March 16, 2016
Health Care Alert
Author(s): Laurie T. Cohen
Centers for Medicare & Medicaid Services (CMS) finalized a regulation earlier this month that addresses various aspects of the operation of state health insurance exchanges and certain standards applicable to Qualified Health Plans (QHPs) participating in such exchanges. Embedded in this regulation is a little known provision from the Affordable Care Act that requires a QHP that contracts with a hospital with more than 50 beds to verify that the hospital utilizes a patient safety evaluation system. The regulation can be found at https://www.federalregister.gov/articles/2016/03/08/2016-04439/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2017. A patient safety evaluation system is defined as the collection, management or analysis of information for reporting to or by a Patient Safety Organization (PSO).
For plan years beginning on or after January 1, 2017, a QHP participating in a health exchange may contract with hospitals with more than 50 beds only if they meet certain patient safety standards. In finalizing the regulations, CMS exercised its discretion to establish reasonable exceptions to the requirement that a hospital contract with a PSO as a condition of participating with a QHP.
More specifically, for plan years beginning on or after January 1, 2017, QHPs can either verify that their contracted hospitals with more than 50 beds have current agreements with PSOs or verify that such contracted hospitals “implement evidence-based initiatives to reduce all cause preventable harm, prevent hospital readmission, improve care coordination and improve health care quality through the collection, management and analysis of patient safety events by a means other than reporting of such information to a PSO.” In explaining its decision to create exceptions to the PSO contracting requirement, CMS stated it “will allow for both flexibility and innovation for hospitals to choose the most relevant patient safety initiative for their populations.”
In implementing this provision, for plan years beginning on or after January 1, 2017, QHPs must collect information, from each of its contracted hospitals with greater than 50 beds, to demonstrate such hospitals’ compliance with this requirement. In response to public comments, CMS clarified that the documentation requirement is intended to direct QHPs “to collect basic, administrative-type information from their contracted hospitals … to demonstrate compliance with the patient safety requirement... For example, we expect such information could include current hospital agreements or attestations to partner with a PSO.” In addition, CMS clarified that such information would also need to be submitted to an exchange, upon request.
In conjunction with CMS’ finalization of this regulation, the Agency for Healthcare Research and Quality (AHRQ) published a brochure, Choosing a Patient Safety Organization, which describes the various factors that a hospital or other health care organization might consider when selecting a PSO. AHRQ administers the PSO program and certifies and lists PSOs. The AHRQ brochure is available at https://pso.ahrq.gov/legislation/ondemand-webinars-interactive-quizzes.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.