CMS Finalizes PSO Reporting Requirements

Post

March 11, 2014, the Centers for Medicare & Medicaid Services (CMS) issued the final rule implementing a number of provisions of the Affordable Care Act (ACA), including the provision that hospitals must satisfy certain patient safety and quality improvement requirements to contract with a qualified health plan (QHP) through Covered California, the state’s health insurance exchange.

The ACA requires QHPs to contract with hospitals that have more than 50 beds only if they meet certain patient safety standards, including the use of a patient safety evaluation system (PSES) and a comprehensive hospital discharge program. However, the final rule adopts the CMS proposal to phase in these changes over time. In phase one, CMS adopted its proposal to allow a QHP to contract with hospitals that have more than 50 beds only if they are either Medicare-certified (having a Medicare CCN) or are Medicaid-only and have been issued a Medicaid-only CMS certification number, even if they don’t use a PSES or meet other ACA patient safety standards. Phase one would begin Jan. 1, 2015, and last two years or until CMS issues further regulation. CMS discusses in the final rule its response to input received through comments on next steps in phase two of implementation.

CHA and the California Hospital Patient Safety Organization (CHPSO) sent comments generally supporting the CMS approach but were hopeful that the agency would move more quickly to address possible alternatives for hospitals to meet the requirements and enhance the capability of PSOs to provide lessons learned to providers. As it stands now, CMS will not issue further standards until it is ready to issue revisions to Health Insurance Exchange market regulations.

Below are the phase I rule for patient safety and some relevant comments by CMS about their intent.

Phase I Standards for documentation of patient safety and discharge planning programs

§ 156.1110 Establishment of patient safety standards for QHP issuers.

(a) Patient safety standards. A QHP issuer that contracts with a hospital with greater than 50 beds must verify that the hospital, as defined in section 1861(e) of the Social Security Act, is Medicare-certified or has been issued a Medicaid-only CMS Certification Number (CCN) and is subject to the Medicare Hospital Conditions of Participation requirements for—

(1) A quality assessment and performance improvement program as specified in 42 CFR 482.21; and

(2) Discharge planning as specified in 42 CFR 482.43.

(b) Documentation. A QHP issuer must collect the CCN, from each of its contracted hospitals with greater than 50 beds, to demonstrate that those hospitals meet patient safety standards required in paragraph (a) of this section.

© Reporting. (1) A QHP issuer must make available to the Exchange the documentation referenced in paragraph (b) of this section, upon request by the Exchange, in a time and manner specified by the Exchange.

(2) Issuers of multi-State plans, as defined in § 155.1000(a) of this subchapter, must provide the documentation described in paragraph (b) of this section to the U.S. Office of Personnel Management, in the time and manner specified by the U.S. Office of Personnel Management.

(d) Effective date. A QHP issuer must ensure that each QHP meets patient safety standards in accordance with paragraph (a) of this section effective for plan years beginning on or after January 1, 2015.

Excerpts from the rule preamble addressing CMS’ plans for the patient safety and discharge planning program requirement

Federal Register Volume 79 Number 47, Page 13746

“Section 1311(h)(1) of the Affordable Care Act specifies that a QHP may contract with health care providers and hospitals with more than 50 beds only if they meet certain patient safety standards. For hospitals with more than 50 beds, this includes the use of a patient safety evaluation system and a comprehensive hospital discharge program. Section 1311(h)(2) of the Affordable Care Act also provides the Secretary flexibility to establish reasonable exceptions to these patient safety requirements, and section 1311(h)(3) of the Affordable Care Act allows the Secretary flexibility to issue regulations to modify the number of beds described in section 1311(h)(1)(A) of the Affordable Care Act.”

Page 13814

“During phase one, a QHP issuer that contracts with hospitals that have more than 50 beds, must verify that they are Medicare-certified or have been issued a Medicaid-only CMS certification number (CCN), and are subject to Medicare Hospital Conditions of Participation (CoPs) requirements found in 42 CFR part 482 (specifically, standards regarding a quality assessment and performance improvement program and a discharge planning process).”

Page 13815

“The first phase of implementation would be for 2 years beginning January 1, 2015 or until we issue further regulations based on a reassessment of the Exchange market, whichever is later. We believe that this provides ample time for Exchange markets to develop, QHP provider networks to grow, PSOs to continue expanding, continued research regarding more robust patient safety standards for QHP issuers and examples of comparable activities to be included as reasonable exceptions.

“As the Exchange market evolves and as enrollment increases, we believe that patient safety reporting standards for QHP issuers should be enhanced. We do not intend phase one standards to be a substitute for hospital and PSO agreements. We believe that the first phase of implementation and aligning with Medicare Hospital CoPs requirements is appropriate at this time because the approach allows for effective alignment of hospital quality standards, clear standards for issuers and hospitals, and sufficient patient access to health care, in time to meet the statutory deadline of January 1, 2015.”

Page 13814

“We anticipate establishing phase two implementation which would begin January 1, 2017 or when we issue further regulations based on a reassessment of the Exchange market, whichever is later, to include standards around hospitals and Patient Safety Organizations (PSO), health care providers, and health care quality improvement mechanisms.”

Page 13815

“We intend to issue future rulemaking regarding the establishment of reasonable exceptions [to the PSO participation requirement] pursuant to the Secretary’s authority in section 1311(h)(2) of the Affordable Care Act and will welcome additional comments at that time.”