# Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments (CLIA), and Patient Protection and Affordable Care Act; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2020-19150 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** September 2, 2020 - **Citation:** 85 FR 54820 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 410, 413, 414, 422, 423, 482, 483, 485, 488 and 493 [CMS-3401-IFC] RIN 0938-AU33 Medicare and Medicaid Programs, Clinical Laboratory Improvement Amendments (CLIA), and Patient Protection and Affordable Care Act; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Interim final rule with comment period. SUMMARY: This interim final rule with comment period (IFC) revises regulations to strengthen CMS' ability to enforce compliance with Medicare and Medicaid long-term care (LTC) facility requirements for reporting information related to coronavirus disease 2019 (COVID-19), establishes a new requirement for LTC facilities for COVID-19 testing of facility residents and staff, establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking the incidence and impact of COVID-19 to assist public health officials in detecting outbreaks and saving lives, and establishes requirements for all CLIA laboratories to report COVID-19 test results to the Secretary of Health and Human Services (Secretary) in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the Public Health Emergency (PHE). DATES: Effective date: These regulations are effective on September 2, 2020. Applicability date: These regulations are applicable for the duration of the PHE for COVID-19. Section 488.447 is applicable 1 year beyond the expiration of the PHE for COVID-19. The amendment to § 414.1305 and the expansion of telehealth codes used in beneficiary assignment for the CMS Web Interface and CAHPS for MIPS survey (found in section II.I. of the preamble) are applicable beginning January 1, 2020. Comment date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on November 2, 2020. ADDRESSES: In commenting, please refer to file code CMS-3401-IFC. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3401-IFC, P.O. Box 8016, Baltimore, MD 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3401-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Debra Lyons, (410) 786-6780, for information on the LTC enforcement regulation at 42 CFR part 488. CAPT Scott Cooper, USPHS, (410) 786-9465, for the hospital and CAH COVID-19 reporting requirements. Sarah Bennett, (410) 786-3354, for laboratory reporting information. Julia Venanzi, (410) 786-1471, for provisions related to the Hospital Value-Based Purchasing Program. Erin Patton, (410) 786-2437, for provisions related to the Hospital Readmissions Reduction Program. Lang Le, (410) 786-5693, for provisions related to the Skilled-Nursing Facility Value-Based Purchasing Program and the Hospital-Acquired Condition Reduction Program. Delia Houseal, (410) 786-2724, for provisions related to the End-Stage Renal Disease Quality Incentive Program. Kimberly Long, (410) 786-5702, or NCDsPublicHealthEmergency@cms.hhs.gov, for provisions related to NCD Procedural Volumes for Facilities and Practitioners to Maintain Medicare Coverage. Jennifer Dupee, (410) 786-6537, for provisions related to order requirements for COVID-19 and related testing. Jaya Ghildiyal, (301) 492-5149, for PPACA risk adjustment requirements. Christina Whitefield, (301) 492-4172, for PPACA medical loss ratio requirements. Elizabeth Goldstein, (410) 786-6665, or PartCandDStarRatings@cms.hhs.gov, for the modifications to the calculation of the 2022 Part C and D Star Ratings. Molly MacHarris, (410) 786-4461, for issues related to the Merit-based Incentive Payment System (MIPS). Kianna Banks, (410) 786-3498, for the LTC resident and staff COVID-19 testing requirements. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view public comments. Table of Contents I. Background II. Provisions of the Interim Final Rule with Comment Period (IFC) A. New Enforcement Requirement for LTC Facilities B. Condition of Participation (CoP) Requirements for Hospitals and CAHs to Report COVID-19 Data As Specified by the Secretary During the PHE for COVID-19 C. Requirements for Laboratories to Report SARS-CoV-2 Test Results During the PHE for COVID-19 D. Quality Reporting: Updates to the Extraordinary Circumstances Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in Response to the PHE for COVID-19, and Update to the Performance Period for the FY 2022 SNF VBP Program E. NCD Procedural Volumes for Facilities and Practitioners to Maintain Medicare Coverage F. Limits on COVID-19 and Related Testing without an Order and Expansion of Testing Order Authority G. Recognizing Temporary Premium Credits as Premium Reductions H. Addressing the Impact of COVID-19 on Part C and Part D Quality Rating Systems I. Merit-Based Incentive Payment System (MIPS) Updates J. Requirement for Long-Term Care (LTC) Facilities to Test Facility Residents and Staff for COVID-19 III. Waiver of Proposed Rulemaking IV. Collection of Information Requirements V. Response to Comments VI. Regulatory Impact Analysis Regulations Text Executive Summary This interim final rule with comment period (IFC) revises regulations to strengthen CMS' ability to enforce compliance with Medicare and Medicaid long-term care (LTC) facility requirements for reporting information related to coronavirus disease 2019 (COVID-19), establishes a new requirement for LTC facilities for COVID-19 testing of facility residents and staff, establishes new requirements in the hospital and critical access hospital (CAH) Conditions of Participation (CoPs) for tracking the incidence and impact of COVID-19 to assist public health officials in detecting outbreaks and saving lives, and establishes requirements for all CLIA laboratories to report COVID-19 test results to the Secretary of Health and Human Services (Secretary) in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the Public Health Emergency (PHE). This IFC updates the extraordinary circumstances exceptions granted for the ESRD Quality Incentive Program (QIP), Hospital Acquired Condition (HAC) Reduction Program, Hospital Readmissions Reduction Program (HRRP), and Hospital VBP Program for the PHE for COVID-19, and revises the FY 2022 performance period under the Skilled Nursing Facility (SNF) VBP as a result of the PHE for COVID-19. This IFC also announces that with respect to the Hospital VBP Program, HRRP, HAC Reduction Program, SNF VBP Program and the ESRD QIP, if, as a result of a decision to grant a new nationwide ECE without request or a decision to grant a substantial number of individual ECE requests, we do not have enough data to reliably compare national performance on measures, we may propose to not score facilities, hospitals, or SNFs based on such limited data or make the associated payment adjustments for the affected program year. In addition, this IFC announces that CMS will not enforce certain procedural volume requirements for four national coverage determinations, revises the previous policy outlined in the May 8th COVID-19 IFC by establishing that one single COVID-19 diagnostic test and one of each other applicable related tests without an order from a treating physician or other practitioner is reasonable and necessary, establishes a policy whereby the orders of pharmacists and other practitioners that are allowed to order laboratory tests in accordance with state scope of practice and other pertinent laws can fulfill the requirements related to orders for covered COVID-19 and related tests for Medicare patients, specifies how temporary premium credits for individual and small group health insurance coverage are treated for purposes of the risk adjustment and medical loss ratio programs, modifies the application of the extreme and uncontrollable circumstances policy for calculation of the 2022 Part C and D Star Ratings to address the effects of the PHE for COVID-19, includes in the Merit-Based Incentive Payment System (MIPS) beneficiary assignment methodology for the CMS Web Interface and Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS survey for performance year 2020 and any subsequent performance year that starts during the PHE for COVID-19 certain Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) code additions, and modifies IA_ERP_3. I. Background The United States is responding to an outbreak of respiratory disease caused by coronavirus disease that was first detected in China and which has now been detected in more than 190 countries internationally, and all 50 States, the District of Columbia, and the U.S. territories. The virus has been named “severe acute respiratory syndrome coronavirus 2” (SARS-CoV-2”) and the disease it causes has been named “coronavirus disease 2019” (“COVID-19”). On January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization (WHO) declared the outbreak a “Public Health Emergency of International Concern”. On January 31, 2020, pursuant to section 319 of the Public Health Service Act (PHSA) (42 U.S.C. 247d), the Health and Human Services Secretary (the Secretary) determined that a public health emergency (PHE) exists for the United States to aid the nation's healthcare community in responding to COVID-19 (hereafter referred to as the PHE for COVID-19). On March 11, 2020, the WHO publicly declared COVID-19 a pandemic. On March 13, 2020, President Donald J. Trump (the President) declared the COVID-19 pandemic a national emergency. Effective July 25, 2020, the Secretary renewed the January 31, 2020 determination that was previously renewed on April 21, 2020, that a PHE for COVID-19 exists and has existed since January 27, 2020. The Centers for Disease Control and Prevention (CDC) has reported that some people are at higher risk of severe illness from COVID-19. 1 These higher-risk categories include: 1 https://www.cdc.gov/mmwr/volumes/69/wr/mm6915e3.htm. • Older adults, with risk increasing by age. • People of any age who have certain underlying medical conditions such as: ++ Cancer. ++ Chronic kidney disease. ++ Obesity. ++ Serious heart conditions (for example, heart failure, coronary artery disease, or cardiomyopathies). ++ Sickle cell disease. ++ Diabetes mellitus. ++ Hypertension. ++ Chronic obstructive pulmonary disease (COPD). ++ Neurologic/Neurodevelopmental disability. 2 2 https://www.cdc.gov/mmwr/volumes/69/wr/mm6924e2.htm?s_cid=mm6924e2_w. ++ Immunocompromised state from solid organ transplant. • Residents of LTC facilities, including nursing homes, Intermediate Care Facilities for Individuals with Intellectual and Developmental Disabilities (ICF/IIDs), inpatient psychiatric and substance abuse treatment facilities including institutions for mental disorders (IMD) and Psychiatric Residential Treatment Facilities (PRTF), assisted living facilities, group homes for individuals with developmental disabilities and board-and-care facilities. The CDC has developed guidance to help in the risk assessment and management of people with potential exposures to COVID-19, including recommending that healthcare professionals make every effort to interview a person under investigation for infection by telephone, text monitoring system, or video conference. 3 3 https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html. As the healthcare community establishes and implements recommended infection prevention and control practices, regulatory agencies operating under appropriate waiver authority granted by the PHE for COVID-19 are also working to revise and implement regulations that support these healthcare community infection prevention and treatment practices. Based on the current and projected increases in the COVID-19 incidence rates in the US, observed fatalities in the older adult population, and the impact on health workers who are at increased risk due to treating special populations, it is CMS' belief that certain regulations should be reviewed and revised as appropriate to offer additional flexibilities in furnishing and providing services to combat the PHE for COVID-19 and to address and minimize the unique impact of the PHE for COVID-19 on other regulatory provisions. We addressed some of these regulations in two previous interim final rules with comment period (IFCs). The “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” IFC appeared in the April 6, 2020 Federal Register (85 FR 19230) with an effective date of March 31, 2020 (hereafter referred to as the “March 31st COVID-19 IFC”), and the “Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” IFC appeared in the May 8, 2020 Federal Register (85 FR 27550) with an effective date of May 8, 2020 (hereafter referred to as the “May 8th COVID-19 IFC”). In this IFC, we are revising regulations to strengthen CMS' ability to enforce new LTC requirements added to 42 CFR part 483 published in the May 8th COVID-19 IFC to report facility data related to COVID-19 and infection control at least weekly. Specifically, we are adding a regulation to specify the civil money penalty (CMP) amounts that may be imposed for the failure to electronically report COVID-19 data each week, which includes, among other things, suspected and confirmed COVID-19 infections among residents and staff, including residents previously treated for COVID-19, total deaths of COVID-19 deaths among residents and staff, and personal protective equipment and hand hygiene supplies in the facility. We are also requiring hospitals and CAHs to report information in accordance with a frequency, and in a standardized format, as specified by the Secretary during the PHE for COVID-19. We believe that universal reporting by all hospitals and CAHs is and will be an important tool for supporting surveillance of COVID-19 and for future planning to prevent the spread of the virus, especially to those most vulnerable and at risk to its effects. In this IFC, we also address condition-level noncompliance related to SARS-CoV-2 laboratory reporting and strengthen CMS' ability to enforce new requirements to electronically report SARS-CoV-2 test results in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the PHE for COVID-19. On October 31, 1988, Congress enacted the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (Pub. L. 100-578) (codified as amended at 42 U.S.C. 263a), requiring any laboratory that examines human specimens for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of health, of human beings to be certified by the Secretary for the categories of examinations or procedures performed by the laboratory. The implementing regulations at 42 CFR part 493 specify the conditions and standards that must be met to achieve and maintain CLIA certification. These conditions and standards strengthen federal oversight of clinical laboratories and help ensure the accuracy and reliability of patient test results. On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136) into law. The CARES Act includes section 18115, which requires every laboratory that performs or analyzes a test that is intended to detect SARS-CoV-2 or to diagnose a possible case of COVID-19 to report the results for such test to the Secretary until the conclusion of the PHE for COVID-19. Subsequently, on June 4, 2020, the Department of Health and Human Services (HHS) published the COVID-19 Pandemic Response, Laboratory Data Reporting: CARES Act Section 18115 Guidance, 4 implementing the requirement under section 18115 of the CARES Act for laboratories to report COVID-related information to the Secretary. 4 https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf. With regard to laboratory oversight, HHS endeavors to improve consistency in application of laboratory standards, to improve coordination, collaboration, and communication in both routine and emergent situations, and thereby further improve the level of laboratory oversight and ultimately patient care. In order for CMS to ensure laboratories are properly reporting SARS-CoV-2 test results, CMS has determined that modifications to the CLIA regulations must be made. We are requiring all laboratories performing testing related to SARS-CoV-2, to report SARS-CoV-2 test results in such form and manner, and at such timing and frequency, as the Secretary may prescribe during the PHE for COVID-19. In addition, this IFC clarifies the data reporting requirements for issuers of risk adjustment covered plans 5 to specify that, for the purposes of 2020 benefit year risk adjustment data submissions, issuers of risk adjustment covered plans that provide temporary premium credits must report to their distributed data environments (EDGE servers) the adjusted plan premiums that reflect actual premiums billed to enrollees, taking the premium credits into account as a reduction in premiums. In addition, we clarify that, consistent with the reporting of the actual premium amounts billed to enrollees for 2020 benefit year risk adjustment data submissions, HHS's calculation of risk adjustment payment and charges for the 2020 benefit year under the state payment transfer formula will be calculated using the statewide average premium that reflects actual premiums billed, taking into account any temporary premium credits provided as a reduction in premium for the applicable months of 2020 coverage. In this IFC, we similarly clarify the Medical Loss Ratio (MLR) reporting and rebate calculation requirements in 45 CFR part 158 for issuers that elect to provide temporary premium credits in 2020 such that these issuers must report as earned premium the actual premium paid, taking into account any temporary premium credits provided for the applicable months of 2020 coverage. 5 See 45 CFR 153.20 for a definition of “risk adjustment covered plan”. This IFC also announces that we will not enforce certain procedural volume requirements in order for facilities and practitioners to maintain Medicare coverage under specific national coverage determinations (NCDs). This applies to facilities and practitioners that, prior to the PHE for COVID-19, met the volume requirements for these NCDs. In this IFC, we are also revising the previous policy outlined in the May 8th COVID-19 IFC, which allowed for broad COVID-19 testing for a single beneficiary without a physician or other practitioner order, by establishing that one single COVID-19 diagnostic test and one of each other related tests (as listed in the May 8th COVID-19 IFC) without a treating physician or other practitioner order is reasonable and necessary. We are also establishing a policy whereby the orders of pharmacists and other practitioners that are allowed to order laboratory tests in accordance with state scope of practice and other pertinent laws can fulfill the requirements related to orders for covered COVID-19 tests for Medicare patients. In addition, this IFC updates the extraordinary circumstances exceptions (ECEs) we granted on March 22, 2020, for the ESRD Quality Incentive Program (QIP), Hospital Acquired Condition (HAC) Reduction Program, HRRP, and Hospital Value-Based Purchasing (VBP) Program in response to the PHE for COVID-19, revises the FY 2022 performance period under the SNF VBP as a result of the PHE for COVID-19, implements a COVID-19 reporting requirement for hospitals and critical access hospitals (CAHs), and modifies the application of the extreme and uncontrollable circumstances policy for calculation of the 2022 Part C and D Star Ratings to address the effects of the PHE for COVID-19. This IFC also announces that with respect to the Hospital VBP Program, HRRP, HAC Reduction Program, SNF VBP Program and the ESRD QIP, if, as a result of a decision to grant a new nationwide ECE without request or a decision to grant a substantial number of individual ECEs, we do not have enough data to reliably compare national performance on measures, we may propose to not score facilities based on such limited data or make the associated payment adjustments for the affected program year. In this IFC, for the 2020 performance year and any subsequent performance year that starts during the PHE for COVID-19, we are including in the MIPS beneficiary assignment methodology for the CMS Web Interface and Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS survey the following additions due to the PHE for COVID-19: (1) CPT codes: 99421, 99422, and 99423 (codes for online digital evaluation and management (E/M) service (e-visit)), and 99441, 99442, and 99443 (codes for telephone E/M services); and (2) HCPCS codes: G2010 (code for remote evaluation of patient video/images) and G2012 (code for virtual check-in). In addition, we are: (1) Expanding the improvement activity IA_ERP_3 titled “COVID-19 Clinical Trial” to also allow credit for clinicians who participate in the care of patients diagnosed with COVID-19 and simultaneously submit relevant clinical data to a clinical data registry for ongoing or future COVID-19 research; (2) updating the title; and (3) extending it through the CY 2021 performance period. In an effort to support national efforts to control the spread of COVID-19, we are also revising the LTC facility infection control regulations at § 483.80 to establish a new requirement for LTC facilities to test their facility residents and staff, including individuals providing services under arrangement and volunteers. We are requiring that resident and staff testing in LTC facilities for COVID-19 be conducted based on parameters set forth by the Secretary. We believe these requirements will positively and substantially impact efforts to control the spread of COVID-19 in LTC facilities. All provisions included in this IFC are effective only for the duration of the PHE for COVID-19, unless otherwise indicated. The provision at § 488.447 is intended to be in effect beyond the expiration of the PHE for COVID-19. II. Provisions of the Interim Final Rule With Comment Period (IFC) In this IFC, we use the term, “Public Health Emergency (PHE),” as defined at 42 CFR 400.200. The definition identifies the PHE determined to exist nationwide by the Secretary under section 319 of the PHSA on January 31, 2020, and renewed effective July 25, 2020, 6 as a result of confirmed cases of COVID-19. 6 https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx. A. New Enforcement Requirement for LTC Facilities Under sections 1866 and 1902 of the Social Security Act (the Act), providers of services seeking to participate in the Medicare or Medicaid program, or both, must enter into an agreement with the Secretary or the state Medicaid agency, as appropriate. LTC facilities seeking to be Medicare and Medicaid providers of services must be certified as meeting federal participation requirements. LTC facilities include SNFs for Medicare and nursing facilities (NFs) for Medicaid. The federal participation requirements for these facilities are specified in sections 1819 and 1919 of the Act and in implementing regulations at 42 CFR part 483, subpart B. Under sections 1819(f)(1) and 1919(f)(1) of the Act, the Secretary must assure that the enforcement of compliance with the participation requirements are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective use of public moneys. The federal requirements related to enforcement of the requirements for SNFs, NFs, or dually-certified facilities, are set forth in sections 1819(h) and 1919(h) of the Act and codified in the regulations at 42 CFR part 488, subpart F. Among the remedies available to be imposed for noncompliance with the requirements is a civil money penalty (CMP), as authorized in sections 1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii) of the Act, and §§ 488.430 through 488.444. We are using our authority under this IFC to immediately implement a new enforcement regulation identified below in order to effectively enhance enforcement of the new infection prevention and control reporting requirements at § 483.80(g)(1) and (2) that became effective on May 8, 2020 as discussed in the May 8th COVID-19 IFC. Prior to the PHE for COVID-19, regulations at § 483.80(a)(2)(ii) required facilities to have written standards, policies and procedures regarding infection control, which must include when and to whom possible incidents of communicable disease or infections should be reported. This includes reporting to local/state health authorities. In an effort to support ongoing surveillance of COVID-19 cases, we added to the infection control requirements provisions to establish weekly facility reporting of suspected and/or confirmed COVID-19 cases, among other information, at new § 483.80(g) in the May 8th COVID-19 IFC (85 FR 27550, 27601 through 27602). This new regulation requires nursing homes to report COVID-19 related facility data to the CDC National Healthcare Safety Network (NHSN). These new CMS reporting requirements do not preclude a facility from following all state and local public health reporting laws and regulations. Specifically, we revised our requirements by adding new provisions at §§ 483.80(g)(1) and (2), to require facilities to electronically report information about COVID-19 in a standardized format and at a frequency specified by the Secretary, but not less than weekly to the CDC NHSN. This critical information will provide real-time information on COVID-19 in nursing homes, and will be used to monitor trends in infection rates, and inform public health policies. To coincide with this new reporting requirement, we developed an automated process within the existing ASPEN (Automated Survey Process Environment) survey software application, which uses information received weekly from the CDC to determine whether a provider reported the data as required. We will determine if noncompliance exists through a retrospective review each week to identify the facilities that failed to take the necessary and timely actions to report to CDC. Noncompliance with this requirement for each weekly reporting cycle will be cited at a scope of widespread, and a severity of no actual harm with potential for more than minimal harm that is not immediate jeopardy, which constitutes a level “F” deficiency. This is consistent with guidance that was issued in QSO 20- 29-NH 7 which also included enforcement policies for the imposition of a CMP for the failure to report to the CDC NHSN. 7 “Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes.” QSO-20-29-NH (May 6, 2020) https://www.cms.gov/files/document/qso-20-29-nh.pdf. With this IFC, we are furthering enforcement efforts of the recently issued requirements at § 483.80(g)(1) and (2) that facilities report COVID-19 related information to the CDC's NHSN by making revisions to part 488. These revisions codify enforcement policies that are specifically tailored to reviewing compliance with and imposing CMPs for the failure to report. We are enforcing the new reporting requirements through the imposition of CMPs for each time a facility fails to report the required data to the CDC NHSN system. We believe that CMPs are an appropriate enforcement remedy that will facilitate a swift return to compliance with the new reporting requirement. Sections 1819(h)(2)(B)(ii)(I) and 1919(h)(3)(C)(ii)(I) of the Act limit the amount of a CMP to $10,000 8 for each day of noncompliance. We have determined that a minimum $1,000 initial CMP, with a $500 incremental increase, is within the authorized CMP range and an appropriate amount to deter noncompliance with this requirement. Specifically, we are noting that a minimum $1,000 CMP will be imposed for the first occurrence of noncompliance, that is, the first time the facility fails to submit a timely report as required under § 483.80(g)(1) and (2). For each subsequent time the facility fails to report the requisite COVID-19 related data, the amount of the CMP imposed will be increased by $500, which is consistent with sections 1819(h)(2)(B) and 1919(h)(3)(C) of the Act providing for the imposition of incrementally more severe fines for repeated deficiencies. For example, if a facility fails to report in 1 week, a minimum $1,000 CMP will be imposed for that occurrence of noncompliance. If it fails to report again in the subsequent week that new noncompliance determination will lead to the imposition of another CMP but in the increased amount of $1,500 for that failure to report. In this example, if the facility complies with the reporting requirements by submitting the required report in a 3rd week, but then subsequently fails to report again in a following week, a CMP in the amount of $2,000 for failing to report a third time will be imposed for that missed weekly report (which is $500 more than the last imposed amount). After each CMP is imposed, CMS will place the facility back into compliance, without requiring a Plan of Correction (POC) in accordance with § 488.408(f). A facility may still submit a POC if it chooses to do so; however, because compliance will be imposed each week and facilities will be assessed an increased CMP amount for each subsequent failure to report, a POC will not be necessary. Facilities are offered an opportunity for Independent Informal Dispute Resolution under § 488.431. This may be requested for reasons, such as technical difficulties that should be adequately documented, that may have prevented the facility from submitting its report in a timely manner. 8 This amount is adjusted annually under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, and listed in 42 CFR 102.3. The 2020 adjusted amount is $22,320 (85 FR 2870, January 17, 2020): https://www.federalregister.gov/documents/2020/01/17/2020-00738/annual-civil-monetary-penalties-inflation-adjustment. Currently, under § 488.408(d), Category 2 CMP remedies for noncompliance that is not immediate jeopardy, but is widespread deficient practice that does not constitute actual harm with a potential for more than minimal harm, or that constitutes actual harm, are imposed at a daily amount not to exceed $6,695. 9 Similarly, because noncompliance with § 483.80(g)(1) and (2) will be cited at an scope and severity of an “F”, which would trigger a Category 2 remedy, we will not continue incrementally increasing the CMPamount after 12 occurrences of noncompliance, so that the maximum CMP amount imposed would not exceed $6,500 for each subsequent occurrence of noncompliance. This specific maximum amount imposed for the failure to report was established to be consistent with the existing CMPs within Category 2 noncompliance. We believe imposing CMPs in this manner is a fair and effective penalty for the failure to report, as assessed each week. 9 Reflects the 2020 annual inflation adjusted amount under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, listed in 42 CFR 102.3 (85 FR 2870, January 17, 2020): https://www.federalregister.gov/documents/2020/01/17/2020-00738/annual-civil-monetary-penalties-inflation-adjustment. To support and further codify these enhanced enforcement efforts, we are adding § 488.447 to impose a minimum CMP amount of $1,000 for the first occurrence of noncompliance with the reporting requirements at § 483.80(g)(1) and (2), and will increase the CMP by $500 for each subsequent time the facility fails to report COVID-19 related data as required. Compliance with the requirements at § 483.80(g)(1) and (2) will be assessed weekly. Facilities found out of compliance with § 483.80(g)(1) and (2) are not required to submit a plan of correction as indicated in § 488.408(f)(1). These CMP amounts are subject to annual adjustments for inflation at 45 CFR 102.3. Under this rule, we will increase the CMP amounts for up to 12 subsequent noncompliance occurrences to the amount specified in § 488.408(d)(1)(iii), which would be $6,500 per occurrence of noncompliance. CMPs imposed in accordance with this rule are subject to the same procedures as all other CMPs imposed under sections 1819(h) and 1919(h) of the Act, including notice, escrow, independent informal dispute resolution, and collections. Also, facilities may appeal the determination leading to a CMP imposed under this rule in accordance with 42 CFR part 498. As discussed in section III. of this IFC, “Waiver of Proposed Rulemaking,” we believe the urgency of this PHE for COVID-19 constitutes good cause to waive the normal notice-and-comment process under Administrative Procedure Act (APA), 5 U.S.C. 533, and section 1871(b)(2)(C) of the Act. Waiving notice and comment is in the public interest because the heightened threat to resident health and safety for, widespread infection control noncompliance necessitates the expedited imposition of enforcement remedies. Additionally, because it is imperative to track the incidence and impact of COVID-19 in nursing homes, it is crucial that a financial penalty be imposed for failure to report. The CMP amounts we codify in this IFC will help deter noncompliance and encourage facilities to establish procedures that result in prompt weekly COVID-19 related data reports for the duration of the PHE for COVID-19. Proper enforcement mechanisms designed to deter noncompliant behavior and prompt corrective actions will help to ensure that residents, staff, and the public are safe, and will help provide critical COVID-19 related data to assist CMS and public health authorities in detecting and expeditiously responding to outbreaks. Furthermore, requiring prior notice and comment is impracticable because the PHE for COVID-19 that the CMP amounts are tailored to address may expire or be nearly over before a proposed rule can be finalized. Finally, we think prior notice and comment is unnecessary because we have broad discretion under the statute and existing CMP regulations to establish a CMP amount, but we are choosing to make our policies more transparent. We believe that a completely transparent CMP structure will help deter noncompliance, encourage timely reporting, and eliminate possible gaps in reporting that could hinder the government's response to the PHE for COVID-19 in specific geographic areas. For example, depending on the circumstances, the failure of one facility to report COVID-19 cases on a timely basis could delay our ability to detect and respond to an emerging COVID-19 hot spot. For similar reasons, we are also waiving the 30-day delay in effective date for these provisions. The effective date for § 488.447 is the date of the publication of this rule (that is, the effective date as noted in the DATES section of this IFC). Furthermore, while we would generally expect that the new § 488.447 would no longer be in effect as of the end of the PHE for COVID-19 as defined in § 400.200, enhanced enforcement to ensure facilities continue to comply with infection control reporting requirements to avoid possible spread of COVID-19 will need to temporarily be in effect for a longer period of time. In conjunction with the PHE for COVID-19, these enforcement policies will continue to be in effect for up to one year beyond the end of the PHE. B. Condition of Participation (CoP) Requirements for Hospitals and CAHs To Report COVID-19 Data As Specified by the Secretary During the PHE for COVID-19 Under sections 1866 and 1902 of the Act, providers of services seeking to participate in the Medicare or Medicaid program, or both, must enter into an agreement with the Secretary or the state Medicaid agency, as appropriate. Hospitals (all hospitals to which the requirements of 42 CFR part 482 apply, including short-term acute care hospitals, LTC hospitals, rehabilitation hospitals, psychiatric hospitals, cancer hospitals, and children's hospitals) and CAHs seeking to be Medicare and Medicaid providers of services must be certified as meeting federal participation requirements. Our conditions of participation (CoPs), conditions for coverage (CfCs), and requirements set out the patient health and safety protections established by the Secretary for various types of providers and suppliers. The specific statutory authority for hospital CoPs is set forth in section 1861(e) of the Act; section 1820(e) of the Act provides similar authority for CAHs. The hospital provision authorizes the Secretary to issue any regulations he or she deems necessary to protect the health and safety of patients receiving services in those facilities; the CAH provision authorizes the Secretary to issue such other criteria as he or she may require. The CoPs are codified in the implementing regulations at part 482 for hospitals, and at 42 CFR part 485, subpart F, for CAHs. Our CoPs at § 482.42 for hospitals and § 485.640 for CAHs, require that hospitals and CAHs, respectively, have active facility-wide programs, for the surveillance, prevention, and control of healthcare-associated infections (HAIs) and other infectious diseases and for the optimization of antibiotic use through stewardship. Additionally, the programs must demonstrate adherence to nationally recognized infection prevention and control guidelines, as well as to best practices for improving antibiotic use where applicable, and for reducing the development and transmission of HAIs and antibiotic-resistant organisms. Infection prevention and control problems and antibiotic use issues identified in the required hospital and CAH programs must also be addressed in coordination with facility-wide quality assessment and performance improvement (QAPI) programs. Infection prevention and control is a primary goal of hospitals and CAHs in their normal day-to-day operations, and these programs have been at the center of initiatives taking place in hospitals and CAHs during the PHE for COVID-19. Our regulations at §§ 482.42(a)(3) and 485.640(a)(3) require infection prevention and control program policies to address any infection control issues identified by public health authorities. On March 4, 2020, we issued guidance 10 stating that hospitals should inform infection prevention and control services, local and state public health authorities, and other healthcare facility staff as appropriate about the presence of a person under investigation for COVID-19. 10 https://www.cms.gov/files/document/qso-20-13-hospitalspdf.pdf-2. In this IFC, we are now requiring hospitals and CAHs to report information in accordance with a frequency, and in a standardized format, as specified by the Secretary during the PHE for COVID-19. Examples of data elements that may be required to be reported include things such as the number of staffed beds in a hospital and the number of those that are occupied, information about its supplies, and a count of patients currently hospitalized who have laboratory-confirmed COVID-19. This list is not exhaustive of those data items that we may require hospitals and CAHs to submit, as specified by the Secretary (see https://www.hhs.gov/sites/default/files/covid-19-faqs-hospitals-hospital-laboratory-acute-care-facility-data-reporting.pdf for the current list of data items specified.). We believe that universal reporting by all hospitals and CAHs is and will be an important tool for supporting surveillance of COVID-19 and for future planning to prevent the spread of the virus, especially to those most vulnerable and at risk to its effects, and we thank the thousands of hospitals and CAHs that have voluntarily reported this data in support of our efforts. However, while we recognize the important and immeasurable role that the timely and continued delivery of COVID-19 information plays in protecting both individual patients, as well as the overall health of the general public, we also recognize the crucial need for data reporting options that will help eliminate the duplicative and sometimes competing reporting requests that continue to place a significant burden on hospitals and CAHs whose resources are already stressed during this PHE for COVID-19. We expect that the new reporting requirements that will be specified by the Secretary, would include reporting channel options to make submission of data as user-friendly as possible to reduce the strain and burden hospitals and CAHs are currently experiencing as they face data requests from a multitude of federal, state, local, and private entities. The new standards will require hospitals and CAHs to report information on COVID-19 in a standardized format specified by the Secretary. Also, the information must be reported at a frequency and manner specified by the Secretary. We believe that a streamlined approach to reporting data will greatly assist the White House Coronavirus Task Force (COVID-19 Task Force) in tracking the movement of the virus and identifying potential problems in the healthcare delivery system. The completeness, accuracy, and timeliness of the data will inform the COVID-19 Task Force decisions on capacity and resource needs to ensure a fully coordinated effort across the nation. Furthermore, we believe that consistent processes and streamlined methods for the reporting of COVID-19 information will possibly reduce future, and urgent, requests for such data. We note here that the new reporting requirements at §§ 482.42(e) and 485.640(d) do not relieve a hospital or a CAH, respectively, of its obligation to continue to comply with §§ 482.42(a)(3) or 485.640(a)(3), each of which requires a facility to address any infection prevention and control issues identified by public health authorities. We believe that the requirements, as specified in this rule, to collect and transmit these data, will also encourage greater awareness and promotion of best practices in infection prevention and control within these facilities. This reporting requirement supports our responsibility to protect and ensure the health and safety of hospital and CAH patients by, among other things, ensuring that these facilities follow infection prevention and control protocols based on recognized standards of practice. We believe that these reporting requirements are necessary for CMS to monitor whether individual hospitals and CAHs are appropriately tracking, responding to, and mitigating the spread and impact of COVID-19 on patients, the staff who care for them, and the general public. We believe that this action reaffirms our commitment to protecting the health and safety of all patients who receive care at the approximately 6,200 Medicare- and Medicaid-participating hospitals and CAHs nationwide. As discussed in section III. of this IFC, “Waiver of Proposed Rulemaking,” we believe the urgency of this PHE for COVID-19 constitutes good cause to waive the normal notice-and-comment process under the APA and section 1871(b)(2)(C) of the Act. Waiving notice and comment is in the public interest because time is of the essence in tracking the incidence and impact of COVID-19 in hospitals and CAHs; such information will assist public health officials in detecting outbreaks and saving lives. The applicability date for § 482.42(e) for hospitals and § 485.640(d) for CAHs is the date of the publication of this rule as noted in the DATES section of this IFC. 2. Enforcement of Requirements for Hospitals and Critical Access Hospitals (CAHs) To Report COVID-19 Data We believe reporting by hospitals and CAHs is an important tool for supporting surveillance of COVID-19 and we will enforce violations of reporting requirements to the extent authorized by the Secretary. Should a hospital or CAH fail to consistently report test results throughout the duration of the PHE for COVID-19, it will be non-compliant with the hospital and the CAH CoPs set forth at §§ 482.42(e) and 485.640(d), respectively, and subject to termination as defined at 42 CFR 489.53(a)(3). We have taken a position on the importance of COVID-19 test results reporting in other provider areas, including use of CMPs for nursing homes that fail to report, and find it prudent to enact penalties for hospitals and CAHs that similarly fail to report COVID-19 test results. CMS currently lacks the statutory authority to impose CMPs against hospitals and CAHs; however, intermediate penalties such as CMPs have been an extremely useful tool in the enforcement of reporting requirements for nursing homes, helping to achieve 98 percent compliance. Therefore, we will continue to utilize all enforcement and payment authorities available to incentivize and promote compliance with all health and safety requirements, as allowed by statute and regulation. C. Requirements for Laboratories To Report SARS-CoV-2 Test Results During the PHE for COVID-19 Assuring a rapid and thorough public health response to the COVID-19 pandemic relies on having complete and comprehensive laboratory testing data, including standardized test results, relevant demographic details, and additional information that can improve both the response to SARS-CoV-2 and treatment of COVID-19. These data can contribute to understanding disease incidence and trends: Initiating epidemiologic case investigations, assisting with contact tracing, assessing availability and use of testing resources, and identifying supply chain issues for reagents and other material. Laboratory testing data, in conjunction with case reports and other data, also provide vital guidance for mitigation and control activities. Section 18115(a) of the CARES Act requires every laboratory that performs or analyzes a test that is intended to detect SARS-CoV-2 or to diagnose a possible case of COVID-19 (hereinafter referred to as a “SARS-CoV-2 test” or “COVID-19 diagnostic test”) to report the results from each such test to the Secretary until the end of the PHE for COVID-19. In addition, the statute authorizes the Secretary to prescribe the form and manner, and timing and frequency, of such reporting. As indicated in HHS guidance issued on June 4, 2020, 11 in an effort to receive these data in the most efficient and effective manner, the Secretary has required that all data be reported through existing public health data reporting methods. The June 4, 2020 guidance states that “as a guiding principle, data should be sent to state or local public health departments using existing reporting channels (in accordance with state law or policies) to ensure rapid initiation of case investigations by those departments, concurrent to laboratory results being shared with an ordering provider, or patient as applicable.” 12 11 COVID-19 Pandemic Response, Laboratory Data Reporting: Section 18115 of the CARES Act, https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf. 12 https://www.hhs.gov/sites/default/files/covid-19-laboratory-data-reporting-guidance.pdf. The June 4, 2020 guidance further explains that “all laboratories—including laboratories, testing locations operating as temporary overflow or remote locations for a laboratory, and other facilities or locations performing testing at point of care or with at-home specimen collection related to SARS-CoV-2—shall report data for all testing completed, for each individual tested, within 24 hours of results being known or determined, on a daily basis to the appropriate state or local public health department based on the individual's residence.” On October 31, 1988, Congress enacted the CLIA (Pub. L. 100-578) (codified as amended at 42 U.S.C. 263a) requiring any laboratory that examines human specimens for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of health, of human beings to be certified by the Secretary for the categories of examinations or procedures performed by the laboratory. The implementing regulations at 42 CFR part 493 specify the conditions and standards that must be met to achieve and maintain CLIA certification. These conditions and standards strengthen federal oversight of clinical laboratories and help ensure the accuracy and reliability of patient test results. Currently, the CLIA program only collects non-waived testing specialty and subspecialty information from laboratories issued a Certificate of Compliance (CoC), Certificate of Accreditation (CoA), or Certificate of Registration (CoR). Such information is collected for certain specialties, subspecialties, and analytes for proficiency testing purposes and during surveys to ensure that the laboratory is meeting CLIA requirements for the level and specialty/subspecialty of testing performed. CMS does not know the complete universe of laboratories performing SARS-CoV-2 testing, or which tests are being performed as information related to specific test systems is not captured in our database. While we collect this information when laboratories initially apply for all certificate types, subsequently it is only collected for CoC and CoA laboratories during an initial, recertification, validation, or complaint survey, as described above. This data is collected to ensure that such labs are meeting the applicable CLIA test complexity testing quality requirements. Certificate of Waiver (CoW) and Certificate for Provider-Performed Microscopy (PPM) laboratories are not required to submit information related to updating their test menu as long as the new testing falls under their current certificate. During this PHE for COVID-19, the Food and Drug Administration (FDA) is issuing Emergency Use Authorizations for in vitro diagnostics that are categorized to be run by certain CLIA-certified laboratories (which may include laboratories with a CoW or Certificate for PPM), depending on the scope and FDA's categorization of the authorized test. SARS-CoV-2 testing includes molecular, antibody, and antigen methods. Molecular (RT-PCR) tests detect the virus's genetic material and antigen tests detect specific proteins on the surface of the virus. Both types of tests are used to detect active or acute infection with SARS-CoV-2. Serology (antibody) testing is used to look for the presence of antibodies which are proteins produced by the body in response to infections. Due to the variety of COVID-19 testing available, our current informational limitations present a gap in understanding the universe of laboratories performing SARS-CoV-2 testing. We believe that, by collecting testing information, the CLIA program will be able to identify quality and accuracy issues with laboratories performing SARS-CoV-2 testing during this PHE for COVID-19. Currently we do not have a specific reporting requirement that allows for collection of SARS-CoV-2 testing information. Once we have accurate information on which laboratories are performing SARS-CoV-2 testing, our oversight authority will allow us to survey these laboratories to determine if they are performing testing within their appropriate CLIA certificate and that they are meeting applicable CLIA requirements to perform accurate and reliable testing. For CMS to ensure laboratories are reporting SARS-CoV-2 test results, the CLIA regulations need to be modified to require SARS-CoV-2 test result reporting. In the interest of ensuring quality laboratory testing during the PHE for COVID-19, we are finalizing the requirement for submission of SARS-CoV-2 test results to the Secretary. Specifically, we are finalizing that during the PHE for COVID-19, as defined in § 400.200, each laboratory that performs a SARS-CoV-2 test must report SARS-CoV-2 test results in such form and manner, and at such timing and frequency, as the Secretary may prescribe. We are also finalizing that failure to submit SARS-CoV-2 test results to the Secretary will be considered a violation of the new CLIA reporting requirements, resulting in condition level deficiencies for which CMPs or other penalties may apply. These regulatory amendments at §§ 493.41 and 493.1100(a) will require all laboratories, including, those holding a CoW, to report SARS-CoV-2 test results to the Secretary for the duration of the PHE for COVID-19, and specify that failure to do so will result in a condition level violation of the CLIA regulations. Should a laboratory not report required SARS-CoV-2 test results, we will impose a CMP under §§ 493.1804 and 493.1834. We are adding or amending the following regulations: • At § 493.2, Definitions, we are amending the definition of “Condition level requirements” to include the requirements in § 493.41. This change is necessary to allow for the imposition of CMPs on CoW laboratories that fail to comply with § 493.41 during the Secretary's PHE declaration for COVID-19 or any extension of such declaration. • At § 493.41, we are adding a that, for the duration of the PHE for COVID-19, CoW laboratories report SARS-CoV-2 test results to the Secretary. • At § 493.555, we are amending the provision by adding paragraph (c)(6) requiring that, for the duration of the PHE for COVID-19, CMS-deemed Accreditation Organizations (AO) and State Licensure Programs, Exempt States (ES), notify CMS within 10 days after identifying a laboratory that fails to report SARS-CoV-2 test results as required at §§ 493.41 and 493.1100(a). • At § 493.1100, we are adding paragraph (a) which requires that, for the duration of the PHE for COVID-19, all laboratories performing non-waived SARS-CoV-2 testing report SARS-CoV-2 test results to the Secretary. • At § 493.1804, we are revising paragraph (c)(1) to allow us to impose alternative sanctions (including CMPs) on CoW laboratories for failure to comply with §§ 493.41 and 493.1100(a) during the PHE for COVID-19. • At § 493.1834, we are amending the provision by adding paragraph (d)(2)(iii) to define the per day CMP amounts that may be imposed as a result of SARS-CoV-2 reporting violations. Such CMPs will be $1000 for the first day of noncompliance with the new reporting requirements, and $500 for each subsequent day the laboratory fails to report SARS-CoV-2 test results. The statute allows for the imposition of CMPs in an amount not to exceed $10,000 for each violation (for example, per sample not reported) or for each day of substantial noncompliance. We believe imposing CMPs based on a per day basis is a fairer and more effective penalty for failure to report than a per violation basis. The latter could lead to large CMPs for brief lapses in reporting. The CLIA regulations at § 493.551(a)(1) require both the AOs and ESs to have requirements that are equal to, or more stringent than, the CLIA condition-level requirements, so we would expect the AOs and ESs to have equivalent reporting requirements to CMS. AOs do not impose CMPs; however, ESs do have the ability to impose CMPs, so we would expect ESs to have an equivalent penalty structure to CMS. The ESs are generally approved by CMS to operate their own oversight programs so we would expect that the two ESs would report these laboratories to CMS, but would then impose the penalties based on their updated CMS-approved standards. In the case of the accredited laboratories, the laboratories identified as not reporting SARS-CoV-2 results as required would result in CMS taking a subsequent enforcement action as described in this section. D. Quality Reporting: Updates to the Extraordinary Circumstances Exceptions (ECE) Granted for Four Value-Based Purchasing Programs in Response to the PHE for COVID-19, and Update to the Performance Period for the FY 2022 SNF VBP Program As part of our response to the COVID-19 pandemic, on March 22, 2020, we granted ECEs to ESRD facilities, hospitals, and SNFs to reduce the data collection and reporting burden on these facilities and providers so they could direct their full resources to patient care during the early months of the pandemic. Each of these ECEs relieved these providers and facilities of their obligation to report data for the fourth quarter calendar year (CY) 2019, first quarter CY 2020 and second quarter CY 2020, but we stated that we would score such data if optionally reported. We continue to believe that the data we have excepted from mandatory reporting under these ECEs serves multiple purposes, including allowing us to understand the impact of the PHE for COVID-19 on quality of care. However, we are concerned about the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations, along with different impacts resulting from different state and local laws and policy changes implemented in response to COVID-19. As a result, we believe it is necessary in this IFC to update the ECEs that we have granted for the following value-based purchasing programs: • The End-Stage Renal Disease Quality Incentive Program (ESRD QIP); • The Hospital-Acquired Condition (HAC) Reduction Program; • The Hospital Readmissions Reduction Program (HRRP); and • The Hospital Value-Based Purchasing (HVBP) Program. Under these updated ECEs, we will only score data that was optionally reported for fourth quarter CY 2019. We will also exclude all data that was optionally reported for the first or second quarter of CY 2020 from our calculation of performance. We note that all of the ECEs that have been granted for the time periods discussed above have now ended. In this IFC, we are also updating the performance period for the FY 2022 SNF VBP Program because we are concerned that using qualifying claims from the two quarters that are not excepted under the ECE for COVID-19 (October 1, 2019 through December 31, 2019 (Q4 2019), and July 1, 2020 through September 30, 2020 (Q3 2020)) for all SNFs nationwide to calculate the SNF Readmission Measure (SNFRM) for the FY 2022 Program will not yield measure scores that reliably reflect SNF quality of care as determined by hospital readmission rates. As explained more fully below, the new performance period will be April 1, 2019 through December 31, 2019 and July 1, 2020 through September 30, 2020. 1. Updates to ESRD QIP: Utilization of Fourth Quarter CY 2019 ESRD QIP Data and the Removal of the Option for Facilities to Opt-Out of the Extraordinary Circumstances Exception (ECE) Granted With Respect to First and Second Quarter (CY) 2020 ESRD QIP Data a. Background of the ESRD QIP ECE Policy The ESRD QIP is authorized under section 1881(h) of the Act, and it aims to promote high-quality care in dialysis facilities by linking a portion of their payment under the ESRD prospective payment system (PPS) directly to their performance on quality of care measures. The ESRD QIP assesses facility performance on clinical and reporting measures adopted through the rulemaking process and scores dialysis facilities based on that performance. A facility that does not meet or exceed the minimum total performance score (TPS) set by CMS for the applicable payment year receives up to a 2 percent reduction to its ESRD PPS payment for that year. In the CY 2015 ESRD PPS final rule (79 FR 66189 through 66190), we adopted an ECE policy for the ESRD QIP, which recognized that there are times when facilities are unable to submit required quality data due to extraordinary circumstances that are not within their control, and that facilities should not be penalized for such circumstances or have their burden unduly increase during these times. This policy was implemented under the authority of section 1881(h)(3)(A)(i) of the Act, which requires the Secretary to develop a methodology for assessing the total performance of each provider of services and renal dialysis facility based on performance standards for the measures selected under section 1881(h)(2) of the Act for a performance period established under section 1881(h)(4)(D) of the Act. We interpreted section 1881(h)(3)(A)(i) of the Act to enable us to configure the methodology for assessing facilities' total performance such that we would not require a facility to submit, nor penalize a facility for failing to submit, data on any ESRD QIP quality measure data from any month in which a facility is granted an ECE. In the CY 2018 ESRD PPS final rule (82 FR 50761 through 50763), we modified the requirements for the ESRD QIP's ECE policy to further align that policy with the ECE policy adopted by other quality reporting and VBP programs. In the CY 2020 ESRD PPS final rule (84 FR 60714), we codified requirements for the ECE policy at 42 CFR 413.178(d)(3) through (7), including a new option for facilities to reject an ECE granted by CMS under certain circumstances. We stated that this option would provide facilities with flexibility under the ECE policy. We also adopted this provision to provide further guidance to the public on the scope of our ECE policy. b. Background of the ESRD QIP ECE Granted in Response to the PHE for COVID-19 On March 22, 2020, in response to COVID-19, we announced relief for clinicians, providers, hospitals and facilities participating in Medicare quality reporting programs (QRPs) and VBP programs. 13 On March 27, 2020, we published a supplemental guidance memorandum that described in more detail the scope and duration of the ECE we were granting under each Medicare QRP and VBP program. 14 13 CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting. 14 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. Under the ECE for the PHE for COVID-19 that we granted to all facilities participating in the ESRD QIP, such facilities are currently excepted from the following reporting requirements and submission deadlines: • For the National Healthcare Safety Network (NHSN) blood stream infection (BSI) clinical measure and NHSN Dialysis Event reporting measure: ++ March 31, 2020, June 30, 2020, September 30, 2020 reporting deadlines for encounters during the following periods: —October 1, 2019 to December 31, 2019 (Q4 2019)—We noted that data from the 4th quarter 2019 would be utilized if submitted. —January 1, 2020 to March 30, 2020 (Q1 2020). —April 1, 2020 to June 30, 2020 (Q2 2020). • For ESRD QIP CROWNWeb reporting deadlines and applicable clinical months: ++ March 31, 2020 (January 2020 clinical month). ++ April 30, 2020 (February 2020 clinical month). ++ June 1, 2020 (March 2020 clinical month). ++ June 30, 2020 (April 2020 clinical month). ++ August 3, 2020 (May 2020 clinical month). ++ August 31, 2020 (June 2020 clinical month). • For the Consumer Assessment of Healthcare Providers and Systems In-Center Hemodialysis (ICH-CAHPS) Survey: ++ The data collected to fulfill the July 2020 data submission deadline for the Spring 2020 Survey. ++ Data collected May 1, 2020-July 10, 2020. • For ESRD QIP claims-based measures, claims data during the following times would be excluded from measure calculations: ++ March 1, 2020-June 30, 2020. With respect to the requirement that facilities selected for validation under one or both ESRD QIP data validation studies (CROWNWeb and NHSN) submit medical records within 60 days of the date identified on the written request letter, we excepted facilities from that requirement as follows: • NHSN and CROWNWeb record requests for discharge periods: ++ January 1, 2019-March 31, 2019 (Q1 2019). ++ April 1, 2019-June 30, 2019 (Q2 2019). In the March 27, 2020 guidance, we also advised that facilities should be aware of the potential subsequent impact to a facility's TPS when data are excluded from score calculations, and noted that facilities impacted by COVID-19 could elect to opt out of this ECE by emailing their request to the ESRD QIP at esrdqip@cms.hhs.gov by June 19, 2020. c. Update to the ESRD QIP ECE Policy for the PHE for COVID-19 We continue to believe that the ESRD QIP data we have excepted serves multiple purposes, including allowing us to understand the impact of the PHE for COVID-19 on the quality of ESRD care provided to Medicare beneficiaries and supporting the continued analysis and evaluation of ESRD quality data submitted to CROWNWeb. However, we are concerned about the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations, along with different impacts resulting from different state and local law and policy changes implemented in response to COVID-19. For these reasons, we are adopting in this IFC two updates to our current ECE policy for the ESRD QIP. First, we are updating our regulations at 42 CFR 413.178(d)(7) to state that a facility has opted out of the ECE for COVID-19 with respect to the reporting of fourth quarter 2019 NHSN data if the facility actually reported the data by the March 31, 2020 deadline but did not notify CMS that it would do so. Additionally, we are removing the ability of facilities to opt-out of the ECE we granted with respect to Q1 and Q2 2020 ESRD QIP data. i. CY 2019 Fourth Quarter NHSN ESRD QIP Measure Data As described previously, we excepted facilities from the requirement to report fourth quarter CY 2019 data for the NHSN BSI clinical measure and NHSN Dialysis Event reporting measure to alleviate the reporting burden on facilities responding to the PHE for COVID-19 that would otherwise be required to report these data by the March 31, 2020 submission deadline. However, in both the March 22nd and March 27th guidance we also stated that we would utilize these data if submitted. At the time we announced the ECE for COVID-19, there were approximately 9 days (time period between March 22, 2020 to March 31, 2020) remaining for facilities to submit their fourth quarter 2019 NHSN data, and nearly all facilities (97.6 percent) timely reported fourth quarter 2019 ESRD QIP data on these measures. These data also assess facility performance prior to the start of the PHE for COVID-19. Unlike the first and second quarter 2020 data, we do not have concerns about the national comparability or representativeness of the fourth quarter 2019 NHSN data because those data reflect facility performance prior to the start of the PHE for COVID-19. In addition, nearly all facilities reported these data prior to the announcement of the ECE with the expectation that they would be used for scoring. Accordingly, we are updating our regulations at § 413.178(d)(7) to state that a facility has opted out of the ECE for COVID-19 with respect to the reporting of fourth quarter 2019 NHSN data if the facility actually reported the data by the March 31, 2020 submission deadline but did not notify CMS that it would do so, and we will include these data when we calculate facility TPSs for PY 2021 and performance standards for PY 2023. This change will enable us to use the data which, as we explain above, are reflective of facility performance and were reported with the expectation that they would be used for scoring. This change is also consistent with our statement in the ECE announcement that we would score these data if they were submitted. A facility that did not timely report its fourth quarter 2019 NHSN BSI clinical measure and NHSN Dialysis Event reporting measure data will not be eligible to receive scores on those measures for PY 2021. ii. CY 2020 First and Second Quarter ESRD QIP Data Under our current policy, facilities may opt out of the ECE we proactively granted in response to the PHE for COVID-19, and continue to report ESRD QIP data. We implemented this policy to give facilities flexibility to continue to report, in particular where a facility does not believe it has been impacted by the extraordinary circumstance(s). We do not believe that is the case here, as the PHE for COVID-19 is a nationwide PHE and an overwhelming majority of facilities continue to be impacted by COVID-19. For example, regardless of protocols in place at facilities, dialysis patients concerned about being exposed to COVID-19 at a facility may decide to skip their treatment sessions. 15 This could be reflected in quality metrics captured for the facility when the patients return to treatment. Furthermore, due to the national nature of this PHE for COVID-19, we believe performance scores for certain measures could be biased and not reflective of nationally comparable performance. Similarly, we are concerned that there may be indirect and unintended consequences of calculating scores using potentially biased data that may not reflect the facility's overall quality. Due to facilities having the option to submit or not submit data for this period, the data may not provide a nationally comparable assessment of performance. Thus, reporting bias is possible due to the voluntary submission of data; that is, a bias could be potentially introduced because only high performers and/or facilities not impacted or better resourced would choose to submit data, while impacted facilities and/or facilities with fewer resources would choose not to submit data. This would affect comparisons between facilities with different circumstances, and would not be in keeping with the program goal of national comparison. Therefore, we believe that it would be inappropriate to include data submitted regarding care provided during first and second quarter CY 2020 in our calculation of a facility's TPS, which is used to determine each facility's payment adjustment. Therefore, we are revising the opt out policy currently codified at § 413.178(d)(7) to provide that the opt out policy does not apply to data excepted due to the PHE for COVID-19 with—that is, the first quarter and second quarters of CY 2020 ESRD QIP data. 15 See https://www.kidney.org/coronavirus/dialysis-covid-19. Finally, although the ECE we granted for the ESRD QIP has ended, with data collection and reporting requirements having resumed July 1, 2020, we understand that geographic differences in COVID-19 incidence continue to change during the PHE for COVID-19. To maintain flexibility for addressing the impact of COVID-19 on the ESRD QIP and determine how best to implement the program equitably, we are announcing in this IFC that if, as a result of an extension of the ECE for the whole country that we grant without a request or the submission of individual ECE requests, we do not have enough data to reliably measure national performance under the ESRD QIP, we may propose to not score facilities based on such limited data or make the associated payment adjustments to facilities under the ESRD PPS for the affected program year. For example, if we granted an ECE that excepted facilities from the requirement to report data for 11 of the 12 months of a given performance period, we would consider not scoring or applying payment adjustments for the associated ESRD QIP payment year because data from the one non-excepted month may not be large enough to calculate reliable measure results for scoring purposes. Although the data themselves may be accurate, the measure(s) might not meet the reliability standards because of the small sample of the remaining non-excepted part of the performance period. 16 In addition, in the scenario we describe above, it is plausible that only larger facilities would be able to meet the required case minimums to be scored in the non-excepted part of the performance period. We may conclude that only scoring remaining facilities would not produce an accurate national comparison of dialysis facilities. Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a majority of facilities might still submit individual ECE requests for those quarters and it is possible that so many facilities will submit individual ECE requests that we will not be able to produce a reliable national comparison. In both cases, we are concerned about using the measures calculated based on these data to score facilities under the ESRD QIP and base payment adjustments on those scores. If circumstances warrant, we may propose to suspend prospective application of program penalties or payment adjustments through the annual ESRD PPS proposed rule. However, in the interest of time and transparency, we may provide subregulatory advance notice of our intentions to suspend such penalties and adjustments through routine communication channels to facilities, vendors, and Quality Improvement Organizations (QIOs). The communications could include memos, emails, and notices on the public QualityNet website ( https://www.qualitynet.org/ ). We welcome public comments on the update to our regulations at § 413.178(d)(7) to consider a facility as having opted out of the ECE with respect to NHSN data reported for Q4 2019 if the facility actually reported the data by the submission deadline, without notifying CMS, and we will include these data when we calculate facility TPSs for PY 2021 and performance standards for PY 2023. We also welcome public comments on the exception we are finalizing to the ECE opt out policy for the ESRD QIP, and we will exclude any ESRD QIP data that facilities optionally reported during Q1 and Q2 2020 from our calculation of Payment Year 2022 TPSs and from the baseline for PY 2023. 16 See http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86453 and choose the “Evaluation Guidance” link. 2. Updates to the Application of the HAC Reduction Program ECE Policy in Response to the PHE for COVID-19 a. Background of the HAC Reduction Program ECE Policy The Hospital-Acquired Condition Reduction Program (“HAC Reduction Program”) is authorized under section 1886(p) of the Act and it aims to heighten awareness of HACs and reduce the number of incidences that occur through implementing the payment adjustments authorized under such statute. The HAC Reduction Program began affecting hospitals' Medicare payments with FY 2015 discharges (that is, October 1, 2014). In the FY 2016 Inpatient Prospective Payment System (IPPS)/Long-term Care Hospitals (LTCH) PPS final rule (80 FR 49579 through 49581), we adopted an ECE policy for the HAC Reduction Program, which recognized that there may be periods of time during which a hospital is affected by an extraordinary circumstance beyond its control. We noted that we considered the feasibility and implications of excluding data for certain measures for a limited period of time from the calculations of the hospital's measure results or Total HAC Score for the applicable performance period. We expressed our aim to minimize data excluded from the program to allow affected hospitals to continue to participate in the HAC Reduction Program for a given year if these hospitals continue to meet applicable measure minimum threshold requirements. We further observed that section 1886(p)(4) of the Act permits the Secretary to determine the applicable period for HAC data collection, and we interpreted the statute to allow us to determine that the period not include times when hospitals may encounter extraordinary circumstances. This policy was similar to the ECE policy for the Hospital Inpatient QRP, as initially adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51651), and modified in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277). In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49580 through 49581), we also stated that this policy would not preclude CMS from granting ECEs to hospitals that do not request them if we determine at our discretion that a disaster or other extraordinary circumstance has affected an entire region or locale. We noted that if CMS makes such a determination to grant an ECE to hospitals in an affected region or locale, we will convey this decision through routine communication channels to hospitals, vendors, and QIOs, including, but not limited to, issuing memos, emails, and notices on the QualityNet website. When time permits we will also communicate such decisions through the annual IPPS/LTCH PPS proposed rule. In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38276 through 38277), we modified the requirements for the HAC Reduction Program ECE policy to further align with the process used by other QRP and VBP programs for requesting an exception from program reporting due to an extraordinary circumstance not within a provider's control. b. Background of the HAC Reduction Program ECE Granted for the PHE for COVID-19 On March 22, 2020, in response to COVID-19, we announced relief for clinicians, providers, hospitals, and facilities participating in Medicare QRPs and VBP programs. 17 On March 27, 2020, we published a supplemental guidance memorandum that described in more detail the scope and duration of the ECEs we were granting under each Medicare QRP and VBP program. 18 17 CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting. 18 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. Under the ECE granted to all eligible hospitals under the HAC Reduction Program, we stated that qualifying claims would be excluded from the measure calculations for the CMS Patient Safety Indicators (PSI) 90 during the periods January 1, 2020-March 31, 2020 (Q1 2020) and April 1, 2020-June 30, 2020 (Q2 2020). We also provided an exception to reporting for all chart-abstracted HAC Reduction Program measures for the May, August, and November 2020 submission deadlines (for reporting Q4 2019, Q1 2020, and Q2 2020 data, respectively). This exception includes the following NHSN HAI Measures: ++ NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure, National Quality Forum (NQF) #0138. ++ NHSN Central Line-Associated Blood Stream Infection (CLABSI) Outcome Measure, NQF #0139. ++ NHSN Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure, NQF #1717. ++ NHSN Facility-wide Inpatient Hospital-onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure, NQF #1716. ++ American College of Surgeons—Centers for Disease Control and Prevention Harmonized Procedure Specific Surgical Site Infection (SSI) Outcome Measure, NQF #0753. We also advised that hospitals should be aware of the potential subsequent impact to the HAC Reduction Program minimum case threshold counts for inclusion in these programs. c. Update to the HAC Reduction Program ECE Granted in Response to the PHE for COVID-19 We continue to believe that the HAC Reduction Program data we have excepted serves multiple purposes, including allowing us to understand the impact of the PHE for COVID-19 on quality of care. Furthermore, the chart-abstracted measures in the HAC Reduction Program are calculated based on data submitted to the CDC's NHSN. We recognize that because the CDC uses the same data for epidemiological surveillance, hospitals may have reporting requirements which are not affected by our ECE (for example, state requirements). We are also concerned with the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations along with different impacts resulting from different state and local law and policy changes implemented in response to COVID-19. For data which hospitals optionally report, we believe that the exception granted for those programs with data submission deadlines in April and May 2020 (that is, data from the fourth quarter of CY 2019) is distinct from the exceptions granted because data collected may be greatly impacted by the response to COVID-19 (that is, data from the first and second quarters of CY 2020). i. CY 2019 Fourth Quarter Data As described previously, we excepted hospitals from the requirement to report fourth quarter CY 2019 data for the HAC Reduction Program to alleviate the reporting burden on hospitals that were responding to the PHE for COVID-19 during the May 18, 2020 data submission deadline. However, nearly all hospitals (95.3 percent) reported these data by the submission deadline, which reflects care provided prior to January 27, 2020, which is the start of the PHE for COVID-19 under the Secretary's declaration of a PHE under section 319 of the PHSA. Therefore, we determined that it would be appropriate to include data that were optionally reported by hospitals for the fourth quarter of CY 2019 in calculating hospitals' Total HAC Scores, which are used to determine the worst-performing 25 percent of hospitals on HAC performance for assessing the 1 percent HAC Reduction Program penalty. This determination is consistent with the policy stated in the March 27, 2020 guidance memo. 19 19 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. ii. CY 2020 First and Second Quarter Data In our application of the ECE policy for the PHE for COVID-19, we excepted hospitals from the requirement to report first and second quarter of CY 2020 HAC Reduction Program chart-abstracted measures and stated we would exclude qualifying claims both because we hoped to alleviate the reporting burden on hospitals that were responding to the PHE for COVID-19 and because of our concern that the representativeness of the data collected during this period may be greatly impacted by the response to COVID-19. We also noted that if hospitals optionally chose to report data, we would use that data for program calculations. While we continue to encourage optional submission of data, we also aim to have the most representative comparison of hospital performance as possible and do not wish to unfairly penalize hospitals that were responding to COVID-19. We believe that using CY 2020 optionally reported data may not provide a nationally comparable assessment of hospital performance for multiple reasons. First, allowing hospitals the option to voluntarily submit for this period may introduce reporting bias; that is, a bias introduced because, for example, only high performers and/or hospitals not impacted or better resourced would choose to submit data, which would render comparisons between hospitals with different circumstances not in keeping with the program goal of national comparison. In addition, a number of other factors could also contribute to our ability to accurately calculate a national comparison. For example, geographic differences in COVID-19 incidence rates and COVID-19 related hospitalizations and differences resulting from changes in referral and hospitalization patterns could both impact the national comparability of optionally submitted data. Because the HAC Reduction Program relies on a relative scoring methodology, we believe that it would be inappropriate and could disparately impact hospitals to include data from quarters excepted under CMS guidance for the PHE for COVID-19 in our calculation of hospitals' performance for the program. Finally, although the ECE we granted for the HAC Reduction Program has ended, with data collection and reporting requirements resuming July 1, 2020, we understand that geographic differences in COVID-19 incidence continue to change during the PHE for COVID-19. To maintain flexibility for addressing the impact of COVID-19 on the HAC Reduction Program and determine how best to implement the program equitably, we are announcing that if, as a result of the extension of the ECE for the whole country that we grant without a request or the submission of individual ECE requests, we do not have enough HAC Reduction Program data to reliably measure national performance, we may propose to not score hospitals based on such limited data or make the associated payment adjustments to hospitals under the IPPS for the affected program year. If we grant another ECE in the future, we would not require that hospitals report the excepted data for the duration of the ECE. Although a hospital may voluntarily report data during the ECE, we may determine that such data will not be used for scoring purposes. We would still require that hospitals report the non-excepted data. However, we may determine that it would be inappropriate to score such data or base payment adjustments on it because of reliability concerns. For illustrative purposes only, if a PHE excepted enough quarters from the HAC Reduction Program's 24-month performance period to lead to unreliable measure calculations, we might consider not scoring for the fiscal year because the sample may not be large enough to calculate reliable measure results for scoring purposes. Although the data itself may be accurate, the measure(s) may not meet the reliability standards because of the small sample of the remaining non-excepted part of the performance period. In addition, in the scenario we describe above, it is likely that only larger hospitals would be able to meet the required case minimums to be scored in the non-excepted part of the performance period. We may conclude that only scoring those remaining large hospitals will not produce an accurate national comparison of hospitals. Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a majority of providers may still submit individual ECE requests for those quarters and it is possible that so many hospitals will submit individual ECE requests that we will not be able to produce a reliable national comparison. In both cases, we are concerned about using the measure calculated based on these data to score hospitals under the HAC Reduction Program and base payment adjustments on those scores. If circumstances warrant, we may propose to suspend prospective application of program penalties or payment adjustments through the annual IPPS/LTCH PPS proposed rule. However, in the interest of time and transparency, we may provide subregulatory advance notice of our intentions to suspend such penalties and adjustments through routine communication channels to hospitals, vendors, and Quality Improvement Organizations (QIOs). The communications could include memos, emails, and notices on the public QualityNet website ( https://www.qualitynet.org/ ). We welcome public comments on our policy to exclude any data submitted regarding care provided during the first and second quarter of CY 2020 from our calculation of performance for the FY 2022 and FY 2023 program years. 3. Update to the HRRP ECE Granted in Response to the PHE for COVID-19 a. Background of the Hospital Readmissions Reduction Program ECE Policy In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49542 through 49543), we adopted an ECE policy for the Hospital Readmissions Reduction Program, which recognized that there may be periods of time during which a hospital is not able to submit all claims (from which readmission measures data are derived) in an accurate or timely fashion due to an extraordinary circumstance beyond its control. We noted that we considered the feasibility and implications of excluding data for certain measures for a limited period of time from the calculations for a hospital's excess readmissions ratios for the applicable performance period. We expressed that we hoped to minimize data excluded from the program to allow affected hospitals to continue to participate in the HRRP for a given year if these hospitals otherwise continue to meet applicable measure minimum threshold requirements. We further observed that section 1886(q)(5)(D) of the Act permits the Secretary to determine the applicable period for readmissions data collection, and we interpreted the statute to allow us to determine that the period not include times when hospitals may encounter extraordinary circumstances. This policy was similar to the ECE policy for the Hospital Inpatient Quality Reporting (IQR) Program, as initially adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51651), and modified in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277). In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49542), we also stated that this policy would not preclude CMS from granting ECEs to hospitals that do not request them if we determined at our discretion that a disaster or other extraordinary circumstance has affected an entire region or locale. We noted that if CMS made such a determination to grant an ECE to hospitals in an affected region or locale, we would convey this decision through routine communication channels to hospitals, vendors, and QIOs, including, but not limited to, issuing memos, emails, and notices on the QualityNet website. In the 2018 IPPS/LTCH PPS final rule (82 FR 38239), we modified the requirements for the HRRP ECE policy to further align with the processes used by other QRP and VBP programs for requesting an exception from program reporting due to an extraordinary circumstance not within a provider's control. b. Background of the HRRP ECE Granted for the PHE for COVID-19 On March 22, 2020, in response to COVID-19, CMS announced relief for clinicians, providers, hospitals and facilities participating in Medicare QRPs and VBP programs. 20 Specifically, we announced that we were granting ECEs for certain data reporting requirements and submission deadlines for the first and second quarters of CY 2020. On March 27, 2020, we published a supplemental guidance memorandum that described the scope and duration of the ECEs we were granting under each Medicare QRP and VBP program. 21 20 CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting. 21 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. Under the ECE for the PHE for COVID-19 that we granted to all hospitals subject to the HRRP, qualifying claims from January 1, 2020 through March 31, 2020 (Q1 2020) and April 1, 2020 through June 30, 2020 (Q2 2020) will be excluded from the measure calculations for the readmission measures used in the program. We also advised that hospitals should be aware of the potential subsequent impact to the HRRP minimum case threshold counts for inclusion in this program. c. Update to the HRRP ECE Granted in Response to the PHE for COVID-19 We continue to believe that the readmissions claims data we have excepted serve multiple purposes, including allowing us to understand the impact of the PHE for COVID-19 on the quality of care provided to Medicare beneficiaries. However, we are concerned that excess readmission ratios calculated using excepted claims data could affect the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations along with different impacts resulting from different state and local law and policy changes implemented in response to COVID-19. Thus, the excess readmission ratios and payment adjustments calculated from excepted data during the PHE for COVID-19 may not provide a nationally comparable assessment of performance in keeping with the program goal of national comparison. i. CY 2019 Fourth Quarter Data Data were not excepted from the fourth quarter of CY 2019 from the HRRP. The readmissions measures used to evaluate performance are claims-based measures and do not require hospitals to report data to CMS. Additionally, we believe that the quality measure data regarding care provided prior to the PHE would not be affected by the PHE for COVID-19. ii. CY 2020 First and Second Quarter Data In our application of the ECE policy for the PHE for COVID-19, we excepted the use of claims data from the first and second quarters of CY 2020 from the HRRP because of our concern that the data collected during this period may be greatly impacted by the response to COVID-19, and therefore, may not be reflective of a hospital's performance during this time due to concerns with national comparability, as described above. Therefore, we believe that it would be inappropriate to include claims data submitted regarding care provided during first and second quarter CY 2020 in our calculation of a hospital's performance that assesses their performance as compared to other hospitals in the nation to determine penalties for excess readmissions. Finally, although the ECE we granted for HRRP has ended, with data collection and reporting requirements having resumed July 1, 2020, we understand that geographic differences in COVID-19 incidence continue to change during the PHE for COVID-19. To maintain flexibility for addressing the impact of COVID-19 on HRRP and determine how best to implement the program equitably, we are announcing in this IFC that if, as a result of the extension of the ECE for the whole country that we grant without a request or the submission of individual ECE requests, we do not have enough data to reliably measure national performance, we may propose to not score hospitals based on such limited data or make the associated payment adjustments to hospitals under the IPPS for the affected program year. If we grant another ECE in the future, we would not require that hospitals report the excepted data for the duration of the ECE. Although a hospital may report data during the ECE, we may determine that such data will not be used for scoring purposes. We would still require that hospitals report the non-excepted data. However, we may determine that it would be inappropriate to score such data or base payment adjustments on it because of reliability concerns. For illustrative purposes only, if a PHE excepted enough quarters from the HRRP 36-month performance period to lead to unreliable measure calculations, we might consider not scoring for the entire year because the sample may not be large enough to calculate reliable measure results for scoring purposes. Although the data itself may be accurate, the measure(s) may not meet the reliability standards because of the small sample of the remaining non-excepted part of the performance period. In addition, in the scenario we describe above, it is likely that only larger hospitals would be able to meet the required case minimums to be scored in the non-excepted part of the performance period. We may conclude that only scoring those remaining large hospitals will produce an accurate national comparison of hospitals. Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a majority of providers may still submit individual ECE requests for those quarters and it is possible that so many hospitals will submit individual ECE requests that we will not be able to produce a reliable national comparison. In both cases, we are concerned about using the measures calculated based on these data to score hospitals under the HRRP and base payment adjustments on those scores. If circumstances warrant, we may propose to suspend prospective application of program penalties or payment adjustments through the annual IPPS/LTCH PPS proposed rule. However, in the interest of time and transparency, we may provide subregulatory advance notice of our intentions to suspend such penalties and adjustments through routine communication channels to facilities, vendors, and QIOs). The communications could include memos, emails, and notices on the public QualityNet website ( https://www.qualitynet.org/ ). We welcome public comments on our policy to exclude any data submitted regarding care provided during first and second quarter of CY 2020 from our calculation of performance for FY 2022, FY 2023, and FY 2024. 4. Update to the Hospital VBP Program ECE Granted in Response to the PHE for COVID-19 a. Background of the Hospital VBP ECE Policy In the FY 2014 IPPS/LTCH final rule (78 FR 50704 through 50707), we finalized a disaster/ECE policy for the Hospital VBP Program. We stated that, upon a hospital's request, we will consider providing an exception from the Hospital VBP Program requirements to hospitals affected by natural disasters or other extraordinary circumstances (78 FR 50704 through 50706). Specifically, we stated that we interpreted the minimum number of cases and measures requirement in sections 1886(o)(1)(C)(ii)(III) and (IV) of the Act to not include any measures or cases for which a hospital has submitted data during a performance period for which the hospital has been granted a Hospital VBP Program ECE. In the May 8th COVID-19 IFC (85 FR 27550), we modified the Hospital VBP Program's ECE policy to allow us to grant ECE exceptions to hospitals which have not requested them when we determine that an extraordinary circumstance that is out of their control, such as an act of nature (for example, a hurricane) or PHE (for example, the COVID-19 pandemic), affects an entire region or locale, in addition to retaining the individual ECE request policy (85 FR 27597 through 27598). We stated that if we grant an ECE to hospitals located in an entire region or locale under this revised policy and, as a result of granting that ECE, one or more hospitals located in that region or locale does not report the minimum number of cases and measures required to enable us to calculate a TPS for that hospital for the applicable program year, the hospital will be excluded from the Hospital VBP Program for the applicable program year. We also stated that a hospital that does not report the minimum number of cases or measures for a program year will not receive a 2 percent reduction to its base operating diagnosis-related group (DRG) payment amount for each discharge in the applicable program year, and will also not be eligible to receive any value-based incentive payments for the applicable program year. We referred readers to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42399 through 42400) for the minimum number of measures and cases that we currently require hospitals to report in order to receive a TPS for a program year under the Hospital VBP Program. b. Background of the Hospital VBP Program ECE Granted in Response to the PHE for COVID-19 On March 22, 2020, in response to COVID-19, CMS announced relief for clinicians, providers, hospitals, and facilities participating in Medicare QRPs and VBP programs. 22 On March 27, 2020, CMS published a supplemental guidance memorandum that described in more detail the scope and duration of the ECEs we were granting under each Medicare QRP and VBP program. 23 22 CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting. 23 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. Specifically, we granted an ECE for the PHE for COVID-19 to all hospitals participating in the Hospital VBP Program for the following reporting requirements: • Hospitals will not be required to report data for the NHSN HAI measures and Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey for the following quarters: October 1, 2019 through December 31, 2019 (Q4 2019), January 1, 2020 through March 31, 2020 (Q1 2020), and April 1, 2020 through June 30, 2020 (Q2 2020). However, hospitals can optionally submit part or all of these data by the posted submission deadlines on the Hospital VBP Program QualityNet site (available at https://www.qualitynet.org/inpatient/iqr/participation ). This includes the following specific measures: ++ HCAHPS, NQF #0166. ++ NHSN Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure, NQF #0138. ++ NHSN CLABSI Outcome Measure, NQF #0139. ++ NHSN Facility-wide Inpatient Hospital-onset CDI Outcome Measure, NQF #1717. ++ NHSN Facility-wide Inpatient Hospital-onset MRSA Bacteremia Outcome Measure, NQF #1716. ++ American College of Surgeons—Centers for Disease Control and Prevention Harmonized Procedure SSI Outcome Measure, NQF #0753. In the March 27, 2020 guidance, we also advised that hospitals should be aware of the potential subsequent impact to its Hospital VBP Program minimum case threshold counts for inclusion in that program, and that data from the impacted quarters for the HCAHPS survey and HAI measures would be used if submitted voluntarily. • The ECE also stated that we would exclude qualifying claims data from measure calculations for the following quarters: January 1, 2020 through March 31, 2020 (Q1 2020) and April 1, 2020 through June 30, 2020 (Q2 2020). This exception applies to the following measures: ++ Medicare Spending Per Beneficiary (MSPB)-Hospital, NQF #2158. ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate Following Acute Myocardial Infarction (AMI) 30-Day Mortality Rate, NQF #0230. ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate Following Heart Failure (HF) 30-Day Mortality Rate, NQF #0229. ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate Following Pneumonia (PN) 30-Day Mortality Rate, NQF #0468. ++ Hospital-Level Risk-Standardized Complication Rate Following Total Hip Arthroplasty (THA)/Total Knee Arthroplasty Complication Rate (TKA), NQF #1550. ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate Following Chronic Obstructive Pulmonary Disease (COPD) 30-Day Mortality Rate, NQF #1893. ++ Hospital 30-Day, All Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Grafting (CABG) 30-Day Mortality Rate, NQF #2558. c. Update to the Hospital VBP ECE Granted in Response to the PHE for COVID-19 We continue to believe that the Hospital VBP Program data we have excepted serves multiple purposes, including allowing us to understand the impact of COVID-19 on quality of care. Furthermore, the HAI measures in the Hospital VBP Program are not abstracted from claims and are calculated based on data submitted to the CDC through the NHSN. We recognize that the CDC separately collects the same data for epidemiological surveillance and that hospitals may have other reporting requirements which are not affected by our ECE (for example, state requirements). We are concerned with the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations along with different impacts resulting from different state and local law and policy changes implemented in response to COVID-19. For these reasons, and as discussed more fully below, we are revising the current ECE we granted for the Hospital VBP Program with respect to first and second quarter CY 2020 excepted data. Under the revised ECE, we will not use any first or second quarter CY 2020 excepted Hospital VBP data that hospitals optionally reported to calculate total performance scores for the FY 2022 through FY 2025 program years or baseline scores for the FY 2024 through FY 2030 program years. We will still use optionally reported fourth quarter CY 2019 Hospital VBP Program data to calculate TPSs for those hospitals for the FY 2021 through FY 2024 program years and baseline scores for the FY 2026 through FY 2029 program years because, as explained below, we believe that the exception granted for those programs with data submission deadlines in April and May 2020 (that is, data from the fourth quarter of CY 2019) is distinct from the exceptions granted because data collected may be greatly impacted by the response to COVID-19 (that is, data from the first and second quarters of CY 2020). i. CY 2019 Fourth Quarter Hospital VBP Program HAI and HCAHPS Data We excepted hospitals from the requirement to report fourth quarter CY 2019 HAI and HCAHPS data for the HVBP Program to alleviate the reporting burden on hospitals that were responding to the PHE for COVID-19 that would otherwise be required to report these data by the May 18, 2020 and April 1, 2020 submission deadlines, respectively. However, we believe that the quality measure data regarding care provided prior to the PHE for COVID-19 would not be affected. Additionally, as of April 2020, 92.6 percent of hospitals submitted fourth quarter CY 2019 HAI data. Therefore, we are not making changes to the Hospital VBP Program ECE that we granted with respect to these data for the PHE for COVID-19 and will include all voluntarily reported measure data for the HCAHPS survey and the five NHSN HAI measures when we calculate hospital TPSs for the FY 2021 program year, as well as when we calculate baseline data for the FY 2023 program year. Because we did not except fourth quarter CY 2019 claims-based data for the Hospital VBP Program, we will also include those data when we calculate hospital TPSs for the FY 2021 through FY 2024 program years and baseline data for the FY 2026 through FY 2029 program years. ii. CY 2020 First and Second Quarter Hospital VBP Program Data We excepted hospitals from the requirement to report all first and second quarter CY 2020 Hospital VBP Program data to alleviate the reporting burden on hospitals that were responding to the PHE for COVID-19 and because we were concerned that the data collected during this period could be greatly impacted by the response to COVID-19. Although we permitted hospitals to voluntarily report these data, we aim to have the most representative comparison of hospital performance as possible and do not wish to unfairly penalize hospitals that were responding to COVID-19. We believe that using first and second quarter CY 2020 optionally reported data may not provide an accurate national assessment of hospital performance for multiple reasons. First, if only the optionally submitted data is used, it may not provide an accurate national comparison as it is possible that there may be reporting bias introduced by voluntary submission. Reporting bias could be introduced if, for example, only high performers and/or hospitals not impacted or better resourced would choose to submit data, hindering comparisons between hospitals with different circumstances and preventing the program from keeping with its goal of national comparison. A number of other factors could also contribute to CMS' ability to generate an accurate national comparison. For example, geographic differences in COVID-19 incidence rates and COVID-19 related hospitalizations and differences resulting from changes in referral and hospitalization patterns could both impact the national comparability of optionally submitted data. We believe that it would be inappropriate to include optionally submitted data regarding care provided during first and second quarter CY 2020 in our calculation of a hospital's TPS. Accordingly, for these reasons, we will not use any first or second quarter CY 2020 excepted Hospital VBP data to calculate total performance scores for the FY 2022 through FY 2025 program years or baseline scores for the FY 2024 through FY 2030 program years to avoid unfairly penalizing hospitals. Finally, although the ECE we granted for the Hospital VBP Program has ended, with data collection and reporting requirements having resumed July 1, 2020, we understand that geographic differences in COVID-19 incidence continue to change during the PHE for COVID-19. To maintain flexibility for addressing the impact of COVID-19 on the Hospital VBP Program and determine how best to implement the program equitably, we are announcing in this IFC that if, as a result of the extension of the ECE for the whole country that we grant without a request or the submission of individual ECE requests, we do not have enough data to reliably measure national performance, we may propose to not score hospitals based on such limited data or make the associated payment adjustments to facilities under the Hospital VBP Program for the affected program year. If we grant another ECE in the future, we would not require that hospitals report the excepted data for the duration of the ECE. Although a hospital may voluntarily report data during the ECE, we may determine that it would be inappropriate to use such data for scoring purposes. We would still require that hospitals report the non-excepted data. However, we may determine that it would be inappropriate to score such data or base payment adjustments on it because of reliability concerns. For example, if we granted an ECE that excepted hospitals from the requirement to report data for 11 of the 12 months of a given performance period, we would consider not scoring or applying payment adjustments for the associated program year because data from the one non-excepted month may not be large enough to calculate reliable measure results. Although the data itself may be accurate, the measure(s) may not meet the reliability standards because of the small sample of the remaining non-excepted part of the performance period. In addition, in the scenario we describe above, it is plausible that only larger hospitals would be able to meet the required case minimums to be scored in the non-excepted part of the performance period. We may conclude that only scoring those remaining large hospitals will produce an accurate national comparison of hospitals. Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a majority of hospitals may still submit individual ECE requests for those quarters and it is possible that so many hospitals will submit individual ECE requests that we will not be able to produce a reliable national comparison. In both cases, we are concerned about using the measures calculated based on these data to score facilities under the Hospital VBP Program and base payment adjustments on those scores. At this time, we are not applying this updated ECE policy to the Hospital VBP Program. If circumstances warrant, we may propose to suspend prospective application of program penalties or payment adjustments through the annual IPPS/LTCH PPS proposed rule. However, in the interest of time and transparency, we may provide subregulatory advance notice of our intentions to suspend such penalties and adjustments through routine communication channels to facilities, vendors, and QIOs. The communications could include memos, emails, and notices on the public QualityNet website ( https://www.qualitynet.org/ ). We welcome public comments on our updated Hospital VBP Program ECE policy to exclude any data submitted regarding care provided during the first and second quarter of CY 2020 from our calculation of performance. 5. Revised Performance Period for the FY 2022 SNF VBP Program as a Result of the ECE Granted for the PHE for COVID-19 In this IFC, we are revising the performance period for the FY 2022 SNF VBP Program because, as explained more fully below, we are concerned that using qualifying claims from the two quarters that are not excepted under the ECE for COVID-19 (October 1, 2019 through December 31, 2019 (Q4 2019), and July 1, 2020 through September 30, 2020 (Q3 2020)) for all SNFs nationwide to calculate the SNFRM for the FY 2022 Program will not yield measure scores that reliably reflect quality of care as determined by hospital readmission rates. We are also announcing that we may propose to update the SNF VBP ECE policy for future ECEs that may be granted during the PHE for COVID-19. a. Background of the SNF VBP ECE Policy In the FY 2019 SNF PPS final rule (83 FR 39280 through 39281), we finalized an ECE policy for the SNF VBP Program. We stated that a SNF requesting an ECE would indicate the dates and duration of the extraordinary circumstance in its request, along with any available evidence of the extraordinary circumstance, and if approved, we would exclude the corresponding calendar months from that SNF's measure rate for the applicable measurement period and by extension, its SNF performance score for applicable fiscal years. We noted that this policy does not preclude us from granting exceptions to SNFs that have not requested them when we determine that an extraordinary circumstance, such as an act of nature or PHE, affects an entire region or locale. We also finalized under the SNF VBP Program ECE policy that we would score any SNFs receiving ECEs on achievement and improvement for any remaining months during the performance period, provided the SNF had at least 25 eligible stays during both of those periods. As an example, we stated that if a SNF received an approved ECE for 6 months of the performance period, we would score the SNF on its achievement during the remaining 6 months on the Program's measure as long as the SNF met the 25 eligible stay threshold during the performance period. We also stated that under this example, we would score the SNF on improvement as long as it met the proposed 25 eligible stay threshold during the applicable baseline period. b. Background of the SNF VBP Program ECE Granted for the PHE for COVID-19 On March 22, 2020, in response to the PHE for COVID-19, 24 we announced relief for clinicians, providers, hospitals and facilities participating in Medicare QRPs and VBP programs. On March 27, 2020, we published a supplemental guidance memorandum that described in more detail the scope and duration of the ECEs we were granting under each Medicare QRP and VBP program. 25 24 CMS press release available at https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting. 25 CMS memorandum available at https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf. Under the ECE, SNFs qualifying claims are excepted from the calculation of the SNF 30-Day All-Cause Readmission Measure (SNFRM; NQF #2510) for the following periods: • January 1, 2020-March 31, 2020 (Q1 2020). • April 1, 2020-June 30, 2020 (Q2 2020). We refer readers to the March 22 and March 27, 2020 guidance memos for additional information regarding exceptions related to the PHE for COVID-19. We continue to believe that the claims data we have excepted serves multiple purposes, including allowing us to understand the impact of the PHE for COVID-19 on the quality of care provided to Medicare beneficiaries. However, we excepted claims data from the first and second quarters of CY 2020 from the SNF VBP Program because of our concern that the data reliability during this period may be greatly impacted by the response to COVID-19. We are also concerned with the national comparability of these data due to the geographic differences of COVID-19 incidence rates and hospitalizations along with different impacts resulting from different state and local law and policy changes implemented in response to COVID-19. Therefore, we believe that it would be inappropriate to include data submitted regarding care provided during first and second quarter CY 2020 in our calculation of a SNF's performance score. However, by excluding 6 months of qualifying claims in CY 2020 (January 1, 2020 through June 30, 2020) for all SNFs nationally, this policy will impact the performance period (October 1, 2019 through September 30, 2020) for the FY 2022 SNF VBP Program Year by reducing the total amount of data available to evaluate SNF performance. Accordingly, as discussed below, we are finalizing in this IFC a new performance period for the FY 2022 SNF VBP that we believe will more reliably reflect SNF performance and quality of care provided to Medicare beneficiaries. In addition, although the ECE we granted for the SNF VBP Program has ended, and data collection resumed July 1, 2020, we understand that geographic differences in COVID-19 incidence continue to change during the PHE for COVID-19. To maintain flexibility for addressing the impact of COVID-19 on the SNF VBP Program and determine how best to implement the program equitably, we are announcing in this IFC that if, as a result a ECE that we grant for the whole country without a request or the submission of individual ECE requests, we do not have enough SNF VBP Program data to reliably measure national performance, we may propose to not score facilities based on such limited data or make the associated payment adjustments to facilities under the SNF PPS for the affected program year. If we grant another ECE in the future, we would not use claims data submitted to CMS during the ECE for scoring purposes under the SNF VBP program. We may determine that it would be inappropriate to score remaining non-excepted data or base payment adjustments on it because of reliability concerns. For example, if we granted an ECE that excepted, for all facilities nationwide, the use of claims data for 11 of the 12 months of a given performance period, we would consider not scoring or applying payment adjustments for the associated program year because data from the one non-excepted month may not be large enough to calculate reliable measure results for scoring purposes. Although the data itself may be accurate, the measure(s) may not meet the reliability standards because of the small sample of the remaining non-excepted part of the performance period. In addition, in the scenario we describe above, it is likely that only larger facilities would be able to meet the required minimum number of eligible SNF stays to be scored in the non-excepted part of the performance period. We may conclude that only scoring those remaining large facilities will not produce an accurate national comparison of SNFs. Alternatively, if we do not extend the ECE to cover Q3 and Q4 2020, it is possible that a majority of SNFs may still submit individual ECE request [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2020-19150. Public record. Not legal advice.