On August 18, 2006, the Centers for Medicare & Medicaid Services (“CMS”) published a final rule that revises the hospital in-patient prospective payment systems (“PPS”) for fiscal year 2007. This article addresses the revisions CMS made to the requirements for Reporting Hospital Quality Data for Annual Payment Update (“RHQDAPU”) program in the PPS update. The revisions supplement the ten (10) quality measures CMS had established in November 1, 2003. These ten (10) quality measures involved Heart Attack, Heart Failure, and Pneumonia. For fiscal years 2005 and 2006, hospitals that chose not to submit quality data on the ten (10) quality measures received a 0.4 percentage reduction in payment update. For 2007 and subsequent years, the failure to report on the quality measures, which are being changed from 10 to 21 measures, will result in a 2.0 percent decrease. This large increase in reduction is mandated by the Deficit Reduction Act of 2005 (the “DRA”).

Per the DRA, CMS revised the RHQDAPU requirements to add eleven (11) new items for reporting quality measures. For 2007, twenty-one (21) quality measures, which hospitals will be required to submit beginning with discharges that occur in the third calendar quarter of 2006, include an expansion of the Heart Attack measures, Heart Failure measures and Pneumonia measures, and adds a new category, Surgical Care. The deadline for submission of this information is February 15, 2007.

The final rule can be found at 71 Fed. Reg. 47870.