these residents did not live Reporting Programs to meet the years in the SNF QRP. in the community prior to their SNF IMPACT Act requirements; both the IRF We are considering a measure focused stay. At that time, we highlighted that and LTCH measures have measurement on pain that relies on the collection of using Medicare FFS claims alone, we periods of two consecutive years. were unable to accurately identify patient-reported pain data, and another We are inviting public comment on baseline nursing facility residents. We measure regarding the Percent of these considerations for Discharge to stated that potential future Residents Who Were Assessed and Community-PAC SNF QRP measure in modifications of the measure could Appropriately Given the Seasonal future years of the SNF QRP. Influenza Vaccine. Finally, we are include assessment of the feasibility and considering a measure related to patient impact of excluding baseline nursing b. IMPACT Act Implementation Update safety, that is, Patients Who Received an facility residents from the measure Antipsychotic Medication. through the addition of patient As a result of the input and assessment-based data. In response to suggestions provided by technical a. IMPACT Act Measure—Possible these public comments, we are experts at the TEPs held by our measure Future Update to Measure considering a future modification of the developer, and through public Specifications Discharge to Community-PAC SNF QRP comment, we are engaging in additional In the FY 2017 SNF PPS final rule (81 measure, which would exclude baseline development work for two measures FR 52021 through 52029), we finalized nursing facility residents from the that would satisfy 1899B(c)(1)(E) of the the Discharge to Community-Post Acute measure. Further, this measure is Act, including performing additional Care (PAC) Skilled Nursing Facility specified to be calculated using one year testing. We intend to specify these (SNF) Quality Reporting Program (QRP) of Medicare FFS claims data. We are measures under section 1899B(c)(1)(E) measure, which assesses successful considering expanding the measurement of the Act no later than October 1, 2018 discharge to the community from a SNF period in the future to two consecutive and we intend to propose to adopt them setting, with successful discharge to the years of data to increase SNF sample for the FY 2021 SNF QRP, with data community including no unplanned sizes and reduce the number of SNFs collection beginning on or about rehospitalizations and no death in the with fewer than 25 stays that would October 1, 2019.

TABLE 19—SNF QRP QUALITY MEASURES UNDER CONSIDERATION FOR FUTURE YEARS

NQS priority Patient- and Caregiver-Centered Care

Measure ...... • Application of Percent of Residents Who Self-Report Moderate to Severe Pain.

NQS Priority Health and Well-Being

Measure ...... • Application of Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine.

NQS Priority Patient Safety

Measure ...... • Percent of SNF Residents Who Newly Received an Antipsychotic Medication.

NQS Priority Communication and Care Coordination

Measure ...... • Modification of the Discharge to Community-Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality Reporting Program (QRP) measure.

10. Proposed Standardized Resident (Short Stay) (NQF #0678), be replaced section 1888(e)(6)(B)(i)(II) for Assessment Data Reporting for the SNF with the proposed pressure ulcer admissions as well as discharges QRP measure, Changes in Skin Integrity Post- occurring during fourth quarter CY 2017 would also satisfy the requirement to a. Proposed Standardized Resident Acute Care: Pressure Ulcer/Injury, report standardized patient assessment Assessment Data Reporting for the FY beginning with the FY 2020 SNF QRP. data for the FY 2019 SNF QRP. 2019 SNF QRP The current pressure ulcer measure will remain in the SNF QRP until that time. The collection of assessment data Section 1888(e)(6)(B)(i)(III) of the Act Accordingly, for the requirement that pertaining to skin integrity, specifically requires that for fiscal year 2019 and SNFs report standardized patient pressure related wounds, is important each subsequent year, SNFs report assessment data for the FY 2019 SNF for multiple reasons. Clinical decision standardized patient assessment data QRP, we are proposing that the data support, care planning, and quality required under section 1899B(b)(1) of elements used to calculate that measure improvement all depend on reliable the Act. As we describe in more detail meet the definition of standardized assessment data collection. Pressure above, we are proposing that the current patient assessment data for medical related wounds represent poor pressure ulcer measure, Percent of conditions and co-morbidities under outcomes, are a serious medical Residents or Patients with Pressure section 1899B(b)(1)(B)(iv) and that the condition that can result in death and Ulcers That Are New or Worsened successful reporting of that data under disability, are debilitating, painful and

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are often an avoidable outcome of held by our measure development We also took into consideration the medical care.34 35 36 37 38 39 Pressure contractor on June 13 and November 15, following factors for each data element: related wounds are considered health 2013, and recently by a TEP on July 18, Overall clinical relevance; ability to care acquired conditions. 2016. TEP members supported the support clinical decisions, care As we note above, the data elements measure and its cross-setting use in planning and interoperable exchange to needed to calculate the current pressure PAC. The report, Technical Expert Panel facilitate care coordination during ulcer measure are already included on Summary Report: Refinement of the transitions in care; and the ability to the MDS and reported for SNFs, and Percent of Patients or Residents with capture medical complexity and risk exhibit validity and reliability for use Pressure Ulcers that are New or factors that can inform both payment across PAC providers. Item reliability Worsened (Short-Stay) (NQF #0678) and quality. Additionally the data for these data elements was also tested Quality Measure for Skilled Nursing elements had to have strong scientific for the nursing home setting during Facilities (SNFs), Inpatient reliability and validity; be meaningful implementation of MDS 3.0. Testing Rehabilitation Facilities (IRFs), Long- enough to inform longitudinal analysis results are from the RAND Development Term Care Hospitals (LTCHs), and by providers; had to have received and Validation of MDS 3.0 project.40 Home Health Agencies (HHAs), is general consensus agreement for its The RAND pilot test of the MDS 3.0 data available at https://www.cms.gov/ usability; and had to have the ability to elements showed good reliability and is Medicare/Quality-Initiatives-Patient- collect such data once but support also applicable to both the IRF–PAI and Assessment-Instruments/Post-Acute- multiple uses. Further, to inform the the LTCH CARE Data Set because the Care-Quality-Initiatives/IMPACT-Act-of- final set of data elements for proposal, data elements tested are the same. 2014/IMPACT-Act-Downloads-and- Across the pressure ulcer data elements, Videos.html. we took into account technical and the average gold-standard nurse to gold- We are inviting public comment on clinical subject matter expert review, standard nurse kappa statistic was this proposal. public comment and consensus input in 0.905. The average gold-standard nurse which such principles were applied. We b. Proposed Standardized Resident to facility-nurse kappa statistic was also took into account the consensus Assessment Data Reporting Beginning 0.937. Data elements used to risk adjust work and empirical findings from the With the FY 2020 SNF QRP this quality measure were also tested PAC–PRD. We acknowledge that during under this same pilot test, and the gold- We describe below our proposals for the development process that led to standard to gold-standard kappa the reporting of standardized patient these proposals, some providers statistic, or percent agreement (where assessment data by SNFs beginning with expressed concern that changes to the kappa statistic not available), ranged the FY 2020 SNF QRP. SNFs would be MDS to accommodate standardized from 0.91 to 0.99 for these data required to report these data forSNF patient assessment data reporting would elements. These kappa scores indicate admissions at the start of the Medicare lead to an overall increased reporting ‘‘almost perfect’’ agreement using the Part A stay and SNF discharges at the burden. However, we note that there is Landis and Koch standard for strength end of the Medicare Part A stay that no additional data collection burden for of agreement.41 occur between October 1, 2018 and standardized data already collected and The data elements used to calculate December 31, 2018, with the exception submitted on the quality measures. the current pressure ulcer measure of two data elements (Hearing and received public comment on several Vision) that would be required for SNF c. Proposed Standardized Resident occasions, including when that measure admissions at the start of the Medicare Assessment Data by Category was proposed in the FY 2012 IRF PPS Part A stay only that occur between (1) Functional Status Data (76 FR 47876) and IPPS/LTCH PPS October 1, 2018, and December 31, proposed rules (76 FR 51754). Further, 2018. The Hearing and Vision data We are proposing that the data they were discussed in the past by TEPs elements would be assessed at elements currently reported by SNFs to admission only due to the relatively calculate the measure, Application of 34 Casey, G. (2013). ‘‘Pressure ulcers reflect stable nature of hearing impairment and Percent of Long-Term Care Hospital quality of nursing care.’’ Nurs N Z 19(10): 20–24. vision impairment, making it unlikely Patients with an Admission and 35 Gorzoni, M.L. and S.L. Pires (2011). ‘‘Deaths in that these assessments would change nursing homes.’’ Rev Assoc Med Bras 57(3): 327– Discharge Functional Assessment and a 331. between the start and end of the SNF Care Plan That Addresses Function 36 Thomas, J.M., et al. (2013). ‘‘Systematic review: stay. Assessment of the Hearing and (NQF #2631), would also meet the health-related characteristics of elderly hospitalized Vision data elements at discharge would definition of standardized patient adults and nursing home residents associated with introduce additional burden without assessment data for functional status short-term mortality.’’ J Am Geriatr Soc 61(6): 902– improving the quality or usefulness of 911. under section 1899B(b)(1)(B)(i) of the 37 White-Chu, E.F., et al. (2011). ‘‘Pressure ulcers the data, and is unnecessary. Following Act, and that the successful reporting of in long-term care.’’ Clin Geriatr Med 27(2): 241–258. the initial reporting year for the FY 2020 that data under section 1886(m)(5)(F)(i) 38 Bates-Jensen BM. Quality indicators for SNF QRP, subsequent years for the SNF of the Act would also satisfy the prevention and management of pressure ulcers in QRP would be based on a full calendar requirement to report standardized vulnerable elders. Ann Int Med. 2001;135 (8 Part 2), year of such data reporting. In selecting 744–51. patient assessment data under section 39 Bennet, G., Dealy, C., Posnett, J. (2004). The the data elements described below, we 1886(m)(5)(F)(ii) of the Act. cost of pressure ulcers in the UK, Age and Aging, carefully weighed the balance of burden 33(3):230–235. in assessment-based data collection and These patient assessment data for 40 Saliba, D., & Buchanan, J. (2008, April). aimed to minimize additional burden functional status are from the CARE Development and validation of a revised nursing through the utilization of existing data Item Set. The development of the CARE home assessment tool: MDS 3.0. Contract No. 500– Item Set and a description and rationale 00–0027/Task Order #2. Santa Monica, CA: Rand in the assessment instruments. We also Corporation. Retrieved from http:// note that the patient and resident for each item is described in a report www.cms.hhs.gov/NursingHomeQualityInits/ assessment instruments are considered entitled ‘‘The Development and Testing Downloads/MDS30FinalReport.pdf. part of the medical record, and sought of the Continuity Assessment Record 41 Landis, R., & Koch, G. (1977, March). The and Evaluation (CARE) Item Set: Final measurement of observer agreement for categorical the inclusion of data elements relevant data. Biometrics 33(1), 159–174. to patient care. Report on the Development of the CARE

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Item Set: Volume 1 of 3.’’ 42 Reliability for severe traumatic brain injury are high quality care through: Facilitating and validity testing were conducted as currently being tested.50 For older better care continuity and coordination; part of CMS’ Post-Acute Care Payment patients and residents diagnosed with better data exchange and Reform Demonstration, and we depression, treatment options to reduce interoperability between settings; and concluded that the functional status symptoms and improve quality of life longitudinal outcome analysis. Hence, items have acceptable reliability and include antidepressant medication and reliable data elements assessing validity. A description of the testing psychotherapy,51 52 53 54 and targeted cognitive impairment and mental status methodology and results are available in services, such as therapeutic recreation, are needed in order to initiate a several reports, including the report exercise, and restorative nursing, to management program that can optimize entitled ‘‘The Development and Testing increase opportunities for psychosocial a patient or resident’s prognosis and of the Continuity Assessment Record interaction.55 reduce the possibility of adverse events. And Evaluation (CARE) Item Set: Final Accurate assessment of cognitive function and mental status of patients (a) Brief Interview for Mental Status Report On Reliability Testing: Volume 2 (BIMS) of 3’’ 43 and the report entitled ‘‘The and residents in PAC would be expected Development and Testing of The to have a positive impact on the We are proposing that the data Continuity Assessment Record And National Quality Strategy’s domains of elements that comprise the Brief Evaluation (CARE) Item Set: Final patient and family engagement, patient Interview for Mental Status meet the Report on Care Item Set and Current safety, care coordination, clinical definition of standardized patient Assessment Comparisons: Volume 3 of process/effectiveness, and efficient use assessment data for cognitive function 3.’’ 44 The reports are available on CMS’ of health care resources. For example, and mental status under section Post-Acute Care Quality Initiatives Web standardized assessment of cognitive 1899B(b)(1)(B)(ii) of the Act. The page at http://www.cms.gov/Medicare/ function and mental status of patients proposed data elements consist of seven Quality-Initiatives-Patient-Assessment- and residents in PAC will support BIMS questions that result in a cognitive Instruments/Post-Acute-Care-Quality- establishing a baseline for identifying function score. For more information on Initiatives/CARE-Item-Set-and-B- changes in cognitive function and the BIMS, we refer readers to the CARE.html. For more information about mental status (for example, delirium), document titled, Proposed this quality measure, we refer readers to anticipating the patient or resident’s Specifications for SNF QRP Quality the FY 2016 SNF PPS final rule (80 FR ability to understand and participate in Measures and Standardized Data 46444 through 46453). treatments during a PAC stay, ensuring Elements, available at https:// patient and resident safety (for example, www.cms.gov/Medicare/Quality- We are inviting public comment on risk of falls), and identifying appropriate Initiatives-Patient-Assessment- this proposal. support needs at the time of discharge Instruments/NursingHomeQualityInits/ (2) Cognitive Function and Mental or transfer. Standardized assessment Skilled-Nursing-Facility-Quality- Status Data data elements will enable or support Reporting-Program/SNF-Quality- clinical decision-making and early Reporting-Program-Measures-and- Cognitive function and mental status clinical intervention; person-centered, Technical-Information.html. in PAC patient and resident populations Dementia and cognitive impairment can be affected by a number of 48 Graff M.J., Vernooij-Dassen M.J., Thijssen M., are associated with long-term functional underlying conditions, including Dekker J., Hoefnagels W.H., Rikkert M.G.O. (2006). dependence and, consequently, poor dementia, stroke, traumatic brain injury, Community Based Occupational Therapy for quality of life and increased health care Patients with Dementia and their Care Givers: 56 side effects of medication, metabolic Randomised Controlled Trial. BMJ, 333(7580): costs and mortality. This makes and/or endocrine imbalances, delirium, 1196. assessment of mental status and early and depression.45 The assessment of 49 Bherer L., Erickson K.I., Liu-Ambrose T. (2013). detection of cognitive decline or cognitive function and mental status by A Review of the Effects of Physical Activity and impairment critical in the PAC setting. Exercise on Cognitive and Brain Functions in Older PAC providers is important because of Adults. Journal of Aging Research, 657508. The burden of cognitive impairment in the high percentage of patients and 50 Giacino J.T., Whyte J., Bagiella E., et al. (2012). PAC is high. The intensity of routine residents with these conditions,46 and Placebo-controlled trial of amantadine for severe nursing care is higher for patients and the opportunity for improving the traumatic brain injury. New England Journal of residents with cognitive impairment quality of care. Symptoms of dementia Medicine, 366(9), 819–826. than those without, and dementia is a 51 Alexopoulos G.S., Katz I.R., Reynolds C.F. 3rd, may improve with pharmacotherapy, Carpenter D., Docherty J.P., Ross R.W. (2001). significant variable in predicting occupational therapy, or physical Pharmacotherapy of depression in older patients: A readmission after discharge to the activity,47 48 49 and promising treatments summary of the expert consensus guidelines. community from PAC providers.57 The Journal of Psychiatric Practice, 7(6), 361–376. BIMS data elements are currently in use 52 Arean P.A., Cook B.L. (2002). Psychotherapy 42 Barbara Gage et al., ‘‘The Development and in two of the PAC assessments: The and combined psychotherapy/pharmacotherapy for Testing of the Continuity Assessment Record and late life depression. Biological Psychiatry, 52(3), MDS 3.0 in SNFs and the IRF–PAI in Evaluation (CARE) Item Set: Final Report on the 293–303. IRFs. The BIMS was tested in the PAC Development of the CARE Item Set’’ (RTI 53 Hollon S.D., Jarrett R.B., Nierenberg A.A., International, 2012). PRD where it was found to have Thase M.E., Trivedi M., Rush A.J. (2005). 43 substantial to almost perfect agreement Ibid. Psychotherapy and medication in the treatment of 44 Ibid. adult and geriatric depression: which monotherapy for inter-rater reliability (kappa range of 45 National Institute on Aging. (2014). Assessing or combined treatment? Journal of Clinical 0.71 to 0.91) when tested in all four PAC Cognitive Impairment in Older Patients. A Quick Psychiatry, 66(4), 455–468. Guide for Primary Care Physicians. Retrieved from 54 Wagenaar D, Colenda CC, Kreft M, Sawade J, 56 Agu¨ ero-Torres, H., Fratiglioni, L., Guo, Z., https://www.nia.nih.gov/alzheimers/publication/ Gardiner J, Poverejan E. (2003). Treating depression Viitanen, M., von Strauss, E., & Winblad, B. (1998). assessing-cognitive-impairment-older-patients. in nursing homes: practice guidelines in the real ‘‘Dementia is the major cause of functional 46 Gage B., Morley M., Smith L., et al. (2012). world. J Am Osteopath Assoc. 103(10), 465–469. dependence in the elderly: 3-year follow-up data Post-Acute Care Payment Reform Demonstration 55 Crespy SD, Van Haitsma K, Kleban M, Hann CJ. from a population-based study.’’ Am J of Public (Final report, Volume 4 of 4). Research Triangle Reducing Depressive Symptoms in Nursing Home Health 88(10): 1452–1456. Park, NC: RTI International. Residents: Evaluation of the Pennsylvania 57 RTI International. Proposed Measure 47 Casey D.A., Antimisiaris D., O’Brien J. (2010). Depression Collaborative Quality Improvement Specifications for Measures Proposed in the FY Drugs for Alzheimer’s Disease: Are They Effective? Program. J Healthc Qual. 2016. Vol. 38, No. 6, pp. 2017 LTCH QRP NPRM. Research Triangle Park, Pharmacology & Therapeutics, 35, 208–11. e76–e88. NC. 2016.

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settings.58 Clinical and subject matter confusion from other types of cognitive Care-Quality-Initiatives/IMPACT-Act-of- expert advisors working with our data impairment. For more information on 2014/IMPACT-Act-Downloads-and- element contractor agreed that the BIMS the CAM, we refer readers to the Videos.html. We requested public is a feasible data element for use by PAC document titled, Proposed comment on the CAM from August 12 providers. Additionally, discussions Specifications for SNF QRP Quality to September 12, 2016. Many during a TEP convened on April 6 and Measures and Standardized Data commenters expressed support for use 7, 2016, demonstrated support for the Elements, available at https:// of the CAM, noting that it would BIMS.. The Development and www.cms.gov/Medicare/Quality- provide important information for care Maintenance of Post-Acute Care Cross- Initiatives-Patient-Assessment- planning and care coordination, and Setting Standardized Patient Instruments/NursingHomeQualityInits/ therefore, contribute to quality Assessment Data Technical Expert Panel Skilled-Nursing-Facility-Quality- improvement. The commenters noted it Summary Report is available at https:// Reporting-Program/SNF-Quality- is particularly helpful in distinguishing www.cms.gov/Medicare/Quality- Reporting-Program-Measures-and- delirium and reversible confusion from Initiatives-Patient-Assessment- Technical-Information.html. other types of cognitive impairment. A Instruments/Post-Acute-Care-Quality- The CAM was developed to identify full report of the comments is available Initiatives/IMPACT-Act-of-2014/ the signs and symptoms of delirium. It at https://www.cms.gov/Medicare/ IMPACT-Act-Downloads-and- results in a score that suggests whether Quality-Initiatives-Patient-Assessment- Videos.html. the patient or resident should be Instruments/Post-Acute-Care-Quality- To solicit additional feedback on the assigned a diagnosis of delirium. Initiatives/IMPACT-Act-of-2014/ BIMS, we requested public comment Because patients and residents with IMPACT-Act-Downloads-and- from August 12 to September 12, 2016. multiple comorbidities receive services Videos.html. Many commenters expressed support from PAC providers, it is important to Therefore, we are proposing to adopt for use of the BIMS, noting that it is assess delirium, which is associated the CAM for use in the SNF QRP. As reliable, feasible to use across settings, with a high mortality rate and prolonged noted above, the CAM is already and will provide useful information duration of stay in hospitalized older included on the MDS. For purposes of about patients and residents. These adults.59 Assessing these signs and reporting for the FY 2020 SNF QRP, comments noted that the data collected symptoms of delirium is clinically SNFs would be required to report these through the BIMS will provide a clearer relevant for care planning by PAC data for SNF admissions at the start of picture of patient or resident providers. the Medicare Part A stay and SNF complexity, help with the care planning The CAM is currently in use in two discharges at the end of the Medicare process, and be useful during care of the PAC assessments: The MDS 3.0 in Part A stay that occur between October transitions and when coordinating SNFs and the LCDS in LTCHs. The 1, 2018 and December 31, 2018. across providers. A full report of the CAM was tested in the PAC PRD where Following the initial reporting year for comments is available at https:// it was found to have substantial the FY 2020 SNF QRP, subsequent years www.cms.gov/Medicare/Quality- agreement for inter-rater reliability for for the SNF QRP would be based on a Initiatives-Patient-Assessment- the ‘‘Inattention and Disorganized full calendar year of such data reporting. Instruments/Post-Acute-Care-Quality- Thinking’’ questions (kappa range of We are inviting public comment on Initiatives/IMPACT-Act-of-2014/ 0.70 to 0.73); and moderate agreement these proposals. IMPACT-Act-Downloads-and- for the ‘‘Altered Level of (c) Behavioral Signs and Symptoms Videos.html. Consciousness’’ question (kappa of Therefore, we are proposing to adopt 60 We are proposing that the Behavioral 0.58). Signs and Symptoms data elements the BIMS for use in the SNF QRP. As Clinical and subject matter expert meet the definition of standardized noted above in this section, the BIMS is advisors working with our data element patient assessment data for cognitive already included on the MDS. For contractor agreed that the CAM is function and mental status under purposes of reporting for the FY 2020 feasible for use by PAC providers, that section 1899B(b)(1)(B)(ii) of the Act. The SNF QRP, SNFs would be required to it assesses key aspects of cognition, and proposed data elements consist of three report these data for SNF admissions at that this information about patient or Behavioral Signs and Symptoms the start of the Medicare Part A stay that resident cognition would be clinically questions and result in three scores that occur between October 1, 2018 and useful both within and across PAC categorize respondents as having or not December 31, 2018. Following the provider types. The CAM was also having certain types of behavioral signs initial reporting year for the FY 2020 supported by a TEP that discussed and and symptoms. For more information on SNF QRP, subsequent years for the SNF rated candidate data elements during a the Behavioral Signs and Symptoms QRP would be based on a full calendar meeting on April 6 and 7, 2016. The data elements, we refer readers to the year of such data reporting. Development and Maintenance of Post- document titled, Proposed We are inviting public comment on Acute Care Cross-Setting Standardized Specifications for SNF QRP Quality these proposals. Patient Assessment Data Technical Measures and Standardized Data Expert Panel Summary Report is (b) Confusion Assessment Method Elements, available at https:// available at https://www.cms.gov/ (CAM) www.cms.gov/Medicare/Quality- Medicare/Quality-Initiatives-Patient- We are proposing that the data Initiatives-Patient-Assessment- Assessment-Instruments/Post-Acute- elements that comprise the Confusion Instruments/NursingHomeQualityInits/ Assessment Method (CAM) meet the Skilled-Nursing-Facility-Quality- 59 Fick, D.M., Steis, M.R., Waller, J.L., & Inouye, definition of standardized patient S.K. (2013). ‘‘Delirium superimposed on dementia Reporting-Program/SNF-Quality- assessment data for cognitive function is associated with prolonged length of stay and poor Reporting-Program-Measures-and- and mental status under section outcomes in hospitalized older adults.’’ J of Technical-Information.html. 1899B(b)(1)(B)(ii) of the Act. The CAM Hospital Med 8(9): 500–505. The questions included in the 60 Gage B., Morley M., Smith L., et al. (2012). is a six-question instrument that screens Post-Acute Care Payment Reform Demonstration Behavioral Signs and Symptoms group for overall cognitive impairment, as well (Final report, Volume 2 of 4). Research Triangle assess whether the patient or resident as distinguishes delirium or reversible Park, NC: RTI International. has exhibited any behavioral symptoms

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that may indicate cognitive impairment IMPACT-Act-Downloads-and- of the PHQ–2 two-item questionnaire or other mental health issues during the Videos.html. that assesses the cardinal criteria for assessment period, including physical, Because the PAC PRD version of the depression: Depressed mood and verbal, and other disruptive or Behavioral Signs and Symptoms data anhedonia (inability to feel pleasure). dangerous behavioral symptoms, but elements were previously tested across For more information on the PHQ–2, we excluding patient wandering. Such PAC providers, we solicited additional refer readers to the document titled, behavioral disturbances can indicate feedback on this version of the data Proposed Specifications for SNF QRP unrecognized needs and care elements by including these data Quality Measures and Standardized preferences and are associated most elements in a call for public comment Data Elements, available at https:// commonly with dementia and other that was open from August 12 to www.cms.gov/Medicare/Quality- cognitive impairment, and less September 12, 2016. Consistent with the Initiatives-Patient-Assessment- commonly with adverse drug events, TEP discussion on the importance of Instruments/NursingHomeQualityInits/ mood disorders, and other conditions. patient and resident behaviors, many Skilled-Nursing-Facility-Quality- Assessing behavioral disturbances can commenters expressed support for use Reporting-Program/SNF-Quality- lead to early intervention, patient- and of the Behavioral Signs and Symptoms Reporting-Program-Measures-and- resident-centered care planning, clinical data elements, noting that they would Technical-Information.html. decision support, and improved staff provide useful information about Depression is a common mental and patient or resident safety through patient and resident behavior at both health condition often missed and early detection. Assessment and admission and discharge and contribute under-recognized. Assessments of documentation of these disturbances to care planning related to what depression help PAC providers better can help inform care planning and treatment is appropriate for the patient understand the needs of their patients patient transitions and provide or resident and what resources are and residents by: Prompting further important information about resource needed. Public comment also supported evaluation (that is, to establish a use. the use of highly similar MDS version diagnosis of depression); elucidating the Data elements that capture behavioral of the data element in order to provide patient’s or resident’s ability to symptoms are currently included in two continuity with existing assessment participate in therapies for conditions of the PAC assessments: The MDS 3.0 in processes in SNFs. A full report of the other than depression during their stay; SNFs and the OASIS–C2 in HHAs. In comments is available at https:// and identifying appropriate ongoing the MDS, each question includes four www.cms.gov/Medicare/Quality- treatment and support needs at the time response options ranging from Initiatives-Patient-Assessment- of discharge. A PHQ–2 score beyond a ‘‘behavior not exhibited’’ (0) to behavior Instruments/Post-Acute-Care-Quality- predetermined threshold signals the ‘‘occurred daily’’ (3). The OASIS–C2 Initiatives/IMPACT-Act-of-2014/ need for additional clinical assessment includes some similar data elements IMPACT-Act-Downloads-and- in order to determine a depression which record the frequency of Videos.html. diagnosis. disruptive behaviors on a 6-point scale Therefore, we are proposing the MDS The proposed data elements that ranging from ‘‘never’’ (0) to ‘‘at least version of the Behavioral Signs and comprise the PHQ–2 are currently used daily’’ (5). Data elements that mirror Symptoms data elements because they in the OASIS–C2 for HHAs and the those used in the MDS and serve the focus more closely on behavioral MDS 3.0 for SNFs (as part of the PHQ– same assessment purpose were tested in symptoms than the OASIS data 9). The PHQ–2 data elements were tested in the PAC PRD, where they were post-acute providers in the PAC PRD elements, and include more detailed found to have almost perfect agreement and found to be clinically relevant, response categories than those used in for inter-rater reliability (kappa range of meaningful for care planning, and the PAC PRD version, capturing more information about the frequency of 0.84 to 0.91) when tested by all four feasible for use in each of the four PAC 62 61 behaviors. As noted above, the PAC providers. settings. Clinical and subject matter expert The proposed data elements were Behavioral Signs and Symptoms data advisors working with our data element supported by comments from the elements are already included on the contractor agreed that the PHQ–2 is Standardized Patient Assessment Data MDS. For purposes of reporting for the feasible for use in PAC, that it assesses TEP held by our data element FY 2020 SNF QRP, SNFs would be key aspects of mental status, and that contractor. The TEP identified patient required to report these data for SNF this information about patient or and resident behaviors as an important admissions at the start of the Medicare Part A stay and SNF discharges at the resident mood would be clinically consideration for resource intensity and useful both within and across PAC care planning, and affirmed the end of the Medicare Part A stay that occur between October 1, 2018 and provider types. We note that both the importance of the standardized PHQ–9 and the PHQ–2 were supported assessment of patient behaviors through December 31, 2018. Following the initial reporting year for the FY 2020 by TEP members who discussed and data elements such as those in use in the rated candidate data elements during a MDS. The Development and SNF QRP, subsequent years for the SNF QRP would be based on a full calendar meeting on April 6 and 7, 2016. They Maintenance of Post-Acute Care Cross- particularly noted that the brevity of the Setting Standardized Patient year of such data reporting. We are inviting public comment on PHQ–2 made it feasible with low Assessment Data Technical Expert Panel these proposals. burden for both assessors and PAC Summary Report is available at https:// patients or residents. The Development www.cms.gov/Medicare/Quality- (d) Patient Health Questionnaire-2 and Maintenance of Post-Acute Care Initiatives-Patient-Assessment- (PHQ–2) Cross-Setting Standardized Patient Instruments/Post-Acute-Care-Quality- We are proposing that the PHQ–2 data Assessment Data Technical Expert Panel Initiatives/IMPACT-Act-of-2014/ elements meet the definition of standardized patient assessment data for 62 Gage B., Smith L., Ross J. et al. (2012). The 61 Gage B., Morley M., Smith L., et al. (2012). cognitive function and mental status Development and Testing of the Continuity Post-Acute Care Payment Reform Demonstration Assessment Record and Evaluation (CARE) Item Set (Final report, Volume 2 of 4). Research Triangle under section 1899B(b)(1)(B)(ii) of the (Final Report on Reliability Testing, Volume 2 of 3). Park, NC: RTI International. Act. The proposed data elements consist Research Triangle Park, NC: RTI International.

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Summary Report is available at https:// services, treatments, and interventions care and transfer of key health www.cms.gov/Medicare/Quality- in PAC is important to ensure the information at the time of discharge or Initiatives-Patient-Assessment- continuing appropriateness of care for transfer to another PAC setting. The new Instruments/Post-Acute-Care-Quality- the patients and residents receiving response options will be embedded in Initiatives/IMPACT-Act-of-2014/ them, and to support care transitions the MDS, and all existing items will be IMPACT-Act-Downloads-and- from one PAC provider to another, an retained for their current uses of Videos.html. acute care hospital, or discharge. payment and care planning. To solicit additional feedback on the Accurate assessment of special services, We are proposing 15 special services, PHQ–2, we requested public comment treatments, and interventions of patients treatments, and interventions as from August 12 to September 12, 2016. and residents served by PAC providers presented below grouped by cancer Many commenters provided feedback are expected to have a positive impact treatments, respiratory treatments, other on using the PHQ–2 for the assessment on the National Quality Strategy’s treatments, and nutritional approaches. of mood. Overall, commenters believed domains of patient and family A TEP convened by our data element that collecting these data elements engagement, patient safety, care contractor provided input on the 15 data across PAC provider types was coordination, clinical process/ elements for Special Services, appropriate, given the role that effectiveness, and efficient use of health Treatments, and Interventions. This depression plays in well-being. Several care resources. TEP, held on January 5 and 6, 2017, commenters expressed support for an For example, standardized assessment opined that these data elements are approach that would use PHQ–2 as a of special services, treatments, and appropriate for standardization because gateway to the longer PHQ–9 and would interventions used in PAC can promote they would provide useful clinical maintain the reduced burden on most patient and resident safety through information to inform care planning and patients and residents, as well as test appropriate care planning (for example, care coordination. The TEP affirmed administrators, which is a benefit of the mitigating risks such as infection or that assessment of these services and PHQ–2, while ensuring that the PHQ–9, pulmonary embolism associated with interventions is standard clinical which exhibits higher specificity,63 central intravenous access), and practice, and that the collection of these would be administered for patients and identifying life-sustaining treatments data by means of a list and checkbox residents who showed signs and that must be continued, such as format would conform with common symptoms of depression on the PHQ–2. mechanical ventilation, dialysis, workflow for PAC providers. A full Specific comments are described in a suctioning, and chemotherapy, at the report of the TEP discussion is available full report available at https:// time of discharge or transfer. at https://www.cms.gov/Medicare/ www.cms.gov/Medicare/Quality- Standardized assessment of these data Quality-Initiatives-Patient-Assessment- Initiatives-Patient-Assessment- elements will enable or support: Instruments/Post-Acute-Care-Quality- Instruments/Post-Acute-Care-Quality- Clinical decision-making and early Initiatives/IMPACT-Act-of-2014/ Initiatives/IMPACT-Act-of-2014/ clinical intervention; person-centered, IMPACT-Act-Downloads-and- IMPACT-Act-Downloads-and- high quality care through, for example, Videos.html. facilitating better care continuity and Videos.html. (a) Cancer Treatment: Chemotherapy coordination; better data exchange and Therefore, we are proposing to adopt (IV, Oral, Other) the PHQ–2 data elements for use in the interoperability between settings; and SNF QRP. As noted above, the PHQ–2 longitudinal outcome analysis. Hence, We are proposing that the data elements are already included on reliable data elements assessing special Chemotherapy (IV, Oral, Other) data the MDS. For purposes of reporting for services, treatments, and interventions elements meet the definition of the FY 2020 SNF QRP, SNFs would be are needed to initiate a management standardized patient assessment data for required to report these data for SNF program that can optimize a patient or special services, treatments, and admissions at the start of the Medicare resident’s prognosis and reduce the interventions under section Part A stay and SNF discharges at the possibility of adverse events. 1899B(b)(1)(B)(iii) of the Act. The end of the Medicare Part A stay that For payment and care planning proposed data elements consist of the occur between October 1, 2018 and purposes in SNFs, the MDS already principal Chemotherapy data element December 31, 2018. Following the collects information on many special and three sub-elements: IV Chemotherapy, Oral Chemotherapy, and initial reporting year for the FY 2020 services, treatments, and interventions Other. For more information on the SNF QRP, subsequent years for the SNF that residents have received over the Chemotherapy data element, we refer QRP would be based on a full calendar prior 14 days, and distinguishes readers to the document titled, Proposed year of such data reporting. whether the treatments were received in We are inviting public comment on or outside of the facility. In order to Specifications for SNF QRP Quality these proposals. standardize across PAC provider types, Measures and Standardized Data data elements on the proposed special Elements, available at https:// (3) Special Services, Treatments, and services, treatments and interventions www.cms.gov/Medicare/Quality- Interventions Data adopted for cross-setting use to fulfill Initiatives-Patient-Assessment- Special services, treatments, and the requirements of the IMPACT Act Instruments/NursingHomeQualityInits/ interventions performed in PAC can also assess treatments and interventions Skilled-Nursing-Facility-Quality- have a major effect on an individual’s during the first 3 days of a resident’s Reporting-Program/SNF-Quality- health status, self-image, and quality of stay, and during the last 7 days of the Reporting-Program-Measures-and- life. The assessment of these special stay (for Nutritional Therapies) and as Technical-Information.html. currently collected, at the last 14 days Chemotherapy is a type of cancer 63 Arroll B, Goodyear-Smith F, Crengle S, Gunn of the stay (for all other treatments and treatment that uses drugs to destroy J, Kerse N, Fishman T, et al. Validation of PHQ–2 therapies). The look-back time frames of cancer cells. It is sometimes used when and PHQ–9 to screen for major depression in the the standardized items were designed to a patient has a malignancy (cancer), primary care population. Annals of family medicine. 2010;8(4):348–53. doi: 10.1370/afm.1139 collect timely and accurate information which is a serious, often life-threatening pmid:20644190; PubMed Central PMCID: to inform care planning at the current or life-limiting condition. Both PMC2906530. site of care and to support continuity of intravenous (IV) and oral chemotherapy

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have serious side effects, including noted the validity of the data element. element, we refer readers to the nausea/vomiting, extreme fatigue, risk Commenters also noted the importance document titled, Proposed of infection due to a suppressed of capturing all types of chemotherapy, Specifications for SNF QRP Quality immune system, anemia, and an regardless of route, and stated that Measures and Standardized Data increased risk of bleeding due to low collecting data only on patients and Elements, available at https:// platelet counts. Oral chemotherapy can residents who received chemotherapy www.cms.gov/Medicare/Quality- be as potent as chemotherapy given by by IV would limit the usefulness of this Initiatives-Patient-Assessment- IV, but can be significantly more standardized data element. A full report Instruments/NursingHomeQualityInits/ convenient and less resource-intensive of the comments is available at https:// Skilled-Nursing-Facility-Quality- to administer. Because of the toxicity of www.cms.gov/Medicare/Quality- Reporting-Program/SNF-Quality- these agents, special care must be Initiatives-Patient-Assessment- Reporting-Program-Measures-and- exercised in handling and transporting Instruments/Post-Acute-Care-Quality- Technical-Information.html. chemotherapy drugs. IV chemotherapy Initiatives/IMPACT-Act-of-2014/ Radiation is a type of cancer treatment may be given by peripheral IV, but is IMPACT-Act-Downloads-and- that uses high-energy radioactivity to more commonly given via an indwelling Videos.html. stop cancer by damaging cancer cell central line, which raises the risk of As a result of the comments and input DNA, but it can also damage normal bloodstream infections. Given the received from clinical and subject cells. Radiation is an important therapy significant burden of malignancy, the matter experts, we are proposing a for particular types of cancer, and the resource intensity of administering principal Chemotherapy data element resource utilization is high, with chemotherapy, and the side effects and with three sub-elements, including Oral frequent radiation sessions required, potential complications of these highly- and Other for standardization. Our data often daily for a period of several weeks. toxic medications, assessing the receipt element contractor then presented the Assessing whether a patient or resident of chemotherapy is important in the proposed data elements to the is receiving radiation therapy is PAC setting for care planning and Standardized Patient Assessment Data important to determine resource determining resource use. TEP on January 5 and 6, 2017, who utilization because PAC patients and The need for chemotherapy predicts supported these data elements for residents will need to be transported to resource intensity, both because of the standardization. A full report of the TEP and from radiation treatments, and complexity of administering these discussion is available at https:// monitored and treated for side effects potent, toxic drug combinations under www.cms.gov/Medicare/Quality- after receiving this intervention. specific protocols, and because of what Initiatives-Patient-Assessment- Therefore, assessing the receipt of the need for chemotherapy signals about Instruments/Post-Acute-Care-Quality- radiation therapy, which would the patient’s underlying medical Initiatives/IMPACT-Act-of-2014/ compete with other care processes given condition. Furthermore, the resource IMPACT-Act-Downloads-and- the time burden, would be important for intensity of IV chemotherapy is higher Videos.html. Therefore, we are care planning and care coordination by than for oral chemotherapy, as the proposing that the Chemotherapy (IV, PAC providers. protocols for administration and the Oral, Other) data elements with a The Radiation data element is care of the central line (if present) principal data element and three sub- currently in use in the MDS 3.0. This require significant resources. elements meet the definition of data element was not tested in the PAC The Chemotherapy (IV, Oral, Other) standardized patient assessment data for PRD. However, public comment and data elements consist of a principal data special services, treatments, and other expert input on the Radiation data element and three sub-elements: IV interventions under section element supported its importance and chemotherapy, which is generally 1899B(b)(1)(B)(iii) of the Act. We are clinical usefulness for patients in PAC resource-intensive; oral chemotherapy, proposing to expand the existing settings, due to the side effects and which is less invasive and generally less Chemotherapy data element in the MDS consequences of radiation treatment on intensive with regard to administration to include sub-elements for IV, Oral, patients that need to be considered in protocols; and a third category provided and Other, and that SNFs would be care planning and care transitions. To to enable the capture of other less required to report these data for the FY solicit additional feedback on the common chemotherapeutic approaches. 2020 SNF QRP for SNF admissions at Radiation data element we are This third category is potentially the start of the Medicare Part A stay and proposing, we requested public associated with higher risks and is more SNF discharges at the end of the comment from August 12 to September resource intensive due to delivery by Medicare Part A stay that occur between 12, 2016. Several commenters provided other routes (for example, October 1, 2018 and December 31, 2018. support for the data element, noting the intraventricular or intrathecal). Following the initial reporting year for relevance of this data element to The principal Chemotherapy data the FY 2020 SNF QRP, subsequent years facilitating care coordination and element is currently in use in the MDS for the SNF QRP would be based on a supporting care transitions, the 3.0. One proposed sub-element, IV full calendar year of such data reporting. feasibility of the item, and the potential Chemotherapy, was tested in the PAC We are inviting public comment on for it to improve quality. A full report PRD and found feasible for use in each these proposals. of the comments is available at https:// of the four PAC settings. We solicited www.cms.gov/Medicare/Quality- public comment on IV Chemotherapy (b) Cancer Treatment: Radiation Initiatives-Patient-Assessment- from August 12 to September 12, 2016. We are proposing that the Radiation Instruments/Post-Acute-Care-Quality- Several commenters provided support data element meets the definition of Initiatives/IMPACT-Act-of-2014/ for the data element and suggested it be standardized patient assessment data for IMPACT-Act-Downloads-and- included as standardized patient special services, treatments, and Videos.html. assessment data. Commenters stated interventions under section The proposed data element was that assessing the use of chemotherapy 1899B(b)(1)(B)(iii) of the Act. The presented to and supported by the TEP services is relevant to share across the proposed data element consists of the held by our data element contractor on care continuum to facilitate care single Radiation data element. For more January 5–6, 2017, which opined that coordination and care transitions and information on the Radiation data Radiation was important corollary

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information about cancer treatment to delivery systems (for example, oxygen end of the Medicare Part A stay that collect alongside Chemotherapy (IV, concentrator, liquid oxygen containers, occur between October 1, 2018 and Oral, Other), and that, because capturing and high-pressure systems), the patient December 31, 2018. Following the this information is a customary part of interface (for example, nasal cannula or initial reporting year for the FY 2020 clinical practice, the proposed data mask), and other accessories (for SNF QRP, subsequent years for the SNF element would be feasible, reliable, and example, regulators, filters, tubing). QRP would be based on a full calendar easily incorporated into existing These data elements capture patient or year of such data reporting. workflow. resident use of two types of oxygen We are inviting public comment on Therefore, we are proposing that the therapy (continuous and intermittent) these proposals. Radiation data element meets the which are reflective of intensity of care (d) Respiratory Treatment: Suctioning definition of standardized patient needs, including the level of monitoring (Scheduled, as Needed) assessment data for special services, and bedside care required. Assessing the treatments, and interventions under receipt of this service is important for We are proposing that the Suctioning section 1899B(b)(1)(B)(iii) of the Act. As care planning and resource use for PAC (Scheduled, As needed) data elements noted above, the Radiation data element providers. meet the definition of standardized is already included on the MDS. For The proposed data elements were patient assessment data element for purposes of reporting for the FY 2020 developed based on similar data special services, treatments, and SNF QRP, SNFs would be required to elements that assess oxygen therapy, interventions under section report these data for SNF admissions at currently in use in the MDS 3.0 1899B(b)(1)(B)(iii) of the Act. The the start of the Medicare Part A stay and (‘‘Oxygen Therapy’’) and OASIS–C2 proposed data elements consist of the SNF discharges at the end of the (‘‘Oxygen (intermittent or continuous)’’), principal Suctioning data element, and Medicare Part A stay that occur between and a data element tested in the PAC two sub-elements, ‘‘Scheduled’’ and ‘‘As October 1, 2018 and December 31, 2018. PRD that focused on intensive oxygen needed.’’ These sub-elements capture Following the initial reporting year for therapy (‘‘High O2 Concentration two types of suctioning. ‘‘Scheduled’’ the FY 2020 SNF QRP, subsequent years Delivery System with FiO2 > 40%’’). indicates suctioning based on a specific for the SNF QRP would be based on a As a result of input from expert frequency, such as every hour; ‘‘As full calendar year of such data reporting. advisors, we solicited public comment needed’’ means suctioning only when We are inviting public comment on on the single data element, Oxygen indicated. For more information on the these proposals. (inclusive of intermittent and Suctioning (Scheduled, As needed) data continuous oxygen use), from August 12 elements, we refer readers to the (c) Respiratory Treatment: Oxygen to September 12, 2016. Several document titled, Proposed Therapy (Continuous, Intermittent) commenters supported the importance Specifications for SNF QRP Quality We are proposing that the Oxygen of the Oxygen data element, noting Measures and Standardized Data Therapy (Continuous, Intermittent) data feasibility of this item in PAC, and the Elements, available at https:// elements meet the definition of relevance of it to facilitating care www.cms.gov/Medicare/Quality- standardized patient assessment data for coordination and supporting care Initiatives-Patient-Assessment- special services, treatments, and transitions, but suggesting that the Instruments/NursingHomeQualityInits/ interventions under section extent of oxygen use be documented. A Skilled-Nursing-Facility-Quality- 1899B(b)(1)(B)(iii) of the Act. The full report of the comments is available Reporting-Program/SNF-Quality- proposed data elements consist of the at https://www.cms.gov/Medicare/ Reporting-Program-Measures-and- principal Oxygen data element and two Quality-Initiatives-Patient-Assessment- Technical-Information.html. sub-elements, ‘‘Continuous’’ (whether Instruments/Post-Acute-Care-Quality- Suctioning is a process used to clear the oxygen was delivered continuously, Initiatives/IMPACT-Act-of-2014/ secretions from the airway when a typically defined as > = 14 hours per IMPACT-Act-Downloads-and- person cannot clear those secretions on day), or ‘‘Intermittent.’’ For more Videos.html. his or her own. It is done by aspirating information on the Oxygen Therapy As a result of public comment and secretions through a catheter connected (Continuous, Intermittent) data input from expert advisors about the to a suction source. Types of suctioning elements, we refer readers to the importance and clinical usefulness of include oropharyngeal and document titled, Proposed documenting the extent of oxygen use, nasopharyngeal suctioning, nasotracheal Specifications for SNF QRP Quality we expanded the single data element to suctioning, and suctioning through an Measures and Standardized Data include two sub-elements, intermittent artificial airway such as a tracheostomy Elements, available at https:// and continuous. tube. Oropharyngeal and www.cms.gov/Medicare/Quality- Therefore, we are proposing that the nasopharyngeal suctioning are a key Initiatives-Patient-Assessment- Oxygen Therapy (Continuous, part of many patients’ care plans, both Instruments/NursingHomeQualityInits/ Intermittent) data elements with a to prevent the accumulation of Skilled-Nursing-Facility-Quality- principal data element and two sub- secretions than can lead to aspiration Reporting-Program/SNF-Quality- elements meet the definition of pneumonias (a common condition in Reporting-Program-Measures-and- standardized patient assessment data for patients with inadequate gag reflexes), Technical-Information.html. special services, treatments, and and to relieve obstructions from mucus Oxygen therapy provides a patient or interventions under section plugging during an acute or chronic resident with extra oxygen when 1899B(b)(1)(B)(iii) of the Act. We are respiratory infection, which often lead medical conditions such as chronic proposing to expand the existing to desaturations and increased obstructive pulmonary disease, Oxygen Therapy data element in the respiratory effort. Suctioning can be pneumonia, or severe asthma prevent MDS to include sub-elements for done on a scheduled basis if the patient the patient or resident from getting Continuous and Intermittent, and that is judged to clinically benefit from enough oxygen from breathing. Oxygen SNFs would be required to report these regular interventions; or can be done as administration is a resource-intensive data for the FY 2020 SNF QRP for SNF needed, such as when secretions intervention, as it requires specialized admissions at the start of the Medicare become so prominent that gurgling or equipment such as a source of oxygen, Part A stay and SNF discharges at the choking is noted, or a sudden

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desaturation occurs from a mucus plug. A TEP convened by the data element breathe when the usual route for As suctioning is generally performed by contractor provided input on the breathing is obstructed or impaired. a care provider rather than proposed data elements. This TEP, held Generally, in all of these cases, independently, this intervention can be on January 5 and 6, 2017, opined that suctioning is necessary to ensure that quite resource-intensive if it occurs these data elements are appropriate for the tracheostomy is clear of secretions every hour, for example, rather than standardization because they would which can inhibit successful once a shift. It also signifies an provide useful clinical information to oxygenation of the individual. Often, underlying medical condition that inform care planning and care individuals with tracheostomies are also prevents the patient from clearing his/ coordination. The TEP affirmed that receiving supplemental oxygenation. her secretions effectively (such as after assessment of these services and The presence of a tracheostomy, albeit a stroke, or during an acute respiratory interventions is standard clinical permanent or temporary, warrants infection). Generally, suctioning is practice. A full report of the TEP careful monitoring and immediate necessary to ensure that the airway is discussion is available at https:// intervention if the tracheostomy clear of secretions which can inhibit www.cms.gov/Medicare/Quality- becomes occluded or in the case of a successful oxygenation of the Initiatives-Patient-Assessment- temporary tracheostomy, the device individual. The intent of suctioning is to Instruments/Post-Acute-Care-Quality- used becomes dislodged. While in rare maintain a patent airway, the loss of Initiatives/IMPACT-Act-of-2014/ cases the presence of a tracheostomy is which can lead to death, or IMPACT-Act-Downloads-and- not associated with increased care complications associated with hypoxia. Videos.html. demands (and in some of those The proposed data elements are based Therefore, we are proposing that the instances, the care of the ostomy is on an item currently in use in the MDS Suctioning (Scheduled, As needed) data performed by the patient) in general the 3.0 (‘‘Suctioning’’ without the two sub- elements with a principal data element presence of such as device is associated elements), and data elements tested in and two sub-elements meet the with increased patient risk, and clinical the PAC PRD that focused on the definition of standardized patient care services will necessarily include frequency of suctioning required for assessment data for special services, close monitoring to ensure that no life- patients with tracheostomies (‘‘Trach treatments, and interventions under threatening events occur as a result of Tube with Suctioning: Specify most section 1899B(b)(1)(B)(iii) of the Act. the tracheostomy, often considered part intensive frequency of suctioning during We are proposing to expand the existing of the patient’s life line. In addition, Suctioning data element in the MDS to stay [Every llhours]’’). tracheostomy care, which primarily include sub-elements for Scheduled and consists of cleansing, dressing changes, Clinical and subject matter expert As needed, and that SNFs would be and replacement of the tracheostomy advisors working with our data element required to report these data for the FY cannula (tube), is also a critical part of contractor agreed that the proposed 2020 SNF QRP for SNF admissions at the care plan. Regular cleansing is Suctioning (Scheduled, As needed) data the start of the Medicare Part A stay and important to prevent infection such as elements are feasible for use in PAC, SNF discharges at the end of the pneumonia and to prevent any and that they indicate important Medicare Part A stay that occur between occlusions with which there are risks treatment that would be clinically October 1, 2018 and December 31, 2018. for inadequate oxygenation. useful to capture both within and across Following the initial reporting year for The proposed data element is PAC providers. We solicited public the FY 2020 SNF QRP, subsequent years currently in use in the MDS 3.0 comment on the suctioning data for the SNF QRP would be based on a (‘‘Tracheostomy care’’). Data elements element currently included in the MDS full calendar year of such data reporting. (‘‘Trach Tube with Suctioning’’) that 3.0 between August 12, to September We are inviting public comment on were tested in the PAC PRD included an 12, 2016. Several commenters wrote in these proposals. equivalent principal data element on the support of this data element, noting presence of a tracheostomy. This data (e) Respiratory Treatment: feasibility of this item in PAC, and the element was found feasible for use in Tracheostomy Care relevance of this data element to each of the four PAC settings as the data facilitating care coordination and We are proposing that the collection aligned with usual work flow. supporting care transitions. We also Tracheostomy Care data element meets Clinical and subject matter expert received comments suggesting that we the definition of standardized patient advisors working with our data element examine the frequency of suctioning in assessment data for special services, contractor agreed that the Tracheostomy order to better understand the use of treatments, and interventions under Care data element is feasible for use in staff time, the impact on a patient or section 1899B(b)(1)(B)(iii) of the Act. PAC and that it assesses an important resident’s capacity to speak and The proposed data element consists of treatment that would be clinically swallow, and intensity of care required. the single Tracheostomy Care data useful both within and across PAC Based on these comments, we decided element. For more information on the provider types. to add two sub-elements (scheduled and Tracheostomy Care data element, we We solicited public comment on this as needed) to the suctioning element. refer readers to the document titled, data element from August 12 to The proposed data elements, Suctioning Proposed Specifications for SNF QRP September 12, 2016. Several (Scheduled, As needed) includes both Quality Measures and Standardized commenters wrote in support of this the principal suctioning data element Data Elements, available at https:// data element, noting the feasibility of that is included on the MDS 3.0 and two www.cms.gov/Medicare/Quality- this item in PAC, and the relevance of sub-elements, ‘‘scheduled’’ and ‘‘as Initiatives-Patient-Assessment- this data element to facilitating care needed.’’ A full report of the comments Instruments/NursingHomeQualityInits/ coordination and supporting care is available at https://www.cms.gov/ Skilled-Nursing-Facility-Quality- transitions. A full report of the Medicare/Quality-Initiatives-Patient- Reporting-Program/SNF-Quality- comments is available at https:// Assessment-Instruments/Post-Acute- Reporting-Program-Measures-and- www.cms.gov/Medicare/Quality- Care-Quality-Initiatives/IMPACT-Act-of- Technical-Information.html. Initiatives-Patient-Assessment- 2014/IMPACT-Act-Downloads-and- A tracheostomy provides an air Instruments/Post-Acute-Care-Quality- Videos.html. passage to help a patient or resident Initiatives/IMPACT-Act-of-2014/

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IMPACT-Act-Downloads-and- Skilled-Nursing-Facility-Quality- patients and residents. A full report of Videos.html. Reporting-Program/SNF-Quality- the comments is available at https:// A TEP convened by the data element Reporting-Program-Measures-and- www.cms.gov/Medicare/Quality- contractor provided input on the Technical-Information.html. Initiatives-Patient-Assessment- proposed data elements. This TEP, held BiPAP and CPAP are respiratory Instruments/Post-Acute-Care-Quality- on January 5 and 6, 2017, opined that support devices that prevent the airways Initiatives/IMPACT-Act-of-2014/ these data elements are appropriate for from closing by delivering slightly IMPACT-Act-Downloads-and- standardization because they would pressurized air via electronic cycling Videos.html. provide useful clinical information to throughout the breathing cycle (Bilevel A TEP convened by the data element inform care planning and care PAP, referred to as BiPAP) or through a contractor provided input on the coordination. The TEP affirmed that mask continuously (Continuous PAP, proposed data elements. This TEP, held assessment of these services and referred to as CPAP). Assessment of on January 5 and 6, 2017, opined that interventions is standard clinical non-invasive mechanical ventilation is these data elements are appropriate for practice. A full report of the TEP important in care planning, as both standardization because they would discussion is available at https:// CPAP and BiPAP are resource-intensive provide useful clinical information to www.cms.gov/Medicare/Quality- (although less so than invasive inform care planning and care Initiatives-Patient-Assessment- mechanical ventilation) and signify coordination. The TEP affirmed that Instruments/Post-Acute-Care-Quality- underlying medical conditions about assessment of these services and Initiatives/IMPACT-Act-of-2014/ the patient or resident who requires the interventions is standard clinical IMPACT-Act-Downloads-and- use of this intervention. Particularly practice. A full report of the TEP Videos.html. when used in settings of acute illness or discussion is available at https:// Therefore, we are proposing that the progressive respiratory decline, www.cms.gov/Medicare/Quality- Tracheostomy Care data element meets additional staff (for example, respiratory Initiatives-Patient-Assessment- the definition of standardized patient therapists) are required to monitor and Instruments/Post-Acute-Care-Quality- assessment data for special services, adjust the CPAP and BiPAP settings and Initiatives/IMPACT-Act-of-2014/ treatments, and interventions under the patient or resident may require more IMPACT-Act-Downloads-and- section 1899B(b)(1)(B)(iii) of the Act. As nursing resources. Videos.html. noted above, the Tracheotomy Care data Data elements that assess BiPAP and Therefore, we are proposing that the element is already included on the CPAP are currently included on the Non-invasive Mechanical Ventilator MDS. For purposes of reporting for the OASIS–C2 for HHAs (‘‘Continuous/Bi- (BiPAP, CPAP) data elements with a FY 2020 SNF QRP, SNFs would be level positive airway pressure’’), LCDS principal data element and two sub- required to report these data for SNF for the LTCH setting (‘‘Non-invasive elements meet the definition of admissions at the start of the Medicare Ventilator (BIPAP, CPAP)’’), and the standardized patient assessment data for Part A stay and SNF discharges at the MDS 3.0 for the SNF setting (‘‘BiPAP/ special services, treatments, and end of the Medicare Part A stay that CPAP’’). A data element that focused on interventions under section occur between October 1, 2018 and CPAP was tested across the four PAC 1899B(b)(1)(B)(iii) of the Act. We are December 31, 2018. Following the providers in the PAC–PRD study and proposing to expand the existing initial reporting year for the FY 2020 found to be feasible for standardization. BiPAP/CPAP data element on the MDS, SNF QRP, subsequent years for the SNF All of these data elements assess BiPAP retaining and relabeling the BiPAP/ QRP would be based on a full calendar or CPAP with a single check box, not CPAP data element to be Non-invasive year of such data reporting. separately. Mechanical Ventilator (BiPAP, CPAP), We are inviting public comment on Clinical and subject matter expert and adding two sub-elements for BiPAP these proposals. advisors working with our data element and CPAP. For the purposes of reporting contractor agreed that the standardized (f) Respiratory Treatment: Non-invasive for the FY 2020 SNF QRP, SNFs would assessment of Non-invasive Mechanical Mechanical Ventilator (BiPAP, CPAP) be required to report these data for SNF Ventilator (BiPAP, CPAP) data elements admissions at the start of the Medicare We are proposing that the Non- would be feasible for use in PAC, and Part A stay and SNF discharges at the invasive Mechanical Ventilator (Bilevel assess an important treatment that end of the Medicare Part A stay that Positive Airway Pressure [BiPAP], would be clinically useful both within occur between October 1, 2018 and Continuous Positive Airway Pressure and across PAC provider types. December 31, 2018. Following the [CPAP]) data elements meet the To solicit additional feedback on the initial reporting year for the FY 2020 definition of standardized patient form of the Non-invasive Mechanical SNF QRP, subsequent years for the SNF assessment data for special services, Ventilator (BiPAP, CPAP) data elements QRP would be based on a full calendar treatments, and interventions under best suited for standardization, we year of such data reporting. section 1899B(b)(1)(B)(iii) of the Act. requested public comment on a single We are inviting public comment on The proposed data elements consist of data element, BiPAP/CPAP, equivalent these proposals. the principal Non-invasive Mechanical (but for labeling) to what is currently in Ventilator data element and two sub- use on the MDS, OASIS, and LCDS, (g) Respiratory Treatment: Invasive elements, BiPAP and CPAP. For more from August 12 to September 12, 2016. Mechanical Ventilator information on the Non-invasive Several commenters wrote in support of We are proposing that the Invasive Mechanical Ventilator (BiPAP, CPAP) this data element, noting the feasibility Mechanical Ventilator data element data element, we refer readers to the of these items in PAC, and the relevance meets the definition of standardized document titled, Proposed of these data elements for facilitating patient assessment data for special Specifications for SNF QRP Quality care coordination and supporting care services, treatments, and interventions Measures and Standardized Data transitions. In addition, there was under section 1899B(b)(1)(B)(iii) of the Elements, available at https:// support in the public comment Act. The proposed data element consists www.cms.gov/Medicare/Quality- responses for separating out BiPAP and of a single Invasive Mechanical Initiatives-Patient-Assessment- CPAP as distinct sub-elements, as they Ventilator data element. For more Instruments/NursingHomeQualityInits/ are therapies used for different types of information on the Invasive Mechanical

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Ventilator data element, we refer readers ‘‘Ventilator—Non-Weaning’’) were initial reporting year for the FY 2020 to the document titled, Proposed included in a call for public comment SNF QRP, subsequent years for the SNF Specifications for SNF QRP Quality that was open from August 12 to QRP would be based on a full calendar Measures and Standardized Data September 12, 2016 because they were year of such data reporting. Elements, available at https:// being considered for standardization. We are inviting public comment on www.cms.gov/Medicare/Quality- Several commenters wrote in support of these proposals. Initiatives-Patient-Assessment- these data elements, highlighting the (h) Other Treatment: Intravenous (IV) Instruments/NursingHomeQualityInits/ importance of this information in Medications (Antibiotics, Skilled-Nursing-Facility-Quality- supporting care coordination and care Anticoagulation, Other) Reporting-Program/SNF-Quality- transitions. Some commenters Reporting-Program-Measures-and- expressed concern about the We are proposing that the IV Technical-Information.html. appropriateness for standardization, Medications (Antibiotics, Invasive mechanical ventilation given the prevalence of ventilator Anticoagulation, Other) data elements includes ventilators and respirators that weaning across PAC providers; the meet the definition of standardized ventilate the patient through a tube that timing of administration; how weaning patient assessment data for special extends via the oral airway into the is defined; and how weaning status in services, treatments, and interventions pulmonary region or through a surgical particular relates to quality of care. under section 1899B(b)(1)(B)(iii) of the opening directly into the trachea. Thus, These comments guided the decision to Act. The proposed data elements consist assessment of invasive mechanical propose a single data element focused of the principal IV Medications data ventilation is important in care planning on current use of invasive mechanical element and three sub-elements, and risk mitigation. Ventilation in this ventilation only, and does not attempt Antibiotics, Anticoagulation, and Other. manner is a resource-intensive therapy to capture weaning status. A full report For more information on the IV associated with life-threatening of the comments is available at https:// Medications (Antibiotics, conditions without which the patient or www.cms.gov/Medicare/Quality- Anticoagulation, Other) data element, resident would not survive. However, Initiatives-Patient-Assessment- we refer readers to the document titled, ventilator use has inherent risks Instruments/Post-Acute-Care-Quality- Proposed Specifications for SNF QRP requiring close monitoring. Failure to Initiatives/IMPACT-Act-of-2014/ Quality Measures and Standardized adequately care for the patient or IMPACT-Act-Downloads-and- Data Elements, available at https:// resident who is ventilator dependent Videos.html. www.cms.gov/Medicare/Quality- can lead to iatrogenic events such as A TEP convened by the data element Initiatives-Patient-Assessment- death, pneumonia and sepsis. contractor provided input on the Instruments/NursingHomeQualityInits/ Mechanical ventilation further signifies proposed data elements. This TEP, held Skilled-Nursing-Facility-Quality- the complexity of the patient’s on January 5 and 6, 2017, opined that Reporting-Program/SNF-Quality- underlying medical and or surgical these data elements are appropriate for Reporting-Program-Measures-and- condition. Of note, invasive mechanical standardization because they would Technical-Information.html. ventilation is associated with high daily provide useful clinical information to IV medications are solutions of a and aggregate costs.64 inform care planning and care specific medication (for example, Data elements that capture invasive coordination. The TEP affirmed that antibiotics, anticoagulants) mechanical ventilation, but vary in their assessment of these services and administered directly into the venous level of specificity, are currently in use interventions is standard clinical circulation via a syringe or intravenous in the MDS 3.0 (‘‘Ventilator or practice. A full report of the TEP catheter (tube). IV medications are respirator’’) and LCDS (‘‘Invasive discussion is available at https:// administered via intravenous push Mechanical Ventilator: Weaning’’ and www.cms.gov/Medicare/Quality- (bolus), single, intermittent, or ‘‘Invasive Mechanical Ventilator: Non- Initiatives-Patient-Assessment- continuous infusion through a tube weaning’’), and related data elements Instruments/Post-Acute-Care-Quality- placed into the vein (for example, that assess invasive ventilator use and Initiatives/IMPACT-Act-of-2014/ commonly referred to as central, weaning status were tested in the PAC IMPACT-Act-Downloads-and- midline, or peripheral ports). Further, PRD (‘‘Ventilator—Weaning’’ and Videos.html. IV medications are more resource ‘‘Ventilator—Non-Weaning’’) and found Therefore, we are proposing that the intensive to administer than oral feasible for use in each of the four PAC Invasive Mechanical Ventilator data medications, and signify a higher settings. element that assesses the use of an patient complexity (and often higher Clinical and subject matter expert invasive mechanical ventilator, but does severity of illness). advisors working with our data element not assess weaning status, meets the The clinical indications for each of contractor agreed that assessing Invasive definition of standardized patient the sub-elements of the IV Medication Mechanical Ventilator use is feasible in assessment data for special services, data element (Antibiotics, PAC, and would be clinically useful treatments, and interventions under Anticoagulants, and Other) are very both within and across PAC providers. section 1899B(b)(1)(B)(iii) of the Act. As different. IV antibiotics are used for To solicit additional feedback on the noted above, the Ventilator or Respirator severe infections when: (1) The form of a data element on this topic that data element, with the same definition bioavailability of the oral form of the would be appropriate for as the Invasive Mechanical Ventilator medication would be inadequate to kill standardization, data element that data element, is already included on the the pathogen; (2) an oral form of the assess invasive ventilator use and MDS. For purposes of reporting for the medication does not exist; or (3) the weaning status that were tested in the FY 2020 SNF QRP, SNFs would be patient is unable to take the medication PAC PRD (‘‘Ventilator—Weaning’’ and required to report these data for SNF by mouth. IV anticoagulants refer to admissions at the start of the Medicare anti-clotting medications (that is, ‘‘blood 64 Wunsch, H., Linde-Zwirble, W.T., Angus, D.C., Part A stay and SNF discharges at the thinners’’), often used for the prevention Hartman, M.E., Milbrandt, E.B., & Kahn, J.M. (2010). end of the Medicare Part A stay that and treatment of deep vein thrombosis ‘‘The epidemiology of mechanical ventilation use in the United States.’’ Critical Care Med 38(10): 1947– occur between October 1, 2018 and and other thromboembolic 1953. December 31, 2018. Following the complications. IV anticoagulants are

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commonly used in patients with limited IMPACT-Act-Downloads-and- Reporting-Program-Measures-and- mobility (either chronically or acutely, Videos.html. Technical-Information.html. in the post-operative setting), who are at A TEP convened by the data element Transfusion refers to introducing risk of deep vein thrombosis, or patients contractor provided input on the blood, blood products, or other fluid with certain cardiac arrhythmias such as proposed data elements. This TEP, held into the circulatory system of a person. atrial fibrillation. The indications, risks, on January 5 and 6, 2017, opined that Blood transfusions are based on specific and benefits of each of these classes of these data elements are appropriate for protocols, with multiple safety checks IV medications are distinct, making it standardization because they would and monitoring required during and important to assess each separately in provide useful clinical information to after the infusion in case of adverse PAC. Knowing whether or not patients inform care planning and care events. Coordination with the provider’s are receiving IV medication and the type coordination. The TEP affirmed that blood bank is necessary, as well as of medication provided by each PAC assessment of these services and documentation by clinical staff to provider will improve quality of care. interventions is standard clinical ensure compliance with regulatory The principal IV Medication data practice. A full report of the TEP requirements. In addition, the need for element is currently in use on the MDS discussion is available at https:// transfusions signifies underlying patient 3.0 and there is a related data element www.cms.gov/Medicare/Quality- complexity that is likely to require care in OASIS–C2 that collects information Initiatives-Patient-Assessment- coordination and patient monitoring, on Intravenous and Infusion Therapies. Instruments/Post-Acute-Care-Quality- and impacts planning for transitions of One sub-element of the proposed data Initiatives/IMPACT-Act-of-2014/ care, as transfusions are not performed elements, IV Anti-coagulants, and two IMPACT-Act-Downloads-and- by all PAC providers. other data elements related to IV Videos.html. The proposed data element was therapy (IV Vasoactive Medications and Therefore, we are proposing that the selected from three existing assessment IV Chemotherapy), were tested in the IV Medications (Antibiotics, items on transfusions and related PAC PRD and found feasible for use in Anticoagulation, Other) data elements services, currently in use in the MDS 3.0 that the data collection aligned with with a principal data element and three (‘‘Transfusions’’) and OASIS–C2 usual work flow in each of the four PAC sub-elements meet the definition of (‘‘Intravenous or Infusion Therapy’’), settings, demonstrating the feasibility of standardized patient assessment data for and a data element tested in the PAC collecting IV medication information, special services, treatments, and PRD (‘‘Blood Transfusions’’), that was including type of IV medication, interventions under section found feasible for use in each of the four through similar data elements in these 1899B(b)(1)(B)(iii) of the Act. We are PAC settings. We chose to propose the settings. MDS version because of its greater level Clinical and subject matter expert proposing to expand the existing IV of specificity over the OASIS–C2 data advisors working with our data element Medications data element in the MDS to contractor agreed that standardized include sub-elements for Antibiotics, element. This selection was informed by collection of information on Anticoagulation, and Other. For the expert advisors and reviewed and medications, including IV medications, purposes of the FY 2020 SNF QRP, supported in the proposed form by the would be feasible in PAC, and assess an SNFs would be required to report these Standardized Patient Assessment Data important treatment that would be data for SNF admissions at the start of TEP held by our data element contractor clinically useful both within and across the Medicare Part A stay and SNF on January 5 and 6, 2017. A full report PAC provider types. discharges at the end of the Medicare of the TEP discussion is available at We solicited public comment on a Part A stay that occur between October https://www.cms.gov/Medicare/Quality- related data element, Vasoactive 1, 2018 and December 31, 2018. Initiatives-Patient-Assessment- Medications, from August 12 to Following the initial reporting year for Instruments/Post-Acute-Care-Quality- September 12, 2016. While commenters the FY 2020 SNF QRP, subsequent years Initiatives/IMPACT-Act-of-2014/ supported this data element with one for the SNF QRP would be based on a IMPACT-Act-Downloads-and- noting the importance of this data full calendar year of such data reporting. Videos.html. element in supporting care transitions, We are inviting public comment on Therefore, we are proposing that the others criticized the need for collecting these proposals. Transfusions data element that is currently in use in the MDS meets the specifically on Vasoactive Medications, (i) Other Treatment: Transfusions giving feedback that the data element definition of standardized patient was too narrowly focused. Additionally, We are proposing that the assessment data for special services, comment received indicated that the Transfusions data element meets the treatments, and interventions under clinical significance of vasoactive definition of standardized patient section 1899B(b)(1)(B)(iii) of the Act. As medications administration alone was assessment data element for special noted above, the Transfusions data not high enough in PAC to merit services, treatments, and interventions element is already included on the mandated assessment, noting that under section 1899B(b)(1)(B)(iii) of the MDS. For purposes of reporting for the related and more useful information Act. The proposed data element consists FY 2020 SNF QRP, SNFs would be could be captured in an item that of the single Transfusions data element. required to report these data for SNF assessed all IV medication use. For more information on the admissions at the start of the Medicare Overall, public comment indicated Transfusions data element, we refer Part A stay and SNF discharges at the the importance of including the readers to the document titled, Proposed end of the Medicare Part A stay that additional check box data elements to Specifications for SNF QRP Quality occur between October 1, 2018 and distinguish particular classes of Measures and Standardized Data December 31, 2018. Following the medications. A full report of the Elements, available at https:// initial reporting year for the FY 2020 comments is available at https:// www.cms.gov/Medicare/Quality- SNF QRP, subsequent years for the SNF www.cms.gov/Medicare/Quality- Initiatives-Patient-Assessment- QRP would be based on a full calendar Initiatives-Patient-Assessment- Instruments/NursingHomeQualityInits/ year of such data reporting. Instruments/Post-Acute-Care-Quality- Skilled-Nursing-Facility-Quality- We are inviting public comment on Initiatives/IMPACT-Act-of-2014/ Reporting-Program/SNF-Quality- these proposals.

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(j) Other Treatment: Dialysis public feedback, described below, we Therefore, we are proposing that the (Hemodialysis, Peritoneal dialysis) decided to propose a data element that Dialysis (Hemodialysis, Peritoneal We are proposing that the Dialysis includes both the principal Dialysis data dialysis) data elements with a principal (Hemodialysis, Peritoneal dialysis) data element and the two sub-elements data element and two sub-elements elements meet the definition of (hemodialysis and peritoneal dialysis). meet the definition of standardized standardized patient assessment data for The Hemodialysis data element, patient assessment data for special special services, treatments, and which was tested in the PAC PRD, was services, treatments, and interventions interventions under section included in a call for public comment under section 1899B(b)(1)(B)(iii) of the 1899B(b)(1)(B)(iii) of the Act. The that was open from August 12 to Act. We are proposing to expand the proposed data elements consist of the September 12, 2016. Commenters existing Dialysis data element in the principal Dialysis data element and two supported the assessment of MDS to include sub-elements for Hemodialysis and Peritoneal dialysis. sub-elements, Hemodialysis and hemodialysis and recommended that For the purposes of the FY 2020 SNF Peritoneal dialysis. For more the data element be expanded to include QRP, SNFs would be required to report information on the Dialysis peritoneal dialysis. Several commenters these data for SNF admissions at the (Hemodialysis, Peritoneal dialysis) data supported the Hemodialysis data start of the Medicare Part A stay and elements, we refer readers to the element, noting the relevance of this SNF discharges at the end of the document titled, Proposed information for sharing across the care Medicare Part A stay that occur between Specifications for SNF QRP Quality continuum to facilitate care October 1, 2018 and December 31, 2018. Measures and Standardized Data coordination and care transitions, the Following the initial reporting year for Elements, available at https:// potential for this data element to be the FY 2020 SNF QRP, subsequent years www.cms.gov/Medicare/Quality- used to improve quality, and the feasibility for use in PAC. In addition, for the SNF QRP would be based on a Initiatives-Patient-Assessment- full calendar year of such data reporting. Instruments/NursingHomeQualityInits/ we received comment that the item would be useful in improving patient We are inviting public comment on Skilled-Nursing-Facility-Quality- these proposals. Reporting-Program/SNF-Quality- and resident transitions of care. Several Reporting-Program-Measures-and- commenters also stated that peritoneal (k) Other Treatment: Intravenous (IV) Technical-Information.html. dialysis should be included in a Access (Peripheral IV, Midline, Central Dialysis is a treatment primarily used standardized data element on dialysis line, Other) to provide replacement for lost kidney and recommended collecting We are proposing that the IV Access function. Both forms of dialysis information on peritoneal dialysis in (Peripheral IV, Midline, Central line, (hemodialysis and peritoneal dialysis) addition to hemodialysis. The rationale Other) data elements meet the definition are resource intensive, not only during for including peritoneal dialysis from of standardized patient assessment data the actual dialysis process but before, commenters included the fact that element for special services, treatments, during and following. Patients and patients and residents receiving and interventions under section residents who need and undergo peritoneal dialysis will have different 1899B(b)(1)(B)(iii) of the Act. The dialysis procedures are at high risk for needs at post-acute discharge compared proposed data elements consist of the physiologic and hemodynamic to those receiving hemodialysis or not principal IV Access data element and instability from fluid shifts and having any dialysis. Based on these four sub-elements, Peripheral IV, electrolyte disturbances as well as comments, the Hemodialysis data Midline, Central line, and Other. For infections that can lead to sepsis. element was expanded to include a more information on the IV Access data Further, patients or residents receiving principal Dialysis data element and two element, we refer readers to the hemodialysis are often transported to a sub-elements, hemodialysis and document titled, Proposed different facility, or at a minimum, to a peritoneal dialysis; these are the same Specifications for SNF QRP Quality different location in the same facility. two data elements that were tested in Measures and Standardized Data Close monitoring for fluid shifts, blood the PAC PRD. This expanded version, Elements, available at https:// pressure abnormalities, and other Dialysis (Hemodialysis, Peritoneal www.cms.gov/Medicare/Quality- adverse effects is required prior to, dialysis), are the data elements being Initiatives-Patient-Assessment- during and following each dialysis proposed. A full report of the comments Instruments/NursingHomeQualityInits/ session. Nursing staff typically perform is available at https://www.cms.gov/ Skilled-Nursing-Facility-Quality- peritoneal dialysis at the bedside, and as Medicare/Quality-Initiatives-Patient- Reporting-Program/SNF-Quality- with hemodialysis, close monitoring is Assessment-Instruments/Post-Acute- Reporting-Program-Measures-and- required. Care-Quality-Initiatives/IMPACT-Act-of- Technical-Information.html. The principal Dialysis data element is 2014/IMPACT-Act-Downloads-and- Patients or residents with central currently included on the MDS 3.0 and Videos.html. lines, including those peripherally the LCDS v3.0 and assesses the overall We note that the Dialysis inserted or who have subcutaneous use of dialysis. The sub-elements for (Hemodialysis, Peritoneal dialysis) data central line ‘‘port’’ access, always Hemodialysis and Peritoneal dialysis elements were also supported by the require vigilant nursing care to keep were tested across the four PAC TEP that discussed candidate data patency of the lines and ensure that providers in the PAC PRD study, and elements for Special Services, such invasive lines remain free from any found to be feasible for standardization. Treatments, and Interventions during a potentially life-threatening events such Clinical and subject matter expert meeting on January 5 and 6, 2017. A full as infection, air embolism, or bleeding advisors working with our data element report of the TEP discussion is available from an open lumen. Clinically complex contractor opined that the standardized at https://www.cms.gov/Medicare/ patients and residents are likely to be assessment of dialysis is feasible in Quality-Initiatives-Patient-Assessment- receiving medications or nutrition PAC, and that it assesses an important Instruments/Post-Acute-Care-Quality- intravenously. The sub-elements treatment that would be clinically Initiatives/IMPACT-Act-of-2014/ included in the IV Access data elements useful both within and across PAC IMPACT-Act-Downloads-and- distinguish between peripheral access providers. As the results of expert and Videos.html. and different types of central access.

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The rationale for distinguishing between Treatments, and Interventions during a of blood chemistries, and maintenance a peripheral IV and central IV access is meeting on January 5 and 6, 2017. A full of a central line. Therefore, assessing a that central lines confer higher risks report of the TEP discussion is available patient or resident’s need for parenteral associated with life-threatening events at https://www.cms.gov/Medicare/ feeding is important for care planning such as pulmonary embolism, infection, Quality-Initiatives-Patient-Assessment- and resource use. In addition to the and bleeding. Instruments/Post-Acute-Care-Quality- risks associated with central and The proposed IV Access (Peripheral Initiatives/IMPACT-Act-of-2014/ peripheral intravenous access, total IV, Midline, Central line, Other) data IMPACT-Act-Downloads-and- parenteral nutrition is associated with elements are not currently included on Videos.html. significant risks such as embolism and any of the mandated PAC assessment Therefore, we are proposing that the sepsis. instruments. However, related data IV access (Peripheral IV, Midline, The Parenteral/IV Feeding data elements (for example, IV Medication in Central line, Other) data elements with element is currently in use in the MDS MDS 3.0 for SNF, Intravenous or a principal data element and four sub- 3.0, and equivalent or related data infusion therapy in OASIS–C2 for elements meet the definition of elements are in use in the LCDS, IRF– HHAs) currently assess types of IV standardized patient assessment data for PAI, and the OASIS–C2. An equivalent access. Several related data elements special services, treatments, and data element was tested in the PAC PRD that describe types of IV access (for interventions under section (‘‘Total Parenteral Nutrition’’) and found example, Central Line Management, IV 1899B(b)(1)(B)(iii) of the Act. We are feasible for use in each of the four PAC Vasoactive Medications) were tested proposing to add the IV Access settings, demonstrating the feasibility of across the four PAC providers in the (Peripheral IV, Midline, Central line, collecting information about this PAC PRD study, and found to be Other) data elements to the MDS, and nutritional service in these settings. feasible for standardization. that, for the purposes of the FY 2020 Total Parenteral Nutrition (an item Clinical and subject matter expert SNF QRP, SNFs would be required to with the same meaning as the proposed advisors working with our data element report these data for SNF admissions at data element, but with the label used in contractor agreed that assessing type of the start of the Medicare Part A stay and the PAC PRD) was included in a call for IV access would be feasible for use in SNF discharges at the end of the public comment that was open from PAC and that it assesses an important Medicare Part A stay that occur between August 12 to September 12, 2016. treatment that would be clinically October 1, 2018 and December 31, 2018. Several commenters supported this data useful both within and across PAC Following the initial reporting year for element, noting its relevance to provider types. the FY 2020 SNF QRP, subsequent years facilitating care coordination and We requested public comment on one for the SNF QRP would be based on a supporting care transitions. After the of the PAC PRD data elements, Central full calendar year of such data reporting. public comment period, the Total Line Management, from August 12 to We are inviting public comment on Parenteral Nutrition data element was September 12, 2016. A central line is these proposals. re-named Parenteral/IV Feeding, to be one type of IV access. Commenters consistent with how this data element is (l) Nutritional Approach: Parenteral/IV supported the assessment of central line referred to in the MDS. A full report of Feeding management and recommended that the the comments is available at https:// data element be broadened to also We are proposing that the Parenteral/ www.cms.gov/Medicare/Quality- include other types of IV access. Several IV Feeding data element meets the Initiatives-Patient-Assessment- commenters supported the data definition of standardized patient Instruments/Post-Acute-Care-Quality- element, noting feasibility and assessment data for special services, Initiatives/IMPACT-Act-of-2014/ importance for facilitating care treatments, and interventions under IMPACT-Act-Downloads-and- coordination and care transitions. section 1899B(b)(1)(B)(iii) of the Act. Videos.html. However, a few commenters The proposed data element consists of A TEP convened by the data element recommended that the definition of this the single Parenteral/IV Feeding data contractor provided input on the data element be broadened to include element. For more information on the proposed data elements. This TEP, held peripherally inserted central catheters Parenteral/IV Feeding data element, we on January 5 and 6, 2017, opined that (‘‘PICC lines’’) and midline IVs. Based refer readers to the document titled, these data elements are appropriate for on public comment feedback and in Proposed Specifications for SNF QRP standardization because they would consultation with clinical and subject Quality Measures and Standardized provide useful clinical information to matters experts, we expanded the Data Elements, available at https:// inform care planning and care Central Line Management data element www.cms.gov/Medicare/Quality- coordination. The TEP affirmed that to include more types of IV access Initiatives-Patient-Assessment- assessment of these services and (Peripheral IV, Midline, Central line, Instruments/NursingHomeQualityInits/ interventions is standard clinical Other). This expanded version, IV Skilled-Nursing-Facility-Quality- practice. A full report of the TEP Access (Peripheral IV, Midline, Central Reporting-Program/SNF-Quality- discussion is available at https:// line, Other), are the data elements being Reporting-Program-Measures-and- www.cms.gov/Medicare/Quality- proposed. A full report of the comments Technical-Information.html. Initiatives-Patient-Assessment- is available at https://www.cms.gov/ Parenteral/IV Feeding refers to a Instruments/Post-Acute-Care-Quality- Medicare/Quality-Initiatives-Patient- patient or resident being fed Initiatives/IMPACT-Act-of-2014/ Assessment-Instruments/Post-Acute- intravenously using an infusion pump, IMPACT-Act-Downloads-and- Care-Quality-Initiatives/IMPACT-Act-of- bypassing the usual process of eating Videos.html. Therefore, we are 2014/IMPACT-Act-Downloads-and- and digestion. The need for IV/ proposing that the Parenteral/IV Videos.html. parenteral feeding indicates a clinical Feeding data element meets the We note that the IV Access complexity that prevents the patient or definition of standardized patient (Peripheral IV, Midline, Central line, resident from meeting his/her assessment data for special services, Other) data elements were supported by nutritional needs enterally, and is more treatments, and interventions under the TEP that discussed candidate data resource intensive than other forms of section 1899B(b)(1)(B)(iii) of the Act. As elements for Special Services, nutrition, as it often requires monitoring noted above, the Parenteral/IV Feeding

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data element is already included on the tubes and parenteral nutrition. The Following the initial reporting year for MDS. For purposes of reporting for the testing of similar nutrition-focused data the FY 2020 SNF QRP, subsequent years FY 2020 SNF QRP, SNFs would be elements in the PAC PRD, and the for the SNF QRP would be based on a required to report these data for SNF current assessment of feeding tubes and full calendar year of such data reporting. admissions at the start of the Medicare related nutritional services and devices, We are inviting public comment on Part A stay and SNF discharges at the demonstrates the feasibility of collecting these proposals. end of the Medicare Part A stay that information about this nutritional occur between October 1, 2018 and service in these settings. (n) Nutritional Approach: Mechanically December 31, 2018. Following the Clinical and subject matter expert Altered Diet initial reporting year for the FY 2020 advisors working with our data element SNF QRP, subsequent years for the SNF contractor opined that the Feeding Tube We are proposing that the QRP would be based on a full calendar data element is feasible for use in PAC, Mechanically Altered Diet data element year of such data reporting. and supported its importance and meets the definition of standardized We are inviting public comment on clinical usefulness for patients in PAC patient assessment data for special these proposals. settings, due to the increased level of services, treatments, and interventions nursing care and patient monitoring under section 1899B(b)(1)(B)(iii) of the (m) Nutritional Approach: Feeding Tube required for patients who received Act. The proposed data element consists We are proposing that the Feeding enteral nutrition with this device. of the single Mechanically Altered Diet Tube data element meets the definition We solicited additional feedback on data element. For more information on of standardized patient assessment data an Enteral Nutrition data element (an the Mechanically Altered Diet data for special services, treatments, and item with the same meaning as the element, we refer readers to the interventions under section proposed data element, but with the document titled, Proposed 1899B(b)(1)(B)(iii) of the Act. The label used in the OASIS) in a call for Specifications for SNF QRP Quality proposed data element consists of the public comment that was open from Measures and Standardized Data single Feeding Tube data element. For August 12 to September 12, 2016. Elements, available at https:// more information on the Feeding Tube Several commenters supported the data www.cms.gov/Medicare/Quality- data element, we refer readers to the element, noting the importance of Initiatives-Patient-Assessment- document titled, Proposed assessing enteral nutrition status for Instruments/NursingHomeQualityInits/ Specifications for SNF QRP Quality facilitating care coordination and care Skilled-Nursing-Facility-Quality- Measures and Standardized Data transitions. After the public comment Reporting-Program/SNF-Quality- Elements, available at https:// period, the Enteral Nutrition data Reporting-Program-Measures-and- www.cms.gov/Medicare/Quality- element used in public comment was re- Technical-Information.html. Initiatives-Patient-Assessment- named Feeding Tube, indicating the The Mechanically Altered Diet data Instruments/NursingHomeQualityInits/ presence of an assistive device. A full element refers to food that has been Skilled-Nursing-Facility-Quality- report of the comments is available at altered to make it easier for the patient Reporting-Program/SNF-Quality- https://www.cms.gov/Medicare/Quality- or resident to chew and swallow, and Reporting-Program-Measures-and- Initiatives-Patient-Assessment- this type of diet is used for patients and Technical-Information.html. Instruments/Post-Acute-Care-Quality- The majority of patients admitted to residents who have difficulty Initiatives/IMPACT-Act-of-2014/ performing these functions. Patients acute care hospitals experience IMPACT-Act-Downloads-and- deterioration of their nutritional status with severe malnutrition are at higher Videos.html. risk for a variety of complications.66 In during their hospital stay, making We note that the Feeding Tube data PAC settings, there are a variety of assessment of nutritional status and element was also supported by the TEP reasons that patients and residents may method of feeding if unable to eat orally that discussed candidate data elements very important in PAC. A feeding tube for Special Services, Treatments, and have impairments related to oral can be inserted through the nose or the Interventions during a meeting on feedings, including clinical or cognitive skin on the abdomen to deliver liquid January 5 and 6, 2017. A full report of status. The provision of a mechanically nutrition into the stomach or small the TEP discussion is available at altered diet may be resource intensive, intestine. Feeding tubes are resource https://www.cms.gov/Medicare/Quality- and can signal difficulties associated intensive and are therefore important to Initiatives-Patient-Assessment- with swallowing/eating safety, assess for care planning and resource Instruments/Post-Acute-Care-Quality- including dysphagia. In other cases, it use. Patients with severe malnutrition Initiatives/IMPACT-Act-of-2014/ signifies the type of altered food source, are at higher risk for a variety of IMPACT-Act-Downloads-and- such as ground or puree, that will complications.65 In PAC settings, there Videos.html. Therefore, we are enable the safe and thorough ingestion are a variety of reasons that patients and proposing that the Feeding Tube data of nutritional substances and ensure residents may not be able to eat orally element meets the definition of safe and adequate delivery of (including clinical or cognitive status). standardized patient assessment data for nourishment to the patient. Often, The Feeding Tube data element is special services, treatments, and patients on mechanically altered diets currently included in the MDS 3.0 for interventions under section also require additional nursing supports SNFs, and in the OASIS–C2 for HHAs, 1899B(b)(1)(B)(iii) of the Act. As noted such as individual feeding, or direct where it is labeled Enteral Nutrition. A above, the Feeding Tube data element is observation, to ensure the safe related data element, collected in the already included on the MDS. For consumption of the food product. IRF–PAI for IRFs (Tube/Parenteral purposes of reporting for the FY 2020 Assessing whether a patient or resident Feeding), assesses use of both feeding SNF QRP, SNFs would be required to requires a mechanically altered diet is report these data for SNF admissions at 65 Dempsey, D.T., Mullen, J.L., & Buzby, G.P. the start of the Medicare Part A stay and 66 Dempsey, D.T., Mullen, J.L., & Buzby, G.P. (1988). ‘‘The link between nutritional status and (1988). ‘‘The link between nutritional status and clinical outcome: can nutritional intervention SNF discharges at the end of the clinical outcome: can nutritional intervention modify it?’’ Am J of Clinical Nutrition 47(2): 352– Medicare Part A stay that occur between modify it?’’ Am J of Clinical Nutrition 47(2): 352– 356. October 1, 2018 and December 31, 2018. 356.

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therefore important for care planning (o) Nutritional Approach: Therapeutic Treatments, and Interventions during a and resource identification. Diet meeting on January 5 and 6, 2017. The proposed data element for a Therefore, we are proposing that the mechanically altered diet is currently We are proposing that the Therapeutic Therapeutic Diet data element meets the included on the MDS 3.0 for SNFs. A Diet data element meets the definition definition of standardized patient related data element for modified food of standardized patient assessment data assessment data for special services, consistency/supervision is currently for special services, treatments, and treatments, and interventions under included on the IRF–PAI for IRFs. A interventions under section section 1899B(b)(1)(B)(iii) of the Act. As related data element is included in the 1899B(b)(1)(B)(iii) of the Act. The noted above, the Therapeutic Diet data OASIS–C2 for HHAs that collects proposed data element consists of the element is already included on the information about independent eating single Therapeutic Diet data element. MDS. For purposes of reporting for the that requires ‘‘a liquid, pureed or For more information on the FY 2020 SNF QRP, SNFs would be ground meat diet.’’ The testing of Therapeutic Diet data element, we refer required to report these data for SNF similar nutrition-focused data elements readers to the document titled, Proposed admissions at the start of the Medicare in the PAC PRD, and the current Specifications for SNF QRP Quality Part A stay and SNF discharges at the assessment of various nutritional Measures and Standardized Data end of the Medicare Part A stay that services across the four PAC settings, Elements, available at https:// occur between October 1, 2018 and demonstrates the feasibility of collecting www.cms.gov/Medicare/Quality- December 31, 2018. Following the information about this nutritional Initiatives-Patient-Assessment- initial reporting year for the FY 2020 service in these settings. Instruments/NursingHomeQualityInits/ SNF QRP, subsequent years for the SNF Clinical and subject matter expert Skilled-Nursing-Facility-Quality- QRP would be based on a full calendar advisors working with our data element Reporting-Program/SNF-Quality- year of such data reporting. contractor agreed that the proposed Reporting-Program-Measures-and- We are inviting public comment on Mechanically Altered Diet data element Technical-Information.html. these proposals. is feasible for use in PAC, and it Therapeutic Diet refers to meals (4) Medical Condition and Comorbidity assesses an important treatment that planned to increase, decrease, or Data would be clinically useful both within eliminate specific foods or nutrients in and across PAC settings. Expert input a patient or resident’s diet, such as a We are proposing that the data on the Mechanically Altered Diet data low-salt diet, for the purpose of treating elements needed to calculate the current element highlighted its importance and a medical condition. The use of measure, Percent of Residents or clinical usefulness for patients in PAC therapeutic diets among patients in PAC Patients with Pressure Ulcers That Are settings, due to the increased provides insight on the clinical New or Worsened (Short Stay) (NQF monitoring and resource use required complexity of these patients and their #0678), and the proposed measure, for patients on special diets. We note multiple comorbidities. Therapeutic Changes in Skin Integrity Post-Acute that the Mechanically Altered Diet data diets are less resource intensive from Care: Pressure Ulcer/Injury, meet the element was also supported by the TEP the bedside nursing perspective, but do definition of standardized patient that discussed candidate data elements signify one or more underlying clinical assessment data for medical conditions for Special Services, Treatments, and conditions that preclude the patient and co-morbidities under section Interventions during a meeting on from eating a regular diet. The 1899B(b)(1)(B)(iv) of the Act, and that January 5 and 6, 2017. A full report of communication among PAC providers the successful reporting of that data the TEP discussion is available at about whether a patient is receiving a under section 1888(e)(6)(B)(i)(II) of the https://www.cms.gov/Medicare/Quality- particular therapeutic diet is critical to Act would also satisfy the requirement Initiatives-Patient-Assessment- ensure safe transitions of care. to report standardized patient Instruments/Post-Acute-Care-Quality- assessment data under section The Therapeutic Diet data element is Initiatives/IMPACT-Act-of-2014/ 1888(e)(6)(B)(i)(III) of the Act. currently in use in the MDS 3.0. The IMPACT-Act-Downloads-and- ‘‘Medical conditions and testing of similar nutrition-focused data Videos.html. comorbidities’’ and the conditions Therefore, we are proposing that the elements in the PAC PRD, and the addressed in the standardized data Mechanically Altered Diet data element current assessment of various elements used in the calculation and meets the definition of standardized nutritional services across the four PAC risk adjustment of these measures, that patient assessment data for special settings, demonstrates the feasibility of is, the presence of pressure ulcers, services, treatments, and interventions collecting information about this diabetes, incontinence, peripheral under section 1899B(b)(1)(B)(iii) of the nutritional service in these settings. vascular disease or peripheral arterial Act. As noted above, the Mechanically Clinical and subject matter expert disease, mobility, as well as low body Altered Diet data element is already advisors working with our data element mass index, are all health-related included on the MDS. For purposes of contractor supported the importance conditions that indicate medical reporting for the FY 2020 SNF QRP, and clinical usefulness of the proposed complexity that can be indicative of SNFs would be required to report these Therapeutic Diet data element for underlying disease severity and other data for SNF admissions at the start of patients in PAC settings, due to the comorbidities. the Medicare Part A stay and SNF increased monitoring and resource use Specifically, the data elements used discharges at the end of the Medicare required for patients on special diets, in the measure are important for care Part A stay that occur between October and agreed that it is feasible for use in planning and provide information 1, 2018 and December 31, 2018. PAC and that it assesses an important pertaining to medical complexity. Following the initial reporting year for treatment that would be clinically Pressure ulcers are serious wounds the FY 2020 SNF QRP, subsequent years useful both within and across PAC representing poor outcomes, and can for the SNF QRP would be based on a settings, We note that the Therapeutic result in sepsis and death. Assessing full calendar year of such data reporting. Diet data element was also supported by skin condition, care planning for We are inviting public comment on the TEP that discussed candidate data pressure ulcer prevention and healing, these proposals. elements for Special Services, and informing providers about their

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presence in patient transitions of care is residents need hearing- or vision- Specifications for SNF QRP Quality a customary and best practice. Venous specific medical attention or assistive Measures and Standardized Data and arterial disease and diabetes are devices, and accommodations, Elements, available at https:// associated with low blood flow which including auxiliary aids and/or services, www.cms.gov/Medicare/Quality- may increase the risk of tissue damage. in order to effectively participate in the Initiatives-Patient-Assessment- These diseases are indicators of factors rehabilitation environment and Instruments/NursingHomeQualityInits/ that may place individuals at risk for treatment, and to ensure that person- Skilled-Nursing-Facility-Quality- pressure ulcer development and are directed care plans are developed to Reporting-Program/SNF-Quality- therefore important for care planning. accommodate a patient’s needs. Reporting-Program-Measures-and- Low BMI, which may be an indicator of Accurate diagnosis and management of Technical-Information.html. underlying disease severity, may be hearing or vision impairment would Accurate assessment of hearing associated with loss of fat and muscle, likely improve rehabilitation outcomes impairment is important in the PAC resulting in potential risk for pressure and care transitions, including setting for care planning and resource ulcers. Bowel incontinence and the transition from institutional-based care use. Hearing impairment has been possible maceration to the skin to the community. Accurate assessment associated with lower quality of life, associated, can lead to higher risk for of hearing and vision impairment would including poorer physical, mental, and pressure ulcers. In addition, the bacteria be expected to lead to appropriate social functioning, and emotional associated with bowel incontinence can treatment, accommodations, including health.67 68 Treatment and complicate current wounds and cause the provision of auxiliary aids and accommodation of hearing impairment local infection. Mobility is an indicator services during the stay, and ensure that led to improved health outcomes, of impairment or reduction in mobility patients and residents continue to have including but not limited to quality of and movement which is a major risk their vision and hearing needs met life.69 For example, hearing loss in factor for the development of pressure when they leave the facility. elderly individuals has been associated ulcers. Taken separately and together, Accurate individualized assessment, with depression and cognitive these data elements are important for treatment, and accommodation of impairment,70 71 72 higher rates of care planning, transitions in services hearing and vision impairments of incident cognitive impairment and and identifying medical complexities. patients and residents in PAC would be cognitive decline,73 and less time in In sections VI.B.7.a and VI.B.10.a, we expected to have a positive impact on occupational therapy.74 Accurate discuss our rationale for proposing that the National Quality Strategy’s domains assessment of hearing impairment is the data elements used in the measures of patient and family engagement, important in the PAC setting for care meet the definition of standardized patient safety, care coordination, planning and defining resource use. patient assessment data. In summary, clinical process/effectiveness, and The proposed data element was we believe that the collection of such efficient use of health care resources. selected from two forms of the Hearing assessment data is important for For example, standardized assessment data element based on expert and multiple reasons, including clinical of hearing and vision impairments used stakeholder feedback. We considered decision support, care planning, and in PAC will support ensuring patient the two forms of the Hearing data quality improvement, and that the data and resident safety (for example, risk of element, one of which is currently in elements assessing pressure ulcers and falls), identifying accommodations use in the MDS 3.0 (Hearing) and the data elements used to risk adjust needed during the stay, and appropriate another data element with different showed good reliability. We solicited support needs at the time of discharge stakeholder feedback on the quality or transfer. Standardized assessment of 67 Dalton DS, Cruickshanks KJ, Klein BE, Klein R, measure, and the data elements from these data elements will enable or Wiley TL, Nondahl DM. The impact of hearing loss on quality of life in older adults. Gerontologist. which it is derived, by means of a support clinical decision-making and 2003;43(5):661–668. public comment period and TEPs, as early clinical intervention; person- 68 Hawkins K, Bottone FG, Jr., Ozminkowski RJ, described in section V.B.7.a of this centered, high quality care (for example, et al. The prevalence of hearing impairment and its proposed rule. We are inviting public facilitating better care continuity and burden on the quality of life among adults with Medicare Supplement Insurance. Qual Life Res. comment on this proposal. coordination); better data exchange and 2012;21(7):1135–1147. interoperability between settings; and 69 (5) Impairment Data Horn KL, McMahon NB, McMahon DC, Lewis longitudinal outcome analysis. Hence, JS, Barker M, Gherini S. Functional use of the Hearing and vision impairments are reliable data elements assessing hearing Nucleus 22-channel cochlear implant in the elderly. conditions that, if unaddressed, affect and vision impairments are needed to The Laryngoscope. 1991;101(3):284–288. activities of daily living, 70 Sprinzl GM, Riechelmann H. Current trends in initiate a management program that can treating hearing loss in elderly people: A review of communication, physical functioning, optimize a patient or resident’s the technology and treatment options—a mini- rehabilitation outcomes, and overall prognosis and reduce the possibility of review. Gerontology. 2010;56(3):351–358. quality of life. Sensory limitations can adverse events. 71 Lin FR, Thorpe R, Gordon-Salant S, Ferrucci L. lead to confusion in new settings, Hearing Loss Prevalence and Risk Factors Among increase isolation, contribute to mood (a) Hearing Older Adults in the United States. The Journals of Gerontology Series A: Biological Sciences and disorders, and impede accurate We are proposing that the Hearing Medical Sciences. 2011;66A(5):582–590. assessment of other medical conditions. data element meets the definition of 72 Hawkins K, Bottone FG, Jr., Ozminkowski RJ, Failure to appropriately assess, standardized patient assessment data for et al. The prevalence of hearing impairment and its accommodate, and treat these impairments under section burden on the quality of life among adults with Medicare Supplement Insurance. Qual Life Res. conditions increases the likelihood that 1899B(b)(1)(B)(v) of the Act. The 2012;21(7):1135–1147. patients and residents will require more proposed data element consists of the 73 Lin FR, Metter EJ, O’Brien RJ, Resnick SM, intensive and prolonged treatment. single Hearing data element. This data Zonderman AB, Ferrucci L. Hearing Loss and Onset of these conditions can be element assesses level of hearing Incident Dementia. Arch Neurol. 2011;68(2):214– gradual, so individualized assessment impairment, and consists of one 220. 74 Cimarolli VR, Jung S. Intensity of Occupational with accurate screening tools and question. For more information on the Therapy Utilization in Nursing Home Residents: follow-up evaluations are essential to Hearing data element, we refer readers The Role of Sensory Impairments. J Am Med Dir determining which patients and to the document titled, Proposed Assoc. 2016;17(10):939–942.

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wording and fewer response option MDS version of the Hearing data improve their overall quality of life. categories that is currently in use in the element received in the public Further, vision impairment is often a OASIS–C2 (Ability to Hear). Ability to comment, we are proposing the Hearing treatable risk factor associated with Hear was also tested in the PAC PRD data element. A full report of the adverse events and poor quality of life. and found to have substantial agreement comments is available at https:// For example, individuals with visual for inter-rater reliability across PAC www.cms.gov/Medicare/Quality- impairment are more likely to settings (kappa of 0.78).75 It was also Initiatives-Patient-Assessment- experience falls and hip fracture, have found to be clinically relevant, Instruments/Post-Acute-Care-Quality- less mobility, and report depressive meaningful for care planning, and Initiatives/IMPACT-Act-of-2014/ symptoms.76 77 78 79 80 81 82 feasible for use in each of the four PAC IMPACT-Act-Downloads-and- Individualized initial screening can settings. Videos.html. lead to life-improving interventions Several data elements that assess Therefore, we are proposing the such as accommodations, including the hearing impairment were presented to Hearing data element currently in use provision of auxiliary aids and services, the Standardized Patient Assessment on the MDS. For purposes of reporting during the stay and/or treatments that Data TEP held by our data element for the FY 2020 SNF QRP, SNFs would can improve vision and prevent or slow contractor. The TEP did not reach be required to report these data for SNF further vision loss. For patients with consensus on the ideal number of admissions at the start of the Medicare some types of visual impairment, use of response categories or phrasing of Part A stay that occur between October glasses and contact lenses can be response options, which are the primary 1, 2018 and December 31, 2018. effective in restoring vision.83 Other differences between the current MDS Following the initial reporting year for conditions, including glaucoma 84 and (Hearing) and OASIS (Ability to Hear) the FY 2020 SNF QRP, subsequent years age-related macular degeneration,85 86 items. The Development and for the SNF QRP would be based on a have responded well to treatment. In Maintenance of Post-Acute Care Cross- full calendar year of such data reporting. addition, vision impairment is often a Setting Standardized Patient The Hearing data element would be treatable risk factor associated with Assessment Data Technical Expert Panel assessed at admission at the start of the adverse events which can be prevented Summary Report is available at https:// Medicare Part A stay only due to the and accommodated during the stay. www.cms.gov/Medicare/Quality- relatively stable nature of hearing Accurate assessment of vision Initiatives-Patient-Assessment- impairment, making it unlikely that a Instruments/Post-Acute-Care-Quality- patient’s score on this assessment would 76 Colon-Emeric CS, Biggs DP, Schenck AP, Lyles Initiatives/IMPACT-Act-of-2014/ change between the start and end of the KW. Risk factors for hip fracture in skilled nursing facilities: who should be evaluated? Osteoporos Int. IMPACT-Act-Downloads-and- PAC stay. Assessment at discharge at 2003;14(6):484–489. Videos.html. the end of the Medicare Part A stay 77 Freeman EE, Munoz B, Rubin G, West SK. The PAC PRD form of the data would introduce additional burden Visual field loss increases the risk of falls in older element (Ability to Hear) was included without improving the quality or adults: the Salisbury eye evaluation. Invest in a call for public comment that was usefulness of the data, and is deemed Ophthalmol Vis Sci. 2007;48(10):4445–4450. 78 Keepnews D, Capitman JA, Rosati RJ. open from August 12 to September 12, unnecessary. Measuring patient-level clinical outcomes of home 2016. This data element includes three We are inviting public comment on health care. J Nurs Scholarsh. 2004;36(1):79–85. response choices, in contrast to the these proposals. 79 Nguyen HT, Black SA, Ray LA, Espino DV, Hearing data element (in use in the MDS Markides KS. Predictors of decline in MMSE scores (b) Vision 3.0 and being proposed for among older Mexican Americans. J Gerontol A Biol We are proposing that the Vision data Sci Med Sci. 2002;57(3):M181–185. standardization), which includes four 80 Prager AJ, Liebmann JM, Cioffi GA, Blumberg response choices. Several commenters element meets the definition of DM. Self-reported Function, Health Resource Use, supported the use of the Ability to Hear standardized patient assessment data and Total Health Care Costs Among Medicare data element, although some element for impairments under section Beneficiaries With Glaucoma. JAMA 1899B(b)(1)(B)(v) of the Act. The ophthalmology. 2016;134(4):357–365. commenters raised concerns that the 81 Rovner BW, Ganguli M. Depression and three-level response choice was not proposed data element consists of the disability associated with impaired vision: the compatible with the current, four-level single Vision (Ability To See in MoVies Project. J Am Geriatr Soc. 1998;46(5):617– response used in the MDS, and favored Adequate Light) data element that 619. the use of the MDS version of the consists of one question with five 82 Tinetti ME, Ginter SF. The nursing home life- space diameter. A measure of extent and frequency Hearing data element. In addition, we response categories. For more of mobility among nursing home residents. J Am received comments stating that information on the Vision data element, Geriatr Soc. 1990;38(12):1311–1315. standardized assessment related to we refer readers to the document titled, 83 Rein DB, Wittenborn JS, Zhang X, et al. The hearing impairment has the ability to Proposed Specifications for SNF QRP Cost-effectiveness of Welcome to Medicare Visual Acuity Screening and a Possible Alternative improve quality of care if information Quality Measures and Standardized Welcome to Medicare Eye Evaluation Among on hearing is included in medical Data Elements, available at https:// Persons Without Diagnosed Diabetes Mellitus. records of patients and residents, which www.cms.gov/Medicare/Quality- Archives of ophthalmology. 2012;130(5):607–614. would improve care coordination and Initiatives-Patient-Assessment- 84 Leske M, Heijl A, Hussein M, et al. Factors for facilitate the development of patient- Instruments/NursingHomeQualityInits/ glaucoma progression and the effect of treatment: The early manifest glaucoma trial. Archives of and resident-centered treatment plans. Skilled-Nursing-Facility-Quality- Ophthalmology. 2003;121(1):48–56. Based on comments that the three-level Reporting-Program/SNF-Quality- 85 Age-Related Eye Disease Study Research G. A response choice (Ability to Hear) was Reporting-Program-Measures-and- randomized, placebo-controlled, clinical trial of not congruent with the current, four- Technical-Information.html. high-dose supplementation with vitamins c and e, beta carotene, and zinc for age-related macular level response used in the MDS Evaluation of an individual’s ability degeneration and vision loss: AREDS report no. 8. (Hearing), and support for the use of the to see is important for assessing for risks Archives of Ophthalmology. 2001;119(10):1417– such as falls and provides opportunities 1436. 75 Gage B., Smith L., Ross J. et al. (2012). The for improvement through treatment and 86 Takeda AL, Colquitt J, Clegg AJ, Jones J. Development and Testing of the Continuity the provision of accommodations, Pegaptanib and ranibizumab for neovascular Assessment Record and Evaluation (CARE) Item Set age-related macular degeneration: a systematic (Final Report on Reliability Testing, Volume 2 of 3). including auxiliary aids and services, review. The British Journal of Ophthalmology. Research Triangle Park, NC: RTI International. which can safeguard patients and 2007;91(9):1177–1182.

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impairment is important in the PAC providers and that its kappa scores from (QIES), Assessment Submission and setting for care planning and defining the PAC PRD support its validity. Some Processing System (ASAP) system. For resource use. commenters noted a preference for MDS more information on SNF QRP reporting The Vision data element that we are version of the Vision data element over through the QIES ASAP system, refer to proposing for standardization was tested the form put forward in public the ‘‘Related Links’’ section at the as part of the development of the MDS comment, citing the widespread use of bottom of https://www.cms.gov/ 3.0 and is currently in use in that this data element. A full report of the Medicare/Quality-Initiatives-Patient- assessment. Similar data elements, but comments is available at https:// Assessment-Instruments/ with different wording and fewer www.cms.gov/Medicare/Quality- NursingHomeQualityInits/ response option categories, are in use in Initiatives-Patient-Assessment- index.html?redirect=/ the OASIS–C2 and were tested in post- Instruments/Post-Acute-Care-Quality- NursingHomeQualityInits/30_ acute providers in the PAC PRD and Initiatives/IMPACT-Act-of-2014/ NHQIMDS30TechnicalInformation found to be clinically relevant, IMPACT-Act-Downloads-and- .asp#TopOfPage. In addition to the data meaningful for care planning, reliable Videos.html. currently submitted on quality measures (kappa of 0.74),87 and feasible for use in Therefore, we are proposing the as previously finalized and discussed in each of the four PAC settings. Vision data element currently in use on section VI.B.6. of this proposed rule, we Several data elements that assess the MDS. For purposes of reporting for are proposing that SNFs would be vision were presented to the TEP held the FY 2020 SNF QRP, SNFs would be required to begin submitting the by our data element contractor. The TEP required to report these data for SNF proposed standardized resident did not reach consensus on the ideal admissions at the start of the Medicare assessment data for SNF Medicare number of response categories or Part A stay that occur between October resident admissions and discharges that phrasing of response options, which are 1, 2018 and December 31, 2018. occur on or after October 1, 2018 using the primary differences between the Following the initial reporting year for the MDS, as described here. Details on current MDS and OASIS items; some the FY 2020 SNF QRP, subsequent years the modifications and assessment members preferring more granular for the SNF QRP would be based on a collection for the MDS for the proposed response options (for example, mild full calendar year of such data reporting. standardized assessment data are impairment and moderate impairment) The Vision data element would be available at https://www.cms.gov/ while others were comfortable with assessed at admission at the start of the Medicare/Quality-Initiatives-Patient- collapsed response options (that is, Medicare Part A stay only due to the Assessment-Instruments/ mild/moderate impairment). The relatively stable nature of vision NursingHomeQualityInits/Skilled- Development and Maintenance of Post- impairment, making it unlikely that a Nursing-Facility-Quality-Reporting- Acute Care Cross-Setting Standardized patient or resident’s score on this Program/SNF-Quality-Reporting- Patient Assessment Data Technical assessment would change between the Program-Measures-and-Technical- Expert Panel Summary Report is start and end of the PAC stay. Information.html. available at https://www.cms.gov/ Assessment at discharge at the end of We are inviting public comments on Medicare/Quality-Initiatives-Patient- the Medicare Part A stay would this proposal. Assessment-Instruments/Post-Acute- introduce additional burden without Care-Quality-Initiatives/IMPACT-Act-of- c. Proposed Schedule for Reporting improving the quality or usefulness of 2014/IMPACT-Act-Downloads-and- Standardized Resident Assessment Data the data, and is deemed unnecessary. Videos.html. Beginning With the FY 2019 SNF QRP We solicited public comment from We are inviting public comment on Starting with the FY 2019 SNF QRP, August 12 to September 12, 2016, on the these proposals. we are proposing to apply our current Ability to See in Adequate Light data 11. Proposals Relating to the Form, schedule for the reporting of measure element (version tested in the PAC PRD Manner, and Timing of Data Submission data to the reporting of standardized with three response categories). The Under the SNF QRP resident assessment data. Under that data element in public comment policy, except for the first program year differed from the proposed data a. Proposed Start Date for Standardized for which a measure is adopted, SNFs element, but the comments supported Resident Assessment Data Reporting by must report data on measures for SNF the assessment of vision in PAC settings New SNFs Medicare admissions that occur during and the useful information a vision data In the FY 2016 SNF PPS final rule (80 the 12-month calendar year (CY) period element would provide. The FR 46455), we adopted timing for new that apply to the program year. For the commenters stated that the Ability to SNFs to begin reporting quality data first program year for which a measure See item would provide important under the SNF QRP beginning with the is adopted, SNFs are only required to information that would facilitate care FY 2018 SNF QRP. We are proposing in report data on SNF Medicare coordination and care planning, and this proposed rule that new SNFs will admissions that occur on or after consequently improve the quality of be required to begin reporting October 1 and discharged from the SNF care. Other commenters suggested it standardized patient assessment data on up to and including December 31 of the would be helpful as an indicator of the same schedule. calendar year that applies to that resource use and noted that the item We are inviting public comment on program year. For example, for the FY would provide useful information about this proposal. 2018 SNF QRP, data on measures the abilities of patients and residents to adopted for earlier program years must care for themselves. Additional b. Proposed Mechanism for Reporting be reported for all CY 2016 SNF commenters noted that the item could Standardized Resident Assessment Data Medicare admissions that occur on or feasibly be implemented across PAC Beginning With the FY 2019 SNF QRP after October 1, 2016 and discharges Under our current policy, SNFs report that occur on or before December 31, 87 Gage B., Smith L., Ross J. et al. (2012). The data by completing applicable sections 2016. However, data on new measures Development and Testing of the Continuity of the MDS, and submitting the MDS– adopted for the first time for the FY Assessment Record and Evaluation (CARE) Item Set (Final Report on Reliability Testing, Volume 2 of 3). RAI to CMS through the Quality 2018 SNF QRP program year must only Research Triangle Park, NC: RTI International. Improvement and Evaluation System be reported for SNF Medicare

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admissions and discharges that occur Tables 20 and 21 illustrate this policy during the last calendar quarter of 2016. using the FY 2019 and FY 2020 SNF QRP as examples.

TABLE 20—SUMMARY ILLUSTRATION OF INITIAL REPORTING CYCLE FOR NEWLY ADOPTED MEASURE AND STANDARDIZED PATIENT ASSESSMENT DATA REPORTING USING CY Q4 DATA *

Proposed data submission quarterly deadlines beginning with FY 2019 Proposed data collection/submission quarterly reporting period * SNF QRP * ∧

Q4: CY 2017 10/1/2017–12/31/2017 ...... CY 2017 Q4 Deadline: May 15, 2018. * We note that submission of the MDS must also adhere to the SNF PPS deadlines. ∧ The term ‘‘FY 2019 SNF QRP’’ means the fiscal year for which the SNF QRP requirements applicable to that fiscal year must be met in order for a SNF to receive the full market basket percentage when calculating the payment rates applicable to it for that fiscal year.

TABLE 21—SUMMARY ILLUSTRATION OF CALENDAR YEAR QUARTERLY REPORTING CYCLES FOR MEASURE AND STANDARDIZED PATIENT ASSESSMENT DATA REPORTING *

Proposed data submission quarterly deadlines beginning with FY 2020 Proposed data collection/submission quarterly reporting period * SNF QRP * ∧

Q1: CY 2018 1/1/2018–3/31/2018 ...... CY 2018 Q1 Deadline: August 15, 2018. Q2: CY 2018 4/1/2018–6/30/2018 ...... CY 2018 Q2 Deadline: November 15, 2018. Q3: CY 2018 7/1/2018–9/30/2018 ...... CY 2018 Q3 Deadline: February 15, 2019. Q4: CY 2018 10/1/2018–12/31/2018 ...... CY 2018 Q4 Deadline: May 15, 2019. * We note that submission of the MDS must also adhere to the SNF PPS deadlines. ∧ The term ‘‘FY 2020 SNF QRP’’ means the fiscal year for which the SNF QRP requirements applicable to that fiscal year must be met in order for a SNF to receive the full market basket percentage when calculating the payment rates applicable to it for that fiscal year.

We are inviting comment on our Initiatives-Patient-Assessment- appreciate that collecting quality data proposal to extend our current policy Instruments/NursingHomeQualityInits/ on all SNF residents regardless of payer governing the schedule for reporting the index.html?redirect=/ source may create additional burden, quality measure data to the reporting of NursingHomeQualityInits/30_ however, we also note that the effort to standardized resident assessment data NHQIMDS30TechnicalInformation separate out SNF residents covered by beginning with the FY 2019 SNF QRP. .asp#TopOfPage. other non-FFS Medicare payers could Starting in CY 2019, SNFs would be d. Proposed Schedule for Reporting the have clinical and work flow required to submit data for the entire Proposed Quality Measures Beginning implications with an associated burden, calendar year beginning with the FY With the FY 2020 SNF QRP and we further appreciate that it is 2021 SNF QRP. common practice for SNFs to collect As discussed in section V.B.7. of this We are inviting public comment on MDS data on all residents regardless of proposed rule, we are proposing to this proposal. payer source. Additionally, we note that adopt five quality measures beginning data collected through MDS for with the FY 2020 SNF QRP: Changes in e. Input Sought on Data Reporting Related to Assessment Based Measures Medicare beneficiaries should match Skin Integrity Post-Acute Care: Pressure that beneficiary’s claims data in certain Ulcer/Injury, Application of IRF Through various means of public key respects (for example, diagnoses Functional Outcome Measure: Change input, including that through previous and procedures); this makes it easier for in Self-Care for Medical Rehabilitation rules, public comment on measures and us to evaluate the accuracy of reporting Patients (NQF #2633), Application of the Measures Application Partnership, in the MDS, such as by comparing IRF Functional Outcome Measure: we received input suggesting that we diagnoses at hospital discharge to Change in Mobility Score for Medical expand the quality measures to include diagnoses at the follow-on SNF Rehabilitation Patients (NQF #2634), all residents and patients regardless of admission. However, we would not Application of IRF Functional Outcome payer status so as to ensure have access to such claims data for non- Measure: Discharge Self-Care Score for representation of the quality of the Medicare beneficiaries. Thus, we are Medical Rehabilitation Patients (NQF services provided on the population as seeking input on whether we should #2635), and Application of IRF a whole, rather than a subset limited to require quality data reporting on all SNF Functional Outcome Measure: Discharge Medicare. While we appreciate that residents, regardless of payer, where Mobility Score for Medical many SNF residents are also Medicare feasible—noting that Part A claims data Rehabilitation Patients (NQF #2636). We beneficiaries, we agree that collecting are limited to only Medicare are proposing that SNFs would report quality data on all residents in the SNF beneficiaries. data on these measures using the MDS setting supports our mission to ensure We are seeking comments on this that is submitted through the QIES quality care for all individuals, topic. ASAP system. For the FY 2020 SNF including Medicare beneficiaries. We QRP, SNFs would be required to report also agree that collecting data on all 12. Proposal To Apply the SNF QRP these data for admissions as well patients provides the most robust and Data Completion Thresholds to the discharges that occur between October accurate reflection of quality in the SNF Submission of Standardized Resident 1, 2018 and December 31, 2018. More setting. Accurate representation of Assessment Data Beginning With the FY information on SNF reporting using the quality provided in SNFs is best 2019 SNF QRP QIES ASAP system is located at https:// conveyed using data on all SNF We have gotten questions surrounding www.cms.gov/Medicare/Quality- residents, regardless of payer. We also the data completion policy we adopted

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beginning with the FY 2018 program those circumstances, data are not comments on our proposal to codify the year, in particular for how that policy ‘‘missing’’ or incomplete. For example, SNF QRP submission exception and applies to patients who reside in the in the case of a patient who does not extension requirements. SNF for part of an applicable period (for have any of the medical conditions in a 15. SNF QRP Submission example, a patient who is admitted to a check all that apply listing, the absence Reconsideration and Appeals SNF during one reporting period but of a response indicates that the Procedures discharged in another, or a patient who condition is not present, and it would is assessed upon admission using one be incorrect to consider the absence of We refer the reader to the FY 2016 version of the MDS but assessed at such data as missing in a threshold SNF PPS final rule (80 FR 46460 discharge using another version. We determination. through 46461) for a summary of our previously finalized that SNFs must We are also proposing to apply this finalized reconsideration and appeals report all of the data necessary to policy to the submission of standardized procedures for the SNF QRP beginning calculate the measures that apply to that resident assessment data, and to codify with the FY 2018 SNF QRP. We are not program year on at least 80 percent of it at § 413.360 of our regulations. We proposing any changes to these the MDS assessments that they submit welcome comment on these proposals. procedures. However, we are proposing (80 FR 46458). We also stated, in to codify the SNF QRP Reconsideration 13. SNF QRP Data Validation and Appeals procedures at new response to a comment, that we would Requirements consider data to have been satisfactorily § 413.360. Under these procedures, a submitted for a program year if the SNF We refer readers to the FY 2016 SNF SNF must follow a defined process to reported all of the data necessary to PPS final rule (80 FR 46458 through file a request for reconsideration if it calculate the measures if the data 46459) for a summary of our approach believes that the finding of actually can be used for purposes of to the development of data validation noncompliance with the reporting such calculations (as opposed to, for process for the SNF QRP. At this time, requirements for the applicable fiscal example, the use of a dash [-]). we are continuing to explore data year is erroneous, and the SNF can file Some stakeholders have interpreted validation methodology that will limit a request for reconsideration only after our requirement that data elements be the amount of burden and cost to SNFs, it has been found to be noncompliant. necessary to calculate the measures to while allowing us to establish In order to be considered, a request for mean that if a patient is assessed, for estimations of the accuracy of SNF QRP a reconsideration must contain all of the example, using one version of the MDS data. elements outlined on our Web site at at admission and another version of the 14. SNF QRP Submission Exception and https://www.cms.gov/Medicare/Quality- MDS at discharge, the two assessments Extension Requirements Initiatives-Patient-Assessment- are included in the pool of assessments Instruments/NursingHomeQualityInits/ used to determine data completion only We refer readers to the FY 2016 SNF Skilled-Nursing-Facility-Quality- if the data elements at admission and PPS final rule (80 FR 46459 through Reporting-Program/SNF-QR- discharge can be used to calculate the 46460) for our finalized policies Reconsideration-and-Exception-and- measures. Our intention, however, was regarding submission exception and Extension.html. We stated that we not to exclude assessments on this basis. extension requirements for the FY 2018 would not review any reconsideration Rather, our intention was solely to SNF QRP. At this time, we are not request that is not accompanied by the clarify that for purposes of determining proposing any changes to the SNF QRP necessary documentation and evidence, whether a SNF has met the data requirements that we adopted in these and that the request should be emailed completion threshold, we would only final rules. However, we are proposing to CMS at the following email address: look at the completeness of the data to codify the SNF QRP Submission [email protected]. elements in the MDS for which Exception and Extension Requirements We further stated that reconsideration reporting is required under the SNF at new § 413.360. We remind readers requests sent to CMS through any other QRP. that, in the FY 2016 SNF PPS final rule channel would not be considered. We To clarify our intended policy, we are (80 FR 46459 through 46460) we stated are inviting public comments on our proposing that the for purposes of that SNF’s must request an exception or proposal to codify the SNF QRP determining whether a SNF has met the extension by submitting a written reconsideration and appeals procedures. data completion threshold, we will request along with all supporting 16. Proposals and Policies Regarding consider all whether the SNF has documentation to CMS via email to the Public Display of Measure Data for the reported all of the required data SNF Exception and Extension mailbox SNF QRP elements applicable to the program year at SNFQRPReconsiderations@ on at least 80 percent of the MDS cms.hhs.gov. We further stated that Section 1899B(g) of the Act requires assessments that they submit for that exception or extension requests sent to the Secretary to establish procedures for program year. For example, if a resident CMS through any other channel would the public reporting of SNFs’ is admitted on December 20, 2017 but not be considered as a valid request for performance, including the performance discharged on January 10, 2018, (1) the an exception or extension from the SNF of individual SNFs, on the measures resident’s 5-Day PPS assessment would QRP’s reporting requirements for any specified under section (c)(1) and be used to determine whether the SNF payment determination. In order to be resource use and other measures met the data completion threshold for considered, a request for an exception or specified under section (d)(1) of the Act the 2017 reporting period (and extension must contain all of the (collectively, IMPACT Act measures) associated program year), and (2) the requirements as outlined on our Web beginning not later than 2 years after the discharge assessment would be used to site at https://www.cms.gov/Medicare/ specified application date under section determine whether the SNF met the data Quality-Initiatives-Patient-Assessment- 1899B(a)(2)(E) of the Act. This is completion threshold for the 2018 Instruments/NursingHomeQualityInits/ consistent with the process applied reporting period (and associated Skilled-Nursing-Facility-Quality- under section 1886(b)(3)(B)(viii)(VII) of program year) We also wish to clarify in Reporting-Program/SNF-QR- the Act, which refers to the public this proposed rule that some assessment Reconsideration-and-Exception-and- display and review requirements for the data will not invoke a response and in Extension.html. We are inviting public Hospital Inpatient Quality Reporting

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(IQR) Program. In addition, for a more and we are proposing to transition from Assessment and a Care Plan That detailed discussion about the provider’s calendar year to fiscal year to make Addresses Function (NQF #2631); confidential review process prior to these measure data publicly available by Percent of Residents or Patients with public display of measures, we refer October 2018. Pressure Ulcers That Are New or readers to the FY 2017 SNF PPS final For the Medicare Spending Per Worsened (NQF #0678); and rule (81 FR 52045 through 52048). Beneficiary—PAC SNF QRP and Application of Percent of Residents In this FY 2018 SNF PPS proposed Discharge to Community—PAC SNF Experiencing One or More Falls with rule, pending the availability of data, we QRP measures, we propose public Major Injury (NQF #0674), to ensure the are proposing to publicly report data in reporting beginning in calendar year statistical reliability of the measures, we CY 2018 for the following 3 assessment- 2018 based on data collected from are proposing to assign SNFs with fewer based measures: (1) Application of discharges beginning October 1, 2016, than 20 eligible cases during a Percent of Long-Term Care Hospital through September 30, 2017 and rates performance period to a separate (LTCH) Patients With an Admission and will be displayed based on one fiscal Discharge Functional Assessment and a year of data. For the Potentially category: ‘‘The number of cases/resident Care Plan That Addresses Function Preventable 30-day Post-Discharge stays is too small to report’’. If a SNF (NQF #2631); (2) Percent of Residents or Readmission Measure for SNF QRP, we had fewer than 20 eligible cases, the Patients with Pressure Ulcers That Are are also proposing in this rule to SNF’s performance would not be New or Worsened (NQF #0678); and (3) increase the years of data used to publicly reported for the measure for Application of Percent of Residents calculate this measure from one year to that performance period. Experiencing One or More Falls with two years and to update the associated For the claims-based measures, Major Injury (NQF # 0674). Data reporting dates. If the proposed Medicare Spending Per Beneficiary— collection for these 3 assessment-based revisions to the Potentially Preventable PAC SNF QRP; Discharge to measures began on October 1, 2016. We 30-Day Post-Discharge Readmission Community—PAC SNF QRP; and are proposing to display data for the Measure for SNF QRP are finalized as Potentially Preventable 30-Day Post- assessment-based measures based on proposed, data will be publicly reported Discharge Readmission Measure for SNF rolling quarters of data, and we would for this measure beginning with QRP, to ensure the statistical reliability initially use discharges from January 1, discharges beginning October 1, 2015, of the measures, we are proposing to 2016 through December 31, 2016. through September 30, 2017 and rates assign SNFs with fewer than 25 eligible In addition, we are proposing to will be displayed based on two cases during a performance period to a publicly report 3 claims-based measures consecutive fiscal years of data. separate category: ‘‘The number of for: (1) Medicare Spending Per Also, we propose to replace the cases/resident stays is too small to Beneficiary-PAC SNF QRP; (2) assessment-based measure ‘‘Percent of report.’’ If a SNF had fewer than 25 Discharge to Community-PAC SNF QRP; Residents or Patients with Pressure eligible cases, the SNF’s performance and (3) Potentially Preventable 30-Day Ulcers That Are New or Worsened would not be publicly reported for the Post-Discharge Readmission Measure for (Short Stay) (NQF #0678) with a SNF QRP. modified version of the measure entitled measure for that performance period. These measures were adopted for the ‘‘Changes in Skin Integrity Post-Acute For Medicare Spending Per SNF QRP in the FY 2017 SNF PPS rule Care: Pressure Ulcer/Injury’’ for the SNF Beneficiary—PAC SNF QRP, to ensure to be based on data from one calendar QRP for future public reporting, if the statistical reliability of the measure, year. As previously adopted in the FY finalized. We refer readers to section we are proposing to assign SNFs with 2017 SNF PPS final rule (81 FR 52045 V.B.7.a of this proposed rule for fewer than 20 eligible cases during a through 52047), confidential feedback additional information regarding the performance period to a separate reports for these 3 claims-based proposed modification of the measure category: ‘‘The number of cases/resident measures will be based on data for quality reporting and public display. stays is too small to report.’’ If a SNF collected for discharges beginning For the assessment-based measures, has fewer than 20 eligible cases, the January 1, 2016 through December 31, Application of Percent of Long-Term SNF’s performance would not be 2016. However, our current proposal Care Hospital (LTCH) Patients With an publicly reported for the measure for revises the dates for public reporting Admission and Discharge Functional that performance period.

TABLE 22—SUMMARY OF PROPOSED MEASURES FOR CY 2018 PUBLIC DISPLAY

Proposed Measures: Percent of Residents or Patients with Pressure Ulcers that Are New or Worsened (Short Stay) (NQF #0678). Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). Application of Percent of Long-Term Care Hospital (LTCH) Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631). Potentially Preventable 30-Day Post-Discharge Readmission Measure for SNF QRP. Discharge to Community—(PAC) SNF QRP. Medicare Spending Per Beneficiary (PAC) SNF QRP.

We invite public comment on the ‘‘Changes in Skin Integrity Post-Acute feedback reports to PAC providers on proposal for the public display of these Care: Pressure Ulcer/Injury’’ described their performance on the measures 3 assessment-based measures and 3 above. specified under subsections (c)(1) and claims-based measures, and the (d)(1) of section 1899B of the Act, 17. Mechanism for Providing replacement of ‘‘Percent of Residents or beginning one year after the specified Confidential Feedback Reports to SNFs Patients with Pressure Ulcers That Are application date that applies to such New or Worsened (NQF #0678) with a Section 1899B(f) of the Act requires measures and PAC providers. In the FY modified version of the measure, the Secretary to provide confidential 2017 SNF PPS final rule (81 FR 52046

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through 52048), we finalized processes readmission measure, scoring, and other the first opportunity to replace the to provide SNF providers the topics. SNFRM with the SNFPPR would be the opportunity to review their data and In this rule, we are proposing to FY 2021 program year, which would information using confidential feedback implement requirements for the SNF give SNFs experience with the SNFRM reports that will enable SNFs to review VBP Program, as well as codify some of and other measures of readmissions their performance on the measures those requirements at § 413.338, such as those adopted under the SNF required under the SNF QRP. including certain definitions, the QRP. However, we have not yet Information on how to obtain these and process for making value-based determined if it would be practicable to other reports available to the SNF QRP incentive payments, limitations on replace the SNFRM at that time. We can be found at https://www.cms.gov/ review, and other requirements. intend to continue to analyze SNF Medicare/Quality-Initiatives-Patient- 2. Measures performance on the SNFPPR in Assessment-Instruments/ comparison to the SNFRM and assess a. Background NursingHomeQualityInits/Skilled- how the replacement of the SNFRM Nursing-Facility-Quality-Reporting- For background on the measures in with the SNFPPR will affect the quality Program/SNF-Quality-Reporting- the SNF VBP Program, we refer readers of care provided to Medicare Program-Spotlights-and- to the FY 2016 SNF PPS final rule (80 beneficiaries. Announcements.html. We are not FR 46419), where we finalized the proposing any changes to this policy. Skilled Nursing Facility 30-Day All- We again request public comments on Cause Readmission Measure (SNFRM) when we should replace the SNFRM C. Skilled Nursing Facility Value-Based (NQF #2510) that we will use for the with the SNFPPR, particularly in light Purchasing Program (SNF VBP) SNF VBP Program. We also refer readers of our proposal (discussed further in 1. Background to the FY 2017 SNF PPS final rule (81 this section) to adopt performance and FR 51987 through 51995), where we baseline periods based on the federal FY Section 215 of the Protecting Access rather than on the calendar year. to Medicare Act of 2014 (PAMA) (Pub. finalized the Skilled Nursing Facility L. 113–93) authorized the SNF VBP 30-Day Potentially Preventable c. Updates to the Skilled Nursing Program (the ‘‘Program’’) by adding Readmission Measure (SNFPPR) that we Facility 30-Day All-Cause Readmission sections 1888(g) and (h) to the Act. As will use for the SNF VBP Program Measure (NQF #2510) instead of the SNFRM as soon as a prerequisite to implementing the SNF practicable. VBP Program, in the FY 2016 SNF PPS Since finalizing the SNFRM for use in final rule (80 FR 46409 through 46426) b. Request for Comment on Measure the SNF VBP Program, we have we adopted an all-cause, all-condition Transition continued to conduct analyses using more recent data, as well as to make hospital readmission measure, as Section 1886(h)(2)(B) of the Act required by section 1888(g)(1) of the some necessary non-substantive requires us to apply the SNFPPR to the measure refinements. Results of this Act. In the FY 2017 SNF PPS final rule SNF VBP Program instead of the work and all refinements are detailed in (81 FR 51986 through 52009), we SNFRM ‘‘as soon as practicable.’’ We a Technical Report Supplement that is adopted an all-condition, risk-adjusted intend to propose a timeline for available on the following CMS Web potentially preventable hospital replacing the SNFRM with the SNFPPR site: https://www.cms.gov/Medicare/ readmission measure for SNFs, as in future rulemaking, after we have had Quality-Initiatives-Patient-Assessment- required by section 1888(g)(2) of the a sufficient opportunity to analyze the Act. In this proposed rule, we are potential effects of this replacement on Instruments/Value-Based-Programs/ making proposals related to the SNFs’ measured performance. We Other-VBPs/SNF-VBP.html. implementation of the Program. believe we must approach the decision d. Accounting for Social Risk Factors in Section 1888(h)(1)(B) of the Act about when it is practicable to replace the SNF VBP Program requires that the SNF VBP Program the SNFRM thoughtfully, and we apply to payments for services continue to welcome public feedback on We understand that social risk factors furnished on or after October 1, 2018. when it is practicable to replace the such as income, education, race and The SNF VBP Program applies to SNFRM with the SNFPPR. ethnicity, employment, disability, freestanding SNFs, SNFs affiliated with In the FY 2017 SNF PPS final rule (81 community resources, and social acute care facilities, and all non-CAH FR 51995), we summarized the public support (certain factors of which are swing-bed rural hospitals. We believe comments we received in response to also sometimes referred to as the implementation of the SNF VBP our request for when we should begin socioeconomic status (SES) factors or Program is an important step towards to measure SNFs on their performance socio-demographic status (SDS) factors) transforming how care is paid for, on the SNFPPR instead of the SNFRM. play a major role in health. One of our moving increasingly towards rewarding Commenters’ views were mixed; one core objectives is to improve beneficiary better value, outcomes, and innovations suggested that we replace the SNFRM outcomes including reducing health instead of merely volume. immediately, while others requested disparities, and we want to ensure that For additional background that we wait until the SNFPPR receives all beneficiaries, including those with information on the SNF VBP Program, NQF endorsement, or that we allow social risk factors, receive high quality including an overview of the SNF VBP SNFs to receive and understand their care. In addition, we seek to ensure that Report to Congress and a summary of SNFPPR data for at least 1 year prior to the quality of care furnished by the Program’s statutory requirements, beginning to use it. Another commenter providers and suppliers is assessed as we refer readers to the FY 2016 SNF suggested that we decline to use the fairly as possible under our programs PPS final rule (80 FR 46409 through SNFPPR until the measure receives while ensuring that beneficiaries have 46410). We also refer readers to the FY additional support from the Measure adequate access to excellent care. 2017 SNF PPS final rule (81 FR 51986 Application Partnership and is the through 52009) for discussion of the subject of additional public comment. We have been reviewing reports policies that we adopted related to the We would like to thank stakeholders prepared by the Office of the Assistant potentially preventable hospital for their input on this issue. We believe Secretary for Planning and Evaluation

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(ASPE) 88 and the National Academies were more likely to be re-hospitalized adjustment of a particular measure. of Sciences, Engineering, and Medicine but that this effect was significantly Examples of social risk factors include, on the issue of accounting for social risk smaller when the measure’s risk but are not limited to, dual eligibility/ factors in CMS’ value-based purchasing adjustment variables were applied low-income subsidy, race and ethnicity, and quality reporting programs, and (including adjustment for age, gender, and geographic area of residence. We considering options on how to address and comorbitities), and that the effect of are seeking comments on which of these the issue in these programs. On dual enrollment disappeared. In factors, including current data sources December 21, 2016, ASPE submitted a addition, being at a SNF with a high where this information would be Report to Congress on a study it was proportion of beneficiaries with social available, could be used alone or in required to conduct under section 2(d) risk factors was associated with an combination, and whether other data of the Improving Medicare Post-Acute increased likelihood of readmissions, should be collected to better capture the Care Transformation (IMPACT) Act of regardless of a beneficiary’s social risk effects of social risk. We will take 2014. The study analyzed the effects of factors. We encourage readers to commenters’ input into consideration as certain social risk factors in Medicare examine this chapter of ASPE’s report, we continue to assess the beneficiaries on quality measures and and we seek any comments on the appropriateness and feasibility of measures of resource use used in one or report’s analysis and findings. accounting for social risk factors in the more of nine Medicare value-based As we continue to consider the SNF VBP Program. We note that any purchasing programs, including the SNF analyses and recommendations from such changes would be proposed VBP Program.89 The report also these reports and await the results of the through future notice-and-comment included considerations for strategies to NQF trial on risk adjustment for quality rulemaking. account for social risk factors in these measures, we are continuing to work We look forward to working with programs. In a January 10, 2017 report with stakeholders in this process. As we stakeholders as we consider the issue of released by The National Academies of have previously communicated, we are accounting for social risk factors and Sciences, Engineering, and Medicine, concerned about holding providers to reducing health disparities in CMS that body provided various potential different standards for the outcomes of programs. Of note, implementing any of methods for measuring and accounting their patients with social risk factors the above methods would be taken into for social risk factors, including because we do not want to mask consideration in the context of how this stratified public reporting.90 potential disparities or minimize and other CMS programs operate (for As noted in the FY 2017 IPPS/LTCH incentives to improve the outcomes for example, data submission methods, PPS final rule, the NQF has undertaken disadvantaged populations. Keeping availability of data, statistical a 2-year trial period in which certain this concern in mind, while we sought considerations relating to reliability of new measures, measures undergoing input on this topic previously, we data calculations, among others), and maintenance review, and measures continue to seek public comment on we also welcome comment on endorsed with the condition that they whether we should account for social operational considerations. CMS is enter the trial period can be assessed to risk factors in the SNF VBP Program, committed to ensuring that its determine whether risk adjustment for and if so, what method or combination beneficiaries have access to and receive selected social risk factors is appropriate of methods would be most appropriate excellent care, and that the quality of for these measures. This trial entails for accounting for social risk factors. care furnished by providers and temporarily allowing inclusion of social Examples of methods include: suppliers is assessed fairly in CMS risk factors in the risk-adjustment Adjustment of the payment adjustment programs. approach for these measures. At the methodology under the SNF VBP 3. Proposed FY 2020 Performance conclusion of the trial, NQF will issue Program; adjustment of provider Standards recommendations on the future performance scores (for instance, inclusion of social risk factors in risk stratifying providers based on the We refer readers to the FY 2017 SNF adjustment for these quality measures, proportion of their patients who are PPS final rule (81 FR 51995 through and we will closely review its findings. dual eligible); confidential reporting of 51998) for a summary of the statutory The SNF VBP section of ASPE’s stratified measure rates to providers; provisions governing performance report examined the relationship public reporting of stratified measure standards under the SNF VBP Program between social risk factors and rates; risk adjustment of measures as and our finalized performance standards performance on the 30-day SNF appropriate based on data and evidence; policy, as well as the numerical values readmission measure for beneficiaries in and redesigning payment incentives (for for the achievement threshold and SNFs. Findings indicated that instance, rewarding improvement for benchmark for the FY 2019 program beneficiaries with social risk factors providers caring for patients with social year. We also responded to public risk factors or incentivizing providers to comments on these policies in that final 88 Office of the Assistant Secretary for Planning achieve health equity). While we rule. and Evaluation. 2016. Report to Congress: Social consider whether and to what extent we In this proposed rule, we are Risk Factors and Performance Under Medicare’s currently have statutory authority to providing estimates of the numerical Value-Based Purchasing Programs. Available at https://aspe.hhs.gov/pdf-report/report-congress- implement one or more of the above- values of the achievement threshold and social-risk-factors-and-performance-under- described methods, we are seeking the benchmark for the FY 2020 program medicares-value-based-purchasing-programs. comments on whether any of these year. We have based these values on the 89 Office of the Assistant Secretary for Planning methods should be considered, and if FY 2016 MedPAR files including a 3- and Evaluation. 2016. Report to Congress: Social month run-out period. We intend to Risk Factors and Performance Under Medicare’s so, which of these methods or Value-Based Purchasing Programs. Available at combination of methods would best include the final numerical values in https://aspe.hhs.gov/pdf-report/report-congress- account for social risk factors in the SNF the FY 2018 SNF PPS final rule. social-risk-factors-and-performance-under- VBP Program. However, as finalized in the FY 2017 medicares-value-based-purchasing-programs. In addition, we are seeking public SNF PPS final rule (81 FR 51998), if we 90 National Academies of Sciences, Engineering, and Medicine. 2017. Accounting for social risk comment on which social risk factors are unable to complete the necessary factors in Medicare payment. Washington, DC: The might be most appropriate for stratifying calculations in time to include the final National Academies Press. measure scores and/or potential risk numerical values in the FY 2018 SNF

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PPS final rule, we will publish the email and a posting on the QualityNet FY 2019 program year. The estimated numerical values not later than 60 days News portion of the Web site. numerical values for the achievement prior to the beginning of the Additionally, as discussed further threshold and benchmark in Table 23 performance period that applies to the below, we are proposing to adopt reflect this proposal by using FY 2016 FY 2020 program year, and we will baseline and performance periods for claims data. As we have done in prior notify SNFs and the public of those final the FY 2020 program year based on the rulemaking, we have inverted the numerical values through a listserv federal fiscal year rather than the SNFRM rates in Table 23 so that higher calendar year as we had finalized for the values represent better performance.

TABLE 23—ESTIMATED FY 2020 SNF VBP PROGRAM PERFORMANCE STANDARDS

Achievement Measure ID Measure description threshold Benchmark

SNFRM ...... SNF 30-Day All-Cause Readmission Measure (NQF #2510) ...... 0.80218 0.83721

We welcome public comments on provide a sufficiently reliable and valid outweighs any cost to SNFs associated these estimated achievement threshold data set for the SNF VBP Program. We with including a single quarter’s and benchmark values. also continue to believe that, where SNFRM data in their SNF performance possible and practicable, the baseline scores twice. 4. Proposed FY 2020 Performance and performance period should be However, as an alternative, we request Period and Baseline Period aligned in length and in months comments on whether or not we should a. Background included in the selections. Taking those instead consider adopting for the FY We refer readers to the FY 2016 SNF considerations and beliefs into account, 2020 Program a one-time, three-quarter PPS final rule (80 FR 46422) for a we propose to adopt FY 2018 (October performance period of January 1, 2018, discussion of the considerations that we 1, 2017, through September 30, 2018) as through September 30, 2018, and a one- took into account when specifying the performance period for the FY 2020 time, three-quarter baseline period of performance periods under the SNF SNF VBP Program, with FY 2016 January 1, 2016 through September 30, VBP Program. Based on those (October 1, 2015, through September 30, 2016 in order to avoid the overlap in considerations, as well as public 2016) as the baseline period for performance period quarters that we comment, we adopted CY 2017 as the purposes of calculating performance describe above. We believe this option performance period for the FY 2019 standards and measuring improvement. could provide us with sufficiently SNF VBP Program, with a This proposed policy, will, if finalized, reliable SNFRM data for purposes of the corresponding baseline period of CY give us an additional 3 months between Program’s scoring while ensuring that 2015. the conclusion of the performance SNFs are not scored on the same quality period and the 60-day notification measure data in successive Program b. FY 2020 Proposals deadline prescribed by section years. However, we note that the shorter Although we continue to believe that 1888(h)(7) of the Act to complete the measurement period could result in a 12-month performance and baseline activities described above. lower denominator counts and seasonal period are appropriate for the Program, We are aware that making this variations in care, as well as disparate we are concerned about the operational transition from the calendar year to the effects of cold weather months on SNFs’ challenges of linking the 12-month federal FY will result in our measuring care could also create variations in periods to the calendar year. SNFs on their performance during Q4 of quality measurement, and could Specifically, the allowance of an 2017 (October 1, 2017, through potentially disproportionately affect approximately 90-day claims run out December 31, 2017) for both the FY SNFs in different areas of the country. period following the last date of 2019 program year and the FY 2020 Under this alternative, we would discharge, coupled with the length of program year. During the FY 2019 resume a 12-month performance and time needed to calculate the measure program year, that quarter will fall at the baseline period beginning with the FY rates using multiple sources of claims end of the finalized performance period 2021 program year needed for statistical modeling, (January 1, 2017, through December 31, We welcome public comments on our determine achievement and 2017), while during the FY 2020 proposal and alternative. In addition, as improvement scores, allow SNFs to program year, that quarter will fall at the we continue considering potential review their measure rates, and beginning of the proposed performance policy changes once we replace the determine the amount of payment period (October 1, 2017, through SNFRM with the SNFPPR, we also seek adjustments could risk delay in meeting September 30, 2018). We believe that, comment on whether or not we should requirement at section 1888(h)(7) of the on balance, this overlap in data is more consider other potential performance Act to notify SNFs of their value-based beneficial than the alternative. We and baseline periods for that measure. incentive payment percentages not later considered proposing not to use that We specifically request comments on than 60 days prior to the fiscal year quarter of measured performance during whether or not we should attempt to involved. the FY 2020 program year, but, as a align the SNF VBP Program’s We therefore considered what policy result, we would be left with fewer than performance and baseline periods with options we had to mitigate this risk and 12 months of data with which to score other CMS value-based purchasing ensure that we comply with the SNFs under the program. As we have programs, such as the Hospital VBP statutory deadline to notify SNFs of stated, we believe it is important to use Program or Hospital Readmissions their payment adjustments under the 12 months of data to avoid seasonality Reduction Program, which could mean Program. issues and to assess SNFs fairly. We proposing to adopt performance and We continue to believe that a 12- therefore believe that meeting these baseline periods that run from July 1st month performance and baseline period operational challenges, in total, to June 30th.

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5. SNF VBP Performance Scoring b. Request for Comments on Policies for payment adjustment. We intend to Facilities With Zero Readmissions address this topic in future rulemaking, We refer readers to the FY 2017 SNF During the Performance Period and we request public comments on PPS final rule (81 FR 52000 through In our analyses of historical SNFRM what accommodations, if any, we 52005) for a detailed discussion of the should employ to ensure that SNFs scoring methodology that we have data, we identified a unit imputation issue associated with certain SNFs’ meeting our quality goals are not finalized for the Program, along with penalized under the Program. We responses to public comments on our measured performance. Specifically, we found that a small number of facilities specifically request comments on the policies and examples of scoring form this potential accommodation calculations. had zero readmissions during the applicable performance period. An should take. a. Proposed Rounding Clarification for observed readmission rate of zero is a c. Request for Comments on SNF VBP Scoring desirable outcome; however, due to risk- Extraordinary Circumstances Exception adjustment and the statistical approach Policy In the FY 2017 SNF PPS final rule (81 used to calculate the measure, outlier FR 52001), we adopted formulas for values are shifted towards the mean, In other value-based purchasing scoring SNFs on achievement and particularly for smaller SNFs. As a programs, such as the Hospital VBP improvement. The final step in these result, observed readmission rates of Program (see 78 FR 50704 through calculations is rounding the scores to zero result in risk-standardized 50706), as well as several of our quality the nearest whole number. readmission rates that are greater than reporting programs, we have adopted Extraordinary Circumstances Exceptions As we have continued examining zero. Analysis conducted by our policies intended to allow participating SNFRM data, we have identified a measure development contractor revealed that it may be possible— facilities to receive administrative relief concern related to that rounding step. from program requirements due to Specifically, we are concerned that although rare—for SNFs with zero readmissions to receive a negative natural disasters or other circumstances rounding SNF performance scores to the beyond the facility’s control that may nearest whole number is insufficiently value-based incentive payment adjustment. We are concerned that affect the facility’s ability to provide precise for purposes of establishing high-quality health care. value-based incentive payments under assigning a net negative value-based incentive payment to a SNF that We are considering whether or not the Program. Rounding scores in this this type of policy would be appropriate manner has the effect of producing achieved zero readmissions during the applicable performance period would for the SNF VBP Program. We intend to significant numbers of tie scores, since address this topic in future rulemaking. SNFs have between 0 and 100 points not support the Program’s goals. We considered our policy options for We therefore request public comments available under the Program, and we on whether or not we should implement estimate that more than 16,000 SNFs SNFs that could be affected by this issue, including excluding SNFs with such a policy, and if so, the form the will participate in the Program. As policy should take and the authority we discussed further in this section, the zero readmissions from the Program entirely in order to ensure that they are should employ. If we propose such a exchange function methodology that we policy in the future, our preference are proposing to adopt is most easily not unduly harmed by being assigned a non-zero RSRR by the measure’s would be to align it with the implemented when we are able to Extraordinary Circumstances Exception differentiate precisely among SNF finalized methodology. However, because the Program’s statute requires policy adopted under our other quality performance scores in order to provide programs. each SNF with a unique value-based us to include all SNFs in the Program, incentive payment percentage. we do not believe we have the authority 6. SNF Value-Based Incentive Payments to exclude any SNFs from the payment a. Proposed Exchange Function We therefore propose to change the withhold and from value-based rounding policy from that previously incentive payments. We also considered We refer readers to the FY 2017 SNF finalized for SNF VBP Program scoring proposing to replace SNF performance PPS final rule (81 FR 52005 through methodology, and instead to award scores for those SNFs in this situation 52006) for discussion of four possible points to SNFs using the formulas that with the median SNF performance exchange functions that we considered we adopted in last year’s rule by score. But because we must pay SNFs adopting in order to translate SNFs’ rounding the results to the nearest ten- ranked in the lowest 40 percent less performance scores into value-based thousandth of a point. Using significant than the amount they would otherwise incentive payments. We have created digits terminology, we propose to use no be paid in the absence of the SNF VBP, new graphical representations of the more than five significant digits to the we do not believe that assigning these four functions that we have considered right of the decimal point when SNFs the median performance rate on in the past—linear, cube, cube root, and calculating SNF performance scores and the applicable measure would logistic—and present those updated subsequently calculating value-based necessarily protect them from receiving representations here. We note that the incentive payments. We view this net negative value-based incentive actual exchange functions’ forms and policy change as necessary to ensure payments, even though they had slopes will vary depending on the that the Program scores SNFs as accomplished a clinical goal set out distributions of SNFs’ performance precisely as possible and to ensure that specifically by the Program. scores from the FY 2019 performance value-based incentive payments reflect We are considering different policy period, and wish to emphasize that SNF performance scores as accurately as options to ensure that SNFs achieving these representations are presented possible. zero readmissions among their patient solely for the reader’s clarity as we We welcome public comments on this populations during the performance discuss our proposed exchange function proposal. period do not receive a negative policy.

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We have continued examining payment and to make reduced payments in value-based incentive payments than historical SNFRM data while to lower performing SNFs. We also the number of SNFs for which a considering our policy options for this considered our desire to avoid reduction is applied to their Medicare program. We have attempted to assess unintended consequences of the payments, as well as the incentive for how each of the four possible exchange Program’s incentive payments, SNFs to reduce hospital readmissions. functions that we set out in the FY 2017 particularly since the Program is limited We hold this view because we believe SNF PPS final rule, as well as potential by statute to using a single measure at that the Program will be most effective variations, would affect SNFs’ incentive a time, and our view that an equitable at encouraging SNFs to improve the payments under the Program. We distribution of value-based incentive quality of care that they provide to specifically considered the effects of the payments would be most appropriate to Medicare beneficiaries if SNFs have the statutory constraints on the Program’s ensure that all SNFs, including SNFs opportunity to earn incentives, rather value-based incentive payments and our serving at-risk populations, could than simply avoid penalties, through belief that in order to create an effective potentially qualify for incentive high performance on the applicable incentive payment program, SNFs’ payments. quality measure. We also believe that value-based incentive payments must be In our view, important factors when SNFs must have incentives to reduce widely distributed to reward higher adopting an exchange function include hospital readmissions for their patients performing SNFs through increased the number of SNFs that receive more

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no matter where their performance lies We recognize that aligning payment with adjustment would enable us to in comparison to their peers. methodologies would help stakeholders make a positive payment adjustment to Taking those considerations into that use VBP payment information a slightly greater number of SNFs than account, we analyzed the four exchange across care settings better understand we would be able to make using the functions on which we have previously the SNF VBP payment methodology. logistic function. However, we were sought comment—linear, cube, cube Both the Hospital VBP program and concerned with the additional root, and logistic—as well as variations QPP use some form of a linear exchange complexity involved in implementing of those exchange functions. We scored function for payment. Three key this type of two-step adjustment to the SNFs using historical SNFRM data and program aspects that facilitate the use of linear exchange function. modeled SNFs’ value-based incentive a linear exchange function are the Taking all of these considerations into payments using each of the functions in programs’ number of measures, measure account, we propose to adopt a logistic turn. We evaluated the distribution of weights, and correlation across program function for the FY 2019 SNF VBP value-based incentive payments that measures. These three aspects in Program and subsequent years. Under resulted from each function, as well as tandem contribute to the approximately this policy, we will: the number of SNFs with positive normal distribution of scores expected 1. Estimate Medicare spending on payment adjustments and the value- in the Hospital VBP program and QPP. SNF services for the FY 2019 payment based incentive payment percentages No single measure is the key driver that year; that resulted from each function. We might ‘‘tilt’’ scores to a non-normal 2. Estimate the total amount of also evaluated the functions’ results for distribution. Since both programs are reductions to SNFs’ adjusted Federal the statutory requirements in section required to be budget neutral, our per diem rates for that year, as required 1888(h)(5)(C)(ii) of the Act, including modeling estimates that scores translate by statute; the requirements in subclause (I) that into an approximately equal number of 3. Calculate the amount realized the percentage be based on the SNF providers with positive payment under the payback percentage proposal performance score for each SNF, in adjustments and providers receiving a (discussed further below); subclause (II) that the application of all net payment reduction. 4. Order SNFs by their SNF such percentages results in an In contrast, the SNF VBP payment performance scores; and appropriate distribution, and in items adjustment is driven, in part, by two 5. Assign a value-based incentive (aa), (bb), and (cc) of subclause (II), specific SNF VBP statutory payment multiplier to each SNF that specifying that SNFs with the highest requirements: The program use of a corresponds to a point on the logistic rankings receive the highest value-based single measure; and the requirement exchange function that corresponds to incentive payment amounts, that SNFs that the total amount of value-based its SNF performance score. with the lowest rankings receive the incentive payments for all SNFs in a As proposed and discussed further in lowest value-based incentive payment fiscal year be between 50 and 70 percent this proposed rule, we will model the amounts, and that the SNFs in the of the total amount of reductions to logistic exchange function in such a lowest 40 percent of the ranking receive payments for that fiscal year, as form that the estimated total amount of a lower payment rate than would estimated by the Secretary. Our analysis value-based incentive payments equals otherwise apply. of the linear exchange function showed not more than 60 percent of the amounts In our analyses, of the four baseline that more SNFs would receive a net withheld from SNFs’ claims. While the functions, we found that the logistic payment reduction than a payment function’s specific form will also function maximized the number of incentive because the total amount depend on the distribution of SNF SNFs with positive payment available for incentive payments in a performance scores during the adjustments among SNFs measured fiscal year is limited to between 50 and performance period, the formula that we using the SNFRM. We also found that 70 percent of the total amount of the have used to construct the logistic the logistic function best fulfills the reduction to SNF payments for that exchange function and that we intend to requirement that the SNFs in the lowest fiscal year. The linear exchange function use for FY 2019 program calculations is: 40 percent of the ranking receive a also results in the provision of a net lower payment rate than would payment reduction to a higher otherwise apply, resulted in an percentage of SNFs that exceeded the appropriate distribution of value-based 50th percentile of national performance, incentive payment percentages, and relative to the logistic payment function. where xi is the SNF’s performance score. fulfilled the other statutory We believe that these finding are unique We welcome public comments on this requirements described in this proposed to the SNF VBP program, relative to proposal, and in particular, on whether rule. Specifically, we noted that the other fee-for-service Medicare programs, a linear function with adjustment would logistic function provided a broad range because of the limitation on the total alternatively be feasible for the SNF of SNFs with net-positive value-based amount that we can use for incentive VBP Program, potentially beginning incentive payments, and while it did payments, coupled with the use of a with FY 2019. not provide the highest value-based single measure and the corresponding b. Payback Percentage Proposal incentive payment percentage to the top scoring distribution. performers of all of the functions, we In addition to the four baseline Section 1888(h)(6)(A) of the Act viewed the number of SNFs with functions described further above, we requires the Secretary to reduce the positive payment adjustments as a more considered adjusting the linear function adjusted federal per diem rate important consideration than the in order to be able to make positive determined under section 1888(e)(4)(G) highest value-based incentive payment payment adjustments to a greater of the Act otherwise applicable to a SNF percentages being awarded. number of SNFs. Specifically, we tested for services furnished by that SNF We also considered alignment of VBP an alternative where we reduced the during a fiscal year by the applicable payment methodologies across fee-for- baseline linear function by 20 percent, percent (which, under section service Medicare VBP programs, then redistributed the resulting funds to 1888(h)(6)(B) of the Act is 2 percent for including the Hospital VBP program the middle 40 percent of SNFs. We FY 2019 and succeeding fiscal years) to and Quality Payment Program (QPP). found that the use of this linear function fund the value-based incentive

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payments for that fiscal year. Section We note also that the Medicare b. Review and Corrections Process: 1888(h)(5)(C)(ii)(III) of the Act further Payment Advisory Commission’s Phase Two specifies that the total amount of value- research has shown that for-profit SNFs’ In the FY 2017 SNF PPS final rule (81 based incentive payments under the average Medicare margins are FR 52007 through 52009), we adopted a 91 Program for all SNFs in a fiscal year significantly positive, though not-for- two-phase review and corrections must be greater than or equal to 50 profit SNFs’ average Medicare margins process for SNFs’ quality measure data percent, but not greater than 70 percent, are substantially lower, and we request that will be made public under section of the total amount of the reductions to comment on the extent to which that 1888(g)(6) of the Act and SNF payments for that fiscal year under the should be considered in our policy. We performance information that will be Program, as estimated by the Secretary. also recognize that there is some made public under section 1888(h)(9) of Thus, we must decide what percentage evidence that not-for-profit SNFs tend to the Act. We explained that we would of the total amount of the reductions to perform better on measures of hospital accept corrections to the quality payments for a fiscal year we will pay 92 readmissions than for-profit SNFs, and measure data used to calculate the as value-based incentive payments to we request comment on whether our measure rates that is included in any SNFs based on their performance under proposed payback percentage SNF’s quarterly confidential feedback the Program for that fiscal year. appropriately balances Medicare’s long- As with our exchange function report, and also that we would provide term sustainability with the need to SNFs with an annual confidential proposal described in this proposed provide strong incentives for quality rule, we view the important factors feedback report containing the improvement to top-performing but performance information that will be when specifying a payback percentage lower-margin SNFs. as the number of SNFs that receive a made public. We detailed the process positive payment adjustment and the We welcome public comments on this for requesting Phase One corrections marginal incentives for all SNFs to proposal. and finalized a policy whereby we would accept Phase One corrections to reduce hospital readmissions and make 7. SNF VBP Reporting broad-based care quality improvements, SNFs’ quarterly reports through March as well as the Medicare Program’s long- a. Confidential Feedback Reports 31 following the report’s issuance via term sustainability through the the CASPER system. additional estimated Medicare trust We refer readers to the FY 2017 SNF In this proposed rule, we are fund savings. We intend for the PPS final rule (81 FR 52006 through proposing to adopt additional specific proposed payback percentage to 52007) for discussion of our intention to requirements for the Phase Two review appropriately balance these factors. We use the QIES system CASPER files to and correction process. Specifically, we analyzed the distribution of value-based fulfill the requirement in section are proposing to limit Phase Two incentive payments using historical 1888(g)(5) of the Act that we provide correction requests to the SNF’s data, focusing on the full range of quarterly confidential feedback reports performance score and ranking because available payback percentages. to SNFs on their performance on the all SNFs would have already had the Taking these considerations into Program’s measures. We also responded opportunity to correct their quality account, we propose that the total in that final rule to public comments on measure data through the Phase One amount of funds that would be available the appropriateness of the QIES system. corrections process. to pay as value-based incentive We provided SNFs with a test report We are proposing to provide these payments in a fiscal year would be 60 in September 2016, followed by data on reports to SNFs at least 60 days prior to percent of the reductions to payments SNFs’ CY 2013 performance on the the FY involved. SNFs will not be otherwise applicable to SNF Medicare SNFRM in December 2016 and SNFs’ allowed to request corrections to their value-based incentive payment payments for that fiscal year, as CY 2014 performance on the SNFRM in adjustments. However, we will make estimated by the Secretary. We believe March 2017. We intend to continue confirming corrections to a SNF’s value- that 60 percent is the most appropriate providing SNFs with their performance based incentive payment adjustment if a payback percentage to balance the data each quarter as required by the SNF successfully requests a correction considerations described in this statute. proposed rule. to its SNF performance score. We note that we intend to monitor the We welcome feedback from SNFs on As with Phase One, we propose that effects of the payback percentage policy the contents of the quarterly reports and Phase Two correction requests must be on Medicare beneficiaries, on what additional elements, if any, we submitted to the SNFVBPinquiries@ participating SNFs, and on their should consider including that would cms.hhs.gov mailbox, and must contain measured performance closely. We be useful for quality improvement the following information: intend to consider proposing to adjust efforts. We specifically seek comment • SNF’s CMS Certification Number the payback percentage in future on what patient-level data would be (CCN); rulemaking. In our consideration, we most helpful to SNFs if they were to • SNF Name; would include the program’s effects on request such data from us as part of • The correction requested and the readmission rates, potential unintended their quality improvement efforts. SNF’s basis for requesting the consequences of SNF care to correction. beneficiaries included in the measure, 91 Medicare Payment Advisory Commission, Specifically, the SNF must identify and SNF profit margins. Since the SNF March 2017 Report to the Congress, ch. 8: Skilled the error for which it is requesting VBP Program is a new, single measure nursing facility services, Table 8–6. http:// correction, and explain the reason for medpac.gov/docs/default-source/reports/mar17_ value-based purchasing program and entirereport.pdf. requesting the correction. The SNF must will continue to evolve as we 92 Neuman, M.D., Wirtalla, C., Werner, R.M. also submit documentation or other implement it—including, for example, Association Between Skilled Nursing Facility evidence, if available, supporting the changing from the SNF Readmission Quality Indicators and Hospital Readmissions. request. As noted above, corrections JAMA. 2014;312(15):1542–1551. doi:10.1001/ requested during Phase Two will be Measure to the SNFPPR as required by jama.2014.13513. Retrieved from http:// statute—we intend to evaluate its effects jamanetwork.com/journals/jama/fullarticle/ limited to SNFs’ performance score and carefully. 1915609. ranking. However, we note that the

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[email protected] mailbox performance on the Program. In that surveys are used by us and the Medicaid cannot receive secured email messages. rule, we discussed the statutory state agency as the basis for a If any SNF believes it needs to submit requirements to order SNF performance determination to enter into, deny, or patient-sensitive information as part of scores from low to high and publish terminate a provider agreement with the a correction request, we request that the those rankings on both the Nursing facility, or to impose a remedy or SNF contact us at the mailbox to arrange Home Compare and QualityNet Web remedies on a facility, as appropriate. a secured transfer. sites, and to publish the ranking after To assess compliance with federal We further propose that SNFs must August 1, 2018, when performance participation requirements, surveyors make any correction requests no later scores and value-based incentive conduct onsite inspections (surveys) of than 30 days following the date of our payment adjustments will be made facilities. In the survey process, posting of their annual SNF available to SNFs. We intend to publish surveyors gather evidence and directly performance score report via the QIES the ranking for each program year once observe the actual provision of care and system CASPER files. For example, if performance scores and value-based services to residents and the effect or we post the reports on August 1, 2017, incentive payment adjustments are possible effects of that care to assess SNFs must review these reports and made available to SNFs. whether the care provided meets the submit any correction requests by 11:59 Having considered those statutory assessed needs of individual residents. p.m. Eastern Standard Time on August requirements, we propose to rank SNFs Sections 1819(g) and 1919(g) of the 31, 2017 (or the next business day, if the for the FY 2019 program year and to Act, and corresponding regulations at 42 30th day following the date of the publish the ranking after August 1, CFR part 488, subpart E, specify the posting is a weekend or federal holiday). 2018. We further propose that the requirements for the types and We will not consider any requests for ranking include the following data periodicity of surveys that are to be corrections to SNF performance scores elements: performed for each facility. Specifically, or rankings that are received after this • Rank, sections 1819(g)(2) and 1919(g)(2) of the deadline. • Provider ID, Act reference standard, special, and We will review all timely Phase Two • Facility name, extended surveys. Sections 1819(g)(2)(E) correction requests that we receive and • Address, and 1919(g)(2)(E) of the Act specify that will provide responses to SNFs that • Baseline period (CY 2015) risk- surveys under section 1819(g)(2) of the have requested corrections as soon as standardized readmission rate, Act in general must consist of a practicable. We will re-issue an updated • Performance period (CY 2017) risk- multidisciplinary team of professionals, SNF performance score report to any standardized readmission rate, including a registered nurse. In SNF that requests a correction with • Achievement score, addition, the statutory requirements which we agree, and if necessary, will • Improvement score, and governing the investigation of update any public postings on Nursing • SNF performance score. complaints and for monitoring on-site a Home Compare and value-based We believe that these data elements SNF’s or NF’s compliance with incentive payment percentages, as will provide consumers and other participation requirements are found in applicable. stakeholders with the necessary sections 1819(g)(4) and 1919(g)(4) of the We welcome public comments on this information to evaluate SNFs’ Act and § 488.332. proposed Phase Two corrections performance under the program, These sections specify that a process. including each component of the SNF specialized team, including an attorney, performance score, including both an auditor, and appropriate health care c. SNF VBP Program Public Reporting professionals may be maintained and Proposal achievement and improvement. We welcome public comments on these utilized in the investigation of We refer readers to the FY 2017 SNF proposals. We will address rankings for complaints for the purpose of PPS final rule (81 FR 52009) for future program years in subsequent identifying, surveying, gathering and discussion of the statutory requirements rulemaking. preserving evidence, and carrying out governing the public reporting of SNFs’ appropriate enforcement actions against performance information under the SNF D. Survey Team Composition SNFs and NFs, respectively. Consistent with the statutory VBP Program. We also sought and 1. Background responded to public comments on provisions noted above, two separate issues that we should take into account To participate in the Medicare and regulations address survey team when posting performance information Medicaid programs, long term care composition. The implementing on Nursing Home Compare or a facilities, including skilled nursing regulation at § 488.314, Survey Teams, successor Web site. facilities (SNFs) in Medicare and reflects the statutory language under We propose to begin publishing SNF nursing facilities (NFs) in Medicaid, sections 1819(g)(2)(E)(i) and performance information under the SNF must be certified as meeting Federal 1919(g)(2)(E)(i) of the Act, and states VBP Program on Nursing Home participation requirements, which are that ‘‘[s]urvey teams must be conducted Compare not later than October 1, 2017. specified in 42 CFR part 483. Section by an interdisciplinary team of We will only publish performance 1864(a) of the Act authorizes the professions, which must include a information for which SNFs have had Secretary to enter into agreements with registered nurse.’’ The implementing the opportunity to review and submit state survey agencies to determine regulation at § 488.332, investigation of corrections. We welcome comments on whether SNFs meet the federal complaints of violations and monitoring this proposal. participation requirements for Medicare of compliance, reflects the statutory and section 1902(a)(33)(B) of the Act language under sections 1819(g)(4) and d. Proposed Ranking of SNFs’ provides for state survey agencies to 1919(g)(4) of the Act, and states that the Performance perform the same survey tasks for NFs state survey agency may use a We refer readers to the FY 2017 SNF participating or seeking to participate in specialized team, which may include an PPS final rule (81 FR 52009) for the Medicaid program. We also conduct attorney, auditor, and appropriate discussion of the statutory requirement surveys directly and also contract out health professionals, but not necessarily that we rank SNFs based on their for certain surveys. The results of these a registered nurse, to investigate

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complaints and conduct on-site survey team consist of an it aligns with the schedule we monitoring. A survey conducted to interdisciplinary team that must include previously set for this measure. monitor on-site a SNF’s or NF’s a registered nurse. Complaint surveys Specifically, we previously finalized compliance with participation and surveys related to on-site that for the PY 2018 ESRD QIP, the requirements, such as an on-site revisit monitoring, including revisit surveys, performance period for this measure survey to determine whether a are subject to the requirements of would be from October, 1, 2015 through noncompliant facility has achieved sections 1819(g)(4) and 1919(g)(4) of the March 31, 2016, which is consistent substantial compliance, is also subject Act and § 488.332, which allow the state with the length of the 2015–2016 to the provisions of § 488.332, and not survey agency to use a specialized influenza season (79 FR 66209), and that § 488.314. investigative team that may include for the PY 2019 ESRD QIP, the The regulation under § 488.308(e) also appropriate health care professionals performance period for this measure addresses complaint investigations, but but need not include a registered nurse. would be from October, 1, 2016 through as currently written, it combines special 2. Major Provisions March 31, 2017, which is consistent surveys, which are authorized under with the length of the 2016–2017 sections 1819(g)(2)(A)(iii)(II) and We propose to make changes to influenza season (80 FR 69059–60). 1919(g)(2)(A)(iii)(II) of the Act, with the §§ 488.30, 488.301, 488.308, and Maintaining the performance period we requirements associated with the 488.314 to clarify the regulatory finalized in the CY 2017 ESRD PPS final investigations of complaints, which are requirements for team composition for rule would result in scoring facilities on governed by sections 1819(g)(4) and surveys conducted for investigating a the same data twice, and would not be 1919(g)(4) of the Act. In the statute, complaint and to align regulatory consistent with our intended schedule ‘‘special surveys’’ are referenced at provisions for investigation of to collect data on the measure in sections 1819(g)(2)(A)(iii)(II) and complaints with the statutory successive influenza seasons. Therefore, 1919(g)(2)(A)(iii)(II) of the Act, while requirements found in sections 1819 we are proposing to revise the the investigation of complaints is and 1919 of the Act. performance period for the NHSN HCP referenced at sections 1819(g)(4) and (1) Proposed revision of the definition Influenza Vaccination Reporting 1919(g)(4) of the Act. of ‘‘complaint survey’’ under § 488.30 to Measure for the PY 2020 ESRD QIP. The regulations as currently written add a provision stating that the Specifically, we are proposing that for do not clearly indicate which survey requirements of sections 1819(g)(4) and the PY 2020 ESRD QIP, the performance team requirement applies to complaint 1919(g)(4) of the Act and § 488.332 period for this measure would be surveys. The language at § 488.314 apply to complaint surveys. October 1, 2017, through March 31, could be broadly interpreted to cover (2) Proposed revision of the definition 2018, which is consistent with the the survey team composition for all of ‘‘abbreviated standard survey’’ under length of the 2017–2018 influenza surveys, including those used to § 488.301 to clarify that abbreviated season. investigate a complaint. Such an standard surveys conducted to We seek comments on this proposal. interpretation, however, would ignore investigate a complaint or to conduct the provisions of § 488.332, which allow on-site monitoring to verify compliance VI. Possible Burden Reduction in the a state survey agency to utilize a with participation requirements are Long-Term Care Requirements specialized investigative team that does subject to the requirements of § 488.332. A. Background not necessarily include a registered (3) Proposed relocation of the nurse to survey a facility in connection requirements included in § 488.308(e)(2) On October 4, 2016, we issued a final with a complaint investigation. The and (3) related to surveys conducted to rule entitled, ‘‘Medicare and Medicaid placement of surveys to investigate a investigate a complaint from under the Programs; Reform of Requirements for complaint together with special surveys heading ‘‘Special Surveys’’ to a new Long-Term Care Facilities’’ (81 FR under § 488.308(e) further places into subsection, titled ‘‘Investigations of 68688). This final rule significantly question which survey team Complaints.’’ revised the requirements that Long- requirement applies to complaint (4) Proposed revision of the language Term Care (LTC) facilities must meet to surveys. However, CMS’ State at § 488.314(a)(1) to specify that the participate in the Medicare and Operations Manual (SOM) (Internet team composition requirements at Medicaid programs. Prior to the final Only Manual Pub. 100–07) notes that § 488.314(a)(1) apply only to surveys rule, the LTC requirements had not been ‘‘Section 488.332 provides the Federal under sections 1819(g)(2) and 1919(g)(2) comprehensively reviewed and updated regulatory basis for the investigation of of the Act. since 1991 (56 FR 48826, September 26, complaints about nursing homes,’’ thus 1991), despite substantial changes in E. Proposal To Correct the Performance indicating CMS’ view that provisions service delivery in this setting. The final Period for the National Healthcare related to survey team composition in rule included revisions that reflect § 488.332 apply to complaint surveys. Safety Network (NHSN) Healthcare advances in the theory and practice of See SOM, Ch. 5, Section 5300; see also Personnel (HCP) Influenza Vaccination service delivery and safety. In addition, SOM, Ch. 7, Sections 7203.5 and Immunization Reporting Measure in the the various revisions sought to achieve 7205.2(3). End-Stage Renal Disease (ESRD) Quality broad-based improvements in the The lack of clarity as to which Incentive Program (QIP) for Payment quality of health care provided in LTC regulatory provision, that is, § 488.314 Year (PY) 2020 facilities and in patient safety. or § 488.332, applies to the survey team In the CY 2017 ESRD PPS final rule We received mixed reactions from composition related to the investigation (81 FR 77834), we finalized that the stakeholders in response to our revision of complaints has been the cause of performance period for the NHSN of the LTC requirements. Overall, recent administrative litigation. We thus Healthcare Personnel Influenza stakeholders supported the regulation’s believe that regulatory changes are Vaccination Reporting Measure for focus towards person-centered care and needed to clarify that only surveys Payment Year (PY) 2020 would be from agreed that reforms to the existing conducted under sections 1819(g)(2) October 1, 2016, through March 31, requirements were necessary to ensure and 1919(g)(2) of the Act are subject to 2017 (81 FR 77915). We are proposing high quality care and quality of life in the requirement at § 488.314 that a to revise that performance period so that LTC facilities. While supportive of the

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goals of the regulation, stakeholders amount of time that they must be is achieving intended objectives to noted that the changes needed to retained. We may also consider reduce inappropriate involuntary comply with the revised requirements removing prescriptive language in the discharges. In addition, we are will be costly and burdensome. Given requirements regarding the specific concerned as to whether LTC the scope of the revisions, stakeholder duties of the grievance official and Ombudsman have the capacity to requests for more time to comply with allow facilities greater flexibility in how receive and review these notices. We are the requirements, and the financial they ensure that grievances are fully soliciting comment as to whether LTC impact that the regulation will impose addressed. We are reviewing these Ombudsman can handle receiving this on LTC facilities, we finalized a phased- requirements to determine whether any material and to what extend they will in implementation of the requirements of the abuse and neglect reporting use information once received. over a 3 year time period in hopes of requirements may be duplicative of state reducing some of the burden placed on law. In instances where these C. Stakeholder Feedback LTC facilities. Readers may refer to the requirements may potentially be October 2016 final rule (81 FR 68696) duplicative we may be able to remove We are interested in receiving for a detailed discussion regarding the them entirely and defer to existing law. feedback regarding the realistic implementation timeframes for the reduction in burden that these revisions 2. Quality Assurance and Performance requirements. may have on facilities and the Improvement (QAPI) possibility of unintended negative B. Areas of Possible Burden Reduction In the October 2016 final rule, we consequences that these potential In a continued effort to further finalized a proposal at § 483.75 to revisions may impose on resident care respond to stakeholder concerns, we are require LTC facilities to develop, and outcomes. We are also interested in currently reviewing the LTC implement, and maintain an effective receiving feedback regarding any requirements to balance the need to comprehensive, data-driven QAPI additional areas of burden reduction maintain quality of care while reducing program that focuses on systems of care, and cost savings in LTC facilities. To the procedural burdens on facilities. outcomes of care and quality of life. extent we proceed with rulemaking in Specifically, we are reviewing the Several stakeholders have indicated that requirements for obsolete or redundant our requirements are very detailed, too this area, we will use this feedback and provisions, areas where processes can prescriptive, and significantly exceed information to inform our policy be streamlined to reduce burden and the QAPI related requirements for other decisions with regard to these issues. cost, or other areas of possible providers. We invite general comment, but are elimination. We are reviewing these requirements particularly interested in data and As a result of our review, we have to determine if we can be less analysis regarding associated costs and identified the following areas of the LTC prescriptive while achieving a balance benefits. requirements that we are considering for between specificity and flexibility in VII. CMMI Solicitation modification or removal in an effort to recognition of the diversity throughout reduce the burden and financial impact LTC facilities. For example, in the areas As the Center for Medicare and imposed on LTC facilities: of program design and scope we could Medicaid Innovation (CMMI) continues propose to eliminate the detailed 1. Grievance Process developing models to test innovation requirements regarding how the and improvements to the Medicare In the October 2016 final rule, we program must be designed and simply program, we regularly engage with finalized a proposal at § 483.10(j) to require facilities to design a program stakeholders to solicit ideas for models extensively expand the grievance that is ongoing, comprehensive, and and concepts to test that have potential process in LTC facilities and require addresses the full range of care and facilities to establish a grievance policy services provided by the facility. to improve the quality of care and to ensure the prompt resolution of Likewise, in the areas of program reduce overall costs. CMMI authority grievances, and identify a grievance feedback, monitoring, and analysis we affords us flexibility to test new ways of officer to oversee the process. In public could eliminate the specific managing, delivering and paying for comments on the proposed rule, requirements for policies regarding care for Medicare services. This stakeholders supported the exactly how a facility will determine flexibility includes utilizing waivers of enhancement of residents’ rights to underlying problems impacting systems statutory and regulatory requirements, voice grievances and emphasized the in the facility, develop corrective such as waiving the qualifying 3-day importance and seriousness of resident actions, and monitor the effectiveness of inpatient hospital stay (QHS) concerns. However, stakeholders also its performance. We believe that such requirement for skilled nursing facility indicated that the expansion of the revisions will allow facilities greater (SNF) services, to allow the model requirements for a grievance process flexibility in tailoring their QAPI participants to achieve the goals of the will be overly burdensome and costly. program to fit the needs of their specific model. We are interested in Specifically, stakeholders indicated that individual facility, eliminating receiving feedback on innovative maintaining evidence related to unnecessary burden on facilities, while concepts to potentially test in the post- grievances for 3 years is burdensome maintaining consistency with the acute care arena and key regulatory and and unnecessary. Stakeholders were requirements under section 1128I of the statutory provisions that could be also concerned regarding the additional Act. potentially waived if we were to costs associated with staffing a implement any of these model tests. We grievance official to oversee the 3. Discharge Notices encourage the submission of creative grievance process. In the October 2016 final rule, we We are considering areas where we finalized a proposal at § 483.15(b)(3)(i) strategies that will accelerate changes to may reduce the burden of these to require LTC facilities to send improve care and reduce costs for this requirements. For example, we may discharge notices to the state LTC important and often vulnerable reduce the financial cost associated with Ombudsman. We are re-evaluating this population of beneficiaries who utilize maintaining records by reducing the requirement to determine if the process post-acute services.

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VIII. Request for Information on CMS disorders, including reimbursement a commitment or authorization to incur Flexibilities and Efficiencies methodologies, care coordination, cost for which reimbursement would be CMS is committed to transforming the systems and services integration, use of required or sought. All submissions health care delivery system—and the paraprofessionals including community become U.S. Government property and Medicare program—by putting an paramedics and other strategies. We are will not be returned. CMS may additional focus on patient-centered requesting commenters to provide clear publically post the public comments care and working with providers, and concise proposals that include data received, or a summary of those public physicians, and patients to improve and specific examples that could be comments. implemented within the law. outcomes. We seek to reduce burdens IX. Collection of Information for hospitals, physicians, and patients, We note that this is a Request for Requirements improve the quality of care, decrease Information only. Respondents are costs, and ensure that patients and their encouraged to provide complete but Under the Paperwork Reduction Act providers and physicians are making the concise responses. This Request for of 1995 (PRA) (44 U.S.C. 3501 et seq.), best health care choices possible. These Information is issued solely for we are required to publish a 60-day are the reasons we are including this information and planning purposes; it notice in the Federal Register and Request for Information in this proposed does not constitute a Request for solicit public comment before a rule. Proposal (RFP), applications, proposal collection of information requirement is As we work to maintain flexibility abstracts, or quotations. This Request for submitted to the Office of Management and efficiency throughout the Medicare Information does not commit the U.S. and Budget (OMB) for review and program, we would like to start a Government to contract for any supplies approval. national conversation about or services or make a grant award. To fairly evaluate whether an improvements that can be made to the Further, CMS is not seeking proposals information collection should be health care delivery system that reduce through this Request for Information approved by OMB, PRA section unnecessary burdens for clinicians, and will not accept unsolicited 3506(c)(2)(A) requires that we solicit proposals. Responders are advised that comment on the following issues: other providers, and patients and their • families. We aim to increase quality of the U.S. Government will not pay for The need for the information care, lower costs, improve program any information or administrative costs collection and its usefulness in carrying incurred in response to this Request for out the proper functions of our agency. integrity, and make the health care • system more effective, simple and Information; all costs associated with The accuracy of our burden responding to this Request for estimates. accessible. • We would like to take this Information will be solely at the The quality, utility, and clarity of opportunity to invite the public to interested party’s expense. We note that the information to be collected. • submit their ideas for regulatory, not responding to this Request for Our effort to minimize the subregulatory, policy, practice, and Information does not preclude information collection burden on the procedural changes to better accomplish participation in any future procurement, affected public, including the use of these goals. Ideas could include if conducted. It is the responsibility of automated collection techniques. payment system redesign, changes to the potential responders to monitor this We are soliciting public comment on conditions of participation, elimination Request for Information announcement each of the section 3506(c)(2)(A)- or streamlining of reporting, monitoring for additional information pertaining to required issues for the following and documentation requirements, this request. In addition, we note that information collection requirements aligning Medicare requirements and CMS will not respond to questions (ICRs). processes with those from Medicaid and about the policy issues raised in this A. Proposed Information Collection other payers, operational flexibility, Request for Information. CMS will not Requirements (ICRs) feedback mechanisms and data sharing respond to comment submissions in that would enhance patient care, response to this Request for Information 1. ICRs Regarding the SNF VBP Program support of the physician-patient in the FY 2018 SNF PPS final rule. As discussed in the FY 2016 SNF PPS relationship in care delivery, and Rather, CMS will actively consider all final rule (80 FR 46473) and the FY facilitation of individual preferences. input as we develop future regulatory 2017 SNF PPS final rule (81 FR 52049 Responses to this Request for proposals or future subregulatory policy through 52050), we have specified Information could also include guidance. CMS may or may not choose claims-based measures to fulfill the SNF recommendations regarding when and to contact individual responders. Such VBP Program’s requirements. Because how CMS issues regulations and communications would be for the sole claims-based measures are calculated policies and how CMS can simplify purpose of clarifying statements in the based on claims figures that are already rules and policies for beneficiaries, responders’ written responses. submitted to the Medicare program for clinicians, physicians, providers, and Contractor support personnel may be payment purposes, there is no suppliers. Where practicable, data and used to review responses to this Request additional respondent burden specific examples would be helpful. If for Information. Responses to this notice associated with data collection or the proposals involve novel legal are not offers and cannot be accepted by submission for either the SNFRM or questions, analysis regarding CMS’ the Government to form a binding SNFPPR measures. Thus, there is no authority is welcome for CMS’ contract or issue a grant. Information additional reporting burden associated consideration. We are particularly obtained as a result of this Request for with the SNF VBP Program’s measures. interested in ideas for incentivizing Information may be used by the organizations and the full range of Government for program planning on a 2. ICRs Regarding the Potentially relevant professionals and nonattribution basis. Respondents Preventable 30-Day Post-Discharge paraprofessionals to provide screening, should not include any information that Readmission Measure assessment and evidence-based might be considered proprietary or We propose to modify the Potentially treatment for individuals with opioid confidential. This Request for Preventable 30-Day Post-Discharge use disorder and other substance use Information should not be construed as Readmission Measure by increasing the

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length of the measurement period and other measures. All of this data must, measures are currently included on the updating the confidential feedback and under section 1899B(a)(1)(B) of the Act, MDS, other data elements would need public reporting dates, as described in be standardized and interoperable to to be added to the MDS. As a result, we section V.B.8. Since this is a claims- allow for its exchange among PAC estimate that reporting these measures based measure, no data collection providers and other providers and the would require an additional 9 minutes beyond the bills submitted in the use by such providers in order to of nursing and therapy staff time to normal course of business are required provide access to longitudinal report data on admission and 5.5 from providers for the calculation of this information to facilitate coordinated minutes of nursing and therapy time to measure. Therefore, we believe the SNF care and improved Medicare beneficiary report data on discharge, for an QRP burden estimate is unaffected by outcomes. Section 1899B(a)(1)(C) of the additional total of 14.5 minutes per stay. the proposed modifications of this Act requires us to modify the MDS to We estimate that the additional MDS measure. The burden is unaffected since allow for the submission of quality items we are proposing will be the proposed measure modifications measure data and standardized patient completed by Registered Nurses for have no impact on any of the reported assessment data to enable its approximately 7 percent of the time, data fields. comparison across IRFs and other Occupational Therapists for providers. approximately 41 percent of the time, 3. ICRs Regarding the Survey Team The five new measures that we are Composition and Physical Therapists for proposing to adopt are as follows: (1) approximately 52 percent of the time. This regulation proposes to clarify the Changes in Skin Integrity Post-Acute Individual providers determine the composition of a survey team. There is Care: Pressure Ulcer/Injury; (2) staffing resources necessary. With no new or additional burden associated Application of the IRF Function 2,886,336 discharges from 15,447 SNFs with the proposed clarification. Outcome Measure: Change in Self-Care annually, we estimate that the reporting 4. ICRs Exempt From the PRA Score for Medical Rehabilitation of the four functional outcome measures Patients (NQF #2633); (3) Application of As discussed elsewhere in this would impose on SNFs an additional IRF Function Outcome Measure: Change burden of 697,531 total hours (2,886,336 preamble, this rule proposes to adopt in Mobility Score for Medical × five new measures beginning with the discharges 14.5 min/60) or 45.16 Rehabilitation Patients (NQF #2634); (4) hours per SNF (697,531 hr/15,447 FY 2020 SNF QRP (see section V.B.7. of Application of IRF Function Outcome this proposed rule), which would be SNFs). Of the 14.5 minutes per stay, 1 Measure: Discharge Self-Care Score for minute of that time is for a Registered calculated using data elements that are Medical Rehabilitation Patients (NQF currently included in the MDS. The data Nurse, 3.5 minutes is for an #2635); and (5) Application of IRF Occupational Therapist, and 4.5 elements are discrete questions and Function Outcome Measure: Discharge response codes that collect information minutes is for a Physical Therapist for Mobility Score for Medical a total of 9 minutes are required for on an IRF patient’s health status, Rehabilitation Patients (NQF #2636). We preferences, goals and general admission. For discharge, 2.5 minutes are also proposing that data for these are for an Occupational Therapist, and administrative information. new measures will be collected by SNFs We are also proposing to require SNFs 3 minutes for a Physical Therapist for a and reported to CMS using the Resident total of 5.5 minutes. For one stay we to report certain standardized patient Assessment Instrument, Minimum Data assessment data beginning with the FY estimate a cost of $19.69 or, in Set (MDS). aggregate, an annual cost of 2019 SNF QRP (see section V.B.10. of For the new measure ‘‘Changes in $56,829,551. Per SNF, we estimate an this proposed rule). We are proposing to Skin Integrity Post-Acute Care: Pressure annual cost of $3,679. A summary of define the term ‘‘standardized patient Ulcer/Injury’’ the items used to assessment data’’ as patient assessment calculate the revised measure are these estimates is provided in Table 24. questions and response options that are already present on the MDS, so the Section V.B.10 of this rule proposes to identical in all four PAC assessment adoption of this measure will not adopt 35 standardized patient instruments, and to which identical require SNFs to report new data assessment data elements beginning standards and definitions apply. The elements. In addition, some data with the FY 2020 SNF QRP. Thirty-four standardized patient assessment data is elements related to pressure ulcers have of the proposed standardized data intended to be shared electronically been identified as duplicative and we elements are already reported to CMS among PAC providers and will are proposing to remove them. Taking on the MDS for admissions, and one is otherwise enable the data to be these proposals together, we estimate newly proposed for the admission comparable for various purposes, that there will be a 1.5 minute reduction assessment. For the discharge including the development of cross- in clinical staff time needed to report assessment, there are 13 standardized setting quality measures and to inform the pressure ulcer measure data. Based data elements that are already reported payment models that take into account on the data provided in Table 24 of this to CMS on the MDS for discharge, 11 patient characteristics rather than proposed rule, and estimating 2,886,336 that are not applicable to the discharge setting. discharges from 15,447 SNFs annually, assessment and 11 standardized patient Under section 1899B(m) of the Act, we also estimate that the total cost of assessment data elements that would be the Paperwork Reduction Act does not reporting these data would be reduced added to the discharge assessment. For apply to the specific changes in the by $324 per SNF annually, or those data elements already reported to collections of information described in $5,007,793 for all SNFs annually. We CMS on the MDS (34 on the admission this proposed rule. believe that the MDS items we are assessment and 13 on the discharge These changes to the collections of proposing would be completed by assessment), there will be no additional information arise from section 2(a) of registered nurses. burden associated with these data the IMPACT Act, which added new For the four newly proposed elements. The data elements can be section 1899B to the Act. That section functional outcome measures (NQF: viewed on our Web site https:// requires SNFs to report standardized #2633, #2634, #2635, and #2636), we www.cms.gov/Medicare/Quality- patient assessment data, data on quality note that although some of the data Initiatives-Patient-Assessment- measures, and data on resource use and elements needed to calculate these Instruments/Post-Acute-Care-Quality-

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Initiatives/IMPACT-Act-of-2014/ total hours (2,886,336 discharges × 3.6 proposed changes to the SNF QRP is IMPACT-Act-Downloads-and- min/60) or 11.21 hours per SNF estimated at an additional $3,912 per Videos.html. annually (173,180 hr/15,447 SNFs). SNF annually, or $60,427,080 for all For the remaining twelve new data Of the 3.6 minutes per stay, 0.9 SNFs annually. A summary of these elements (one on the admission minute is allocated to the Registered estimates is provided in Table 24. assessment and eleven on the discharge Nurse and 2.7 minutes is allocated to Under section 1899B(m) of the Act, assessment), we estimate that these data the Licensed Vocational Nurse. For one the Paperwork Reduction Act does not elements will take 0.3 minutes of stay we estimate a cost of $2.98 or, in apply to the specific changes to the nursing/clinical staff time to report data aggregate, an annual cost of $8,605,322. collections of information described in on admission and 3.3 minutes of Per SNF we estimate an annual cost of this proposed rule. We are, however, nursing/clinical staff time to report data $547.46. A summary of these estimates setting out the burden as a courtesy to on discharge, for a total of 3.6 minutes. is provided in Table 24. advise interested parties of the proposed We estimate that the additional data In summary, given the 1.5 minute actions’ time and costs and for reference elements we are proposing will be reduction in burden associated with the refer to section XI.A of this proposed completed by Registered Nurses for new pressure ulcer measure and rule of the regulatory impact analysis approximately 25 percent of the time removal of duplicative pressure ulcer (RIA). The requirement and burden will and Licensed Vocational Nurses for data elements, the additional 14.5 be submitted to OMB for review and approximately 75 percent of the time. additional minutes of burden for the approval when the modifications to the Individual providers determine the functional outcome measures, and the MDS have achieved standardization and staffing resources necessary. Estimating 3.6 additional minutes of burden for the are no longer exempt from the 2,886,336 discharges from 15,447 SNFs proposed standardized data elements, requirements under section 1899B(m) of annually, this would equate to 173,180 the overall cost associated with the Act.

TABLE 24—CALCULATION OF COST

Aggregate Hours per Aggregate QRP QM Data Minutes annual hours SNF Dollars annual cost Annual cost elements all SNFs annually per stay all SNFs per SNF

Functional Outcome Measures .... 18 14.5 697,531 45.16 $19.69 $56,829,551 $3,679 Standardized Data Elements ...... 12 3.6 173,180 11.21 2.98 8,605,322 557 Changes in Skin Integrity ...... (3) (1.5) (72,158) (4.67) (1.74) (5,007,793) (324)

Total ...... 27 17 798,553 52 21 60,427,080 3,912

Number of Skilled Nursing Facilities = 15,447.

Number of Discharges = 2,886,336.

B. Submission of PRA-Related XI. Economic Analyses environmental, public health and safety Comments effects, distributive impacts, and A. Regulatory Impact Analysis We have submitted a copy of this equity). Executive Order 13563 NPRM to OMB for its review of the 1. Introduction emphasizes the importance of quantifying both costs and benefits, of rule’s information collection and We have examined the impacts of this recordkeeping requirements. The reducing costs, of harmonizing rules, proposed rule as required by Executive and of promoting flexibility. This rule requirements are not effective until they Order 12866 on Regulatory Planning have been approved by OMB. has been designated an economically and Review (September 30, 1993), significant rule, under section 3(f)(1) of We invite public comments on these Executive Order 13563 on Improving information collection requirements. If Executive Order 12866. Accordingly, we Regulation and Regulatory Review you wish to comment, please identify have prepared a regulatory impact (January 18, 2011), the Regulatory the rule (CMS–1679–P) and, where analysis (RIA) as further discussed Flexibility Act (RFA, September 19, applicable, the preamble section, and below. Also, the rule has been reviewed 1980, Pub. L. 96–354), section 1102(b) of the ICR section. by OMB. the Act, section 202 of the Unfunded See this rule’s DATES and ADDRESSES Executive Order 13771, titled sections for the comment due date and Mandates Reform Act of 1995 (UMRA, Reducing Regulation and Controlling for additional instructions. March 22, 1995; Pub. L. 104–4), Regulatory Costs, was issued on January Executive Order 13132 on Federalism 30, 2017. Section 2(a) of Executive X. Response to Comments (August 4, 1999), the Congressional Order 13771 requires an agency, unless Because of the large number of public Review Act (5 U.S.C. 804(2)), and prohibited by law, to identify at least comments we normally receive on Executive Order 13771 on Reducing two existing regulations to be repealed Federal Register documents, we are not Regulation and Controlling Regulatory when the agency publicly proposes for able to acknowledge or respond to them Costs (January 30, 2017). notice and comment, or otherwise individually. We will consider all Executive Orders 12866 and 13563 promulgates, a new regulation. In comments we receive by the date and direct agencies to assess all costs and furtherance of this requirement, section time specified in the DATES section of benefits of available regulatory 2(c) of Executive Order 13771 requires this preamble, and when we proceed alternatives and, if regulation is that the new incremental costs with a subsequent document, we will necessary, to select regulatory associated with new regulations shall, to respond to the comments in the approaches that maximize net benefits the extent permitted by law, be offset by preamble to that document. (including potential economic, the elimination of existing costs

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associated with at least two prior predict behavioral responses to these the proposed FY 2018 wage index and regulations. OMB’s implementation changes, or to make adjustments for labor-related share value to simulate FY guidance, issued on April 5, 2017, future changes in such variables as days 2018 payments. We tabulate the explains that ‘‘Federal spending or case-mix. resulting payments according to the regulatory actions that cause only We would note that events may occur classifications in Table 25 (for example, income transfers between taxpayers and to limit the scope or accuracy of our facility type, geographic region, facility program beneficiaries (for example, impact analysis, as this analysis is ownership), and compare the simulated regulations associated with . . . future-oriented, and thus, very FY 2017 payments to the simulated FY Medicare spending) are considered susceptible to forecasting errors due to 2018 payments to determine the overall ‘transfer rules’ and are not covered by events that may occur within the impact. The breakdown of the various EO 13771 .... However . . . such assessed impact time period. categories of data in the table follows: In accordance with sections regulatory actions may impose • The first column shows the 1888(e)(4)(E) and 1888(e)(5) of the Act, requirements apart from transfers . . . breakdown of all SNFs by urban or rural if not for the enactment of section 411(a) In those cases, the actions would need status, hospital-based or freestanding of MACRA (as discussed in section III.B to be offset to the extent they impose status, census region, and ownership. of this proposed rule), we would update more than de minimis costs. Examples • of ancillary requirements that may the FY 2017 payment rates by a factor The first row of figures describes require offsets include new reporting or equal to the market basket index the estimated effects of the various recordkeeping requirements.’’ The percentage change adjusted by the MFP changes on all facilities. The next six implications of the rule’s costs and cost adjustment to determine the payment rows show the effects on facilities split savings will be further considered in the rates for FY 2018. As discussed by hospital-based, freestanding, urban, context of our compliance with previously, section 1888(e)(5)(B)(iii) of and rural categories. The next nineteen Executive Order 13771. the Act establishes a special rule for FY rows show the effects on facilities by 2018 requiring the market basket urban versus rural status by census 2. Statement of Need percentage used to update the federal region. The last three rows show the This proposed rule would update the SNF PPS rates to be equal to 1.0 percent. effects on facilities by ownership (that FY 2017 SNF prospective payment rates The impact to Medicare is included in is, government, profit, and non-profit as required under section 1888(e)(4)(E) the total column of Table 25. In status). of the Act. It also responds to section updating the SNF PPS rates for FY 2018, • The second column shows the 1888(e)(4)(H) of the Act, which requires we made a number of standard annual number of facilities in the impact the Secretary to provide for publication revisions and clarifications mentioned database. in the Federal Register before the elsewhere in this proposed rule (for • The third column shows the effect August 1 that precedes the start of each example, the update to the wage and of the annual update to the wage index. FY, the unadjusted federal per diem market basket indexes used for adjusting This represents the effect of using the rates, the case-mix classification system, the federal rates). most recent wage data available. The and the factors to be applied in making The annual update set forth in this total impact of this change is zero the area wage adjustment. As these proposed rule applies to SNF PPS percent; however, there are statutory provisions prescribe a detailed payments in FY 2018. Accordingly, the distributional effects of the change. methodology for calculating and analysis of the impact of the annual • disseminating payment rates under the update that follows only describes the The fourth column shows the effect SNF PPS, we do not have the discretion impact of this single year. Furthermore, of all of the changes on the FY 2018 to adopt an alternative approach on in accordance with the requirements of payments. The update of 1.0 percent is these issues. the Act, we will publish a rule or notice constant for all providers and, though for each subsequent FY that will not shown individually, is included in 3. Overall Impacts provide for an update to the payment the total column. It is projected that This proposed rule sets forth rates and include an associated impact aggregate payments will increase by 1.0 proposed updates of the SNF PPS rates analysis. percent, assuming facilities do not contained in the SNF PPS final rule for change their care delivery and billing FY 2017 (81 FR 51970). Based on the 4. Detailed Economic Analysis practices in response. above, we estimate that the aggregate The FY 2018 SNF PPS payment As illustrated in Table 25, the impact would be an increase of $390 impacts appear in Table 25. Using the combined effects of all of the changes million in payments to SNFs in FY most recently available data, in this case vary by specific types of providers and 2018, resulting from the SNF market FY 2016, we apply the current FY 2017 by location. For example, due to basket update to the payment rates, as wage index and labor-related share changes proposed in this rule, providers required by section 1888(e)(5)(B)(iii) of value to the number of payment days to in the urban Pacific region would the Act. Although the best data available simulate FY 2017 payments. Then, experience a 1.5 percent increase in FY are utilized, there is no attempt to using the same FY 2016 data, we apply 2018 total payments.

TABLE 25—PROJECTED IMPACT TO THE SNF PPS FOR FY 2018

Number of Update Total facilities wage data change FY 2018 (%) (%)

Group: Total ...... 15,447 0.0 1.0 Urban ...... 10,992 0.1 1.1 Rural ...... 4,455 ¥0.6 0.4 Hospital-based urban ...... 517 0.2 1.2 Freestanding urban ...... 10,475 0.1 1.1

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TABLE 25—PROJECTED IMPACT TO THE SNF PPS FOR FY 2018—Continued

Number of Update Total facilities wage data change FY 2018 (%) (%)

Hospital-based rural ...... 575 ¥0.7 0.3 Freestanding rural ...... 3,880 ¥0.6 0.4 Urban by region: New England ...... 791 0.2 1.2 Middle Atlantic ...... 1,485 0.4 1.4 South Atlantic ...... 1,867 ¥0.2 0.8 East North Central ...... 2,117 0.0 1.0 East South Central ...... 551 ¥0.6 0.4 West North Central ...... 919 0.4 1.4 West South Central ...... 1,333 0.1 1.1 Mountain ...... 509 ¥0.2 0.8 Pacific ...... 1,415 0.5 1.5 Outlying ...... 5 ¥1.9 ¥0.9 Rural by region: New England ...... 137 1.5 2.6 Middle Atlantic ...... 215 ¥0.4 0.6 South Atlantic ...... 502 ¥0.7 0.3 East North Central ...... 934 ¥1.1 ¥0.2 East South Central ...... 527 ¥0.9 0.1 West North Central ...... 1,077 ¥0.3 0.7 West South Central ...... 737 ¥0.8 0.2 Mountain ...... 228 ¥0.4 0.6 Pacific ...... 98 0.2 1.2 Ownership: Profit ...... 10,805 0.0 1.0 Non-profit ...... 3,590 0.0 1.0 Government ...... 1,052 ¥0.3 0.7 Note: The Total column includes the 1.0 percent market basket increase required by section 1888(e)(5)(B)(iii) of the Act. Additionally, we found no SNFs in rural outlying areas.

5. Estimated Impacts for the SNF QRP measure and the removal of duplicative cost associated with proposed changes pressure ulcer data elements, the to the SNF QRP is estimated at an Estimated impacts for the SNF QRP additional 14.5 additional minutes of additional $3,912 per SNF annually, or are based on analysis discussed in burden for the functional outcome $60,427,080 for all SNFs annually. A section V.B. of this proposed rule. For measures, and the 3.6 additional summary of these estimates is provided the 1.5 minute reduction in burden minutes of burden for the proposed in Table 26. associated with the new pressure ulcer standardized data elements, the overall

TABLE 26—CALCULATION OF COST PER QUALITY MEASURE

Aggregate Hours per Aggregate QRP QM Data Minutes annual hours SNF Dollars annual cost Annual cost elements all SNFs annually per stay all SNFs per SNF

Functional Outcome Measures .... 18 14.5 697,531 45.16 $19.69 $56,829,551 $3,679 Standardized Data Elements ...... 12 3.6 173,180 11.21 2.98 8,605,322 557 Changes in Skin Integrity ...... (3) (1.5) (72,158) (4.67) (1.74) (5,007,793) (324)

Total ...... 27 17 798,553 52 21 60,427,080 3,912

Number of Skilled Nursing Facilities = 15,447.

Number of Discharges = 2,886,336.

6. Estimated Impacts for the SNF VBP exchange function with a payback profit SNFs perform better on the Program percentage of 60 percent, as discussed SNFRM compared to for-profit SNFs, further in the preamble to this proposed and that government-owned SNFs Estimated impacts of the FY 2019 rule. perform better still. We also estimate SNF VBP Program are based on As illustrated in Table 27, the effects that smaller SNFs (measured by bed historical data that appear in Table 27. of the SNF VBP Program vary by size) tend to perform better, on average, We modeled SNFs’ performance in the specific types of providers and by compared to larger SNFs. (We note that Program using SNFRM data from CY location. For example, we estimate that the risk-standardized readmission rates 2013 as the baseline period and CY 2015 rural SNFs perform better on the presented below are not inverted; that as the performance period. SNFRM, on average, compared to urban is, lower rates represent better Additionally, we modeled a logistic SNFs. Similarly, we estimate that non- performance).

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These differences in performance on multiplier, on average, in FY 2019, as measured by bed size would receive the SNFRM result in differences in while SNFs in rural areas would receive an incentive multiplier of 1.166 percent, value-based incentive payment a slightly higher incentive multiplier of on average. We note that the multipliers percentages computed by the Program. 1.227 percent, on average. Additionally, that we have listed in Table 27 are For example, we estimate that, at the SNFs in the smallest 25 percent as applied to SNFs’ adjusted Federal per proposed 60 percent payback measured by bed size would receive an diem rates after application of the 2 percentage, SNFs in urban areas would incentive multiplier of 1.203 percent, on percent reduction to those rates required receive a 1.161 percent incentive average, while SNFs in the 2nd quartile by statute.

TABLE 27—ESTIMATED FY 2019 SNF VBP PROGRAM IMPACTS

Mean Number of RSRR incentive Percent of pro- Category Criterion facilities (mean) multiplier posed pay- (60% payback) back

Group ...... Total ...... 15,746 0.19061 1.218 100.0 Urban ...... 11,116 0.18790 1.161 83.5 Rural ...... 4,630 0.18293 1.227 16.5 Urban by Region ...... Total ...... 11,116 ...... 01=Boston ...... 808 0.18734 1.165 5.978 02=New York ...... 922 0.18848 1.116 10.590 03=Philadelphia ...... 1,132 0.18611 1.307 10.295 04=Atlanta ...... 1,890 0.19291 1.025 12.443 05=Chicago ...... 2,330 0.18728 1.213 16.248 06=Dallas ...... 1,379 0.19131 0.920 6.126 07=Kansas City ...... 666 0.18764 1.109 2.815 08=Denver ...... 323 0.17831 1.644 2.879 09=San Francisco ...... 1,325 0.18518 1.174 12.107 10=Seattle ...... 341 0.17634 1.765 3.983 Rural by Region ...... Total ...... 4,630 ...... 01=Boston ...... 145 0.17458 1.648 1.009 02=New York ...... 94 0.17746 1.435 0.409 03=Philadelphia ...... 287 0.18145 1.231 1.431 04=Atlanta ...... 918 0.18633 1.011 3.363 05=Chicago ...... 1,127 0.18156 1.361 4.662 06=Dallas ...... 814 0.18676 0.926 1.824 07=Kansas City ...... 801 0.18459 1.291 1.575 08=Denver ...... 284 0.17596 1.570 0.883 09=San Francisco ...... 68 0.16620 1.650 0.706 10=Seattle ...... 92 0.17488 1.569 0.670 Ownership Type ...... Total ...... 15,746 ...... Government ...... 1,096 0.17844 1.240 4.601 Profit ...... 10,973 0.18864 1.113 71.137 Non-Profit ...... 3,677 0.18225 1.364 24.260 No. of Beds: 1st Quartile: ...... 3,986 0.17935 1.203 13.393 2nd Quartile: ...... 3,937 0.18646 1.166 19.738 3rd Quartile: ...... 3,887 0.19009 1.148 26.388 4th Quartile: ...... 3,938 0.19000 1.204 40.481

7. Alternatives Considered It specifies that the base year cost data 8. Accounting Statement to be used for computing the SNF PPS As described in this section, we payment rates must be from FY 1995 As required by OMB Circular A–4 estimate that the aggregate impact for (October 1, 1994, through September 30, (available online at FY 2018 under the SNF PPS would be 1995). In accordance with the statute, www.whitehouse.gov/sites/default/files/ an increase of $390 million in payments we also incorporated a number of omb/assets/regulatory_matters_pdf/a- to SNFs, resulting from the SNF market elements into the SNF PPS (for example, 4.pdf), in Table 28, we have prepared an basket update to the payment rates, as case-mix classification methodology, a accounting statement showing the required by section 1888(e)(5)(B)(iii) of market basket index, a wage index, and classification of the expenditures the Act. the urban and rural distinction used in associated with the provisions of this Section 1888(e) of the Act establishes the development or adjustment of the proposed rule for FY 2018. Table 28 the SNF PPS for the payment of federal rates). Further, section provides our best estimate of the Medicare SNF services for cost reporting 1888(e)(4)(H) of the Act specifically possible changes in Medicare payments periods beginning on or after July 1, requires us to disseminate the payment under the SNF PPS as a result of the 1998. This section of the statute rates for each new FY through the policies in this proposed rule, based on prescribes a detailed formula for Federal Register, and to do so before the the data for 15,447 SNFs in our database calculating base payment rates under August 1 that precedes the start of the and the cost for the SNF QRP of the SNF PPS, and does not provide for new FY; accordingly, we are not implementing the IMPACT Act. the use of any alternative methodology. pursuing alternatives for this process.

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TABLE 28—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE 2017 SNF PPS FISCAL YEAR TO THE 2018 SNF PPS FISCAL YEAR

Category Transfers

Annualized Monetized Transfers ...... $390 million.* From Whom To Whom? ...... Federal Government to SNF Medicare Providers.

FY 2018 Cost to Updating the Quality Reporting Program

Category Costs

Cost for SNFs to Submit Data for the Quality Reporting Program ...... $60 million. * The net increase of $390 million in transfer payments is a result of the market basket increase of $390 million.

9. Conclusion B. Regulatory Flexibility Act Analysis Guidance issued by the Department of Health and Human Services on the This proposed rule sets forth updates The RFA requires agencies to analyze options for regulatory relief of small proper assessment of the impact on of the SNF PPS rates contained in the small entities in rulemakings, utilizes a SNF PPS final rule for FY 2017 (81 FR entities, if a rule has a significant impact on a substantial number of small cost or revenue impact of 3 to 5 percent 51970). Based on the above, we estimate as a significance threshold under the the overall estimated payments for SNFs entities. For purposes of the RFA, small entities include small businesses, non- RFA. In their March 2017 Report to in FY 2018 are projected to increase by Congress (available at http:// $390 million, or 1.0 percent, compared profit organizations, and small governmental jurisdictions. Most SNFs medpac.gov/docs/default-source/ with those in FY 2017. We estimate that reports/mar17_medpac_ch8.pdf), in FY 2018 under RUG–IV, SNFs in and most other providers and suppliers are small entities, either by reason of MedPAC states that Medicare covers urban and rural areas would experience, approximately 11 percent of total on average, a 1.1 percent increase and their non-profit status or by having revenues of $27.5 million or less in any patient days in freestanding facilities 0.4 percent increase, respectively, in and 21 percent of facility revenue estimated payments compared with FY 1 year. We utilized the revenues of individual SNF providers (from recent (March 2017 MedPAC Report to 2017. Providers in the rural New Congress, 202). As a result, for most England region would experience the Medicare Cost Reports) to classify a small business, and not the revenue of facilities, when all payers are included largest estimated increase in payments a larger firm with which they may be in the revenue stream, the overall of approximately 2.6 percent. Providers affiliated. As a result, we estimate impact on total revenues should be in the urban Outlying region would approximately 97 percent of SNFs are substantially less than those impacts experience the largest estimated considered small businesses according presented in Table 25. As indicated in decrease in payments of 0.9 percent. to the Small Business Administration’s Table 25, the effect on facilities is Additionally, § 488.314 regarding latest size standards (NAICS 623110), projected to be an aggregate positive survey team composition implements with total revenues of $27.5 million or impact of 1.0 percent for FY 2018. As section 1819(g)(4) of the Act and less in any 1 year. (For details, see the the overall impact on the industry as a provides that States may maintain and Small Business Administration’s Web whole, and thus on small entities utilize a specialized team that need not site at http://www.sba.gov/category/ specifically, is less than the 3 to 5 include a registered nurse for the navigation-structure/contracting/ percent threshold discussed previously, investigation of complaints. Section contracting-officials/eligibility-size- the Secretary has determined that this 1919 of the Act contains the same standards). In addition, approximately proposed rule would not have a statutory language as applicable to 23 percent of SNFs classified as small significant impact on a substantial Nursing Facilities (NFs). The regulations entities are non-profit organizations. number of small entities for FY 2018. in part 488 were originally established Finally, individuals and states are not In addition, section 1102(b) of the Act under the authority of the sections 1819 included in the definition of a small requires us to prepare a regulatory and 1919 of the Act, which were added entity. impact analysis if a rule may have a by the Omnibus Budget Reconciliation This proposed rule sets forth updates significant impact on the operations of Act of 1987 (OBRA 87) (Pub. L. 100– of the SNF PPS rates contained in the a substantial number of small rural 203, enacted on December 22, 1987) and SNF PPS final rule for FY 2017 (81 FR hospitals. This analysis must conform to further amendments to OBRA 87 by 51970). Based on the above, we estimate the provisions of section 603 of the subsequent 1988, 1989, and 1990 that the aggregate impact for FY 2018 RFA. For purposes of section 1102(b) of legislation. would be an increase of $390 million in the Act, we define a small rural hospital Sections 4204(b) and 4214(d) of payments to SNFs, resulting from the as a hospital that is located outside of OBRA 87 pertain to skilled nursing SNF market basket update to the an MSA and has fewer than 100 beds. facilities (SNFs) and nursing facilities payment rates. While it is projected in This proposed rule would affect small (NFs), respectively, and provide for a Table 25 that most providers would rural hospitals that (1) furnish SNF waiver of PRA requirements for the experience a net increase in payments, services under a swing-bed agreement or regulations that implement the OBRA we note that some individual providers (2) have a hospital-based SNF. We ’87 requirements. The provisions of within the same region or group may anticipate that the impact on small rural OBRA 87 that exempt agency actions to experience different impacts on hospitals would be similar to the impact collect information from states or payments than others due to the on SNF providers overall. Moreover, as facilities relevant to survey and distributional impact of the FY 2018 noted in previous SNF PPS final rules enforcement activities from the PRA are wage indexes and the degree of (most recently, the one for FY 2017 (81 not time-limited. Medicare utilization. FR 51970)), the category of small rural

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hospitals would be included within the commenters reviewed last year’s rule in PART 409—HOSPITAL INSURANCE analysis of the impact of this proposed detail, and it is also possible that some BENEFITS rule on small entities in general. As reviewers chose not to comment on the indicated in Table 25, the effect on proposed rule. For these reasons we ■ 1. The authority citation for part 409 facilities for FY 2018 is projected to be thought that the number of past continues to read as follows: an aggregate positive impact of 1.0 commenters would be a fair estimate of percent. As the overall impact on the the number of reviewers of this rule. We Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and industry as a whole is less than the 3 to welcome any comments on the 1395hh). 5 percent threshold discussed above, the approach in estimating the number of Secretary has determined that this entities which will review this proposed ■ 2. Section 409.30 is amended by proposed rule would not have a rule. revising the introductory text to read as significant impact on a substantial We also recognize that different types follows: number of small rural hospitals for FY of entities are in many cases affected by 2018. mutually exclusive sections of this § 409.30 Basic requirements. proposed rule, and therefore for the C. Unfunded Mandates Reform Act Posthospital SNF care, including purposes of our estimate we assume that Analysis SNF-type care furnished in a hospital or each reviewer reads approximately 50 CAH that has a swing-bed approval, is Section 202 of the Unfunded percent of the rule. We seek comments covered only if the beneficiary meets the Mandates Reform Act of 1995 also on this assumption. requirements of this section and only for requires that agencies assess anticipated Using the wage information from the days when he or she needs and receives costs and benefits before issuing any BLS for medical and health service care of the level described in § 409.31. rule whose mandates require spending managers (Code 11–9111), we estimate A beneficiary in an SNF is also in any 1 year of $100 million in 1995 that the cost of reviewing this rule is considered to meet the level of care dollars, updated annually for inflation. $90.16 per hour, including overhead requirements of § 409.31 up to and In 2017, that threshold is approximately and fringe benefits https://www.bls.gov/ including the assessment reference date $148 million. This proposed rule will _ oes/2015/may/naics4 621100.htm. for the 5-day assessment prescribed in impose no mandates on state, local, or Assuming an average reading speed, we § 413.343(b) of this chapter, when tribal governments or on the private estimate that it would take correctly assigned one of the case-mix sector. approximately 4 hours for the staff to classifiers that CMS designates for this D. Federalism Analysis review half of this proposed rule. For purpose as representing the required each SNF that reviews the rule, the Executive Order 13132 establishes × level of care. For the purposes of this estimated cost is $361 (4 hours section, the assessment reference date is certain requirements that an agency $90.16). Therefore, we estimate that the must meet when it issues a proposed defined in accordance with § 483.315(d) total cost of reviewing this regulation is of this chapter, and must occur no later rule (and subsequent final rule) that $34,295 ($361 × 95 reviewers). imposes substantial direct requirement than the eighth day of posthospital SNF In accordance with the provisions of care. costs on state and local governments, Executive Order 12866, this proposed preempts state law, or otherwise has rule was reviewed by the Office of * * * * * federalism implications. This proposed Management and Budget. rule would have no substantial direct PART 411—EXCLUSIONS FROM effect on state and local governments, List of Subjects MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT preempt state law, or otherwise have 42 CFR Part 409 federalism implications. Health facilities, Medicare. ■ 3. The authority citation for part 411 E. Congressional Review Act continues to read as follows: 42 CFR Part 411 This proposed regulation is subject to Authority: Secs. 1102, 1860D–1 through the Congressional Review Act Diseases, Medicare, Reporting and 1860D–42, 1871, and 1877 of the Social provisions of the Small Business recordkeeping requirements. Security Act (42 U.S.C. 1302, 1395w–101 Regulatory Enforcement Fairness Act of 42 CFR Part 413 through 1395w–152, 1395hh, and 1395nn). 1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress and the Health facilities, Diseases, Medicare, ■ 4. Section 411.15 is amended by Comptroller General for review. Reporting and recordkeeping revising paragraph (p)(3)(iii) to read as requirements. follows: F. Regulatory Review Costs 42 CFR Part 424 If regulations impose administrative § 411.15 Particular services excluded from costs on private entities, such as the Emergency medical services, Health coverage. time needed to read and interpret this facilities, Health professions, Medicare, * * * * * proposed rule, we should estimate the Reporting and recordkeeping (p) * * * requirements. cost associated with regulatory review. (3) * * * Due to the uncertainty involved with 42 CFR Part 488 accurately quantifying the number of (iii) The beneficiary receives entities that will review the rule, we Administrative practice and outpatient services from a Medicare- assume that the total number of unique procedure, Health facilities, Medicare, participating hospital or CAH (but only commenters on last year’s proposed rule Reporting and recordkeeping for those services that CMS designates will be the number of reviewers of this requirements. as being beyond the general scope of proposed rule. We acknowledge that For the reasons set forth in the SNF comprehensive care plans, as this assumption may understate or preamble, the Centers for Medicare & required under § 483.21(b) of this overstate the costs of reviewing this Medicaid Services proposes to amend chapter); or rule. It is possible that not all 42 CFR chapter IV as set forth below: * * * * *

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PART 413—PRINCIPLES OF paragraph (d)(4)(i) of this section to the score under the SNF VBP Program for a REASONABLE COST SNF market basket index percentage fiscal year. REIMBURSEMENT; PAYMENT FOR change may result in such percentage (11) SNF readmission measure means, END-STAGE RENAL DISEASE being less than zero for a fiscal year, and for a fiscal year, the all-cause all- SERVICES; PROSPECTIVELY may result in payment rates for that condition hospital readmission measure DETERMINED PAYMENT RATES FOR fiscal year being less than such payment (SNFRM) or the all-condition risk- SKILLED NURSING FACILITIES; rates for the preceding fiscal year. adjusted potentially preventable PAYMENT FOR ACUTE KIDNEY (iii) Any 2.0 percentage point hospital readmission rate (SNFPPR) INJURY DIALYSIS reduction applied pursuant to paragraph specified by CMS for application in the (d)(4)(i) of this section will apply only SNF Value-Based Purchasing Program. ■ 5. The authority citation for part 413 to the fiscal year involved and will not (12) Performance score means the continues to read as follows: be taken into account in computing the numeric score ranging from 0 to 100 Authority: 42 U.S.C. 1302; 42 U.S.C. payment amount for a subsequent fiscal awarded to each SNF based on its 1395d(d); 42 U.S.C. 1395f(b); 42 U.S.C. year. performance under the SNF VBP 1395g; 42 U.S.C. 1395l(a), (i), and (n); 42 * * * * * Program for a fiscal year. U.S.C. 1395x(v); 42 U.S.C. 1395hh; 42 U.S.C. (13) SNF Value-Based Purchasing ■ 9. Section 413.338 is added to read as 1395rr; 42 U.S.C. 1395tt; 42 U.S.C. 1395ww; (VBP) Program means the program follows: sec. 124 of Public Law 106–113, 113 Stat. required under section 1888(h) of the 1501A–332; sec. 3201 of Public Law 112–96, 126 Stat. 156; sec. 632 of Public Law 112– § 413.338 Skilled Nursing Facility Value- Social Security Act. 240, 126 Stat. 2354; sec. 217 of Public Law Based Purchasing. (14) Value-based incentive payment 113–93, 129 Stat. 1040; sec. 204 of Public (a) Definitions. (1) Achievement amount is the portion of a SNF’s Law 113–295, 128 Stat. 4010; and sec. 808 of threshold (or achievement performance adjusted Federal per diem rate that is Public Law 114–27, 129 Stat. 362. standard) means the 25th percentile of attributable to the SNF VBP Program. (15) Value-based incentive payment ■ 6. The heading for part 413 is revised SNF performance on the SNF adjustment factor is the number that to read as set forth above. readmission measure during the ■ 7. Section 413.333 is amended by baseline period for a fiscal year. will be multiplied by the adjusted revising the definition of ‘‘Resident (2) Adjusted Federal per diem rate Federal per diem rate for services classification system’’ to read as follows: means the payment made to SNFs under furnished by a SNF during a fiscal year, the skilled nursing facility prospective based on its performance score for that § 413.333 Definitions. payment system (as described under fiscal year, and after such rate is * * * * * section 1888(e)(4)(G) of the Act). reduced by the applicable percent. (b) Applicability of the SNF VBP Resident classification system means (3) Applicable percent means for FY Program. The SNF VBP Program applies a system for classifying SNF residents 2019 and subsequent fiscal years, 2.0 to SNFs, including facilities described into mutually exclusive groups based on percent. clinical, functional, and resource-based in section 1888(e)(7)(B). (4) Baseline period means the time (c) Process for reducing the adjusted criteria. For purposes of this subpart, period used to calculate the this term refers to the current version of Federal per diem rate and applying the achievement threshold, benchmark and value-based incentive payment the resident classification system, as set improvement threshold that apply for a forth in the annual publication of adjustment factor under the SNF VBP fiscal year. Program—(1) General. CMS will make Federal prospective payment rates (5) Benchmark means, for a fiscal described in § 413.345. value-based incentive payments to each year, the arithmetic mean of the top SNF based on its performance score for * * * * * decile of SNF performance on the SNF ■ 8. Section 413.337 is amended by a fiscal year under the SNF VBP readmission measure during the Program under the requirements and adding paragraph (d)(4) to read as baseline period for that fiscal year. follows: conditions specified in this paragraph. (6) Logistic exchange function means (2) Value-based incentive payment § 413.337 Methodology for calculating the the function used to translate a SNF’s amount—(i) Available amount. The prospective payment rates. performance score on the SNF total amount available for value-based * * * * * readmission measure into a value-based incentive payments for a fiscal year is (d) * * * incentive payment percentage. equal to 60 percent of the total amount (4) Penalty for failure to report quality (7) Improvement threshold (or of the reduction to the adjusted SNF data. For fiscal year 2018 and improvement performance standard) PPS payments for that fiscal year, as subsequent fiscal years— means an individual SNF’s performance estimated by CMS. (i) In the case of a SNF that does not on the SNF readmission measure during (ii) Calculation of the value-based meet the requirements in § 413.360, for the applicable baseline period. incentive payment amount. The value- a fiscal year, the SNF market basket (8) Performance period means the based incentive payment amount is index percentage change for the fiscal time period during which performance calculated by multiplying the adjusted year (as specified in paragraph (d)(1)(v) on the SNF readmission measure is Federal per diem rate by the value-based of this section, as modified by any calculated for a fiscal year. incentive payment adjustment factor, applicable forecast error adjustment (9) Performance standards are the after the adjusted Federal per diem rate under paragraph (d)(2) of this section, levels of performance that SNFs must has been reduced by the applicable reduced by the MFP adjustment meet or exceed to earn points under the percent. specified in paragraph (d)(3) of this SNF VBP Program for a fiscal year, and (iii) Calculation of the value-based section, and as specified for FY 2018 in are announced no later than 60 days incentive payment adjustment factor. section 1888(e)(5)(B)(iii) of the Act), is prior to the start of the performance The value-based incentive payment further reduced by 2.0 percentage period that applies to the SNF adjustment factor calculated by points. readmission measure for that fiscal year. estimating Medicare spending under the (ii) The application of the 2.0 (10) Ranking means the ordering of skilled nursing facility prospective percentage point reduction specified in SNFs based on each SNF’s performance payment system to estimate the total

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amount available for value-based (f) Limitations on review. There is no measures specified under sections incentive payments, ordering SNFs by administrative or judicial review of the 1899B(c)(1) and 1899B(d)(1) of the Act their SNF performance scores, then following: and standardized resident assessment assigning an adjustment factor value for (1) The methodology used to data in accordance with section each performance score subject to the determine the value-based incentive 1899B(b)(1) of the Act, in the form and limitations set by the exchange function. payment percentage and the amount of manner, and at a time, specified by (iv) Reporting of adjustment to SNF the value-based incentive payment CMS. payments. CMS will inform each SNF of under section 1888(h)(5) of the Act. (2) CMS will consider a SNF to have the value-based incentive payment (2) The determination of the amount complied with paragraph (b)(1) of this adjustment factor that will be applied to of funding available for value-based section for a program year if the SNF its adjusted Federal per diem rate for incentive payments under section reports: 100 percent of the required data services furnished during a fiscal year at 1888(h)(5)(C)(ii)(III) of the Act and the elements on at least 80 percent of the least 60 days prior to the start of that payment reduction under section MDS assessments submitted for that fiscal year. 1888(h)(6) of the Act. program year. (d) Performance scoring under the (3) The establishment of the (c) Exception and extension requests. SNF VBP Program. (1) CMS will award performance standards under section (1) A SNF may request and CMS may points to SNFs based on their 1888(h)(3) of the Act and the grant exceptions or extensions to the performance on the SNF readmission performance period. reporting requirements under paragraph measure applicable to a fiscal year (4) The methodology developed under (b) of this section for one or more during the performance period section 1888(h)(4) of the Act that is used quarters, when there are certain applicable to that fiscal year as follows: to calculate SNF performance scores extraordinary circumstances beyond the (i) CMS will award from 1 to 99 and the calculation of such scores. control of the SNF. points for achievement to each SNF (5) The ranking determinations under (2) A SNF may request an exception whose performance meets or exceeds section 1888(h)(4)(B) of the Act. or extension within 90 days of the date the achievement threshold but is less ■ 10. Section 413.345 is revised to read that the extraordinary circumstances than the benchmark. as follows: occurred by sending an email to (ii) CMS will award from 0 to 90 [email protected] points for improvement to each SNF § 413.345 Publication of Federal that contains all of the following whose performance exceeds the prospective payment rates. information: improvement threshold but is less than CMS publishes information pertaining (i) SNF CMS Certification Number the benchmark. to each update of the Federal payment (CCN). (iii) CMS will award 100 points to a rates in the Federal Register. This (ii) SNF Business Name. SNF whose performance meets or information includes the standardized (iii) SNF Business Address. exceeds the benchmark. Federal rates, the resident classification (iv) CEO or CEO-designated personnel (2) The highest of the SNF’s system that provides the basis for case- contact information including name, achievement, improvement and mix adjustment, and the factors to be telephone number, title, email address, benchmark score will be the SNF’s applied in making the area wage and mailing address. (The address must performance score for the fiscal year. adjustment. This information is be a physical address, not a post office (e) Confidential feedback reports and published before May 1 for the fiscal box.) public reporting. (1) Beginning October year 1998 and before August 1 for the (v) SNF’s reason for requesting the 1, 2016, CMS will provide quarterly fiscal years 1999 and after. exception or extension. confidential feedback reports to SNFs ■ 11. Section 413.360 is added to (vi) Evidence of the impact of on their performance on the SNF subpart J to read as follows: extraordinary circumstances, including, readmission measure. SNFs will have but not limited to, photographs, the opportunity to review and submit § 413.360 Requirements under the Skilled newspaper, and other media articles. corrections for this data by March 31st Nursing Facility (SNF) Quality Reporting (vii) Date when the SNF believes it following the date that CMS provides Program (QRP). will be able to again submit SNF QRP the reports. Any such correction (a) Participation start date. Beginning data and a justification for the proposed requests must be accompanied by with the FY 2018 program year, a SNF date. appropriate evidence showing the basis must begin reporting data in accordance (3) Except as provided in paragraph for the correction. with paragraph (b) of this section no (c)(4) of this section, CMS will not (2) Beginning not later than 60 days later than the first day of the calendar consider an exception or extension prior to each fiscal year, CMS will quarter subsequent to 30 days after the request unless the SNF requesting such provide SNF performance score reports date on its CMS Certification Number exception or extension has complied to SNFs on their performance under the (CCN) notification letter, which fully with the requirements in this SNF VBP Program for a fiscal year. SNFs designates the SNF as operating in the paragraph (c). will have the opportunity to review and Certification and Survey Provider (4) CMS may grant exceptions or submit corrections to their SNF Enhanced Reports (CASPER) system. extensions to SNFs without a request if performance scores and ranking For purposes of this section, a program it determines that one or more of the contained in these reports for 30 days year is the fiscal year in which the following has occurred: following the date that CMS provides market basket percentage described in (i) An extraordinary circumstance the reports. Any such correction § 413.337(d) is reduced by two affects an entire region or locale. requests must be accompanied by percentage points if the SNF does not (ii) A systemic problem with one of appropriate evidence showing the basis report data in accordance with CMS’s data collection systems directly for the correction. paragraph (b) of this section. affected the ability of a SNF to submit (3) CMS will publicly report the (b) Data submission requirement. (1) data in accordance with paragraph (b) of information described in paragraphs Except as provided in paragraph (c) of this section. (e)(1) and (2) of this section on the this section, and for a program year, (d) Reconsideration. (1) SNFs that do Nursing Home Compare Web site. SNFs must submit to CMS data on not meet the requirement in paragraph

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(b) of this section for a program year § 424.20 [Amended] to conduct on-site monitoring to verify will receive a letter of non-compliance ■ 13. In § 424.20— compliance with participation through the Quality Improvement and ■ a. Amend paragraph (a)(1)(ii) by requirements are subject to the Evaluation System Assessment removing the phrase ‘‘to one of the requirements of § 488.332. Other Submission and Processing (QIES– Resource Utilization Groups premises for abbreviated standard ASAP) system, as well as through the designated’’ and adding in its place the surveys would follow the requirements United States Postal Service. A SNF phrase ‘‘one of the case-mix classifiers of § 488.314. may request reconsideration no later that CMS designates’’; and * * * * * than 30 calendar days after the date ■ b. Amend paragraph (e)(2)(ii)(B)(2) by ■ 17. In § 488.308— identified on the letter of non- removing the reference ‘‘§ 483.40(e)’’ ■ compliance. and adding in its place the reference a. Redesignate paragraphs (e)(2) and (2) Reconsideration requests must be ‘‘§ 483.30(e)’’. (3) as paragraphs (f)(1) and (2); submitted to CMS by sending an email ■ b. Reserve paragraph (e)(2); to SNFQRPReconsiderations@ PART 488—SURVEY, CERTIFICATION, ■ b. Add a paragraph heading for cms.hhs.gov containing all of the AND ENFORCEMENT PROCEDURES paragraph (f); and following information: ■ ■ (i) SNF CCN. 14. The authority citation for part 488 c. Revise newly redesignated (ii) SNF Business Name. continues to read as follows: paragraph (f)(1) introductory text. (iii) SNF Business Address. Authority: Secs. 1102, 1128l, 1864, 1865, The addition and revision read as (iv) CEO or CEO-designated personnel 1871 and 1875 of the Social Security Act, follows: contact information including name, unless otherwise noted (42 U.S.C. 1302, telephone number, title, email address, 1320a–7j, 1395aa, 1395bb, 1395hh) and § 488.308 Survey frequency. and mailing address. (The address must 1395ll. * * * * * be a physical address, not a post office ■ 15. Section 488.30(a) is amended by (f) Investigation of complaints. (1) The box.) revising the definition of ‘‘Complaint survey agency must review all (v) CMS identified reason(s) for non- surveys’’ to read as follows: complaint allegations and conduct a compliance stated in the non- standard or an abbreviated survey to compliance letter. § 488.30 Revisit user fee for revisit investigate complaints of violations of (vi) Reason(s) for requesting surveys. requirements by SNFs and NFs if its reconsideration, including all (a) * * * review of the allegation concludes supporting documentation. CMS will Complaint surveys means those that— not consider an exception or extension surveys conducted on the basis of a * * * * * request unless the SNF has complied substantial allegation of noncompliance, fully with the requirements in as defined in § 488.1. The requirements ■ 18. Section 488.314 is amended by paragraph (d)(2) of this section. of sections 1819(g)(4) and 1919(g)(4) of revising paragraph (a)(1) to read as (3) CMS will make a decision on the the Social Security Act and § 488.332 follows: request for reconsideration and provide apply to complaint surveys. § 488.314 Survey teams. notice of the decision to the SNF * * * * * through the QIES–ASAP system and via ■ 16. Section 488.301 is amended by (a) * * * letter sent through the United States revising the definition of ‘‘Abbreviated (1) Surveys under sections 1819(g)(2) Postal Service. standard survey’’ to read as follows: and 1919(g)(2) of the Social Security Act (e) Appeals. (1) A SNF that is must be conducted by an dissatisfied with CMS’ decision on a § 488.301 Definitions. interdisciplinary team of professionals, request for reconsideration may file an * * * * * which must include a registered nurse. appeal with the Provider Abbreviated standard survey means a * * * * * Reimbursement Review Board (PRRB) survey other than a standard survey that Dated: April 21, 2017. under 42 CFR part 405, subpart R. gathers information primarily through (2) [Reserved] resident-centered techniques on facility Seema Verma, compliance with the requirements for Administrator, Centers for Medicare & PART 424—CONDITIONS FOR Medicaid Services. MEDICARE PAYMENT participation. An abbreviated standard survey may be premised on complaints Dated: April 21, 2017. ■ 12. The authority citation for part 424 received; a change of ownership, Thomas E. Price, continues to read as follows: management, or director of nursing; or Secretary, Department of Health and Human Services. Authority: Secs. 1102 and 1871 of the other indicators of specific concern. Social Security Act (42 U.S.C. 1302 and Abbreviated standard surveys [FR Doc. 2017–08521 Filed 4–27–17; 4:15 pm] 1395hh). conducted to investigate a complaint or BILLING CODE 4120–01–P

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