CMS issued a proposed rule, with comment period, implementing Section 10332 of the Patient Protection and Affordable Care Act (PPACA), Pub. L. 111-148, which requires the Centers for Medicare and Medicaid Services (CMS) to disclose standardized extracts of Medicare claims data under Parts A, B, and D to “qualified entities” for the evaluation of the quality performance of providers and suppliers.  The qualified entities must combine the Medicare data with claims data from other payers and make “comprehensive performance reports” available to the public.  According to CMS, this statutory provision is “intended to make Medicare data available to those already working with other claims data in order to increase sample sizes used to calculate measures and evaluate the performance of providers of services and suppliers.”

The proposed rule sets forth stringent requirements that an entity would have to meet to qualify as a “qualified entity,” including having an “established track record” of “handling claims data and calculating performance measures” for providers and suppliers.  CMS is not planning to limit the number of qualified entities in any geographical area, however, raising the possibility that “in certain circumstances providers of services and suppliers might receive multiple reports from different qualified entities.”

Qualified entities would use Medicare and non-Medicare claims data to assess provider and supplier performance on “standard” or “alternative” quality measures.  Standard quality measures are measures that are endorsed by the National Quality Forum (NQF) or already used by CMS in other quality reporting initiatives.  CMS may adopt additional “alternative” measures if the qualified entity can show that the “alternative measures would be more valid, reliable, responsive to consumer preferences, cost-effective, or relevant to dimensions of quality and resource use not addressed by the standard measures.”  CMS will consider proposed alternative measures annually in notice and comment rulemaking prior to the start of the next calendar year.   Approved alternative measures would be available for use by all qualified entities.  Qualified entities must use all measures as approved “including all numerator and denominator inclusions and exclusions, measured time periods, and specified data sources.” 

Qualified entities must then create quality reports that include “an understandable description of the measures, rationale for use, methodology (including risk-adjustment and physician attribution), data specifications and limitations, and sponsors.”  Under the proposed rule, the qualified entity must make the quality reports available to the provider or supplier at least 30 days before the report is made publicly available.  They must give providers and suppliers at least 10 days from receipt of the report to request the underlying documentation or seek an appeal of errors.  CMS stated, however, that the public disclosure of reports will not be delayed because of a pending appeal.  Instead, the qualified entity must simply note on the report if an appeal is pending.

CMS will be accepting comments until August 8, 2011.  We encourage providers and suppliers to review the rule, which would add eleven new sections to the Code of Federal Regulations (42 C.F.R. §§  401.701 - 401.711), and consider submitting comments.  Among several areas for possible comment, the proposed appeal procedures appear woefully inadequate.  Besides giving a provider or supplier only 10 days to review its reports and request corrections, and making reports available to the public notwithstanding an ongoing appeal, CMS imposes no real requirements on the qualified entity’s appeal process.  Instead, CMS merely “encourage[s] qualified entities to dedicate appropriate resources . . . to resolving good faith questions regarding performance results.”  Providers and suppliers have no further recourse should this process be inadequate.  The proposed rule is available here.