Proposed rule includes provisions implementing ACA’s PSO reporting requirements

The Department of Health and Human Services (HHS) issued a proposed rule implementing a number of provisions of the Affordable Care Act (ACA), including the provision that hospitals must satisfy certain patient safety and quality improvement requirements in order to contract with a qualified health plan (QHP) through the new health insurance exchange (in California, that is Covered California).

Beginning Jan. 1, 2017, QHPs may contract with hospitals that have more than 50 beds only if they meet certain patient safety standards, including the use of a patient safety evaluation system (PSES) and a comprehensive hospital discharge program. The proposed rule clarifies the PSES provision, defining a PSES as the collection, management or analysis of information for reporting to or by a patient safety organization (PSO). The Centers for Medicare & Medicaid Services (CMS) proposes to phase in these changes, noting the challenges in meeting the condensed timelines. In phase one, CMS proposes that a QHP insurer may contract with hospitals that have more than 50 beds only if they are either Medicare-certified (having a Medicare CCN) or are Medicaid-only and have been issued a Medicaid-only CCN.

Both types of hospitals are subject to the Medicare Conditions of Participation. More specifically, CMS notes the importance of hospitals having a robust quality assessment and performance improvement program (42 CFR §482.21), as well as an effective discharge planning process that applies to all patients (42 CFR. §43). Under the current proposal, phase one would last two years or until CMS issues further regulation.

CMS also requests comments on how QHP issuers could track hospital membership in PSOs and other patient safety information, and which specific comparable activities could be included as reasonable exceptions to the ACA’s specific patient safety standards. Comments on the proposed rule are due by Dec. 26. Please contact with any comments.


CHPSO members gain extraordinary access to incident data analysis and the collective intelligence of patient safety experts nationwide. We maintain close alliances with other national PSOs, quality and safety agencies, research institutes and think tanks. This translates into exponential improvements, economically and clinically.

Membership is offered at no charge for members of the California Hospital Association and the Regional Hospital Associations. Membership is also available to hospitals outside of California for a nominal fee. Further information is on our web site.