[Federal Register Volume 78, Number 91 (Friday, May 10, 2013)]
[Proposed Rules]
[Pages 27823-27852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10389]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1449-P]
RIN 0938-AR64
Medicare Program; FY 2014 Hospice Wage Index and Payment Rate
Update; Hospice Quality Reporting Requirements; and Updates on Payment
Reform
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would update the hospice payment rates and
the wage index for fiscal year (FY) 2014, and continue the phase out of
the wage index budget neutrality adjustment factor (BNAF). Including
the FY 2014 15 percent BNAF reduction, the total BNAF reduction in FY
2014 will be 70 percent. The BNAF phase-out will continue with
successive 15 percent reductions in FY 2015 and FY 2016. This proposed
rule would also clarify how hospices are to report diagnoses on hospice
claims, and proposes changes in
[[Page 27824]]
the requirements for the hospice quality reporting program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 28, 2013.
ADDRESSES: In commenting, please refer to file code CMS-1449-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-1449-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-1449-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 hospice experience of care survey. Robin
Dowell, (410) 786-0060 for questions regarding quality reporting for
hospices and collection of information requirements. Hillary Loeffler,
(410) 786-0456 for general questions about hospice payment. Katherine
Lucas, (410) 786-7723 for questions regarding payment reform. Anjana
Patel, (410) 786-2120 for questions regarding the hospice wage index
and payment rates. Kelly Vontran, (410) 786-0332 for questions on
diagnosis reporting on hospice claims.
SUPPLEMENTARY INFORMATION:
Wage Index Addenda: In the past, the wage index addenda referred to
in the preamble of our proposed and final rules were available in the
Federal Register. However, the wage index addenda of the annual
proposed and final rules will no longer be available in the Federal
Register. Instead, these 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.) Readers who experience any
problems accessing any of the wage index addenda related to the hospice
payment rules that are posted on the CMS Web site identified above
should contact Anjana Patel at 410-786-2120.
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
E. Trends in Medicare Hospice Utilization
III. Provisions of the Proposed Rule
A. Diagnosis Reporting on Hospice Claims
1. ICD-9-CM Coding Guidelines
2. Use of Nonspecific, Symptom Diagnoses
3. Use of ``Mental, Behavioral and Neurodevelopmental Disorders''
ICD-9-CM Codes
4. Guidance on Coding of Principal and Other, Additional, and/or
Co-existing Diagnoses
5. Transition to ICD-10-CM
B. Proposed Update to the Hospice Quality Reporting Program
1. Background and Statutory Authority
2. Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2014
3. Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2015 and Beyond
4. Quality Measures for Hospice Quality Reporting Program for
Payment Year FY 2016 and Beyond
5. Public Availability of Data Submitted
6. Proposed Adoption of the CMS Hospice Experience of Care Survey
for the FY 2017 Payment Determination and That of Subsequent Fiscal
Years
7. Notice Pertaining To Reconsiderations Following APU
Determinations
C. FY 2014 Hospice Rate Update
1. Hospice Wage Index
2. FY 2014 Wage Index With an Additional 15 Percent Reduced Budget
Neutrality Adjustment Factor (BNAF)
3. Hospice Payment Update Percentage
4. Proposed Updated FY 2014 Hospice Payment Rates
D. Update on Hospice Payment Reform and Data Collection
[[Page 27825]]
1. Update on Reform Options
a. Rebasing the Routine Home Care (RHC) Rate
b. Site of Service Adjustment for Hospice Patients in Nursing
Facilities
2. Reform Research Findings
3. Additional Data Collection
E. Technical and Clarifying Regulatory Text Change
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
1. Detailed Economic Analysis
2. Regulatory Flexibility Act Analysis
3. Unfunded Mandates Reform Act Analysis
VII. 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
BBA Balanced Budget Act of 1997
BNAF Budget Neutrality Adjustment Factor
BLS Bureau of Labor Statistics
CAHPS Consumer Assessment of Healthcare Providers and Systems
CBSA Core-Based Statistical Area
CMS Centers for Medicare & Medicaid Services
CCW Chronic Conditions Warehouse
CHC Continuous Home Care
COPD Chronic Obstructive Pulmonary Disease
CoPs Conditions of Participation
CR Change Request
CVA Cerebral Vascular Accident
DME Durable Medical Equipment
FEHC Family Evaluation of Hospice Care
FY Fiscal Year
GIP General Inpatient Care
HIS Hospice Item Set
HHS Health and Human Services
HQRP Hospice Quality Reporting Program
LUPA Low Utilization Payment Amount
MedPAC Medicare Payment Advisory Commission
MFP Multi-factor Productivity
MSA Metropolitan Statistical Area
NEC Not Elsewhere Classified
NPI National Provider Identifier
NQF National Quality Forum
OACT Office of the Actuary
OMB Office of Management and Budget
OIG Office of Inspector General
PRA Paperwork Reduction Act
PRRB Provider Reimbursement Review Board
QAPI Quality Assessment and Performance Improvement
QRP Quality Reporting Program
RFA Regulatory Flexibility Act
RHC Routine Home Care
SBA Small Business Administration
TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEP Technical Expert Panel
I. Executive Summary for This Proposed Rule
A. Purpose
This rule proposes updates to the payment rates for hospice
providers for fiscal year (FY) 2014 as required under section 1814 (i)
of the Social Security Act (the Act). The proposed updates incorporate
the use of updated hospital wage index data, the 5th year of the 7-year
Budget Neutrality Adjustment Factor (BNAF) phase-out, and an update to
the hospice payment rates by the hospice payment update percentage.
Additionally, this proposed rule clarifies diagnosis reporting on
hospice claims, provides an update on hospice payment reform and
additional data collection requirements, and proposes changes to the
quality reporting requirements for hospice providers.
B. Summary of the Major Provisions
In this rule we propose to update the hospice payment rates for FY
2014 by 1.8 percent as described in section III.C.3. The hospice wage
index would be updated with more current wage data and the BNAF will be
reduced by an additional 15 percent for a total BNAF reduction of 70
percent as described in section III.C.2. The August 6, 2009 FY 2010
Hospice Wage Index final rule (74 FR 39384) finalized a 10 percent
reduced BNAF for FY 2010 as the first year of a 7-year phase-out of the
BNAF, to be followed by an additional 15 percent per year reduction in
the BNAF in each of the next 6 years. The total BNAF phase-out will be
complete by FY 2016. This proposed rule also clarifies diagnosis
reporting on hospice claims, especially regarding the use of non-
specific symptom diagnoses; provides an update on hospice payment
reform and additional data collection requirements; proposes a
technical regulations text change; and proposes changes to the hospice
quality reporting program.
C. Summary of Costs, Benefits, and Transfers
Table 1--Transfers
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Provision description Total
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FY 2014 Hospice Payment Rate Update....... The overall economic impact
of this proposed rule is an
estimated $180 million in
increased payments to
hospices.
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II. Background
A. Hospice Care
Coping with a life-limiting illness can be an overwhelming
experience, physically, emotionally and spiritually, for both the
person and his or her family. Recognition that the care needs at end-
of-life are different from other health care needs is a foundation of
the Medicare hospice benefit. Hospice is a compassionate care
philosophy and practice for those who are terminally ill. It is a
holistic approach to treatment that recognizes that the impending death
of an individual warrants a change from curative to palliative care.
Palliative care means ``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. The person beginning hospice care, or his or her
representative, needs to understand that his or her illness is no
longer responding to medical interventions to cure or slow the
progression of disease and then must choose to stop further curative
attempts while palliative care continues and intensifies, as needed,
for continued symptom management. As we stated in the June 5, 2008
Hospice Conditions of Participation final rule (73 FR 32088),
palliative care is an approach that ``optimizes quality of life by
anticipating, preventing, and treating suffering''. The goal of
palliative care in hospice is to improve the quality of life of
individuals and their families facing the issues associated with life-
threatening illness through the prevention and relief of suffering by
means of early identification, assessment and treatment of pain and
other issues. In addition, palliative care in hospice includes
coordinating care services, reducing unnecessary diagnostics or
ineffective therapies, and offering ongoing conversations with
individuals and their families about changes in the disease and shifts
in the plan of care to meet the changing needs with disease progression
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. As generally accepted by the medical community, the term
``terminal illness'' refers to an advanced and progressively
deteriorating illness, and the illness is
[[Page 27826]]
diagnosed as incurable. 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 ``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 42 CFR 418.22(b)(1), to
be eligible for Medicare hospice services, the beneficiary's attending
physician (if any) and the hospice medical director must certify that
the individual is terminally ill, that is, the individual's prognosis
is for a life expectancy of 6 months or less if the terminal illness
runs its normal course as defined in section 1861(dd)(3)(A) of the Act
and further clarified in Sec. 418.3. 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 stated in 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 under routine hospice 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 to maintain the individual 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
per our regulations at Sec. 418.204. A minimum of 8 hours of care must
be furnished on a particular day to qualify for the continuous home
care rate (Sec. 418.302(e)(4)).
B. History of the Medicare Hospice Benefit
Before the creation of the Medicare hospice benefit, hospice was
originally run by volunteers who cared for the dying. During the early
development stages of the Medicare Hospice Benefit, hospice advocates,
working with legislators, were clear that they wanted a Medicare
benefit available 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 beneficiary
``electing'' the hospice benefit and being certified as terminally ill
were two key components put into 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 section 1861(dd) of the Social
Security Act (the Act), codified at 42 U.S.C. 1395x(dd), to provide
coverage of hospice care for terminally ill Medicare beneficiaries who
elected to receive care from a Medicare-certified, hospice. In Sec.
418.54(c), our regulations 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 which must be addressed 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. The
Medicare hospice benefit requires the hospice to cover all palliative
care related to the terminal illness and related conditions. In the
December 16, 1983 Hospice final rule, hospices are also to cover care
for interventions to manage pain and symptoms (48 FR 56008).
Clinically, related conditions are any physical or mental condition(s)
that are related to or caused by either the terminal illness or the
medications used to manage the terminal illness.\2\ Additionally, per
the hospice Conditions of Participation at Sec. 418.56, hospice must
provide all services necessary 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 or family.\3\ For example, a hospice patient
with lung cancer (the terminal illness) may receive inhalants for
shortness of breath (related to the terminal condition). The patient
may also suffer from metastatic bone pain (a related condition) and
would be treated with opioid analgesics. As a result of the opioid
therapy, the patient may suffer from constipation (an associated
symptom) and requires a laxative for symptom relief. It is often not a
single diagnosis that represents the terminal illness of the patient,
but the combined effect of several conditions that makes the patient's
condition terminal. We are restating what we communicated in the
December 16, 1983 Hospice final rule regarding what is related versus
unrelated to the terminal illness: ``. . . 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'' (48 FR 56010
through 56011). Therefore, unless there
[[Page 27827]]
is clear evidence that a condition is unrelated to the terminal
illness, all services would be considered related. It is also the
responsibility of the hospice physician to document why a patient's
medical need(s) would be unrelated to the terminal illness.
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\1\ Connor, Stephen. (2007). Development of Hospice and
Palliative Care in the United States. OMEGA. 56(1), p89-99.
\2\ Harder, PharmD, CGP, Julia. (2012). To Cover or Not To
Cover: Guidelines for Covered Medications in Hospice Patients. The
Clinician. 7(2), p1-3.
\3\ Paolini, DO, Charlotte. (2001). Symptoms Management at End
of Life. JAOA. 101(10). p609-615.
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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 as stated in the December 16, 1983
Hospice final rule (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 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
To be covered under the Medicare hospice benefit, 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 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 to be reimbursed. The hospice
interdisciplinary group should be comprised of paid hospice employees
as well as hospice volunteers, as stated in the August 22, 1983 Hospice
proposed rule (48 FR 38149). This expectation is in line with the
history of hospice and philosophy of holistic, comprehensive,
compassionate, end-of-life care.
The National Hospice Study was initiated in 1980 through a grant
sponsored by the Robert Wood Johnson and John A. Hartford Foundations
and CMS (formerly, the Health Care Financing Administration (HCFA). The
study was conducted between October 1980 and March 1983. The study
summarized the hospice care philosophy 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.
In the August 22, 1983 Hospice proposed rule (48 FR 38149) we
stated ``the hospice benefit and the resulting Medicare reimbursement
is not intended to diminish the voluntary spirit of hospices''.
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 42 CFR 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 (routine home care,
continuous home care, inpatient respite care, and general inpatient
care) to hospices, based on each day a qualified Medicare beneficiary
is under hospice election. This per diem payment is to include all of
the 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 methodology concerning updating
the daily payment rates: (1) effective January 1, 1990, the daily
payment rates for routine home care and other services in 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 routine home
care and other services included in hospice care for fiscal years
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 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
fiscal years will be the hospital market basket percentage increase for
the FY. The Social Security
[[Page 27828]]
Act requires us to use the inpatient hospital market basket to
determine hospice payment rates.
3. Hospice Wage Index Final Rule for FY 1998
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)
would 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. Hospice Wage Index Final Rule for FY 2010
Inpatient hospital pre-floor and pre-reclassified wage index
values, as described in the 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 budget neutrality adjustment factor (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,
and additional 15 percent reduction for a total of 25 percent in FY
2011, an additional 15 percent reduction for a total 40 percent in FY
2012, and an additional 15 percent reduction for a total of 55 percent
in FY 2013. The phase-out will continue with an additional 15 percent
reduction for a total reduction of 70 percent in FY 2014, 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. 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 fiscal years), 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 of
2010 (Pub. L 111-148) as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L 111-152) (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, for FY 2014 and subsequent fiscal years. 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 an individual to determine continued
eligibility of the individual for hospice care prior to the 180th-day
recertification and each subsequent recertification and attest that
such visit took place. When implementing this provision, we decided
that the 180th-day recertification and subsequent recertifications
corresponded to the recertification for a beneficiary's third or
subsequent benefit periods (August 4, 2011 FY 2012 Hospice Wage Index
final rule (76 FR 47314)).
Further, section 1814(i) of the Act, as amended by section 3132(a)
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 routine home care 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. Hospice Wage Index Final Rule for FY 2012
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 provider 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
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
[[Page 27829]]
cap, then the hospice would have to repay the excess back to Medicare.
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 2012. Similarly, Medicare hospice expenditures have risen from
$2.9 billion in FY 2000 to $14.7 billion in FY 2012. 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 86 days in FY 2010, an increase of 59 percent.
There have also been noted changes in the diagnosis patterns among
Medicare hospice enrollees, with a growing percentage of beneficiaries
with non-cancer diagnoses. Specifically, there were notable increases
between 2002 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 2012, both
``debility'' and ``adult failure to thrive'' were in the top five
claims-reported hospice diagnoses and were the first and third most
common hospice diagnoses, respectively (see table 2 below).
Table 2--The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007,
FY 2012
------------------------------------------------------------------------
ICD-9/Reported
Rank Principal Diagnosis Total patients Percentage
------------------------------------------------------------------------
Year: 2002 Total Patients = 663,406
------------------------------------------------------------------------
1............ 162.9 Lung Cancer.... 73,769 11
2............ 428.0 Congestive 45,951 7
Heart Failure.
3............ 799.3 Debility 36,999 6
Unspecified.
4............ 496 COPD............. 35,197 5
5............ 331.0 Alzheimer's 28,787 4
Disease.
6............ 436 CVA/Stroke....... 26,897 4
7............ 185 Prostate Cancer.. 20,262 3
8............ 783.7 Adult Failure 18,304 3
To Thrive.
9............ 174.9 Breast Cancer.. 17,812 3
10........... 290.0 Senile 16,999 3
Dementia, Uncomp..
11........... 153.0 Colon Cancer... 16,379 2
12........... 157.9 Pancreatic 15,427 2
Cancer.
13........... 294.8 Organic Brain 10,394 2
Synd Nec.
14........... 429.9 Heart Disease 10,332 2
Unspecified.
15........... 154.0 Rectosigmoid 8,956 1
Colon Cancer.
16........... 332.0 Parkinson's 8,865 1
Disease.
17........... 586 Renal Failure 8,764 1
Unspecified.
18........... 585 Chronic Renal 8,599 1
Failure (End 2005).
19........... 183.0 Ovarian Cancer. 7,432 1
20........... 188.9 Bladder Cancer. 6,916 1
------------------------------------------------------------------------
Year: 2007 Total Patients = 1,039,099
------------------------------------------------------------------------
1............ 799.3 Debility 90,150 9
Unspecified.
2............ 162.9 Lung Cancer.... 86,954 8
3............ 428.0 Congestive 77,836 7
Heart Failure.
4............ 496 COPD............. 60,815 6
5............ 783.7 Adult Failure 58,303 6
To Thrive.
6............ 331.0 Alzheimer's 58,200 6
Disease.
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 19,082 2
Unspecified.
13........... 153.9 Colon Cancer... 19,080 2
14........... 294.8 Organic Brain 17,697 2
Syndrome NEC.
15........... 332.0 Parkinson's 16,524 2
Disease.
16........... 294.10 Dementia In 15,777 2
Other 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: 2012 Total Patients = 1,328,651
------------------------------------------------------------------------
1............ 799.3 Debility 161,163 12
Unspecified.
2............ 162.9 Lung Cancer.... 89,636 7
3............ 783.7 Adult Failure 86,467 7
To Thrive.
4............ 428.0 Congestive 84,333 6
Heart Failure.
5............ 496 COPD............. 74,786 6
[[Page 27830]]
6............ 331.0 Alzheimer's 64,199 5
Disease.
7............ 290.0 Senile 56,234 4
Dementia, Uncomp..
8............ 429.9 Heart Disease 32,081 2
Unspecified.
9............ 436 CVA/Stroke....... 31,987 2
10........... 294.10 Dementia In 27,417 2
Other Diseases w/o
Behavioral Dist..
11........... 174.9 Breast Cancer.. 22,421 2
12........... 153.9 Colon Cancer... 22,197 2
13........... 157.9 Pancreatic 22,007 2
Cancer.
14........... 332.0 Parkinson's 21,183 2
Disease.
15........... 185 Prostate Cancer.. 21,042 2
16........... 294.8 Other 17,762 1
Persistent Mental
Dis.-classified
elsewhere.
17........... 585.6 End Stage Renal 17,545 1
Disease.
18........... 518.81 Respiratory 12,962 1
Failure.
19........... 294.11 Dementia In 11,751 1
Other Diseases w/
Behavioral Dist.
20........... 188.9 Bladder Cancer. 10,511 1
------------------------------------------------------------------------
Source: FY 2002, 2007, and 2012 hospice claims data from the Chronic
Condition Warehouse (CCW), accessed on February 14 and February 20,
2013.
Note(s): The frequencies shown represent beneficiaries that had a least
one claim with the specific ICD-9 code listed 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.
III. Provisions of the Proposed Rule
A. Diagnosis Reporting on Hospice Claims
This section is a clarification of existing ICD-9-CM coding
guidelines. No proposals are being made in this proposed rule with
regards to diagnosis coding. These clarifications are not intended to
preclude any clinical judgment in determining a beneficiary's
eligibility for hospice services, rather these clarifications are to
address current and ongoing diagnosis reporting patterns noted on
hospice claims. A beneficiary who elects hospice care and meets our
eligibility requirements at Sec. 418.20, is admitted to the hospice
and receives hospice care prior to any claim submission, which occurs
at the end of each calendar month while under hospice services, or upon
the death or discharge of the beneficiary, whichever occurs first. In
the July 27, 2012 FY 2013 Hospice Wage Index notice (77 FR 44247), we
provided in-depth information regarding longstanding, existing ICD-9-CM
coding guidelines. We also discussed related versus unrelated diagnosis
reporting on claims and clarified that ``all of a patient's coexisting
or additional diagnoses'' related to the terminal illness or related
conditions should be reported on the hospice claims. Based on analysis
of preliminary claims data from the first quarter of FY 2013 (October
1, 2012 through December 31, 2012), 72 percent of providers still only
report one diagnosis on the hospice claim. This hospice diagnosis data
is comparable to the hospice diagnosis data reported in the July 27,
2012 FY 2013 Hospice Wage Index notice (77 FR 44242), in which we
stated that over 77 percent of the hospice claims reported only a
principal diagnosis. Therefore, in this year's proposed rule, we are
further clarifying the ICD-9-CM coding guidelines and CMS' expectations
for diagnosis reporting on the hospice claims in order to ensure the
Medicare hospice beneficiaries are receiving the holistic comprehensive
hospice services based on the initial and ongoing comprehensive
assessment and the individualized hospice plan of care. Eligibility for
hospice services is based on meeting the eligibility requirements as
stated in Sec. 418.20 of our regulations. For beneficiaries eligible
for the Medicare hospice benefit, access to hospice care or the
continuation of hospice care should not be affected or limited by the
following ICD-9-CM coding guidelines for diagnosis reporting on claims.
1. ICD-9-CM Coding Guidelines
As previously reported in Section II.E of this proposed rule there
have been noted changes in reported hospice diagnosis patterns with the
top reported hospice diagnoses being non-cancer diagnoses. The hospice
benefit covers all care for the terminal illness, related conditions,
and for the management of pain and symptoms. As noted in the ICD-9-CM
Official Guidelines for Coding and Reporting, effective October 1,
2011, available at the CMS Web site at the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/ICD9ProviderDiagnosticCodes/ or on the CDC's Web
site at: http://www.cdc.gov/nchs/data/icd9/icd9cm_guidelines_2011.pdf, ``these coding and reporting guidelines are a set of rules
that have been developed to accompany and complement the official
conventions and instructions provided with the ICD-9-CM itself.
Adherence to these guidelines when assigning ICD-9-CM diagnosis and
procedure codes is required under the Health Insurance Portability and
Accountability Act (HIPAA).''
Additionally, in our regulations at 45 CFR 162.1002, the Secretary
adopted the ICD-9-CM code set, including The Official ICD-9-CM
Guidelines for Coding and Reporting. The CMS' Hospice Claims Processing
manual (Pub 100-04, chapter 11) requires that hospice claims include
other diagnoses ``as required by ICD-9-CM Coding Guidelines'' available
at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c11.pdf. HIPAA, federal regulations, and the Medicare
hospice claims processing manual all require that these ICD-9-CM Coding
Guidelines be applied to the coding and reporting of diagnoses on
hospice claims. Regarding diagnosis reporting on hospice claims, we
clarified in our July 27, 2012 FY 2013 Hospice Wage Index notice (77 FR
44247 through 44248) that all providers should code and report the
principal diagnosis as well as all coexisting and additional diagnoses
related to the terminal condition or related conditions to more fully
describe the Medicare patients they are treating.
We are actively collecting and analyzing hospice data for
evaluation of hospice payment reform methodologies as mandated in
section 3132(a) of the Affordable Care Act. To adequately account for
any clinical complexities a given hospice patient might have as a
result of related conditions, these related conditions must be included
on
[[Page 27831]]
the Medicare hospice claim. Some hospice providers already report
related additional and coexisting diagnoses on their claims; however,
the majority of hospice providers do not report this information. The
reporting of only one principal diagnosis does not lend to a
comprehensive, holistic, and accurate description of the beneficiaries'
end-of-life conditions and may not fully reflect the individualized
needs in the individual's required hospice plan of care. As a result,
analysis of current claims data does not allow us to appropriately
determine whether case-mix adjustment, or other considered methods
would or would not be a reasonable approach to, or part of, hospice
payment reform. Ongoing hospice data analysis is available on the CMS
Hospice Center Web page at: http://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.html.
2. Use of Nonspecific, Symptom Diagnoses
As mentioned in section II.E, of this proposed rule, there have
been changes in the reported hospice principal diagnoses since the
inception of the Medicare hospice benefit. In 1983, the most common
reported hospice diagnoses were cancer diagnoses. Over time, and with
the advancements in medical technology and interventions, there has
been a notable shift in the most commonly reported hospice diagnoses
from cancers to non-cancer terminal illnesses, such as ``debility'' and
``adult failure to thrive,'' which are considered to be nonspecific,
symptom diagnoses according to ICD-9-CM Coding Guidelines and are under
the ICD-9-CM classification of ``Symptoms, Signs and Ill-defined
Conditions''.
Codes under the classification, ``Symptoms, Signs, and Ill-defined
Conditions'', are not to be used as principal diagnosis when a related
definitive diagnosis has been established or confirmed by the provider.
``Debility'' is medically defined as: an unspecified syndrome
characterized by unexplained weight loss, malnutrition, functional
decline, multiple chronic conditions contributing to the terminal
progression, and increasing frequency of outpatient visits, emergency
department visits and/or hospitalizations. ``Debility'' is associated
with multiple primary conditions. The individual diagnosed with
``Debility'' may have multiple comorbid conditions that individually,
may not deem the individual to be terminally ill. However, the
collective presence of these multiple comorbid conditions will
contribute to the terminal status of the individual. Data analysis
using FY 2012 claims data for those beneficiaries with a reported
principal hospice diagnosis of ``debility,'' and reported secondary
diagnoses, shows that congestive heart failure, coronary artery
disease, heart disease, atrial fibrillation, Parkinson's disease,
Alzheimer's disease, renal failure, chronic kidney disease, and chronic
obstructive pulmonary disease are among the most common secondary
diagnoses reported. ``Adult Failure to Thrive'' is often used
interchangeably with ``Debility'' as a primary hospice diagnosis.
Despite the specificity of ICD-9-CM Coding Guidelines, it is unclear as
to why these two diagnoses are often used interchangeably. ``Adult
Failure to Thrive'' is defined as undefined weight loss, decreasing
anthromorphic measurements, and a Palliative Performance Scale < 40
percent. It is also associated with multiple primary conditions
contributing to the physical and functional decline of the individual.
Four syndromes known to be individually predictive of adverse outcomes
in older adults are repeatedly cited as prevalent in patients with
``adult failure to thrive'' impaired physical functioning,
malnutrition, depression, and cognitive impairment. Data analysis using
FY 2012 claims data for those beneficiaries with a reported principal
hospice diagnosis of ``adult failure to thrive,'' and reported
secondary diagnoses, shows that pneumonia, cerebral vascular accident
(stroke), atrial fibrillation, heart disease, Alzheimer's disease,
congestive heart failure, and Parkinson's disease are among the most
common secondary diagnoses reported.
By the nature of the clinical criteria of ``debility'' and ``adult
failure to thrive'', these symptom syndromes are the result of multiple
primary conditions that contribute to the terminal decline. If any or
all of these multiple primary conditions have been or are being treated
or managed by a health care provider, or if medications have been
prescribed for the patient to treat or manage any or all of these
multiple primary conditions, we believe that these conditions meet the
criteria of being established and/or confirmed by the beneficiary's
health care provider and, thus, ``debility'' or ``adult failure to
thrive'' would not be listed as the principal hospice diagnosis per
ICD-9-CM coding guidelines.
Moreover, at the initial hospice election period, an eligible
Medicare beneficiary must be certified as terminally ill. This
certification is based on the recommendation of the medical director in
consultation with, or with input from, the beneficiary's attending
physician (if any) and a comprehensive assessment of all body systems.
Per our regulations at Sec. 418.25, Admission to Hospice Care, ``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 clinical relevant information supporting all
diagnoses.''
All physical, emotional, and spiritual issues are assessed and an
individualized, specific hospice plan of care is established by the
hospice interdisciplinary team. A reported principal hospice diagnosis
in the non-specific ICD-9-CM category, ``Symptoms, Signs, and Ill-
Defined Conditions'', such as ``debility'' or ``adult failure to
thrive,'' does not encompass the comprehensive, holistic nature of the
assessment and care to be provided under the Medicare hospice benefit.
For the eligible Medicare beneficiary who has elected the Medicare
hospice benefit, and has been certified as terminally ill per the
eligibility criteria, the hospice benefit provides services for all
care related to the terminal illness, related conditions, and, for the
management of pain and symptoms that result from the terminal illness
and related conditions. If a non-specific, ill-defined diagnosis is
reported as the principal hospice diagnosis, a comprehensive,
individualized patient-centered plan of care, as required, may be
difficult to accurately develop and implement, and, as a result, the
hospice beneficiary may not receive the full benefit of hospice
services. According to the hospice Conditions of Participation at Sec.
418.56, ``The hospice must develop an individualized written plan of
care for each patient. The plan of care must reflect patient and family
goals and interventions based on the problems identified in the
initial, comprehensive, and updated comprehensive assessments. The plan
of care must include all services necessary for the palliation and
management of the terminal illness and related conditions, including
the following:
1. Interventions to manage pain and symptoms.
2. A detailed statement of the scope and frequency of services
necessary to meet the specific patient and family needs.
[[Page 27832]]
3. Measurable outcomes anticipated from implementing and
coordinating the plan of care.
4. Drugs and treatment necessary to meet the needs of the patient.
5. Medical supplies and appliances to meet the needs of the
patient.
6. The interdisciplinary group's documentation of the patient's or
representative's level of understanding, involvement, and agreement
with the plan of care, in accordance with the hospice's own policies,
in the clinical record''(42 CFR 418.56(c)).
A comprehensive hospice plan of care starts with accurate and
thorough assessment and identification of the conditions contributing
to the terminal illness and decline. ``Debility'' and ``adult failure
to thrive'' are not appropriate principal diagnoses in the terminally
ill population as these diagnoses are incongruous to the comprehensive
nature of the hospice assessment, the specific, individualized hospice
plan of and care, and the hospice services provided. CMS is aware that
diagnosing diseases is not always a perfect science but the expectation
is that based on the comprehensive hospice assessment, the certifying
physicians are using their best clinical judgment in determining the
principal diagnosis and related conditions.
In this proposed rule, we would clarify that ``debility'' and
``adult failure to thrive'' would not be used as principal hospice
diagnoses on the hospice claim form. When reported as a principal
diagnosis, these would be considered questionable encounters for
hospice care, and the claim would be returned to the provider for a
more definitive principal diagnosis. ``Debility'' and ``adult failure
to thrive'' could be listed on the hospice claim as other, additional,
or coexisting diagnoses. We believe that the private sector requires
that ICD-9-CM coding guidelines be followed; this includes not allowing
``debility'' and ``adult failure to thrive'' as principal diagnoses on
private sector hospice claims. The principal diagnosis listed should be
determined by the certifying hospice physician(s) as the diagnosis most
contributory to the terminal condition. When there are two or more
interrelated conditions (such as diseases in the same ICD-9-CM chapter
or manifestations characteristically associated with a certain disease)
potentially meeting the definition of principal diagnosis, either
condition may be sequenced first, unless the circumstances of the
admission, the therapy provided, the Tabular List, or the Alphabetic
Index indicate otherwise. In the unusual instance when two or more
diagnoses equally meet the criteria for principal diagnosis as
determined by the circumstances of admission, diagnostic workup and/or
therapy provided, and the Alphabetic Index, Tabular List, or other
coding guidelines do not provide sequencing direction, any one of the
diagnoses may be sequenced first. We expect hospice providers to code
the most definitive, contributory terminal diagnosis in the principal
diagnosis field with all other related conditions in the additional
diagnoses fields for hospice claims reporting. As stated previously,
these clarifications are not intended to preclude any clinical judgment
in determining a beneficiary's eligibility for hospice services.
Therefore, CMS does not expect that these coding clarifications will
create any limitations or barriers to accessing Medicare hospice
services by eligible Medicare beneficiaries as coding on claims occurs
after the beneficiary has elected and accessed hospice services. In
fact, adherence to the ICD-9-CM coding guidelines should promote access
to appropriate and comprehensive hospice services. We solicit comments
regarding these ICD-9-CM coding guideline clarifications.
3. Use of ``Mental, Behavioral and Neurodevelopmental Disorders'' ICD-
9-CM Codes
Another concerning trend noted in the top twenty claims-reported
principal hospice diagnoses is the use of codes that fall under the
classification of ``Mental, Behavioral and Neurodevelopmental
Disorders.'' There are several codes that fall under this
classification that encompass multiple dementia diagnoses that are
frequently reported principal hospice diagnoses on hospice claims, but
are not appropriate principal diagnoses per ICD-9-CM Coding Guidelines.
Some of these ICD-9-CM codes are considered manifestation codes. In
accordance with the 2012 ICD-9-CM Coding Guidelines, certain conditions
have both an underlying etiology and multiple body system
manifestations due to the underlying etiology. For such conditions, the
ICD-9-CM has a coding convention that requires the underlying condition
be sequenced first followed by the manifestation. Wherever such a
combination exists, there is a ``use additional code'' note at the
etiology code, and a ``code first'' note at the manifestation code.
These instructional notes indicate the proper sequencing order of the
codes, etiology followed by manifestation.'' In most cases, these
manifestation codes will have in the code title, ``in diseases
classified elsewhere'' or ``in conditions classified elsewhere.'' Codes
with this in the title are a component of the etiology/manifestation
convention. The codes with ``in diseases classified elsewhere'' or ``in
conditions classified elsewhere'' in the title indicates that it is a
manifestation code. ``In diseases classified elsewhere'' or ``in
conditions classified elsewhere'' codes are never permitted to be used
as first listed or principal diagnosis codes and they must be listed
following the underlying condition.
However, there are manifestation codes that do not have ``in
diseases classified elsewhere'' or ``in conditions classified
elsewhere'' in their title. For such codes a ``use additional code''
note would still be present, and the rules for coding sequencing still
apply. We note that several dementia codes which are not allowable as
principal diagnoses per ICD-9-CM coding guidelines are under the
classification of ``Mental, Behavioral and Neurodevelopmental
Disorders.'' According to the ICD-9-CM coding guidelines for ``Mental,
Behavioral and Neurodevelopmental Disorders'', dementias that fall
under this category are ``most commonly a secondary manifestation of an
underlying causal condition.'' Data analysis using FY 2012 claims data
for those beneficiaries with a reported principal hospice diagnosis of
a dementia classified under ``Mental, Behavioral and Neurodevelopmental
Disorders'' and reported secondary diagnoses shows that Alzheimer's
disease, Parkinson's disease, and stroke were the among the most common
secondary diagnoses reported. Therefore, we are further reiterating the
importance of following the ICD-9-CM coding guidelines for diagnosis
reporting on the hospice claims submission.
There are, however, other ICD-9-CM dementia codes, such as those
for Alzheimer's disease and others that fall under the ICD-9-CM
classification, ``Diseases of the Nervous System and Sense Organs''
which are acceptable as principal diagnoses per ICD-9-CM coding
guidelines. However, there are also dementia codes under this
classification that do have manifestation/etiology or sequencing
conventions; therefore, it is imperative that hospice providers follow
ICD-9-CM coding guidelines and sequencing rules for all diagnoses and
pay particular attention to dementia coding as there are dementia codes
found in more than one ICD-9-CM classification chapter and there are
multiple coding guidelines associated with these dementia conditions.
[[Page 27833]]
Again, these clarifications are not intended to preclude any
clinical judgment in determining a beneficiary's eligibility for
hospice services; rather these are clarifications regarding the
reporting of dementia diagnoses on the hospice claims. We are restating
that CMS expects hospice providers to code the most definitive,
contributory terminal illness in the principal diagnosis field with all
other related conditions in the additional diagnoses fields for hospice
claims reporting. The reporting of accurate diagnoses of the principal
terminal condition and all related conditions is keeping with the
intent of the comprehensive, holistic nature of the Medicare hospice
benefit. By adhering to these comprehensive assessment and diagnostic
principals and coding guidelines, CMS expects that there will be no
limitations or barriers to access to hospice care by eligible Medicare
beneficiaries, and should; in fact, promote appropriate and
comprehensive hospice services as per the original intent of the
Medicare hospice benefit as proposed and finalized in the 1983 rules.
We solicit comments regarding these ICD-9-CM coding guideline
clarifications.
4. Guidance on Coding of Principal and Other, Additional, and/or Co-
Existing Diagnoses
a. General Rules for Principal Diagnosis
Based on the ICD-9-CM coding guidelines, the circumstances of an
inpatient admission always govern the selection of 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 analyzing frequently reported principal hospice
diagnoses, data analysis revealed differences between reported
principal hospice diagnoses and reported principal hospital diagnoses
in patients who elected hospice within 3 days of discharge from the
hospital. In analyzing data on cancer diagnoses of Medicare hospice
beneficiaries for 2009 through 2011, Table 3 below shows that
beneficiaries with a hospital-reported principal cancer diagnosis that
elected hospice within three days of hospital discharge did not always
have a hospice-reported principal cancer diagnosis. Although ICD-9-CM
Coding Guidelines specify that the circumstances of an inpatient
hospital admission diagnosis are to be used in determining the
selection of a principal diagnosis, this guideline is not always being
adhered to for the selection of the principal hospice diagnosis
following a hospice beneficiary's inpatient hospitalization. It is
unclear as to why there is this discrepancy in the hospital/hospice
diagnosis patterns as ICD-9-CM Coding Guidelines are specific regarding
principal diagnosis selection.
Table 3--Principal Hospice Diagnoses and Incidence of Same Diagnoses From Hospitalizations Within Three Days
Prior to Hospice Election, FY 2009-2011
----------------------------------------------------------------------------------------------------------------
ICD-9 Diagnoses Instances of . . . That then also became
----------------------------------------------------------- principal hospice principal diagnosis
hospital -----------------------------------
diagnosis . . . Percent of total
ICD-9 Code ------------------ instances of
Label ranges Number principal
Number hospital
diagnosis
----------------------------------------------------------------------------------------------------------------
Lung & Chest Cavity Cancer.............. 162-165s 32,428 27,939 86.2
Colo-Rectal Cancer...................... 153-154s 10,360 8,270 79.8
Blood & Lymphatic Cancer................ 200-208s 15,491 12,747 82.3
Breast Cancer........................... 174-175s 1,881 1,651 87.8
Pancreatic Cancer....................... 157s 11,334 9,887 87.2
Prostate Cancer......................... 185s 1,764 1,520 86.2
Liver Cancer............................ 155-156s 6,710 5,009 74.6
Bladder Cancer.......................... 188s 2,844 2,218 78.0
----------------------------------------------------------------------------------------------------------------
Source: FY 2009-2011 Hospice claims matched with hospital inpatient claims where no more than three days passed
between hospital discharge and hospice admission.
Note(s): Data sources included the Hospice Claims File (FYs 2009-2011) and the Hospitalizations File (FY 2009
through 2011). These two files were combined and records utilized for analysis were trimmed where Hospital
Beneficiary ID equaled Hospice Beneficiary ID and Hospice Admit Date was within three days of Hospital
Discharge Date. The data included the beneficiaries' ID number, their hospice admission date, the ICD-9 code
for their principal hospice diagnosis, the hospital discharge date, and the ICD-9 code for their admitting
hospital diagnosis.
Further, ICD-9-CM coding guidelines state, to list first the
diagnosis shown in the medical record to be chiefly responsible for the
services provided and to list additional codes that describe any
coexisting conditions.
b. General Rules for Other (Additional) Diagnoses
For 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''. Section IV.K of the ICD-9-CM Coding Guidelines addresses
outpatient settings, and instructs providers to ``code all documented
conditions at the time of the encounter/visit, and require or affect
patient care treatment or management.'' These guidelines for
determining principal and other diagnoses are stated in the ICD-9-CM
Coding Guidelines.
We do not believe that requiring the reporting of other,
additional, and/or coexisting diagnoses that are related to the
terminal illness and related conditions would create a clinical or
administrative burden on hospices. We note that some hospice providers
are already reporting these diagnoses on their claims. Information on a
patient's related and unrelated diagnoses should already be included as
part of the hospice comprehensive assessment and appropriate
interventions for the palliation and management of the terminal illness
and related conditions should be incorporated into the patient's plan
of care, as determined by the hospice interdisciplinary group
[[Page 27834]]
(IDG). The hospice Conditions of Participation (CoPs) at Sec.
418.54(c)(2) require that the comprehensive assessment ``include
complications and risk factors that affect care planning.'' The CoPs at
Sec. 418.56(e)(4) require that the hospice IDG ``provide for an
ongoing sharing of information with other non-hospice healthcare
providers furnishing services unrelated to the terminal illness and
related conditions.'' It is common for hospices to include the related
and unrelated diagnoses on the comprehensive assessment in order to
assure coordinated, holistic, patient care and to monitor the
effectiveness of the care that is delivered.
With the specificity of both the ICD-9-CM coding guidelines and the
ICD-10-CM coding guidelines, it is expected that complete,
comprehensive coding will be applied to hospice claims submissions.
Hospice providers are expected to report all coexisting or additional
diagnoses related to the terminal illness and related conditions on the
hospice claim to be in compliance with existing policy, and provide the
data needed for evaluating potential hospice payment reform
methodologies. This accurate coding of the principal hospice diagnosis
and the other, additional, and/or coexisting diagnoses is in keeping
with the comprehensive assessment and incorporated into the
individualized hospice plan of care to aid hospices in identifying and
meeting the hospice beneficiaries' needs. Currently, the hospice claim
includes a field for the patient's principal hospice diagnosis, but
allows for up to 17 additional diagnoses on the paper UB-04 claim, and
up to 24 additional diagnoses on the 837I 5010 electronic claim.
5. Transition to ICD-10-CM
We note that ICD-10-CM will replace the ICD-9-CM on October 1,
2014. We would apply the coding clarifications discussed above to the
ICD-10-CM coding guidelines, as well as the ICD-9-CM guidelines. A
critical issue associated with the transition to ICD-10-CM involves the
matter of crosswalking between the ICD-9-CM and ICD-10-CM code sets.
The term ``crosswalking'' is generally defined as the act of mapping or
translating a code in one code set to a code or codes in another code
set. (The terms ``crosswalking'' and ``mapping'' are sometimes used
interchangeably.) Understanding crosswalking will be important to
physicians during the transition phase when learning which new ICD-10
code to use in place of an ICD-9 code. The National Center for Health
Statistics (NCHS) has developed what is known as a ``General
Equivalence Mappings'' (GEMs) for the diagnosis codes. Likewise, we
have developed the GEMs for the procedure codes. The GEMs are
considered to be the authoritative source for crosswalking between ICD-
10 and ICD-9. The GEMs are data files that list the ICD-9 and ICD-10
codes and the attributes of the mapping between the two code sets.
There is a file for mapping from ICD-10 to ICD-9 and another for
mapping from ICD-9 to ICD-10. The GEMs files are available for free and
can be downloaded from the NCHS Web site, www.cdc.gov/nchs/icd/icd10cm.htm. Hospices should not substitute crosswalking for learning
and fully implementing ICD-10-CM into their procedures. Additional
information regarding the transition to ICD-10-CM is available through
the CMS Web site at: http://www.cms.gov/Medicare/Coding/ICD10/index.html?redirect=/icd10 and ICD-10-CM coding guidelines can be found
on the CDC's Web site at www.cdc.gov/nchs/data/icd10/10cmguidelines2012.pdf.
B. Proposed Update to the Hospice Quality Reporting Program
1. Background and Statutory Authority
Section 3004 of the Affordable Care Act amended 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. Any measures selected by the Secretary must have been
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. Section 1814(i)(5)(D)(iii) of
the Act requires that the Secretary publish selected measures
applicable with respect to FY 2014 no later than October 1, 2012.
2. Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2014
The successful development of a Hospice Quality Reporting Program
(HQRP) that promotes the delivery of high quality healthcare services
is our paramount concern. We seek to adopt measures for the HQRP that
promote efficient and safer care. Our measure selection activities for
the HQRP takes into consideration input we receive from the Measure
Applications Partnership (MAP), convened by the National Quality Forum
(NQF), as part of a pre-rulemaking process that we have established and
are required to follow 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). For
more details about the pre-rulemaking process, see the FY 2013 IPPS/
LTCH PPS final rule (77 FR at 53376 (August 31, 2012)).
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), and the National Strategy
for Quality Improvement in Healthcare located at (http://www.healthcare.gov/news/reports/nationalqualitystrategy032011.pdf). To
the extent practicable, we have sought to adopt measures that have been
[[Page 27835]]
endorsed by the national consensus organization, recommended by multi-
stakeholder organizations, and developed with the input of providers,
purchasers/payers, and other stakeholders.
As stated in the August 4, 2011 FY 2012 Hospice Wage Index final
rule (76 FR 47302, 47320), to meet the quality reporting requirements
for hospices for the FY 2014 payment determination as set forth in
section 1814(i)(5) of the Act, we finalized the requirement that
hospices report two measures:
An NQF-endorsed measure that is related to pain
management, NQF 0209. The data collection period for this
measure was October 1, 2012 through December 31, 2012, and the data
submission deadline was April 1, 2013. The data for this measure are
collected at the patient level, but are reported in the aggregate for
all patients cared for within the reporting period, regardless of
payer.
A structural measure that is not endorsed by NQF:
Participation in a Quality Assessment and Performance Improvement
(QAPI) program that includes at least three quality indicators related
to patient care. The data collection period for this measure was
October 1, 2012 through December 31, 2012, and the data submission
deadline was January 31, 2013. Hospices are not asked to report their
level of performance on these patient care related indicators.
Hospices failing to report quality data before the specified
deadline in 2013, would have their market basket update reduced by 2
percentage points in FY 2014. Hospice programs would be evaluated for
purposes of the quality reporting program based on whether or not they
submit data, not based on their performance level on required measures.
For the FY 2014 payment determination, hospices were asked to
provide identifying information, and then complete a web based data
entry for the required measures. For hospices that could not complete
the web based data entry, a downloadable data entry form was made
available upon request. Electronic data submission would be required
for the FY 2015 payment determination and beyond; there would be no
other data submission method available.
3. Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2015 and Beyond
In the November 8, 2012 CY 2013 Home Health Prospective Payment
System Rate Update final rule (77 FR 67068, 67133), to meet the quality
reporting requirements for hospices for the FY 2015 payment
determination and each subsequent year, as set forth in section
1814(i)(5) of the Act, we finalized the requirement that hospices
report two measures:
The NQF-endorsed measure that is related to pain
management, NQF 0209
The structural measure: Participation in a Quality
Assessment and Performance Improvement (QAPI) Program that includes at
least three quality indicators related to patient care. We did not
extend the requirement that hospices complete a check list of their
patient care indicators and indicate the data sources they used for
their quality indicators.
In this rule, we propose that the structural measure related to
QAPI indicators and the NQF 0209 pain measure would not be
required for the hospice quality reporting program beyond data
submission for the FY 2015 payment determination. The original intent
of the structural measure was for hospices to submit information about
number, type, and data source of quality indicators used as a part of
their QAPI Program. Data gathered as part of the structural measure
were used to ascertain the breadth and context of existing hospice QAPI
programs to inform future measure development activities including the
data collection approach for the first year of required reporting (FY
2014). To date, hospices have reported two cycles worth of structural
measure data to CMS:
Voluntary reporting period (submitted to CMS by January
31, 2012)--For the voluntary reporting period hospices submitted free
text data describing each quality indicator in their QAPI programs;
data regarding number and data source of quality indicators were also
submitted.
FY 2014 (submitted to CMS by January 31, 2013)--For the FY
2014 cycle, hospices submitted data about the topic areas of care
addressed by quality indicators in their QAPI Programs, using a drop-
down menu checklist rather than free text to reduce burden. Data
regarding number and data source of quality indicators were also
submitted.
CMS has analyzed data from both reporting periods. Findings from the
voluntary reporting period showed that hospices use quality indicators
that address a wide range of patient care related topics and that there
is great variation in how hospices collect and use ``standardized''
quality indicators. The majority of reported indicators addressed
patient safety and physical symptom management. Likewise, findings from
analysis of the FY 2014 structural measure data reiterated findings
from the voluntary reporting period.
Other topics addressed included management of psychosocial aspects
of care, bereavement and grief, communication, and care coordination.
Overall, findings from both data collections of the structural measure
have provided adequate information on hospice's patient care-related
indicators making further reporting on the structural measure
unnecessary.
In addition, we have determined that the NQF 0209 measure
as it is currently collected and reported by hospices is not suitable
for long term use as part of the Hospice Quality Reporting Program
(HQRP). In making this decision, we considered findings from the
Voluntary Reporting Period and the Hospice Item Set pilot. We will also
examine data from the first year of reporting on the measure (impacting
FY 2014 APU determination). In addition, we considered stakeholder
input including comments submitted during rulemaking, expert input from
a Technical Expert Panel (TEP), and provider questions and comments
submitted to the hospice quality help desk during the 2012/2013 data
collection and reporting period. There are two central concerns with
the NQF 0209 measure. First, the measure does not easily
correspond with the clinical processes for pain management, resulting
in variance in what hospices collect, aggregate, and report. This
concern could potentially be addressed by extensive and ongoing
provider training or standardizing data collection. However, even with
extensive training and the use of a standardized item set during the
pilot test, the data showed continued variance in implementation of the
measure. Second, there is a high rate of patient exclusion due to
patient ineligibility for the measure and patients' denying pain at the
initial assessment. This high rate of patient exclusion from the
measure results in a small denominator and creates validity concerns.
These concerns cannot be addressed by training or standardizing data
collection. We recognize the value of measuring hospices' ability to
achieve patient comfort and the desire to include a patient outcome
measure such as the NQF 0209 in the HQRP. By removing the
requirement that hospices submit the NQF 0209 measure, pain
comfort would not be measured as part of the HQRP. However, we plan to
collect two other measures that reflect care for pain. The standardized
item set that CMS has developed contains data
[[Page 27836]]
elements to collect 7 quality measures endorsed by NQF for hospice.
Among these are two process measures related to pain: The NQF
1634, Pain screening, and NQF 1637, pain assessment.
However, while these measures provide insight about screening and
assessment of patients, they do not offer information about patient
comfort related to pain. An alternative proposal would be to retain NQF
0209 until a more suitable outcome measure was available for
use in the HQRP, in order to maintain a focus on achieving patient
comfort. We also recognize the importance of adherence to standardized
data collection specifications when producing measures for public
reporting. We intend to work toward the HQRP's future inclusion of an
improved pain outcome measure. We solicit comment on the removal of the
checklist and data source questions from the structural measure, and
the removal of the NQF 0209 measure. We also solicit comment
on the alternative proposal of maintaining NQF 0209 until
another pain outcome measure is available.
4. Quality Measures for Hospice Quality Reporting Program for Payment
Year FY 2016 and Beyond
As stated in the November 8, 2012 CY 2013 Home Health Prospective
Payment System Rate Update final rule (77 FR 67068, 67133), we
considered an expansion of the required measures to include additional
measures endorsed by NQF. We also stated that to support the
standardized collection and calculation of quality measures, collection
of the needed data elements would require a standardized data
collection instrument. We have developed and tested a hospice patient-
level item set to be used by all hospices to collect and submit
standardized data items about each patient admitted to hospice. We
contracted with RTI International to support the development of the
Hospice Item Set (HIS) for use as part of the HQRP. In developing the
HIS, RTI focused on the NQF endorsed measures that had evidence of use
and/or testing with hospice providers. Most of these measures were
initially developed during the PEACE (Prepare, Embrace, Attend,
Communicate, and Empower) Project, which was funded by CMS to develop
and test an initial set of quality measures for use in hospice and
palliative care. The PEACE project, which ended in 2008, resulted in
the identification of recommended quality measure and data collection
tools that hospice providers could use in their Quality Assessment and
Performance Improvement (QAPI) programs to assess quality of care and
target areas for improvement. Additional information on the PEACE
project can be found at http://www.thecarolinascenter.org/default.aspx?pageid=24.
Most of the measures endorsed by NQF are already widely in use by
hospices nationwide as part of their internal Quality Reporting and
Performance Improvement (QAPI) programs. Data we received from hospices
during the Voluntary Reporting Period in 2011 showed that hospices had
implemented and were using the PEACE measures. Some of the PEACE
measures were endorsed by NQF in February, 2012, and are listed below
with their NQF endorsement numbers. The HIS standardizes the collection
of the data elements that are needed to calculate seven of the NQF
endorsed measures. The HIS was pilot tested during the early summer of
2012. The primary objective of the pilot was to explore data collection
methods and the feasibility of implementing a patient-level item set
for possible future use as part of the HQRP.
In developing the standardized HIS, we considered comments offered
in response to the July 13, 2012 CY 2013 Home Health Prospective
Payment System Rate Update proposed rule (77 FR 41548, 41573). We have
included data items that support the following NQF endorsed measures
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)
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 propose the
implementation of the HIS in July 2014. We believe that to support the
standardized collection and calculation of any or all of the hospice
quality measures listed above, it is necessary to use a standardized
data collection mechanism. The HIS was developed specifically for this
data collection purpose. We expect the HIS Paperwork Reduction Act
(PRA) package to post on or within several days after the publication
of this FY 2014 Hospice proposed rule. The HIS will be posted on the
Paperwork Reduction Act (PRA) area of the CMS.gov Web site at: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/index.html.
We propose that hospices begin the use and submission of the HIS in
July 2014. To meet the quality reporting requirements for hospices for
the FY 2016 payment determination and each subsequent year, we propose
regular and ongoing electronic submission of the HIS data for each
patient admitted to hospice on or after July 1, 2014, regardless of
payer. Hospices would be required to complete and submit an admission
HIS and a discharge HIS for each patient. Hospices failing to report
quality data via the HIS in 2014 would have their market basket update
reduced by 2 percentage points in FY 2016. Hospice programs would be
evaluated for purposes of the quality reporting program based on
whether or not they submit data, instead of their performance level on
required measures. If our proposals for use of the Hospice Item Set are
finalized, we plan to provide Hospices with further information and
details about use of the Hospice Item Set. We will provide this
information through venues such as postings on the Hospice Quality
Reporting Program Web page, Special Open Door Forums, announcements in
the CMS E-News, providers training, and National Provider calls.
Electronic data submission would be required for HIS submission in CY
2014 and beyond; there would be no other data submission method
available. We would make available submission software for the HIS to
hospices at no cost. We would also provide reports to individual
hospices on their performance on the measures calculated from data
submitted via the HIS. The specifics of the reporting system and
precisely when specific measures would be made available have not yet
been determined. We would report to providers on the following measures
on a schedule to be determined:
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)
[[Page 27837]]
Table 4--Summary Tables
----------------------------------------------------------------------------------------------------------------
Data collection Data submission APU Impact Measure name
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 HH PPS Final Rule
----------------------------------------------------------------------------------------------------------------
1/1/2013-12/31/2013................ 4/1/2014................... FY 2015 (10/1/2014)... Structural/QAPI
measure, NQF 0209.
----------------------------------------------------------------------------------------------------------------
Proposed in this Proposed Rule
----------------------------------------------------------------------------------------------------------------
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Hospice and Palliative
Care--Pain Screening,
NQF 1634.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Hospice and Palliative
Care--Pain
Assessment, NQF
1637.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Hospice and Palliative
Care--Dyspnea
Screening, NQF 1639.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Hospice and Palliative
Care--Dyspnea
Treatment, NQF 1638.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Patients Treated with
an Opioid who are
Given a Bowel
Regimen, NQF 1617.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Hospice and Palliative
Care--Treatment
Preferences, NQF
1641.
7/1/2014-12/31/2014................ Rolling.................... FY 2016 (10/1/2015)... Beliefs/Values
Addressed (if desired
by patient), NQF
1647.
----------------------------------------------------------------------------------------------------------------
As stated in the August 4, 2011 FY 2012 Hospice Wage Index final
rule (76 FR 47302, 47320), we finalized that all hospice quality
reporting periods subsequent to that for Payment Year FY 2014 would be
based on a CY instead of a calendar quarter and for FY 2015 and beyond,
the data submission deadline would be April 1st of each year. Our
proposal to implement the HIS in July 2014 would negate the CY data
collection requirement and the April 1st data submission deadline. We
would provide details on data collection and submission timing prior to
implementation of the HIS in July 2014.
5. Public Availability of Data Submitted
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 ensure that a hospice
would have the opportunity to review the data regarding the hospice's
respective program before it is made public. In addition, under section
1814(i)(5)(E) of the Act, the Secretary is authorized to report quality
measures that relate to services furnished by a hospice on the CMS Web
site. 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 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. The development and
implementation of a standardized data set for hospices must precede
public reporting of hospice quality measures. Once hospices have
implemented the standardized data collection approach, we will have the
data needed to establish the scientific soundness of the quality
measures that can be calculated using the standardized data collection.
It is critical to establish the reliability and validity of the
measures prior to public reporting in order to demonstrate the ability
of the measures to distinguish between the quality of services
provided. To establish reliability and validity of the quality
measures, at least four quarters of data will need to be analyzed.
Typically the first two quarters of data reflect the learning curve of
the providers as they adopt a standardized data collection; these data
are not used to establish reliability and validity. This means that if
the proposal to begin data collection in CY 2014 (Q3) is finalized, the
data from CY 2014 (Q3, Q4) would not be used for assessing validity and
reliability of the quality measures. Data collected by hospices during
CY 2015 would be analyzed starting in CY 2015. Decisions about whether
to report some or all of the quality measures publicly would be based
on the findings of analysis of the CY 2015 data. In addition, as noted,
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
data. In light of all the steps required prior to data being publicly
reported, we anticipate that public reporting will not be implemented
in FY 2016. Public reporting may occur during the FY 2018 APU year,
allowing ample time for data analysis, review of measures'
appropriateness for use for public reporting, and allowing hospices the
required time to review their own data prior to public reporting. We
will announce the timeline for public reporting of data in future
rulemaking. We welcome public comment on what we should consider when
developing future proposals related to public reporting.
6. Proposed Adoption of the CMS Hospice Experience of Care Survey for
the FY 2017 Payment Determination and That of Subsequent Fiscal Years
In the CY 2013 Home Health Prospective Payment System Rate Update
final rule (77 FR 67135), we stated that were considering the use of a
patient/family experience of care survey in addition to other hospice
quality of care (clinical) measures. We are currently developing a
Hospice Experience of Care Survey questionnaire drawing heavily on
questionnaires in the public domain such as the Family Evaluation of
Hospice Care (FEHC). The Hospice Experience of Care Survey would treat
the dying patient and his or her informal caregivers (family members or
friends) as the unit of care.
Before the development of this survey, there was no official
national standard experience of care survey that included standard
survey administration protocols. This is one reason we did not adopt
the FEHC as
[[Page 27838]]
our experience of care survey. In addition, topic areas that were not
addressed by the FEHC were identified by the public as important to
their experiences. The Hospice Experience of Care Survey would include
detailed survey administration protocols which would allow for
comparisons across hospices. The survey would focus on topics that are
important to hospice users and for which informal caregivers are the
best source for gathering this information. In addition, the ``About
You'' section of the instrument includes demographic characteristics of
the patients and their caregivers which can be used to feed into case
mix adjustments of the publicly reported data.
The Hospice Experience of Care Survey now under development would
seek information from informal caregivers of patients who died while
enrolled in hospices. We plan to field the questionnaires after the
patient's death. Fielding timelines would be established to give the
respondent some time from the death of their loved one, while
simultaneously not delaying so long that the respondent is likely to
forget details of the hospice experience. Caregivers would be 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 would be required to offer the
survey, but individual caregivers would respond only if they
voluntarily chose to do so.
The Hospice Experience of Care Survey captures such topics as
hospice provider communications with patients and family members,
hospice provider care, and patient and family member characteristics.
The survey would allow the informal caregiver (family member or friend)
to provide an overall rating of the hospice care their patient
received, and would ask if they would recommend ``this hospice'' to
others.
The Hospice Experience of Care Survey is undergoing development in
accordance with the principles used in the development of the Consumer
Assessment of Healthcare Providers and Systems (CAHPS[supreg]) surveys.
Therefore, we are--
Obtaining input from consumers and stakeholders regarding
how hospice patients perceive hospice care and what elements in hospice
programs are of greatest importance to patients and informal
caregivers.
Drafting a version of the hospice questionnaire that would
be cognitively tested with a small number of respondents in both
English and Spanish. This type of testing will allow us to assess how
respondents interpret and respond to individual questionnaire items.
Providing a pilot test of the Hospice Experience of Care
Survey instrument after the development of an initial questionnaire is
completed. This pilot test would allow us to review survey
implementation procedures and use statistical analysis of the survey
results to select the final set of questions. In addition, it will
allow us to select variables which may be used in the case mix
adjustment of survey results for public reporting.
The Hospice Experience of Care Survey, as well as the CAHPS[supreg]
family of surveys, focuses on patient perspectives on the experience of
care, rather than on patient satisfaction. CAHPS[supreg] data
complements other data, including clinical measures. CAHPS[supreg]
surveys are specifically intended to focus on issues where the patient
(or in this case the caregiver) is the best source of information. We
intend the Hospice Experience of Care Survey to have a similar focus.
We are planning to move forward with a model of survey
administration in which we would approve and train survey vendors to
administer the survey on behalf of hospices. Hospices would be required
to contract with an approved survey vendor and to provide the sampling
frame to the approved vendor on a monthly basis. The following are
proposed key dates for the national implementation of the Hospice
Experience of Care Survey:
Based on the model of CMS-implemented CAHPS[supreg]
surveys (that is, Hospital CAHPS[supreg] and Home Health Care
CAHPS[supreg]), we propose that hospices would contract with a CMS-
approved survey vendor to conduct a ``dry run'' of the survey for at
least 1 month in the first quarter of CY 2015 (January 2015 through
March 2015). Vendors would submit data on the hospice's behalf to the
CMS hospice patient experience data center. The deadline for data
submission has not yet been finalized. For the ``dry run'' the survey
vendor would follow all the national implementation procedures, but the
data would not be publicly reported. The dry run would provide hospices
and their vendors with the opportunity to work together under ``test''
conditions before they are required to start publicly reporting data.
We propose that hospices would contract with CMS-approved vendors
to begin continuous monthly data collection starting April 1, 2015.
Data submission dates are being developed; however, we expect that data
would be submitted quarterly.
We propose that the FY 2017 Annual Payment Update (APU)
determination, based in part on the Hospice Experience of Care Survey,
would include a dry run for at least 1 month in the first quarter of CY
2015 (January 2015, February 2015, and/or March 2015) plus 3 quarters
of continuous monthly participation (April 1, 2015 through December 31,
2015).
We propose that subsequent APU determinations would be
based upon 4 quarters of continuous monthly participation from January
1 through December 31 of the relevant CY.
We propose to exempt very small hospices from the survey
requirements. Hospices that had fewer than 50 unduplicated or unique
deceased patients in the period from January 1, 2014 through December
31, 2014 would be exempt from the Hospice Experience of Care Survey
data collection and reporting requirements for the FY 2017 payment
determination. The hospices would be required to submit their patient
counts for the period of January 1, 2014 through December 31, 2014 to
CMS. Data submission procedures would be further specified in future
rules. There would be similar exemptions for subsequent APU
determinations. However, a hospice would need to submit to CMS their
patient count for each future period to qualify for this exemption.
As part of the national implementation, we would develop technical
specifications for vendors to follow and would issue a detailed survey
guidelines manual prior to the dry run months.
In addition, there would be a Web site devoted specifically to the
Hospice Survey. It would include information and updates regarding
survey implementation and technical assistance. Hospices interested in
viewing similar model Web sites are encouraged to visit the Hospital
CAHPS[supreg] Web site at www.hcahpsonline.org or to the Home Health
Care CAHPS[supreg] Web site at https://homehealthcahps.org. On these
Web sites, viewers can see and download the detailed manuals about the
surveys (the Quality Assurance Guidelines for Hospital CAHPS[supreg]
and the Protocols and Guidelines Manual for Home Health Care
CAHPS[supreg]), as well as obtain information about the surveys'
histories, data submission information, and survey updates.
Consistent with our other implemented surveys, we would provide an
email address and toll-free telephone number for technical assistance.
[[Page 27839]]
The Affordable Care 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 the FY. Any such
reduction would not be cumulative and would not be taken into account
in computing the payment amount for subsequent FYs. In the November 8,
2012 CY 2013 Home Health Prospective Payment System final rule (77 FR
67068), it was stated that all hospice quality reporting periods
subsequent to that for Payment Year 2014 be based on a CY rather than
on a FY. With the proposed dry run timeline of least 1 month in the
first quarter of CY 2015 and data collection beginning April 1, 2015,
we propose that the survey requirements be part of the Hospice Quality
Reporting Program requirements for the FY 2017 payment determination.
We are proposing that to meet the FY 2017 requirements, hospices would
participate in a dry run for at least 1 month of the first quarter of
CY 2015 (January 2015, February 2015, and/or March 2015) and must
collect the survey data on a monthly basis from April 1, 2015 through
December 31, 2015.
In summary, we are proposing to start the Hospice Experience of
Care Survey requirements with a test run for at least 1 month in the
first quarter of CY 2015 with continuous monthly data collection
beginning April 1, 2015, to meet the annual payment update requirements
for FY 2017. We are proposing to add the Hospice Experience of Care
Survey requirements to the Hospice quality reporting program
requirements for the FY 2017 annual payment update. Participating
hospices would have to contract with an approved Hospice Experience of
Care Survey vendor to conduct the survey on their behalf.
7. Notice Pertaining to Reconsiderations Following APU Determinations
At the conclusion of any given quality data reporting period, we
would review the data received from each hospice during that reporting
period to determine if the hospice has met the reporting requirements.
Hospices that are found to be non-compliant with the reporting
requirements set forth for that reporting cycle could receive a
reduction in the amount of 2 percentage points to their annual payment
update for the upcoming payment year.
We are aware that there may be situations when a hospice has
evidence to dispute a finding of non-compliance. We further understand
that there may be times when a provider may be prevented from
submitting quality data due to the occurrence of extraordinary
circumstances beyond their control (for example, natural disasters). It
is our goal not to penalize hospice providers in these circumstances or
to unduly increase their burden during these times.
Other CMS Quality Reporting Programs, such as Home Health Quality
Reporting and Inpatient Quality Reporting, include an opportunity for
providers to request a reconsideration pertaining to their APU
determinations. We are aware of the potential need for providers to
request reconsideration and that we will be making APU determinations
for FY 2014 in the coming months. Therefore, to be consistent with
other established quality reporting programs, we are using this
proposed rule to notify providers of our intent to provide a process
that would allow hospices to request reconsiderations pertaining to
their FY 2014 and subsequent years' payment determinations.
Specifically, as part of the reconsideration process for hospices
beginning with the FY 2014 payment determinations, hospices found to be
non-compliant with the reporting requirements during a given reporting
cycle would be notified of that finding. The purpose of this
notification is to put hospices on notice of the following: (1) That
they have been identified as being non-compliant with section 3004 of
the Affordable Care Act for the reporting cycle in question; (2) that
they would be scheduled to receive a reduction in the amount of 2
percentage points to the annual payment update to the applicable fiscal
year; (3) that they may file a request for reconsideration if they
believe that the finding of non-compliance is erroneous, or that if
they were non-compliant, they have a valid and justifiable excuse for
this non-compliance; and, (4) that they must follow a defined process
on how to file a request for reconsideration, which would be described
in the notification.
Upon the conclusion of our review of each request for
reconsideration, we would render a decision. We could reverse our
initial finding of non-compliance if: (1) The hospice provides proof of
full compliance with the all requirements during the reporting period;
or (2) the hospice was not able to comply with requirements during the
reporting period, and it provides adequate proof of a valid or
justifiable excuse for this non-compliance. We would uphold our initial
finding of non-compliance if the hospice could not show any
justification for non-compliance.
We would provide details of the reconsideration process, including
mechanisms of notification, time frames and mechanisms for filing
requests for reconsideration, required content for requests, required
supporting documentation, and mechanisms of notification of final
determinations on the HQRP section of cms.gov and by program
instruction this spring.
C. FY 2014 Rate Update
1. Hospice Wage Index
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 and 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 by the Office of Management and
Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.
We have consistently used the pre-floor, pre-reclassified hospital wage
index when deriving the hospice wage index. In our August 4, 2005 FY
2006 Hospice Wage Index final rule (70 FR 45130), we began adopting the
revised labor market area definitions as discussed in the OMB Bulletin
No. 03-04 (June 6, 2003). This bulletin announced revised definitions
for MSAs and the creation of Core-Based Statistical Areas (CBSAs). The
bulletin is available online at http://www.whitehouse.gov/omb/bulletins/b03-04.html. In the FY 2006 Hospice Wage Index final rule, we
implemented a 1-year transition policy using a 50/50 blend of the CBSA-
based wage index values and the MSA-based wage index values for FY
2006. The one-year transition policy ended on September 30, 2006. For
FY 2007 and beyond, we have used CBSAs exclusively to calculate wage
index values. OMB has published subsequent bulletins regarding CBSA
changes. The most recent CBSA changes used for the FY 2014 hospice wage
index are found in OMB Bulletin 10-02, available at: http://www.whitehouse.gov/sites/default/files/omb/assets/bulletins/b10-02.pdf.
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
[[Page 27840]]
the calculation of the hospice wage index. 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 our August 6, 2009 FY 2010 Hospice Wage Index final rule
(74 FR 39386). In FY 2014, the only CBSA without a hospital from which
hospital wage data could be derived is 25980, Hinesville-Fort Stewart,
Georgia.
In our August 31, 2007 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. In our August 31, 2007 FY 2008 Hospice Wage Index
final rule, we noted that we interpret the term ``contiguous'' to mean
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.
While we have not identified an alternative methodology for imputing a
pre-floor, pre-reclassified hospital wage index for rural Puerto Rico,
we will continue to evaluate the feasibility of using existing hospital
wage data and, possibly, wage data from other sources. For FY 2008
through FY 2013, we have used the most recent pre-floor, pre-
reclassified hospital wage index available for Puerto Rico, which is
0.4047. In this proposed rule, for FY 2014, we continue to use the most
recent pre-floor, pre-reclassified hospital wage index value available
for Puerto Rico, which is 0.4047.
For FY 2014, we would use the 2013 pre-floor, pre-reclassified
hospital wage index to derive the applicable wage index values for the
hospice wage. We would continue to use the pre-floor, pre-reclassified
hospital wage data as a basis to determine the hospice wage index
values because hospitals and hospices both compete in the same labor
markets, and therefore, experience similar wage-related costs. We
believe the use of the pre-floor, pre-reclassified hospital wage index
data, as a basis for the hospice wage index, results in the appropriate
adjustment to the labor portion of the costs. The FY 2014 hospice wage
index values presented in this proposed rule were computed consistent
with our pre-floor, pre-reclassified hospital (IPPS) wage index policy
(that is, our historical policy of not taking into account IPPS
geographic reclassifications in determining payments for hospice). The
FY 2013 pre-floor, pre-reclassified hospital wage index does not
reflect OMB's new area delineations, based on the 2010 Census, as
outlined in OMB Bulletin 13-01, released on February 28, 2013.
Moreover, the proposed FY 2014 pre-floor, pre-reclassified hospital
wage index does not contain OMB's new area delineations because those
changes will be in the FY 2014 IPPS proposed rule, which will be
published in the Federal Register, in the near future. CMS intends to
propose changes to the FY 2015 hospital wage index based on the newest
CBSA changes in the FY 2015 IPPS proposed rule. Therefore, 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.
2. FY 2014 Hospice Wage Index With an Additional 15 Percent Reduced
Budget Neutrality Adjustment Factor (BNAF)
This proposed rule would update the hospice wage index values for
FY 2014 using the FY 2013 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 are 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 are adjusted by either: (1) The
hospice budget neutrality adjustment factor (BNAF); or (2) the hospice
floor subject to a maximum wage index value of 0.8; whichever results
in the greater value.
The BNAF is calculated by computing estimated payments using the
most recent, completed year of hospice claims data. The units (days or
hours) from those claims are multiplied by the updated hospice payment
rates to calculate estimated payments. For the FY 2014 Hospice Wage
Index proposed rule, that means estimating payments for FY 2014 using
units (days or hours) from FY 2012 hospice claims data, and applying
the FY 2014 hospice payment rates. The FY 2014 hospice wage index
values are then applied to the labor portion of the payments. The
procedure is repeated using the same units from the claims data and the
same payment rates, but using the 1983 Bureau of Labor Statistics
(BLS)-based wage index instead of the updated raw pre-floor, pre-
reclassified hospital wage index (note that both wage indices include
their respective floor adjustments). The total payments are then
compared, and the adjustment required to make total payments equal is
computed; that adjustment factor is the BNAF.
The August 6, 2009 FY 2010 Hospice Wage Index final 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). Once the BNAF is completely phased out, the hospice
floor adjustment would simply consist of increasing any wage index
value less than 0.8 by 15 percent, subject to a maximum wage index
value of 0.8. Therefore, in accordance with the FY 2010 Hospice Wage
final rule, the BNAF for FY 2014 will be reduced by an additional 15
percent for a total BNAF reduction of 70 percent (10 percent from FY
2010, an additional 15 percent from FY 2011, an additional 15 percent
for FY 2012, an additional 15 percent for FY 2013 and an additional 15
percent in FY 2014).
The unreduced BNAF for FY 2014 is 0.061498 (or 6.1498 percent). A
70 percent reduction to the BNAF is computed to be 0.018449 (or 1.8449
percent). For FY 2014, this is mathematically equivalent to taking 30
percent of the unreduced BNAF value, or multiplying 0.061498 by 0.30,
which equals 0.018449 (1.8449 percent). The BNAF of 1.8449 percent
reflects a 70 percent reduction in the BNAF. The 70 percent reduced
BNAF (1.8449 percent) was applied to the pre-floor, pre-reclassified
hospital wage index values of 0.8 or greater.
The 10 percent reduced BNAF for FY 2010 was 0.055598, based on a
full BNAF of 0.061775; the additional 15 percent reduced BNAF 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
[[Page 27841]]
0.060438; and the additional 15 percent reduced BNAF for FY 2014 (for a
cumulative reduction of 70 percent) is 0.018449, based on a full BNAF
of 0.061498.
Hospital wage index values which are less than 0.8 are subject to
the hospice floor calculation. For example, if in FY 2013, County A had
a pre-floor, pre-reclassified hospital wage index (raw wage index)
value of 0.3994, we would perform the following calculations using the
budget-neutrality factor (which for this example is an unreduced BNAF
of 0.061498, less 70 percent, or 0.018449) and the hospice floor to
determine County A's hospice wage index:
Pre-floor, pre-reclassified hospital wage index value below 0.8
multiplied by 1 + 70 percent reduced BNAF: (0.3994 x 1.018449 =
0.4068); Pre-floor, pre-reclassified hospital wage index value below
0.8 multiplied by 1 + hospice floor: (0.3994 x 1.15 = 0.4593).Based on
these calculations, County A's hospice wage index would be 0.4593. The
BNAF may be updated for the final rule based on availability of more
complete data.
An addendum A and Addendum B with the FY 2014 wage index values for
rural and urban areas will not be published in the Federal Register.
The FY 2014 wage index values for rural areas and urban areas are
available via the internet at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html. The hospice wage index for
FY 2014 set forth in this proposed rule includes the BNAF reduction and
would be effective October 1, 2013 through September 30, 2014.
3. 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. In addition, 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 2014 is based on the inpatient
hospital market basket update of 2.5 percent (based on IHS Global
Insight, Inc.'s first quarter 2013 forecast with historical data
through the fourth quarter of 2012). A detailed description of how the
inpatient hospital market basket is derived will be available in the FY
2014 IPPS proposed rule, which will be published in the Federal
Register, in the near future. 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 2014 of 2.5 percent must
be reduced by a productivity adjustment as mandated by Affordable Care
Act (currently estimated to be 0.4 percentage point for FY 2014). The
estimated inpatient hospital market basket for FY 2014 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
2014 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 and productivity adjustment), we would
use such data, if appropriate, to determine the FY 2014 market basket
update and the multi-factor productivity MFP adjustment in the FY 2014
Hospice PPS final rule.
Currently, the labor portion of the hospice payment rates is as
follows: for Routine Home Care, 68.71 percent; for Continuous Home
Care, 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 Routine Home
Care, 31.29 percent; for Continuous Home Care, 31.29 percent; for
General Inpatient Care, 35.99 percent; and for Respite Care, 45.87
percent.
4. Proposed Updated FY 2014 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,
starting in this FY 2014 rule and for subsequent fiscal years, we
propose to use rulemaking as the means to propose hospice payment
rates. This change is proposed to be consistent with the rate update
process in other Medicare benefits, and should provide 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 routine home care rate for
each day the beneficiary is enrolled in hospice, unless the hospice
provides continuous home care, inpatient respite care, or general
inpatient care. Continuous home care is provided during a period of
patient crisis to maintain the patient at home, inpatient respite care
is short-term care to allow the usual caregiver to rest, and general
inpatient care is to treat symptoms that cannot be managed in another
setting.
The proposed FY 2014 payment rates would be the FY 2013 payment
rates, increased by 1.8 percent, which is the proposed hospice payment
update percentage for FY 2014 as discussed in section III.C.3. The
proposed FY 2014 hospice payment rates would be effective for care and
services furnished on or after October 1, 2013, through September 30,
2014.
[[Page 27842]]
Table 5--Proposed FY 2014 Hospice Payment Rates Updated by the Proposed Hospice Payment Update Percentage
--------------------------------------------------------------------------------------------------------------------------------------------------------
Multiply by
the FY 2014 Non-Labor
FY 2013 proposed FY 2014 Labor Share of share of the
Code Description payment rates hospice Proposed the proposed proposed
payment update payment rate payment rate payment rate
of 1.8 percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
651....................................... Routine Home Care........... $153.45 x 1.018 $156.21 $107.33 $48.88
652....................................... Continuous Home Care........ 895.56 x 1.018 911.68 626.42 285.26
Full Rate = 24 hours of care
$=37.99 hourly rate
655....................................... Inpatient Respite Care...... 158.72 x 1.018 161.58 87.46 74.12
656....................................... General Inpatient Care...... 682.59 x 1.018 694.88 444.79 250.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
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. Beginning in FY 2014, hospices which
fail to report quality data will have their market basket update
reduced by 2 percentage points. In the August 4, 2011 FY 2012 Hospice
Wage Index final rule (76 FR 47320 through 47324), we implemented a
hospice Quality Reporting Program (QRP) 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.
Hospices failing to report quality data in 2013 will have their market
basket update reduced by 2 percentage points in FY 2014.
Table 6--Proposed FY 2014 Hospice Payment Rates Updated by the Proposed Hospice Payment Update Percentage for
Hospices That DO NOT Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
Multiply by the
FY 2014 proposed
hospice payment
update
Code Description FY 2013 payment percentage of FY 2014 Proposed
rates 1.8 percent payment rate
percent minus 2
percentage
points (-0.2)
----------------------------------------------------------------------------------------------------------------
651................................ Routine Home care.... $153.45 x 0.998 $153.14
652................................ Continuous Home Care 895.56 x 0.998 893.77
Full Rate= 24 hours
of care $=37.99
hourly rate.
655................................ Inpatient Respite 158.72 x 0.998 158.40
Care.
656................................ General Inpatient 682.59 x 0.998 681.22
Care.
----------------------------------------------------------------------------------------------------------------
A Change Request with the finalized hospice payment rates, a
finalized hospice wage index, the Pricier for FY 2014, and the hospice
cap amount for the cap year ending October 31, 2013 would continue to
be issued in the summer.
D. Update on Hospice Payment Reform and Data Collection
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 types of data and information described in the Act would capture
resource utilization and other measures of cost, which can be collected
on claims, cost reports, and possibly other mechanisms as we determine
to be appropriate. 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, 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.
This section of the proposed rule contains three subsections which
update the public or discuss different aspects of hospice payment
reform; there are no proposals in any of these three subsections.
1. Update on Reform Options
Our hospice contractor, Abt Associates, continues to conduct
research and analyses, to identify potential data collection needs, and
to research and develop hospice payment model options. To date, we
completed an environmental scan; a draft analytic plan; and convened
technical advisory panel meetings under the initial contract with Abt
in 2010. We are continuing with these efforts under a contract awarded
in September 2011. In June 2012, we convened stakeholder meetings where
research findings were presented on potential payment system
vulnerabilities; utilization of the Medicare hospice benefit, including
general inpatient care use during the period the beneficiary is
enrolled in hospice care; analysis of hospice cost reports; and the
effects of the face-to-face encounter requirement. These and other
findings are described in the Abt Hospice Study Technical Report, which
is available on the CMS Hospice Center Web page, at http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
Additionally, we continue to conduct analyses of various payment
reform model options under consideration. These models include a U-
shaped model of resource use which MedPAC recommended that we adopt,
and which is described in Chapter 6 of its March,
[[Page 27843]]
2009 report entitled ``Report to the Congress: Medicare Payment
Policy'' (available online at: http://www.medpac.gov/chapters/Mar09_Ch06.pdf). MedPAC determined that the level of Medicare payment to a
hospice under the current per diem payment system is constant
throughout a hospice patient's stay. The report noted that the
constancy of the per diem payment over the course of a hospice stay is
misaligned with a hospice's costs during the stay. A hospice's costs
typically follow a U-shaped curve, with higher costs at the beginning
and end of a stay, and lower costs in the middle of the stay. This cost
curve reflects hospices' higher service intensity at the time of the
patient's admission and the time surrounding the patient's death
(MedPAC, page 358). Payment under a U-shaped model would be higher at
the beginning and end of a hospice stay, and lower in the middle
portion of the stay.
The analysis 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. As such, we are also considering a
tiered approach, with payment tiers based on the length of stay. For
example, payment for stays of 5 days or less (which occurred for about
25 percent of hospice beneficiaries in 2011) could be made under a per
diem system that accounts for the higher hospice costs, with no
variation in the rate based on length of stay as would occur under a U-
shaped model. Payment for longer stays, where costs follow more of a U-
shape, could be made under a tier based on the U-shaped payment model,
where the per diem amount fluctuates depending upon whether the days
billed are at the beginning, middle, or end of the stay.
Another option is to analyze whether a short-stay add-on payment,
similar to the home health Low Utilization Payment Amount (LUPA) add-
on, would improve payment accuracy if we retain the current per diem
system. The LUPA add-on is made for home health patients who require
four or fewer visits during the 60-day episode. These home health
episodes are paid based on the visits actually furnished during the
episode. For LUPA episodes that occur as the only episode or the first
episode in a sequence of adjacent home health episodes for a given
beneficiary, an increased payment is made to account for the front-
loading of costs (see http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/HomeHlthProspaymt.pdf for more information).
Finally, as we collect more accurate diagnosis data, including data
on related conditions, we would also evaluate whether case-mix should
play a role in determining payments.
a. Rebasing the Routine Home Care (RHC) Rate
We are updating our review of the hospice RHC rate, but are not
including any proposals at this time. Rebasing the RHC rate involves
using the existing components that make up the rate, and recalculating
based on more current data. 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 reimbursed per
day regardless of the volume or intensity of services provided to a
beneficiary on any given day. It is anticipated that there will be days
when a beneficiary does not require any services, as well as days when
a beneficiary requires several visits from the hospice provider.
When the hospice benefit was created in 1983, the RHC base payment
rate was set using nine different components of cost from a relatively
small set of hospices (n=26) that were participating in a CMS hospice
demonstration, as described in the December 16, 1983 Hospice final rule
(48 FR 56008). The nine cost components were: nursing care ($16.25);
home health aide ($12.74); social services/therapy ($3.23); home
respite ($1.46); interdisciplinary group ($2.78); drugs ($1.18);
supplies ($4.49); equipment ($1.13); and outpatient hospital therapies
($2.99). The sum of all the components' costs equaled the base payment
rate for RHC as stated in that 1983 hospice final rule. The original
RHC rate was set at $46.25. In addition to RHC, we also established
three other levels of care for hospice care from data obtained from the
Medicare hospice demonstration project: Continuous Home Care (CHC),
Inpatient Respite Care (IRC) and General Inpatient Care (GIP).
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. As we continue to gather and analyze more data for
payment reform, we have found evidence of a potential misalignment
between the current RHC payment rate and the cost of providing RHC. One
potential option to address this misalignment could be to rebase the
hospice RHC rate, though we are not proposing to do so at this time, so
that the cost categories established in the rate reflect the changes in
the utilization of hospice services provided for palliation and
management of terminally ill patients. However, we are still evaluating
data and are currently not proposing any changes to address the
misalignment.
At this time, we do not have the data to support rebasing six of
the nine cost components described in the 1983 final rule. Information
on the utilization of drugs, supplies, and equipment is not available
from hospice claims data, and the corresponding information that is
available from cost reports, such as outpatient hospital therapies, is
not sufficiently detailed to allow for rebasing. One approach to
consider in more closely aligning RHC payments with costs is to rebase
the three clinical service components (nursing, home health aide,
social services/therapy) that currently comprise 69.7 percent of the
RHC rate by calculating the average cost per day, weighted by the
number of RHC days, for each of the three components using FY 2011 cost
report data matched to FY 2011 claims data. As part of rebasing the RHC
rate we would then inflate the 1983 cost per day for each of the six
remaining components by a factor of 3.1704, which corresponds to the
market basket increases between 1983 and 2011.\4\ We note that our cost
report analysis thus far found that drug costs over the years have
declined, and the other non-labor components are plateauing. A detailed
methodology for rebasing the clinical service components of the RHC
rate can be found in the Abt Hospice Study Technical Report which is
published with this proposed rule at http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
---------------------------------------------------------------------------
\4\ The original RHC rate in 1983 was $46.25. The FY 2011 rate
for RHC was $146.63. $146.63/46.25 = 3.1704.
---------------------------------------------------------------------------
Using the methodology described above, the rebased amount for FY
2011 would be $130.54 as described in Table 7 below.
[[Page 27844]]
Table 7--Comparison of RHC Rate Cost Components From 1983 to FY 2011
----------------------------------------------------------------------------------------------------------------
1983 Final
RHC components rule cost per Inflation FY 2011 Cost
day factor per day
----------------------------------------------------------------------------------------------------------------
Nursing Care.................................................... $16.25 N/A $56.54
Home Health Aide................................................ 12.74 N/A 19.24
Social Services/Therapy......................................... 3.23 N/A 10.29
Home respite.................................................... 1.46 x 3.1704 4.63
Interdisciplinary group......................................... 2.78 x 3.1704 8.81
Drugs........................................................... 1.18 x 3.1704 3.74
Supplies........................................................ 4.49 x 3.1704 14.23
Equipment....................................................... 1.13 x 3.1704 3.58
Outpatient Hospital Therapies................................... 2.99 x 3.1704 9.48
-----------------------------------------------
Total....................................................... 46.25 .............. 130.54
----------------------------------------------------------------------------------------------------------------
Source: 1983 Final Rule and FY 2011 hospice cost report and claims data.
Note(s): The costs per day for the clinical services components (nursing care, home health aide and social
services/therapy) were calculated based on the cost per minute for each discipline using cost report data
multiplied by the RHC minutes for each discipline per RHC day from claims data to compute the cost of a
discipline per RHC day. The average cost per day across all hospices in our sample was weighted by the number
of RHC days. Of the 2,717 FY 2011 hospice cost reports for freestanding and facility-based hospices that were
matched to FY 2011 claims data, we excluded: (1) cost reports with period less than 10 months or greater than
14 months; (2) cost reports with missing information or negative reported values for total costs or payments;
(3) providers in the highest and lowest percentile (1% and 99%) in costs per days across all levels of care;
(4) the top and bottom 5% of provider margin; and (5) providers were excluded if the log payment to cost ratio
was greater than the 90th or less than the 10th percentile of this value across all providers plus or minus
1.5 times the range between the 10th and 90th percentiles of this log ratio. The number of hospices remaining
in our sample was 2,140 representing 73.1 percent of RHC days in 2011.
For example, if we were to apply the rebased amounts for the
clinical services components of RHC to FY 2014, we would inflate the FY
2011 rebased amount to FY 2013 levels. We first inflated the FY 2011
rebased rate by full hospital market basket of 3.0 percent for FY 2012.
The FY 2012 rebased rate would be $134.46 ($130.54 x 1.03=$134.46). We
then inflated the FY 2012 rebased rate by full hospital market basket
of 2.6 percent for FY 2013. The FY 2013 rebased rate would be $137.96
($134.46 x 1.026= $137.96). Finally, we inflated the rebased FY 2013
rate ($137.96) by applying the proposed hospice payment update
percentage of 1.8 percent to calculate a FY 2014 rebased RHC rate.
Therefore, the FY 2014 rebased rate would be $140.44, a 10.1 percent
reduction in the FY 2014 proposed RHC payment rate of $156.21, or an
estimated reduction in payments to hospices of $1.6 billion in FY 2014.
Rebasing the clinical service components of the RHC payment is one of
several approaches to hospice payment reform that CMS could consider
for revising the RHC payment rate. As outlined in the Affordable Care
Act, hospice payment reform must be done in a budget neutral manner. As
rebasing would be considered part of hospice payment reform, any
savings achieved through the reduction of the RHC rate would need to be
redistributed in a budget neutral manner.
b. Site of Service Adjustment for Hospice Patients in Nursing
Facilities
As part of future hospice payment reform, we are considering an OIG
recommendation to reduce payments to Medicare hospices for
beneficiaries in nursing facilities who are receiving hospice care. The
OIG's July 2011 report entitled ``Medicare Hospices that Focus on
Nursing Facility Residents,'' (available at https://oig.hhs.gov/oei/reports/oei-02-10-00070.pdf) studied hospice patients in nursing
facilities. This report noted the growth of hospice services provided
to beneficiaries in nursing facilities, and discussed hospices that
have a high percentage of their beneficiaries in nursing facilities.
The OIG's report noted that the current payment structure provides
incentives for hospices to seek out beneficiaries in nursing
facilities, as these beneficiaries often receive longer but less
complex care. The OIG noted that unlike private homes, nursing
facilities are staffed with professional caregivers and are often paid
by third-party payers, such as Medicaid. These facilities are required
to provide personal care services, which are similar to hospice aide
services that are paid for under the hospice benefit. To lessen this
incentive, the OIG recommended that we reduce Medicare payments for
hospice care provided in nursing facilities.
In addition, the March 2012 Medicare Payment Advisory Commission
(MedPAC) report entitled ``Report to Congress: Medicare Payment
Policy'' noted that hospices with a higher share of their patients in
nursing facilities have margins as high as 13.8 percent (pages 302 and
303). MedPAC attributed these higher margins to possible efficiencies
in the nursing home setting (multiple patients in a single setting,
reduced driving time and mileage), and to reduced workload due to an
overlap in aide services and supplies provided by the nursing facility.
In response to both MedPAC's and OIG's concerns about possible
duplication of aide services provided both by the hospice and the
nursing facility, we conducted an analysis of the number and length of
aide visits per day using 2011 hospice claims data. Table 8 below
describes the number and length of aide visits for RHC beneficiaries at
home (including patients in an assisted living facility) compared to
RHC beneficiaries in a NF or SNF.
Table 8--Hospice Routine Home Care Aide Services 2011
----------------------------------------------------------------------------------------------------------------
Sites of service Difference
-------------------------------------------------------------------------------
Home Q5001/2 NF/SNF Q5003/4 NF/SNF-Home %
----------------------------------------------------------------------------------------------------------------
Number of beneficiaries......... 769,640 302,004 (467,636) ..................
Total days...................... 58,637,171 22,946,972 (35,690,199) ..................
Total visits.................... 16,625,635 8,501,366 (8,124,269) ..................
Total minutes................... 1,223,254,095 584,825,520 (638,428,575) ..................
[[Page 27845]]
Visits per beneficiary.......... 21.6 28.1 6.5 30.3
Minutes per visit............... 73.6 68.8 (4.8) 6.5
Total visits/day................ 0.28 0.37 0.09 30.7
Total minutes/day............... 20.86 25.49 4.62 22.2
----------------------------------------------------------------------------------------------------------------
Source: Abt Associates Hospice Claims Data File, 2011.
Table 8 demonstrates that hospice patients in a NF/SNF receive more
visits than patients at home, though the length of those visits is
shorter. Average minutes per day shows that RHC patients in a NF/SNF
had hospice aide services of longer duration (25.49 minutes) than RHC
patients at home (20.86 minutes). The Medicare Conditions of
Participation (CoPs) require that hospices provide services at the same
level and to the same extent as those services would be provided if the
NF/SNF resident were in his or her home. Hospices provide aide services
to beneficiaries at home depending on the beneficiaries' needs. It
seems reasonable to expect that a beneficiary who has a paid caregiver
(that is, a NF/SNF aide) does not need as many services from the
hospice aide, because those services are being provided by the paid
caregiver. As described in the June 5, 2008 Hospice Conditions of
Participation final rule (73 FR 32095), ``[h]ospice care is meant to
supplement the care provided by the patient's caregiver.'' Given the
presence of the paid caregiver in the NF/SNF, we would expect that on
average, there would be fewer hospice aide services provided to hospice
patients in a NF/SNF than to hospice patients at home.
It is not clear why hospice patients in nursing facilities are
receiving more minutes per day of aide services than hospice patients
at home. We used regression analysis to control for age, gender,
diagnosis, length of stay, and provider characteristics (ownership
status, base, size, age of hospice, geographic location) when analyzing
the visit data. However, we still found that significantly more aide
services were provided to NF/SNF patients than to patients at home,
even after controlling for patient and provider characteristics.
The June 5, 2008 Hospice Conditions of Participation final rule (73
FR 32088) preamble details the requirements related to aide services
provided to hospice patients residing in a nursing facility. These
requirements can also be found at Sec. 418.112(c)(4) through (5). The
CoPs require a written agreement between the hospice and NF/SNF, which
specifies that the NF/SNF should continue to provide the aide services
that are provided prior to the hospice election, to meet the patient's
needs at that same level of care as if the patient were at home. These
services include providing 24 hour room and board care, meeting the
patient's personal care needs, and to the degree permitted by State
law, administering medications or therapies. There should be no
reduction of NF/SNF aide services to a patient in anticipation of a
future hospice election, or once the patient (or his/her
representative) elects the hospice benefit. As such, hospice patients
in nursing facilities should have much, if not most, of their need for
aide services provided by the facility's aide. As stated previously, we
would expect that, on average, the hospice aide would be providing
fewer services to nursing facility patients than to patients at home.
Table 8 suggests that the hospice aide may be replacing the
facility aide, rather than supplementing or augmenting the care of the
facility aide. Or, as the OIG and MedPAC identified, there could be an
overlap in aide services when a hospice beneficiary is in a NF/SNF. It
would not be appropriate for the Medicare hospice benefit to subsidize
the nursing home benefit by providing aide services that the facility
aide should provide. Section 1862(a)(1)(C) of the Social Security Act
(the Act) forbids payment for any items or services which are not
reasonable and necessary for the palliation and management of the
terminal illness. Services which are not needed, or which are
duplicative of those to be provided by the facility aide, would not be
reasonable and necessary.
At this time, we are not proposing to make a site of service
adjustment to reduce payments for RHC patients in a nursing facility.
Any reform option considering reduced payments for RHC care provided to
hospice patients in a NF or SNF should not result in a reduction in the
services that hospice patients in NFs or SNFs receive, but would
instead be a shifting of who provides those aide services; some of the
services currently provided by the hospice aide would be provided by
the facility aide as expected. As such, we do not expect that the
quality of care to hospice patients in a NF/SNF would be diminished. If
such a policy were to be proposed and implemented, it would be made in
a budget neutral manner as required by the Affordable Care Act. In
addition, we would monitor for any unintended consequences.
2. Reform Research Findings
We have conducted a number of analyses to better understand hospice
utilization and trends, to identify vulnerabilities in the payment
system, and to develop and test models that would more accurately match
hospice resource use with Medicare payments. We posted the Abt Hospice
Study Technical Report on hospice payment reform on our hospice center
Web page, located at: http://www.cms.gov/Center/Provider-Type/Hospice-Center.html. The report summarizes research findings related to
resource use and payment system vulnerabilities.
The report also includes a discussion of hospice cost report
analyses. Overall, the total cost per election period has not
significantly increased from 2007 to 2010, in real dollars. Inpatient
costs constitute about 14 percent of hospice costs across freestanding
hospice providers that reported inpatient costs. About one-third of
providers reported no inpatient costs. It appeared that some providers
with no inpatient costs were substituting continuous home care (CHC)
for GIP, based on analysis of the proportion of CHC days. Visiting
services (for example, direct labor costs for nurses, aides, social
workers, counselors, and therapists) account for about two-thirds of
hospice costs, and have trended upward from 2004 to 2010. Nursing care,
hospice aides, and medical social services comprise 90 percent of
visiting service costs.
Other hospice service costs include non-labor costs such as drugs,
durable medical equipment (DME), supplies, imaging, patient
transportation, and outpatient services. These types of services
represent about 20 to 25 percent of total hospice costs. Drugs, DME,
and supplies account for 90
[[Page 27846]]
percent of these other hospice services costs. Drug costs have trended
downward over time, while medical supply costs have remained steady.
Finally, in examining non-reimbursable costs, we found that 26 percent
of providers in 2010 showed no bereavement costs on their cost report,
even though bereavement services are required by statute; it is unclear
if bereavement services were not provided or if bereavement costs were
not correctly reported.
The report also describes an analysis of GIP utilization. In 2010
through 2011, a quarter of all hospice beneficiaries had at least one
GIP stay, with a quarter of those stays associated with cancer
diagnoses. While most GIP stays were 2 days long, the average GIP
length of stay was 5.66 days, reflecting a small number of extremely
long GIP stays. Sixty-five percent of GIP stays were provided in a
hospice inpatient unit. Almost 80 percent of hospices provided at least
one GIP day in 2010 through 2011. Hospices that provided GIP tended to
be older and larger.
The Abt Hospice Study Technical Report also provides descriptive
statistics for all beneficiaries and for 3 major sites of routine home
care services. It includes visit data findings, including visits per
day, visits per beneficiary, minutes per day, and minutes per
beneficiary for key disciplines reported on hospice claims.
Additionally, there are several figures which depict the U-shaped curve
for key personnel by length of stay. The curves show that resource use
tends to follow a U-shaped curve, but one which is higher at the
beginning rather than at the end of the hospice stay. There was little
evidence that strong differences in the U-shape exist across most
subgroups (for example, freestanding vs. provider-based, ownership
status, patient diagnosis).
For more detailed information on these findings, and a description
of the methods used, see the Abt Hospice Study Technical Report, which
is posted on the hospice center Web page (http://www.cms.gov/Center/Provider-Type/Hospice-Center.html). We have also posted a review of
pertinent hospice literature as of December 2012 on the hospice center
Web page. This should be considered an evolving document, as Abt
Associates updates the review periodically. We encourage interested
stakeholders to review this update on our progress. We will continue to
collaborate with other federal experts regarding hospice payment reform
research efforts and to update stakeholders on our progress on hospice
payment reform.
3. Additional Data Collection
Over the past several years, MedPAC, the Government Accountability
Office (GAO), and the HHS Office of Inspector General (OIG) have also
recommended that we collect more comprehensive data in order to better
understand the utilization of the Medicare hospice benefit. In December
2012, we posted a document to our Hospice Center Web page (http://www.cms.gov/Center/Provider-Type/Hospice-Center.html) describing
additional data collection which we are considering, and noting that
cost report revisions are forthcoming. We received 65 comments about
the claims data collection items under consideration, which are briefly
summarized below.
Line item visit data, including length of visit in 15-
minute increments, for hospice chaplains and counselors providing care
to hospice beneficiaries. Commenters were supportive, but suggested we
include phone calls by chaplains and counselors, and allow reporting of
chaplain time spent officiating or attending beneficiary funerals, as
this is part of their service to families. A few suggested that we have
a separate category for Bereavement Counseling to acknowledge this
requirement even if it is not subject to reimbursement. Several
suggested we define ``other counselors.''
Line item visit data, including length of visits in 15-
minute increments, for hospice staff providing care to hospice patients
receiving GIP in a hospital or nursing facility, but not for hospice
patients receiving GIP in a hospice facility. Our suggestion to collect
GIP visit data did not include visits by non-hospice staff, and was
focused on patients in a hospital or nursing facility only. Therefore,
GIP visits to hospice patients in hospice inpatient facilities continue
to be reported as weekly totals, without including the length of
visits. Commenters were generally supportive, provided the visits were
for hospice staff only. Several comments noted that this would be no
more difficult than what already occurs when recording visits to
patients' homes.
The National Provider Identifier (NPI) of facilities where
hospice patients are receiving care. Most commenters noted that it
would not be difficult to get this information and enter it into their
systems. A few commenters noted that sometimes patients are in more
than one facility type during a claim period, but that there is only
space for one NPI on the claim.
Post-mortem visits on the calendar day of death.
Commenters suggested we collect visit data for various timeframes after
the time of death, rather than the calendar day of death, since many
deaths occur late at night. They suggested we clarify what we mean by
time of death (time death actually occurs, or time the death is
pronounced). Several commenters suggested we gather post-mortem visit
data regardless of level of care or site of service.
Any durable medical equipment (DME) provided by the
hospice. Some commenters indicated that this would be difficult to
collect and record on claims. Many indicated that DME suppliers bill
them monthly, and waiting for the DME invoice would cause a delay in
submission of their claims. They also noted that it would take a great
deal of lead time to set this up with suppliers and software vendors to
track DME at the patient level. A few suggested that we use aggregate
data on DME costs from the cost reports instead.
Non-routine supplies provided by the hospice. Most
commenters indicated that this would be difficult to collect and record
on claims. A number of commenters wrote that their software does not
accommodate such reporting, and that it would create an additional
burden on clinical staff to track these items. Several mentioned that
it would take some lead time to modify existing systems to enable
hospices to track and report this information accurately. A few
suggested we use aggregate data on non-routine supplies from the cost
reports instead.
Drugs (injectable, non-injectable, and over-the-counter)
provided by the hospice. Most commenters indicated that this would be
difficult to collect and record on claims. Several asked if injectable
drugs include infusion pumps, which is considered DME. Several
commenters noted that the hospice staff person is not always the person
administering drugs, making tracking more complicated; they suggested
focusing on the fills, rather than drugs administered. Some wrote that
hospices get their drugs from multiple pharmacies, making reporting
more difficult due to inconsistencies in pharmacy billing. Others wrote
that their data systems are not able to track drugs by patient, and
suggested that we use aggregate data from the cost reports instead.
Some noted that they purchase some drugs in larger quantities, making
reporting at the patient level more complicated. A few noted that this
could be done, but said that hospices would need lead time to prepare
systems to track and report at the patient level. One suggested that we
specify what cost structure drug charges
[[Page 27847]]
should be based upon, such as average wholesale price plus a
percentage.
In summary, commenters were largely supportive of our suggestions
to collect additional visit and NPI data on claims. Many suggested
collecting data on DME, supplies, and drugs from the cost reports,
rather than at the patient level. Several commenters reminded us that
their primary focus is patient care, and were concerned about the cost
of such data collection. We appreciate the comments submitted, and will
consider this input as we move forward towards implementing any new
data collection for hospices. We expect to issue a change request
detailing the upcoming data collection this spring or summer.
Section 3132(a)(1)(C) of the Affordable Care Act also authorizes us
to collect more data on hospice cost reports. The revisions to the
hospice cost report and its associated instructions will be described
in detail in a revision to the information collection request currently
approved under OMB control number 0938-0758. As required by the
Paperwork Reduction Act, we will publish the both 60-day and 30-day
notices with comment periods in the Federal Register in the near
future. Comments related to cost report revisions should be submitted
as instructed in 60-day and 30-day notices that publish in the Federal
Register.
E. Technical and Clarifying Regulations Text Change
We are proposing to incorporate the following technical change to
correct an erroneous cross reference in our regulations text.
Administrative Appeals (Sec. 418.311)
A hospice that does not believe its payments have been properly
determined may request a review from the intermediary or from the
Provider Reimbursement Review Board (PRRB), depending on the amount in
controversy. Section 418.311 details the procedures for appealing a
payment decision and also refers to 42 CFR part 405, subpart R. The
rationale for this appeals process was explained in the August 22, 1983
Hospice proposed rule (48 FR 38146) and finalized in the December 16,
1983 Hospice final rule (48 FR 56008). Hospices are permitted to appeal
computation of the payment limit or the amount due to the hospice to
the PRRB if the amount in controversy is $10,000 or more.
We propose to make a technical correction in Sec. 418.311 to
correct an erroneous reference to Sec. 405.1874. The published
reference to Sec. 405.1874 does not exist and was a typographic error.
We are correcting this error by changing the referenced Sec. 405.1874
to Sec. 405.1875--Administrator review. Section 405.1875 allows for
the Administrator, at his or her discretion, to immediately review any
decision of the Board as described in the August 22, 1983 proposed and
December 16, 1983 final rules (48 FR 38159, and 48 FR 56019,
respectively).
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques. We are soliciting public comment on each of these issues
for this section of this document that contains information collection
requirements (ICRs).
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. Under section 1814(i)(5)(D)(iii) of the
Act, the Secretary must publish selected measures that will be
applicable with respect to FY 2014 not later than October 1, 2012. In
implementing the Hospice quality reporting program, we seek to collect
measure information with as little burden to the providers as possible
and which reflects the full spectrum of quality performance.
We propose to implement a Hospice Experience of Care Survey to
reflect the patients' families' and friends' perspectives of care in
hospices. The 60-day notice for the field test of the survey was
published on April 4, 2013 (78 FR 20323) under CMS-10475 (OCN 0938-
New). While we set out the requirements and burden estimates for the
field study, it is too early to set out the requirements and burden
estimates for the national implementation of the survey. We anticipate
having the final survey instrument in 2014 and setting out the
collection of information requirements and burden estimates in the
proposed rule for CY 2015. We propose implementation of the survey in
2015.
In the August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR
47302, 47320), to meet the quality reporting requirements for hospices
for the FY 2014 payment determination as set forth in section
1814(i)(5) of the Act, we finalized the requirement that hospices
report two measures: (1) An NQF-endorsed measure that is related to
pain management, NQF 0209; and (2) a structural measure that
is not endorsed by NQF: Participation in a Quality Assessment and
Performance Improvement (QAPI) program that includes at least three
quality indicators related to patient care. In this rule, we propose
that the structural measure related to QAPI indicators and the NQF
0209 pain measure not be required for the hospice quality
reporting program beyond data submission for the FY 2015 payment
determination.
We are not proposing to adopt any new measures in this proposed
rule. However, we are proposing to implement a hospice patient-level
data set to be used by all hospices to collect and submit standardized
data about each patient admitted to hospice. This Hospice Item Set will
be used to support the standardized collection and calculation of
quality measures, collection of the requisite data elements. Hospices
would be required to complete and submit an admission HIS and a
discharge HIS on all patients admitted to hospice starting July 1, 2014
for FY 2016 APU determination. The admission and discharge HIS will
collect the standardized data elements needed to calculate 7 NQF
endorsed measures for hospice.
Using 2011 Medicare claims data we have estimated that there will
be approximately 1,089,719 admissions across all hospices per year and
therefore, we would expect that there should be 1,089,719 Hospice Item
Sets (consisting of one admission and one discharge assessment per
patient), submitted across all hospices yearly. There were 3,742
certified hospices in the U.S. as of October 1, 2012; we estimate that
each individual hospice will submit on average 291 Hospice Item Sets
annually or 24 Hospice Items Sets per month.
The Hospice Item Set consists of both an admission assessment and a
discharge assessment. As noted above, we estimate that there will be
1,089,719
[[Page 27848]]
hospice admissions across all hospices per year. Therefore, we expect
there to be 2,179,438 Hospice Item Set submissions, (both admission and
discharge assessment) submitted across all hospices annually or 181,620
across all hospices monthly. We further estimate that there will be 582
Hospice Item Set submissions by each hospice annually or 49 submissions
monthly.
For the Admission Hospice Item Set, we estimate that it will take
14 minutes of time by a clinician such as a Registered Nurse at an
hourly wage of $33.23 to abstract data for Admission Hospice Item Set.
This would cost the facility approximately $7.75 for each admission
assessment.\5\ We further estimate that it will take 5 minutes of time
by clerical or administrative staff person such as a medical data entry
clerk or medical secretary at an hourly wage of $15.59 to upload the
Hospice Item Set data into the CMS system. This would cost the facility
approximately $1.30 per assessment.\6\ For the Discharge Hospice Item
Set, we estimate that it will take 5 minutes of time by a clinician
such as a nurse at an hourly wage of $33.23 to abstract data for
Discharge Hospice Item Set. This would cost the facility approximately
$2.77. We further estimate that it will take 5 minutes of time by
clerical or administrative staff such as a medical data entry clerk or
medical secretary at an hourly wage of $15.59 to upload data into the
CMS system. This would cost the facility approximately $1.30.
---------------------------------------------------------------------------
\5\ 14 minutes of time by a Registered Nurse at $33.23/60
minutes per hour = $0.56; $0.56 per one minute x 5 minutes = $7.75.
\6\ 5 minutes of time by a Medical Data Entry Clerk at $15.59/60
minutes per hour = $0.265; $0.265 per one minute x 5 minutes =
$1.30.
---------------------------------------------------------------------------
We estimate that the total nursing time required for completion of
both the admission and discharge assessments is 19 minutes at a rate of
$33.23 per hour. The annualized cost across all Hospices for the
nursing/clinical time required to complete both the admission and
discharge Hospice Item sets is estimated to be $11,458,528 and the cost
to each individual Hospice is estimated to be $3,062.14. The estimated
time burden to hospices for a medical data entry clerk to complete the
admission and discharge Hospice Item Set assessments is 10 minutes at a
rate of $15.59 per hour. The cost for completion of the both the
admission and discharge Hospice Item sets by a medical data entry clerk
is estimated to be $2,829,401 across all Hospices and $756.12 to each
Hospice.
The total combined time burden for completion of the Admission and
Discharge Hospice Data Item Sets is estimated to be 29 minutes. The
total annualized cost across all hospices is estimated to be
$14,287,929. For each individual hospice, this annualized cost is
estimated to be $3,818.26. The estimated cost for each individual
Hospice Item Set submission is $13.11.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget,
Attention: CMS Desk Officer, [CMS-1449-P]
Fax: (202) 395 6974; or
Email: [email protected]
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VI. Regulatory Impact Analysis
A. Statement of Need
This proposed rule follows 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 Metropolitan Statistical Areas (MSAs).
This rule proposes updates to the hospice payment rates for FY 2014. In
addition, this proposed rule provides background on hospice care,
clarifies diagnosis coding on hospice claims, updates the public on the
status of hospice payment reform, proposes a technical and clarifying
regulatory text change, and proposes changes to the hospice quality
reporting program.
B. Overall Impact
The overall impact of this proposed rule is an estimated net
increase in Federal payments to hospices of $180 million, or 1.1
percent, for FY 2014. This estimated impact on hospices is a result of
the proposed hospice payment update percentage for FY 2014 of 1.8
percent and changes to the FY 2014 hospice wage index, including a
reduction to the BNAF by an additional 15 percent, for a total BNAF
reduction of 70 percent (10 percent in FY 2010, and 15 percent per year
for FY 2011 through FY 2014). A 70 percent reduced BNAF is computed to
be 0.018449 (or 1.8449 percent). The BNAF reduction is part of a 7-year
BNAF phase-out that was finalized in in the August 6, 2009 FY 2010
Hospice Wage Index final rule (74 FR 39384), and is not a policy
change.
1. Detailed Economic Analysis
Column 4 of Table 9 shows the combined effects of the updated wage
data (the 2012 pre-floor, pre-reclassified hospital wage index) and of
the additional 15 percent reduction in the BNAF (for a total BNAF
reduction of 70 percent), comparing estimated payments for FY 2013 to
estimated payments for FY 2014. The FY 2013 payments used for
comparison have a 55 percent reduced BNAF applied. We estimate that the
total hospice payments for FY 2014 would decrease by 0.7 percent. This
0.7 percent is the result of a 0.1 percent reduction due to the use of
updated wage data ($-20 million), and a 0.6 percent reduction due to
the additional 15 percent reduction in the BNAF ($-100 million). This
estimate does not take into account the proposed hospice payment update
percentage of 1.8 percent (+$300 million) for FY 2014.
Column 5 of Table 9 shows the combined effects of the updated wage
data (the 2012 pre-floor, pre-reclassified hospital wage index), the
additional 15 percent reduction in the BNAF (for a total BNAF reduction
of 70 percent), and the proposed hospice payment update percentage of
1.8 percent. The proposed 1.8 percent hospice payment update percentage
is based on a 2.5 percent estimated inpatient hospital market basket
update for FY 2014 reduced by a 0.4 percentage point productivity
adjustment and by 0.3 percentage point as mandated by the Affordable
Care Act. The estimated effect of the 1.8 percent proposed hospice
payment update percentage is an increase in payments to hospices of
approximately $300 million. Taking into account the 1.8 percent
proposed hospice payment update percentage (+$300 million), the use of
updated wage data ($-20 million), and the additional 15 percent
reduction in the BNAF ($-100 million), it is estimated that hospice
payments would increase by $180 million in FY 2014 ($300 million-$20
million -$100 million = $180 million) or 1.1 percent in FY 2014.
[[Page 27849]]
a. Effects on Hospices
This section discusses the impact of the projected effects of the
hospice wage index and the effects of a proposed 1.8 percent hospice
payment update percentage for FY 2014. This proposed rule continues to
use the CBSA-based pre-floor, pre-reclassified hospital wage index as a
basis for the hospice wage index and continues to use the same policies
for treatment of areas (rural and urban) without hospital wage data.
The proposed FY 2014 hospice wage index is based upon the 2012 pre-
floor, pre-reclassified hospital wage index and the most complete
claims data available (FY 2012) with an additional 15 percent reduction
in the BNAF (for a total BNAF reduction of 70 percent).
For the purposes of our impacts, our baseline is estimated FY 2013
payments with a 55 percent BNAF reduction, using the 2011 pre-floor,
pre-reclassified hospital wage index. Our first comparison (column 3 of
Table 9) compares our baseline to estimated FY 2014 payments (holding
payment rates constant) using the updated wage data (2012 pre-floor,
pre-reclassified hospital wage index). Consequently, the estimated
effects illustrated in column 3 of Table 9 show the distributional
effects of the updated wage data only. The effects of using the updated
wage data combined with the additional 15 percent reduction in the BNAF
are illustrated in column 4 of Table 9.
We have included a comparison of the combined effects of the
additional 15 percent BNAF reduction, the updated wage data, and the
proposed 1.8 percent hospice payment update percentage for FY 2014
(Table 9, column 5). Presenting these data gives the hospice industry a
more complete picture of the effects on their total revenue based on
changes to the hospice wage index and the BNAF phase-out as discussed
in this proposed rule and the proposed FY 2014 hospice payment update
percentage. 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 9--Anticipated Impact on Medicare Hospice Payments of Updating the Pre-Floor, Pre-Reclassified Hospital Wage Index Data, Reducing the Budget
Neutrality Adjustment Factor (BNAF) by an Additional 15 Percent (for a Total BNAF Reduction of 70 Percent) and Applying a 1.8 Percent Hospice Payment
Update Percentage, Compared to the FY 2013 Hospice Wage Index with a 55 Percent BNAF Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent change in
Percent change in hospice payments
hospice payments due to wage index
Number of Percent change due to wage index change,
Number of routine home in hospice change, additional 15%
hospices care days in payments due additional 15% reduction in
thousands to FY2014 wage reduction in budget neutrality
index change budget neutrality adjustment and
adjustment market basket
update
(1) (2) (3) (4) (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALL HOSPICES...................................................... 3,545 85,390 -0.1 -0.7 1.1
URBAN HOSPICES................................................ 2,575 74,784 -0.1 -0.7 1.1
RURAL HOSPICES................................................ 970 10,606 -0.2 -0.6 1.2
BY REGION--URBAN:
NEW ENGLAND................................................... 129 2,780 1.0 0.4 2.2
MIDDLE ATLANTIC............................................... 247 8,018 0.0 -0.6 1.2
SOUTH ATLANTIC................................................ 376 16,441 -0.7 -1.3 0.5
EAST NORTH CENTRAL............................................ 334 11,435 0.0 -0.6 1.2
EAST SOUTH CENTRAL............................................ 154 4,332 -0.5 -1.0 0.8
WEST NORTH CENTRAL............................................ 195 4,627 0.4 -0.2 1.6
WEST SOUTH CENTRAL............................................ 514 9,894 -0.4 -1.0 0.8
MOUNTAIN...................................................... 260 6,545 -0.8 -1.4 0.4
PACIFIC....................................................... 331 9,432 0.9 0.3 2.1
OUTLYING...................................................... 35 1,280 0.3 0.3 2.1
BY REGION--RURAL:
NEW ENGLAND................................................... 24 232 -0.7 -1.4 0.4
MIDDLE ATLANTIC............................................... 42 563 -0.1 -0.7 1.1
SOUTH ATLANTIC................................................ 135 2,358 -0.3 -0.6 1.2
EAST NORTH CENTRAL............................................ 137 1,708 0.4 -0.2 1.6
EAST SOUTH CENTRAL............................................ 132 1,814 0.1 0.0 1.8
WEST NORTH CENTRAL............................................ 182 1,240 -0.9 -1.3 0.5
WEST SOUTH CENTRAL............................................ 175 1,537 -0.1 -0.2 1.6
MOUNTAIN...................................................... 95 665 0.3 -0.1 1.7
PACIFIC....................................................... 47 473 -2.2 -2.9 -1.1
OUTLYING...................................................... 1 15 0.0 0.0 1.8
BY SIZE/DAYS:
0-3499 DAYS (small)........................................... 587 1,021 -0.4 -0.9 0.9
3500-19,999 DAYS (medium)..................................... 1,711 17,331 -0.2 -0.7 1.1
20,000+ DAYS (large).......................................... 1,247 67,037 -0.1 -0.7 1.1
TYPE OF OWNERSHIP:
VOLUNTARY..................................................... 1,077 30,041 0.0 -0.6 1.2
GOVERNMENT.................................................... 486 8,911 -0.1 -0.7 1.1
PROPRIETARY................................................... 1,982 46,438 -0.2 -0.8 1.0
HOSPICE BASE:
[[Page 27850]]
FREESTANDING.................................................. 2,547 69,752 -0.2 -0.8 1.0
HOME HEALTH AGENCY............................................ 521 9,848 0.3 -0.3 1.5
HOSPITAL...................................................... 458 5,574 0.0 -0.6 1.2
SKILLED NURSING FACILITY...................................... 19 216 0.2 -0.5 1.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Providers with hospice claims with dates of service between October 1, 2011 and September 30, 2012, based on the 2012 standard analytic file
(SAF) as of December 31, 2012.
Note: The proposed 1.8 percent hospice payment update percentage for FY 2014 is based on an estimated 2.5 percent inpatient hospital market basket
update, reduced by a 0.4 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 9 shows the results of our analysis. In column 1, we indicate
the number of hospices included in our analysis as of December 31,
2012, which had also filed claims in FY 2012. In column 2, we indicate
the number of routine home care days that were included in our
analysis, although the analysis was performed on all types of hospice
care. Columns 3, 4, and 5 compare FY 2013 estimated payments with those
estimated for FY 2014. The estimated FY 2013 payments incorporate a
BNAF, which has been reduced by 55 percent. Column 3 shows the
percentage change in estimated Medicare payments for FY 2014 due to the
effects of the updated wage data only, compared with estimated FY 2013
payments. The effect of the updated wage data can vary from region to
region depending on the fluctuations in the wage index values of the
pre-floor, pre-reclassified hospital wage index. Column 4 shows the
percentage change in estimated hospice payments from FY 2013 to FY 2014
due to the combined effects of using the updated wage data and reducing
the BNAF by an additional 15 percent. Column 5 shows the percentage
change in estimated hospice payments from FY 2013 to FY 2014 due to the
combined effects of using updated wage data, an additional 15 percent
BNAF reduction, and the proposed 1.8 percent hospice payment update
percentage.
The impact of changes in this proposed rule has been analyzed
according to the type of hospice, geographic location, type of
ownership, hospice base, and size. Table 9 categorizes hospices by
various geographic and hospice characteristics. The first row of data
displays the aggregate result of the impact for all Medicare-certified
hospices. The second and third rows of the table categorize hospices
according to their geographic location (urban and rural). Our analysis
indicated that there are 2,575 hospices located in urban areas and 970
hospices located in rural areas. The next two row groupings in the
table indicate the number of hospices by census region, also broken
down by urban and rural hospices. The next grouping shows the impact on
hospices based on the size of the hospice's program. We determined that
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 2012. The next
grouping shows the impact on hospices by type of ownership. The final
grouping shows the impact on hospices defined by whether they are
provider-based or freestanding.
As indicated in column 1 of Table 9, there are 3,545 hospices.
Approximately 44.1 percent of Medicare-certified hospices are
identified as voluntary (non-profit) or government agencies; a majority
(55.9 percent) are proprietary (for-profit), with 1,563 designated as
non-profit or government hospices, and 1,982 as proprietary. In
addition, our analysis shows that most hospices are in urban areas and
provide the vast majority of routine home care days, most hospices are
medium-sized, and the vast majority of hospices are freestanding.
b. Hospice Size
Under the Medicare hospice benefit, hospices can provide four
different levels of care. The majority of the days provided by a
hospice are routine home care (RHC) days, representing about 97 percent
of the services provided by a hospice. Therefore, the number of RHC
days can be used as a proxy for the size of the hospice, that is, the
more days of care provided, the larger the hospice. We currently use
three size designations to present the impact analyses. The
[[Page 27851]]
three categories are--(1) small agencies having 0 to 3,499 RHC days;
(2) medium agencies having 3,500 to 19,999 RHC days; and (3) large
agencies having 20,000 or more RHC days. The FY 2014 updated wage data
before any BNAF reduction are anticipated to decrease payments to large
hospices by 0.1 percent, to medium hospices by 0.2 percent, and to
small hospices by 0.4 percent (column 3), respectively. The updated
wage data and the additional 15 percent BNAF reduction (for a total
BNAF reduction of 70 percent) are anticipated to decrease estimated
payments to small hospices by 0.9 percent, to medium hospices by 0.7
percent, and to large hospices by 0.7 percent (column 4). Finally, the
updated wage data, the additional 15 percent BNAF reduction (for a
total BNAF reduction of 70 percent), and the proposed 1.8 percent
hospice payment update percentage are projected to increase estimated
payments by 0.9 percent for small hospices, by 1.1 percent for medium
hospices, and by 1.1 percent for large hospices (column 5).
c. Geographic Location
Column 3 of Table 9 shows the estimated impact of using updated
wage data without the BNAF reduction. Urban hospices are anticipated to
experience a decrease of 0.1 percent and rural hospices are anticipated
to experience a decrease of 0.2 percent in payments. Urban hospices can
anticipate an increase in payments in New England of 1.0 percent, in
the West North Central region of 0.4 percent, in the Pacific region of
0.9 percent and in Outlying regions of 0.3 percent. Urban hospices can
anticipate a decrease in payments ranging from 0.8 percent in the
Mountain region to 0.4 percent in the West South Central region. Urban
hospices in Middle Atlantic and East North Central are not anticipated
to be affected by the updated wage data.
Rural hospices are estimated to see a decrease in payments in six
regions, ranging from 2.2 percent in the Pacific region to 0.1 percent
in the West South Central and Middle Atlantic regions. Rural hospices
can anticipate an increase in payments in three regions ranging from
0.1 percent in the East South Central region to 0.4 percent in the East
North Central region. There is no anticipated change in payments for
Outlying regions due to the use of updated wage data.
Column 4 shows the combined effect of the updated wage data and the
additional 15 percent BNAF reduction on estimated payments, as compared
to the FY 2013 estimated payments using a BNAF with a 55 percent
reduction. Overall, hospices are anticipated to experience a 0.7
percent decrease in payments, with urban hospices experiencing an
estimated decrease of 0.7 percent and rural hospices experiencing an
estimated decrease of 0.6 percent. All urban areas other than Outlying,
Pacific and New England regions are estimated to see decreases in
payments, ranging from 1.4 percent in the Mountain region to 0.2
percent in the West North Central region. Rural hospices are estimated
to experience a decrease in payments in seven regions, ranging from 2.9
percent in the Pacific region to 0.1 percent in the Mountain region.
Payments in the Outlying and East South Central regions are anticipated
to stay relatively stable.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction, and the proposed 1.8 percent
hospice payment update percentage on estimated FY 2014 payments as
compared to estimated FY 2013 payments. Overall, hospices are
anticipated to experience a 1.1 percent increase in payments, with
urban hospices anticipated to experience a 1.1 percent increase in
payments, and rural hospices anticipated to experience a 1.2 percent
increase in payments. Urban hospices are anticipated to experience an
increase in estimated payments in every region, ranging from 0.4
percent in the Mountain region to 2.2 percent in New England. Rural
hospices in every region but one are estimated to see an increase in
payments ranging from 0.4 percent in New England to 1.8 percent in the
East South Central and Outlying regions. The Pacific region is
estimated to see a decrease in payments of 1.1 percent.
d. Type of Ownership
Column 3 demonstrates the effect of the updated wage data on FY
2014 estimated payments, versus FY 2013 estimated payments. We
anticipate that using the updated wage data would decrease estimated
payments to proprietary (for-profit) and Government hospices by 0.2
percent and 0.1 percent, respectively. Voluntary (non-profit) hospices
are expected to have no change in payments. Column 4 demonstrates the
combined effects of the updated wage data and of the additional 15
percent BNAF reduction. Estimated payments to voluntary (non-profit),
proprietary (for-profit) and government hospices are anticipated to
decrease by 0.6 percent, 0.8 percent and 0.7 percent, respectively.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction (for a total BNAF reduction of 70
percent), and the proposed 1.8 percent hospice payment update
percentage on estimated payments, comparing FY 2014 to FY 2013.
Estimated FY 2014 payments are anticipated to increase for voluntary
(non-profit) hospices, for proprietary (for-profit) hospices, and
government hospices, by 1.2, 1.0, and 1.1 percent, respectively.
e. Hospice Base
Column 3 demonstrates the effect of using the updated wage data,
comparing estimated payments for FY 2014 to FY 2013. Estimated payments
are anticipated to decrease for freestanding hospices by 0.2 percent.
Estimated payments are anticipated to increase for Home Health Agency
and Skilled Nursing Facility based hospices by 0.3 percent and by 0.2
percent, respectively. Hospital based hospices are estimated to
experience no change in payments. Column 4 shows the combined effects
of the updated wage data and reducing the BNAF by an additional 15
percent, comparing estimated payments for FY 2014 to FY 2013. All
hospice facilities are anticipated to experience decrease in payments
ranging from 0.8 percent for freestanding hospices to 0.3 percent for
Home Health Agency based hospices. Column 5 shows the combined effects
of the updated wage data, the additional 15 percent BNAF reduction, and
the proposed 1.8 percent hospice payment update percentage on estimated
payments, comparing FY 2014 to FY 2013. Estimated payments are
anticipated to increase for all hospices, ranging from 1.0 percent for
freestanding hospices to 1.5 percent for Home Health Agency based
hospices.
f. Effects on Other Providers
This proposed rule only affects 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 2014 are anticipated to decrease by
$20 million due to the update in the wage index data, and to decrease
by $100 million due to the additional 15 percent reduction in the BNAF
(for a total 70 percent reduction in the BNAF). However, the proposed
hospice payment update percentage of 1.8 percent is anticipated to
increase Medicare payments by $300 million. Therefore, the total effect
on Medicare
[[Page 27852]]
hospice payments is estimated to be a $180 million increase (1.1
percent).
h. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 10 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with this proposed rule. Table 10 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
using data for 3,545 hospices in our database.
Table 10--Accounting Statement: Classification of Estimated
Expenditures, From FY 2013 to FY 2014
[In $Millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $180.
From Whom to Whom......................... Federal Government to
Hospices.
------------------------------------------------------------------------
i. Conclusion
In conclusion, the overall effect of this proposed rule is an
estimated $180 million increase in Federal Medicare payments to
hospices due to the wage index changes (including the additional 15
percent reduction in the BNAF) and the proposed hospice payment update
percentage of 1.8 percent. Furthermore, the Secretary has determined
that this will not have a significant impact on a substantial number of
small entities, or have a significant effect relative to section
1102(b) of the Act.
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. For purposes of the RFA, we estimate that
almost all hospices are small entities as that term is used in the RFA.
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 $7.0 million to $34.5 million in
any 1 year), or being nonprofit organizations. While the SBA does not
define a size threshold in terms of annual revenues for hospices, it
does define one for home health agencies ($14 million; see http://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf).
For the purposes of this proposed rule, because the hospice benefit is
a home-based benefit, we are applying the SBA definition of ``small''
for home health agencies to hospices; we will use this definition of
``small'' in determining if this proposed rule has a significant impact
on a substantial number of small entities (for example, hospices). We
estimate that 95 percent of hospices have Medicare revenues below $14
million or are nonprofit organizations and therefore are considered
small entities.
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, the additional 15 percent
BNAF reduction, and the proposed FY 2014 hospice payment update
percentage of 1.8 percent results in an increase in estimated hospice
payments of 1.1 percent for FY 2014. For small and medium hospices (as
defined by routine home care days), the estimated effects on revenue
when accounting for the updated wage data, the additional 15 percent
BNAF reduction, and the proposed FY 2014 hospice payment update
percentage reflect increases in payments of 0.9 percent and 1.1
percent, respectively. 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 2013, that
threshold is approximately $141 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 $141 million or more.
VII. Federalism Analysis and Regulations Text
Executive Order 13132 on Federalism (August 4, 1999) establishes
certain requirements that an agency must meet when it promulgates a
proposed rule (and subsequent final rule) that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications. We have reviewed this
proposed rule under the threshold criteria of Executive Order 13132,
Federalism, and have determined that it will not have substantial
direct effects on the rights, roles, and responsibilities of States,
local or tribal governments.
List of Subjects in 42 CFR Part 418
Health Facilities, Hospice Care, Medicare, Reporting and record
keeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR part 418 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).
Sec. 418.311 [Amended]
0
2. Amend Sec. 418.311 by removing the reference to ``Sec. 405.1874''
and adding in its place the reference ``Sec. 405.1875''.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program) (Catalog of Federal Domestic Assistance Program
No. 93.773, Medicare--Hospital Insurance; and Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: April 23, 2013.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: April 25, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2013-10389 Filed 4-29-13; 4:15 pm]
BILLING CODE 4120-01-P