The 6 Things You Need to Know About the 2018 IPPS Final Rule

Hospitals reporting to the CMS IQR program will feel the burden of electronically reporting ease up a bit in 2017. At least that’s how CMS is hoping hospitals will feel when they review the final rule that was released recently. The final rule covers the requirements for the Inpatient Prospective Payments Systems for 2018 with additional modifications to the 2017 reporting year.

Here is a summary of the top six things to know about the 2018 IPPS Final Rule.

1. The Hospital Inpatient Quality Reporting (IQR) Program Requirements Have Changed

CMS rolled back the electronic requirements for hospitals reporting to the IQR program in 2017. They went further by keeping those easier requirements for the 2018 program year as well. They have also relaxed the EHR demands that were scheduled to take effect in 2018. Here are the notable changes to the IQR program.

CMS lowered the number of eCQMs required for 2017 and 2018.

CMS has reduced the required number of eCQMs a hospital must submit to the IQR program in 2017 and 2018 from eight to four eCQMs.


CMS reduced the reporting period for 2017 and 2018.

In addition to reducing the number of eCQMs required for submission, CMS also reduced the number of quarters required. Instead of submitting data from all four quarters of 2017, hospitals may submit one quarter of data from any quarter of 2017. This applies to 2018 as well.

This is a change from the 2017 Final Rule which required eight eCQMs from all four quarters of 2017. This is also a change from the 2018 Proposed Rule released earlier this year, that proposed to scale back the requirements to six eCQMs for two quarters of 2017.


CMS has pushed back the 2015 EHR certification requirement.

One of the biggest concerns for hospitals was the 2018 IQR program requirement to use the 2015 Edition of CEHRT. CMS has modified this requirement. Hospitals will be permitted to continue to use either the 2014 or 2015 edition of CEHRT in 2018. A combination of both editions is also acceptable.


Your EHR must be certified for all 15 eCQMs.

Even though your EHR edition requirements are eased, hospitals must still make sure their EHR technology is certified for all 15 eCQMs that are available. They must also use the most recent version of the eCQM specifications. CMS did clarify that the EHR technology does not need to be recertified each time the eCQMs are updated.


CMS has reduced the number of cases they will audit and included additional exclusions.

In coordination with the reduced number of eCQMs required for submission, CMS has also reduced the number of cases that will be audited for the 2017 reporting year. They will now only audit eight cases for each of the 200 hospitals that are chosen to be audited.

Additionally, they have included additional exclusion criteria. CMS will exclude hospitals that do not have at least five discharges for at least one eCQM submitted. They will also exclude cases with episodes of care longer than 120 days or cases with zero denominators for each measure.


2. CMS Modified the Meaningful Use Requirements

In this final rule, hospitals will not need to meet Stage 3 Meaningful Use requirements until 2019. eCQM requirements were changed to reflect the newly modified IQR requirements. CMS added an exception for hospitals and providers whose EHR was decertified and therefore rendering them unable to meet their requirements.

Meaningful Use is pushed back one year.

Most notably, the requirement for all hospitals to be at Stage 3 of Meaningful Use by 2018 was eased. Hospitals may now continue to meet the modified Stage 2 measures for one more year. In 2019, hospitals will be required to meet Stage 3 of the Meaningful Use program.


Electronic measures were aligned with the IQR program.

Another change of note deals with the alignment of eCQM requirements between the Meaningful Use and IQR programs. Eligible and Critical Access Hospitals reporting electronically to the Meaningful Use program must also submit four eCQMs for one quarter of 2017. Any hospitals attesting under the Meaningful Use program, must attest to all 16 available CQMs for a full year.


The reporting period for Eligible Professionals is modified.

The reporting period for Eligible Professionals is changing to be a minimum of a continuous 90-day period of 2017. CMS has also aligned the CQMs that are available, to reflect those CQMs also available in the MIPS program.


New exceptions were created for decertified EHR technology.

If a hospital or provider was not able to meet the Meaningful Use requirements because their EHR was decertified by ONC, CMS will not penalize that hospital or provider.


3. An increase to the Hospital Operating Payment Rate is in store

Hospitals successfully participating in the IQR and Meaningful Use program will receive a 1.2% increase in their operating payment rate.

Increase to the Hospital Operating Rate Payment

+2.7% (Hospital Market Basket Update)
-0.6% (Multi-factor Productivity)
-0.6% (Remove the one-time adjustments for the two midnight policy)
-0.75% (In accordance with the Affordable Care Act)
+0.45% (In accordance with the 21st Century Cures Act)

= 1.2% Increase to Operating Payment Rate

CMS projects that the operating payment increase, along with other changes, will give Eligible Hospitals a$2.4 billion increase. For comparison, hospitals received a $746 million raise in 2017.

4. The way uncompensated care payments are distributed has been adjusted

CMS also finalized its proposal to distribute $6.8 billion in uncompensated care payments, an increase of $800 million from 2017.  They also decided to finalize their proposal to use data from the Worksheet S-10 of the Medicare cost report to decide how these funds are allocated to hospitals.

This modification – applying to fiscal year 2018 – is a bit controversial. Historically, CMS payments were distributed based on the number of Medicaid, dual-eligible (Medicare and Medicaid) and disabled patients the hospitals served. This new method basically relies on the amount of uncompensated care the hospital claimed on its Medicare cost report.

5. Readmission penalties will be calculated based on peer groups

CMS is changing how they will assess penalties to hospitals eligible for the Hospital Readmissions Reduction Program. In this final rule, they determined that they will assess readmission penalties based on the hospital’s performance relative to other hospitals with a similar number of patients who are dually eligible for Medicare and Medicaid. In other words, CMS is splitting hospitals up into five peer groups. Your peer group will have a similar number of dually eligible patients that your hospital cared for.


6. Measure modifications were made for the Hospital Value-Based Purchasing (VBP) program

CMS has decided to remove one measure and adopt two new measures to the Hospital Value-Based Purchasing program.

Starting in fiscal year 2019, CMS will remove the current 8-indicator Patient Safety measure from the Safety domain. They will replace this measure with the 10-indicator Patient Safety and Adverse Events Composite measure.

CMS will also adopt a payment measure for pneumonia patients with a 30-day episode of care. This will be added to the Efficiency and Cost Reduction domain beginning with fiscal year 2022.

And finally, CMS updated the weighting of measures in the Efficiency and Cost Reduction domain. This update reflects the addition of the new measures beginning in fiscal year 2021.



The 8 Requirements For Hospital IQR Program In 2018

While some hospitals have the IQR program down to a science, there are still many hospitals out there that still scramble each year. In my hospital, who is responsible for what? What are the dates to complete each part of the program?

The best way to succeed is to begin with a plan. To make it easier for you, we’ve laid out the eight requirements you must do in 2018 to successfully complete the IQR program in this FREE 23-page eBook.

This eBook includes:

  1. The requirements for each part of program
  2. Submission method details
  3. Measure lists
  4. 2018 deadlines

New Call-to-action

Erin Heilman