[Federal Register Volume 80, Number 86 (Tuesday, May 5, 2015)]
[Proposed Rules]
[Pages 25832-25886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-10422]
[[Page 25831]]
Vol. 80
Tuesday,
No. 86
May 5, 2015
Part III
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Part 418
Medicare Program; FY 2016 Hospice Wage Index and Payment Rate Update
and Hospice Quality Reporting Requirements; Proposed Rule
Federal Register / Vol. 80 , No. 86 / Tuesday, May 5, 2015 / Proposed
Rules
[[Page 25832]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1629-P]
RIN 0938-AS39
Medicare Program; FY 2016 Hospice Wage Index and Payment Rate
Update and Hospice Quality Reporting Requirements
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update the hospice payment rates and
the wage index for fiscal year (FY) 2016, including implementing the
last year of the phase-out of the wage index budget neutrality
adjustment factor (BNAF). This proposed rule also discusses recent
hospice payment reform research and analyses and proposes to
differentiate payments for routine home care (RHC) based on the
beneficiary's length of stay and to implement a service intensity add-
on (SIA) payment for services provided in the last 7 days of a
beneficiary's life, if certain criteria are met. In addition, this rule
would implement changes to the aggregate cap calculation mandated by
the Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act), align the cap accounting year for both the inpatient cap
and the hospice aggregate cap with the federal fiscal year starting in
FY 2017, make changes to the hospice quality reporting program, and
would include a clarification regarding diagnosis reporting on the
hospice claim.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 29, 2015.
ADDRESSES: In commenting, please refer to file code CMS-1629-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four 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-1629-P, P.O. Box 8010, Baltimore, MD
21244-8010.
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-1629-P, Mail Stop C4-26-05, 7500
Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is
not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--
Centers for Medicare & Medicaid Services, Department of Health and
Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call
telephone number (410) 786-9994 in advance to schedule your arrival
with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Debra Dean-Whittaker, (410) 786-0848
for questions regarding the CAHPS[supreg] Hospice Survey. Michelle
Brazil, (410) 786-1648 for questions regarding the hospice quality
reporting program. For general questions about hospice payment policy
please send your inquiry via email to: [email protected].
SUPPLEMENTARY INFORMATION:
Wage index addenda will be available only through the internet on
the CMS Web site at: (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.)
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 Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Costs, Benefits, and Transfers
II. Background
A. Hospice Care
B. History of the Medicare Hospice Benefit
C. Services Covered by the Medicare Hospice Benefit
D. Medicare Payment for Hospice Care
1. Omnibus Budget Reconciliation Act of 1989
2. Balanced Budget Act of 1997
3. FY 1998 Hospice Wage Index Final Rule
4. FY 2010 Hospice Wage Index Final Rule
5. The Affordable Care Act
6. FY 2012 Hospice Wage Index Final Rule
7. FY 2015 Hospice Rate Update Final Rule
8. Impact Act of 2014
E. Trends in Medicare Hospice Utilization
III. Provisions of the Proposed Rule
A. Hospice Payment Reform: Research and Analyses
1. Pre-Hospice Spending
2. Non-Hospice Spending for Hospice Beneficiaries During an
Election
3. Live Discharge Rates
B. Proposed Routine Home Care Rates and Service Intensity Add-On
(SIA) Payment
1. Background and Statutory Authority
a. U-Shaped Payment Model
b. Tiered Payment Model
c. Visits During the Beginning and End of a Hospice Election
2. Proposed Routine Home Care Rates
3. Proposed Service Intensity Add-on Payment
[[Page 25833]]
C. Proposed FY 2016 Hospice Wage Index and Rates Update
1. Proposed FY 2016 Hospice Wage Index
a. Background
b. Elimination of the Wage Index Budget Neutrality Factor (BNAF)
c. Proposed Implementation of New Labor Market Delineations
2. Proposed Hospice Payment Update Percentage
3. Proposed FY 2016 Hospice Payment Rates
4. Hospice Aggregate Cap and the IMPACT Act of 2014
D. Proposed Alignment of the Inpatient and Aggregate Cap
Accounting Year with the Federal Fiscal Year
1. Streamlined Method and Patient-by-Patient Proportional Method
for Counting Beneficiaries to Determine Each Hospice's Aggregate Cap
Amount
2. Proposed Inpatient and Aggregate Cap Accounting Year
Timeframe
E. Proposed Updates to the Hospice Quality Reporting Program
1. Background and Statutory Authority
2. General Considerations Used for Selection of Quality Measures
for the HQRP
3. Proposed Policy for Retention on HQRP Measures Adopted for
Previous Payment Determination
4. Previously Adopted Measures for FY 2016 and FY 2017 Payment
Determination
5. HQRP Quality Measures and Concepts Under Consideration for
Future Years
6. Form, Manner, and Timing of Quality Data Submission
a. Background
b. Proposed Policy for New Facilities to Begin Submitting
Quality Data
c. Previously Finalized Data Submission Mechanism, Collection
Timelines, and Submission Deadlines for the FY 2017 Payment
Determination
d. Proposed Data Submission Timelines and Requirements for FY
2018 Payment Determination and Subsequent Years
e. Proposed HQRP Data Submission and Compliance Thresholds for
the FY 2018 Payment Determination and Subsequent Years
7. HQRP Submission Exception and Extension Requirements for the
FY 2017 Payment Determination and Subsequent Years
8. Adoption of the CAHPS Hospice Survey for the FY 2017 Payment
Determination
a. Background Description of the Survey
b. Participation Requirements to Meet Quality Reporting
Requirements for the FY 2017 APU
c. Participation Requirements to Meet Quality Reporting
Requirements for the FY 2018 APU
d. Vendor Participation Requirements for the FY 2017 APU Annual
Payment Update
9. Previously Finalized HQRP Reconsideration and Appeals
Procedures for the FY 2016 Payment Determination and Subsequent
Years
10. Public Display of Quality Measures Data for HQRP
11. Public Display of other Hospice Information
F. Clarification Regarding Diagnosis Reporting on Hospice Claims
1. Background
2. Current Discussions About Hospice Vulnerabilities
3. Medicare Hospice Eligibility Requirements
4. Assessment of Conditions and Comorbidities Required by
Regulation
5. Clarification Regarding Diagnosis Reporting on Hospice Claims
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
A. Statement of Need
B. Introduction
C. Overall Impact
1. Detailed Economic Analysis
a. Effects on Hospices
b. Hospice Size
c. Geographic Location
d. Type of Ownership
e. Hospice Base
f. Effects on Other Providers
g. Effects on the Medicare and Medicaid Programs
h. Alternatives Considered
i. Accounting Statement
j. Conclusion
2. Regulatory Flexibility Act Analysis
3. Unfunded Mandates Reform Act Analysis
VI. Federalism Analysis and Regulations Text
Acronyms
Because of the many terms to which we refer by acronym in this
proposed rule, we are listing the acronyms used and their corresponding
meanings in alphabetical order below:
APU Annual Payment Update
ASPE Assistant Secretary of Planning and Evaluation
BBA Balanced Budget Act of 1997
BETOS Berenson-Eggers Types of Service
BIPA Benefits Improvement and Protection Act of 2000
BNAF Budget Neutrality Adjustment Factor
BLS Bureau of Labor Statistics
CAHPS[supreg] Consumer Assessment of Healthcare Providers and
Systems
CBSA Core-Based Statistical Area
CCN CMS Certification Number
CCW Chronic Conditions Data Warehouse
CFR Code of Federal Regulations
CHC Continuous Home Care
CHF Congestive Heart Failure
CMS Centers for Medicare & Medicaid Services
COPD Chronic Obstructive Pulmonary Disease
CoPs Conditions of Participation
CPI Center for Program Integrity
CPI-U Consumer Price Index-Urban Consumers
CR Change Request
CVA Cerebral Vascular Accident
CWF Common Working File
CY Calendar Year
DME Durable Medical Equipment
DRG Diagnostic Related Group
ER Emergency Room
FEHC Family Evaluation of Hospice Care
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
GIP General Inpatient Care
HCFA Healthcare Financing Administration
HHS Health and Human Services
HIPPA Health Insurance Portability and Accountability Act
HIS Hospice Item Set
HQRP Hospice Quality Reporting Program
IACS Individuals Authorized Access to CMS Computer Services
ICD-9-CM International Classification of Diseases, Ninth Revision,
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision,
Clinical Modification
ICR Information Collection Requirement
IDG Interdisciplinary Group
IMPACT Act Improving Medicare Post-Acute Care Transformation Act of
2014
IOM Institute of Medicine
IPPS Inpatient Prospective Payment System
IRC Inpatient Respite Care
LCD Local Coverage Determination
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MedPAC Medicare Payment Advisory Commission
MFP Multifactor Productivity
MSA Metropolitan Statistical Area
MSS Medical Social Services
NHPCO National Hospice and Palliative Care Organization
NF Long Term Care Nursing Facility
NOE Notice of Election
NOTR Notice of Termination/Revocation
NP Nurse Practitioner
NPI National Provider Identifier
NQF National Quality Forum
OIG Office of the Inspector General
OACT Office of the Actuary
OMB Office of Management and Budget
PRRB Provider Reimbursement Review Board
PS&R Provider Statistical and Reimbursement Report
Pub. L Public Law
QAPI Quality Assessment and Performance Improvement
RHC Routine Home Care
RN Registered Nurse
SBA Small Business Administration
SEC Securities and Exchange Commission
SIA Service Intensity Add-on
SNF Skilled Nursing Facility
TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEP Technical Expert Panel
UHDDS Uniform Hospital Discharge Data Set
U.S.C. United States Code
I. Executive Summary for This Proposed Rule
A. Purpose
This rule proposes updates to the payment rates for hospices for
fiscal year (FY) 2016, as required under section 1814(i) of the Social
Security Act (the Act) and reflects the final year of the 7-year Budget
Neutrality Adjustment Factor (BNAF) phase-out finalized in the FY 2010
Hospice Wage Index final rule (74 FR 39407). Our proposed update to
payment rates for hospices also includes a proposal to
[[Page 25834]]
change the hospice wage index by incorporating the new Office of
Management and Budget (OMB) core-based statistical area (CBSA)
definitions, changes to the aggregate cap calculation required by
section 1814(i)(2)(B)(ii) of the Act, and includes a proposal to align
the cap accounting year for both the inpatient cap and the hospice
aggregate cap with the federal fiscal year starting in FY 2017. In
addition, in accordance with section 1814(i)(6)(D)(i) of the Act, this
rule proposes to create two different payment rates for routine home
care (RHC) that would result in a higher base payment rate for the
first 60 days of hospice care and a reduced base payment rate days 61
or over of hospice care. Also, in accordance with section
1814(i)(6)(d)(i) of the Act, this rule proposes a service intensity
add-on (SIA) payment that would result in an add-on payment equal to
the Continuous Home Care (CHC) hourly payment rate multiplied by the
amount of direct patient care provided by a registered nurse (RN) or
social worker provided during the last 7 days of a beneficiary's life,
if certain criteria are met. In addition, section 3004(c) of the
Affordable Care Act established a quality reporting program for
hospices. In accordance with section 1814(i)(5)(A) of the Act, starting
in FY 2014, hospices that have failed to meet quality reporting
requirements receive a 2 percentage point reduction to their payment
update percentage. Although this proposed rule does not propose new
quality measures, it provides updates on the hospice quality reporting
program. Finally, this proposed rule includes a clarification regarding
diagnosis reporting on the hospice claim form.
B. Summary of the Major Provisions
Section III.A of this proposed rule provides an update on hospice
payment reform research and analysis. As a result of the hospice
payment reform research and analysis conducted over the past several
years, some of which is described in section III.A of this proposed
rule and in various technical reports available on the CMS Hospice
Center Web page (http://www.cms.gov/Center/Provider-Type/Hospice-Center.html). Section III.B proposes to create two different payment
rates for RHC that would result in a higher base payment rate for the
first 60 days of hospice care and a reduced base payment rate for days
61 or over of hospice care. Section III.B also proposes SIA payment, in
addition to the per diem rate for the RHC level of care, that would
result in an add-on payment equal to the CHC hourly payment rate
multiplied by the amount of direct patient care provided by a RN or
social worker that occurred during the last 7 days of a beneficiary's
life, if certain criteria were met.
In section III.C.1 of this rule, we propose to update the hospice
wage index using a 50/50 blend of the existing CBSA designations and
the new CBSA designations outlined in a February 28, 2013, OMB
bulletin. Section III.C.2 of this rule implements year 7 of the 7-year
BNAF phase-out finalized in the FY 2010 Hospice Wage Index final rule
(74 FR 39407). In section III.C.3, we propose to update the hospice
payment rates for FY 2016 by 1.8 percent. Section III.C.4 would
implement changes mandated by the Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT Act), in which the aggregate cap for
accounting years that end after September 30, 2016 and before October
1, 2025, would be updated by the hospice payment update rather than
using the CPI-U. Specifically, the 2016 cap year, starting on November
1, 2015 and ending on October 31, 2016, would be updated by the FY 2016
percentage update for hospice care. In addition, in section III.D, we
are proposing to align the cap accounting year for both the inpatient
cap and the hospice aggregate cap with the fiscal year for FY 2017 and
later. We believe that this would allow for the timely implementation
of the IMPACT Act changes while better aligning the cap accounting year
with the timeframe described in the IMPACT Act.
In section III.E of this rule, we discuss updates to the hospice
quality reporting program, including participation requirements for
current year (CY) 2015 regarding the Consumer Assessment of Healthcare
Providers and Systems (CAHPS[supreg]) Hospice Survey, and remind the
hospice industry that last year we set the July 1, 2014 implementation
date for the Hospice Item Set (HIS) and the January 1, 2015
implementation date for the CAHPS[supreg] Hospice Survey. More than
seven new quality measures will be derived from these tools; therefore,
no new measures were proposed this year. Also, Section III.E of this
rule will make changes related to the reconsideration process,
extraordinary circumstance extensions or exemptions, hospice quality
reporting program (HQRP) eligibility requirements for newly certified
hospices and new data submission timeliness requirements and compliance
thresholds. Finally, in Section III.F, we clarify that hospices must
report all diagnoses of the beneficiary on the hospice claim as a part
of the ongoing data collection efforts for possible future hospice
refinements. We believe that reporting of all diagnoses on the hospice
claim aligns with current coding guidelines as well as admission
requirements for hospice certifications.
C. Summary of Impacts
Table 1--Impact Summary Table
------------------------------------------------------------------------
Provision description Transfers
------------------------------------------------------------------------
FY 2016 Hospice Wage Index and Payment The overall economic impact of
Rate Update. this proposed rule is
estimated to be $200 million
in increased payments to
hospices during FY 2016.
------------------------------------------------------------------------
II. Background
A. Hospice Care
Hospice care is an approach to treatment that recognizes that the
impending death of an individual warrants a change in the focus from
curative care to palliative care for relief of pain and for symptom
management. The goal of hospice care is to help terminally ill
individuals continue life with minimal disruption to normal activities
while remaining primarily in the home environment. A hospice uses an
interdisciplinary approach to deliver medical, nursing, social,
psychological, emotional, and spiritual services through use of a broad
spectrum of professionals and other caregivers, with the goal of making
the individual as physically and emotionally comfortable as possible.
Hospice is compassionate patient and family-centered care for those who
are terminally ill. It is a comprehensive, holistic approach to
treatment that recognizes that the impending death of an individual
necessitates a change from curative to palliative care.
Medicare regulations define ``palliative care'' as ``patient and
family-centered care that optimizes quality of life by anticipating,
preventing, and treating suffering. Palliative care throughout the
continuum of illness involves addressing physical, intellectual,
emotional, social, and spiritual needs and to facilitate patient
autonomy, access to information, and choice.'' (42 CFR 418.3)
Palliative care is at the core of hospice philosophy and care
practices, and is a critical component of the Medicare hospice benefit.
See also Hospice Conditions of Participation final rule (73 FR 32088)
(2008). The goal of palliative care in hospice is to improve the
quality of life of individuals, and their families, facing the issues
associated with a life-threatening illness through the
[[Page 25835]]
prevention and relief of suffering by means of early identification,
assessment and treatment of pain and other issues. This is achieved by
the hospice interdisciplinary team working with the patient and family
to develop a comprehensive care plan focused on coordinating care
services, reducing unnecessary diagnostics or ineffective therapies,
and offering ongoing conversations with individuals and their families
about changes in their condition. It is expected that this
comprehensive care plan will shift over time to meet the changing needs
of the patient and family as the individual approaches the end of life.
Medicare hospice care is palliative care for individuals with a
prognosis of living 6 months or less if the terminal illness runs its
normal course. When an individual is terminally ill, many health
problems are brought on by underlying condition(s), as bodily systems
are interdependent. In the June 5, 2008 Hospice Conditions of
Participation final rule (73 FR 32088), we stated that ``the medical
director must consider the primary terminal condition, related
diagnoses, current subjective and objective medical findings, current
medication and treatment orders, and information about unrelated
conditions when considering the initial certification of the terminal
illness.'' As referenced in our regulations at Sec. 418.22(b)(1), to
be eligible for Medicare hospice services, the patient's attending
physician (if any) and the hospice medical director must certify that
the individual is ``terminally ill,'' as defined in section
1861(dd)(3)(A) of the Social Security Act (the Act) and our regulations
at Sec. 418.3 that is, the individual's prognosis is for a life
expectancy of 6 months or less if the terminal illness runs its normal
course. The certification of terminal illness must include a brief
narrative explanation of the clinical findings that supports a life
expectancy of 6 months or less as part of the certification and
recertification forms, as set out at Sec. 418.22(b)(3).
The goal of hospice care is to make the hospice patient as
physically and emotionally comfortable as possible, with minimal
disruption to normal activities, while remaining primarily in the home
environment. Hospice care uses an interdisciplinary approach to deliver
medical, nursing, social, psychological, emotional, and spiritual
services through the use of a broad spectrum of professional and other
caregivers and volunteers. While the goal of hospice care is to allow
for the individual to remain in his or her home environment,
circumstances during the end-of-life may necessitate short-term
inpatient admission to a hospital, skilled nursing facility (SNF), or
hospice facility for procedures necessary for pain control or acute or
chronic symptom management that cannot be managed in any other setting.
These acute hospice care services are to ensure that any new or
worsening symptoms are intensively addressed so that the individual can
return to his or her home environment at a home level of care. Short-
term, intermittent, inpatient respite services are also available to
the family of the hospice patient when needed to relieve the family or
other caregivers. Additionally, an individual can receive continuous
home care during a period of crisis in which an individual requires
primarily continuous nursing care to achieve palliation or management
of acute medical symptoms so that the individual can remain at home.
Continuous home care may be covered on a continuous basis for as much
as 24 hours a day, and these periods must be predominantly nursing care
in accordance with our regulations at Sec. 418.204. A minimum of 8
hours of nursing, or nursing and aide, care must be furnished on a
particular day to qualify for the continuous home care rate (Sec.
418.302(e)(4)).
Hospices are expected to comply with all civil rights laws,
including the provision of auxiliary aids and services to ensure
effective communication with patients or patient care representatives
with disabilities consistent with Section 504 of the Rehabilitation Act
of 1973 and the Americans with Disabilities Act, and to provide
language access for such persons who are limited in English
proficiency, consistent with Title VI of the Civil Rights Act of 1964.
Further information about these requirements may be found at http://www.hhs.gov/ocr/civilrights.
B. History of the Medicare Hospice Benefit
Before the creation of the Medicare hospice benefit, hospice
programs were originally operated by volunteers who cared for the
dying. During the early development stages of the Medicare hospice
benefit, hospice advocates were clear that they wanted a Medicare
benefit that provided all-inclusive care for terminally-ill
individuals, provided pain relief and symptom management, and offered
the opportunity to die with dignity in the comfort of one's home rather
than in an institutional setting.\1\ As stated in the August 22, 1983
proposed rule entitled ``Medicare Program; Hospice Care'' (48 FR
38146), ``the hospice experience in the United States has placed
emphasis on home care. It offers physician services, specialized
nursing services, and other forms of care in the home to enable the
terminally ill individual to remain at home in the company of family
and friends as long as possible.'' The concept of a patient
``electing'' the hospice benefit and being certified as terminally ill
were two key components of the legislation responsible for the creation
of the Medicare Hospice Benefit (section 122 of the Tax Equity and
Fiscal Responsibility Act of 1982 (TEFRA), (Pub. L. 97-248)). Section
122 of TEFRA created the Medicare Hospice benefit, which was
implemented on November 1, 1983. Under sections 1812(d) and 1861(dd) of
the Act, codified at 42 U.S.C. 1395d(d) and 1395x(dd), we provide
coverage of hospice care for terminally ill Medicare beneficiaries who
elect to receive care from a Medicare-certified hospice. Our
regulations at Sec. 418.54(c) stipulate that the comprehensive hospice
assessment must identify the patient's physical, psychosocial,
emotional, and spiritual needs related to the terminal illness and
related conditions, and address those needs in order to promote the
hospice patient's well-being, comfort, and dignity throughout the dying
process. The comprehensive assessment must take into consideration the
following factors: The nature and condition causing admission
(including the presence or lack of objective data and subjective
complaints); complications and risk factors that affect care planning;
functional status; imminence of death; and severity of symptoms (Sec.
418.54(c)). The Medicare hospice benefit requires the hospice to cover
all reasonable and necessary palliative care related to the terminal
prognosis, as described in the patient's plan of care. The December 16,
1983 Hospice final rule (48 FR 56008) requires hospices to cover care
for interventions to manage pain and symptoms. Additionally, the
hospice Conditions of Participation (CoP) at Sec. 418.56(c) require
that the hospice must provide all reasonable and necessary services for
the palliation and management of the terminal illness, related
conditions and interventions to manage pain and symptoms. Therapy and
interventions must be assessed and managed in terms of providing
palliation and comfort without undue symptom burden for the hospice
patient
[[Page 25836]]
or family.\2\ In the December 16, 1983 Hospice final rule (48 FR 56010
through 56011), regarding what is related versus unrelated to the
terminal illness, we stated: ``. . .we believe that the unique physical
condition of each terminally ill individual makes it necessary for
these decisions to be made on a case-by-case basis. It is our general
view that hospices are required to provide virtually all the care that
is needed by terminally ill patients.'' Therefore, unless there is
clear evidence that a condition is unrelated to the terminal prognosis;
all conditions are considered to be related to the terminal illness. It
is also the responsibility of the hospice physician to document why a
patient's medical needs will be unrelated to the terminal prognosis.
---------------------------------------------------------------------------
\1\ Connor, Stephen. (2007). Development of Hospice and
Palliative Care in the United States. OMEGA. 56(1), p89-99.
\2\ Paolini, DO, Charlotte. (2001). Symptoms Management at End
of Life. JAOA. 101(10). p609-615.
---------------------------------------------------------------------------
As stated in the December 16,1983 Hospice final rule, the
fundamental premise upon which the hospice benefit was designed was the
``revocation'' of traditional curative care and the ``election'' of
hospice care for end-of-life symptom management and maximization of
quality of life (48 FR 56008). After electing hospice care, the patient
typically returns to the home from an institutionalized setting or
remains in the home, to be surrounded by family and friends, and to
prepare emotionally and spiritually for death while receiving expert
symptom management and other supportive services. Election of hospice
care also includes waiving the right to Medicare payment for curative
treatment for the terminal prognosis, and instead receiving palliative
care to manage pain or symptoms.
The benefit was originally designed to cover hospice care for a
finite period of time that roughly corresponded to a life expectancy of
6 months or less. Initially, beneficiaries could receive three election
periods: Two 90-day periods and one 30-day period. Currently, Medicare
beneficiaries can elect hospice care for two 90-day periods and an
unlimited number of subsequent 60-day periods; however, the expectation
remains that beneficiaries have a life expectancy of 6 months or less
if the terminal illness runs its normal course.
C. Services Covered by the Medicare Hospice Benefit
One requirement for coverage under the Medicare Hospice benefit is
that hospice services must be reasonable and necessary for the
palliation and management of the terminal illness and related
conditions. Section 1861(dd)(1) of the Act establishes the services
that are to be rendered by a Medicare certified hospice program. These
covered services include: Nursing care; physical therapy; occupational
therapy; speech-language pathology therapy; medical social services;
home health aide services (now called hospice aide services); physician
services; homemaker services; medical supplies (including drugs and
biologics); medical appliances; counseling services (including dietary
counseling); short-term inpatient care (including both respite care and
procedures necessary for pain control and acute or chronic symptom
management) in a hospital, nursing facility, or hospice inpatient
facility; continuous home care during periods of crisis and only as
necessary to maintain the terminally ill individual at home; and any
other item or service which is specified in the plan of care and for
which payment may otherwise be made under Medicare, in accordance with
Title XVIII of the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for
providing hospice care to a beneficiary who is a hospice patient be
established before care is provided by, or under arrangements made by,
that hospice program and that the written plan be periodically reviewed
by the beneficiary's attending physician (if any), the hospice medical
director, and an interdisciplinary group (described in section
1861(dd)(2)(B) of the Act). The services offered under the Medicare
hospice benefit must be available, as needed, to beneficiaries 24 hours
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the
implementation of the hospice benefit, the Congress expected hospices
to continue to use volunteer services, though these services are not
reimbursed by Medicare (see Section 1861(dd)(2)(E) of the Act and (48
FR 38149)). As stated in the August 22, 1983 Hospice proposed rule, the
hospice interdisciplinary group should be comprised of paid hospice
employees as well as hospice volunteers (48 FR 38149). This expectation
supports the hospice philosophy of holistic, comprehensive,
compassionate, end-of-life care.
Before the Medicare hospice benefit was established, the Congress
requested a demonstration project to test the feasibility of covering
hospice care under Medicare. The National Hospice Study was initiated
in 1980 through a grant sponsored by the Robert Wood Johnson and John
A. Hartford Foundations and CMS (then, the Health Care Financing
Administration (HCFA)). The demonstration project was conducted between
October 1980 and March 1983. The project summarized the hospice care
philosophy and principles as the following:
Patient and family know of the terminal condition.
Further medical treatment and intervention are indicated
only on a supportive basis.
Pain control should be available to patients as needed to
prevent rather than to just ameliorate pain.
Interdisciplinary teamwork is essential in caring for
patient and family.
Family members and friends should be active in providing
support during the death and bereavement process.
Trained volunteers should provide additional support as
needed.
The cost data and the findings on what services hospices provided
in the demonstration project were used to design the Medicare hospice
benefit. The identified hospice services were incorporated into the
service requirements under the Medicare hospice benefit. Importantly,
in the August 22, 1983 Hospice proposed rule, we stated ``the hospice
benefit and the resulting Medicare reimbursement is not intended to
diminish the voluntary spirit of hospices'' (48 FR 38149).
D. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of
the Act, and our regulations in part 418, establish eligibility
requirements, payment standards and procedures, define covered
services, and delineate the conditions a hospice must meet to be
approved for participation in the Medicare program. Part 418, subpart
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (RHC, CHC, inpatient respite
care, and general inpatient care), based on each day a qualified
Medicare beneficiary is under hospice care (once the individual has
elected). This per diem payment is to include all of the hospice
services needed to manage the beneficiaries' care, as required by
section 1861(dd)(1) of the Act. There has been little change in the
hospice payment structure since the benefit's inception. The per diem
rate based on level of care was established in 1983, and this payment
structure remains today with some adjustments, as noted below:
1. Omnibus Budget Reconciliation Act of 1989
Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided
for the following two changes in the
[[Page 25837]]
methodology concerning updating the daily payment rates: (1) Effective
January 1, 1990, the daily payment rates for RHC and other services
included in hospice care were increased to equal 120 percent of the
rates in effect on September 30, 1989; and (2) the daily payment rate
for RHC and other services included in hospice care for fiscal years
(FYs) beginning on or after October 1, 1990, were the payment rates in
effect during the previous Federal fiscal year increased by the
hospital market basket percentage increase.
2. Balanced Budget Act of 1997
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish
updates to hospice rates for FYs 1998 through 2002. Hospice rates were
updated by a factor equal to the hospital market basket percentage
increase, minus 1 percentage point. Payment rates for FYs from 2002
have been updated according to section 1814(i)(1)(C)(ii)(VII) of the
Act, which states that the update to the payment rates for subsequent
FYs will be the hospital market basket percentage increase for the FY.
The Act requires us to use the inpatient hospital market basket to
determine hospice payment rates.
3. FY 1998 Hospice Wage Index Final Rule
In the August 8, 1997 FY 1998 Hospice Wage Index final rule (62 FR
42860), we implemented a new methodology for calculating the hospice
wage index based on the recommendations of a negotiated rulemaking
committee. The original hospice wage index was based on 1981 Bureau of
Labor Statistics hospital data and had not been updated since 1983. In
1994, because of disparity in wages from one geographical location to
another, the Hospice Wage Index Negotiated Rulemaking Committee was
formed to negotiate a new wage index methodology that could be accepted
by the industry and the government. This Committee was comprised of
representatives from national hospice associations; rural, urban, large
and small hospices, and multi-site hospices; consumer groups; and a
government representative. The Committee decided that in updating the
hospice wage index, aggregate Medicare payments to hospices would
remain budget neutral to payments calculated using the 1983 wage index,
to cushion the impact of using a new wage index methodology. To
implement this policy, a Budget Neutrality Adjustment Factor (BNAF)
will be computed and applied annually to the pre-floor, pre-
reclassified hospital wage index when deriving the hospice wage index,
subject to a wage index floor.
4. FY 2010 Hospice Wage Index Final Rule
Inpatient hospital pre-floor and pre-reclassified wage index
values, as described in the August 8, 1997 Hospice Wage Index final
rule, are subject to either a budget neutrality adjustment or
application of the wage index floor. Wage index values of 0.8 or
greater are adjusted by the (BNAF). Starting in FY 2010, a 7-year
phase-out of the BNAF began (August 6, 2009 FY 2010 Hospice Wage Index
final rule, (74 FR 39384)), with a 10 percent reduction in FY 2010, an
additional 15 percent reduction for a total of 25 percent in FY 2011,
an additional 15 percent reduction for a total 40 percent reduction in
FY 2012, an additional 15 percent reduction for a total of 55 percent
in FY 2013, and an additional 15 percent reduction for a total 70
percent reduction in FY 2014. The phase-out will continue with an
additional 15 percent reduction for a total reduction of 85 percent in
FY 2015, and an additional 15 percent reduction for complete
elimination in FY 2016. We note that the BNAF is an adjustment which
increases the hospice wage index value. Therefore, the BNAF reduction
is a reduction in the amount of the BNAF increase applied to the
hospice wage index value. It is not a reduction in the hospice wage
index value or in the hospice payment rates.
5. The Affordable Care Act
Starting with FY 2013 (and in subsequent FYs), the market basket
percentage update under the hospice payment system referenced in
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act will
be annually reduced by changes in economy-wide productivity, as
specified in section 1886(b)(3)(B)(xi)(II) of the Act, as amended by
section 3132(a) of the Patient Protection and Affordable Care Act (Pub.
L. 111-148) as amended by the Health Care and Education Reconciliation
Act (Pub. L. 111-152) (collectively referred to as the Affordable Care
Act)). In FY 2013 through FY 2019, the market basket percentage update
under the hospice payment system will be reduced by an additional 0.3
percentage point (although for FY 2014 to FY 2019, the potential 0.3
percentage point reduction is subject to suspension under conditions as
specified in section 1814(i)(1)(C)(v) of the Act).
In addition, sections 1814(i)(5)(A) through (C) of the Act, as
amended by section 3132(a) of the Affordable Care Act, require hospices
to begin submitting quality data, based on measures to be specified by
the Secretary of the Department of Health and Human Services (the
Secretary), for FY 2014 and subsequent FYs. Beginning in FY 2014,
hospices which fail to report quality data will have their market
basket update reduced by 2 percentage points.
Section 1814(a)(7)(D)(i) of the Act was amended by section
3132(b)(2)(D)(i) of the Affordable Care Act, and requires, effective
January 1, 2011, that a hospice physician or nurse practitioner have a
face-to-face encounter with the beneficiary to determine continued
eligibility of the beneficiary's hospice care prior to the 180th-day
recertification and each subsequent recertification, and to attest that
such visit took place. When implementing this provision, we finalized
in the CY 2011 Home Health Prospective Payment System final rule (75 FR
70435) that the 180th-day recertification and subsequent
recertification's corresponded to the beneficiary's third or subsequent
benefit periods. Further, section 1814(i)(6) of the Act, as amended by
section 3132(a)(1)(B) of the Affordable Care Act, authorizes the
Secretary to collect additional data and information determined
appropriate to revise payments for hospice care and other purposes. The
types of data and information suggested in the Affordable Care Act
would capture accurate resource utilization, which could be collected
on claims, cost reports, and possibly other mechanisms, as the
Secretary determines to be appropriate. The data collected may be used
to revise the methodology for determining the payment rates for RHC and
other services included in hospice care, no earlier than October 1,
2013, as described in section 1814(i)(6)(D) of the Act. In addition, we
are required to consult with hospice programs and the Medicare Payment
Advisory Commission (MedPAC) regarding additional data collection and
payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
When the Medicare Hospice benefit was implemented, the Congress
included an aggregate cap on hospice payments, which limits the total
aggregate payments any individual hospice can receive in a year. The
Congress stipulated that a ``cap amount'' be computed each year. The
cap amount was set at $6,500 per beneficiary when first enacted in 1983
and is adjusted annually by the change in the medical
[[Page 25838]]
care expenditure category of the consumer price index for urban
consumers from March 1984 to March of the cap year (section
1814(i)(2)(B) of the Act). The cap year is defined as the period from
November 1st to October 31st. As we stated in the August 4, 2011 FY
2012 Hospice Wage Index final rule (76 FR 47308 through 47314) for the
2012 cap year and subsequent cap years, the hospice aggregate cap will
be calculated using the patient-by-patient proportional methodology,
within certain limits. We will allow existing hospices the option of
having their cap calculated via the original streamlined methodology,
also within certain limits. New hospices will have their cap
determinations calculated using the patient-by-patient proportional
methodology. The patient-by-patient proportional methodology and the
streamlined methodology are two different methodologies for counting
beneficiaries when calculating the hospice aggregate cap. A detailed
explanation of these methods is found in the August 4, 2011 FY 2012
Hospice Wage Index final rule (76 FR 47308 through 47314). If a
hospice's total Medicare reimbursement for the cap year exceeded the
hospice aggregate cap, then the hospice must repay the excess back to
Medicare.
7. FY 2015 Hospice Rate Update Final Rule
When electing hospice, a beneficiary waives Medicare coverage for
any care for the terminal illness and related conditions except for
services provided by the designated hospice and attending physician. A
hospice is to file a Notice of Election (NOE) as soon as possible to
establish the hospice election within the claims processing system.
Late filing of the NOE can result in inaccurate benefit period data and
leaves Medicare vulnerable to paying non-hospice claims related to the
terminal illness and related conditions and beneficiaries possibly
liable for any cost-sharing associated costs. The FY 2015 Hospice Rate
Update final rule (79 FR 50452) finalized a requirement that requires
the NOE be filed within 5 calendar days after the effective date of
hospice election. If the NOE is filed beyond this 5 day period, hospice
providers are liable for the services furnished during the days from
the effective date of hospice election to the date of NOE filing (79 FR
50454, 50474). Similar to the NOE, the claims processing system must be
notified of a beneficiary's discharge from hospice or hospice benefit
revocation. This update to the beneficiary's status allows claims from
non-hospice providers to process and be paid. Upon live discharge or
revocation, the beneficiary immediately resumes the Medicare coverage
that had been waived when he or she elected hospice. The FY 2015
Hospice Rate Update final rule also finalized a requirement that
requires hospices to file a notice of termination/revocation within 5
calendar days of a beneficiary's live discharge or revocation, unless
the hospices have already filed a final claim. This requirement helps
to protect beneficiaries from delays in accessing needed care (79 FR
50509).
A hospice ``attending physician'' is described by the statutory and
regulatory definitions as a medical doctor, osteopath, or nurse
practitioner whom the patient identifies, at the time of hospice
election, as having the most significant role in the determination and
delivery of his or her medical care. We received reports of problems
with the identification of the patient's designated attending physician
and a third of hospice patients had multiple providers submit Part B
claims as the ``attending physician'' using a modifier. The FY 2015
Hospice Rate Update final rule finalized a requirement that the
election form must include the beneficiary's choice of attending
physician and that the beneficiary provide the hospice with a signed
document when he or she chooses to change attending physicians (79 FR
50479).
Hospice providers are required to begin using a Hospice Experience
of Care Survey for informal caregivers of hospice patients surveyed in
2015. The FY 2015 Hospice Rate Update final rule provided background
and a description of the development of the Hospice Experience of Care
Survey, including the model of survey implementation, the survey
respondents, eligibility criteria for the sample, and the languages in
which the survey is offered. The FY 2015 Hospice Rate Update final rule
also outlined participation requirements for CY 2015 and discussed
vendor oversight activities and the reconsideration and appeals process
(79 FR 50496).
Finally, the FY 2015 Hospice Rate Update final rule requires
providers to complete their aggregate cap determination within 5 months
after the cap year, but not sooner than 3 months after the end of the
cap year, and remit any overpayments. Those hospices that do not submit
their aggregate cap determinations will have their payments suspended
until the determination is completed and received by the Medicare
Administrative Contractor (MAC) (79 FR 50503).
8. IMPACT Act of 2014
The Improving Medicare Post-Acute Care Transformation Act (IMPACT
Act) of 2014 became law on October 6, 2014 (Pub. L. 113-185). Section
3(a) of the IMPACT Act mandates that all Medicare certified hospices be
surveyed every 3 years beginning April 6, 2015 and ending September 30,
2025, as it was found that surveys of hospices were being performed on
an infrequent basis. In addition, the IMPACT Act also implements a
provision set forth in the Affordable Care Act that requires medical
review of hospice cases involving patients receiving more than 180 days
care in select hospices that show a preponderance of such patients, and
the IMPACT Act contains a new provision mandating that the aggregate
cap amount for accounting years that end after September 30, 2016, and
before October 1, 2025 be updated by the hospice payment update rather
than using the consumer price index for urban consumers (CPI-U) for
medical care expenditures. Specifically, the 2016 cap year, which
starts on November 1, 2015 and ends on October 31, 2016, will be
updated by the FY 2016 payment update percentage for hospice care. In
accordance with the statute, we will continue to do this through any
cap year ending before October 1, 2025 (that is, through cap year
2025).
E. Trends in Medicare Hospice Utilization
Since the implementation of the hospice benefit in 1983, and
especially within the last decade, there has been substantial growth in
hospice utilization. The number of Medicare beneficiaries receiving
hospice services has grown from 513,000 in FY 2000 to over 1.3 million
in FY 2013. Similarly, Medicare hospice expenditures have risen from
$2.8 billion in FY 2000 to an estimated $15.3 billion in FY 2013. Our
Office of the Actuary (OACT) projects that hospice expenditures are
expected to continue to increase, by approximately 8 percent annually,
reflecting an increase in the number of Medicare beneficiaries, more
beneficiary awareness of the Medicare Hospice Benefit for end-of-life
care, and a growing preference for care provided in home and community-
based settings. However, this increased spending is partly due to an
increased average lifetime length of stay for beneficiaries, from 54
days in 2000 to 98.5 days in FY 2013, an increase of 82 percent.
There have also been changes in the diagnosis patterns among
Medicare hospice enrollees. Specifically, there were notable increases
between 2002
[[Page 25839]]
and 2007 in neurologically-based diagnoses, including various dementia
diagnoses. Additionally, there have been significant increases in the
use of non-specific, symptom-classified diagnoses, such as ``debility''
and ``adult failure to thrive.'' In FY 2013, ``debility'' and ``adult
failure to thrive'' were the first and sixth most common hospice
diagnoses, respectively, accounting for approximately 14 percent of all
diagnoses. Effective October 1, 2014, hospice claims were returned to
the provider if ``debility'' and ``adult failure to thrive'' were coded
as the principal hospice diagnosis as well as other ICD-9-CM codes that
are not permissible as principal diagnosis codes per ICD-9-CM coding
guidelines. We reminded the hospice industry that this policy would go
into effect and claims would start to be returned October 1, 2014 in
the FY 2015 hospice rate update final rule. As a result of this, there
has been a shift in coding patterns on hospice claims. For FY 2014, the
most common hospice principal diagnoses were Alzheimer's disease,
Congestive Heart Failure, Lung Cancer, Chronic Airway Obstruction and
Senile Dementia which constituted approximately 32 percent of all
claims-reported principal diagnosis codes reported in FY 2014 (see
Table 2 below).
Table 2--The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007, FY 2013, FY 2014
----------------------------------------------------------------------------------------------------------------
ICD-9/Reported Principal
Rank Diagnosis Count Percentage
----------------------------------------------------------------------------------------------------------------
Year: FY 2002
----------------------------------------------------------------------------------------------------------------
1................................. 162.9 Lung Cancer......... 73,769 11
2................................. 428.0 Congestive Heart 45,951 7
Failure.
3................................. 799.3 Debility Unspecified 36,999 6
4................................. 496 COPD.................. 35,197 5
5................................. 331.0 Alzheimer's Disease. 28,787 4
6................................. 436 CVA/Stroke............ 26,897 4
7................................. 185 Prostate Cancer....... 20,262 3
8................................. 783.7 Adult Failure To 18,304 3
Thrive.
9................................. 174.9 Breast Cancer....... 17,812 3
10................................ 290.0 Senile Dementia, 16,999 3
Uncomp.
11................................ 153.0 Colon Cancer........ 16,379 2
12................................ 157.9 Pancreatic Cancer... 15,427 2
13................................ 294.8 Organic Brain Synd 10,394 2
Nec.
14................................ 429.9 Heart Disease 10,332 2
Unspecified.
15................................ 154.0 Rectosigmoid Colon 8,956 1
Cancer.
16................................ 332.0 Parkinson's Disease. 8,865 1
17................................ 586 Renal Failure 8,764 1
Unspecified.
18................................ 585 Chronic Renal Failure 8,599 1
(End 2005).
19................................ 183.0 Ovarian Cancer...... 7,432 1
20................................ 188.9 Bladder Cancer...... 6,916 1
----------------------------------------------------------------------------------------------------------------
Year: FY 2007
----------------------------------------------------------------------------------------------------------------
1................................. 799.3 Debility Unspecified 90,150 9
2................................. 162.9 Lung Cancer......... 86,954 8
3................................. 428.0 Congestive Heart 77,836 7
Failure.
4................................. 496 COPD.................. 60,815 6
5................................. 783.7 Adult Failure To 58,303 6
Thrive.
6................................. 331.0 Alzheimer's Disease. 58,200 6
7................................. 290.0 Senile Dementia 37,667 4
Uncomp.
8................................. 436 CVA/Stroke............ 31,800 3
9................................. 429.9 Heart Disease 22,170 2
Unspecified.
10................................ 185 Prostate Cancer....... 22,086 2
11................................ 174.9 Breast Cancer....... 20,378 2
12................................ 157.9 Pancreas Unspecified 19,082 2
13................................ 153.9 Colon Cancer........ 19,080 2
14................................ 294.8 Organic Brain 17,697 2
Syndrome NEC.
15................................ 332.0 Parkinson's Disease. 16,524 2
16................................ 294.10 Dementia In Other 15,777 2
Diseases w/o Behav. Dist.
17................................ 586 Renal Failure 12,188 1
Unspecified.
18................................ 585.6 End Stage Renal 11,196 1
Disease.
19................................ 188.9 Bladder Cancer...... 8,806 1
20................................ 183.0 Ovarian Cancer...... 8,434 1
----------------------------------------------------------------------------------------------------------------
Year: FY 2013
----------------------------------------------------------------------------------------------------------------
1................................. 799.3 Debility Unspecified 127,415 9
2................................. 428.0 Congestive Heart 96,171 7
Failure.
3................................. 162.9 Lung Cancer......... 91,598 6
4................................. 496 COPD.................. 82,184 6
5................................. 331.0 Alzheimer's Disease. 79,626 6
6................................. 783.7 Adult Failure To 71,122 5
Thrive.
7................................. 290.0 Senile Dementia, 60,579 4
Uncomp.
8................................. 429.9 Heart Disease 36,914 3
Unspecified.
9................................. 436 CVA/Stroke............ 34,459 2
10................................ 294.10 Dementia In Other 30,963 2
Diseases w/o Behavioral
Dist.
11................................ 332.0 Parkinson's Disease. 25,396 2
[[Page 25840]]
12................................ 153.9 Colon Cancer........ 23,228 2
13................................ 294.20 Dementia 23,224 2
Unspecified w/o
Behavioral Dist.
14................................ 174.9 Breast Cancer....... 23,059 2
15................................ 157.9 Pancreatic Cancer... 22,341 2
16................................ 185 Prostate Cancer....... 21,769 2
17................................ 585.6 End-Stage Renal 19,309 1
Disease.
18................................ 518.81 Acute Respiratory 15,965 1
Failure.
19................................ 294.8 Other Persistent 14,372 1
Mental Dis.--classified
elsewhere.
20................................ 294.11 Dementia In Other 13,687 1
Diseases w/Behavioral
Dist.
----------------------------------------------------------------------------------------------------------------
Year: FY 2014
----------------------------------------------------------------------------------------------------------------
1................................. 331.0 Alzheimer's disease. 127,438 9
2................................. 428.0 Congestive heart 106,570 8
failure, unspecified.
3................................. 162.9 Lung Cancer......... 89,726 6
4................................. 496 COPD.................. 78,643 6
5................................. 290.0 Senile dementia, 40,120 3
uncomplicated.
6................................. 429.9 Heart disease, 36,929 3
unspecified.
7................................. 436 CVA/Stroke............ 33,466 2
8................................. 294.20 Dementia, 33,119 2
unspecified, without
behavioral disturbance.
9................................. 332.0 Parkinson's Disease. 30,070 2
10................................ 153.9 Colon Cancer........ 23,385 2
11................................ 174.9 Breast Cancer....... 23,343 2
12................................ 157.9 Pancreatic Cancer... 22,521 2
13................................ 185 Prostate Cancer....... 22,136 2
14................................ 585.6 End stage renal 21,467 2
disease.
15................................ 294.10 Dementia in 19,523 1
conditions classified
elsewhere w/o behav
disturbance.
16................................ 331.2 Senile degeneration 18,660 1
of brain.
17................................ 518.81 Acute respiratory 17,347 1
failure.
18................................ 290.40 Vascular dementia, 17,220 1
uncomplicated.
19................................ 491.21 Obstructive chronic 15,985 1
bronchitis with (acute)
exacerbation.
20................................ 429.2 Cardiovascular 14,186 1
disease, unspecified.
----------------------------------------------------------------------------------------------------------------
Note(s): The frequencies shown represent beneficiaries that had a least one claim with the specific ICD-9-CM
code reported as the principal diagnosis. Beneficiaries could be represented multiple times in the results if
they have multiple claims during that time period with different principal diagnoses.
Source: FY 2002 and 2007 hospice claims data from the Chronic Conditions Data Warehouse (CCW), accessed on
February 14 and February 20, 2013. FY 2013 hospice claims data from the CCW, accessed on June 26, 2014 and
preliminary FY 2014 hospice claims data from the CCW, accessed on January 26, 2015.
III. Provisions of the Proposed Rule
A. Hospice Payment Reform Research and Analyses
In 2010, the Congress amended section 1814(i)(6) of the Act with
section 3132(a) of the Affordable Care Act. The amendment authorizes
the Secretary to collect additional data and information determined
appropriate to revise payments for hospice care and for other purposes.
The data collected may be used to revise the methodology for RHC and
other hospice services (in a budget-neutral manner in the first year),
no earlier than October 1, 2013, as described in section 1814(i)(6)(D)
of the Act. The Secretary is required to consult with hospice programs
and the MedPAC regarding additional data collection and payment reform
options.
Since 2010, we have undertaken efforts to collect the data needed
to establish what revisions to the methodology for determining the
hospice payment rates may be necessary. Effective April 1, 2014, we
began requiring additional information on hospice claims regarding
drugs and certain durable medical equipment and effective October 1,
2014, we finalized changes to the hospice cost report to improve data
collection on the costs of providing hospice care.\3\ In addition, our
research contractor Abt Associates conducted a hospice literature
review; held stakeholder meetings; and developed and maintained an
analytic plan, which supports effort towards implementing hospice
payment reform. During the stakeholder meetings, attendees articulated
concerns of sweeping payment reform changes and encouraged us to
consider incremental steps or to use existing regulatory authority to
refine the hospice program. We also held five industry technical expert
panels (TEPs) via webinar and in-person meetings; consulted with
federal hospice experts; provided annual updates on findings from our
research and analyses and reform options in the FY 2014 and FY 2015
Hospice Wage Index and Payment Rate Update proposed and final rules (78
FR 48234 and 79 FR 50452); and updated the hospice industry on reform
work through Open Door Forums, industry conferences and academic
conferences.\4\ We have taken into consideration the recommendations
from MedPAC on reforming hospice payment, as articulated in the MedPAC
Reports to Congress since 2009. The MedPAC recommendations and research
provided a foundation for our development of an analytic plan and
additional payment reform concepts. Furthermore, MedPAC participated in
post-TEP meeting briefings with other federal hospice experts. These
meetings provided valuable feedback regarding the TEP's comments and
discussed
[[Page 25841]]
potential research and analyses to consider for hospice payment reform.
---------------------------------------------------------------------------
\3\ CMS Transmittal 2864, ``Additional Data Reporting
Requirements for Hospice claim''. Available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864P.pdf.
\4\ http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-Project-Background.pdf.
---------------------------------------------------------------------------
The FY 2012 Hospice Wage Index final rule (76 FR 47324) noted our
collaboration with the Assistant Secretary of Planning and Evaluation
(ASPE) to develop analyses that were used to inform our research
efforts. The results from such analyses were used by Abt Associates to
facilitate discussion, in 2012, of potential payment reform options and
to guide the identification of topics for further analysis. In early
2014, we began working with Acumen, LLC, using real-time claims data,
to monitor the vulnerabilities identified in the 2013 and 2014 Abt
Associates' Hospice Payment Reform Technical Reports. On September 18,
2014, the IMPACT Act, mandated that the Centers for Medicare & Medicaid
(CMS) undertake additional hospice monitoring and oversight activities.
As noted previously, the IMPACT Act requires CMS to survey hospices at
least as frequently as every 3 years for the next 10 years and review
medical records of hospice beneficiaries on the hospice benefit for 180
days or greater as specified by the Secretary. CMS is actively engaged
in cross-agency collaboration to meet the intent of the IMPACT Act to
increase monitoring and oversight of hospice providers.
The majority of the research and analyses conducted by CMS and
summarized in this rule were based on analyses of FY 2013 Medicare
claims and cost report data conducted by our research contractor, Abt
Associates, unless otherwise specified. In addition, we cite research
and analyses, conducted by Acumen, LLC that are based on real-time
claims data from the Integrated Data Repository (IDR). In the sections
below, analysis conducted on pre-hospice spending, non-hospice spending
for hospice beneficiaries during a hospice election, and live discharge
rates highlight potential vulnerabilities of the Medicare hospice
benefit.
1. Pre-Hospice Spending
In 1982, the Congress introduced hospice into the Medicare program
as an alternative to aggressive treatment at the end of life. During
the development of the benefit, multiple testimonies from industry
leaders and hospice families, it was reported that hospices provided
high-quality, compassionate and humane care while also offering a
reduction in Medicare costs.\5\ Additionally, a Congressional Budget
Office (CBO) study asserted that hospice care would result in sizable
savings over conventional hospital care.\6\ Those savings estimates
were based on a comparison of spending in the last 6 months of life for
a cancer patient not utilizing hospice care versus the cost of hospice
care for the 6 months preceding death.\7\ The original language for
section 1814(i) of the Act (prior to August 29, 1983) set the hospice
aggregate cap amount at 40 percent of the average Medicare per capita
expenditure amount for cancer patients in the last 6 months of life.
When the hospice benefit was created, the average lifetime length of
stay for a hospice patient was between 55 and 75 days. Since the
implementation of the Medicare hospice benefit, the principal diagnosis
for patients electing the hospice benefit has changed from primarily
cancer diagnoses in 1983 to primarily non-cancer diagnoses in FY
2014.\8\ Alzheimer's disease and Congestive Heart Failure (CHF) were
the most reported principal diagnoses comprising 17 percent of all
diagnoses reported (see Table 2 in section II.E) in FY 2014.
---------------------------------------------------------------------------
\5\ Subcommittee of Health of the Committee of Ways and Means,
House of Representatives, March 25, 1982.
\6\ Mor V. Masterson-Allen S. (1987): Hospice care systems:
Structure, process, costs and outcome. New York: Springer Publishing
Company.
\7\ Fogel, Richard. (1983): Comments on the Legislative Intent
of Medicare's Hospice Benefit (GAO/HRD-83-72).
\8\ Connor, S. (2007). Development of Hospice and Palliative
Care in the Unites States. OMEGA. 56(1), 89-99. doi:102190/OM.5.1.h.
---------------------------------------------------------------------------
Analysis was conducted to evaluate pre-hospice spending for
beneficiaries who ever used hospice that died in FY 2013. To evaluate
pre-hospice spending, we calculated the median daily Medicare payments
for such beneficiaries for the 180 days, 90 days, and 30 days prior to
electing hospice care. We then categorized patients according to the
principal diagnosis reported on the hospice claim. The analysis
revealed that for some patients, the Medicare payments in the 180 days
prior to the hospice election were lower than Medicare payments
associated with hospice care once the benefit was elected (see Table 3
and Figure 1 below). Specifically, median Medicare spending for a
beneficiary with a diagnosis of Alzheimer's disease, non-Alzheimer's
dementia, or Parkinson's in the 180 days prior to hospice admission
(about 20 percent of patients) was $66.84 per day compared to the RHC
rate of $153.45 in FY 2013 during a hospice election (see Table 3
below). Closer to the hospice admission, the median Medicare payments
per day increase, as would be expected as the patient approaches the
end of life and patient needs intensify. However, 30 days prior to a
hospice election, median Medicare spending was $105.24 for patients
with Alzheimer's disease, non-Alzheimer's dementia, or Parkinson's. In
contrast, the median Medicare payments prior to hospice election for
patients with a principal hospice diagnosis of cancer were $143.56 in
the 180 days prior to hospice admission and increased to $289.85 in the
30 days prior to hospice admission. The average length of stay for
hospice elections where the principal diagnosis was reported as
Alzheimer's disease, non-Alzheimer's Dementia, or Parkinson's is
greater than patient's with other diagnoses, such as cancer, CVA/
stroke, chronic kidney disease, and Chronic Obstructive Pulmonary
Disease (COPD). For example, the average lifetime length of stay for an
Alzheimer's, non-Alzheimer's Dementia, or Parkinson's patient in FY
2013 was 119 days compared to 47 days for patients with a principal
diagnosis of cancer (or in other words, 150 percent longer).
Table 3--Median Pre-Hospice Daily Spending Estimates and Interquartile Range Based on 180, 90, and 30 Day Look-Back Periods Prior to Initial Hospice
Admission With Estimates of Average Lifetime Length of Stay (LOS) by Primary Diagnosis at Hospice Admission, FY 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimates of daily non-hospice Medicare spending prior to first hospice admission
------------------------------------------------------------------------------------------
180 day look-back 90 day look-back 30 day look-back Mean
------------------------------------------------------------------------------------------ lifetime
25th 75th 25th 75th 25th 75th LOS
pct. Median pct. pct. Median pct. pct. Median pct.
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Diagnoses....................................... $47.04 $117.73 $240.73 $55.75 $157.89 $337.97 $57.66 $266.84 $545.44 73.8
Alzheimer's, Dementia, and Parkinson's.............. 23.39 66.84 162.60 23.06 82.00 220.12 21.02 105.24 368.30 119.3
CVA/Stroke.......................................... 56.18 116.86 239.30 82.32 170.40 352.74 150.21 352.41 622.23 47.4
[[Page 25842]]
Cancers............................................. 62.81 143.56 265.58 78.30 188.08 360.92 81.52 289.85 569.67 47.1
Chronic Kidney Disease.............................. 94.78 217.46 402.10 126.41 293.18 541.41 199.01 466.25 820.78 27.3
Heart (CHF and Other Heart Disease)................. 61.28 135.48 255.53 80.62 186.52 364.24 101.80 325.15 588.50 77.2
Lung (COPD and Pneumonias).......................... 65.53 142.78 272.13 90.68 201.02 401.12 126.51 367.68 685.17 67.5
All Other Diagnoses................................. 36.00 99.80 222.25 39.45 132.88 316.15 38.96 213.84 504.57 85.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: All Medicare Parts A, B, and D claims for FY 2013 from the Chronic Conditions Data Warehouse (CCW) retrieved March, 2015.
Note(s): Estimates drawn from FY2013 hospice decedents who were first-time hospice admissions, ages 66+ at hospice admission, admitted since 2006, and
not enrolled in Medicare Advantage prior to admission. All payments are inflation-adjusted to September 2013 dollars using the Consumer Price Index
(Medical Care; All Urban Consumers).
[GRAPHIC] [TIFF OMITTED] TP05MY15.000
In the FY 2014 Hospice Wage Index and Payment Rate Update proposed
and final rules (78 FR 27843 and 78 FR 48272), we discussed whether a
case-mix system could be created in future refinements to differentiate
hospice payments according to patient characteristics. While we do not
have the necessary data on the hospice claim form at this time to
conduct more thorough research to determine whether a case-mix system
is appropriate, analyzing pre-hospice spending was undertaken as an
initial step in determining whether patients required different
resource needs prior to hospice based on the principal diagnosis
reported on the hospice claim. Table 3 and Figure 1 above indicate that
hospice patients with the longest length of stay had lower pre-hospice
spending relative to hospice patients with shorter lengths of stay.
These hospice patients tend to be those with neurological conditions,
[[Page 25843]]
including those with Alzheimer's disease, other related dementias and
Parkinson's disease. Typically, these conditions are associated with
longer disease trajectories, progressive loss of functional and
cognitive abilities, and more difficult prognostication. Research has
shown that the majority of dementia patients are cared for at home,
thereby causing informal costs that put an economic burden on families
rather than on healthcare systems.\9\ Additionally, research using the
National Long-Term Care Survey (NLCS) merged with Medicare claims;
researchers found that patients with Alzheimer's disease and related
conditions do not have higher Medicare expenditures over the last 5
years of their life than the non-demented elderly.\10\ Finally,
research conducted by the RAND Corporation and published in the Annals
of Internal Medicine in February of 2004 found that ``adjusted mean
[Medicare] expenditures were 4.0 percent higher overall among hospice
enrollees than among non-enrollees. Adjusted mean [Medicare]
expenditures were 1 percent lower for hospice enrollees with cancer
than for patients with cancer who did not use hospice. Savings were
highest (7 percent to 17 percent) among enrollees with lung cancer and
other very aggressive types of cancer diagnosed in the last year of
life. [Medicare] Expenditures for hospice enrollees without cancer were
11 percent higher than for non-enrollees, ranging from 20 percent to 44
percent for patients with dementia and 0 percent to 16 percent for
those with chronic heart failure or failure of most other organ
systems''.\11\ While analysis examining pre-hospice spending for
hospice patients according to their diagnosis reported on the hospice
claim has some limitations, it does show that, depending on the type of
research study design selected, different conclusions can be drawn
regarding the effect of Alzheimer's disease and dementia on medical
care costs.\12\
---------------------------------------------------------------------------
\9\ Schaller, S., Mauskopf, J., Kriza, C., Wahlster, P.,
Kolominsky-Rabas, P. (2015). The main cost drivers in dementia: a
systematic review. International Journal of Geriatric Psychiatry.
15, 111-129. doi: 10.1002/gps.4198.
\10\ Ayyagari, P., M. Salm, and F. Sloan. 2008. ``Effects of
Diagnosed Dementia on Medicare and Medicaid Program Costs.'' Inquiry
44 (Winter 2007/2008): 481-94. Lamb, V., F. Sloan, and A. Nathan.
2008. ``Dementia and Medicare at Life's End.'' Health Services
Research 43 (2): 714-32.
\11\ http://www.rand.org/pubs/external_publications/EP20040207.html. Accessed on April 23, 2015.
\12\ Yang, Z., Zhang, K., Lin, P., Clevenger, C., & Atherly, A.
(2012). A Longitudinal Analysis of the Lifetime Cost of Dementia.
Health Services Research, 47(4), 1660-1678. doi:10.1111/j.1475-
6773.2011.01365.x.
---------------------------------------------------------------------------
2. Non-Hospice Spending for Hospice Beneficiaries During an Election
When a beneficiary elects the Medicare hospice benefit, he or she
waives the right to Medicare payment for services related to the
terminal illness and related conditions, except for services provided
by the designated hospice and the attending physician as described in
section II.D.7. However, Medicare payment is allowed for covered
Medicare items or services that are unrelated to the terminal illness
and related conditions (that is, the terminal prognosis). When a
hospice beneficiary receives items or services unrelated to the
terminal illness and related conditions from a non-hospice provider,
that provider can bill Medicare for the items or services, but must
include on the claim a GW (service not related to the hospice patient's
terminal condition) modifier (if billed on a professional claim),\13\
or condition code 07 (if billed on an institutional claim).\14\
Prescription Drug Events (PDEs) unrelated to the terminal prognosis for
which hospice beneficiaries are receiving hospice care are billed to
Part D and do not require a modifier or a condition code. We reported
initial findings on CY 2012 non-hospice spending during a hospice
election in the FY 2015 Hospice Wage Index and Payment Rate Update
final rule (79 FR 50452). This section updates our analysis of non-
hospice spending during a hospice election using FY 2013 data.
---------------------------------------------------------------------------
\13\ Medicare Claims Processing Manual, Chapter 11-Processing
Hospice Claims, Section 30.4-Claims from Medicare Advantage
Organizations, B-Billing of Covered Services. http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c11.pdf.
\14\ Medicare Claims Processing Manual, Chapter 11-Processing
Hospice Claims, Section 30.3-Data Required on the Institutional
Claim to Medicare Contractors, Conditions Codes. http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c11.pdf.
---------------------------------------------------------------------------
For FY 2013, we found that Medicare paid $694.1 million for Part A
and Part B items or services while a beneficiary was receiving hospice
care. The $694.1 million paid for Part A and Part B items or services
was for durable medical equipment (6.4 percent), inpatient care (care
in long- term care hospitals, inpatient rehabilitation facilities,
acute care hospitals; 28.6 percent), outpatient Part B services (16.6
percent), other Part B services (also known as physician, practitioner
and supplier claims, such as labs and diagnostic tests, ambulance
transports, and physician office visits; 38.8 percent), skilled nursing
facility care (5.3 percent), and home health care (4.3 percent). Part A
and Part B non-hospice spending occurred mostly for hospice
beneficiaries who were at home (56.0 percent). We also found that on
hospice service days in which non-hospice spending occurred, 25.7
percent of hospice beneficiaries were in a nursing facility, 1.9
percent were in an inpatient setting, 15.1 percent were in an assisted
living facility, and 1.3 percent were in other settings. Although the
average daily rate of expenditures outside the hospice benefit was
$7.65, we found geographic differences where beneficiaries receive
care. The highest rates per day occurred for hospice beneficiaries
residing in West Virginia ($13.74), Delaware ($12.76), Mississippi
($12.31), South Florida ($12.24), and Texas ($12.10)
Table 4 below details the various components of Part D spending for
patients receiving hospice care. The portion of the $439.5 million
total Part D spending which was paid by Medicare is the sum of the Low
Income Cost-Sharing Subsidy and the Covered Drug Plan Paid Amount, or
$347.1 million.
Table 4--Drug Cost Sources for Hospice Beneficiaries' FY 2013 Drugs
Received Through Part D
------------------------------------------------------------------------
Component FY 2013 expenditures
------------------------------------------------------------------------
(Patient Pay Amount)........................... $50,871,517
(Low Income Cost-Sharing Subsidy).............. 116,890,745
(Other True Out-of Pocket Amount).............. 2,125,071
(Patient Liability Reduction due to Other Payer 6,678,561
Amount).......................................
(Covered Drug Plan Paid Amount)................ 230,216,153
(Non-Covered Plan Paid Amount.................. 28,733,518
(Six Payment Amount Totals).................... 435,515,566
(Unknown/Unreconciled)......................... 3,945,667
(Gross Total Drug Costs, Reported)............. 439,461,233
------------------------------------------------------------------------
Source: Abt Associates analysis of 100% FY 2013 Medicare Claim Files.
For more information on the components above and on Part D data, go to
the Research Data Assistance Center's (ResDAC's) Web site at: http://www.resdac.org/.
Non-hospice Medicare expenditures occurring during a hospice
election in FY 2013 were $694.1 million for Parts A and B spending plus
$347.1 million for Part D spending, or approximately $1 billion dollars
total. This figure is comparable to the estimated $1 billion MedPAC
reported during its December
[[Page 25844]]
2013 public meeting.\15\ Associated with this $1 billion in Medicare
spending were cost sharing liabilities such as co-payments and
deductibles that beneficiaries incurred. Hospice beneficiaries had
$132.5 million in cost-sharing for items and services that were billed
to Medicare Parts A and B, and $50.9 million in cost-sharing for drugs
that were billed to Medicare Part D, while they were in a hospice
election. In total, this represents an FY 2013 beneficiary liability of
$183.4 million for Parts A, B, and D items or services provided to
hospice beneficiaries during a hospice election. Therefore, the total
non-hospice costs paid by Medicare or beneficiaries for items or
services provided to hospice beneficiaries during a hospice election
were over $1.2 billion in FY 2013.
---------------------------------------------------------------------------
\15\ MedPAC, ``Assessing payment adequacy and updating payments:
hospice services'', December 13 2013. Available at: http://www.medpac.gov/documents/december-2013-meeting-transcript.pdf.
---------------------------------------------------------------------------
In a recent report, the HHS Office of Inspector General (OIG)
identified instances where Medicare may be paying under Part D for
drugs that should be provided by the hospice as part of the plan of
care.\16\ To assist CMS in identifying and evaluating instances where
drugs, supplies, durable medical equipment (DME), and Part B services
provided to hospice patients appear to be related to the principal
diagnosis reported on the hospice claim, but were billed separately to
other parts of the Medicare program, Acumen, LLC developed case studies
that were reviewed and evaluated by CMS clinical staff.\17\ Although
hospice beneficiaries are allowed to continue receiving care outside
the hospice benefit for conditions that are unrelated to the terminal
illness and related conditions (that is, unrelated to the terminal
prognosis), Sec. 418.56(c) requires hospices to provide all services
necessary for the palliation and management of the terminal illness and
related conditions.
---------------------------------------------------------------------------
\16\ oig.hhs.gov/oas/region6/61000059.pdf ``Medicare Could Be
Paying Twice for Prescriptions For Beneficiaries in Hospice''.
\17\ The case studies were developed using CY 2013 claims data
for only those beneficiaries with Parts A, B and D coverage
throughout their hospice. In identifying services that overlapped
with a hospice election, we used two methods. The first method
identified a match between the first three diagnosis codes of the
hospice claim and the diagnosis codes of the overlapping services in
the Part A, Part B, and Part D claim for the same beneficiary. The
second method identified a match between the hospice diagnoses and
the diagnosis codes of the overlapping services in the Part A, Part
B and Part D based on a diagnosis code on the overlapping claim and
any diagnosis on the hospice claim mapping to the same Healthcare
Cost and Utilization Project (HCUP).
---------------------------------------------------------------------------
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Across
Terminal Conditions
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
(DMEPOS) products whose use was initiated during a hospice stay are
likely related to the terminal prognosis. Table 5 and 6 below
summarizes total concurrent billing for DMEPOS products by Berenson-
Eggers Types of Service (BETOS) categories and concurrent Durable
Medical Equipment (DME) billing by the top 20 principal diagnoses as
reported on hospice claims in CY 2013.\18\ These diagnoses comprised
2.3 million hospice stays, and accounted for $27.1 million in total
concurrent spending for DME products. This amount does not include
spending for DME rental products that beneficiaries began using prior
to a hospice stay.
---------------------------------------------------------------------------
\18\ DMEPOS HCPCS codes are summarized by Berenson-Eggers Types
of Service (BETOS) categories. BETOS categories were developed by
the American Medical Association (AMA) and aggregate HCPCS codes
into clinically coherent groups.
Table 5--Concurrent Payments for All DME Use Initiated During a Hospice
Stay by BETOS Category, CY 2013
------------------------------------------------------------------------
Total payment for
DMEPOS BETOS category related DME
------------------------------------------------------------------------
Hospital Beds.................................. $943,731
Wheelchairs.................................... 2,295,038
Oxygen and Supplies............................ 2,412,281
Orthotics and Prosthetics...................... 4,400,353
Medical/Surgical Supplies...................... 7,467,616
Other DME...................................... 9,585,003
------------------------
Total...................................... 27,104,022
------------------------------------------------------------------------
Table 6--Concurrent Payments for All DME Use Initiated During a Hospice
Stay by Top 20 Principal Diagnosis Reported on Hospice Claim, CY 2013
------------------------------------------------------------------------
Total payment for
Principal diagnosis related DME
------------------------------------------------------------------------
Heart failure.................................. $3,365,348
Malignant neoplasm of trachea, bronchus, and 1,519,514
lung..........................................
Other cerebral degenerations................... 2,979,399
Other organic psychotic conditions (chronic)... 2,540,146
Chronic airways obstruction, not elsewhere 2,610,628
classified....................................
Senile and presenile organic psychotic 2,868,760
conditions....................................
Other ill-defined and unknown causes of 2,349,855
morbidity and mortality.......................
Ill-defined descriptions and complications of 1,584,522
heart disease.................................
Acute but ill-defined cerebrovascular disease.. 1,092,772
Other diseases of lung......................... 412,501
Chronic renal failure.......................... 415,800
Symptoms concerning nutrition, metabolism, and 1,390,685
development...................................
Malignant neoplasm of pancreas................. 297,573
Malignant neoplasm of female breast............ 486,019
Malignant neoplasm of colon.................... 521,690
Parkinson's disease............................ 955,390
Malignant neoplasm of prostate................. 312,754
Late effects of cerebrovascular disease........ 559,253
Other forms of chronic ischemic heart disease.. 670,947
Malignant neoplasm of liver and intrahepatic 170,470
bile ducts....................................
------------------------------------------------------------------------
We noted that hospice beneficiaries with hospice claims-reported
principal diagnoses of chronic airway obstruction, congestive heart
failure, cerebral degeneration and lung cancer were receiving services
clinically indicated and recommended for these conditions outside of
the hospice benefit, which is in violation of requirements regarding
the Medicare hospice benefit. This could be attributed to hospices
[[Page 25845]]
incorrectly classifying conditions as unrelated and referring patients
to non-hospice providers, not communicating and coordinating the care
and services needed to manage the needs of the hospice beneficiary, or
deliberately, to avoid costs. The case studies below are focused on
four of the most commonly reported principal hospice diagnoses on
hospice claims (see Table 2 in section II.E) based on evidence based
clinical guidelines as described for each principal hospice diagnosis.
Malignant Neoplasm of the Trachea, Bronchus, and Lung
Malignant neoplasm of the trachea, bronchus, and lung (or lung
cancer) is defined by ICD-9 diagnosis codes beginning with 162 and
describes malignant cancers affecting various part of the pulmonary
system. Symptoms for this class of conditions may include chronic and
worsening cough, shortness of breath, chest pain, metastatic bone pain,
and anorexia and weight loss. Clinical practice guidelines for end-
stage cancer recommend treatment and management of refractory symptoms
including pain, mucositis, dyspnea, fatigue, depression and anorexia
through the use of pharmacological interventions including nonsteroidal
anti-inflammatories, corticosteroids, opioids and antidepressants.\19\
Additionally, evidence shows that palliative chemotherapy and
radiotherapy can provide symptom relief from bone and brain
metastasis.\20\ Recommended interventions for dyspnea include treatment
of the underlying reason such as, thoracentesis for pleural effusion,
bronchodilators and systemic corticosteroids for inflammation and
secretions, and supportive measures such supplemental oxygen, opioids
and anxiolytics to decrease the sensation of breathlessness.\21\
---------------------------------------------------------------------------
\19\ Qaseem A, Snow V, Shekelle P, Casey DE, Cross JT, Owens DK,
et al. Evidence-Based Interventions to Improve the Palliative Care
of Pain, Dyspnea, and Depression at the End of Life: A Clinical
Practice Guideline from the American College of Physicians. Ann
Intern Med. 2008;148:141-146. doi:10.7326/0003-4819-148-2-200801150-
00009
\20\ Palliative care in lung cancer*: accp evidence-based
clinical practice guidelines (2nd edition) Kvale PA, Selecky PA,
Prakash US. Chest. 2007;132(3_suppl):368S-403S.
\21\ ibid.
---------------------------------------------------------------------------
Our assessment of concurrently billed Part D drugs included 89,925
stays for beneficiaries with ICD-9 code 162 listed as a primary
diagnosis on the hospice claim. Our assessment of concurrently billed
Part B services included 153,199 stays. In CY 2013, concurrent billing
for all services related this terminal condition comprised $3.4
million. Table 7 below summarizes concurrent payments for services that
were potentially related to this class of conditions. Part D drugs that
should have been covered under the hospice benefit for the treatment of
this condition accounted for $2.1 million. DME services that were
billed during hospice stays related to this condition during the same
time cost $640,166. Concurrent services provided in Part B
institutional settings accounted for $591,772.
Table 7--Concurrent Payments for Services Provided to Hospice
Beneficiaries With Malignant Neoplasm of the Trachea, Bronchus, and
Lung, CY 2013
------------------------------------------------------------------------
Type of service Description Total payment
------------------------------------------------------------------------
Drugs/Part D................. Common $851,639
Palliative
Drugs.
Drugs/Part D................. Anti-neoplastics 1,321,507
(chemotherapy).
DME.......................... Oxygen Equipment 454,068
and Supplies.
DME.......................... Hospital Beds... 47,781
DME.......................... Wheelchairs..... 138,316
Part B Inst.................. Diagnostic 341,601
Imaging.
Part B Inst.................. Radiation....... 250,171
------------------------
Total.................... ................ 3,405,083
------------------------------------------------------------------------
Chronic Airway Obstruction
Chronic airway obstruction is defined by ICD-9 diagnosis codes
beginning with 496 and includes chronic lung disease with unspecified
cause, and is characterized by inflammation of the lungs and airways.
Typical symptoms of these pulmonary diseases include increasing and
disabling shortness of breath, labored breathing, increased coughing,
increased heart rate, decreased functional reserve, increased
infections and unintentional, progressive weight loss. Evidence-based
practice supports the benefits of oral opioids, neuromuscular
electrical stimulation, chest wall vibration, walking aids, respiratory
assist devices and pursed-lip breathing in the management of dyspnea in
the individual patient with advanced COPD.\22\ Oxygen is recommended
for COPD patients with resting hypoxemia for symptomatic benefit.\23\
Additionally, clinical practice guidelines recommend inhaled
bronchodilators, systemic corticosteroids, and pulmonary physiotherapy
for the management of COPD exacerbations.\24\ Analysis conducted by
Acumen, LLC, shows concurrently billed Part D drugs included 130,283
stays for beneficiaries with ICD-9 code 469 listed as a primary
diagnosis on the hospice claim. Additionally, concurrently billed Part
B services included 198,098 such stays. Table 8 below summarizes
concurrent payments for services that are potentially related to this
class of conditions. In CY 2013, concurrent billing for all services
related this terminal condition comprised $10.4 million. Part D drugs
that should have been covered under the hospice benefit for the
treatment of this condition accounted for $8.6 million. DME services
that were billed during hospice stays related to this condition during
the same time amounted to $1.2 million dollars.\25\ Finally, concurrent
services provided in Part B institutional settings accounted for
$605,110.
---------------------------------------------------------------------------
\22\ DD Marciniuk, D Goodridge, P Hernandez, et al. (2011).
Canadian Thoracic Society COPD Committee Dyspnea Expert Working
Group. Managing dyspnea in patients with advanced chronic
obstructive pulmonary disease: A Canadian Thoracic Society clinical
practice guideline. Canadian Respiratory Journal. 18(2), 1-10.
\23\ ibid
\24\ National Clinical Guideline Centre for Acute and Chronic
Conditions. Chronic obstructive pulmonary disease. Management of
chronic obstructive pulmonary disease in adults in primary and
secondary care. London (UK): National Institute for Health and
Clinical Excellence (NICE); 2010 Jun. 61 p. (Clinical guideline; no.
101). Retrieved from the National Guideline Clearinghouse on
February 19, 2015. http://www.guideline.gov/
\25\ DMEPOS HCPCS codes are summarized by Berenson-Eggers Types
of Service (BETOS) categories. BETOS categories were developed by
the American Medical Association (AMA) and aggregate HCPCS codes
into clinically coherent groups.
[[Page 25846]]
Table 8--Concurrent Payments for Services Provided to Hospice
Beneficiaries With Chronic Airway Obstruction, CY 2013
------------------------------------------------------------------------
Type of service Description Total payment
------------------------------------------------------------------------
Drugs/Part D................. Common $1,757,326
Palliative
Drugs \26\.
Drugs/Part D................. Antiasthmatics & 6,545,089
Bronchodilators.
Drugs/Part D................. Corticosteroids. 141,179
Drugs/Part D................. Respiratory 148,793
Agents.
DME.......................... Oxygen Equipment 525,276
and Supplies
\27\.
DME.......................... Hospital Beds... 480,854
DME.......................... Wheelchairs..... 196,692
Part B Institutional......... Diagnostic 605,110
Imaging.
------------------------
Total.................... ................ 10,400,319
------------------------------------------------------------------------
Cerebral Degeneration
Cerebral degeneration is defined by ICD-9 diagnosis codes beginning
with 331, and includes conditions such as Alzheimer's disease and
Reye's syndrome. These conditions are typically characterized by a
progressive loss of cognitive function with symptoms including the loss
of memory and changes in language ability, behavior, and personality.
Additionally, as these cerebral degenerations progress, other clinical
manifestations occur such as dysphagia, motor dysfunction, impaired
mobility, increased need for activities of daily living assistance,
urinary and fecal incontinence, weight loss and muscle wasting.
Individuals with these conditions are also at increased risk for
aspiration, falls, pneumonias, decubitus ulcers and urinary tract
infections. Clinical practice guidelines for the treatment of cerebral
degenerative conditions includes pharmacological interventions
including Angiotensin Converting Enzyme inhibitors, memantine or
combination therapy depending on severity of disease, as well as
antidepressants, antipsychotics, psychostimulants, mood stabilizers,
benzodiazepines and neuroleptics, depending on behavioral
manifestations. Non-pharmacological interventions recommended include
mental, behavioral and cognitive therapy, speech language pathology to
address swallowing issues, and other interventions to treat and manage
manifestations including pressure ulcers, cachexia and infections.\28\
---------------------------------------------------------------------------
\26\ Includes all analgesics, anxiolytics, antiemetics, and
laxatives. These four drug types are considered ``nearly always
covered under the hospice benefit'' and as such are rarely expected
to be billed separately during a hospice stay.
\27\ For COPD, we also include respiratory assist devices (RADs)
in this category.
\28\ Development Group of the Clinical Practice Guideline
[trunc]. Clinical practice guideline on the comprehensive care of
people with Alzheimer's disease and other dementias. Barcelona
(Spain): Agency for Health Quality and Assessment of Catalonia
(AQuAS); 2010. 499 p. Retrieved from the National Guideline
Clearinghouse on February 19, 2015. http://www.guideline.gov/.
---------------------------------------------------------------------------
Our assessment of concurrently billed Part D drugs included 208,346
stays for beneficiaries with ICD-9 code 331 listed as a primary
diagnosis on the hospice claim. Our assessment of concurrently billed
Part B services included 318,044 stays. In CY 2013, concurrent billing
for all services related to this principal diagnosis comprised $11.2
million. Table 9 below summarizes concurrent payments for services that
are potentially related to this class of conditions. Part D drugs that
should have been covered under the hospice benefit for the treatment of
this condition accounted for $10.3 million. Concurrently billed DME
products that were related this condition cost Medicare an additional
$390,476. Concurrent services provided in Part B institutional settings
accounted for $496,790.
Table 9--Concurrent Payments for Services Provided to Hospice
Beneficiaries With Cerebral Degeneration, CY 2013
------------------------------------------------------------------------
Type of service Description Total payment
------------------------------------------------------------------------
Drugs/Part D................. Common $1,184,005
Palliative
Drugs.
Drugs/Part D................. Antipsychotic/ 2,336,504
Antimanic
Agents.
Drugs/Part D................. Psychotherapeuti 6,752,270
c &
Neurological
Agents.
DME.......................... Hospital Beds... 138,249
DME.......................... Wheelchairs..... 252,228
Part B Inst.................. Diagnostic 496,790
Imaging.
------------------------
Total.................... ................ 11,160,046
------------------------------------------------------------------------
Congestive Heart Failure
Congestive heart failure (CHF) is defined by ICD-9 diagnosis codes
beginning with 428. CHF is characterized by symptoms such as shortness
of breath, edema, diminished endurance, angina, productive cough and
fatigue. For the management of congestive heart failure, clinical
practice guidelines recommend pharmacological interventions including
beta blockers, angiotensin converting enzyme inhibitors, angiotensin
receptor blockers, diuretics, anti-platelets, anti-coagulants and
digoxin, depending on symptomology and response or nonresponse to other
treatments.\29\ Nonpharmacological interventions recommended include
continuous positive airway pressure and
[[Page 25847]]
supplemental oxygen for those with coexisting pulmonary disease.\30\
---------------------------------------------------------------------------
\29\ Scottish Intercollegiate Guidelines Network (SIGN).
Management of chronic heart failure. A national clinical guideline.
Edinburgh (Scotland): Scottish Intercollegiate Guidelines Network
(SIGN); 2007 Feb. 53 p. (SIGN publication; no. 95).
\30\ Lindenfeld J, Albert NM, Boehmer JP, Collins SP, Ezekowitz
JA, Givertz MM, Klapholz M, Moser DK, Rogers JG, Starling RC,
Stevenson WG, Tang WHW, Teerlink JR, Walsh MN. Executive Summary:
HFSA 2010 Comprehensive Heart Failure Practice Guideline. J Card
Fail 2010;16:475e539.
---------------------------------------------------------------------------
Our assessment of concurrently billed Part D drugs included 158,220
stays for beneficiaries with ICD-9 code 428 listed as a primary
diagnosis on the hospice claim. Our assessment of concurrently billed
Part B services included 256,236 stays. In CY 2013, concurrent billing
for all services related this terminal condition comprised $5.8
million. Table 10 below summarizes concurrent payments for services
that are potentially related to this class of conditions. Part D drugs
that should have been covered under the hospice benefit for the
treatment of this condition accounted for $3.8 million. DME services
that were billed during hospice stays related to this condition during
this time cost $843,534. Concurrent services provided in Part B
institutional settings accounted for $1.2 million.
Table 10--Concurrent Payments for Services Provided to Hospice
Beneficiaries With Congestive Health Failure, CY 2013
------------------------------------------------------------------------
Type of service Description Total payment
------------------------------------------------------------------------
Drugs/Part D................. Common $1,229,748
Palliative
Drugs.
Drugs/Part D................. Diuretics....... 334,700
Drugs/Part D................. Beta Blockers... 363,480
Drugs/Part D................. Anti- 584,799
hypertensives.
Drugs/Part D................. Anti-anginal 468,333
Agents.
Drugs/Part D................. Cardiovascular 799,605
Agents--Misc.
Drugs/Part D................. Vasopressors.... 43,496
DME.......................... Oxygen Equipment 471,376
and Supplies.
DME.......................... Hospital Beds... 96,219
DME.......................... Wheelchairs..... 275,940
Part B Inst.................. Diagnostic 690,726
Imaging.
Part B Inst.................. EKGs............ 72,933
Part B Inst.................. Cardiac Devices. 242,819
Part B Inst.................. Diagnostic 79,999
Clinical Labs.
Part B Prof.................. Diagnostic 64,698
Clinical Labs.
------------------------
Total.................... ................ 5,818,871
------------------------------------------------------------------------
Our regulations at Sec. 418.56(c) require that hospices provide
all services necessary for the palliation and management of the
terminal illness and related conditions. We have discussed recommended
evidence-based practice clinical guidelines for the hospice claims-
reported principal diagnoses mentioned in this section. However, this
analysis reveals that these recommended practices are not being covered
under the Medicare hospice benefit. We believe the case studies in this
section highlight the potential systematic unbundling of the Medicare
hospice benefit and may be valuable analysis to inform policy
stakeholders.
3. Live Discharge Rates
Currently, federal regulations allow a patient who has elected to
receive Medicare hospice services to revoke their hospice election at
any time and for any reason. Specifically, the regulations state that
if the hospice patient (or his/her representative) revokes the hospice
election, Medicare coverage of hospice care for the remainder of that
period is forfeited. The patient may, at any time, re-elect to receive
hospice coverage for any other hospice election period that he or she
is eligible to receive (Sec. 418.28(c)(3) and Sec. 418.24(e)). During
the time period between revocation/discharge and the re-election of the
hospice benefit, Medicare coverage would resume for those Medicare
benefits previously waived. A revocation can only be made by the
beneficiary, in writing, that he or she is revoking the hospice
election and the effective date of the revocation. A hospice cannot
``revoke'' a beneficiary's hospice election, nor is it appropriate for
hospices to encourage, request or demand that the beneficiary revoke
his or her hospice election. Like the hospice election, a hospice
revocation is to be an informed choice based on the beneficiary's
goals, values and preferences for the services they wish to receive.
Federal regulations only provide limited opportunity for a Medicare
hospice provider to discharge a patient from its care. In accordance
with Sec. 418.26, discharge from hospice care is permissible when the
patient moves out of the provider's service area, is determined to be
no longer terminally ill, or for cause. Hospices may not automatically
or routinely discharge the patient at its discretion, even if the care
may be costly or inconvenient. As we indicated in the FY 2015 Hospice
Wage Index and Payment Rate Update proposed and final rules, we
understand that the rate of live discharges should not be zero, given
the uncertainties of prognostication and the ability of patients and
their families to revoke the hospice election at any time. On July 1,
2012, we began collecting discharge information on the claim to capture
the reason for all types of discharges which includes, death,
revocation, transfer to another hospice, moving out of the hospice's
service area, discharge for cause, or due to the patient no longer
being considered terminally ill (that is, no longer qualifying for
hospice services). Based upon the additional discharge information, Abt
Associates, our research contractor performed analysis on FY 2013
claims to identify those beneficiaries who were discharged alive. The
details of this analysis will be reported in the 2015 technical report
and will be made available on the Hospice Center Web page. In order to
better understand the characteristics of hospices with high live
discharge rates, we examined the aggregate cap status, skilled visit
intensity; average lengths of stay; and non-hospice spending rates per
beneficiary.
Between 2000 and 2013, the overall rate of live discharges
increased from 13.2 percent in 2000 to 18.3 percent in 2013. Among
hospices with 50 or more discharges (discharged alive or deceased),
there is significant variation
[[Page 25848]]
in the rate of live discharge between the 10th and 90th percentiles
(see Table 11 below). Most notably, hospices at the 95th percentile
discharged 50 percent or more of their patients alive.
Table 11--Distribution of Live Discharge Rates in FY 2013 for Hospices
With 50 or More Live Discharges
------------------------------------------------------------------------
Live
Statistic discharge
rate (%)
------------------------------------------------------------------------
5th Percentile............................................. 8.1
10th Percentile............................................ 9.5
25th Percentile............................................ 12.9
Median..................................................... 18.3
75th Percentile............................................ 26.6
90th Percentile............................................ 39.1
95th Percentile............................................ 50.0
------------------------------------------------------------------------
Note: n=3,096
We analyzed hospices' aggregate cap status to determine whether
there is a relationship between live discharge rates and their
aggregate cap status. As described in section III.4.C and section
III.D, when the Medicare Hospice Benefit was implemented, the Congress
included an aggregate cap on hospice payments, which limits the total
aggregate payments any individual hospice can receive in a year. Our FY
2013 analytic file contained 3,061 hospices with aggregate cap
information and with more than 50 discharges in FY 2013. We found that
40.3 percent of hospices above the 90th percentile were also above the
aggregate cap for the 2013 cap year. Conversely, only 3.8 percent of
hospices below the 90th percentile were above the aggregate cap. As
illustrated by the box plot below, the vertical axis represents the
hospices' live discharge rates in FY 2013 and the horizontal axis
represents the total payments hospices received at the end of the cap
year of November 2012 through October 2013 relative to the total cap
amount. Hospices under 100 percent on the X-axis are below the cap and
those 100 percent or higher on the X-axis are above the cap. Our
analysis found that hospices with higher live discharge rates are also
above the cap. Specifically, the top of the rectangle represents the
75th percentile of live discharge rates, the middle line represents the
median for that group, and the bottom of the rectangle is the 25th
percentile of live discharge rates among all hospices ending the year
within the range of cap percentages of live discharge rates as
indicated by the horizontal axis (see Figure 2 below). We found that
there appears to be a relationship with hospices with high live
discharge rates and those that are above the aggregate cap.
[GRAPHIC] [TIFF OMITTED] TP05MY15.001
In FY 2013, we found that hospices with high live discharge rates
also, on average, provide fewer visits per week. Those hospices with
live discharge rates at or above the 90th percentile provide, on
average, 3.97 visits per week. Hospices with live discharge rates below
the 90th percentile provide, on average, 4.48 visits per week. We also
found in FY 2013 that, when focusing on visits classified as skilled
nursing or medical social services, hospices with
[[Page 25849]]
live discharge rates at or above the 90th percentile provide, on
average, 1.91 visits per week versus hospices with live discharge rates
below the 90th percentile that provide, on average, 2.35 visits per
week.
We examined whether there was a relationship between hospices with
high live discharge rates, average lengths of stay, and non-hospice
spending per beneficiary per day (see Table 12 and Figure 3 below). As
described above in section III.A.2, we identified instances, in the
aggregate and illustrated by case studies, where Medicare appeared to
be paying for services twice because we would expect them to be covered
by the hospice base payment rate. Hospices with patients that, on
average, accounted for $30 per day in non-hospice spending while in
hospice (decile 10 in Table 12 and Figure 3 below) had live discharge
rates that were, on average, about 33.8 percent and had an average
lifetime length of stay of 156 days. In contrast, hospices with
patients that, on average, accounted for $4 per day in non-hospice
spending while in a hospice election (decile 1 in Table 12 and Figure 3
below) had live discharge rates that were, on average, about 19.2
percent and an average lifetime length of stay of 103 days. In other
words, hospices in the highest decile, according to their level of non-
hospice spending for patients in a hospice election, had live discharge
rates and average lifetime lengths of stay that averaged 76 percent and
52 percent higher, respectively, than the hospices in lowest decile.
[GRAPHIC] [TIFF OMITTED] TP05MY15.002
[[Page 25850]]
[GRAPHIC] [TIFF OMITTED] TP05MY15.003
The analytic findings presented above suggests that some hospices
may consider the Medicare Hospice program as a long-term custodial
benefit rather than an end of life benefit for beneficiaries with a
medical prognosis of 6 months or less if the illness runs its normal
course. As previously discussed in reports by MedPAC and the OIG, there
is a concern that hospices may be admitting individuals who do not meet
hospice eligibility criteria. We continue to communicate and
collaborate across CMS to improve monitoring and oversight activities.
We expect to analyze the additional claims and cost report data
reported by hospices in the future to determine whether additional
regulatory proposals to reform and strengthen the Medicare Hospice
benefit are warranted.
B. Proposed Routine Home Care Rates and Service Intensity Add-On
Payment
1. Statutory Authority and Background
Section 3132(a) of the Affordable Care Act amended 1814(i) of the
Act by adding paragraph (6)(D), that instructs the Secretary, no
earlier than October 1, 2013, to implement revisions to the methodology
for determining the payment rates for RHC and other services included
in hospice care as the Secretary determines to be appropriate. The
revisions may be based on an analysis of new data and information
collected and such revisions may include adjustments to per diem
payments that reflect changes in resource intensity in providing such
care and services during the course of the entire episode of hospice
care. In addition, we are required to consult with hospice programs and
MedPAC on the revised hospice payment methodology.
This legislation emerged largely in response to MedPAC's March 2009
Report to Congress, which cited rapid growth of for-profit hospices and
longer lengths of stay that raised concerns regarding a per diem
payment structure that encouraged inappropriate utilization of the
benefit.\31\ MedPAC stated that a revised payment system would
encourage hospice stays consistent with meeting the eligibility
requirements of a medical prognosis of 6 months or less if the illness
runs its normal course and increase greater provider accountability to
monitor patients' conditions. In that same report, MedPAC stated that
their goal was to ``strengthen the hospice payment system and not
discourage enrollment in hospice, while deterring program abuse.''
---------------------------------------------------------------------------
\31\ Medicare Payment Advisory Commission (MedPAC). ``Reforming
Medicare's Hospice Benefit.'' Report to the Congress: Medicare
Payment Policy. March, 2009. Web. 18 Feb. 2015. http://medpac.gov/documents/reports/Mar09_Ch06.pdf?sfvrsn=0.
---------------------------------------------------------------------------
As described in section III.A, CMS has transparently conducted
payment reform activities and released research findings to the public
since 2010. At that time, Abt Associates conducted a literature review
and carried out original research to provide background on the current
state of the Medicare
[[Page 25851]]
hospice benefit. The initial contract also included several technical
expert panel meetings with national hospice association
representatives, academic researchers, and a cross-section of hospice
programs that provided valuable insights and feedback on baseline
empirical analyses provided by the ASPE. A subsequent award to Abt
Associates continues to support the dissemination of research analyses
and findings, which are located in the ``Research and Analyses''
section of the Hospice Center Web page (http://cms.hhs.gov/Center/Provider-Type/Hospice-Center.html). In addition, research findings and
payment reform concepts were set out in a 2013 technical report and a
2014 technical report, as well as in the FY 2014 Hospice Wage Index and
Payment Rate Update final rule (78 FR 48234) and in the FY 2015 Hospice
Wage Index and Payment Rate Update final rule (79 FR 50452). These
research findings and concepts provide a basis for an important initial
step toward payment reform outlined in section III.B.2 below.
Over the past several years, MedPAC, the Government Accountability
Office (GAO), and OIG, have all recommended that CMS collect more
comprehensive data to better evaluate trends in utilization of the
Medicare hospice benefit. Furthermore, section 3132(a)(1)(C) of the
Affordable Care Act specifies that the Secretary may collect additional
data and information on cost reports, claims, or other mechanisms as
the Secretary determines to be appropriate. We have received many
suggestions for ways to improve data collection to support larger
payment reform efforts in the future. Based on those suggestions and
industry feedback, we began collecting additional information on the
hospice claim form as of April 1, 2014.\32\ Additionally, revisions to
the cost report form for freestanding hospices became effective for
cost reporting periods beginning on or after October 1, 2014. The
instructions for completing the revised freestanding hospice cost
report form are found in the Medicare Provider Reimbursement Manual-
Part 2, chapter 43.\33\ Once available, we expect the data from hospice
claims and cost reports to provide more comprehensive information on
the costs associated with the services provided by hospices to Medicare
beneficiaries by level of care.
---------------------------------------------------------------------------
\32\ CMS Transmittal 2864. ``Additional Data Reporting
Requirements for Hospice Claims''. Available at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864CP.pdf.
\33\ http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html?DLPage=1&DLSort=0&DLSortDir=ascending.
---------------------------------------------------------------------------
a. U-Shaped Payment Model
For over a decade, MedPAC and other organizations have reported
findings that suggest that the hospice benefit's fixed per-diem payment
system is inconsistent with the true variance of service costs over the
course of an episode. Specifically, MedPAC cited both academic and non-
academic studies, as well as its own analyses (as summarized and
articulated in MedPAC's 2002,\34\ 2004,\35\ 2006,\36\ 2008,\37\ and
2009 \38\ Reports to Congress), demonstrating that the intensity of
services over the duration of a hospice stay manifests in a `U-Shaped'
pattern (that is, the intensity of services provided is higher both at
admission and near death and, conversely, is relatively lower during
the middle period of the hospice episode). According to MedPAC's 2008
Report to Congress, after the high costs at admission, the `turning
point' or `break-even' point of profitability was found to be about 3
weeks (21 days).\39\ Beyond 21 days, the magnitude of profitability
deficits or `marginal costs' declined and the lengths of stay became
profitable--and more so--with longer stays.\40\ Since hospice care is
most profitable during the long, low-cost middle portions of an
episode, longer episodes would potentially have very profitable, long
middle segments. This financial incentive appears to have resulted in
hospices enrolling beneficiaries that are not truly eligible for the
benefit (that is, do not have a life expectancy of 6 months or less)
and ``may lead some patients, families, and providers to implicitly
regard hospice as a source of basic health care for failing patients
who did not qualify for skilled nursing facility or home health care
and did not qualify for Medicaid or otherwise could not afford other
sources of long-term custodial care'',\41\ rather than the end-of-life
care for which the benefit was originally designed.
---------------------------------------------------------------------------
\34\ http://www.medpac.gov/documents/contractor-reports/report-to-the-congress-medicare-beneficiaries'-access-to-hospice-(may-
2002).pdf.
\35\ http://www.medpac.gov/documents/reports/June04_ch6.pdf.
\36\ http://www.medpac.gov/documents/reports/Jun06_Ch03.pdf.
\37\ http://www.medpac.gov/documents/reports/Jun08_Ch08.pdf.
\38\ http://www.medpac.gov/documents/reports/Mar09_Ch06.pdf.
\39\ http://www.medpac.gov/documents/reports/Jun08_Ch08.pdf.
\40\ Cheung, L., K. Fitch, and B. Pyenson. 2001. The costs of
hospice care: An actuarial evaluation of the Medicare hospice
benefit. Report by Milliman USA for the National Hospice and
Palliative Care Organization, August 1. New York: Milliman USA.
\41\ http://www.medpac.gov/documents/reports/Mar09_Ch06.pdf?sfvrsn=0.
---------------------------------------------------------------------------
In its March 2009 report, ``Reforming Medicare's Hospice Benefit,''
MedPAC recommended that the Congress require CMS to implement a payment
system that would adjust per-diem hospice rates based on the day's
timing within the hospice episode, with the express goal of mitigating
the apparent inconsistency between payments and resource utilization
(that is, costs) in hospice episodes.\42\ Specifically, MedPAC
recommended that payments near the beginning and ending of a stay be
set at higher levels (weighted upwards) and payments during the middle
portion of care be set at lower levels (weighted downwards) to better
mirror documented variation in cost over an episode's duration. Two
primary weighting schemes were outlined in MedPAC's 2009 Report: A
``larger intensity adjustment'' (essentially a deeper U-shaped payment
model, paying twice the base rate in the first 30/last 7 days and just
a quarter of the daily rate in days 181+) and a ``smaller intensity
adjustment'' (a relatively shallower U-shaped model, paying 1.5 times
the base rate in the first 30/last 7 days and 0.375 times the daily
rate in days 181+).
---------------------------------------------------------------------------
\42\ Medicare Payment Advisory Commission (MedPAC). ``Reforming
Medicare's Hospice Benefit.'' Report to the Congress: Medicare
Payment Policy. March, 2009. Web. 18 Feb. 2015. http://medpac.gov/documents/reports/Mar09_Ch06.pdf?sfvrsn=0.
---------------------------------------------------------------------------
In its March 2015 Report to the Congress,\43\ MedPAC reiterated its
continued concerns regarding the ``mismatch between payments and
hospice service intensity'' in the current hospice system and the
ongoing need for payment reform. The Commission stated that
``Medicare's hospice payment system is not well aligned with the costs
of providing care throughout a hospice episode. As a result, long
hospice stays are generally more profitable than short stays.'' The
Commission previously ``recommended that the hospice payment system be
reformed to better match service intensity throughout a hospice episode
of care (higher per diem payments at the beginning of the episode and
at the end of the episode near the time of death and lower payments in
the middle)''.
---------------------------------------------------------------------------
\43\ http://medpac.gov/documents/reports/chapter-12-hospice-services-(march-2015-report).pdf?sfvrsn=0.
---------------------------------------------------------------------------
Other organizations have also explored the concept of a U-shaped
payment model. The ASPE, in conjunction with its contractor, Acumen
LLC, analyzed hospice enrollment and utilization data. ASPE's research
[[Page 25852]]
demonstrated that the resource use curve becomes more pronounced as
episode lengths increase for hospice users, indicating that this effect
occurs because resource use declines more substantially for the middle
days relative to beginning and ending days in longer episodes of
hospice care than it does for shorter episodes. The decline in the
center of the `U' is deeper for those users who receive RHC only during
their hospice episode, which is the case for the majority of hospice
patients. Recently, CMS's contracting partner, Abt Associates,
conducted analysis of FY 2013 hospice claims data, showing that of the
approximately 92 million hospice days billed, 97.45 percent are
categorized as RHC.
b. Tiered Payment Model
As required under section 3132(a) of the Affordable Care Act, CMS
also explored other options for hospice payment reform. Taking into
consideration the research and analysis performed by MedPAC, ASPE, and
others, our payment reform contractor, Abt Associates, examined hospice
utilization data and modeled a hypothetical ``tiered'' payment system
similar to MedPAC's U-shaped payment model by paying different per-diem
rates for RHC according to the timing of the RHC day in the patient's
episode of care. However, because analysis of hospice claims data found
that a relatively high percentage of patients were not receiving
skilled visits during the last days of life, the ``tiered payment
model'' made the increased payments at end of life contingent on
whether skilled services were provided. As reported in the FY 2015
Hospice Payment Rate Update final rule, in CY 2012, approximately 14
percent beneficiaries did not receive any skilled visits in the last 2
days of life (79 FR 50461). While this could be explained, in part, by
sudden or unexpected death, the high percentage of beneficiaries with
no skilled visits in the last 2 days of life causes concern as to
whether beneficiaries and their families are not receiving needed
hospice care and support at the very end of life. If hospices are
actively engaging with the beneficiary and the family throughout the
election, we would expect to see skilled visits during those last days
of life. Therefore, in the tiered payment model, making the increased
payment at the end of life contingent on whether skilled visits
occurred in the last 2 days of life was thought of as one way to
provide additional incentive for care to be provided when the patient
needs it most.
The groupings in the tiered payment model, presented in Table13
below, were developed through Abt Associates' analyses of resource
utilization over the hospice episode and clinical input. Using a sample
of 100 percent RHC hospice service days from 2011, Abt then developed
payment weights for each grouping by calculating its relative resource
utilization rate compared to the overall estimate of resource use
across all RHC days (see Table 13 below).
Table 13--Average Daily Resource Use by Payment Groups in the Tiered
Payment Model, CY 2011
------------------------------------------------------------------------
Group Days of hospice Implied weight
------------------------------------------------------------------------
Group 1: RHC Days 1-5............. 2,800,144 2.3
Group 2: RHC Days 6-10............ 2,493,004 1.11
Group 3: RHC Days 11-30........... 7,767,918 0.97
Group 4: RHC Days 31+............. 65,958,740 0.86
Group 5: RHC During Last Seven 2,832,620 2.44
Days, Skilled Visits During Last
2 Days...........................
Group 6: RHC During Last Seven 476,809 0.91
Days, No Skilled Visits During
Last 2 Days......................
Group 7: RHC When Hospice Length 510,787 3.64
of Stay is 5 Days or Less,
Patient Discharged as
``Expired''......................
-------------------------------------
Total......................... 82,840,022 1.0
------------------------------------------------------------------------
The payment weighting scheme in this system, derived from observed
resource utilization across the entire episode, would produce higher
payments during times when service is more intensive (the beginning of
a stay or the end of life) and produce lower payments during times when
service is less intensive (such as the ``middle period'' of the stay).
The tiered payment model was discussed in more detail in the FY2014
Hospice Wage Index final rule (78 FR 48271) and in the Hospice Study
Technical Report issued in April of 2013.\44\
---------------------------------------------------------------------------
\44\ http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-Study-Technical-Report.pdf.
---------------------------------------------------------------------------
c. Visits During the Beginning and End of a Hospice Election
Updated analysis of FY 2013 hospice claims data continues to
demonstrate a U-Shaped pattern in of resource use. Increased
utilization at both the beginning and end of a stay is demonstrated in
Figure 4 below, where FY 2013 resource costs (as captured by wage-
weighted minutes) are markedly higher in the first two days of a
hospice election and once again in the six days preceding the date of
death and on the date of death itself.
[[Page 25853]]
[GRAPHIC] [TIFF OMITTED] TP05MY15.004
Analysis of skilled nursing and social work visits provided on the
first day of a hospice election shows that nearly 89 percent of
patients received a visit totaling 15 minutes or more, while 11 percent
did not receive a skilled nursing visit or social work visit on the
first day of a hospice election (see Table 14 below). The percentage of
patients that did not receive a skilled nursing or social work visit on
a given day increased to nearly 38 percent on the second day of a
hospice election. In accordance with the hospice CoPs at Sec.
418.54(a), hospices are required to have a RN complete an initial
assessment of the hospice patient within 48 hours of election;
therefore, we would expect to see a nursing visit occurring within the
first 2 days of an election in order to be in compliance with the CoPs.
We found that, in FY 2013, 96 percent of hospice patients did receive a
skilled visit in the first 2 days of a hospice election. The percentage
of patients that did not receive a skilled nursing or social work visit
on any given day increased to about 65 percent by the sixth day of a
hospice election. Overall, on any given day during the first 7 days of
a hospice election, nearly 50 percent of the time the patient is not
receiving a skilled visit (skilled nursing or social worker visit).
Table 14--Frequency and Length of Skilled Nursing and Social Work Visits (Combined) During the First Seven Days of a Hospice Election, FY 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
First
First day Second day Third day Fourth day Fifth day Sixth day Seventh day through
Visit length (percent) (percent) (percent) (percent) (percent) (percent) (percent) seventh day
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Visit........................................ 11.0 37.7 56.0 59.1 62.0 65.6 64.2 49.3
15mins to 1 hr.................................. 12.8 27.1 22.2 20.6 20.4 20.1 22.3 20.7
1hr15m to 2 hrs................................. 32.0 21.4 14.3 13.4 12.2 10.4 10.2 16.9
2hrs15m to 3 hrs................................ 22.8 8.6 4.8 4.5 3.6 2.5 2.2 7.5
3hrs15m to 3hrs45m.............................. 8.5 2.6 1.3 1.2 0.9 0.6 0.5 2.4
4 or more hrs................................... 13.0 2.6 1.3 1.2 0.9 0.7 0.6 3.2
-------------------------------------------------------------------------------------------------------
Total....................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2013 hospice claims data from the Standard Analytic Files for CY 2012 (as of June 30, 2013) and CY 2014 (as of December 31, 2013).
As we noted above, we are concerned that many beneficiaries are not
receiving skilled visits during the last few days of life. At the end
of life, patient needs typically surge and more intensive services are
warranted. However, analysis of FY 2013 claims data shows that on any
given day during the last 7 days of a hospice election, nearly 50
percent of the time the patient is not receiving a skilled visit
(skilled nursing or social worker visit) (see table 15 below).
Moreover, on the day of death nearly 30 percent of beneficiaries did
not receive a skilled visit (skilled nursing or social work visit).
[[Page 25854]]
Table 15--Frequency and Length of Skilled Nursing and Social Work Visits (Combined) During the Last Seven Days of a Hospice Election, FY 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
One day Two days Three days Four days Five days Six days Last seven
Day of before before before before before before days
Visit length (percent) death death death death death death death combined
(percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Visit........................................ 27.8 38.7 45.2 49.8 53.2 55.8 58.0 46.3
15mins to 1 hr.................................. 23.9 27.9 26.5 25.1 24.2 23.5 22.8 24.9
1hr15m to 2 hrs................................. 24.2 19.3 17.4 15.9 14.5 13.6 12.7 17.1
2hrs15m to 3 hrs................................ 12.3 7.2 5.9 5.1 4.5 4.1 3.8 6.3
3hrs15m to 3hrs45m.............................. 4.4 2.4 1.9 1.6 1.4 1.2 1.1 2.1
4 or more hrs................................... 7.4 4.3 3.0 2.4 2.1 1.9 1.6 3.4
-------------------------------------------------------------------------------------------------------
Total....................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2013 hospice claims data from the Standard Analytic Files for CY 2012 (as of June 30, 2013) and CY 2014 (as of December 31, 2013).
We would expect that skilled visits are provided to the patient and
family at end of life as the changing condition of the individual and
the imminence of death often warrants frequent changes to care to
alleviate and minimize symptoms and to provide support for the family.
Although previous public comments stated that patients and families
sometimes request no visits at the end of life, and there are rare
instances where a patient passes away unexpectedly, we would expect
that these instances would be rare and represent a small proportion of
the noted days without visits at the end of life. However, the data
presented in Table 15 above suggests that it is not rare for patients
and families to have not received skilled visits (skilled nursing or
social work visits) at the end of life. In the FY 2015 Hospice Wage
Index and Payment Rate Update final rule, we noted that nearly 5
percent of hospices did not provide any skilled visits in the last 2
days of life to more than 50 percent of their decedents receiving
routine home care on those last 2 days and 34 hospices did not make any
skilled visits in the last 2 days of life to any of their decedents who
died while receiving routine home care (79 FR 50462).
2. Proposed Routine Home Care Rates
RHC is the basic level of care under the Hospice benefit, where a
beneficiary receives hospice care, but remains at home. With this level
of care, hospice providers are currently reimbursed per day regardless
of the volume or intensity of services provided to a beneficiary on any
given day. As stated in the FY 2014 Hospice Wage Index and Payment Rate
Update final rule (78 FR 48234), ``it is CMS' intent to ensure that
reimbursement rates under the Hospice benefit align as closely as
possible with the average costs hospices incur when efficiently
providing covered services to beneficiaries.'' However, as discussed in
section III.B.1 above, there is evidence of a misalignment between the
current RHC per diem payment rate and the cost of providing RHC. In
order to help ensure that hospices are paid adequately for providing
care to patients regardless of their palliative care needs during the
stay, while at the same time encouraging hospices to more carefully
determine patient eligibility relative to the statutory requirement
that the patients' life expectancy be 6 months or less, we are using
the authority under section 1814(i)(6)(D) of the Act, as amended by
section 3132(a) of the Affordable Care Act to propose a revision to the
current RHC per diem payment rate to more accurately align the per diem
payments with visit intensity (that is, the cost of providing care for
the clinical service (labor) components of the RHC rate). We are
proposing, in conjunction with a SIA payment discussed in section
III.B.3 below, two different RHC rates that would result in a higher
base payment rate for the first 60 days of hospice care and a reduced
base payment rate for days 61 or over of hospice care.
The two proposed rates for RHC are based on an extensive body of
research concerning visit intensity during a hospice episode as cited
throughout this section. We consider a hospice ``episode'' of care to
be a hospice election period or series of election periods. Visit
intensity is commonly measured in terms of wage-weighted minutes and
reflects variation in the provision of care for the clinical service
(labor) components of the RHC rate. The labor components of the RHC
rate comprise nearly 70 percent of the RHC rate (78 FR 48272).
Therefore, visit intensity is a close proxy for the reasonable cost of
providing hospice care absent data on the non-labor components of the
RHC rate, such as drugs and DME. As shown in Figures 5 and 6 below, the
daily cost of care, as measured wage-weighted minutes, declines quickly
for individual patients during their hospice episodes, and for long
episode patients, remains low for a significant portion of the episode.
Thus, long episode patients are potentially more profitable than
shorter episode patients under the current per diem payments system in
which the payment rate is the same for the entire episode. At the same
time, the percent of beneficiaries that enter hospice less than 7 days
prior to death has remained relatively constant (approximately 30
percent) over this time period, meaning the increase in the average
episode length can be attributed to an increasing number of long stay
patients. We found that the percent of episodes that are more than 6
months in length has nearly doubled from about 7 percent in 1999 to 13
percent in 2013.
Figure 5 displays the pattern of wage-weighted minutes by time
period within beneficiary episodes, but excluding the last 7 days of
the episode for decedents. The wage-weighted minutes for the last 7
days are displayed separately by the bar furthest to the right of the
Figure 5. The visit intensity curve declines rapidly after 7 days and
then at a slower rate until 60 days when the curve becomes flat
throughout the remainder of episodes (excluding the last 7 days prior
to death). It is for this reason we are proposing to pay the higher
rate for the first 60 days and a lower rate thereafter. It is clear
from the figure that visit utilization is constant from day 61 on,
until the last 7 days for decedents. We believe the most important
reason for proposing a different RHC rate for the first 60 days versus
days 61 and beyond is that we must account for differences in average
visit intensity between episodes that will end within 60 days and those
that will go on for longer episodes.
[[Page 25855]]
[GRAPHIC] [TIFF OMITTED] TP05MY15.005
As Figure 6 demonstrates, beneficiaries whose entire episode is
between 8 and 60 days do have higher wage-weighted minute usage than
those with longer stays. Using 60 days for the high RHC rate as opposed
to an earlier time assured that hospices would have sufficient
resources for providing high quality care to patients (for example, 1
through 60 days) whose average daily visit intensity is higher than for
longer stay patients.
[GRAPHIC] [TIFF OMITTED] TP05MY15.006
The SIA payments based on actual visits provided would be added to
the applicable rate during the last 7 days to reflect the rapid
increase in visit intensity during that time period.
Table 16 below describes the average wage-weighted minutes for RHC
days in FY 2014, calculated both in specific phases within an episode
as well as overall.
[[Page 25856]]
Table 16--Average Wage Weighted Minutes per RHC Day, FY 2014
----------------------------------------------------------------------------------------------------------------
Ratio of wage
weighted minutes
Average wage- for each row
Phase of days in episode weighted minutes RHC Days divided by wage
weighted minutes
for days 1-7
----------------------------------------------------------------------------------------------------------------
1-7 Days............................................... 39.32 5,401,497 1.0000
8-14 Days.............................................. 20.12 4,276,570 0.5118
15-30 Days............................................. 17.96 7,693,966 0.4567
31-60 Days............................................. 16.10 10,679,971 0.4095
61-90 Days............................................. 15.44 8,061,934 0.3927
91-180 Days............................................ 14.93 16,156,969 0.3797
181-272 Days........................................... 14.79 10,056,928 0.3762
273-365 Days........................................... 14.91 6,844,692 0.3791
365 up Days............................................ 15.05 15,962,038 0.3828
--------------------------------------------------------
Total RHC Days..................................... 17.21 85,134,565 0.4377
----------------------------------------------------------------------------------------------------------------
In Table 16, the average wage-weighted minutes per day for days 1
through 7 describe the baseline for the other phases of care, set at a
value of one. Given the demands of the initial care in an episode,
resource intensity is highest during this first week of an episode, and
resource needs decline steadily over the course of an episode. The
overall average wage-weighted minutes per day across all RHC days
equals $17.21 as described in the last row in table 16 above. We then
calculated the average wage-weighted minute costs for the two groups of
days (Days 1 through 60 and Days 61+) utilizing FY 2014 RHC days
multiplied by the 2013 Bureau of Labor Statistics (BLS) average hourly
wage values for the relevant disciplines, as follows: Skilled Nursing:
$40.07; Physical Therapy: $55.93; Occupational Therapy: $55.57; Speech
Language Pathology: $60.21; Medical Social Services: $38.25; and Aide:
$14.28. The average wage-weighted minute cost for days 1 through 60
equals to $21.69 while the average wage weighted minutes for days 61 or
more equals $15.01.
To calculate the RHC payment rate for days 1 through 60, we compare
the average wage-weighted minutes per day for days 1 through 60 to the
overall average wage-weighted minutes per day multiplied by the labor
portion of the FY 2015 RHC rate (column 4 in Table 17 below), which
equals ($21.69/$17.21)*$109.48 = $137.98. Similarly, the RHC payment
rate for days 61+ equals the average wage-weighted minutes per day for
days 61+ divided by the overall average wage-weighted minutes per day
multiplied by the labor portion of the FY 2015 RHC rate (column 4 in
Table 17 below), which equals ($15.01/$17.21)*$109.48 = $95.48.
Table 17--FY 2015 RHC Rate Revised Labor Portion Calculation
----------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
----------------------------------------------------------------------------------------------------------------
Average wage weighted
FY 2015 RHC RHC Labor- FY 2015 RHC minutes for RHC Revised FY
payment related payment differential rate/ 2015 labor
rate share rate--labor overall RHC average portion
portion wage weighted minutes
----------------------------------------------------------------------------------------------------------------
Days 1-60.......................... $159.34 x 0.6871 $109.48 x 1.2603 $137.98
($21.69/$17.21)
Days 61+........................... 159.34 x 0.6871 109.48 x 0.8722 95.48
($15.01/$17.21)
----------------------------------------------------------------------------------------------------------------
As discussed in section III.C of this rule, currently, the labor-
related share of the hospice payment rate for RHC is 68.71 percent. The
non-labor share is equal to 100 percent minus the labor-related share,
or 31.29 percent. Given the current base rate for RHC for FY 2015 of
$159.34, the labor and non-labor components are as follows: for the
labor-share portion, $159.34 multiplied by 68.71 percent equals
$109.48; for the non-labor share portion, $159.34 multiplied by 31.29
percent equals $49.86. After determining the labor portion for the RHC
rate for the first 60 days and the labor portion for the RHC rate for
days 61 and over, we add the non-labor portion ($49.86) to the revised
labor portions as described in column 6 in Table 17 above and in column
2 in Table 18 below. In order to maintain budget neutrality, as
required under section 1814(i)(6)(D)(ii) of the Act, the proposed RHC
rates would need to be adjusted by a ratio of the total labor payments
for RHC under using the current single rate for RHC to the estimated
total labor payments for RHC using the two proposed rates for RHC. This
ratio results in a budget neutrality adjustment of 0.9985 as shown in
column 3 in Table 18 below. Finally, adding the revised labor portion
with budget neutrality to the non-labor portion results in revised FY
2015 RHC payment rates of $187.63 for days 1 through 60 and $145.21 for
days 61 and over.
[[Page 25857]]
Table 18--RHC Budget Neutrality Adjustment for RHC Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Revised FY 2015
Revised FY 2015 Budget neutrality labor portion FY 2015 Non-labor FY 2015 Revised
labor portion factor \1\ with budget portion RHC payment rates
neutrality
--------------------------------------------------------------------------------------------------------------------------------------------------------
Days 1-60................................................ $137.98 x 0.9985 $137.77 $49.86 $187.63
Days 61+................................................. 95.49 x 0.9985 95.35 49.86 145.21
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The budget neutrality adjustment is required due to differences in the average wage index for days 1-60 compared to days 61 and over.
The proposed RHC rates for days 1 through 60 and days 61 and over
(column 6 of Table 18 above) would replace the current single RHC per
diem payment rate with two new RHC per diem rates for patients who
require RHC level of care during a hospice election. In order to
mitigate potential high rates of discharge and readmissions, we further
propose that the count of days follow the patient. For hospice patients
who are discharged and readmitted to hospice within 60 days of that
discharge, his or her prior hospice days will continue to follow the
patient and count toward his or her patient days for the receiving
hospice upon hospice election. The hospice days would continue to
follow the patient solely to determine whether the receiving hospice
may bill at the 1 through 60 or 61+ RHC rate. The proposed policy does
not preclude the receiving hospice (same or different hospice) from
billing for a per diem payment for each hospice day. Therefore, we
consider an ``episode'' of care to be a hospice election period or
series of election periods separated by no more than a 60 day gap. We
will monitor this proposal and trends in discharges and revocations for
potential future refinements to address perverse incentives. This
policy proposal attempts to better align RHC payment rates with
resource use and is not intended to place an arbitrary limit on hospice
services. We continue to expect hospices to adhere to the long-standing
policy to provide ``virtually all'' care during a hospice election as
articulated in the 1983 Hospice Care proposed and final rules as well
as most recently in FY 2015 Hospice Wage Index and Payment Rate Update
final rule. Furthermore, program integrity and oversight efforts
including but not limited to, medical review, MAC audits, Zone Program
Integrity Contractor actions, Recovery Auditor activities, or
suspension of provider billing privileges, are being considered to
address fraud and abuse. We are soliciting public comment on all
aspects of the proposed RHC payment rates as articulated in this
section as well as this policy in conjunction with the proposed SIA
payment described in section III.B.3 below.
3. Proposed Service Intensity Add-On (SIA) Payment
Section 1814(i)(1)(A) of the Act states that payment for hospice
services must be equal to the costs which are reasonable and related to
the cost of providing hospice care or which are based on such other
tests of reasonableness as the Secretary may prescribe in regulations.
In addition, section 1814(i)(6)(D) of the Act, as amended by section
3132(a) of the Affordable Care Act, requires the Secretary to implement
revisions to the methodology for determining the payment rates for RHCs
and other services included in hospice care under Medicare Part A as
the Secretary determines to be appropriate as described in section
III.B.1 above. Given that independent analyses demonstrate a U-shaped
cost pattern across hospice episodes, CMS believes that implementing
revisions to the payment system that align with this concept supports
the requirements of reasonable cost in section 1814(i)(A) of the Act.
As articulated above, CMS considered implementing a tiered payment
model as described in the FY 2014 Hospice Wage Index final rule (78 FR
48271) and in the Hospice Study Technical Report issued in April of
2013,\45\ in order to better align payments with observed resource use
over the length of a hospice stay. However, operational concerns and
programmatic complexity led us to explore the concept of a SAI that
could be implemented with minimal systems changes that limit
reprocessing of hospice claims due to sequential billing requirements.
In addition, while the tiered model represented a move toward better
aligning payments with resource use, it only accounted for whether
skilled services were provided in the last 2 days of life (Groups 5 and
6 in Table 13 above). Section III.B.1.c, above notes that on any given
day during the first 7 days of a hospice election and last 7 days of
life, only about 50 percent of the time are visits being made. In our
view, increasing payments at the beginning of a hospice election and at
the end of life for days where visits are not occurring does not align
with the requirements of reasonable cost articulated in statute in
section 1814(i)(A) of the Act. Therefore, as one of the first steps in
addressing the observed misalignment between resource use and
associated Medicare payments and in improving patient care through the
promotion of skilled visits at end of life with minimal claims
processing systems changes, CMS proposes to implement a SIA payment if
the criteria outlined below are met
---------------------------------------------------------------------------
\45\ http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-Study-Technical-Report.pdf.
---------------------------------------------------------------------------
To qualify for the SIA payment, we propose that the following
criteria must be met: (1) The day is billed as a RHC level of care day;
(2) the day occurs during the last 7 days of life (and the beneficiary
is discharged dead); (3) direct patient care is provided by a RN or a
social worker (as defined by Sec. 418.114(c) and Sec. 418.114(b)(3),
respectively) that day; and (4) the service is not provided in a
skilled nursing facility/nursing facility (SNF/NF). The proposed SIA
payment would be equal to the CHC) hourly payment rate (the current FY
2015 CHC rate is $38.75 per hour), multiplied by the amount of direct
patient care provided by a RN or social worker for up to 4 hours total,
per day, as long as the four criteria listed above are met. The
proposed SIA payment would be paid in addition to the current per diem
rate for the RHC level of care.
CMS would create two separate G-codes for use when billing skilled
nursing visits (revenue center 055x), one for a RN and one for a
Licensed Practical Nurse (LPN). During periods of crisis, such as the
precipitous decline before death, RNs are more highly trained
clinicians with commensurately higher payment rates. Moreover, our
rules at Sec. 418.56(a)(1) require the RN member of the hospice
interdisciplinary group to be responsible for ensuring that the needs
of the patient and family are continually assessed. We would expect
that at end of life the needs of the
[[Page 25858]]
patient and family would need to be frequently assessed; thus the
skills of the interdisciplinary group RN are required. We note that
social workers also often play a crucial role in providing support for
the patient and family when a patient is at end of life. While the
nature of the role of the social worker does facilitate interaction via
the telephone, CMS proposes to only pay an SIA for those social work
services provided by means of in-person visits. Analysis conducted by
Abt Associates on the FY 2013 hospice claims data shows that in the
last 7 days of life only approximately 10 percent of beneficiaries
received social work visits of any kind. Moreover, we also found that
only about 13 percent of social work ``visits'' are provided via
telephone; therefore, the proportion of social work calls likely
represents a very small fraction of visits overall in the last few days
of life. The SIA payment would be in addition to the RHC payment amount
and the costs associated with social work phone conversations; visits
by LPNs, aides, and therapists; counseling; drugs; medical supplies;
DME; and any other item or service usually covered by Medicare would
still be covered by the existing RHC payment amount in accordance with
section 1861(dd)(1) of the Act.
In 2011, the OIG published a report that focused specifically on
Medicare payments to hospices who served a high percentage of nursing
facility residents. The OIG found that from 2005 to 2009, the total
Medicare spending for hospice care for nursing facility residents
increased from $2.55 billion to $4.31 billion, an increase of almost 70
percent (OIG, 2011). When looking at hospices that had more than two-
thirds of their beneficiaries in nursing facilities, the OIG found that
72 percent of these facilities were for-profit and received, on
average, $3,182 more per beneficiary in Medicare payments than hospices
overall. High-percentage hospices were found to serve beneficiaries who
spent more days in hospice care, to the magnitude of 3 weeks longer
than the average beneficiary. In addition, when looking at
distributions in diagnoses, OIG found that high-percentage hospices
enrolled beneficiaries who required less skilled care. In response to
these findings, OIG recommended that CMS modify the current hospice
reimbursement system to reduce the incentive for hospices to seek out
beneficiaries in nursing facilities, who often receive longer but less
complex and costly care.\46\ Per the OIG recommendation, we are
proposing to exclude SNF/NF sites of service from eligibility for the
SIA payment.
---------------------------------------------------------------------------
\46\ http://oig.hhs.gov/oei/reports/oei-02-10-00070.pdf.
---------------------------------------------------------------------------
The for-profit provider community has frequently highlighted its
concerns regarding the lack of adequate reimbursement for hospice short
stays in its public filings with the Securities and Exchange Commission
(SEC) as described in MedPAC's 2008 Report to Congress.\47\
Specifically, MedPAC cited records from the SEC for publicly traded
for-profit hospice chains as evidence of a general acknowledgement of
the nonlinear cost function of resource use within hospice episodes.
For instance:
---------------------------------------------------------------------------
\47\ http://www.medpac.gov/documents/reports/Jun08_Ch08.pdf.
---------------------------------------------------------------------------
VistaCare: ``Our profitability is largely dependent on our
ability to manage costs of providing services and to maintain a patient
base with a sufficiently long length of stay to attain profitability,''
and that ``cost pressures resulting from shorter patient lengths of
stay . . . could negatively impact our profitability.'' \48\
---------------------------------------------------------------------------
\48\ Health Care Strategic Management. 2004. Hospice companies
benefit from favorable Medicare rates. Health Care Strategic
Management 22, no. 1: 13-14.
---------------------------------------------------------------------------
Odyssey HealthCare: ``Length of stay impacts our direct
hospice care expenses as a percentage of net patient service revenue
because, if lengths of stay decline, direct hospice care expenses,
which are often highest during the earliest and latter days of care for
a patient, are spread against fewer days of care.'' \49\
---------------------------------------------------------------------------
\49\ Odyssey HealthCare, Inc. 2004. Annual report to
shareholders, form 10-K. Filed with the Securities and Exchange
Commission, Washington, DC, March 11. Dallas, TX: Odyssey
HealthCare, Inc.
---------------------------------------------------------------------------
Short lengths of stay were also cited as a source of financial
difficulties for small rural hospices (implying that longer stays were
more profitable).\50\ In the FY 2014 Hospice Wage Index and Payment
Rate Update proposed rule, we stated that ``analysis conducted by Abt
Associates found that very short hospice stays have a flatter curve
than the U-shaped curve seen for longer stays, and that average hospice
costs are much higher. These short stays are less U-shaped because
there is not a lower-cost middle period between the time of admission
and the time of death.'' The FY 2014 Hospice Wage Index and Payment
Rate Update proposed rule went on to note that a ``short stay add-on''
was under consideration as a possible reform option (78 FR 27843).
Public comments received in response to the proposed rule were
favorable regarding a possible short stay add-on payment. Since the
proposed SIA payment would be applicable to any 7-day period of time
ending in the patient's death, hospice elections with short lengths of
stay would receive an additional payment that would help mitigate the
marginally higher costs associated with short lengths of stay,
consistent with the `reasonable cost' structure of the hospice payment
system. For FY 2013, 32 percent of hospice stays were 7 days or less
with 60 percent of stays lasting 30 days or less. The median length of
stay in FY 2013 was 17 days.
---------------------------------------------------------------------------
\50\ Virnig, B. A., I. S. Moscovice, S. B. Durham, et al. 2004.
Do rural elders have limited access to Medicare hospice services?
Journal of the American Geriatrics Society 52, no. 5: 731-735.
---------------------------------------------------------------------------
Although Figure 4 above demonstrates that there is increased
resource use during the first 2 days of an election, we are not
proposing an additional SIA payment for the first or second day of a
hospice election when the length of stay is beyond 7 days. According to
MedPAC, the breakeven point for a hospice election is about three weeks
after admission.\51\ The proposed SIA payment for the last 7 days of
life would provide additional reimbursement to help to mitigate the
higher costs for stays lasting 3 weeks or less where spreading out the
initial costs in the first 2 days of the election over a smaller number
of days is not enough to make the overall stay profitable. Once a
hospice stay reaches 3 weeks or more, the initial costs associated with
the first 2 days of a hospice election can be spread out over a larger
number of days, making the overall stay profitable. A stay of 7 days or
less before death would be eligible for SIA payment on all days.
---------------------------------------------------------------------------
\51\ http://www.medpac.gov/documents/reports/Jun08_Ch08.pdf.
---------------------------------------------------------------------------
We believe that the proposed SIA payment helps to address MedPAC
and industry concerns regarding the visit intensity at end of life and
the concerns associated with the profitability of hospice short stays.
The proposed RHC rates described in section III.B2 and SIA payment
would advance hospice payment reform incrementally, as mandated by the
Affordable Care Act while simultaneously maintaining flexibility for
future refinements. Since this approach would be implemented within the
current constructs of the hospice payment system, no major overhaul of
the claims processing system or related claims/cost report forms would
be required, minimizing burden for hospices as well as for Medicare.
CMS needs to further assess whether the four levels of care and the
current payment amounts, as well as the amounts after implementation of
the SIA, will align with the actual cost of
[[Page 25859]]
providing hospice services. The hospice cost report was redesigned,
effective for cost reporting periods beginning on October 1, 2014, and
additional data are now being collected on the hospice claim form,
effective April 1, 2014. Once additional data is available, CMS will
continue to assess additional refinements that may inform more
extensive policy and payment approaches, in accordance with the payment
methodology reform required by the Affordable Care Act.
As required by section 1814(i)(6)(D)(ii) of the Act, any changes to
the hospice payment system must be made in a budget neutral manner in
the first year of implementation. Based on the desire to improve
patient care through the promotion of skilled visits at end of life,
regardless of the patient's lifetime length of stay, we are proposing
to make the SIA payments budget neutral through a reduction to the
overall RHC rate. The SIA payment budget neutrality factor (SBNF) used
to reduce the overall RHC rate is outlined in section III.C.3 and is
reflected in the proposed RHC payment rate tables.
We also propose to continue to make the SIA payments budget neutral
through an annual determination of the SBNF, which will then be applied
to the RHC payment rate. The SBNF for the SIA payments would be
calculated for each FY using the most current and complete fiscal year
utilization data available at the time of rulemaking. Finally, we are
soliciting public comment on all aspects of the proposed SIA payment as
articulated in this section as well as the corresponding proposed
changes to the regulations at Sec. 418.302 in section VI. We are also
proposing to change the word ``Intermediary'' to ``Medicare
Administrative Contractor'' in the regulations text at Sec. 418.302
and proposing technical regulations text changes to Sec. 418.306 as
described in section VI. As more data become available, CMS will
continue to analyze hospice payments, costs, and utilization and will
consider refining the SIA payment criteria if needed.
C. Proposed FY 2016 Hospice Wage Index and Rate Update
1. Proposed FY 2016 Hospice Wage Index
a. Background
The hospice wage index is used to adjust payment rates for hospice
agencies under the Medicare program to reflect local differences in
area wage levels based on the location where services are furnished.
The hospice wage index utilizes the wage adjustment factors used by the
Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital
wage adjustments. Our regulations at Sec. 418.306(c) require each
labor market to be established using the most current hospital wage
data available, including any changes made by OMB to the Metropolitan
Statistical Areas (MSAs) definitions.
We use the previous fiscal year's hospital wage index data to
calculate the hospice wage index values. For FY 2016, the hospice wage
index will be based on the FY 2015 hospital pre-floor, pre-reclassified
wage index. This means that the hospital wage data used for the hospice
wage index is not adjusted to take into account any geographic
reclassification of hospitals including those in accordance with
section 1886(d)(8)(B) or 1886(d)(10) of the Act. The appropriate wage
index value is applied to the labor portion of the payment rate based
on the geographic area in which the beneficiary resides when receiving
RHC or CHC. The appropriate wage index value is applied to the labor
portion of the payment rate based on the geographic location of the
facility for beneficiaries receiving General Inpatient care (GIP) or
Inpatient Respite Care (IRC).
In the FY 2006 Hospice Wage Index final rule (70 FR 45130), we
adopted the changes discussed in the OMB Bulletin No. 03-04 (June 6,
2003). This bulletin announced revised definitions for MSAs and the
creation of micropolitan statistical areas and combined statistical
areas. The bulletin is available online at http://www.whitehouse.gov/omb/bulletins/b03-04.html. In adopting the CBSA geographic designations
for FY 2006, we provided for a 1-year transition with a blended wage
index for all providers. For FY 2006, the wage index for each
geographic area consisted of a blend of 50 percent of the FY 2006 MSA-
based wage index and 50 percent of the FY 2006 CBSA-based wage index.
As discussed in the Hospice Wage Index final rule for FY 2006 (70 FR
45138), since the expiration of this 1-year transition on September 30,
2006, we have used the full CBSA-based wage index values.
When adopting OMB's new labor market designations in FY 2006, we
identified some geographic areas where there were no hospitals, and
thus, no hospital wage index data, which to base the calculation of the
hospice wage index. In the FY 2010 Hospice Wage Index final rule (74 FR
39386), we also adopted the policy that for urban labor markets without
a hospital from which hospital wage index data could be derived, all of
the CBSAs within the state would be used to calculate a statewide urban
average pre-floor, pre-reclassified hospital wage index value to use as
a reasonable proxy for these areas. In FY 2016, the only CBSA without a
hospital from which hospital wage data could be derived is 25980,
Hinesville-Fort Stewart, Georgia.
In the FY 2008 Hospice Wage Index final rule (72 FR 50214), we
implemented a new methodology to update the hospice wage index for
rural areas without a hospital, and thus no hospital wage data. In
cases where there was a rural area without rural hospital wage data, we
used the average pre-floor, pre-reclassified hospital wage index data
from all contiguous CBSAs to represent a reasonable proxy for the rural
area. The term ``contiguous'' means sharing a border (72 FR 50217).
Currently, the only rural area without a hospital from which hospital
wage data could be derived is Puerto Rico. However, our policy of
imputing a rural pre-floor, pre-reclassified hospital wage index based
on the pre-floor, pre-reclassified hospital wage index (or indices) of
CBSAs contiguous to a rural area without a hospital from which hospital
wage data could be derived does not recognize the unique circumstances
of Puerto Rico. In this proposed rule, for FY 2016, we propose to
continue to use the most recent pre-floor, pre-reclassified hospital
wage index value available for Puerto Rico, which is 0.4047.
b. Elimination of the Wage Index Budget Neutrality Factor (BNAF)
This proposed rule would update the hospice wage index values for
FY 2016 using the FY 2015 pre-floor, pre-reclassified hospital wage
index. As described in the August 8, 1997 Hospice Wage Index final rule
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index
is used as the raw wage index for the hospice benefit. These raw wage
index values were then subject to either a budget neutrality adjustment
or application of the hospice floor to compute the hospice wage index
used to determine payments to hospices. Pre-floor, pre-reclassified
hospital wage index values below 0.8 were adjusted by either: (1) The
hospice BNAF; or (2) the hospice floor--a 15 percent increase subject
to a maximum wage index value of 0.8; whichever results in the greater
value.
The FY 2010 Hospice Wage Index rule finalized a provision to phase-
out the BNAF over 7 years, with a 10 percent reduction in the BNAF in
FY 2010, and an additional 15 percent reduction in each of the next 6
years, with complete phase out in FY 2016 (74 FR 39384). The 10 percent
reduced BNAF for FY
[[Page 25860]]
2010 was 0.055598, based on a full BNAF of 0.061775; the additional 15
percent reduced BNAF for FY 2011 (for a cumulative reduction of 25
percent) was 0.045422, based on a full BNAF of 0.060562; the additional
15 percent reduced BNAF for FY 2012 (for a cumulative reduction of 40
percent) was 0.035156, based on a full BNAF of 0.058593; the additional
15 percent reduced BNAF for FY 2013 (for a cumulative reduction of 55
percent) was 0.027197, based on a full BNAF of 0.060438; the additional
15 percent BNAF for FY 2014 (for a cumulative reduction of 70 percent)
was 0.018461, based on a full BNAF of 0.061538 and the additional 15
percent reduced BNAF for FY 2015 (for a cumulative reduction of 85
percent) is 0.009313, based on a full BNAF of 0.062804. For FY 2016,
the BNAF is reduced by an additional and final 15 percent for a
cumulative reduction of 100 percent. Therefore, for FY 2016, the BNAF
is completely phased-out and eliminated.
Hospital wage index values which are less than 0.8 are still
subject to the hospice floor calculation. The hospice floor equates to
a 15 percent increase, subject to a maximum wage index value of 0.8.
For example, if County A has a pre-floor, pre-reclassified hospital
wage index value of 0.3994, we would multiply 0.3994 by 1.15, which
equals 0.4593. Since 0.4593 is not greater than 0.8, then County A's
hospice wage index would be 0.4593. In another example, if County B has
a pre-floor, pre-reclassified hospital wage index value of 0.7440, we
would multiply 0.7440 by 1.15 which equals 0.8556. Because 0.8556 is
greater than 0.8, County B's hospice wage index would be 0.8.
c. Proposed Implementation of New Labor Market Delineations
OMB has published subsequent bulletins regarding CBSA changes. On
February 28, 2013, OMB issued OMB Bulletin No. 13-01, announcing
revisions to the delineation of MSAs, Micropolitan Statistical Areas,
and Combines Statistical Areas, and guidance on uses of the delineation
in these areas. A copy of this bulletin is available online at: http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
This bulletin states that it ``provides the delineations of all
Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical Areas, and New England City and
Town Areas in the United States and Puerto Rico based on the standards
published on June 28, 2010, in the Federal Register (75 FR 37246-37252)
and Census Bureau data.'' In the FY 2015 Hospice Wage Index final rule
(79 FR 50483), we stated that if CMS incorporates OMB's new area
delineations, based on the 2010 Census, in the FY 2015 hospital wage
index, those changes would also be reflected in the FY 2016 hospice
wage index. In the FY 2015 Inpatient Prospective Payment System (IPPS)
final rule (79 FR 49951), we finalized the proposal to use OMB's new
area delineations, based on the 2010 Census, in the FY 2015 hospital
wage index. In addition, the new area delineations have been
incorporated into the FY 2015 SNF PPS (79 FR 45628) and the CY 2015
Home Health (HH) PPS (79 FR 66032) using a 1-year transition with a
blended wage index.
While the revisions OMB published on February 28, 2013, are not as
sweeping as the changes made when we adopted the CBSA geographic
designations for FY 2006, the February 28, 2013 bulletin does contain a
number of significant changes. For example, there are new CBSAs, urban
counties that have become rural, rural counties that have become urban,
and existing CBSAs that have been split apart. We believe it is
important for the hospice wage index to use the latest OMB delineations
available in order to maintain a more accurate and up-to-date payment
system that reflects the reality of population shifts and labor market
conditions. While CMS and other stakeholders have explored potential
alternatives to the current CBSA-based labor market system (we refer
readers to the CMS Web site at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html), no consensus
has been achieved regarding how best to implement a replacement system.
As discussed in the FY 2005 IPPS final rule (69 FR 49027), ``While we
recognize that MSAs are not designed specifically to define labor
market areas, we believe they do represent a useful proxy for this
purpose.'' We further believe that using the most current OMB
delineations would increase the integrity of the hospice wage index by
creating a more accurate representation of geographic variation in wage
levels. We have reviewed our findings and impacts relating to the new
OMB delineations, and have concluded that there is no compelling reason
to further delay implementation. We are proposing to implement the new
OMB delineations as described in the February 28, 2013 OMB Bulletin No.
13-01 for the hospice wage index effective beginning in FY 2016.
i. Micropolitan Statistical Areas
As discussed in the FY 2006 Hospice Wage Index proposed rule (70 FR
22397) and final rule (70 FR 45132), CMS considered how to use the
Micropolitan Statistical Area definitions in the calculation of the
wage index. OMB defines a ``Micropolitan Statistical Area'' as a CBSA
``associated with at least one urban cluster that has a population of
at least 10,000, but less than 50,000 (75 FR 37252). We refer to these
as Micropolitan Areas. After extensive impact analysis, consistent with
the treatment of these areas under the IPPS as discussed in the FY 2005
IPPS final rule (69 FR 49029 through 49032), CMS determined the best
course of action would be to treat Micropolitan Areas as ``rural'' and
include them in the calculation of each state's Hospice rural wage
index (see 70 FR 22397 and 70 FR 45132). Thus, the hospice statewide
rural wage index is determined using IPPS hospital data from hospitals
located in non-MSA areas.
Based upon the 2010 Decennial Census data, a number of urban
counties have switched status and have joined or became Micropolitan
Areas, and some counties that once were part of a Micropolitan Area,
have become urban. Overall, there are fewer Micropolitan Areas (541)
under the new OMB delineations based on the 2010 Census than existed
under the latest data from the 2000 Census (581). We believe that the
best course of action would be to continue the policy established in
the FY 2006 Hospice Wage Index final rule and include Micropolitan
Areas in each state's rural wage index. These areas continue to be
defined as having relatively small urban cores (populations of 10,000
to 49,999). Therefore, in conjunction with our proposal to implement
the new OMB labor market delineations beginning in FY 2016 and
consistent with the treatment of Micropolitan Areas under the IPPS, we
are proposing to continue to treat Micropolitan Areas as ``rural'' and
to include Micropolitan Areas in the calculation of each state's rural
wage index.
ii. Urban Counties Becoming Rural
If we adopt the new OMB delineations (based upon the 2010 decennial
Census data), a total of 37 counties (and county equivalents) that are
currently considered urban would be considered rural beginning in FY
2016. Table 19 below lists the 37 counties that would change to rural
status if we finalize our proposal to implement the new OMB
delineations.
[[Page 25861]]
Table 19--Counties That Would Change to Rural Status
----------------------------------------------------------------------------------------------------------------
CBSA number
from FY 2015
County State hospice wage CBSA name
index
----------------------------------------------------------------------------------------------------------------
Greene County........................... IN.................. 14020 Bloomington, IN.
Anson County............................ NC.................. 16740 Charlotte-Gastonia-Rock Hill, NC-
SC.
Franklin County......................... IN.................. 17140 Cincinnati-Middletown, OH-KY-IN.
Stewart County.......................... TN.................. 17300 Clarksville, TN-KY.
Howard County........................... MO.................. 17860 Columbia, MO.
Delta County............................ TX.................. 19124 Dallas-Fort Worth-Arlington, TX.
Pittsylvania County..................... VA.................. 19260 Danville, VA.
Danville City........................... VA.................. 19260 Danville, VA.
Preble County........................... OH.................. 19380 Dayton, OH.
Gibson County........................... IN.................. 21780 Evansville, IN-KY.
Webster County.......................... KY.................. 21780 Evansville, IN-KY.
Franklin County......................... AR.................. 22900 Fort Smith, AR-OK.
Ionia County............................ MI.................. 24340 Grand Rapids-Wyoming, MI.
Newaygo County.......................... MI.................. 24340 Grand Rapids-Wyoming, MI.
Greene County........................... NC.................. 24780 Greenville, NC.
Stone County............................ MS.................. 25060 Gulfport-Biloxi, MS.
Morgan County........................... WV.................. 25180 Hagerstown-Martinsburg, MD-WV.
San Jacinto County...................... TX.................. 26420 Houston-Sugar Land-Baytown, TX.
Franklin County......................... KS.................. 28140 Kansas City, MO-KS.
Tipton County........................... IN.................. 29020 Kokomo, IN.
Nelson County........................... KY.................. 31140 Louisville/Jefferson County, KY-
IN.
Geary County............................ KS.................. 31740 Manhattan, KS.
Washington County....................... OH.................. 37620 Parkersburg-Marietta-Vienna, WV-
OH.
Pleasants County........................ WV.................. 37620 Parkersburg-Marietta-Vienna, WV-
OH.
George County........................... MS.................. 37700 Pascagoula, MS.
Power County............................ ID.................. 38540 Pocatello, ID.
Cumberland County....................... VA.................. 40060 Richmond, VA.
King and Queen County................... VA.................. 40060 Richmond, VA.
Louisa County........................... VA.................. 40060 Richmond, VA.
Washington County....................... MO.................. 41180 St. Louis, MO-IL.
Summit County........................... UT.................. 41620 Salt Lake City, UT.
Erie County............................. OH.................. 41780 Sandusky, OH.
Franklin County......................... MA.................. 44140 Springfield, MA.
Ottawa County........................... OH.................. 45780 Toledo, OH.
Greene County........................... AL.................. 46220 Tuscaloosa, AL.
Calhoun County.......................... TX.................. 47020 Victoria, TX.
Surry County............................ VA.................. 47260 Virginia Beach-Norfolk-Newport
News, VA-NC.
----------------------------------------------------------------------------------------------------------------
iii. Rural Counties Becoming Urban
If we finalize our proposal to implement the new OMB delineations
(based upon the 2010 decennial Census data), a total of 105 counties
(and county equivalents) that are currently designated rural would be
considered urban beginning in FY 2016. Table 20 below lists the 105
counties that would change to urban status.
Table 20--Counties That Would Change to Urban Status
----------------------------------------------------------------------------------------------------------------
County State CBSA number CBSA name
----------------------------------------------------------------------------------------------------------------
Utuado Municipio........................ PR.................. 10380 Aguadilla-Isabela, PR.
Linn County............................. OR.................. 10540 Albany, OR.
Oldham County........................... TX.................. 11100 Amarillo, TX.
Morgan County........................... GA.................. 12060 Atlanta-Sandy Springs-Roswell,
GA.
Lincoln County.......................... GA.................. 12260 Augusta-Richmond County, GA-SC.
Newton County........................... TX.................. 13140 Beaumont-Port Arthur, TX.
Fayette County.......................... WV.................. 13220 Beckley, WV.
Raleigh County.......................... WV.................. 13220 Beckley, WV.
Golden Valley County.................... MT.................. 13740 Billings, MT.
Oliver County........................... ND.................. 13900 Bismarck, ND.
Sioux County............................ ND.................. 13900 Bismarck, ND.
Floyd County............................ VI.................. 13980 Blacksburg-Christiansburg-
Radford, VA.
De Witt County.......................... IL.................. 14010 Bloomington, IL.
Columbia County......................... PA.................. 14100 Bloomsburg-Berwick, PA.
Montour County.......................... PA.................. 14100 Bloomsburg-Berwick, PA.
Allen County............................ KY.................. 14540 Bowling Green, KY.
Butler County........................... KY.................. 14540 Bowling Green, KY.
St. Mary's County....................... MD.................. 15680 California-Lexington Park, MD.
Jackson County.......................... IL.................. 16060 Carbondale-Marion, IL.
Williamson County....................... IL.................. 16060 Carbondale-Marion, IL.
[[Page 25862]]
Franklin County......................... PA.................. 16540 Chambersburg-Waynesboro, PA.
Iredell County.......................... NC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
Lincoln County.......................... NC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
Rowan County............................ NC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
Chester County.......................... SC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
Lancaster County........................ SC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
Buckingham County....................... VA.................. 16820 Charlottesville, VA.
Union County............................ IN.................. 17140 Cincinnati, OH-KY-IN.
Hocking County.......................... OH.................. 18140 Columbus, OH.
Perry County............................ OH.................. 18140 Columbus, OH.
Walton County........................... FL.................. 18880 Crestview-Fort Walton Beach-
Destin, FL.
Hood County............................. TX.................. 23104 Dallas-Fort Worth-Arlington, TX.
Somervell County........................ TX.................. 23104 Dallas-Fort Worth-Arlington, TX.
Baldwin County.......................... AL.................. 19300 Daphne-Fairhope-Foley, AL.
Monroe County........................... PA.................. 20700 East Stroudsburg, PA.
Hudspeth County......................... TX.................. 21340 El Paso, TX.
Adams County............................ PA.................. 23900 Gettysburg, PA.
Hall County............................. NE.................. 24260 Grand Island, NE.
Hamilton County......................... NE.................. 24260 Grand Island, NE.
Howard County........................... NE.................. 24260 Grand Island, NE.
Merrick County.......................... NE.................. 24260 Grand Island, NE.
Montcalm County......................... MI.................. 24340 Grand Rapids-Wyoming, MI.
Josephine County........................ OR.................. 24420 Grants Pass, OR.
Tangipahoa Parish....................... LA.................. 25220 Hammond, LA.
Beaufort County......................... SC.................. 25940 Hilton Head Island-Bluffton-
Beaufort, SC.
Jasper County........................... SC.................. 25940 Hilton Head Island-Bluffton-
Beaufort, SC.
Citrus County........................... FL.................. 26140 Homosassa Springs, FL.
Butte County............................ ID.................. 26820 Idaho Falls, ID.
Yazoo County............................ MS.................. 27140 Jackson, MS.
Crockett County......................... TN.................. 27180 Jackson, TN.
Kalawao County.......................... HI.................. 27980 Kahului-Wailuku-Lahaina, HI.
Maui County............................. HI.................. 27980 Kahului-Wailuku-Lahaina, HI.
Campbell County......................... TN.................. 28940 Knoxville, TN.
Morgan County........................... TN.................. 28940 Knoxville, TN.
Roane County............................ TN.................. 28940 Knoxville, TN.
Acadia Parish........................... LA.................. 29180 Lafayette, LA.
Iberia Parish........................... LA.................. 29180 Lafayette, LA.
Vermilion Parish........................ LA.................. 29180 Lafayette, LA.
Cotton County........................... OK.................. 30020 Lawton, OK.
Scott County............................ IN.................. 31140 Louisville/Jefferson County, KY-
IN.
Lynn County............................. TX.................. 31180 Lubbock, TX.
Green County............................ WI.................. 31540 Madison, WI.
Benton County........................... MS.................. 32820 Memphis, TN-MS-AR.
Midland County.......................... MI.................. 33220 Midland, MI.
Martin County........................... TX.................. 33260 Midland, TX.
Le Sueur County......................... MN.................. 33460 Minneapolis-St. Paul-
Bloomington, MN-WI.
Mille Lacs County....................... MN.................. 33460 Minneapolis-St. Paul-
Bloomington, MN-WI.
Sibley County........................... MN.................. 33460 Minneapolis-St. Paul-
Bloomington, MN-WI.
Maury County............................ TN.................. 34980 Nashville-Davidson-Murfreesboro-
Franklin, TN.
Craven County........................... NC.................. 35100 New Bern, NC.
Jones County............................ NC.................. 35100 New Bern, NC.
Pamlico County.......................... NC.................. 35100 New Bern, NC.
St. James Parish........................ LA.................. 35380 New Orleans-Metairie, LA.
Box Elder County........................ UT.................. 36260 Ogden-Clearfield, UT.
Gulf County............................. FL.................. 37460 Panama City, FL.
Custer County........................... SD.................. 39660 Rapid City, SD.
Fillmore County......................... MN.................. 40340 Rochester, MN.
Yates County............................ NY.................. 40380 Rochester, NY.
Sussex County........................... DE.................. 41540 Salisbury, MD-DE.
Worcester County........................ MA.................. 41540 Salisbury, MD-DE.
Highlands County........................ FL.................. 42700 Sebring, FL.
Webster Parish.......................... LA.................. 43340 Shreveport-Bossier City, LA.
Cochise County.......................... AZ.................. 43420 Sierra Vista-Douglas, AZ.
Plymouth County......................... IA.................. 43580 Sioux City, IA-NE-SD.
Union County............................ SC.................. 43900 Spartanburg, SC.
Pend Oreille County..................... WA.................. 44060 Spokane-Spokane Valley, WA.
Stevens County.......................... WA.................. 44060 Spokane-Spokane Valley, WA.
Augusta County.......................... VA.................. 44420 Staunton-Waynesboro, VA.
Staunton City........................... VA.................. 44420 Staunton-Waynesboro, VA.
Waynesboro City......................... VA.................. 44420 Staunton-Waynesboro, VA.
Little River County..................... AR.................. 45500 Texarkana, TX-AR.
Sumter County........................... FL.................. 45540 The Villages, FL.
[[Page 25863]]
Pickens County.......................... AL.................. 46220 Tuscaloosa, AL.
Gates County............................ NC.................. 47260 Virginia Beach-Norfolk-Newport
News, VA-NC.
Falls County............................ TX.................. 47380 Waco, TX.
Columbia County......................... WA.................. 47460 Walla Walla, WA.
Walla Walla County...................... WA.................. 47460 Walla Walla, WA.
Peach County............................ GA.................. 47580 Warner Robins, GA.
Pulaski County.......................... GA.................. 47580 Warner Robins, GA.
Culpeper County......................... VA.................. 47894 Washington-Arlington-Alexandria,
DC-VA-MD-WV.
Rappahannock County..................... VA.................. 47894 Washington-Arlington-Alexandria,
DC-VA-MD-WV.
Jefferson County........................ NY.................. 48060 Watertown-Fort Drum, NY.
Kingman County.......................... KS.................. 48620 Wichita, KS.
Davidson County......................... NC.................. 49180 Winston-Salem, NC.
Windham County.......................... CT.................. 49340 Worcester, MA-CT.
----------------------------------------------------------------------------------------------------------------
iv. Urban Counties Moving to a Different Urban CBSA
In addition to rural counties becoming urban and urban counties
becoming rural, several urban counties would shift from one urban CBSA
to another urban CBSA under our proposal to adopt the new OMB
delineations. In other cases, applying the new OMB delineations would
involve a change only in CBSA name or number, while the CBSA continues
to encompass the same constituent counties. For example, CBSA 29140
(Lafayette, IN), would experience both a change to its number and its
name, and would become CBSA 29200 (Lafayette-West Lafayette, IN), while
all of its three constituent counties would remain the same. We are not
discussing these proposed changes in this section because they are
inconsequential changes with respect to the hospice wage index.
However, in other cases, if we adopt the new OMB delineations, counties
would shift between existing and new CBSAs, changing the constituent
makeup of the CBSAs. In one type of change, an entire CBSA would be
subsumed by another CBSA. For example, CBSA 37380 (Palm Coast, FL)
currently is a single county (Flagler, FL) CBSA. Flagler County would
be a part of CBSA 19660 (Deltona-Daytona Beach-Ormond Beach, FL) under
the new OMB delineations. In another type of change, some CBSAs have
counties that would split off to become part of or to form entirely new
labor market areas. For example, CBSA 37964 (Philadelphia Metropolitan
Division of MSA 37980) currently is comprised of 5 Pennsylvania
counties (Bucks, Chester, Delaware, Montgomery, and Philadelphia). If
we adopt the new OMB delineations, Montgomery, Bucks, and Chester
counties would split off and form the new CBSA 33874 (Montgomery
County-Bucks County-Chester County, PA Metropolitan Division of MSA
37980), while Delaware and Philadelphia counties would remain in CBSA
37964. Finally, in some cases, a CBSA would lose counties to another
existing CBSA if we adopt the new OMB delineations. For example,
Lincoln County and Putnam County, WV would move from CBSA 16620
(Charleston, WV) to CBSA 26580 (Huntington-Ashland, WV KY OH). CBSA
16620 would still exist in the new labor market delineations with fewer
constituent counties. Table 21 lists the urban counties that would move
from one urban CBSA to another urban CBSA if we adopt the new OMB
delineations.
Table 21--Counties That Would Change to a Different CBSA
------------------------------------------------------------------------
Previous CBSA New CBSA County State
------------------------------------------------------------------------
11300........................ 26900 Madison County. IN.
11340........................ 24860 Anderson County SC.
14060........................ 14010 McLean County.. IL.
37764........................ 15764 Essex County... MA.
16620........................ 26580 Lincoln County. WV.
16620........................ 26580 Putnam County.. WV.
16974........................ 20994 DeKalb County.. IL.
16974........................ 20994 Kane County.... IL.
21940........................ 41980 Ceiba Municipio PR.
21940........................ 41980 Fajardo PR.
Municipio.
21940........................ 41980 Luquillo PR.
Municipio.
26100........................ 24340 Ottawa County.. MI.
31140........................ 21060 Meade County... KY.
34100........................ 28940 Grainger County TN.
35644........................ 35614 Bergen County.. NJ.
35644........................ 35614 Hudson County.. NJ.
20764........................ 35614 Middlesex NJ.
County.
20764........................ 35614 Monmouth County NJ.
20764........................ 35614 Ocean County... NJ.
35644........................ 35614 Passaic County. NJ.
20764........................ 35084 Somerset County NJ.
35644........................ 35614 Bronx County... NY.
35644........................ 35614 Kings County... NY.
35644........................ 35614 New York County NY.
35644........................ 20524 Putnam County.. NY.
35644........................ 35614 Queens County.. NY.
35644........................ 35614 Richmond County NY.
[[Page 25864]]
35644........................ 35614 Rockland County NY.
35644........................ 35614 Westchester NY.
County.
37380........................ 19660 Flagler County. FL.
37700........................ 25060 Jackson County. MS.
37964........................ 33874 Bucks County... PA.
37964........................ 33874 Chester County. PA.
37964........................ 33874 Montgomery PA.
County.
39100........................ 20524 Dutchess County NY.
39100........................ 35614 Orange County.. NY.
41884........................ 42034 Marin County... CA.
41980........................ 11640 Arecibo PR.
Municipio.
41980........................ 11640 Camuy Municipio PR.
41980........................ 11640 Hatillo PR.
Municipio.
41980........................ 11640 Quebradillas PR.
Municipio.
48900........................ 34820 Brunswick NC.
County.
49500........................ 38660 Gu[aacute]nica PR.
Municipio.
49500........................ 38660 Guayanilla PR.
Municipio.
49500........................ 38660 Pe[ntilde]uelas PR.
Municipio.
49500........................ 38660 Yauco Municipio PR.
------------------------------------------------------------------------
v. Transition Period
Overall, we believe that implementing the new OMB delineations
would result in wage index values being more representative of the
actual costs of labor in a given area. Among the 458 total CBSA and
statewide rural areas, 20 (4 percent) would have a higher wage index
using the newer delineations. However, 34 (7.4 percent) would have a
lower wage index using the newer delineations. Therefore, to remain
consistent with the manner in which we ultimately adopted the revised
OMB delineations for FY 2006 (70 FR 45138), we are proposing to
implement a 1-year transition to the new OMB delineations.
Specifically, we propose to apply a blended wage index for one year (FY
2016) for all geographic areas that would consist of a 50/50 blend of
the wage index values using OMB's old area delineations and the wage
index values using OMB's new area delineations. That is, for each
county, a blended wage index would be calculated equal to 50 percent of
the FY 2016 wage index using the old labor market area delineation and
50 percent of the FY 2016 wage index using the new labor market area
delineation. This results in an average of the two values. We refer to
this blended wage index as the FY 2016 hospice transition wage index.
This proposed 1-year transition policy is also consistent with the
transition policies adopted by both the FY 2015 SNF PPS (79 FR 25767)
and the CY 2015 HH PPS (79 FR 66032). This transition policy would be
for a 1-year period, going into effect on October 1, 2015, and
continuing through September 30, 2016. Thus, beginning October 1, 2016,
the wage index for all hospice payments would be fully based on the new
OMB delineations. We invite comments on our proposed transition
methodology.
The proposed wage index applicable to FY 2016 is set forth in
Addendum A available on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html. Addendum
A will not be published in the Federal Register. The proposed hospice
wage index for FY 2016 would be effective October 1, 2015 through
September 30, 2016.
Addendum A provides a crosswalk between the FY 2016 wage index
using the current OMB delineations in effect in FY 2015 and the FY 2016
wage index using the proposed revised OMB delineations, as well as the
proposed transition wage index values that would be in effect in FY
2016 if these proposed changes are finalized. Addendum A shows each
state and county and its corresponding proposed transition wage index
along with the previous CBSA number, the new CBSA number, and the new
CBSA name.
Due to the way that the transition wage index is calculated, some
CBSAs and statewide rural areas may have more than one transition wage
index value associated with that CBSA or rural area. However, each
county will have only one transition wage index. For counties located
in CBSAs and rural areas that correspond to more than one transition
wage index value, the CBSA number will not be able to be used for FY
2016 claims. In these cases, a number other than the CBSA number would
be necessary to identify the appropriate wage index value on claims for
hospice care provided in FY 2016. These numbers are five digits in
length and begin with ``50.'' These codes are shown in the last column
of Addendum A in place of the CBSA number where appropriate. For
counties located in CBSAs and rural areas that still correspond to only
one wage index value, the CBSA number would still be used.
2. Proposed Hospice Payment Update Percentage
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended
section 1814(i)(1)(C)(ii)(VI) of the Act to establish updates to
hospice rates for FYs 1998 through 2002. Hospice rates were to be
updated by a factor equal to the market basket index, minus 1
percentage point. Payment rates for FYs since 2002 have been updated
according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states
that the update to the payment rates for subsequent FYs must be the
market basket percentage for that FY. The Act requires us to use the
inpatient hospital market basket to determine the hospice payment rate
update. In addition, section 3401(g) of the Affordable Care Act
mandates that, starting with FY 2013 (and in subsequent FYs), the
hospice payment update percentage will be annually reduced by changes
in economy-wide productivity as specified in section
1886(b)(3)(B)(xi)(II) of the Act. The statute defines the productivity
adjustment to be equal to the 10-year moving average of changes in
annual economy-wide private nonfarm business multifactor productivity
(MFP) (as projected by the Secretary for the 10-year period ending with
the applicable FY, year, cost reporting period, or other annual period)
(the ``MFP adjustment''). A complete description of the MFP projection
methodology is available on our Web site at http://www.cms.gov/
[[Page 25865]]
Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/
MedicareProgramRatesStats/MarketBasketResearch.html.
In addition to the MFP adjustment, section 3401(g) of the
Affordable Care Act also mandates that in FY 2013 through FY 2019, the
hospice payment update percentage will be reduced by an additional 0.3
percentage point (although for FY 2014 to FY 2019, the potential 0.3
percentage point reduction is subject to suspension under conditions
specified in section 1814(i)(1)(C)(v) of the Act). The proposed hospice
payment update percentage for FY 2016 is based on the estimated
inpatient hospital market basket update of 2.7 percent (based on IHS
Global Insight, Inc.'s first quarter 2015 forecast with historical data
through the fourth quarter of 2014). Due to the requirements at
1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the estimated
inpatient hospital market basket update for FY 2016 of 2.7 percent must
be reduced by a MFP adjustment as mandated by Affordable Care Act
(currently estimated to be 0.6 percentage point for FY 2016). The
estimated inpatient hospital market basket update for FY 2016 is
reduced further by a 0.3 percentage point, as mandated by the
Affordable Care Act. In effect, the proposed hospice payment update
percentage for FY 2016 is 1.8 percent. We are also proposing that if
more recent data are subsequently available (for example, a more recent
estimate of the inpatient hospital market basket update and MFP
adjustment), we would use such data, if appropriate, to determine the
FY 2016 market basket update and the MFP adjustment in the FY 2016
Hospice Rate Update final rule.
Currently, the labor portion of the hospice payment rates is as
follows: For RHC, 68.71 percent; for CHC, 68.71 percent; for General
Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The
non-labor portion is equal to 100 percent minus the labor portion for
each level of care. Therefore, the non-labor portion of the payment
rates is as follows: For RHC, 31.29 percent; for CHC, 31.29 percent;
for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87
percent.
3. Proposed FY 2016 Hospice Payment Rates
Historically, the hospice rate update has been published through a
separate administrative instruction issued annually in the summer to
provide adequate time to implement system change requirements; however,
beginning in FY 2014 and for subsequent FY, we are using rulemaking as
the means to update payment rates. This change was proposed in the FY
2014 Hospice Wage Index and Payment Rate Update proposed rule and
finalized in the FY 2014 Hospice Wage Index and Payment Rate Update
final rule (78 FR 48270). It is consistent with the rate update process
in other Medicare benefits, and provides rate information to hospices
as quickly as, or earlier than, when rates are published in an
administrative instruction.
There are four payment categories that are distinguished by the
location and intensity of the services provided. The base payments are
adjusted for geographic differences in wages by multiplying the labor
share, which varies by category, of each base rate by the applicable
hospice wage index. A hospice is paid the RHC rate for each day the
beneficiary is enrolled in hospice, unless the hospice provides
continuous home care, IRC, or general inpatient care. CHC is provided
during a period of patient crisis to maintain the patient at home; IRC
is short-term care to allow the usual caregiver to rest; and GIP is to
treat symptoms that cannot be managed in another setting.
As discussed in section III.B.2, of this proposed rule, we are
proposing two different RHC payment rates, one RHC rate for the first
60 days and a second RHC rate for days 60 and beyond. As discussed in
section III.B.3, we are proposing to make a SIA payment, in addition to
the daily RHC payment, when direct patient care is provided by a RN or
social worker during the last 7 days of the patient's life. The SIA
payment would be equal to the CHC hourly rate multiplied by the hours
of nursing or social work provided (up to 4 hours total) that occurred
on the day of service. The SIA payment would also be adjusted by the
appropriate wage index. In order to maintain budget neutrality, as
required under section 1814(i)(6)(D)(ii) of the Act, for the proposed
SIA payment, the proposed RHC rates would need to be adjusted by a
budget neutrality factor. The budget neutrality adjustment that would
apply to days 1 through 60 is equal to 1 minus the ratio of SIA
payments for days 1 through 60 to the total payments for days 1 through
60 and is calculated to be 0.9853. The budget neutrality adjustment
that would apply to days 61 and beyond is equal to 1 minus the ratio of
SIA payments for days 61 and beyond to the total payments for days 61
and beyond and is calculated to be 0.9967. Lastly, the RHC rates would
be increased by the proposed FY 2016 hospice payment update percentage
of 1.8 percent as discussed in section III.C.3. The proposed FY 2016
RHC rates are shown in Table 22. The proposed FY 2016 payment rates for
CHC, IRC, and GIP would be the FY 2015 payment rates increased by 1.8
percent. The proposed rates for these three levels of care are shown in
Table 23. The proposed FY 2016 rates for hospices that do not submit
the required quality data are shown in Tables 24 and 25. The proposed
FY 2016 hospice payment rates would be effective for care and services
furnished on or after October 1, 2015, through September 30, 2016.
Table 22--Proposed FY 2016 Hospice Payment Rates for RHC
----------------------------------------------------------------------------------------------------------------
Proposed SIA
budget Proposed FY
Proposed rates neutrality 2016 hospice Proposed FY
Code Description \1\ factor payment 2016 payment
adjustment (1- update rates
0.0081) percentage
----------------------------------------------------------------------------------------------------------------
651........................... Routine Home $187.63 x 0.9853 x 1.018 $188.20
Care (days 1-
60).
651........................... Routine Home 145.21 0.9967 x 1.018 147.34
Care (days 61+).
----------------------------------------------------------------------------------------------------------------
\1\ See section III.B.2 for the proposed RHC rates for days 1-60, and days 61 and beyond before accounting for
the proposed Service Intensity Add-on (SIA) payment budget neutrality factor and the proposed FY 2016 hospice
payment update percentage of 1.8 percent as required by section 1814(i)(1)(C) of the Act.
[[Page 25866]]
Table 23--Proposed FY 2016 Hospice Payment Rates for CHC, IRC, and GIP
----------------------------------------------------------------------------------------------------------------
Proposed FY
2016 hospice Proposed FY
Code Description FY 2015 payment 2016 payment
payment rates update of 1.8 rate
percent
----------------------------------------------------------------------------------------------------------------
652................................... Continuous Home Care.... $929.91 x 1.018 $946.65
Full Rate = 24 hours of
care.
$=39.44 FY 2016 hourly
rate.
655................................... Inpatient Respite Care.. 164.81 x 1.018 167.78
656................................... General Inpatient Care.. 708.77 x 1.018 721.53
----------------------------------------------------------------------------------------------------------------
We reiterate in this proposed rule, that the Congress required in
sections 1814(i)(5)(A) through (C) of the Act that hospices begin
submitting quality data, based on measures to be specified by the
Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320
through 47324), we implemented a Hospice Quality Reporting Program
(HQRP) as required by section 3004 of the Affordable Care Act. Hospices
were required to begin collecting quality data in October 2012, and
submit that quality data in 2013. Section 1814(i)(5)(A)(i) of the Act
requires that beginning with FY 2014 and each subsequent FY, the
Secretary shall reduce the market basket update by 2 percentage points
for any hospice that does not comply with the quality data submission
requirements with respect to that FY. We remind hospices that this
applies to payments in FY 2016 (See Tables 24 and 25 below). For more
information on the HQRP requirements please see section III.E. in this
proposed rule.
Table 24--Proposed FY 2016 Hospice Payment Rates for RHC for Hospices That DO NOT Submit the Required Quality
Data
----------------------------------------------------------------------------------------------------------------
Proposed FY
Proposed SIA 2016 hospice
budget payment
Proposed RHC neutrality update of 1.8 Proposed FY
Code Description rates \1\ factor percent minus 2016 payment
adjustment (1- 2 percentage rates
0.0081) points = -0.2
percent
----------------------------------------------------------------------------------------------------------------
651........................... Routine Home $187.63 x 0.9853 x 0.998 $184.50
Care (days 1-
60).
651........................... Routine Home 145.21 0.9967 x 0.998 144.44
Care (days 61+).
----------------------------------------------------------------------------------------------------------------
\1\ See section III.B.2 for the proposed RHC rates for days 1-60, and days 61 and beyond before accounting for
the proposed Service Intensity Add-on (SIA) payment budget neutrality factor and the proposed FY 2016 hospice
payment update percentage of 1.8 percent as required by section 1814(i)(1)(C) of the Act.
Table 25--Proposed FY 2016 Hospice Payment Rates for CHC, IRC, and GIP for Hospices That DO NOT Submit the
Required Quality Data
----------------------------------------------------------------------------------------------------------------
Proposed FY
2016 hospice
payment
FY 2015 update of 1.8 Proposed FY
Code Description payment rates percent minus 2016 payment
2 percentage rate
points = -0.2
percent
----------------------------------------------------------------------------------------------------------------
652................................... Continuous Home Care $929.91 x 0.998 $928.05
Full Rate= 24 hours of
care $=38.67 hourly
rate.
655................................... Inpatient Respite Care.. 164.81 x 0.998 164.48
656................................... General Inpatient Care.. 708.77 x 0.998 707.35
----------------------------------------------------------------------------------------------------------------
4. Hospice Aggregate Cap and the IMPACT Act of 2014
When the Medicare hospice benefit was implemented, the Congress
included 2 limits on payments to hospices: An inpatient cap and an
aggregate cap. As set out in sections 1861(dd)(2)(A)(iii) and
1814(i)(2)(A) through (C) of the Act, respectively, the hospice
inpatient cap limits the total number of Medicare inpatient days
(general inpatient care and respite care) to no more than 20 percent of
a hospice's total Medicare hospice days. The intent of the inpatient
cap was to ensure that hospice remained a home-based benefit. The
hospice aggregate cap limits the total aggregate payment any individual
hospice can receive in a year. The intent of the hospice aggregate cap
was to protect Medicare from spending more for hospice care than it
would for conventional care at the end of life.
The aggregate cap amount was set at $6,500 per beneficiary when
first enacted in 1983; this was an amount hospice advocates agreed was
well above the average cost of caring for a hospice patient.\52\ Since
1983, the
[[Page 25867]]
$6,500 amount has been adjusted annually by the change in the medical
care expenditure category of the consumer price index for urban
consumers (CPI-U) from March 1984 to March of the cap year, as required
by section 1814(i)(2)(B) of the Act. The cap amount is multiplied by
the number of Medicare beneficiaries who received hospice care from a
particular hospice during the year, resulting in its hospice aggregate
cap, which is the allowable amount of total Medicare payments that
hospice can receive for that cap year. The cap year is currently
November 1 to October 31, and was set in place in the December 16, 1983
Hospice final rule (48 FR 56022).
---------------------------------------------------------------------------
\52\ National Hospice and Palliative Care Organization (NHPCO),
``A Short History of the Medicare Hospice Cap on Total
Expenditures.'' Web 19 Feb. 2014. http://www.nhpco.org/sites/default/files/public/regulatory/History_of_Hospice_Cap.pdf.
---------------------------------------------------------------------------
Section 1814(i)(2)(B)(i) and (ii) of the Act, as added by section
3(b) of the IMPACT Act requires, effective for the 2016 cap year
(November 1, 2015 through October 31, 2016), that the cap amount for
the previous year to be updated by the hospice payment update
percentage, rather than the original $6,500 being annually adjusted by
the change in the CPI-U for medical care expenditures since 1984. This
new provision will sunset for cap years ending after September 30,
2025, at which time the annual update to the cap amount will revert
back to the original methodology. This provision is estimated to result
in $540 million in savings over 10 years starting in 2017.
As a result, we are proposing to update Sec. 418.309 to reflect
the new language added to section 1814(i)(2)(B) of the Act.
In accordance with section 1814(i)(2)(B)(i) of the Act, the hospice
aggregate cap amount for the 2015 cap year, starting on November 1,
2014 and ending on October 31, 2015, will be $27,135.96. This amount
was calculated by multiplying the original cap amount of $6,500 by the
change in the CPI-U medical care expenditure category, from the fifth
month of the 1984 accounting year (March 1984) to the fifth month the
current accounting year (in this case, March 2015). The CPI-U for
medical care expenditures for 1984 to present is available from the
Bureau of Labor Statistics (BLS) Web site at: http://www.bls.gov/cpi/home.htm.
Step 1: From the BLS Web site given above, the March 2015 CPI-U for
medical care expenditures is 444.020 and the 1984 CPI-U for medical
care expenditures was 105.4.
Step 2: Divide the March 2015 CPI-U for medical care expenditures
by the 1984 CPI-U for medical care expenditures to compute the change.
440.020/105.4 = 4.174763
Step 3: Multiply the original cap base amount ($6,500) by the
result from step 2) to get the updated aggregate cap amount for the
2015 cap year.
$6,500 x 4.174763 = $27,135.96
As required by section 1814(i)(2)(B)(ii) of the Act, the hospice
aggregate cap amount for the 2016 cap year, starting on November 1,
2015 and ending on October 31, 2016, will be the 2015 cap amount
updated by the FY 2016 hospice payment update percentage (see section
III.C.2 above). As such, the 2016 cap amount will be $27,624.41
($27,135.96 * 1.018 = $27,624.41). A Change Request with the finalized
hospice payment rates, a finalized hospice wage index, the Pricer for
FY 2016, and the hospice cap amount for the cap year ending October 31,
2015 will be issued in the summer.
D. Proposed Alignment of the Inpatient and Aggregate Cap Accounting
Year With the Federal Fiscal Year
As noted in section III.C.4, when the Medicare hospice benefit was
implemented, the Congress included 2 limits on payments to hospices: an
aggregate cap and an inpatient cap. The intent of the hospice aggregate
cap was to protect Medicare from spending more for hospice care than it
would for conventional care at the end-of-life. If a hospice's total
Medicare payments for the cap year exceed such hospice's aggregate cap
amount, then the hospice must repay the excess back to Medicare. The
intent of the inpatient cap was to ensure that hospice remained a home-
based benefit. If a hospice's inpatient days (GIP and respite) exceed
20 percent of all hospice days then, for inpatient care, the hospice is
paid: (1) the sum of the total reimbursement for inpatient care
multiplied by the ratio of the maximum number of allowable inpatient
days to actual number of all inpatient days; and (2) the sum of the
actual number of inpatient days in excess of the limitation by the
routine home care rate.
1. Streamlined Method and Patient-by-Patient Proportional Method for
Counting Beneficiaries To Determine Each Hospice's Aggregate Cap Amount
The aggregate cap amount for any given hospice is established by
multiplying the cap amount by the number of Medicare beneficiaries who
received hospice services during the year. Originally, the number of
Medicare beneficiaries who received hospice services during the year
was determined using a ``streamlined'' methodology whereby each
beneficiary is counted as ``1'' in the initial cap year of the hospice
election and is not counted in subsequent cap years. Specifically, the
hospice includes in its number of Medicare beneficiaries those Medicare
beneficiaries who have not previously been included in the calculation
of any hospice cap, and who have filed an election to receive hospice
care in accordance with Sec. 418.24 during the period beginning on
September 28th (34 days before the beginning of the cap year) and
ending on September 27th (35 days before the end of the cap year),
using the best data available at the time of the calculation. This is
applicable for cases in which a beneficiary received care from only one
hospice. If a beneficiary received care from more than one hospice,
each hospice includes in its number of Medicare beneficiaries only that
fraction which represents the portion of a patient's total days of care
with that hospice in that cap year, using the best data available at
the time of the calculation. Using the streamlined method, a different
timeframe from the cap year is used to count the number of Medicare
beneficiaries because it allows those beneficiaries who elected hospice
near the end of the cap year to be counted in the year when most of the
services were provided (48 FR 38158).
During FY 2012 rulemaking, in addition to the streamlined method,
CMS added a ``patient-by-patient proportional'' method as a way of
calculating the number of Medicare beneficiaries who received hospice
services during the year in determining the aggregate cap amount for
any given hospice (76 FR 47309). This method specifies that a hospice
should include in its number of Medicare beneficiaries only that
fraction which represents the portion of a patient's total days of care
in all hospices and all years that was spent in that hospice in that
cap year, using the best data available at the time of the calculation.
The total number of Medicare beneficiaries for a given hospice's cap
year is determined by summing the whole or fractional share of each
Medicare beneficiary that received hospice care during the cap year,
from that hospice. Under the patient-by-patient proportional
methodology, the timeframe for counting the number of Medicare
beneficiaries is the same as the cap accounting year (November 1
through October 31). The aggregate cap amount for each hospice is now
calculated using the patient-by-patient proportional method, except for
those hospices that had their cap determination calculated under the
streamlined method prior to the 2012 cap year, did not appeal the
streamlined method used to determine
[[Page 25868]]
the number of Medicare beneficiaries used in the aggregate cap
calculation, and opted to continue to have their hospice aggregate cap
calculated using the streamlined method no later than 60 days after
receipt of its 2012 cap determination
2. Proposed Inpatient and Aggregate Cap Accounting Year Timeframe
As stated in section III.C.4, the cap accounting year is currently
November 1 to October 31. In the past, CMS has considered changing the
cap accounting year to coincide with the hospice rate update year,
which is the federal fiscal year (October 1 through September 30). In
the FY 2011 Hospice Wage Index notice (75 FR 42951), CMS solicited
comments on aligning the cap accounting year for both the inpatient and
aggregate hospice cap to coincide with the FY. In the FY 2012 Hospice
Wage Index proposed rule, we summarized the comments we received,
stating that ``several commenters supported the idea of our aligning
the cap year with the federal fiscal year; with some noting that the
change would be appropriate for a multi-year apportioning approach (the
patient-by-patient proportional method).'' Other commenters stated that
we should not change the cap year at this time, and recommended that we
wait for this to be accomplished as part of hospice payment reform (76
FR 26812).
In FY 2012, we decided not to finalize changing the cap accounting
year to the FY, partly because of a concern that a large portion of
providers could still be using the streamlined method. As stated
earlier, the streamlined method has a different timeframe for counting
the number of beneficiaries than the cap accounting year, allowing
those beneficiaries who elected hospice near the end of the cap year to
be counted in the year when most of the services were provided.
However, for the 2013 cap year, only 486 hospices used the streamlined
method to calculate the number of Medicare hospice patients and the
remaining providers used the patient-by-patient proportional method.
Since the majority of providers now use the patient-by-patient
proportional method, we believe there is no longer an advantage to
defining the cap accounting year differently from the hospice rate
update year and maintaining a cap accounting year (as well as the
period for counting beneficiaries under the streamlined method) that is
different from the federal fiscal year creates an added layer of
complexity that can lead to hospices unintentionally calculating their
aggregate cap determinations incorrectly. In addition, shifting the cap
accounting year timeframes to coincide with the hospice rate update
year (the federal fiscal year) would better align with the intent of
the new cap calculation methodology required by the IMPACT Act of 2014,
as discussed in section III.C.4. Therefore, we are proposing to align
the cap accounting year for both the inpatient cap and the hospice
aggregate cap with the federal fiscal year for FYs 2017 and later.
Under this proposal, in addition to aligning the cap accounting year
with the federal fiscal year, we would also align the timeframe for
counting the number of beneficiaries with the federal fiscal year. This
proposal would eliminate timeframe complexities associating with
counting payments and beneficiaries differently from the federal fiscal
year and would help hospices avoid mistakes in calculating their
aggregate cap determinations.
In shifting the cap accounting year to match the federal fiscal
year, we note that new section 1814(i)(2)(B)(ii) of the Act, as added
by section 3(b) of the IMPACT Act, requires the cap amount for 2016 to
be updated by the hospice payment update percentage in effect ``during
the FY beginning on the October 1 preceding the beginning of the
accounting year''. In other words, we interpret this to mean that the
statute requires the 2016 cap amount to be updated using the most
current hospice payment update percentage in effect at the start of
that cap year. For the 2016 cap year, the 2015 cap amount would be
updated by the FY 2016 hospice payment update percentage outlined in
section III.C.2. For the 2017 cap year through the 2025 cap year, we
would update the previous year's cap amount by the hospice payment
update percentage for that current federal fiscal year. For the 2026
cap year and beyond, changing the cap accounting year to coincide with
the federal fiscal year will require us to use the CPI-U for February
when updating the cap amount, instead of the current process which uses
the March CPI-U to update the cap amount. Section 1814(i)(2)(B) of the
Act requires us to update the cap amount by the same percentage as the
percentage increase or decrease in the medical care expenditure
category of the CPI-U from March 1984 to the ``fifth month of the
accounting year '' for all years except those accounting years that end
after September 30, 2016 and before October 1, 2025.
In shifting the cap year to match the federal fiscal year, we are
proposing to also align the timeframes in which beneficiaries and
payments are counted for the purposes of determining each individual
hospice's aggregate cap amount (see table 26 below) as well as the
timeframes in which days of hospice care are counted for the purposes
determining whether a given hospice exceeded the inpatient cap. In the
year of transition (2017 cap year), for the inpatient cap, we propose
to calculate the percentage of all hospice days of care that were
provided as inpatient days (GIP care and respite care) from November 1,
2016 through September 30, 2017 (11 months). For those hospices using
the patient-by-patient proportional method for their aggregate cap
determinations, for the 2017 cap year, we would count beneficiaries
from November 1, 2016 to September 30, 2017. For those hospices using
the streamlined method for their aggregate cap determinations, we
propose to allow 3 extra days to count beneficiaries in the year of
transition. Specifically, for the 2017 cap year (October 1, 2016 to
September 30, 2017), we would count beneficiaries from September 28,
2016 to September 30, 2017, which is 12 months plus 3 days, in that cap
year's calculation. For hospices using either the streamlined method or
the patient-by-patient proportional method, we propose to count 11
months of payments from November 1, 2016 to September 30, 2017 for the
2017 cap year. For the 2018 cap year (October 1, 2017 to September 30,
2018), we would count both beneficiaries and payments for hospices
using the streamlined or the patient-by-patient proportional methods
from October 1, 2017 to September 30, 2018. Likewise, for the 2018 cap
year would calculate the percentage of all hospice days of care that
were provided as inpatient days (GIP care or respite care) from October
1, 2017 to September 30, 2018. Because of the non-discretionary
language used by Congress in determining the cap for a year, the actual
cap amount for the adjustment year would not be prorated for a shorter
time frame. We are soliciting public comment on all aspects of the
proposed alignment of the cap accounting year with the federal fiscal
year, as articulated in this section, as well as the corresponding
proposed changes to the regulations at Sec. 418.308(c) in section VI.
[[Page 25869]]
Table 26--Hospice Aggregate Cap Timeframes for Counting Beneficiaries and Payments for the Proposed Alignment of the Cap Accounting Year With the
Federal Fiscal Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Beneficiaries Payments
---------------------------------------------------------------------------------------------------
Cap year Patient-by-patient Patient-by-patient
Streamlined method proportional method Streamlined method proportional method
--------------------------------------------------------------------------------------------------------------------------------------------------------
2016................................................ 9/28/15-9/27/16 11/1/15-10/31/16 11/1/15-10/31/16 11/1/15-10/31/16
Proposed 2017 (Transition Year)..................... 9/28/16-9/30/17 11/1/16-9/30/17 11/1/16-9/30/17 11/1/16-9/30/17
Proposed 2018....................................... 10/1/17-9/30/18 10/1/17-9/30/18 10/1/17-9/30/18 10/1/17-9/30/18
--------------------------------------------------------------------------------------------------------------------------------------------------------
E. Proposed Updates to the Hospice Quality Reporting Program (HQRP)
1. Background and Statutory Authority
Section 3004(c) of the Affordable Care Act amended section
1814(i)(5) of the Act to authorize a quality reporting program for
hospices. Section 1814(i)(5)(A)(i) of the Act requires that beginning
with FY 2014 and each subsequent FY, the Secretary shall reduce the
market basket update by 2 percentage points for any hospice that does
not comply with the quality data submission requirements with respect
to that FY. Depending on the amount of the annual update for a
particular year, a reduction of 2 percentage points could result in the
annual market basket update being less than 0.0 percent for a FY and
may result in payment rates that are less than payment rates for the
preceding FY. Any reduction based on failure to comply with the
reporting requirements, as required by section 1814(i)(5)(B) of the
Act, would apply only for the particular FY involved. Any such
reduction would not be cumulative or be taken into account in computing
the payment amount for subsequent FYs. Section 1814(i)(5)(C) of the Act
requires that each hospice submit data to the Secretary on quality
measures specified by the Secretary. The data must be submitted in a
form, manner, and at a time specified by the Secretary.
2. General Considerations Used for Selection of Quality Measures for
the HQRP
Any measures selected by the Secretary must be endorsed by the
consensus-based entity, which holds a contract regarding performance
measurement with the Secretary under section 1890(a) of the Act. This
contract is currently held by the National Quality Forum (NQF).
However, section 1814(i)(5)(D)(ii) of the Act provides that in the case
of a specified area or medical topic determined appropriate by the
Secretary for which a feasible and practical measure has not been
endorsed by the consensus-based entity, the Secretary may specify
measures that are not so endorsed as long as due consideration is given
to measures that have been endorsed or adopted by a consensus-based
organization identified by the Secretary. Our paramount concern is the
successful development of a Hospice Quality Reporting Program (HQRP)
that promotes the delivery of high quality healthcare services. We seek
to adopt measures for the HQRP that promote patient-centered, high
quality, and safe care. Our measure selection activities for the HQRP
take into consideration input from the Measure Applications Partnership
(MAP), convened by the NQF, as part of the established CMS pre-
rulemaking process required under section 1890A of the Act. The MAP is
a public-private partnership comprised of multi-stakeholder groups
convened by the NQF for the primary purpose of providing input to CMS
on the selection of certain categories of quality and efficiency
measures, as required by section 1890A(a)(3) of the Act. By February
1st of each year, the NQF must provide that input to CMS. Input from
the MAP is located at: (http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx. We also take into
account national priorities, such as those established by the National
Priorities Partnership at (http://www.qualityforum.org/npp/), the HHS
Strategic Plan http://www.hhs.gov/secretary/about/priorities/priorities.html), the National Strategy for Quality Improvement in
Healthcare, (http://www.ahrq.gov/workingforquality/nqs/nqs2013annlrpt.htm) and the CMS Quality Strategy (http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html). To the extent
practicable, we have sought to adopt measures endorsed by member
organizations of the National Consensus Project recommended by multi-
stakeholder organizations, and developed with the input of providers,
purchasers/payers, and other stakeholders.
3. Proposed Policy for Retention of HQRP Measures Adopted for Previous
Payment Determinations
Beginning with the FY 2018 payment determination, for the purpose
of streamlining the rulemaking process, we propose that when we adopt
measures for the HQRP beginning with a payment determination year,
these measures are automatically adopted for all subsequent years'
payment determinations, unless we propose to remove, suspend, or
replace the measures.
Quality measures may be considered for removal by CMS if:
Measure performance among hospices is so high and
unvarying that meaningful distinctions in improvements in performance
can be no longer be made;
Performance or improvement on a measure does not result in
better patient outcomes;
A measure does not align with current clinical guidelines
or practice;
A more broadly applicable measure (across settings,
populations, or conditions) for the particular topic is available;
A measure that is more proximal in time to desired patient
outcomes for the particular topic is available;
A measure that is more strongly associated with desired
patient outcomes for the particular topic is available; or
Collection or public reporting of a measure leads to
negative unintended consequences.
For any such removal, the public will be given an opportunity to
comment through the annual rulemaking process. However, if there is
reason to believe continued collection of a measure raises potential
safety concerns, we will take immediate action to remove the measure
from the HQRP and will not wait for the annual rulemaking cycle. The
measures will be promptly removed and we will immediately notify
hospices and the public of such a decision through the usual HQRP
communication channels, including listening sessions, memos, email
notification, and Web postings. In such instances, the removal of a
[[Page 25870]]
measure will be formally announced in the next annual rulemaking cycle.
CMS is not proposing to remove any measures for the FY 2017
reporting cycle. We invite public comment on our proposal that once a
quality measure is adopted, it be retained for use in the subsequent
fiscal year payment determinations unless otherwise stated.
4. Previously Adopted Quality Measures for FY 2016 and FY 2017 Payment
Determination
As stated in the CY 2013 HH PPS final rule (77 FR 67068, 67133),
CMS expanded the set of required measures to include additional
measures endorsed by NQF. We also stated that to support the
standardized collection and calculation of quality measures by CMS,
collection of the needed data elements would require a standardized
data collection instrument. In response, CMS developed and tested a
hospice patient-level item set, the HIS. Hospices are required to
submit an HIS-Admission record and an HIS-Discharge record for each
patient admission to hospice on or after July 1, 2014. In developing
the standardized HIS, we considered comments offered in response to the
CY 2013 HH PPS proposed rule (77 FR 41548, 41573). In the FY 2014
Hospice Wage Index final rule (78 FR 48257), and in compliance with
section 1814(i)(5)(C) of the Act, we finalized the specific collection
of data items that support the following six NQF endorsed measures and
one modified measure for hospice:
NQF #1617 Patients Treated with an Opioid who are Given a
Bowel Regimen,
NQF #1634 Pain Screening,
NQF #1637 Pain Assessment,
NQF #1638 Dyspnea Treatment,
NQF #1639 Dyspnea Screening,
NQF #1641 Treatment Preferences,
NQF #1647 Beliefs/Values Addressed (if desired by the
patient) (modified).
To achieve a comprehensive set of hospice quality measures
available for widespread use for quality improvement and informed
decision making, and to carry out our commitment to develop a quality
reporting program for hospices that uses standardized methods to
collect data needed to calculate quality measures, we finalized the HIS
effective July 1, 2014 (78 FR 48258). To meet the quality reporting
requirements for hospices for the FY 2016 payment determination and
each subsequent year, we require regular and ongoing electronic
submission of the HIS data for each patient admission to hospice on or
after July 1, 2014, regardless of payer or patient age (78 FR 48234,
48258). Collecting data on all patients provides CMS with the most
robust, accurate reflection of the quality of care delivered to
Medicare beneficiaries as compared with non-Medicare patients.
Therefore, to measure the quality of care delivered to Medicare
beneficiaries in the hospice setting, we collect quality data necessary
to calculate the adopted measures on all patients. We finalized in the
FY 2014 Hospice Wage Index (78 FR 48258) that hospice providers collect
data on all patients in order to ensure that all patients regardless of
payer or patient age are receiving the same care and that provider
metrics measure performance across the spectrum of patients.
Hospices are required to complete and submit an HIS-Admission and
an HIS-Discharge record for each patient admission. Hospices failing to
report quality data via the HIS in FY 2015 will have their market
basket update reduced by 2 percentage points in FY 2017 beginning in
October 1, 2016. In the FY 2015 Hospice Wage Index final rule (79 FR
50485, 50487), we finalized the proposal to codify the HIS submission
requirement at Sec. 418.312. The System of Record (SOR) Notice titled
``Hospice Item Set (HIS) System,'' SOR number 09-70-0548, was published
in the Federal Register on April 8, 2014 (79 FR 19341).
5. HQRP Quality Measures and Concepts Under Consideration for Future
Years
We are not currently proposing any new measures for FY 2017.
However, we are working with our measure development and maintenance
contractor to identify measure concepts for future implementation in
the HQRP. In identifying priority areas for future measure enhancement
and development, CMS takes into consideration input from numerous
stakeholders, including the Measures Application Partnership (MAP), the
Medicare Payment Advisory Commission (MedPAC), Technical Expert Panels,
and national priorities, such as those established by the National
Priorities Partnership, the HHS Strategic Plan, the National Strategy
for Quality Improvement in Healthcare, and the CMS Quality Strategy. In
addition, CMS takes into consideration vital feedback and input from
research published by our payment reform contractor as well as from the
Institute of Medicine (IOM) report, titled ``Dying in America,''
released in September 2014.\53\ Finally, the current HQRP measure set
is also an important consideration for future measure development
areas; future measure development areas should complement the current
HQRP measure set, which includes HIS measures and CAHPS[supreg] Hospice
Survey measures. Based on input from stakeholders, CMS has identified
several high priority concept areas for future measure development:
---------------------------------------------------------------------------
\53\ IOM (Institute of Medicine). 2014. Dying in America:
Improving quality and honoring individual preferences near the end
of life. Washington, DC: The National Academies Press.
---------------------------------------------------------------------------
Patient reported pain outcome measure that incorporates
patient and/or proxy report regarding pain management;
Claims-based measures focused on care practice patterns
including skilled visits in the last days of life, burdensome
transitions of care for patients in and out of the hospice benefit, and
rates of live discharges from hospice;
Responsiveness of hospice to patient and family care
needs;
Hospice team communication and care coordination.
These measure concepts are under development, and details regarding
measure definitions, data sources, data collection approaches, and
timeline for implementation will be communicated in future rulemaking.
CMS invites comments about these four high priority concept areas for
future measure development.
6. Form, Manner, and Timing of Quality Data Submission
a. Background
Section 1814(i)(5)(C) of the Act requires that each hospice submit
data to the Secretary on quality measures specified by the Secretary.
Such data must be submitted in a form and manner, and at a time
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act
requires that beginning with the FY 2014 and for each subsequent FY,
the Secretary shall reduce the market basket update by 2 percentage
points for any hospice that does not comply with the quality data
submission requirements with respect to that FY.
b. Proposed Policy for New Facilities To Begin Submitting Quality Data
In the FY 2015 Hospice Wage Index and Payment Rate Update final
rule (79 FR 50488) we finalized a policy stating that any hospice that
receives its CCN notification letter on or after November 1 of the
preceding year involved is excluded from any payment penalty for
quality reporting purposes for the following FY. For example, if a
hospice provider receives their CCN notification letter on November 2,
2015 they would
[[Page 25871]]
not be required to submit quality data for the current reporting period
ending December 31, 2015 (which would affect the FY 2017 APU). In this
instance, the hospice would begin with the next reporting period
beginning January 1, 2016 and all subsequent years. However, if a
hospice provider receives their CCN notification letter on October 31,
2015, they would be required to submit quality data for the current
reporting period ending December 31, 2015 (which would affect the FY
2017 APU) and all subsequent years. This requirement was codified at
Sec. 418.312.
We are proposing to modify our policies for the timing of new
providers to begin reporting to CMS. Beginning with the FY 2018 payment
determination and for each subsequent payment determination, we propose
that a new hospice be responsible for HQRP quality data reporting
beginning on the date they receive their Certification Number (CCN)
(also known as the Medicare Provider Number) notification letter from
CMS. Under this proposal, hospices would be responsible for reporting
quality data on patient admissions beginning on the date they receive
their CCN notification.
Currently, new hospices may experience a lag between Medicare
certification and receipt of their actual CCN Number. Since hospices
cannot submit data to the Quality Improvement and Evaluation System
(QIES) Assessment Submission and Processing (ASAP) system without a
valid CCN Number, CMS proposes new hospices begin collecting HIS
quality data beginning on the date they receive their CCN notification
letter by CMS. We believe this policy will provide sufficient time for
new hospices to establish appropriate collection and reporting
mechanisms to submit the required quality data to CMS. We invite public
comment on this proposal that a new hospice be required to begin
reporting quality data under HQRP beginning on the date they receive
their CCN notification letter from CMS.
c. Previously Finalized Data Submission Mechanism, Collection Timelines
and Submission Deadlines for the FY 2017 Payment Determination
In the FY 15 Hospice Wage Index final rule (79 FR 50486) we
finalized our policy requiring that, for the FY 2017 reporting
requirements, hospices must complete and submit HIS records for all
patient admissions to hospice on or after July 1, 2014. Electronic
submission is required for all HIS records. Although electronic
submission of HIS records is required, hospices do not need to have an
electronic medical record to complete or submit HIS data. In the FY 14
Hospice Wage Index (78 FR 48258) we finalized that, to complete HIS
records, providers can use either the Hospice Abstraction Reporting
Tool (HART) software, which is free to download and use, or a vendor-
designed software. HART provides an alternative option for hospice
providers to collect and maintain facility, patient, and HIS Record
information for subsequent submission to the QIES ASAP system. Once HIS
records are complete, electronic HIS files must be submitted to CMS via
the QIES ASAP system. Electronic data submission via the QIES ASAP
system is required for all HIS submissions; there are no other data
submission methods available. Hospices have 30 days from a patient
admission or discharge to submit the appropriate HIS record for that
patient through the QIES ASAP system. CMS will continue to make HIS
completion and submission software available to hospices at no cost. We
provided details on data collection and submission timing at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html.
The QIES ASAP system provides reports upon successful submission
and processing of the HIS records. The final validation report may
serve as evidence of submission. This is the same data submission
system used by nursing homes, inpatient rehabilitation facilities, home
health agencies, and long-term care hospitals for the submission of
Minimum Data Set Version 3.0 (MDS 3.0), Inpatient Rehabilitation
Facility--Patient Assessment Instrument (IRF-PAI), Outcome Assessment
Information Set (OASIS), and Long-Term Care Hospital Continuity
Assessment Record & Evaluation Data Set (LTCH CARE), respectively. We
have provided hospices with information and details about use of the
HIS through postings on the HQRP Web page, Open Door Forums,
announcements in the CMS MLN Connects Provider e-News (E-News), and
provider training.
d. Proposed Data Submission Timelines and Requirements for FY 2018
Payment Determination and Subsequent Years
Hospices are evaluated for purposes of the quality reporting
program based on whether or not they submit data, not on their
substantive performance level with respect to the required quality
measures. In order for CMS to appropriately evaluate the quality
reporting data received by hospice providers, it is essential HIS data
be received in a timely manner.
The submission date for any given HIS record is defined as the date
on which a provider submits the completed record. The submission date
is the date on which the completed record is submitted and accepted by
the QIES ASAP system. Beginning with the FY 2018 payment determination,
we propose that hospices must submit all HIS records within 30 days of
the Event Date, which is the patient's admission date for HIS-Admission
records or discharge date for HIS-Discharge records.
For HIS-Admission records, the submission date should be
no later than the admission date plus 30 calendar days. The submission
date can be equal to the admission date, or no greater than 30 days
later. The QIES ASAP system will issue a warning on the Final
Validation Report if the submission date is more than 30 days after the
patient's admission date.
For HIS-Discharge records, the submission date should be
no later than the discharge date plus 30 calendar days. The submission
date can be equal to the discharge date, or no greater than 30 days
later. The QIES ASAP system will issue a warning on the Final
Validation Report if the submission date is more than 30 days after the
patient's discharge date.
The QIES ASAP system validation edits are designed to monitor the
timeliness and ensure that providers submitted records conform to the
HIS data submission specifications. Providers are notified when timing
criteria have not been met by warnings that appear on their Final
Validation Reports. A standardized data collection approach that
coincides with timely submission of data is essential in order to
establish a robust quality reporting program and ensure the scientific
reliability of the data received. We invite comments on the proposal
that hospices must submit all HIS records within 30 days of the Event
Date, which is the patient's admission date for HIS-Admission records
or discharge date for HIS-Discharge records.
e. Proposed HQRP Data Submission and Compliance Thresholds for the FY
2018 Payment Determination and Subsequent Years
In order to accurately analyze quality reporting data received by
hospice providers, it is imperative we receive ongoing and timely
submission of all HIS-Admission and HIS-Discharge records. To date, the
timeliness criteria for submission of HIS Admission and HIS-Discharge
records has never been proposed and finalized through rulemaking
process. We believe this
[[Page 25872]]
matter should be addressed by defining a clear standard for timeliness
and compliance at this time. In response to input from our stakeholders
seeking additional specificity related to HQRP compliance affecting FY
payment determinations and, due to the importance of ensuring the
integrity of quality data submitted to CMS, we are proposing to set
specific HQRP thresholds for timeliness of submission of hospice
quality data beginning with data affecting the FY 2018 payment
determination and subsequent years.
Beginning with the FY 2018 payment determination and subsequent FY
payment determinations, we propose that all HIS records must be
submitted within 30 days of the Event Date, which is the patient's
admission date or discharge date. To coincide with this requirement, we
propose to establish an incremental threshold for compliance with this
timeliness requirement; the proposed threshold would be implemented
over a 3 year period. To be compliant with timeliness requirements, we
propose that hospices would have to submit no less than 70 percent of
their total number of HIS-Admission and HIS-Discharge records by no
later than 30 days from the Event Date for the FY 2018 APU
determination. The timeliness threshold would be set at 80 percent for
FY 2019 and at 90 percent for FY 2020 and subsequent years. The
threshold corresponds with the overall amount of HIS records received
from each provider that fall within the established 30 day submission
timeframes. Our ultimate goal is to require all hospices to achieve a
timeliness requirement compliance rate of 90 percent or more.
For example, beginning in FY 2018, hospices will have met the
timeliness requirement threshold if at the end of the reporting period
70 percent of all their HIS reporting data for the year has been
received within the 30 day submission timeframe.
To summarize, we propose to implement the timeliness threshold
requirement beginning with all HIS admission and discharge records that
occur on or after January 1, 2016, in accordance with the following
schedule.
Beginning on or after January 1, 2016 to December 31,
2016, hospices must submit at least 70 percent for all required HIS
records within the 30 day submission timeframe for the year or be
subject to a 2 percentage point reduction to their market basket update
for FY 2018.
Beginning on or after January 1, 2017 to December 31,
2017, hospices must score at least 80 percent for all HIS records
received within the 30 day submission timeframe for the year or be
subject to a 2 percentage point reduction to their market basket update
for FY 2019.
Beginning on or after January 1, 2018 to December 31,
2018, hospices must score at least 90 percent for all HIS records
received within the 30 day submission timeframe for the year or be
subject to a 2 percentage point reduction to their market basket update
for FY 2020.
We invite public comment on our proposal to implement the new data
submission and compliance threshold requirement, as described
previously, for the HQRP.
7. HQRP Submission Exception and Extension Requirements for the FY 2017
Payment Determination and Subsequent Years
In the FY 2015 Hospice Wage Index and Payment Rate Update final
rule (79 FR 50488), we finalized our proposal to allow hospices to
request and for CMS to grant exemptions/extensions with respect to the
reporting of required quality data when there are extraordinary
circumstances beyond the control of the provider. When an extension/
exception is granted, a hospice will not incur payment reduction
penalties for failure to comply with the requirements of the HQRP. For
the FY 2016 payment determination and subsequent payment
determinations, a hospice may request an extension/exception of the
requirement to submit quality data for a specified time period. In the
event that a hospice requests an extension/exception for quality
reporting purposes, the hospice would submit a written request to CMS.
In general, exceptions and extensions will not be granted for hospice
vendor issues, fatal error messages preventing record submission, or
staff error.
In the event that a hospice seeks to request an exception or
extension for quality reporting purposes, the hospice must request an
exception or extension within 30 days of the date that the
extraordinary circumstances occurred by submitting the request to CMS
via email to the HQRP mailbox at [email protected].
Exception or extension requests sent to CMS through any other channel
would not be considered as a valid request for an exception or
extension from the HQRP's reporting requirements for any payment
determination. In order to be considered, a request for an exception or
extension must contain all of the finalized requirements as outlined on
our Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospiceQuality-Reporting/index.html.
If a provider is granted an exception or extension, timeframes for
which an exception or extension is granted will be applied to the new
timeliness requirement so providers are not penalized. If a hospice is
granted an exception, we will not require that the hospice submit any
quality data for a given period of time. If we grant an extension to a
hospice, the hospice will still remain responsible for submitting
quality data collected during the timeframe in question, although we
will specify a revised deadline by which the hospice must submit this
quality data.
This process does not preclude us from granting extensions/
exceptions to hospices that have not requested them when we determine
that an extraordinary circumstance, such as an act of nature, affects
an entire region or locale. We may grant an extension/exception to a
hospice if we determine that a systemic problem with our data
collection systems directly affected the ability of the hospice to
submit data. If we make the determination to grant an extension/
exception to hospices in a region or locale, we will communicate this
decision through routine communication channels to hospices and
vendors, including, but not limited to, Open Door Forums, ENews and
notices on https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/. We propose to codify
the HQRP Submission Exception and Extension Requirements at Sec.
418.312.
8. Hospice CAHPS Participation Requirements for the 2018 APU and 2019
APU
In the FY 2015 Hospice Wage Index and Payment Rate Update final
rule (79 FR 50452), we stated that CMS would start national
implementation of the CAHPS[supreg] Hospice Survey as of January 1,
2015. We started national implementation of this survey as planned. The
CAHPS[supreg] Hospice Survey is a component of CMS' Hospice Quality
Reporting Program that emphasizes the experiences of hospice patients
and their primary caregivers listed in the hospice patients' records.
Measures from the survey will be submitted to the National Quality
Forum (NQF) for endorsement as hospice quality measures. We refer
readers to our extensive discussion of the Hospice Experience of Care
Survey in the Hospice Wage Index FY 2015 final rule for a description
of the measurements involved and their relationship to the statutory
requirement for hospice
[[Page 25873]]
quality reporting (79 FR 50450 also refer to 78 FR 48261).
a. Background and Description of the Survey
The CAHPS[supreg] Hospice Survey is the first national hospice
experience of care survey that includes standard survey administration
protocols that allow for fair comparisons across hospices.
CMS developed the CAHPS[supreg] Hospice Survey with input from many
stakeholders, including other government agencies, industry
stakeholders, consumer groups and other key individuals and
organizations involved in hospice care. The Survey was designed to
measure and assess the experiences of patients who died while receiving
hospice care as well as the experiences of their informal caregivers.
The goals of the survey are to--
Produce comparable data on patients' and caregivers'
perspectives of care that allow objective and meaningful comparisons
between hospices on domains that are important to consumers;
Create incentives for hospices to improve their quality of
care through public reporting of survey results; and
Hold hospice care providers accountable by informing the
public about the providers' quality of care.
The development process for the survey began in 2012 and included a
public request for information about publicly available measures and
important topics to measure (78 FR 5458, January 25, 2013); a review of
the existing literature on tools that measure experiences with end-of-
life care; exploratory interviews with caregivers of hospice patients;
a technical expert panel attended by survey development and hospice
care quality experts; cognitive interviews to test draft survey
content; incorporation of public responses to Federal Register notices
(78 FR 48234, August 7, 2013) and a field test conducted by CMS in
November and December 2013.
The CAHPS[supreg] Hospice Survey treats the dying patient and his
or her informal caregivers (family members or friends) as the unit of
care. The Survey seeks information from the informal caregivers of
patients who died while enrolled in hospices. Survey-eligible patients
and caregivers are identified using hospice records. Fielding timelines
give the respondent some recovery time (2 to 3 months), while
simultaneously not delaying so long that the respondent is likely to
forget details of the hospice experience. The survey focuses on topics
that are important to hospice users and for which informal caregivers
are the best source for gathering this information. Caregivers are
presented with a set of standardized questions about their own
experiences and the experiences of the patient in hospice care. During
national implementation of this survey, hospices are required to
conduct the survey to meet the Hospice Quality Reporting requirements,
but individual caregivers will respond only if they voluntarily choose
to do so. A survey Web site is the primary information resource for
hospices and vendors (www.hospicecahpssurvey.org). The CAHPS[supreg]
Hospice Survey is currently available in English, Spanish, Traditional
Chinese, and Simplified Chinese. CMS will provide additional
translations of the survey over time in response to suggestions for any
additional language translations. Requests for additional language
translations should be made to the CMS Hospice CAHPS[supreg] Project
Team at [email protected].
In general, hospice patients and their caregivers are eligible for
inclusion in the survey sample with the exception of the following
ineligible groups: primary caregivers of patients under the age of 18
at the time of death; primary caregivers of patients who died within 48
hours of admission to hospice care; patients for whom no caregiver is
listed or available, or for whom caregiver contact information is not
known; patients whose primary caregiver is a legal guardian unlikely to
be familiar with care experiences; patients for whom the primary
caregiver has a foreign (Non-US or US Territory address) home address;
patients or caregivers of patients who request that they not be
contacted (those who sign ``no publicity'' requests while under the
care of hospice or otherwise directly request not to be contacted).
Identification of patients and caregivers for exclusion will be based
on hospice administrative data. Additionally, caregivers under 18 are
excluded.
Hospices with fewer than 50 survey-eligible decedents/caregivers
during the prior calendar year are exempt from the CAHPS[supreg]
Hospice Survey data collection and reporting requirements for payment
determination. Hospices with 50 to 699 survey-eligible decedents/
caregivers in the prior year will be required to survey all cases. For
hospices with 700 or more survey-eligible decedents/caregivers in the
prior year, a sample of 700 will be drawn under an equal-probability
design. Survey-eligible decedents/caregivers are defined as that group
of decedent and caregiver pairs that meet all the criteria for
inclusion in the survey sample.
We moved forward with a model of national survey implementation,
which is similar to that of other CMS patient experience of care
surveys. Medicare-certified hospices are required to contract with a
third-party vendor that is CMS-trained and approved to administer the
survey on their behalf. A list of approved vendors can be found at this
Web site: www.hospicecahpssurvey.org. Hospices are required to contract
with independent survey vendors to ensure that the data are unbiased
and collected by an organization that is trained to collect this type
of data. It is important that survey respondents feel comfortable
sharing their experiences with an interviewer not directly involved in
providing the care. We have successfully used this mode of data
collection in other settings, including for Medicare-certified home
health agencies. The goal is to ensure that we have comparable data
across all hospices.
Consistent with many other CMS CAHPS[supreg] surveys that are
publicly reported on CMS Web sites, CMS will publicly report hospice
data when at least 12 months of data are available, so that valid
comparisons can be made across hospice providers in the United States,
to help patients, family and friends choose a hospice program for
themselves or their loved ones.
b. Participation Requirements To Meet Quality Reporting Requirements
for the FY 2018 APU
In section 3004(c) of the Affordable Care Act, the Secretary is
directed to establish quality reporting requirements for Hospice
Programs. The CAHPS[supreg] Hospice Survey is a component of the CMS
Hospice Quality Reporting Requirements for the FY 2018 APU and
subsequent years.
The CAHPS[supreg] Hospice Survey includes the measures detailed in
Table 27. The individual survey questions that comprise each measure
are listed under the measure. These measures are in the process of
being submitted to the National Quality Forum (NQF).
[[Page 25874]]
------------------------------------------------------------------------
Table 27--Hospice Experience of Care Survey Quality Measures Composite
and Constituent Items Measures
---------------------------------------------------------------------------
Hospice team communication
While your family member was in hospice care, how
often did the hospice team keep you informed about when
they would arrive to care for your family member?
While your family member was in hospice care, how
often did the hospice team explain things in a way that
was easy to understand?
How often did the hospice team listen carefully to
you when you talked with them about problems with your
family member's hospice care?
While your family member was in hospice care, how
often did the hospice team keep you informed about your
family member's condition?
While your family member was in hospice care, how
often did the hospice team listen carefully to you?
Getting timely care
While your family member was in hospice care, when
you or your family member asked for help from the hospice
team, how often did you get help as soon as you needed it?
How often did you get the help you needed from the
hospice team during evenings, weekends, or holidays?
Treating family member with respect
While your family member was in hospice care, how
often did the hospice team treat your family member with
dignity and respect?
While your family member was in hospice care, how
often did you feel that the hospice team really cared
about your family member?
Providing emotional support
While your family member was in hospice care, how
much emotional support did you get from the hospice team?
In the weeks after your family member died, how
much emotional support did you get from the hospice team?
Getting help for symptoms
Did your family member get as much help with pain
as he or she needed?
How often did your family member get the help he
or she needed for trouble breathing?
How often did your family member get the help he
or she needed for trouble with constipation?
How often did your family member get the help he
or she needed from the hospice team for feelings of
anxiety or sadness?
Getting hospice care training
Did the hospice team give you the training you
needed about what side effects to watch for from pain
medicine?
Did the hospice team give you the training you
needed about if and when to give more pain medicine to
your family member?
Did the hospice team give you the training you
needed about how to help your family member if he or she
had trouble breathing?
Did the hospice team give you the training you
needed about what to do if your family member became
restless or agitated?
------------------------------------------------------------------------
Single Item Measures
------------------------------------------------------------------------
Providing support for religious and spiritual beliefs
(Support for religious or spiritual beliefs
includes talking, praying, quiet time, or other ways of
meeting your religious or spiritual needs.) While your
family member was in hospice care, how much support for
your religious and spiritual beliefs did you get from the
hospice team?
Information continuity
While your family member was in hospice care, how
often did anyone from the hospice team give you confusing
or contradictory information about your family member's
condition or care?
Understanding the side effects of pain medication
Side effects of pain medicine include things like
sleepiness. Did any member of the hospice team discuss
side effects of pain medicine with you or your family
member?
------------------------------------------------------------------------
Global Measures
------------------------------------------------------------------------
Overall rating of hospice
Using any number from 0 to 10, where 0 is the
worst hospice care possible and 10 is the best hospice
care possible, what number would you use to rate your
family member's hospice care?
Recommend hospice
Would you recommend this hospice to your friends
and family?
------------------------------------------------------------------------
To comply with CMS's quality reporting requirements for the FY 2018
APU, hospices will be required to collect data using the CAHPS[supreg]
Hospice Survey. Hospices would be able to comply by utilizing only CMS-
approved third party vendors that are in compliance with the provisions
at Sec. 418.312(e). Ongoing monthly participation in the survey is
required January 1, 2016 through December 31, 2016 for compliance with
the FY 2018 APU.
Approved CAHPS[supreg] Hospice Survey vendors will submit data on
the hospice's behalf to the CAHPS[supreg] Hospice Survey Data Center.
The deadlines for data submission occur quarterly and are shown in
Table 28 below. Deadlines are the second Wednesday of the submission
months, which are August, November, February, and May. Deadlines are
final; no late submissions will be accepted. However, in the event of
extraordinary circumstances beyond the control of the provider, the
provider will be able to request an exemption as previously noted in
the Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2016 and Beyond section.
Hospice providers are responsible for making sure that their vendors
are submitting data in a timely manner.
[[Page 25875]]
Table 28--CAHPS[supreg] Hospice Survey Data Submission Dates FY2017 APU,
FY2018 APU, and FY2019 APU
------------------------------------------------------------------------
Sample months (that is, month of Quarterly data submission
death) \1\ deadlines \2\
------------------------------------------------------------------------
FY2017 APU
------------------------------------------------------------------------
Dry Run January-March 2015 (Q1)..... August 12, 2015.
April-June 2015 (Q2)................ November 11, 2015.\3\
July-September 2015 (Q3)............ February 10, 2016.
October-December 2015 (Q4).......... May 11, 2016.
------------------------------------------------------------------------
FY2018 APU
------------------------------------------------------------------------
January-March 2016 (Q1)............. August 10, 2016.
April-June 2016 (Q2)................ November 9, 2016.
July-September 2016 (Q3)............ February 8, 2017.
October-December 2016 (Q4).......... May 10, 2017.
------------------------------------------------------------------------
FY2019 APU
------------------------------------------------------------------------
January-March 2017 (Q1)............. August 9, 2017.
April-June 2017 (Q2)................ November 8, 2017.
July-September 2017 (Q3)............ February, 14, 2018.
October-December 2017 (Q4).......... May 9, 2018.
------------------------------------------------------------------------
\1\ Data collection for each sample month initiates two months following
the month of patient death (for example, in April for deaths occurring
in January).
\2\ Data submission deadlines are the second Wednesday of the submission
month.
\2\ Corrected from the Final Rule published August 22, 2014, 79 FR
50493.
In the FY 2014 Hospice Wage Index and Rate Update final rule, we
stated that we would exempt very small hospices from CAHPS[supreg]
Hospice Survey requirements. We propose to continue that exemption:
Hospices that have fewer than 50 survey-eligible decedents/caregivers
in the period from January 1, 2015 through December 31, 2015 are exempt
from CAHPS[supreg] Hospice Survey data collection and reporting
requirements for the 2018 APU. To qualify for the survey exemption for
the FY 2018 APU, hospices must submit an exemption request form. This
form will be available on the CAHPS[supreg] Hospice Survey Web site
http://www.hospicecahpssurvey.org. Hospices are required to submit to
CMS their total unique patient count for the period of January 1, 2015
through December 31, 2015. The due date for submitting the exemption
request form for the FY 2018 APU is August 10, 2016.
c. Participation Requirements To Meet Quality Reporting Requirements
for the FY 2019 APU
To meet participation requirements for the FY 2019 APU, we proposed
that hospices collect data on an ongoing monthly basis from January
2017 through December 2017 (inclusive). Data submission deadlines for
the 2019 APU will be announced in future rulemaking.
Hospices that have fewer than 50 survey-eligible decedents/
caregivers in the period from January 1, 2016 through December 31, 2016
are exempt from CAHPS[supreg] Hospice Survey data collection and
reporting requirements for the FY 2019 payment determination. To
qualify, hospices must submit an exemption request form. This form will
be available in first quarter 2017 on the CAHPS[supreg] Hospice Survey
Web site http://www.hospicecahpssurvey.org.
Hospices are required to submit to CMS their total unique patient
count for the period of January 1, 2016 through December 31, 2016. The
due date for submitting the exemption request form for the FY 2018 APU
is August 10, 2016.
d. Annual Payment Update
The Affordable Care Act requires that beginning with FY 2014 and
each subsequent fiscal year, the Secretary shall reduce the market
basket update by 2 percentage points for any hospice that does not
comply with the quality data submission requirements with respect to
that fiscal year, unless covered by specific exemptions. Any such
reduction will not be cumulative and will not be taken into account in
computing the payment amount for subsequent fiscal years. In the FY
2015 Hospice Wage Index we added the CAHPS[supreg] Hospice Survey to
the Hospice Quality Reporting Program requirements for the FY 2017
payment determination and determinations for subsequent years.
To meet the HQRP requirements for the FY 2018 payment
determination, hospices would collect survey data on a monthly basis
for the months of January 1, 2016 through December 31, 2016 to qualify
for the full APU.
To meet the HQRP requirements for the FY 2019 payment
determination, hospices would collect survey data on a monthly basis
for the months of January 1, 2017 through December 31, 2017 to qualify
for the full APU.
e. CAHPS[supreg] Hospice Survey Oversight Activities
We propose to continue a requirement that vendors and hospice
providers participate in CAHPS[supreg] Hospice Survey oversight
activities to ensure compliance with Hospice CAHPS[supreg] technical
specifications and survey requirements. The purpose of the oversight
activities is to ensure that hospices and approved survey vendors
follow the CAHPS[supreg] Hospice Survey technical specifications and
thereby ensure the comparability of CAHPS[supreg] Hospice Survey data
across hospices.
We propose that the reconsiderations and appeals process for
hospices failing to meet the Hospice CAHPS[supreg] data collection
requirements will be part of the Reconsideration and Appeals process
already developed for the Hospice Quality Reporting program. We
encourage hospices interested in learning more about the CAHPS[supreg]
Hospice Survey to visit the CAHPS[supreg] Hospice Survey Web site:
http://www.hospicecahpssurvey.org.
[[Page 25876]]
9. HQRP Reconsideration and Appeals Procedures for the FY 2016 Payment
Determination and Subsequent Years
In the FY 2015 Hospice Wage Index and Payment Rate Update final
rule (79 FR 50496), we notified hospice providers on how to seek
reconsideration if they received a noncompliance decision for the FY
2016 payment determination and subsequent years. A hospice may request
reconsideration of a decision by CMS that the hospice has not met the
requirements of the Hospice Quality Reporting Program for a particular
period. Reporting compliance is determined by successfully fulfilling
both the Hospice CAHPS[supreg] Survey requirements and the HIS data
submission requirements.
We wish to clarify that any hospice that wishes to submit a
reconsideration request must do so by submitting an email to CMS
containing all of the requirements listed on the HQRP Web site at
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Reconsideration-Requests.html.
Electronic email sent to [email protected] is the only
form of submission that will be accepted. Any reconsideration requests
received through any other channel including U.S. postal service or
phone will not be considered as a valid reconsideration request. We
codified this process at Sec. 418.312. In addition, we codified at
Sec. 418.306 that beginning with FY 2014 and each subsequent FY, the
Secretary shall reduce the market basket update by 2 percentage points
for any hospice that does not comply with the quality data submission
requirements with respect to that FY and solicited comments on all of
the proposals and the associated regulations text at Sec. 418.312 and
in Sec. 418.306 in section VI.
In the past, only hospices found to be non-compliant with the
reporting requirements set forth for a given payment determination
received a notification of this finding along with instructions for
requesting reconsideration in the form of a certified United States
Postal Service (USPS) letter. In an effort to communicate as quickly,
efficiently, and broadly as possible with hospices regarding annual
compliance, we are proposing additions to our communications method
regarding annual notification of reporting compliance in the HQRP. In
addition to sending a letter via regular USPS mail, beginning with the
FY 2017 payment determination and for subsequent fiscal years, we
propose to use the Quality Improvement and Evaluation System (QIES)
National System for Certification and Survey Provider Enhanced Reports
(CASPER) Reporting as an additional mechanism to communicate to
hospices regarding their compliance with the reporting requirements for
the given reporting cycle. The electronic APU letters would be accessed
using the CASPER Reporting Application. Requesting access to the CMS
systems is performed in two steps. Details are provided on the QIES
Technical Support Office Web site (direct link), https://www.qtso.com/hospice.html. Once successfully registered, access the CMS QIES to
Success Welcome page https://web.qiesnet.org/qiestosuccess/index.html
and select the ``CASPER Reporting'' link. Additional information about
how to access the letters will be provided prior to the release of the
letters.
We propose to disseminate communications regarding the availability
of hospice compliance reports in CASPER files through routine channels
to hospices and vendors, including, but not limited to issuing memos,
emails, Medicare Learning Network (MLN) announcements, and notices on
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Reconsideration-Requests.html.
We further propose to publish a list of hospices who successfully
meet the reporting requirements for the applicable payment
determination on the HQRP Web site http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting.html. We propose updating the list after reconsideration
requests are processed on an annual basis.
We invite comment on the proposals to add CASPER Reporting as an
additional communication mechanism for the dissemination of compliance
notifications and to publish a list of compliant hospices on the HQRP
Web site.
10. Public Display of Quality Measures and Other Hospice Data for the
HQRP
Under section 1814(i)(5)(E) of the Act, the Secretary is required
to establish procedures for making any quality data submitted by
hospices available to the public. The procedures must ensure that a
hospice would have the opportunity to review the data regarding the
hospice's respective program before it is made public.
We recognize that public reporting of quality data is a vital
component of a robust quality reporting program and are fully committed
to developing the necessary systems for public reporting of hospice
quality data. We also recognize that it is essential that the data made
available to the public be meaningful and that comparing performance
between hospices requires that measures be constructed from data
collected in a standardized and uniform manner. Hospices have been
required to use a standardized data collection approach (HIS) since
July 1, 2014. Data from July 1, 2014 onward is currently being used to
establish the scientific soundness of the quality measures prior to the
onset of public reporting of the seven quality measures implemented in
the HQRP. We believe it is critical to establish the reliability and
validity of the quality measures prior to public reporting in order to
demonstrate the ability of the quality measures to distinguish the
quality of services provided. To establish reliability and validity of
the quality measures, at least four quarters of data will be analyzed.
Typically, the first one or two quarters of data reflect the learning
curve of the facilities as they adopt standardized data collection
procedures; these data often are not used to establish reliability and
validity. We began data collection in CY 2014; the data from CY 2014
for Quarter 3 (Q3) will not be used for assessing validity and
reliability of the quality measures. We are analyzing data collected by
hospices during Quarter 4 (Q4) CY 2014 and Q1-Q3 CY 2015. Decisions
about whether to report some or all of the quality measures publicly
will be based on the findings of analysis of the CY 2015 data.
In addition, the Affordable Care Act requires that reporting be
made public on a CMS Web site and that providers have an opportunity to
review their data prior to public reporting. CMS will develop the
infrastructure for public reporting, and provide hospices an
opportunity to review their quality measure data prior to publicly
reporting information about the quality of care provided by ``Medicare-
certified'' hospice agencies throughout the nation. CMS also plans to
make available provider-level feedback reports in the Certification and
Survey Provider Enhances Reports (CASPER) system. These provider-level
feedback reports or ``quality reports'' will be separate from public
reporting and will be for provider viewing only, for the purposes of
internal provider quality improvement. As is common in other quality
reporting programs, quality reports would contain feedback on facility-
level performance on quality metrics, as well as
[[Page 25877]]
benchmarks and thresholds. For the CY 2014 Reporting Cycle, there were
no quality reports available in CASPER; however, CMS anticipates that
provider-level quality reports will begin to be available sometime in
CY 2015. CMS anticipates that providers would use the quality reports
as part of their Quality Assessment and Performance Improvement (QAPI)
efforts.
As part of our ongoing efforts to make healthcare more transparent,
affordable, and accountable, the HQRP is prepared to post hospice data
on a public data set, the Medicare Provider Utilization and Payment
Data: Physician and Other Supplier Public Use File located at https://data.cms.hhs.gov. This site includes information on services and
procedures provided to Medicare beneficiaries by physicians and other
healthcare professionals and serves as a helpful resource to the
healthcare community. A timeline for posting hospice data on a public
data set has not been determined by CMS. Should a timeline become
available prior to the next annual rulemaking cycle, details would be
announced via regular HQRP communication channels, including listening
sessions, memos, email notification, and Web postings.
Furthermore, to meet the requirement for making such data public,
we will develop a CMS Compare Web site for hospice, which will list
hospice providers geographically. Consumers can search for all Medicare
approved hospice providers that serve their city or zip code (which
would include the quality measures and CAHPS[supreg] Hospice Survey
results) and then find the agencies offering the types of services they
need. Like other CMS Compare Web sites, the Hospice Compare Web site
will feature a quality rating system that gives each hospice a rating
of between one (1) and five (5) stars. Hospices will have
prepublication access to their own agency's quality data, which enables
each agency to know how it is performing before public posting of data
on the Compare Web site. Decisions regarding how the rating system will
determine a providers star rating and methods used for calculations, as
well as a proposed timeline for implementation will be announced via
regular HQRP communication channels, including listening sessions,
memos, email notification, provider association calls, Open Door
Forums, and Web postings. We will announce the timeline for public
reporting of quality measure data in future rulemaking.
F. Clarification Regarding Diagnosis Reporting on Hospice Claims
1. Background
During the grass roots movement of hospice growth in the United
States in the 1970s, healthcare providers recognized the need for a
care delivery model to address the needs of those individuals who no
longer wanted to seek out the curative care for advancing illnesses and
injuries. In the early stages of development, hospice leaders worked
with key legislative leaders to develop a system to reimburse hospice
care in the United States.\54\ However, it was evident that before
governmental reimbursement could occur, data had to be collected and
analyzed to demonstrate what hospices actually provided and what costs
were involved in rendering hospice care. The Health Care Financing
Administration (HCFA)--now known as the Centers for Medicare & Medicaid
Services (CMS)--conducted a demonstration that included 26 hospices
located throughout the country to study the effect of Medicare-
reimbursed hospice care. The results of this demonstration, as well as
those sponsored by the private health insurance sector and private
foundations, along with the testimony of multiple hospice industry
leaders, legislators, and hospice families, helped to form the
structure of the Medicare hospice benefit. Stakeholders agreed that a
Medicare hospice benefit needed to be structured to promote cost
control and appropriate service provision, while discouraging providers
from entering the hospice market with the intent of maximizing
reimbursement from Medicare.
---------------------------------------------------------------------------
\54\ Connor, S. (2007). Development of Hospice and Palliative
Care in the United States. OMEGA. 56 (1); 89-99.
---------------------------------------------------------------------------
Both the Congress and the hospice industry wanted the Medicare
hospice benefit to provide a coordinated range of services to ensure
that terminally ill individuals would have access to comprehensive care
aimed at addressing their physical, emotional, psychosocial and
spiritual needs as they approached the end of life. As stated in the
1983 hospice final rule, and reiterated throughout hospice rules since
implementation of the benefit, it is our general view that the waiver
required by the law is a broad one and that hospices are required to
provide virtually all the care that is needed by terminally ill
patients (48 FR 56010). Therefore, hospices are to provide pain and
symptom management, as an alternative to the curative model of care,
focused on the ``total person'' as opposed to individual disease or
injury states. The goal of hospice care is to help terminally ill
individuals continue life with minimal disruption to normal activities
while remaining primarily in the home environment. We continue to
support the philosophy of holistic, comprehensive, virtually all-
inclusive hospice care and seek to protect beneficiary access and
coverage under the Medicare hospice benefit.
2. Current Discussions About Hospice Vulnerabilities
The Institute of Medicine (IOM) recently released the report, Dying
in America: Improving Quality and Honoring Individual Preferences Near
the End of Life. This report discussed vulnerabilities in the current
health care system, especially as it relates to those who are
approaching the end of life, and stated that one of the largest
barriers in providing efficient, quality end-of-life care is the lack
of coordination and communication among different components of the
health care system.\55\ The report states that better coordination of
care is essential in improving patient outcomes and that end-of-life
care should be individualized based on patient values, goals, needs,
and informed preferences with a recognition that individual service
needs and intensity will change over time.\56\
---------------------------------------------------------------------------
\55\ Institute of Medicine (IOM), ``Dying in America: Improving
Quality and Honoring Individual Preferences Near End-of-Life,''
2014, p.5-10.
\56\ Institute of Medicine (IOM), ``Dying in America: Improving
Quality and Honoring Individual Preferences Near End-of-Life,''
2014, p.5-52.
---------------------------------------------------------------------------
Recent news articles on hospice care highlight the same concerns
expressed in the IOM report regarding vulnerabilities in the current
health care system. While recent news articles agree that hospice care
is a valuable and needed service for patients who are near death, the
articles identified issues with hospice quality of care, the lack of
services provided, conflicts of interest, and the current Medicare
payment structure that may incentivize the provision of fewer
services.\57\ Overall, the IOM report and recent news articles raise
concerns regarding fragmented and uncoordinated care for those who are
terminally ill.
---------------------------------------------------------------------------
\57\ http://www.washingtonpost.com/sf/business/collection/business-of-dying/
---------------------------------------------------------------------------
As mentioned in previous rules, and in section III.A of this
proposed rule, there is data suggesting a significant amount of
``unbundling'' is occurring for services that should be included in the
hospice bundled payment. As
[[Page 25878]]
discussed previously above, our data analysis shows that $1.3 billion
is being paid outside of the Medicare hospice benefit for those under
an active hospice election. With such a significant amount of services
being provided outside of the Medicare hospice benefit, it raises
questions whether hospices are providing full disclosure of the nature
of hospice care, which focuses on improving quality of life as one is
approaching the end of life while eliminating the need for unnecessary,
futile and possibly harmful diagnostics, treatments, and therapies.
Additionally, we have received anecdotal reports from non-hospice
providers who have rendered care and services to hospice beneficiaries
in which the non-hospice provider states that the care given was
related to the terminal prognosis of the individual. These reports go
on to say that they have contacted hospices to coordinate the care of
the hospice beneficiary only to be told by those hospices that they
disagreed with the non-hospice providers' clinical judgment that the
care was related to the terminal prognosis. We have been told that
hospices are refusing to reimburse the non-hospice provider for care
related to the terminal prognosis. These non-hospice providers also
informed us that the hospices told them to code the claim with a
different diagnosis or to code condition code 07 (treatment of Non-
terminal Condition for Hospice) or the modifier ``GW'' (service not
related to the hospice patient's terminal condition) on their claims to
ensure that the non-hospice provider would consequently get paid
through Medicare. These non-hospice providers stated that they
disagreed with this practice, and considered it fraudulent. As such,
they were unable to be reimbursed by the hospice or by Medicare for
services provided that they felt were the responsibility of hospice. We
have also received anecdotal reports from hospice beneficiaries and
their families that they have been told by the hospice to revoke their
hospice election to receive high-cost services that should be covered
by the hospice, such as palliative chemotherapy and radiation.
Given the legislative history, the statements provided by hospices
during the development of the benefit, and anecdotal reports from non-
hospice providers and hospice beneficiaries, we are concerned that some
hospices are making determinations of hospice coverage based solely on
cost and reimbursement as opposed to being based on patient-centered
needs, preferences and goals for those approaching the end of life. We
believe this to be counter to the holistic, comprehensive, and
coordinated hospice care model promoted during the development of the
Medicare hospice benefit.\58\ It was very clear throughout the
development, and years after the implementation, of the Medicare
hospice benefit that hospices were expected to make good on their
promise to do a better job in the provision and coordination of care
than conventional Medicare services for those who were at the end of
life.\59\ However, if hospices are not making good on that promise, it
results in increased burden on hospice beneficiaries and their
families--both clinically and financially--and is not in keeping with
the intent of the Medicare hospice benefit as originally developed and
implemented in 1983.
---------------------------------------------------------------------------
\58\ ``Background Materials on Medicare Hospice Benefit
Including Description of Proposed Implementing Regulations,''
September 9, 1983. Committee on Finance, United States Senate, S.
Prt. 98-88, p. 1.
\59\ Hoyer, T. (1998). A History of the Medicare Hospice
Benefit. The Hospice Journal, 13(1-2), 61-69.
---------------------------------------------------------------------------
3. Medicare Hospice Eligibility Requirements
The Medicare hospice regulations at Sec. 418.25(b) state that in
reaching a decision to certify that a patient is terminally ill,
meaning that the patient has a medical prognosis of a life expectancy
of 6 months or less, the certifying physician(s) must consider at least
the following information:
Diagnosis of the terminal condition of the patient.
Other health conditions, whether related or unrelated to
the terminal condition.
Current clinically relevant information supporting all
diagnoses.
Eligibility for the Medicare hospice benefit has always been based
on the prognosis of the individual. As we have mentioned in previous
rules, prognosis is not necessarily established through just a single
diagnosis or even multiple diagnoses; rather, it is based on the
totality of the individual and everything that affects their life
expectancy. In the FY 2015 Hospice Payment Rate Update final rule (79
FR 50471), we reminded providers that there are multiple public sources
available to assist in determining whether a patient meets Medicare
hospice prognosis eligibility criteria (that is, industry-specific
clinical and functional assessment tools and information on MAC Web
sites, including Local Coverage Determinations (LCDs)). We have
mentioned that there are prognostication tools available for hospices
to assist in thoughtful evaluation of Medicare beneficiaries for
determining eligibility for the Medicare hospice benefit. We expect
hospice providers to use the full range of tools available, including
guidelines, comprehensive assessments, and the complete medical record,
as necessary, to make responsible and thoughtful clinical
determinations regarding prognosis eligibility.
As mentioned earlier in this section, the hospice industry has come
under increased media scrutiny, much of it related to hospices
enrolling patients who may not be eligible for the benefit because they
are not terminally ill and enrolling patients with certain diagnoses
that typically have a longer length of stay, mainly non-cancer
diagnoses. In the December 26, 2013 Washington Post article, ``Hospice
firms draining billions from Medicare'', the author discusses the
incentives for hospices to recruit patients who are not yet terminally
ill or not yet ready to elect the hospice benefit. This article also
goes on to describe allegations from former hospice employees who say
that some hospices knowingly admitted patients who were not declining
in health.\60\ To address some of these noted hospice vulnerabilities,
the recent IMPACT Act legislation, as summarized in Section II.D.8. of
this proposed rule, requires increased hospice program oversight
through more frequent hospice surveys and medical review efforts. All
of these efforts seek to protect the Medicare hospice beneficiaries, as
well as, the integrity of the Medicare hospice benefit.
---------------------------------------------------------------------------
\60\ http://www.washingtonpost.com/business/economy/medicare-rules-create-a-booming-business-in-hospice-care-for-people-who-arent-dying/2013/12/26/4ff75bbe-68c9-11e3-ae56-22de072140a2_story.html.
---------------------------------------------------------------------------
4. Assessment of Conditions and Comorbidities Required by Regulation
We have recognized throughout the federal regulations at part 418
that the total person is to be assessed, including acute and chronic
conditions, as well as, controlled and uncontrolled conditions, and
comorbidities, in order to determine an individual's terminal
prognosis. We have also been clear that the original intent of the
Medicare hospice benefit is to provide comprehensive, integrated and
holistic care for those who have a terminal prognosis. While hospices
are responsible for the palliation and management of the terminal
illness and related conditions, in the 1983 hospice proposed rule (48
FR 38147) we stated that upon hospice election, the individual waives
payment for certain other benefits except in ``exceptional and unusual
circumstances.'' In that
[[Page 25879]]
proposed rule, we did not specify these ``exceptional and unusual
circumstances'' because we did not yet know what specific types of
circumstances would warrant the use of this exception and invited
comments on this point. In the 1983 hospice final rule (48 FR 56010
through 56011), we stated that we did not receive any suggestions for
identifying exceptional and unusual circumstances that warranted the
inclusion of a specific provision in the regulations to accommodate
them. We stated this because most of the comments that were made
attempted to suggest this exception as a means of routinely providing
non-hospice Medicare financing for the expense of costly services
needed by hospice patients and we do not view this as an appropriate
interpretation of the law (48 FR 56011). We reiterated that we believe
that the unique physical condition of each terminally ill individual
makes it necessary for these decisions to be made on a case by case
basis and that it is our general rule that the waiver required by law
is a broad one.
Since the implementation of the Medicare hospice benefit, there
have been many questions and requests for CMS to provide those
``exceptional and unusual'' circumstances for which a condition would
be unrelated to the prognosis of the terminally ill individual. We
continue to state that those circumstances would be ``exceptional and
unusual'' and that hospices continue to be required to provide
virtually all the care that is needed by terminally ill patients. To
respond to the many requests for greater clarification, in the Medicare
Program; FY 2015 Payment Rate Update proposed rule (79 FR 26554 through
26555), we solicited comments on definitions we provided for ``terminal
illness'' and ``related conditions.'' Based on comments received in
response to those definitions and from comments received in prior
year's proposed rules, it appears that there continues to be widely
varying interpretation as to what constitutes ``terminal illness'' and
``related conditions'' and hence the services that should be provided
and covered by hospices. Similar to the 1983 hospice final rule, some
commenters appear to have a very broad interpretation stating that all
conditions are related to the terminal prognosis. Other commenters have
a very narrow interpretation as to what illnesses and conditions would
be and would not be the responsibility of hospice, and felt that those
conditions are limited to a single diagnosis. Additionally, some
comments previously received stated that longstanding, preexisting,
chronic, stable and controlled conditions and disease states as well as
comorbidities, should not be considered related to a patient's terminal
illness or related conditions. Some commenters went on to say that not
all pain and symptoms are related to a patient's terminal prognosis.
Many commenters stated that determining ``related conditions'' was
often very difficult, while others reported that it wasn't difficult at
all. Many commenters felt that the management and maintenance of
comorbidities is not the responsibility of hospice as they felt that
these comorbidities are not related to the reason why an individual is
terminally ill. These commenters believed that these types of
conditions should not be included in the bundle of services covered
under the Medicare hospice benefit. As we have previously stated in
response to those comments, we believe these conditions are included in
the bundle of hospice services as hospices are required to provide
reasonable and necessary services for both palliation and management of
all conditions that contribute to a terminal prognosis. Conversely,
several commenters were in agreement that all medical problems will
affect a person's prognosis and will relate, in some way, to the
disease that will ultimately end that person's life.
Defined at Sec. 418.3, ``terminally ill'' means that the
individual has a medical prognosis that his or her life expectancy is 6
months or less if the illness runs its normal course. The original
implementing regulations of the Medicare hospice benefit, beginning
with the 1983 hospice propose and final rules (48 FR 318146 and 48 FR
56008), articulate a set of requirements that do not delineate between
preexisting, chronic, controlled or comorbid conditions. The presence
of comorbidities is recognized as an important factor contributing to
the overall status of an individual and should be considered when
determining terminal prognosis. Mental health comorbidities must also
be considered as it is not uncommon for terminally ill individuals to
have underlying mental health conditions that could contribute to their
prognosis and/or affect the plan of care. Health care researchers agree
the importance of comorbidity is clear, due to its high prevalence in
older populations and its impact on health and health care.\61\ It is
also well-documented that comorbidities affect overall general health,
treatment choice, prognosis, and is a predictor of poor survival.\62\ A
study of U.S. hospice patients also showed that hospice patients with
higher comorbidity index scores were more likely to--
---------------------------------------------------------------------------
\61\ Gijsen, R., Hoeymans, N., Schellevis, F., Ruwaard,
Satariano, W., van den Bos, G., (2001). Causes and consequences of
comorbidity: A review. Journal of Clinical Epidemiology, 54(2001),
661.
\62\ Yancik, R., Ganz, P, Varricchio, C., Conley, B. (2001).
Perspectives on Comorbidity and Cancer in Older Patients: Approaches
to Expand the Knowledge Base. American Society of Clinical Oncology.
PAGE #.
Repetto, L., Comandini, D., Mammoliti, S. (2001). Life
expectancy, comorbidity and quality of life: The treatment equation
in the older cancer patients. Critical Reviews in Oncology/
Hematology, 37(2001), 148.
Escarrabill, J., Cataluna, J., Hernandez, C., Servera, E.
(2009). Recommendations for End-of-Life Care in Patients with
Chronic Obstructive Pulmonary Disease. Archivos de Bronconeumologia,
45(6), 297-303.
---------------------------------------------------------------------------
Be admitted to the ER and hospital;
Die in the hospital;
Be discharged from hospice.\63\
---------------------------------------------------------------------------
\63\ Legler et al. (2011). The effect of comorbidity burden on
health care utilization for patients with cancer using hospice.
Journal of Palliative Care Medicine. 14(6), 751-756.
---------------------------------------------------------------------------
It is not an uncommon clinical practice for some clinicians to stop
drugs for comorbid conditions arbitrarily because the person has a
progressive life-limiting illness; however, withdrawing long term drugs
from comorbidities without considering the natural course of the
illness can lead to serious problems, such as rebound hypertension,
tachycardia, depression and death.\64\ It is imperative for hospice
patients with comorbidities to have careful management and for
clinicians to consider both the physical and psychological effects of
treatment.\65\
---------------------------------------------------------------------------
\64\ Stevenson, J., Abernethy, A., Miller, C, Currow, D. (2004).
Managing comorbidities in patients at the end of life. British
Medical Journal. 324(2004), 909-912.
\65\ Stevenson, J., Abernethy, A., Miller, C, Currow, D. (2004).
Managing comorbidities in patients at the end of life. British
Medical Journal. 324(2004), 909-912.
---------------------------------------------------------------------------
The National Hospice and Palliative Care Organization (NHPCO)
recognizes the importance of comorbidities. They define ``comorbidity''
as known factors or pathological disease impacting on the primary
health problem and generally attributed to contributing to increased
risk for poor health status outcomes \66\ This aligns with the Medicare
hospice benefit requirements in which the physical, psychosocial,
emotional and spiritual needs of the individual and his or her family
must be assessed to develop the hospice plan of care. The
individualized plan of care is developed and refined, as necessary,
through the course of an individual's hospice election and is based on
the initial and ongoing comprehensive assessments.
[[Page 25880]]
Our regulations at Sec. 418.54(c) require that the comprehensive
assessment must take into consideration the following factors:
---------------------------------------------------------------------------
\66\ National Hospice and Palliative Care Organization. (2010).
Standards of Practice for Hospice Programs.
---------------------------------------------------------------------------
The nature and condition causing admission (including the
presence or lack of objective data and subjective complaints).
Complications and risk factors that affect care planning.
Functional status, including the patient's ability to
understand and participate in his or her own care.
Imminence of death.
Severity of symptoms.
Drug profile. A review of all of the patient's
prescription and over-the-counter drugs, herbal remedies and other
alternative treatments that could affect drug therapy.
Bereavement. An initial bereavement assessment of the
needs of the patient's family and other individuals focusing on the
social, spiritual, and cultural factors that may impact their ability
to cope with the patient's death. Information gathered from the initial
bereavement assessment must be incorporated into the plan of care and
considered in the bereavement plan of care.
The need for referrals and further evaluation by
appropriate health professionals.
The hospice CoPs at Sec. 418.56(c) require that the hospice plan
of care reflect patient and family goals and have measurable outcomes.
Furthermore, the plan of care is a dynamic and fluid document that will
change as the individual's condition changes throughout the course of a
hospice election. A comprehensive, holistic, integrated and coordinated
approach to service delivery is the hallmark of hospice care and a
valued service for Medicare beneficiaries and families as the
individual approaches the end-of-life. We believe that many hospices
practice this comprehensive approach as they recognize that it is the
hospices' responsibility to provide all medical, emotional,
psychosocial and spiritual services for all component conditions of the
terminal prognosis along the continuum of care.
5. Clarification Regarding Diagnosis Reporting on Hospice Claims
International Classification of Diseases, Tenth Revision, Clinical
Modification (ICD-10-CM) Coding Guidelines state the following
regarding the selection of the principal diagnosis: The principal
diagnosis is defined in the Uniform Hospital Discharge Data Set (UHDDS)
as that condition established after study to be chiefly responsible for
occasioning the admission of the patient to the hospital for care. In
the case of selection of a principal diagnosis for hospice care, this
would mean the diagnosis most contributory to the terminal prognosis of
the individual. In the instance where two or more diagnoses equally
meet the criteria for principal diagnosis, ICD-10-CM coding guidelines
do not provide sequencing direction, and thus, any one of the diagnoses
may be sequenced first, meaning to report all of those diagnoses
meeting the criteria as a principal diagnosis. Per ICD-10-CM Coding
Guidelines, for diagnosis reporting purposes, the definition for
``other diagnoses'' is interpreted as additional conditions that affect
patient care in terms of requiring:
Clinical evaluation; or
therapeutic treatment; or
diagnostic procedures; or
extended length of hospital stay; or
increased nursing care and/or monitoring.
The UHDDS item #11-b defines Other Diagnoses as all conditions that
coexist at the time of admission, that develop subsequently, or that
affect the treatment received and/or the length of stay. ICD-10-CM
coding guidelines are clear that all diagnoses affecting the management
and treatment of the individual within the healthcare setting are
requirement to be reported. This has been longstanding existing policy.
Adherence to coding guidelines when assigning ICD-9-CM and ICD-10-CM
diagnosis and procedure codes is required under the Health Insurance
Portability and Accountability Act (HIPAA) as well as our regulations
at 45 CFR 162.1002.
However, though established coding guidelines are required, it does
not appear that all hospices are coding on hospice claims per these
guidelines. In 2010, over 77 percent of hospice claims reported only
one diagnosis. Previous rules have discussed requirements for hospice
diagnosis reporting on claims and the importance of complete and
accurate coding. Preliminary analysis of FY 2014 claims data
demonstrates that hospice diagnosis coding is improving; however,
challenges remain. Analysis of FY 2014 claims data indicates that 49
percent of hospice claims listed only one diagnosis.\67\ We conducted
additional analysis on instances where only one diagnosis was reported
on the FY 2014 hospice claim and found that 50 percent of these
beneficiaries had, on average, eight or more chronic conditions and 75
percent had, on average, five or more chronic conditions.\68\ These
chronic, comorbid conditions include: Hypertension, anemia, congestive
heart failure, chronic obstructive pulmonary disease, ischemic heart
disease, depression, diabetes and atrial fibrillation, to name a few.
---------------------------------------------------------------------------
\67\ Preliminary FY 2014 hospice claims data from the Chronic
Conditions Data Warehouse (CCW), accessed on January 13, 2015.
\68\ Preliminary FY 2014 hospice claims data from the Chronic
Conditions Data Warehouse (CCW), accessed on January 21, 2015.
---------------------------------------------------------------------------
In the Medicare Program; Hospice Wage Index for Fiscal Year 2013
Notice (77 FR 44248) we stated that hospices should report on hospice
claims all coexisting or additional diagnoses that are related to the
terminal illness; they should not report coexisting or additional
diagnoses that are unrelated to the terminal illness, even though
coding guidelines required the reporting of all diagnoses that affect
patient assessment and planning. However, as discussed earlier in this
section, there is widely varying interpretation as to what factors
influence the terminal prognosis of the individual (that is, what
conditions render the individual terminally ill and which conditions
are related). Furthermore, based on the numerous comments received in
previous rulemaking, and anecdotal reports from hospices, hospice
beneficiaries, and non-hospice providers discussed above, we are
concerned that hospices may not be conducting a comprehensive
assessment nor updating the plan of care as articulated by the CoPs to
recognize the conditions that affect an individual's terminal
prognosis.
Therefore, we are clarifying that hospices will report all
diagnoses identified in the initial and comprehensive assessments on
hospice claims, whether related or unrelated to the terminal prognosis
of the individual. This is in keeping with the requirements of
determining whether an individual is terminally ill. This would also
include the reporting of any mental health disorders and conditions
that would affect the plan of care as hospices are to assess and
provide care for identified psychosocial and emotional needs, as well
as, for the physical and spiritual needs. Our regulations at Sec.
418.25(b) state, ``in reaching a decision to certify that the patient
is terminally ill, the hospice medical director must consider at least
the following information:
Diagnosis of the terminal condition of the patient.
Other health conditions, whether related or unrelated to
the terminal condition.
Current clinically relevant information supporting all
diagnoses.
[[Page 25881]]
ICD-10-CM Coding Guidelines state that diagnoses should be reported
that develop subsequently, coexist or affect the treatment of the
individual. Furthermore, having these diagnoses reported on claims
falls under the authority of the Affordable Care Act for the collection
of data to inform hospice payment reform. Section 3132 a(1)(C) of the
Affordable Care Act states that the Secretary may collect the
additional data and information on cost reports, claims, or other
mechanisms as the Secretary determines to be appropriate. Having
adequate data on hospice patient characteristics will help to inform
thoughtful, appropriate, and clinically relevant policy for future
rulemaking. We will monitor compliance with required coding practices
and collaborate with all relevant CMS components to determine whether
further policy changes are needed or if additional program integrity
oversight actions need to be implemented.
IV. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995.
V. Regulatory Impact Analysis
A. Statement of Need
This proposed rule meets the requirements of our regulations at
Sec. 418.306(c), which requires annual issuance, in the Federal
Register, of the hospice wage index based on the most current available
CMS hospital wage data, including any changes to the definitions of
Core-Based Statistical Areas (CBSAs), or previously used Metropolitan
Statistical Areas (MSAs). This proposed rule would also update payment
rates for each of the categories of hospice care described in Sec.
418.302(b) for FY 2016 as required under section 1814(i)(1)(C)(ii)(VII)
of the Act. The payment rate updates are subject to changes in economy-
wide productivity as specified in section 1886(b)(3)(B)(xi)(II) of the
Act. In addition, the payment rate updates may be reduced by an
additional 0.3 percentage point (although for FY 2014 to FY 2019, the
potential 0.3 percentage point reduction is subject to suspension under
conditions specified in section 1814(i)(1)(C)(v) of the Act). In 2010,
the Congress amended section 1814(i)(6) of the Act with section 3132(a)
of the Affordable Care Act. The amendment authorized the Secretary to
collect additional data and information determined appropriate to
revise payments for hospice care and for other purposes. The data
collected may be used to revise the methodology for determining the
payment rates for routine home care and other services included in
hospice care, no earlier than October 1, 2013. In accordance with
section 1814(i)(6)(D) of the Act, this proposed rule would provide an
update on hospice payment reform research and analyses and proposes a
SIA payment in accordance with the requirement to revise the
methodology for determining hospice payments in a budget-neutral
manner. Finally, section 3004 of the Affordable Care Act amended the
Act to authorize a quality reporting program for hospices and this rule
discusses changes in the requirements for the hospice quality reporting
program in accordance with section 1814(i)(5) of the Act.
B. Introduction
We have examined the impacts of this proposed rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA, March
22, 1995; Pub. L. 104-4), and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. A regulatory impact analysis (RIA) must be prepared for
major rules with economically significant effects ($100 million or more
in any 1 year). This proposed rule has been designated as economically
significant under section 3(f)(1) of Executive Order 12866 and thus a
major rule under the Congressional Review Act. Accordingly, we have
prepared a regulatory impact analysis (RIA) that, to the best of our
ability, presents the costs and benefits of the rulemaking. This
proposed rule was also reviewed by OMB.
C. Overall Impact
The overall impact of this proposed rule is an estimated net
increase in Federal Medicare payments to hospices of $200 million, or
1.3 percent, for FY 2016. The $200 million increase in estimated
payments for FY 2016 reflects the distributional effects of the 1.8
percent proposed FY 2016 hospice payment update percentage ($290
million increase), the use of updated wage index data and the phase-out
of the wage index budget neutrality adjustment factor (-0.7 percent/
$120 million decrease) and the proposed implementation of the new OMB
CBSA delineations for the FY 2016 hospice wage index with a one-year
transition (0.2 percent/$30 million increase). The elimination of the
wage index budget neutrality adjustment factor (BNAF) was part of a 7-
year phase-out that was finalized in the FY 2010 Hospice Wage Index
final rule (74 FR 39384), and is not a policy change. The proposed RHC
rates and the proposed SIA payment, outlined in section III.B, would be
implemented in a budget neutral manner in the first year of
implementation, as required per section 1814(i)(6)(D)(ii) of the Act.
In section III.B., we also proposed continuing to make the SIA payments
budget neutral annually. The RHC rate budget neutrality factors and the
SBNF used to reduce the overall RHC rate are outlined in section
III.C.3. Therefore, the proposed RHC rates and the proposed SIA payment
would not result in an overall payment impact for the Medicare program
or hospices.
1. Detailed Economic Analysis
Table 29, Column 3 shows the combined effects of the use of updated
wage data (the FY 2015 pre-floor, pre-reclassified hospital wage index)
and the phase-out of the BNAF (for a total BNAF reduction of 100
percent), resulting in an estimated decrease in FY 2016 payments of 0.7
percent ($-120 million). Column 4 of Table 29, shows the effects of the
proposed 50/50 blend of the FY 2016 hospice wage index values (based on
the use of FY 2015 pre-floor, pre-reclassified hospital wage index
data) under the old and the new CBSA delineations, resulting in an
estimated increase in FY 2016 payments of 0.2 percent ($30 million).
Column 5 displays the estimated effects of the proposed RHC rates,
resulting in no overall change in FY 2016 payments for hospices as this
proposal would be implemented in a budget neutral manner. Column 6
shows the estimated effects of the proposed SIA payment, resulting in
no change in FY 2016
[[Page 25882]]
payments for hospices as this proposal would be implemented in a budget
neutral manner through a reduction to the overall RHC rate for FY 2016.
Column 7 shows the effects of the proposed FY 2016 hospice payment
update percentage. The proposed 1.8 percent hospice payment update
percentage is based on a 2.7 percent inpatient hospital market basket
update for FY 2016 reduced by a 0.6 percentage point productivity
adjustment and by 0.3 percentage point as mandated by the Affordable
Care Act. The estimated effects of the 1.8 percent proposed hospice
payment update percentage would result in an increase in payments to
hospices of approximately $290 million. Taking into account the 1.8
percent proposed hospice payment update percentage ($290 million
increase), the use of updated wage data and the phase-out of the BNAF
(-$120 million), and the proposed adoption of the new OMB CBSA
delineations with a one-year transition for the FY 2016 hospice wage
index ($30 million), Column 8 shows that hospice payments are estimated
to increase by $200 million ($290 million - $120 million + $30 million
= $200 million), or 1.3 percent, in FY 2016.
a. Effects on Hospices
This section discusses our analysis of the estimated impacts on FY
2016 payments to hospices due to: (1) The use of updated wage index
data for the proposed FY 2016 hospice wage index (using FY 2015
hospital pre-floor, pre-reclassified hospital wage data) and the phase-
out of the BNAF, (2) the proposed FY 2016 hospice wage index that
adopts the new OMB CBSA delineations with a one-year transition, (3)
the proposed RHC rates, (4) the proposed SIA payment, and (5) the
proposed 1.8 percent hospice payment update percentage. Table 29 below
shows the results of our analysis. For the purposes of our impact
analysis, we use the utilization observed in the most complete hospice
claims data available at the time of rulemaking (FY 2014 hospice claims
submitted as of December 31, 2014). Presenting these data gives the
hospice industry a more complete picture of the effects on their total
revenue based on the use of updated hospital wage index data and the
BNAF phase-out, the proposed adoption of the new OMB CBSA delineations
with a one-year transition, the proposed SIA payment, and the proposed
FY 2016 hospice payment update percentage as discussed in this proposed
rule. Certain events may limit the scope or accuracy of our impact
analysis, because such an analysis is susceptible to forecasting errors
due to other changes in the forecasted impact time period. The nature
of the Medicare program is such that the changes may interact, and the
complexity of the interaction of these changes could make it difficult
to predict accurately the full scope of the impact upon hospices.
Table 29--Estimated Hospice Impacts by Facility Type and Area of the Country, FY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed 50/
Updated FY 50 blend of Proposed Proposed FY
2016 wage FY 2016 wage routine Proposed FY 2016 Total FY
index data index values home care 2016 SIA hospice 2016
Providers and phase- under old rates (days payment (% payment proposed
out of BNAF and new CBSA 1 thru 60 change) update policies
(% change) delineations and days percentage (% change)
(% change) 61+) (%) (% change)
(1) (2) (3) (4) (5) (6) (7) (8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Hospices................................................ 4,010 -0.7 0.2 0.0 0.0 1.8 1.3
Urban Hospices.............................................. 3,015 -0.7 0.3 0.0 0.0 1.8 1.4
Rural Hospices.............................................. 995 -0.3 -0.2 0.4 0.0 1.8 1.7
Urban Hospices--New England................................. 140 0.0 0.1 1.3 -0.1 1.8 3.1
Urban Hospices--Middle Atlantic............................. 251 -0.7 -0.2 0.8 0.0 1.8 1.7
Urban Hospices--South Atlantic.............................. 410 -1.1 0.3 -0.7 -0.1 1.8 0.2
Urban Hospices--East North Central.......................... 388 -0.8 0.7 -0.2 0.0 1.8 1.5
Urban Hospices--East South Central.......................... 165 -0.7 0.5 -0.3 0.0 1.8 1.3
Urban Hospices--West North Central.......................... 221 -0.7 0.6 0.7 0.0 1.8 2.4
Urban Hospices--West South Central.......................... 593 -1.1 0.6 -1.2 -0.2 1.8 -0.1
Urban Hospices--Mountain.................................... 299 -0.6 0.2 -0.4 0.0 1.8 1.0
Urban Hospices--Pacific..................................... 511 -0.1 0.0 1.0 0.2 1.8 2.9
Urban Hospices--Outlying.................................... 37 0.0 0.3 -1.1 -0.2 1.7 0.7
Rural Hospices--New England................................. 24 -0.3 0.0 3.3 0.3 1.8 5.1
Rural Hospices--Middle Atlantic............................. 42 0.3 -0.1 1.8 0.5 1.8 4.3
Rural Hospices--South Atlantic.............................. 141 -0.6 0.1 -0.2 0.0 1.8 1.1
Rural Hospices--East North Central.......................... 135 -0.7 -0.4 0.8 0.2 1.8 1.7
Rural Hospices--East South Central.......................... 133 -0.1 -0.1 -0.9 -0.2 1.8 0.5
Rural Hospices--West North Central.......................... 184 -0.3 -0.1 2.2 -0.1 1.8 3.5
Rural Hospices--West South Central.......................... 184 -0.1 -0.1 -1.0 -0.2 1.8 0.4
Rural Hospices--Mountain.................................... 102 -1.4 -0.7 0.3 0.1 1.8 0.1
Rural Hospices--Pacific..................................... 47 2.1 0.1 3.3 0.3 1.8 7.6
Rural Hospices--Outlying.................................... 3 -0.8 -0.2 1.9 0.2 1.8 2.9
0-3,499 RHC Days (Small).................................... 840 -0.5 0.1 3.0 0.1 1.8 4.5
3,500-19,999 RHC Days (Medium).............................. 1,924 -0.6 0.2 0.6 0.0 1.8 2.0
20,000+ RHC Days (Large).................................... 1,246 -0.7 0.3 -0.2 0.0 1.8 1.2
Non-Profit Ownership........................................ 1,070 -0.6 0.2 1.2 0.1 1.8 2.7
For Profit Ownership........................................ 2,398 -0.7 0.3 -1.0 -0.1 1.8 0.3
Govt/Other Ownership........................................ 542 -0.6 0.3 0.6 0.1 1.8 2.2
Freestanding Facility Type.................................. 3,016 -0.7 0.3 -0.4 0.0 1.8 1.0
HHA/Facility-Based Facility Type............................ 994 -0.4 0.2 1.8 0.2 1.8 3.6
Rate of RHC NF/SNF Days is in Lowest Quartile (Less than or 1,002 -0.5 0.1 0.7 0.0 1.8 2.1
equal to 3.1%).............................................
Rate of RHC NF/SNF Days is in 2nd Quartile (Greater than 3.1 1,003 -0.6 0.1 0.4 0.2 1.8 1.9
and Less than or equal to 16.7%)...........................
Rate of RHC NF/SNF Days is in 3rd Quartile (Greater than 1,003 -0.7 0.3 -0.1 0.0 1.8 1.3
16.7 and less than or equal to 35.5%)......................
[[Page 25883]]
Rate of RHC NF/SNF Days is in Highest Quartile (Greater than 1,002 -0.7 0.4 -0.6 -0.2 1.8 0.7
35.5%).....................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2014 hospice claims data from the Standard Analytic Files for CY 2013 (as of June 30, 2014) and CY 2014 (as of December 31, 2014).
Note: The proposed 1.8 percent hospice payment update percentage for FY 2016 is based on an estimated 2.7 percent inpatient hospital market basket
update, reduced by a 0.6 percentage point productivity adjustment and by 0.3 percentage point. Starting with FY 2013 (and in subsequent fiscal years),
the market basket percentage update under the hospice payment system as described in section 1814(i)(1)(C)(ii)(VII) or section 1814(i)(1)(C)(iii) of
the Act will be annually reduced by changes in economy-wide productivity as set out at section 1886(b)(3)(B)(xi)(II) of the Act. In FY 2013 through FY
2019, the market basket percentage update under the hospice payment system will be reduced by an additional 0.3 percentage point (although for FY 2014
to FY 2019, the potential 0.3 percentage point reduction is subject to suspension under conditions set out under section 1814(i)(1)(C)(v) of the Act).
REGION KEY:
New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic=Pennsylvania, New Jersey, New York; South
Atlantic=Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East North
Central=Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central=Alabama, Kentucky, Mississippi, Tennessee; West North Central=Iowa, Kansas,
Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central=Arkansas, Louisiana, Oklahoma, Texas; Mountain=Arizona, Colorado, Idaho,
Montana, Nevada, New Mexico, Utah, Wyoming; Pacific=Alaska, California, Hawaii, Oregon, Washington; Outlying=Guam, Puerto Rico, Virgin Islands.
Table 29 above also presents the impact of the changes in this
proposed rule according to the type of hospice, geographic location,
type of ownership, hospice base, size, and percentage of RHC days in a
SNF/NF. The majority of hospice payments are made at the routine home
care rate; therefore, we based the size of each individual hospice's
program on the number of routine home care days provided in FY 2014. As
indicated in column 2 of Table 29, there are 4,010 hospices included in
the regulatory impact analysis. Approximately 40 percent of Medicare-
certified hospices are identified as voluntary (non-profit) or
government agencies (1,612 hospices) and 60 percent are proprietary
(for-profit) (2,398 hospices). In addition, our analysis shows that
most hospices are in urban areas, are medium-sized, and are
freestanding.
b. Hospice Size
The use of updated wage data combined with the BNAF phase-out is
anticipated to decrease FY 2016 payments to large hospices by 0.7
percent and to decrease payments to small and medium hospices by 0.5
percent and 0.6 percent respectively (column 3). The proposed 50/50
Blend for FY 2016 wage index values under the old and the new CBSA
delineations is anticipated to result in an increase in payments to
small hospices of 0.1 percent, an increase in payments to medium
hospices of 0.2 percent, and an increase to large hospices of 0.3
percent (column 4). The proposed RHC rates are projected to increase
payments by 3.0 percent for small hospices and 0.6 percent for medium
hospices. The proposed RHC rates are anticipated to decrease payments
by 0.2 percent for large hospices. The proposed FY 2016 SIA payment is
projected to result in an increase in FY 2016 payments of 0.1 percent
for small hospices and no change in payments for medium and large
hospices (column 6).
c. Geographic Location
Column 3 of Table 29 shows the combined estimated effects of using
updated wage data and the BNAF phase-out and results in a decrease in
FY 2016 payments of 0.7 percent for urban hospices and 0.3 percent for
rural hospices. Urban hospices can anticipate a decrease in payments
ranging from 1.1 percent in the South Atlantic and West South Central
regions to 0.1 percent for hospices in the Pacific. No change in
payments is expected for urban hospices in the New England and outlying
areas. Rural hospices are estimated to see a decrease in payments in
eight regions, ranging from 1.4 percent in the Mountain region to 0.1
percent in the East South Central and West South Central regions. Rural
hospices can anticipate an increase in payments in the Middle Atlantic
region of 0.3 percent and an increase of 2.1 percent in the Pacific
region.
Column 4 shows the effect of the proposed 50/50 Blend of the FY2016
wage index values under the old and the new CBSA delineations. Overall,
hospices are anticipated to experience a 0.2 percent increase in
payments, with urban hospices experiencing an estimated increase of 0.3
percent and rural hospices experiencing an estimated decrease of 0.2
percent. All urban areas other than Middle Atlantic and Pacific are
estimated to see increases in payments, ranging from 0.7 percent in the
East North Central region to 0.1 percent in the New England region. No
change in FY 2016 payments for hospices in urban areas in the Pacific
region is expected. In contrast, rural hospices are estimated to
experience a small decrease in payments in seven regions, ranging from
0.1 percent in the East South Central, Middle Atlantic, and West North
Central regions to 0.7 percent in the Mountain region. Payments in the
New England region are anticipated to remain unchanged and payments in
the South Atlantic and Pacific regions are estimated to increase
slightly by 0.1 percent.
Column 5 shows the anticipated effects of the proposed RHC rates,
that is, paying separate rates for days 1 through 60 and days beyond
60. Overall, hospices would experience no change in overall payments
for FY 2016 due to the proposed RHC rates. FY 2016 payments are
estimated to range from an increase of 3.3 percent for rural hospices
in New England and Pacific regions to a decrease of 1.2 percent for
urban hospices in the West South Central region.
Column 6 shows the effects of proposed FY 2016 SIA Payment.
Overall, hospices are anticipated to experience no change in overall
payments for FY 2016. However, FY 2016 payments are estimated to range
from an increase of 0.5 percent for rural hospices in the Middle
Atlantic region to a decrease of 0.2 percent for urban hospices in the
West South Central region and the Outlying region.
Column 8 shows the total anticipated impact of the FY 2016 proposed
policy
[[Page 25884]]
changes. Overall, all hospices are anticipated to receive a 1.3 percent
increase in payment. Rural hospices in the Pacific Region show the
largest anticipated payment increase of 7.6 percent. Rural hospices in
New England are anticipated to receive an increase of 5.1 percent,
Middle Atlantic hospices are anticipated to receive an increase of 4.3
percent and rural hospices in the outlying regions are estimated to
receive an increase of 2.9 percent in payments.
d. Type of Ownership
Column 3 demonstrates the effect of the use of updated wage data
and BNAF phase-out on estimated FY 2016 payments. We estimate that
using the updated wage data and BNAF phase-out would decrease estimated
payments to voluntary (non-profit) and government hospices by 0.6
percent. Proprietary (for-profit) hospices are expected to have a
decrease in payments of 0.7 percent. Column 4 demonstrates the effects
of the proposed 50/50 Blend of FY 2016 wage index values under the old
and the new CBSA delineations. Estimated FY 2016 payments to voluntary
(non-profit), proprietary (for-profit) and government hospices are
anticipated to increase by 0.2 percent, 0.3 percent and 0.3 percent,
respectively. Column 5 shows the anticipated impacts for the two
proposed RHC rates. Estimated FY 2016 payments are anticipated to
increase for voluntary (non-profit) and government hospices by 1.2
percent and 0.6 percent respectively and to decrease for proprietary
(for-profit) hospices by 1.0 percent. Column 6 shows the estimated
effects of the proposed SIA payment. Estimated FY 2016 payments are
anticipated to increase for voluntary (non-profit) and government
hospices by 0.1 percent and decrease for proprietary (for-profit)
hospices by 0.1 percent.
e. Hospice Base and Percentage of RHC Days in a SNF/NF
Column 3 demonstrates the combined effects of using the updated
wage data and the BNAF phase-out on estimated payments for FY 2016.
Estimated payments are anticipated to decrease for freestanding
hospices by 0.7 percent and decrease for HHA/facility-based hospices by
0.4 percent. Column 4 shows the effects of the proposed 50/50 Blend of
FY 2016 wage index values under the old and new CBSA delineations.
Payments are estimated to increase by 0.3 percent for freestanding
hospices and by 0.2 percent for HHA/facility-based hospices. Column 5
shows the effects of the proposed RHC rates. Payments to freestanding
hospices are expected to decrease by 0.4 percent while payments to HHA/
facility-based hospices are expected to increase by 1.8 percent. Column
6 shows the effects of the proposed SIA payment. Payments to
freestanding hospices are expected to neither increase nor decrease due
to the SIA proposal, while payments for HHA/facility-based hospices are
expected to increase by 0.2 percent.
Table 29 also shows the effects of the proposed changes in this
rule by the rate of RHC NF/SNF days in quartiles. Column 3 shows that
all four quartiles (lowest quartile being less than or equal to 3.1
percent of RHC days in a SNF/NF to the highest quartile being greater
than 35.5 percent of RHC days in a SNF/NF) are anticipated to
experience a decrease in payments ranging from 0.5 percent for the
first quartile to 0.7 percent for the third and fourth quartiles.
Column 4 shows the effect of the proposed 50/50 Blend of FY 2016 wage
index values under the old and the new CBSA delineations. All four
quartiles are anticipated to experience an increase in payments under
this proposal with the first and second quartiles anticipated to
experience increases of 0.1percent, the third quartile anticipated to
experience an increase of 0.3 percent, and the highest quartile to
experience an increase in payments of 0.4 percent. Column 5 shows the
anticipated impact of the proposed RHC rates on hospices by their rates
of RHC days in a SNF/NF. The first and second quartiles are anticipated
to see an increase in payments of 0.7 percent and 0.4 percent
respectively. The third and fourth quartiles are anticipated to see
decreases of 0.1 percent and 0.6 percent respectively due to the
proposed RHC rates. Column 6 shows the anticipated effect of the
proposed FY 2016 SIA payment on hospices by their rates of RHC days in
a SNF/NF. The second quartile is anticipated to see an increase in
payments of 0.2 percent. The first and third quartile is expected to
experience no change in payments under the FY 2016 SIA payment proposal
and the highest quartile is anticipated to experience a decrease in FY
2016 payments of 0.2 percent under this proposal.
f. Effects on Other Providers
This proposed rule would only affect Medicare hospices, and
therefore has no effect on other provider types.
g. Effects on the Medicare and Medicaid Programs
This proposed rule only affects Medicare hospices, and therefore
has no effect on Medicaid programs. As described previously, estimated
Medicare payments to hospices in FY 2016 are anticipated to increase by
1.3 percent, or $200 million.
h. Alternatives Considered
For the FY 2016 proposed rule, we considered several alternatives
to the proposals articulated in section III.B. As described in Table 13
in section III.B.1 of this preamble, previous work on a tiered payment
model indicates that a different RHC payment could begin at day 31.
Therefore, we considered proposing that the higher rate of the RHC
payment to be the first 30 days of hospice care given the results above
and given that MedPAC identified in their 2008 Report to Congress that
the `break-even' point of profitability was found to be about three
weeks. However, because our analysis found that `marginal costs'
continued to decline slightly between days 15-30 and days 31-60 (see
figure 5 in section III.B.2 of this preamble), we proposed to begin the
lower RHC payment rate on day 61. In addition, we proposed to have the
``count of days'' follow the patient (that is, count the days relative
to the patient's lifetime length of stay) to mitigate potential high
rates of live discharge and readmission due to the proposed RHC payment
rates based on the days of care. For hospice patients who are
discharged and readmitted to hospice within 60 days of that discharge,
his/her prior hospice days will continue to follow the patient and
count toward his/her patient days for the receiving hospice upon
hospice election. We also considered a longer (that is, 90 days) window
of time between a discharge and a subsequent hospice election as a
basis of determining which RHC payment rate would be applied based on
the days following the beneficiary. However, we proposed the 60 day
time period. We also considered not applying the higher initial RHC
rate (1 through 60 days) to beneficiaries in nursing homes.
For the SIA payment, we considered allowing the first two days of a
new hospice election with a unique hospice provider to also be eligible
for the SIA payment. The reason for not proposing to allow the SIA
payment to apply to the first two days of a new hospice election with a
unique hospice was outlined in section III.B. In addition, because the
SIA payment is required to be implemented in a budget neutral manner in
the first year of implementation, per section 1814(i)(6)(D)(ii),
allowing the first two days of the hospice election with a unique
hospice provider to be eligible for the SIA payment would result in a
larger decrease to the RHC rate for all hospice providers. We estimate
that the
[[Page 25885]]
RHC would need to be reduced by 1.26 percent (rather than the proposed
0.81 percent).
i. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 30 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with this proposed rule. Table 30 provides our
best estimate of the increase in Medicare payments under the hospice
benefit as a result of the changes presented in this proposed rule for
3,879 hospices in our impact analysis file constructed using FY 2014
claims as of December 31, 2014.
Table 30--Accounting Statement: Classification of Estimated Transfers,
From FY 2015 to FY 2016
[In $millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
FY 2015 Hospice Wage Index and Payment Rate Update
------------------------------------------------------------------------
Annualized Monetized Transfers............ $200.
From Whom to Whom? Federal Government to
Hospices.
------------------------------------------------------------------------
j. Conclusion
In conclusion, the overall effect of this proposed rule is an
estimated $200 million increase in Medicare payments to hospices. The
$200 million increase in estimated payments for FY 2016 reflects the
distributional effects of the 1.8 percent proposed FY 2016 hospice
payment update percentage ($290 million increase), the use of updated
wage index data and the phase-out of the wage index budget neutrality
adjustment factor (-0.7 percent/$120 million decrease) and the proposed
implementation of the new OMB CBSA delineations for FY 2016 hospice
wage index with a one-year transition (0.2 percent/$30 million
increase). The proposed SIA payment does not result in aggregate
changes to estimate hospice payments for FY 2016 as this proposal would
be implemented in a budget neutral manner through an overall reduction
to the RHC payment rate for all hospices.
2. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze options for regulatory relief
of small businesses if a rule has a significant impact on a substantial
number of small entities. The great majority of hospitals and most
other health care providers and suppliers are small entities by meeting
the Small Business Administration (SBA) definition of a small business
(in the service sector, having revenues of less than $7.5 million to
$38.5 million in any 1 year), or being nonprofit organizations. For
purposes of the RFA, we consider all hospices as small entities as that
term is used in the RFA. HHS's practice in interpreting the RFA is to
consider effects economically ``significant'' only if they reach a
threshold of 3 to 5 percent or more of total revenue or total costs. As
noted above, the combined effect of the updated wage data and the BNAF
phase-out (-0.7 percent decrease or -$120 million) the proposed
implementation of the new OMB CBSA delineations for FY 2016 hospice
wage index with a one-year transition (0.2 percent increase or $30
million), the proposed SIA payment (no estimated aggregate impact on
payments), and the proposed FY 2016 hospice payment update percentage
(1.8 percent increase or $290 million) results in an overall increase
in estimated hospice payments of 1.3 percent, or $200 million, for FY
2016. Therefore, the Secretary has determined that this proposed rule
will not create a significant economic impact on a substantial number
of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. This proposed rule only
affects hospices. Therefore, the Secretary has determined that this
proposed rule would not have a significant impact on the operations of
a substantial number of small rural hospitals.
3. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2015, that
threshold is approximately $144 million. This proposed rule is not
anticipated to have an effect on State, local, or tribal governments,
in the aggregate, or on the private sector of $144 million or more.
VI. Federalism Analysis and Regulations Text
Executive Order 13132, Federalism (August 4, 1999) requires an
agency to provide federalism summary impact statement when it
promulgates a proposed rule (and subsequent final rule) that has
federalism implications and which imposes substantial direct
requirement costs on State and local governments which are not required
by statute. We have reviewed this proposed rule under these criteria of
Executive Order 13132, and have determined that it will not impose
substantial direct costs on State or local governments.
List of Subjects in 42 CFR Part 418
Health facilities, Hospice care, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
and Medicaid Services propose to amend 42 CFR chapter IV as set forth
below:
PART 418--HOSPICE CARE
0
1. The authority citation for part 418 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart G--Payment for Hospice Care
0
2. Section 418.302 is amended by--
0
a. Adding paragraphs (b)(1)(i) and (ii).
0
b. Amending paragraphs (d)(1), (d)(2), (e) introductory text, (f)(2)
and (f)(5)(ii) by removing the word ``intermediary'' and adding in its
place the words ``Medicare Administrative Contractor''.
0
c. Revising paragraph (e)(1).
The revisions and additions read as follows:
Sec. 418.302 Payment procedures for hospice care.
* * * * *
(b) * * *
(1) * * *
(i) Service intensity add-on. Except as provided in paragraph
(b)(1)(ii) of this section, routine home care days that occur during
the last 7 days of a hospice election ending with a patient discharged
as ``expired'' are eligible for a service intensity add-on payment.
Such payment must be equal to the continuous home care hourly payment
rate, as described in paragraph (e)(4) of this section, multiplied by
the amount of direct patient care provided by a RN and/or social
worker, up to 4 hours total per day.
(ii) Routine home care days provided to patients residing in a
skilled nursing facility (SNF) or a long-term care
[[Page 25886]]
nursing facility (NF) are not eligible for the service intensity add-on
payment.
* * * * *
(e) * * *
(1) Payment is made to the hospice for each day during which the
beneficiary is eligible and under the care of the hospice, regardless
of the amount of services furnished on any given day (except as set out
in paragraph (b)(1)(i) of this section).
* * * * *
0
3. Section 418.306 is amended by revising the section heading and
paragraphs (a), (b), and (c) to read as follows:
Sec. 418.306 Annual update of the payment rates and adjustment for
area wage differences.
(a) Applicability. CMS establishes payment rates for each of the
categories of hospice care described in Sec. 418.302(b). The rates are
established using the methodology described in section 1814(i)(1)(C) of
the Act and in accordance with section 1814(i)(6)(D) of the Act.
(b) Annual update of the payment rates. The payment rates for
routine home care and other services included in hospice care are the
payment rates in effect under this paragraph during the previous fiscal
year increased by the hospice payment update percentage increase (as
defined in sections1814(i)(1)(C) of the Act), applicable to discharges
occurring in the fiscal year.
(1) For fiscal year 2014 and subsequent fiscal years, per section
1814(i)(5)(A)(i) of the Act, in the case of a Medicare-certified
hospice that submits hospice quality data, as specified by the
Secretary, the payment rates are equal to the rates for the previous
fiscal year increased by the applicable hospice payment update
percentage increase.
(2) For fiscal year 2014 and subsequent fiscal years, per section
1814(i)(5)(A)(i) of the Act, in the case of a Medicare-certified
hospice that does not submit hospice quality data, as specified by the
Secretary, the payment rates are equal to the rates for the previous
fiscal year increased by the applicable hospice payment update
percentage increase, minus 2 percentage points. Any reduction of the
percentage change will apply only to the fiscal year involved and will
not be taken into account in computing the payment amounts for a
subsequent fiscal year.
(c) Adjustment for wage differences. Each hospice's labor market is
determined based on definitions of Metropolitan Statistical Areas
(MSAs) issued by OMB. CMS will issue annually, in the Federal Register,
a hospice wage index based on the most current available CMS hospital
wage data, including changes to the definition of MSAs. The urban and
rural area geographic classifications are defined in Sec.
412.64(b)(1)(ii)(A) through (C) of this chapter. The payment rates
established by CMS are adjusted by the Medicare contractor to reflect
local differences in wages according to the revised wage data.
* * * * *
Sec. 418.308 [Amended]
0
4. Section 418.308(c) is amended by removing the phrase ``(that is, by
March 31st)''.
0
5. Section 418.309 is amended by revising the introductory text and
paragraph (a) to read as follows:
Sec. 418.309 Hospice aggregate cap.
A hospice's aggregate cap is calculated by multiplying the adjusted
cap amount (determined in paragraph (a) of this section) by the number
of Medicare beneficiaries, as determined by one of two methodologies
for determining the number of Medicare beneficiaries for a given cap
year described in paragraphs (b) and (c) of this section.
(a) Cap amount. The cap amount was set at $6,500 in 1983 and is
updated using one of two methodologies described in paragraphs (a)(1)
and (2) of this section.
(1) For accounting years that end on or before September 30, 2016
and end on or after October 1, 2025, the cap amount is adjusted for
inflation by using the percentage change in the medical care
expenditure category of the Consumer Price Index (CPI) for urban
consumers that is published by the Bureau of Labor Statistics. This
adjustment is made using the change in the CPI from March 1984 to the
fifth month of the cap year.
(2) For accounting years that end after September 30, 2016, and
before October 1, 2025, the cap amount is the cap amount for the
preceding accounting year updated by the percentage update to payment
rates for hospice care for services furnished during the fiscal year
beginning on the October 1 preceding the beginning of the accounting
year as determined pursuant to section 1814(i)(1)(C) of the Act
(including the application of any productivity or other adjustments to
the hospice percentage update).
* * * * *
Dated: April 23, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: April 27, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2015-10422 Filed 4-30-15; 4:15 pm]
BILLING CODE 4120-01-P