[Federal Register Volume 79, Number 89 (Thursday, May 8, 2014)]
[Proposed Rules]
[Pages 26538-26587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10505]
[[Page 26537]]
Vol. 79
Thursday,
No. 89
May 8, 2014
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405 and 418
Medicare Program; FY 2015 Hospice Wage Index and Payment Rate Update;
Hospice Quality Reporting Requirements and Process and Appeals for Part
D Payment for Drugs for Beneficiaries Enrolled in Hospice; Proposed
Rule
Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Proposed
Rules
[[Page 26538]]
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Department of Health and Human Services
Centers for Medicare & Medicaid Services
42 CFR Parts 405 and 418
[CMS-1609-P]
RIN 0938-AS10
Medicare Program; FY 2015 Hospice Wage Index and Payment Rate
Update; Hospice Quality Reporting Requirements and Process and Appeals
for Part D Payment for Drugs for Beneficiaries Enrolled in Hospice
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) 2015 and continue the phase out of
the wage index budget neutrality adjustment factor (BNAF). This rule
provides an update on hospice payment reform analyses and solicits
comments on ``terminal illness'' and ``related conditions''
definitions, and on a process and appeals for Part D payment for drugs,
while beneficiaries are under a hospice election. Also, this rule
proposes timeframes for filing the notice of election and the notice of
termination/revocation; adding the attending physician to the hospice
election form; a requirement that hospices complete their hospice
inpatient and aggregate cap determinations within 5 months after the
cap year ends, and remit any overpayments; and updates for the hospice
quality reporting program.
In addition, this rule would provide guidance on determining
hospice eligibility, information on the delay in the implementation of
the International Classification of Diseases, 10th Revision, Clinical
Modification (ICD-10-CM), and would further clarify how hospices are to
report diagnoses on hospice claims. Finally, the rule proposes to make
a technical regulatory text change.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on July 1, 2014.
ADDRESSES: In commenting, please refer to file code CMS-1609-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-1609-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-1609-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building is
not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call
telephone number (410) 786-9994 in advance to schedule your arrival
with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Debra Dean-Whittaker, (410) 786-0848
for questions regarding the CAHPS[supreg] Hospice Survey. Robin Dowell,
(410) 786-0060 for questions regarding the hospice quality reporting
program. Deborah Larwood, (410) 786-9500 for questions regarding
process and appeals for Part D payment for drugs while beneficiaries
are under a hospice election. Owen Osaghae, (410) 786-7550 for
questions regarding the hospice inpatient and aggregate cap
determinations.
For general questions about hospice payment policy please send your
inquiry via email to: [email protected].
SUPPLEMENTARY INFORMATION: Wage index addenda will be available only
through the internet on the CMS Web site at: (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.) 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 Hillary Loeffler at 410-786-0456.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Costs, Benefits, and Transfers
II. Background
A. Hospice Care
B. History of the Medicare Hospice Benefit
C. Services Covered by the Medicare Hospice Benefit
D. Medicare Payment for Hospice Care
1. Omnibus Budget Reconciliation Act of 1989
2. Balanced Budget Act of 1997
3. FY 1998 Hospice Wage Index Final Rule
4. FY 2010 Hospice Wage Index Final Rule
[[Page 26539]]
5. The Affordable Care Act
6. FY 2012 Hospice Wage Index Final Rule
E. Trends in Medicare Hospice Utilization
III. Provisions of the Proposed Rule
A. Hospice Payment Reform: Research and Analyses
1. Beneficiaries Dying Without Skilled Visits in the Last Days
of Life
2. General Inpatient Care, Continuous Home Care, and Inpatient
Respite Care Utilization
3. Hospice Live Discharges
4. Non-hospice Spending for Hospice Beneficiaries During an
Election
B. Solicitation of Comments on Definitions of ``Terminal
Illness'' and ``Related Conditions''
1. The Development of the Medicare Hospice Benefit
2. Legislative History of the Medicare Hospice Benefit
3. Hospice Care Today
4. Definition of ``Terminal Illness''
5. Definition of ``Related Conditions''
C. Guidance on Determining Beneficiaries' Eligibility
D. Proposed Timeframe for Hospice Cap Determinations and
Overpayment Remittances
E. Proposed Timeframes for Filing the Notice of Election and
Notice of Termination/Revocation
1. Proposed Timeframe for Filing the Notice of Election
2. Proposed Timeframe for Filing the Notice of Termination/
Revocation
F. Proposed Addition of the Attending Physician to the Hospice
Election Form
G. FY 2015 Hospice Wage Index and Rates Update
1. FY 2015 Hospice Wage Index
2. FY 2015 Wage Index with an Additional 15 Percent Reduced
Budget Neutrality Adjustment Factor (BNAF)
3. Proposed Hospice Payment Update Percentage
4. Proposed FY 2015 Hospice Payment Rates
H. Proposed Updates to the Hospice Quality Reporting Program
1. Background and Statutory Authority
2. Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Years FY 2014 and FY 2015
3. Quality Measures for Hospice Quality Reporting Program and
Data Submission Requirements for Payment Year FY 2016 and Beyond
4. Future Measure Development
5. Public Availability of Data Submitted
6. Proposed Adoption of the CAHPS[supreg] Hospice Survey for the
FY 2017 Payment Determination
a. Background and Description of the Survey
b. Participation Requirements to Meet Quality Reporting
Requirements for the FY 2017 APU
c. Participation Requirements to Meet Quality Reporting
Requirements for the FY 2018 APU
d. Vendor Participation Requirements for the 2017 APU
e. Annual Payment Update
f. CAHPS[supreg] Hospice Survey Oversight Activities
7. Procedures for Payment Year 2016 and Subsequent Years
I. Solicitation of Comments on Coordination of Benefits Process
and Appeals for Part D Payment for Drugs While Beneficiaries are
Under a Hospice Election
1. Part D Sponsor Coordination of Payment with Hospice Providers
2. Hospice Coordination of Payment with Part D Sponsors and
Other Payers
3. Beneficiary Rights and Appeals
J. Update on the International Classification of Diseases, 10th
Revision, Clinical Modification (ICD-10-CM) and Coding Guidelines
for Hospice Claims Reporting
1. International Classification of Diseases, 10th Revision,
Clinical Modification (ICD-10-CM)
2. Coding Guidelines for Hospice Claims Reporting
K. Technical Regulatory Text Change
IV. Collection of Information Requirements
A. Proposed Changes Related to Hospice Payment Policy
1. Proposed Changes to the Election Statement (Sec. 418.24)
2. Proposed Changes to Inpatient and Aggregate Cap Determination
Reporting (Sec. 418.308)
B. CAHPS[supreg] Hospice Survey
V. Regulatory Impact Analysis
A. Statement of Need
B. Introduction
C. Overall Impact
1. Detailed Economic Analysis
a. Effects on Hospices
b. Hospice Size
c. Geographic Location
d. Type of Ownership
e. Hospice Base
f. Effects on Other Providers
g. Effects on the Medicare and Medicaid Programs
h. Alternatives Considered
i. Accounting Statement
j. Conclusion
2. Regulatory Flexibility Act Analysis
3. Unfunded Mandates Reform Act Analysis
VI. Federalism Analysis and Regulations Text
Acronyms
Because of the many terms to which we refer by acronym in this
proposed rule, we are listing the acronyms used and their corresponding
meanings in alphabetical order below:
ACA Affordable Care Act
APU Annual Payment Update
BBA Balanced Budget Act of 1997
BIPA Benefits Improvement and Protection Act of 2000
BNAF Budget Neutrality Adjustment Factor
BLS Bureau of Labor Statistics
CAHPS[supreg] Consumer Assessment of Healthcare Providers and
Systems
CBSA Core-Based Statistical Area
CCW Chronic Conditions Data Warehouse
CFR Code of Federal Regulations
CHC Continuous Home Care
CMS Centers for Medicare & Medicaid Services
COPD Chronic Obstructive Pulmonary Disease
CoPs Conditions of Participation
CR Change Request
CVA Cerebral Vascular Accident
CWF Common Working File
CY Calendar Year
DDE Direct Data Entry
DME Durable Medical Equipment
DRG Diagnostic Related Group
DTRR Daily Transaction Reply Report
ER Emergency Room
FEHC Family Evaluation of Hospice Care
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
GIP General Inpatient Care
HCFA Healthcare Financing Administration
HHS Health and Human Services
HIPPA Health Insurance Portability and Accountability Act
HIS Hospice Item Set
HQRP Hospice Quality Reporting Program
IACS Individuals Authorized Access to CMS Computer Services
ICD-9-CM International Classification of Diseases, Ninth Revision,
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision,
Clinical Modification
ICR Information Collection Requirement
IDG Interdisciplinary Group
IPPS Inpatient Prospective Payment System
IRC Inpatient Respite Care
LCD Local Coverage Determination
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MedPAC Medicare Payment Advisory Commission
MFP Multi-Factor Productivity
MSA Metropolitan Statistical Area
NCPDP National Council for Prescription Drug Programs
NHPCO National Hospice and Palliative Care Organization
NF Long Term Care Nursing Facility
NOE Notice of Election
NOTR Notice of Termination/Revocation
NP Nurse Practitioner
NPI National Provider Identifier
NQF National Quality Forum
OIG Office of the Inspector General
OACT Office of the Actuary
OIG Office of Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information
Technology
PA Prior Authorization
PBM Pharmacy Benefit Manager
PDE Prescription Drug Event
PRA Paperwork Reduction Act
PRRB Provider Reimbursement Review Board
PS&R Provider Statistical and Reimbursement Report
Pub. L. Public Law
QAPI Quality Assessment and Performance Improvement
QIO Quality Improvement Organization
QRP Quality Reporting Program
RFA Regulatory Flexibility Act
RHC Routine Home Care
SAF Standard Analytic File
SBA Small Business Administration
SNF Skilled Nursing Facility
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TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEP Technical Expert Panel
TrOOP True Out-of-Pocket
U.S.C. United States Code
I. Executive Summary for This Proposed Rule
A. Purpose
This rule proposes updates to the payment rates for hospices for
fiscal year (FY) 2015 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 6th 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. In
addition, section 3004(c) of the Patient Protection and Affordable Care
Act (Pub. L. 111-148) as amended by the Health Care and Education
Reconciliation Act (Pub. L. 111-152) (the Affordable Care Act)
established a quality reporting program for hospices. Starting in FY
2014, hospices that failed to meet quality reporting requirements
received a two percentage point reduction to their market basket
update. The Affordable Care Act also requires the Secretary to
implement revisions to the hospice payment methodology no earlier than
October 1, 2013. As such, this proposed rule provides an update of our
hospice payment reform activities. This rule solicits comments on:
Definitions of ``terminal illness'' and ``related conditions''; and
process and appeals for Part D payment for drugs while beneficiaries
are under a hospice election. This rule proposes timeframes for filing
the hospice notice of election and the notice of termination/
revocation; adding the attending physician to the hospice election
form; expediting hospice inpatient and aggregate cap determinations;
and updates to the hospice quality reporting program. Additionally,
this proposed rule provides guidance on determining a patient's
eligibility for hospice, discusses the delay in the implementation of
the International Classification of Diseases, 10th Revision, Clinical
Modification (ICD-10-CM), clarifies how hospices would report
diagnoses, in accordance with current ICD-9-CM guidelines, on hospice
claims, and proposes a technical regulations text change.
B. Summary of the Major Provisions
In this rule we propose to update the hospice payment rates for FY
2015 by 1.3 percent as described in section III.G.3. The hospice wage
index would be updated with more current wage data and the BNAF would
be reduced by an additional 15 percent for a total BNAF reduction of 85
percent as described in section III.G.2. The total BNAF phase-out would
be complete by FY 2016. 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
(no earlier than October 1, 2013) and for other purposes. An initial
step of hospice payment reform in this proposed rule is to clarify and
enforce hospice payment policy, when necessary, in order to safeguard
beneficiaries and the Medicare hospice benefit. In section III.A, we
provide information on hospice behavior and trends that raise program
integrity concerns; the impact of beneficiary access to quality end of
life care; and the effect of hospice providers' market driven goals
rather than preserving the intent of the Medicare Hospice benefit. In
response to the concerning trends and comments received in response to
prior rulemaking, we are soliciting comments on definitions of
``terminal illness'' and ``related conditions'' in section III.B, in
order to strengthen and clarify the current concepts of holistic and
comprehensive hospice care under the Medicare hospice benefit. In
section III.I, we are soliciting comments on processes that Part D plan
sponsors could use to coordinate with Medicare hospices in determining
coverage of drugs for hospice beneficiaries and resolving disagreements
between the parties. In section III.E, we propose to require hospices
to file both the notice of election (NOE) and the notice of
termination/revocation (NOTR) on behalf of beneficiaries within 3
calendar days of admission/discharge. If an NOE is not filed timely,
the days from the effective date of election to the date of filing the
NOE would be the financial responsibility of the hospice. In section
III.F, we propose to require the hospice to identify the attending
physician on the election form. In section III.D, we propose that
hospices complete their cap determinations, using a pro-forma
spreadsheet, within 150 days after the cap period, and remit any
overpayments at that time. Given concerns about hospices increasingly
exceeding their aggregate cap, along with the average overpayment per
beneficiary, we believe that this procedural change is necessary in
order to better safeguard the Medicare Trust Fund.
This proposed rule, in section III.H, discusses updates to the
hospice quality reporting program, including participation requirements
for CY 2015 regarding the CAHPS[supreg] Hospice Survey, and reminds the
hospice industry that last year we set the July 1, 2014 implementation
date for the Hospice Item Set and the January 1, 2015 implementation
date for the CAHPS[supreg] Hospice Survey.
More than seven new quality measures would be derived from these
tools; therefore, no new measures are proposed this year. Section III.H
of this rule also proposes changes related to the reconsideration
process, extraordinary circumstance extensions or exemptions, and
hospice quality reporting program (HQRP) eligibility requirements for
newly certified hospices. Finally, this proposed rule provides:
guidance on determining the beneficiary's eligibility for hospice in
section III.C; discusses the delay in the implementation of the
International Classification of Diseases, 10th Revision, Clinical
Modification (ICD-10-CM); clarifies appropriate diagnosis reporting on
hospice claims. We propose that, effective October 1, 2014, claims
would be returned to the provider if the claim listed a non-specific
symptom diagnosis as the principal hospice diagnosis in section III. J.
We also propose a technical regulations text change in section III.K
pertaining to the definition of ``social worker''.
C. Summary of Impacts
Table 1--Impact Summary Table
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Provision description Transfers
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FY 2015 Hospice Wage Index and Payment The overall economic impact of
Rate Update. this proposed rule is
estimated to be $230 million
in increased payments to
hospices during FY 2015.
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Provision description Total costs
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New Quality Reporting Requirements for $8.77 million.
Hospices (FY 2015).
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II. Background
A. Hospice Care
Hospice care is an approach to treatment that recognizes that the
impending death of an individual warrants a change in the focus from
curative care to palliative care for relief of pain and for symptom
management.
[[Page 26541]]
The goal of hospice care is to help terminally ill individuals continue
life with minimal disruption to normal activities while remaining
primarily in the home environment. A hospice uses an interdisciplinary
approach to deliver medical, nursing, social, psychological, emotional,
and spiritual services through use of a broad spectrum of professionals
and other caregivers, with the goal of making the individual as
physically and emotionally comfortable as possible. Hospice is
compassionate patient and family-centered care for those who are
terminally ill. It is a comprehensive, holistic approach to treatment
that recognizes that the impending death of an individual necessitates
a change from curative to palliative care.
Medicare regulations define palliative care as ``patient and
family-centered care that optimizes quality of life by anticipating,
preventing, and treating suffering.'' Palliative care throughout the
continuum of illness involves addressing physical, intellectual,
emotional, social, and spiritual needs and to facilitate patient
autonomy, access to information, and choice'' (42 CFR 418.3).
Palliative care is at the core of hospice philosophy and care
practices, and is a critical component of the Medicare hospice benefit.
As 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 a life-threatening illness through the prevention and relief of
suffering by means of early identification, assessment and treatment of
pain and other issues. This is achieved by the hospice
interdisciplinary team working with the patient and family to develop a
comprehensive care plan focused on coordinating care services, reduce
unnecessary diagnostics or ineffective therapies, and offering ongoing
conversations with individuals and their families about changes in the
disease. It is expected that this comprehensive care plan would shift
over time to meet the changing needs of the patient and family as the
individual approaches the end-of-life.
Medicare hospice care is palliative care for individuals with a
prognosis of living 6 months or less if the terminal illness runs its
normal course. As generally accepted by the medical community, the term
``terminal illness'' refers to an advanced and progressively
deteriorating illness, and that the illness is diagnosed as incurable
(please see section III.B for a discussion and solicitation of comments
on a possible Medicare hospice definition of ``terminal illness'').
When an individual is terminally ill, many health problems are brought
on by underlying condition(s), as bodily systems are interdependent. In
the June 5, 2008 Hospice Conditions of Participation final rule (73 FR
32088), we stated that ``the medical director must consider the primary
terminal condition, related diagnoses, current subjective and objective
medical findings, current medication and treatment orders, and
information about unrelated conditions when considering the initial
certification of the terminal illness.'' As referenced in our
regulations at Sec. 418.22(b)(1), to be eligible for Medicare hospice
services, the patient's attending physician (if any) and the hospice
medical director must certify that the individual is terminally ill,
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 our regulations at
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 a home level of care.
Short-term, intermittent, inpatient respite services are also available
to the family of the hospice patient when needed to relieve the family
or other caregivers. Additionally, an individual can receive continuous
home care during a period of crisis in which an individual requires
primarily continuous nursing care to achieve palliation or management
of acute medical symptoms so that the individual can remain at home.
Continuous home care may be covered on a continuous basis for as much
as 24 hours a day, and these periods must be predominantly nursing care
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)).
Hospices are expected to comply with all civil rights laws,
including the provision of auxiliary aids and services to ensure
effective communication with patients or patient care representatives
with disabilities consistent with Section 504 of the Rehabilitation Act
of 1973 and the Americans with Disabilities Act, and to provide
language access for such persons who are limited in English
proficiency, consistent with Title VI of the Civil Rights Act of 1964.
Further information about these requirements may be found at http://www.hhs.gov/ocr/civilrights.
B. History of the Medicare Hospice Benefit
Before the creation of the Medicare hospice benefit, hospice was
originally run by volunteers who cared for the dying. During the early
development stages of the Medicare hospice benefit, hospice advocates
were clear that they wanted a Medicare benefit 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 patient ``electing'' the hospice benefit
and being certified as terminally ill were two key components in the
legislation responsible for the creation of the Medicare Hospice
Benefit (section 122 of the Tax Equity
[[Page 26542]]
and Fiscal Responsibility Act of 1982 (TEFRA), (Pub. L. 97-248)).
Section 122 of TEFRA created the Medicare Hospice Benefit, which was
implemented on November 1, 1983. Under sections 1812(d) and 1861(dd) of
the Social Security Act (the Act), codified at 42 U.S.C. 1395d(d) and
1395x(dd), we provide coverage of hospice care for terminally ill
Medicare beneficiaries who elect to receive care from a Medicare-
certified hospice. Our regulations at Sec. 418.54(c) stipulate that
the comprehensive hospice assessment must identify the patient's
physical, psychosocial, emotional, and spiritual needs related to the
terminal illness and related conditions, and address those needs in
order to promote the hospice patient's well-being, comfort, and dignity
throughout the dying process. The comprehensive assessment must take
into consideration the following factors: the nature and condition
causing admission (including the presence or lack of objective data and
subjective complaints); complications and risk factors that affect care
planning; functional status; imminence of death; and severity of
symptoms (Sec. 418.54(c)). The Medicare hospice benefit requires the
hospice to cover all reasonable and necessary palliative care related
to the terminal prognosis and related conditions, as described in the
patient's plan of care. The December 16, 1983 Hospice final rule (48 FR
56008) requires hospices to cover care for interventions to manage pain
and symptoms. Clinically, related conditions are any physical or mental
conditions that are related to or caused by either the terminal illness
or the medications used to manage the terminal illness.\2\ See section
III.B of this proposed rule for a discussion and solicitation of
comments on a possible Medicare hospice definition of ``related
conditions.'' Additionally, the hospice Conditions of Participation at
Sec. 418.56(c) require that the 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 principal terminal diagnosis) 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 (a related condition)
and require a laxative for symptom relief. It is often not a single
diagnosis that represents the terminal prognosis of the patient, but
the combined effect of several conditions that makes the patient's
condition terminal. In the December 16, 1983 Hospice final rule (48 FR
56010 through 56011), regarding what is related versus unrelated to the
terminal illness, we stated: ``. . . we believe that the unique
physical condition of each terminally ill individual makes it necessary
for these decisions to be made on a case-by-case basis. It is our
general view that hospices are required to provide virtually all the
care that is needed by terminally ill patients.'' Therefore, unless
there is clear evidence that a condition is unrelated to the terminal
prognosis, all services would be considered related. It is also the
responsibility of the hospice physician to document why a patient's
medical needs would be unrelated to the terminal prognosis.
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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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As stated in the December 16,1983 Hospice final rule, the
fundamental premise upon which the hospice benefit was designed was the
``revocation'' of traditional curative care and the ``election'' of
hospice care for end-of-life symptom management and maximization of
quality of life (48 FR 56008). After electing hospice care, the patient
typically returns to the home from an institutionalized setting or
remains in the home, to be surrounded by family and friends, and to
prepare emotionally and spiritually for death while receiving expert
symptom management and other supportive services. Election of hospice
care also includes waiving the right to Medicare payment for curative
treatment for the terminal prognosis, and instead receiving palliative
care to manage pain or symptoms.
The benefit was originally designed to cover hospice care for a
finite period of time that roughly corresponded to a life expectancy of
6 months or less. Initially, beneficiaries could receive three election
periods: Two 90-day periods and one 30-day period. Currently, Medicare
beneficiaries can elect hospice care for two 90-day periods and an
unlimited number of subsequent 60-day periods; however, the expectation
remains that beneficiaries have a life expectancy of 6 months or less
if the terminal illness runs its normal course.
C. Services Covered by the Medicare Hospice Benefit
One requirement for coverage under the Medicare Hospice Benefit is
that hospice services must be reasonable and necessary for the
palliation and management of the terminal illness and related
conditions. Section 1861(dd)(1) of the Act establishes the services
that are to be rendered by a Medicare certified hospice program. These
covered services include: Nursing care; physical therapy; occupational
therapy; speech-language pathology therapy; medical social services;
home health aide services (now called hospice aide services); physician
services; homemaker services; medical supplies (including drugs and
biologics); medical appliances; counseling services (including dietary
counseling); short-term inpatient care (including both respite care and
procedures necessary for pain control and acute or chronic symptom
management) in a hospital, nursing facility, or hospice inpatient
facility; continuous home care during periods of crisis and only as
necessary to maintain the terminally ill individual at home; and any
other item or service which is specified in the plan of care and for
which payment may otherwise be made under Medicare, in accordance with
Title XVIII of the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for
providing hospice care to a beneficiary who is a hospice patient be
established before care is provided by, or under arrangements made by,
that hospice program and that the written plan be periodically reviewed
by the beneficiary's attending physician (if any), the hospice medical
director, and an interdisciplinary group (described in section
1861(dd)(2)(B) of the Act). The services offered under the Medicare
hospice benefit must be available, as needed, to beneficiaries 24 hours
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the
implementation of the hospice benefit, the Congress expected hospices
to continue to use volunteer services, though these services are not
reimbursed by Medicare (see Section 1861(dd)(2)(E) of the Act and (48
FR 38149)). As stated in the August 22, 1983 Hospice proposed rule, the
hospice interdisciplinary group should be comprised of paid hospice
employees as well as hospice volunteers (48 FR 38149). This expectation
is in line with the history of hospice and philosophy of holistic,
comprehensive, compassionate, end-of-life care.
Before the Medicare hospice benefit was established, Congress
requested a demonstration project to test the
[[Page 26543]]
feasibility of covering hospice care under Medicare. The National
Hospice Study was initiated in 1980 through a grant sponsored by the
Robert Wood Johnson and John A. Hartford Foundations and CMS (then, the
Health Care Financing Administration (HCFA)). The demonstration project
was conducted between October 1980 and March 1983. The project
summarized the hospice care philosophy as the following:
Patient and family know of the terminal condition.
Further medical treatment and intervention are indicated
only on a supportive basis.
Pain control should be available to patients as needed to
prevent rather than to just ameliorate pain.
Interdisciplinary teamwork is essential in caring for
patient and family.
Family members and friends should be active in providing
support during the death and bereavement process.
Trained volunteers should provide additional support as
needed.
The cost data and the findings on what services hospices provided in
the demonstration project were used to design the Medicare hospice
benefit. The identified hospice services were incorporated into the
service requirements under the Medicare hospice benefit. Importantly,
in the August 22, 1983 hospice proposed rule, we stated ``the hospice
benefit and the resulting Medicare reimbursement is not intended to
diminish the voluntary spirit of hospices'' (48 FR 38149).
D. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of
the Act, and our regulations in part 418, establish eligibility
requirements, payment standards and procedures, define covered
services, and delineate the conditions a hospice must meet to be
approved for participation in the Medicare program. Part 418, subpart
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (routine home care,
continuous home care, inpatient respite care, and general inpatient
care), based on each day a qualified Medicare beneficiary is under
hospice care (once the individual has elected). This per diem payment
is to include all of the hospice services needed to manage the
beneficiaries' care, as required by section 1861(dd)(1) of the Act.
There has been little change in the hospice payment structure since the
benefit's inception. The per diem rate based on level of care was
established in 1983, and this payment structure remains today with some
adjustments, as noted below:
1. Omnibus Budget Reconciliation Act of 1989
Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided
for the following two changes in the 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 from 2002
have been updated according to section 1814(i)(1)(C)(ii)(VII) of the
Act, which states that the update to the payment rates for subsequent
FYs will be the hospital market basket percentage increase for the FY.
The Act requires us to use the inpatient hospital market basket to
determine hospice payment rates.
3. FY 1998 Hospice Wage Index Final Rule
In the August 8, 1997 FY 1998 Hospice Wage Index final rule (62 FR
42860), we implemented a new methodology for calculating the hospice
wage index based on the recommendations of a negotiated rulemaking
committee. The original hospice wage index was based on 1981 Bureau of
Labor Statistics hospital data and had not been updated since 1983. In
1994, because of disparity in wages from one geographical location to
another, the Hospice Wage Index Negotiated Rulemaking Committee was
formed to negotiate a new wage index methodology that could be accepted
by the industry and the government. This Committee was comprised of
representatives from national hospice associations; rural, urban, large
and small hospices, and multi-site hospices; consumer groups; and a
government representative. The Committee decided that in updating the
hospice wage index, aggregate Medicare payments to hospices would
remain budget neutral to payments calculated using the 1983 wage index,
to cushion the impact of using a new wage index methodology. To
implement this policy, a Budget Neutrality Adjustment Factor (BNAF)
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. FY 2010 Hospice Wage Index Final Rule
Inpatient hospital pre-floor and pre-reclassified wage index
values, as described in the August 8, 1997 Hospice Wage Index final
rule, are subject to either a budget neutrality adjustment or
application of the wage index floor. Wage index values of 0.8 or
greater are adjusted by the (BNAF). Starting in FY 2010, a 7-year
phase-out of the BNAF began (August 6, 2009 FY 2010 Hospice Wage Index
final rule, (74 FR 39384)), with a 10 percent reduction in FY 2010, an
additional 15 percent reduction for a total of 25 percent in FY 2011,
an additional 15 percent reduction for a total 40 percent reduction in
FY 2012, an additional 15 percent reduction for a total of 55 percent
in FY 2013, and an additional 15 percent reduction for a total 70
percent reduction in FY 2014. The phase-out would continue with an
additional 15 percent reduction for a total reduction of 85 percent in
FY 2015, and an additional 15 percent reduction for complete
elimination in FY 2016. 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 (Pub.
L. 111-148) as amended by the Health Care and Education Reconciliation
Act (Pub. L. 111-152) (the Affordable Care Act)). In FY 2013 through FY
2019, the market
[[Page 26544]]
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 to 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 (CY 2011 Home Health Prospective Payment
System final rule (75 FR 70435)). Further, section 1814(i)(6) of the
Act, as amended by section 3132(a)(1)(B) of the Affordable Care Act,
authorizes the Secretary to collect additional data and information
determined appropriate to revise payments for hospice care and other
purposes. The types of data and information suggested in the Affordable
Care Act would capture accurate resource utilization, which could be
collected on claims, cost reports, and possibly other mechanisms, as
the Secretary determines to be appropriate. The data collected may be
used to revise the methodology for determining the payment rates for
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. FY 2012 Hospice Wage Index Final Rule
When the Medicare Hospice Benefit was implemented, the Congress
included an aggregate cap on hospice payments, which limits the total
aggregate payments any individual hospice can receive in a year. The
Congress stipulated that a ``cap amount'' be computed each year. The
cap amount was set at $6,500 per beneficiary when first enacted in 1983
and is adjusted annually by the change in the medical care expenditure
category of the consumer price index for urban consumers from March
1984 to March of the cap year (section 1814(i)(2)(B) of the Act). The
cap year is defined as the period from November 1st to October 31st. As
we stated in the August 4, 2011 FY 2012 Hospice Wage Index final rule
(76 FR 47308 through 47314), for the 2012 cap year and subsequent cap
years, the hospice aggregate cap will be calculated using the patient-
by-patient proportional methodology, within certain limits. We will
allow existing hospices the option of having their cap calculated via
the original streamlined methodology, also within certain limits. New
hospices will have their cap determinations calculated using the
patient-by-patient proportional methodology. The patient-by-patient
proportional methodology and the streamlined methodology are two
different methodologies for counting beneficiaries when calculating the
hospice aggregate cap. A detailed explanation of these methods is found
in the August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR
47308 through 47314). If a hospice's total Medicare reimbursement for
the cap year exceeded the hospice aggregate cap, then the hospice 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 2013. Similarly, Medicare hospice expenditures have risen from
$2.9 billion in FY 2000 to an estimated $15.1 billion in FY 2013. Our
Office of the Actuary (OACT) projects that hospice expenditures are
expected to continue to increase, by approximately 8 percent annually,
reflecting an increase in the number of Medicare beneficiaries, more
beneficiary awareness of the Medicare Hospice Benefit for end-of-life
care, and a growing preference for care provided in home and community-
based settings. However, this increased spending is partly due to an
increased average lifetime length of stay for beneficiaries, from 54
days in 2000 to 86 days in 2011, an increase of 59 percent.
There have also been noted changes in the diagnosis patterns among
Medicare hospice enrollees. 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 the first and third
most common hospice diagnoses, respectively. ``Debility'' and ``adult
failure to thrive'' continue to be among the most common hospice
principal diagnoses (14 percent), and those, combined with ``dementia''
and Alzheimer's disease constituted approximately 30 percent of all
claims-reported principal diagnosis codes reported in FY 2013 (see
Table 2 below).
Table 2--The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007,
FY 2012, FY 2013
------------------------------------------------------------------------
ICD-9/Reported
Rank principal Count Percentage
diagnosis
------------------------------------------------------------------------
Year: FY 2002
------------------------------------------------------------------------
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 20,262 3
Cancer.
8................... 783.7 Adult 18,304 3
Failure To Thrive.
[[Page 26545]]
9................... 174.9 Breast 17,812 3
Cancer.
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 10,394 2
Brain Synd Nec.
14.................. 429.9 Heart 10,332 2
Disease
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 7,432 1
Cancer.
20.................. 188.9 Bladder 6,916 1
Cancer.
------------------------------------------------------------------------
Year: FY 2007
------------------------------------------------------------------------
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 58,303 6
Failure To Thrive.
6................... 331.0 Alzheimer's 58,200 6
Disease.
7................... 290.0 Senile 37,667 4
Dementia Uncomp..
8................... 436 CVA/Stroke.... 31,800 3
9................... 429.9 Heart 22,170 2
Disease
Unspecified.
10.................. 185 Prostate 22,086 2
Cancer.
11.................. 174.9 Breast 20,378 2
Cancer.
12.................. 157.9 Pancreas 19,082 2
Unspecified.
13.................. 153.9 Colon Cancer 19,080 2
14.................. 294.8 Organic 17,697 2
Brain 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 11,196 1
Renal Disease.
19.................. 188.9 Bladder 8,806 1
Cancer.
20.................. 183.0 Ovarian 8,434 1
Cancer.
------------------------------------------------------------------------
Year: FY 2012
------------------------------------------------------------------------
1................... 799.3 Debility 161,163 12
Unspecified.
2................... 162.9 Lung Cancer. 89,636 7
3................... 783.7 Adult 86,467 7
Failure To Thrive.
4................... 428.0 Congestive 84,333 6
Heart Failure.
5................... 496 COPD.......... 74,786 6
6................... 331.0 Alzheimer's 64,199 5
Disease.
7................... 290.0 Senile 56,234 4
Dementia, Uncomp..
8................... 429.9 Heart 32,081 2
Disease
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 22,421 2
Cancer.
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 21,042 2
Cancer.
16.................. 294.8 Other 17,762 1
Persistent Mental
Dis.--classified
elsewhere.
17.................. 585.6 End Stage 17,545 1
Renal 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 10,511 1
Cancer.
------------------------------------------------------------------------
Year: FY 2013
------------------------------------------------------------------------
1................... 799.3 Debility 127,308 9
Unspecified.
2................... 428.0 Congestive 95,850 7
Heart Failure.
3................... 162.9 Lung Cancer. 91,263 6
4................... 496 COPD.......... 81,944 6
5................... 331.0 Alzheimer's 79,360 6
Disease.
6................... 783.7 Adult 71,033 5
Failure to Thrive.
7................... 290.0 Senile 60,441 4
Dementia, Uncomp..
8................... 429.9 Heart 36,817 3
Disease
Unspecified.
[[Page 26546]]
9................... 436 CVA/Stroke.... 34,330 2
10.................. 294.10 Dementia In 30,884 2
Other Diseases w/
o Behavioral Dist.
11.................. 332.0 Parkinson's 25,308 2
Disease.
12.................. 153.9 Colon Cancer 23,133 2
13.................. 294.20 Dementia 23,108 2
Unspecified w/o
Behavioral Dist.
14.................. 174.9 Breast 22,986 2
Cancer.
15.................. 157.9 Pancreatic 22,267 2
Cancer.
16.................. 185 Prostate 21,701 2
Cancer.
17.................. 585.6 End-Stage 19,212 1
Renal Disease.
18.................. 518.81 Acute 15,900 1
Respiratory
Failure.
19.................. 294.8 Other 14,337 1
Persistent Mental
Dis.--classified
elsewhere.
20.................. 294.11 Dementia In 13,648 1
Other Diseases w/
Behavioral Dist.
------------------------------------------------------------------------
Note(s): The frequencies shown represent beneficiaries that had at least
one claim with the specific ICD-9-CM code reported as the principal
diagnosis. Beneficiaries could be represented multiple times in the
results if they have multiple claims during that time period with
different principal diagnoses.
Source: FY 2002, 2007, and 2012 hospice claims data from the Chronic
Conditions Data Warehouse (CCW), accessed on February 14 and February
20, 2013. FY 2013 hospice claims data from the CCW, accessed on
February 27, 2014.
III. Provisions of the Proposed Rule
A. Hospice Payment Reform: Research and Analyses
In 2010, the Congress amended section 1814(i)(6) of the Act with
section 3132(a) of the Affordable Care Act. The amendment authorized
the Secretary to collect additional data and information determined
appropriate to revise payments for hospice care and for other purposes.
The data collected may be used to revise the methodology for
determining the payment rates for routine home care and other services
included in hospice care, no earlier than October 1, 2013, as described
in section 1814(i)(6)(D) of the Act. We are also required to consult
with hospice programs and the Medicare Payment Advisory Commission
(MedPAC) regarding additional data collection and payment revision
options. Since 2010, we have been working with our hospice reform
contractor, Abt Associates, to review the most current peer-reviewed
literature; conduct research and analyses; identify potential
vulnerabilities in the current payment system; and research and develop
hospice payment model options. We recently required additional
information on hospice claims regarding drugs and certain durable
medical equipment, effective April 1, 2014; and are in the process of
finalizing changes to the hospice cost report to better collect data on
the costs of providing hospice care. The additional information on
hospice claims and the hospice cost report will be used in our hospice
payment reform efforts, once the data are available for analysis.
The research and analyses conducted thus far on available Medicare
claims and cost report data have highlighted hospice utilization trends
that could raise concerns regarding the viability of the Medicare
hospice program and the impact of beneficiary access to quality end of
life care. In March 2009, the Medicare Payment Advisory Commission
(MedPAC) recommended that Medicare improve its payment system for
hospice services to address a misalignment between Medicare's payments
and hospice's costs that created incentives for providers to enroll
patients who are more likely to have long stays because those stays are
more profitable than short ones (http://www.medpac.gov/chapters/Mar09_Ch06.pdf). MedPAC 's June 2013 Report To Congress on Medicare and the
Health Care Delivery System reiterated concerns about utilization
trends and suggested that such trends were driven by a misalignment in
the payment system (http://www.medpac.gov/chapters/Jun13_Ch05.pdf).
MedPAC's June 2013 report added that, while payment reform would better
align payments with costs, additional administrative controls were
necessary to balance incentives and strengthen provider compliance. As
such, we believe that a critical goal of the Medicare hospice payment
system is to strengthen and safeguard the current scope of the Medicare
hospice benefit. This will provide a solid foundation on which to
reform the methodology used to pay for Medicare hospice services.
Program integrity is being addressed immediately while we fully develop
our data and research to address payment reform in the near future.
Abt Associates, with its subcontractor Brown University, has
developed a technical report entitled, ``Medicare Hospice Payment
Reform: Analyses to Support Payment Reform'', dated May 1, 2014
(hereafter, referred to as the May 2014 Technical Report) that
thoroughly describes the analytic file and extensive work performed on
analyzing current hospice utilization data, of which many of the
results of the analyses are presented in this proposed rule. Both the
May 2014 Technical Report and an updated literature review will be
available on our hospice center Web page in May, 2014 at: http://www.cms.gov/Center/Provider-Type/Hospice-Center.html in the ``Research
and Analyses'' section. We further examined hospice utilization data
and developed a provider-level file to identify aberrant hospice
behavior. The provider-level file contains information on beneficiaries
who were discharged (alive or deceased) in Calendar Year (CY) 2012 and
includes claims data from January 1, 2010 through December 31, 2012.
Some of the findings described in this section, are based on this
provider-level file.
1. Beneficiaries Dying Without Skilled Visits in the Last Days of Life
Hospice clinicians are experts in recognizing changes as a patient
is approaching the last few days of life and helping to prepare and
support the patient and family. Most individuals approaching end-of-
life have noted declines over the several days prior to death. As such,
the expectation is that there would be an increased need for hospice
services in the days leading up to the hospice beneficiary's death.
Although we recognize that prognostication is not an exact science,
there are hallmark physical, functional, nutritional and cognitive
changes that are typically present leading up the hospice patient's
death (see section III.C of this proposed rule).
When looking at skilled visits provided in the last days of life,
as reported on the hospice claim, our
[[Page 26547]]
analysis found that a relatively high percentage (28.9 percent) of
hospice decedents who were receiving RHC on their last day of life did
not receive a skilled visit on that day (see Table 3 below). This could
be explained, in part, by sudden or unexpected death. Expanding this
analysis to skilled visits provided in the last two to four days of
life, we found that 14.4 percent of hospice decedents did not receive
skilled visits in the last 2 days of life and 6.2 percent of hospice
decedents did not receive skilled visits in the last 4 days of life.
While this could also be explained, in part, by sudden or unexpected
death, we are concerned with the possibility that those beneficiaries
and their families are not receiving hospice care and support at the
very end of life. If hospices are actively engaging with the
beneficiary and the family throughout the election period, we would
expect to see skilled visits during those last days of life.
Table 3--Frequency and Percentage of Decedents Not Receiving Skilled
Visits at the End of Life, Calendar Year 2012
------------------------------------------------------------------------
Percentage of
Number of decedents with
decedents no skilled
visits
------------------------------------------------------------------------
No skilled visits on last day (and last 656,355 28.9
day was RHC)...........................
No skilled visits on last two days (and 622,334 14.4
last two days were RHC)................
No skilled visits on last three days 585,648 9.1
(and last three days were RHC).........
No skilled visits on last four days (and 551,359 6.2
last four days were RHC)...............
------------------------------------------------------------------------
Note(s): Skilled visit was considered to be a visit from a social
worker, therapist, or nurse.
Source: Beneficiaries whose last days of hospice enrollment were billed
to the RHC level of care using 100% of hospice days from the Hospice
Standard Analytic File (SAF), Calendar Year (CY) 2012.
Further analysis of skilled visits during the last two days of life
found that 10.3 percent of very short stay decedents (5 days or less)
did not receive skilled visits during the last two days of life. In
contrast, 15.9 percent of decedents with lengths of stay 181 days or
longer did not receive visits in the last two days of life. Newer
hospices (5 years or less since Medicare certification) were more
likely to have decedents with no skilled visits during the last two
days of life (17.8 percent) compared to older hospices (6 years or more
since Medicare certification) (14.0 percent). We also found geographic
differences in this analysis. The five states with the lowest
percentage of decedents with no skilled visits on the last two days of
life included: Wisconsin (5.7 percent), North Dakota (7.3 percent),
Vermont (7.5 percent), Tennessee (7.5 percent), and Kansas (8.7
percent). The five states with the highest percentage of decedents with
no skilled visits on the last two days of life included: New Jersey (23
percent), Massachusetts (22.9 percent), Oregon (21.2 percent),
Washington (21 percent), and Minnesota (19.4 percent).
Using the provider-level file referenced above, we also found that,
on average, hospices did not report any skilled visits in the last two
days of life for 9.7 percent of their decedents who died receiving
routine home care.\4\ Nearly 5 percent of hospices did not provide any
skilled visits in the last two days of life to more than 50 percent of
their decedents receiving routine home care on those last two days; the
average lifetime length of stay among those decedents was 143 days. We
note that the average lifetime length of stay in our provider-level
file was 95.4 days (among beneficiaries who were discharged alive or
deceased in CY 2012). Furthermore, we found that 34 hospices did not
make any skilled visits in the last 48 hours of life to any of their
decedents who died while receiving routine home care.
---------------------------------------------------------------------------
\4\ The provider-level analysis conducted on whether skilled
visits were provided in the last two days of life only examined
instances where the decedent was receiving routine home care in the
last two days of life. We note that 21 providers did not have any
decedents that died while on routine home care.
---------------------------------------------------------------------------
2. General Inpatient Care, Continuous Home Care, and Inpatient Respite
Care Utilization
Medicare Conditions of Participation require hospices to
demonstrate that they are able to provide all four levels of care--
Routine Home Care (RHC), General Inpatient Care (GIP), Continuous Home
Care (CHC) and Inpatient Respite Care (IRC) to be a certified Medicare
hospice provider. As stated in our regulations at Sec. 418.302(b)(4),
a general inpatient care (GIP) day is a day in which an individual who
has elected hospice care, receives general inpatient care in an
inpatient facility for pain control or acute or chronic symptom
management which cannot be managed in other settings. For FY 2014, the
payment rate for GIP was $694.19 per day compared to $156.06 for a day
of RHC.
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 inpatient 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 a home level of care.
As part of our reform work, we analyzed CY 2012 data to better
understand GIP utilization. We found that 77.3 percent of beneficiaries
did not have any GIP care in 2012. Using provider-level data for
beneficiaries discharged in 2012, we also found that 21.1 percent of
hospices did not provide any GIP care to their beneficiaries. While
there are appropriate circumstances where a hospice provides no GIP
(for example, when a provider only has a few patients, none of whom
needs GIP), we are concerned that more than a fifth of hospices not
providing any GIP may be an indication that hospice beneficiaries do
not have adequate access to a necessary level of care for acute or
chronic symptom management. We also found that there were site of
service differences such that the longest GIP length of stay was in the
inpatient hospice setting (6.1 days) and shortest at in the inpatient
hospital setting (4.5 days). Over two-thirds of GIP days were provided
in an inpatient hospice setting (68 percent), and about a quarter of
GIP days were provided in an inpatient hospital (24.9 percent). Only
5.5 percent of GIP days were provided in a SNF.
[[Page 26548]]
As stated in our regulations at Sec. 418.302(b)(2), a continuous
home care day is a day on which an individual who has elected to
receive hospice care, is not in an inpatient facility, and receives
hospice care consisting predominantly of nursing care on a continuous
basis at home. Home health aide (also known as a hospice aide) or
homemaker services, or both, may also be provided on a continuous
basis. Continuous home care is only furnished during brief periods of
crisis as described in Sec. 418.204(a), and only as necessary to
maintain the terminally ill patient 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)).
As part of our reform work, we analyzed CY 2012 data to better
understand CHC utilization. Overall, approximately 0.4 percent of all
hospice days in 2012 were billed as CHC, but that percentage decreases
to 0.2 when a large chain provider with a large percentage of its
hospice days billed as CHC days was excluded. Although 42.7 percent of
hospices billed at least 1 day of CHC, we found considerable variation
in the share of CHC days among hospices that provided any CHC. Almost
90 percent of hospices that provided any CHC had less than 1 percent of
their days billed as CHC, but four hospices billed more than 10 percent
of their days as CHC. Forty hospices accounted for 46 percent of all
CHC days and a single hospice accounted for over a quarter of all CHC
days. Among hospices who billed for providing CHC, 9.4 percent provided
over half of their CHC days to beneficiaries residing in a nursing
home. For CHC, a hospice must provide a minimum of 8 hours of care
during a 24-hour day, which begins and ends at midnight.
Finally, we analyzed inpatient respite care (IRC) utilization in
CYs 2005 through 2012. IRC is provided in an approved facility, as
needed, on an occasional basis to relieve the family caregivers for up
to 5 consecutive days. Payment for IRC is subject to the requirement
that it may not be provided consecutively for more than 5 days at a
time. As stated in our regulations at Sec. 418.302(e)(5), payment for
the sixth and any subsequent day of respite care is made at the routine
home care rate. Overall, while the percentage of beneficiaries
receiving at least 1 day of IRC care is increasing from 1.44 percent in
CY 2005 to 3.4 percent in CY 2012, only a small percentage of
beneficiaries utilize IRC. We also found that 26 percent of hospices
did not bill for any IRC days in CY 2012. IRC is a critical part of the
Medicare hospice benefit, providing vital support and relief to the
patient's caregiver and family. We will continue to monitor utilization
of IRC level of care, over time, to ensure beneficiaries receiving
hospice care have access to respite services for their caregivers.
The variation in the provision of GIP, CHC, and IRC could suggest
that the level of hospice care that a beneficiary receives may not
always be driven by patient factors. Medicare Conditions of
Participation require hospices to demonstrate that they are able to
provide all four levels of care--RHC, GIP, CHC, and IRC--in order to be
a certified Medicare hospice provider. We will continue to monitor GIP,
CHC, and IRC use to identify hospices with aberrant utilization
patterns, to identify hospices that may be in violation of the CoPs or
of payment regulations, and to refer hospices identified through our
analysis to Survey and Certification, to the Office of Financial
Management, and to the Center for Program Integrity for further
investigation.
3. Hospice Live Discharges
Currently, federal regulations allow a patient who has elected to
receive Medicare hospice services to revoke that election at any time.
That patient may re-elect hospice benefits at any time for any other
election period that is still available. However, federal regulations
provide limited opportunity for a Medicare hospice provider to
discharge a patient from its care. Discharge from hospice care is
permissible when the patient moves out of the provider's service area,
is determined to be no longer terminally ill, or for cause. Hospices
may not automatically or routinely discharge the patient at its
discretion, even if the care may be costly or inconvenient. Neither
should the hospice request or demand that the patient revoke his/her
election.
Our regulations also describe that if the hospice patient (or his/
her representative) revokes the hospice election, Medicare coverage of
hospice care for the remainder of that period is forfeited. The patient
may, at any time, re-elect to receive hospice coverage for any other
hospice election period that he or she is eligible to receive (Sec.
418.28(c)(3) and Sec. 418.24(e)). During the time period between
revocation/discharge and the re-election of the hospice benefit,
Medicare coverage would resume for those Medicare benefits previously
waived.
Prior to 2012, claims data provided limited information about the
reason a hospice patient was discharged from a hospice's care. Starting
July 1, 2012, the discharge information collected on the Medicare claim
was expanded to capture the reason for all types of discharge, that is,
if the discharge was due to a death, revocation, transfer to another
hospice, moving out of the hospice's service area, discharge for cause,
or due to the patient no longer being considered terminally ill (that
is, no longer qualifying for hospice services). Between 2000 and 2012,
the overall rate of live discharges increased from 13.2 percent of
hospice discharges to 18.1 percent in 2012. In 2010, the rate of live
discharges varied by state (from 12.8 percent in Connecticut to 40.5
percent in Mississippi) and by hospice provider (from a 25th percentile
9.5 percent to 75th percentile of 26.4 percent). Furthermore, analysis
of our provider-level file shows that of the 3,702 hospices in our
file, 71 hospices had a live discharge on 100 percent of their
beneficiaries. The average lifetime length of stay for these hospices
was 193 days compared to the national average lifetime length of stay
of 95.4 days (among beneficiaries who were discharged alive or deceased
in CY 2012). We have shared this information with the Office of
Financial Management and with the Center for Program Integrity for
their review and follow-up.
One study of hospice live discharges in cancer patients noted that
smaller hospices and for-profit hospices had a higher rate of hospice
live discharges.\5\ Our subcontractors at Brown University studied 2010
hospice live discharges among all diagnoses, finding that not-for-
profit hospice programs had a lower rate of hospice live discharges
than for-profit hospice programs (14.6 percent vs. 22.4 percent,
p<=.001). Small for-profit hospices in operations 5 years or less had a
higher rate of hospice live discharges compared to older, for-profit
hospices (31.5 percent vs. 12.8 percent, p<=.001). We are also
concerned over patterns of revocations and elections of the Medicare
hospice benefit for the purpose of potentially avoiding costly
hospitalizations or expensive procedures. In 2010, 13,770 out of the
182,172 live discharges had a pattern of hospice discharge, hospital
admission, and hospice readmission. These cases
[[Page 26549]]
accounted for $126 million dollars in Medicare payments for the
hospitalization between hospice election periods. Nearly half of these
Medicare payments are accounted for in ten states with the highest rate
of this pattern of discharges (that is, MS, OK, AL, SC, MD, VA, TX, NJ,
GA, and LA accounted for $56.0 million dollars of the hospitalization
costs).
---------------------------------------------------------------------------
\5\ Carlson MD, Herrin J, Du Q, et al. Hospice characteristics
and the disenrollment of patients with cancer. Health Serv Res. Dec
2009;44(6):2004-2021
---------------------------------------------------------------------------
We understand that the rate of live discharges should not be zero,
given the uncertainties of prognostication and the ability of patients
and their families to revoke the hospice election at any time. However,
Medicare hospice care is a comprehensive patient and family focused
care model designed to optimize quality of life by anticipating,
preventing, and treating pain and symptoms. We are concerned that
patterns of discharge, hospital admission, and hospice readmission do
not provide a comprehensive, coordinated care experience for terminally
ill patients.
4. Non-hospice Spending for Hospice Beneficiaries During an Election
When a beneficiary elects the Medicare hospice benefit, he or she
waives the right to Medicare payment for services related to the
terminal illness and related conditions, except for services provided
by the designated hospice and the attending physician. However,
Medicare payment is allowed for covered Medicare items or services
which are unrelated to the terminal illness and related conditions.
When a hospice beneficiary receives items or services unrelated to the
terminal illness and related conditions from a non-hospice provider,
that provider can bill Medicare for the items or services, but must
include on the claim a GW modifier (if billed on a professional claim)
or condition code 07 (if billed on an institutional claim).
Prescription Drug Events (PDEs) unrelated to the terminal illness and
related conditions for which hospice beneficiaries are receiving
hospice care are billed to Part D and do not require a modifier or a
condition code.
In follow up to our initial analysis of hospice drugs being paid
through Part D (78 FR 48245-48246), we analyzed the magnitude of
Medicare spending outside of the hospice benefit for items or services
provided to hospice beneficiaries during a hospice election from Parts
A, B, and D. In CY 2012, we found that Medicare paid $710.1 million for
Part A and Part B items or services while a beneficiary was receiving
hospice care. We estimated that 76.5 percent of the $710.1 million
included either a GW modifier or a condition code 07 on the claim,
which indicated that the services identified by the provider or
supplier as unrelated to the terminal illness and related conditions.
The remaining 23.5 percent of this $710.1 million was for claims
without a GW modifier or condition code 07, some of which may have
processed due to late filing of the notice of election (NOE).
The $710.1 million paid for Part A and Part B items or services was
for durable medical equipment (7.0 percent), inpatient care (care in
long-term care hospitals, inpatient rehabilitation facilities, acute
care hospitals; 28.6 percent), outpatient Part B services (16.9
percent), other Part B services (also known as physician, practitioner
and supplier claims, such as labs and diagnostic tests, ambulance
transports, and physician office visits; 37.4 percent), skilled nursing
facility care (5.7 percent), and home health care (4.5 percent). Part A
and Part B non-hospice spending occurred mostly for hospice
beneficiaries who were at home (43.3 percent). We also found that 28.3
percent of hospice beneficiaries were in a nursing facility, 14.1
percent were in an inpatient setting, 10.2 percent were in an assisted
living facility, and 4.1 percent were in other settings. Although the
average daily rate of expenditures outside the hospice benefit was
$7.91, we found differences amongst states where beneficiaries receive
care. The highest rates per day occurred for hospice beneficiaries
residing in West Virginia ($13.91), or in the South (Florida ($13.17),
Texas ($12.45), Mississippi ($11.91), and South Carolina ($10.16)).
Another area of concern in high non-hospice Medicare spending
occurring during a hospice election is hospital emergency room (ER)
visits and observation stays. Ninety-five percent of these ER visits
and observation stays were billed and paid outside of the hospice
benefit with condition code 07 on the claim. Using data on CY 2010
hospice admissions, followed through discharge or December 31, 2011
(whichever came first), we found that 8.8 percent of hospice
beneficiaries had a total of 87,720 ER visits/observation stays billed
to Medicare during their hospice election, at a cost of $268.4 million.
The majority of these beneficiaries (77.6 percent) only experienced a
single ER visit/observation stay, but 20.9 percent had between 2 and 4
ER visits/observation stays during their election, and 1.4 percent had
more than 5 ER visits/observation stays during their hospice election.
Although some beneficiaries may go directly to the ER rather than
contacting the hospice first, 22.3 percent had 2 or more ER visits;
these results may indicate that the hospice is not aware of the
beneficiary's condition, the hospice is not being responsive to
beneficiary needs, or related conditions are being treated as if they
were unrelated. Most ER visits/observation stays occurred in younger
beneficiaries with non-cancer diagnoses, in beneficiaries in newer
hospices, and in beneficiaries receiving care in the South, with
Mississippi and Oklahoma having the highest rates (21.1 and 20.5 ER
visits/observation stays per 100 hospice admissions, respectively). The
most frequently occurring Diagnostic Related Groups (DRGs) associated
with these ER visits/observation stays were septicemia or severe
sepsis, kidney and urinary tract infections, hip and femur procedures,
simple pneumonia and pleurisy, and gastrointestinal hemorrhage. Some of
these frequently occurring DRGs are conditions which are common at end-
of-life, and could be attended to in the home or with a GIP level of
care. This raises concerns about whether the ER visits/observation
stays were actually related to the terminal illness and related
conditions and should have been covered by the hospice.
In addition to analyzing data from Parts A and B of Medicare, we
analyzed CY 2012 Part D data which showed $ 417.9 million in total drug
spending by Medicare, states, beneficiaries, and other payers, for
hospice beneficiaries during a hospice election. Table 4 details the
various components of Part D spending.
Table 4--Drug Cost Sources for Hospice Beneficiaries' 2012 Drugs
Received Through Part D
------------------------------------------------------------------------
Total
Component Description Expenditures
------------------------------------------------------------------------
Patient Pay Amount............ The dollar amount the $48,191,067
beneficiary paid that
is not reimbursed by
a third party.
Low Income Cost-Sharing Medicare payments to 117,558,814
Subsidy. plans to subsidize
the cost-sharing
liability of
qualifying low-income
beneficiaries at the
point of sale.
[[Page 26550]]
Other True Out-of-Pocket Records all other 2,366,896
Amount. third-party payments
on behalf of
beneficiary. Examples
are state pharmacy
assistance programs
and charities.
Patient Liability Reduction Amount patient 3,120,834
due to Other Payer Amount. liability reduced due
to other benefits.
Examples are
Veteran's
Administration and
TRICARE.
Covered Drug Plan Paid Amount. Contains the net 217,370,068
amount the plan paid
for standard benefits.
Non-Covered Plan Paid Amount.. Contains the net 16,985,982
amount the plan paid
beyond standard
benefits. Examples
include supplemental
drugs, supplemental
cost-sharing, and OTC
drugs paid under plan
administrative costs.
Components' Total............. ...................... 405,593,660
Unknown....................... Unreconciled/ 12,307,603
Unreported Difference
between total Gross
Drug Costs and
Reported payer
sources (includes
sales taxes, drug
dispensing fees, and
drugs' ingredient
costs).
Gross Total Drug Costs, ...................... 417,901,263
Reported.
------------------------------------------------------------------------
Source: Abt Associates analysis of 100% 2012 Medicare Claim Files. For
more information on the components above and on Part D data, go to the
Research Data Assistance Center's (ResDAC's) Web site at http://www.resdac.org/.
The portion of the $417.9 million total Part D spending which was
paid by Medicare is the sum of the Low Income Cost-Sharing Subsidy and
the Covered Drug Plan Paid Amount, or $334.9 million.
Medicare Spending: In total, actual non-hospice Medicare
expenditures occurring during a hospice election in CY 2012 were $710.1
million for Parts A and B spending, plus $334.9 million for Part D
spending, or $1 billion dollars. This figure is comparable to the
estimated $1 billion MedPAC reported during its December 2013 public
meeting.\6\ Associated with this $1 billion in Medicare spending were
cost sharing liabilities such as co-payments and deductibles that
beneficiaries incurred. Hospice beneficiaries had $135.5 million in
cost-sharing for items and services that were billed to Medicare Parts
A and B, and $48.2 million in cost-sharing for drugs that were billed
to Medicare Part D, while they were in a hospice election. In total,
this represents a 2012 beneficiary liability of $183.7 million for
Parts A, B, and D items or services provided to hospice beneficiaries
during a hospice election. Therefore, the total non-hospice costs paid
by Medicare or due from beneficiaries for items or services provided to
hospice beneficiaries during a hospice election were over $1.2 billion
in CY 2012.
---------------------------------------------------------------------------
\6\ MedPAC, ``Assessing payment adequacy and updating payments:
hospice services'', December 13 2013. Available at: http://www.medpac.gov/transcripts/hospice_December2013_Public.pdf.
---------------------------------------------------------------------------
All-Payer Spending: Under Part D, gross covered drug cost on a
claim includes the amount paid by the Part D plan, the beneficiary's
cost sharing, and any amounts paid by others on the beneficiary's
behalf. These latter amounts include the low-income subsidy amount paid
by Medicare for beneficiaries who are subsidy-eligible, amounts paid by
other payers whose payments can be counted toward the beneficiary's
true out-of-pocket (TrOOP) costs, and amounts paid by others whose
payments, though not TrOOP-eligible, reduce the amount of the
beneficiary's liability. Accumulated gross covered drug costs are used
to establish the beneficiary's position in the benefit. That is, these
costs determine when the beneficiary has met plan's deductible, if any,
and moves into the initial coverage period, and when his or her initial
coverage period ends and the coverage gap begins. TrOOP, whether paid
by the beneficiary or on the beneficiary's behalf by a TrOOP-eligible
payer, determines when the beneficiary has met the annual out-of-pocket
threshold and moves into the catastrophic phase of the benefit. Thus,
administration of the Medicare prescription drug benefit is dependent
upon both gross covered drug costs and TrOOP. As such, we are also
describing total non-hospice Part D spending, both Medicare and non-
Medicare. Non-hospice Part D spending for hospice beneficiaries during
a hospice election was incurred by Medicare, by States, by the Veterans
Administration, by TRICARE, by charities, and by other payers, in
addition to the cost-sharing liabilities incurred by beneficiaries.
Part D spending by all-payers that occurs for hospice beneficiaries
during a hospice election, including beneficiary cost-sharing, totaled
$417.9 million in CY 2012. If this is added to the $710.1 million in
Medicare spending for Parts A and B, and $135.5 million in cost sharing
for Parts A and B, total non-hospice costs are $1.3 billion. We do not
have data on other payers' spending for Part A or Part B services. Of
note, 51.6 percent of this $1.3 billion is associated with 373
hospices, with an average total per beneficiary of $1,289 in non-
hospice costs.
On December 6, 2013 and March 3, 2014, we issued memoranda to all
Part D plan sponsors and Medicare hospice providers (available at
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-PartD-Payment.pdf and http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Part-D-Payment-Hospice-Final-2014-Guidance.pdf, respectively). These memoranda
reiterated longstanding policy regarding the coverage of drugs in the
Medicare hospice benefit, and Part D guidance regarding payment for
drugs for hospice beneficiaries under Part D. These memoranda also
contained new clarified guidance for addressing the determination of
payment responsibility for Part D drugs for hospice beneficiaries in
2014 and the need for rulemaking to address the use of standardized
processes for determining payment responsibility, recovering payment
when the wrong party has paid, and resolving disputes regarding payment
responsibility. We encourage providers to review these important
memoranda at: http://www.cms.gov/Center/Provider-Type/Hospice-Center.html, and in section III.I in this proposed rule.
The dollars spent by Part D and by beneficiaries for drugs covered
outside of the hospice benefit for hospice beneficiaries during a
hospice election raise concerns about whether some of these drugs
should have been paid for by the hospice. We examined drug costs
incurred by hospices from 2004 to 2012, using hospice cost report data
adjusted to constant 2010 dollars. We saw a declining trend in the drug
costs per patient day, with costs declining from a mean of $20 per
patient-day in 2004 to
[[Page 26551]]
$11 per patient-day in 2012 (see Table 5 below). We recognize that many
hospices have become more efficient in their operations, but are
concerned that the decline in drug costs is of a magnitude that could
suggest that some hospices are not providing, and thus are not
incurring the costs for, all needed patient medications.
Table 5--Costs per Patient-Day by Year, 2010 Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number............................. n = 1,047 n = 1,218 n = 1,490 n = 1,694 n = 1,834 n = 1,882 n = 1,929 n = 2,015 n = 2,054
--------------------------------------------------------------------------------------------------------------------------------------------------------
Provider-level drug costs per patient-day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Mean............................... $20 $18 $17 $15 $14 $13 $12 $11 $11
Std dev............................ (10) (11) (11) (9) (9) (9) (7) (6) (6)
Median............................. $20 $17 $16 $15 $14 $13 $12 $11 $10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trimmed means
--------------------------------------------------------------------------------------------------------------------------------------------------------
1%-99%............................. $21 $19 $17 $16 $15 $14 $13 $12 $11
5%-95%............................. $20 $18 $16 $15 $14 $13 $12 $11 $10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Freestanding hospice cost reports with HCRIS release date of 1/23/2014. The costs are averaged at the provider-level and adjusted to constant
2010 dollars using the Producer Price Index for prescription pharmaceuticals.
Notes: We excluded cost reports with period less than 10 months or greater than 14 months, missing information or negative reported values for total
costs or payments, were in the top and bottom 1% of cost per day, were in the top and bottom 5% of provider margins, and where the aggregate of cost
centers does not equal total costs as reported.
We will continue to monitor non-hospice Medicare spending for
beneficiaries in hospice elections.
B. Solicitation of Comments on Definitions of ``Terminal Illness'' and
``Related Conditions''
1. The Development of the Medicare Hospice Benefit
Dame Cicely Saunders introduced the idea of hospice care in the
United States during a lecture at Yale University in 1963. During the
same decade, the international best-seller, On Death and Dying,
published in 1969, by Dr. Elisabeth Kubler-Ross, helped to bring death
out of secrecy and brought new public awareness and discussion about
dying for the first time. Her interviews with over 500 dying patients
shed new light on the dying process, as well as the needs and treatment
wishes of those who were at the end-of-life. Her hallmark work argued
for end-of-life care provided in the home, rather than in an
institution, and stressed the importance of patients' being an integral
part of their treatment decision-making.\7\ In 1970, there were no
formal hospice programs in the United States. However, healthcare
providers started to recognize the need for a care delivery model to
address the needs of those individuals who no longer wanted to seek out
the aggressive, medical, curative model of healthcare for advancing
illnesses and injuries. They also focused on a care delivery model that
would provide pain and symptom relief that would offer an alternative
to hospitalization and would focus on the ``total person,'' as he or
she approached the end-of-life. The hospice model of care, which had
been previously introduced to the United States by Cicely Saunders, was
viewed to be the type of care delivery model that could offer those
services.
---------------------------------------------------------------------------
\7\ Story, P., Knight, C. (2004). The Hospice/Palliative
Medicine Approach to End-of-Life Care, 2nd ed. UNIPAC One.
---------------------------------------------------------------------------
In 1972, Dr. Elisabeth Kubler-Ross testified at the first national
hearings on the subject of death with dignity, conducted by the U.S.
Senate Special Committee on Aging, and the first hospice legislation
was introduced in the United States Senate, but was not enacted.\8\
Florence Wald, the Dean of the Yale School of Nursing, who attended the
1963 lecture given by Cicely Saunders, along with two pediatricians and
a chaplain, founded the first United States hospice, Connecticut
Hospice, in 1974. Ongoing meetings between hospice providers and
hospice leaders evolved into the formation of the National Hospice
Organization in 1978 (now called the National Hospice and Palliative
Care Organization, or NHPCO). The first ``Standards of a Hospice
Program of Care'' were published by National Hospice Organization in
1979. Even during the early stages of hospice development, hospice
leaders were working with key legislative leaders to develop a system
to reimburse hospice care in the United States.\9\ However, it was
evident that before governmental reimbursement could occur, data had to
be collected and analyzed to demonstrate what hospices actually
provided and what costs were involved in rendering hospice care. The
Health Care Finance Administration (HCFA)--now known as the Centers for
Medicare & Medicaid Services (CMS) conducted a national demonstration
of 26 hospices throughout the country to study the effect of reimbursed
hospice care. The results of this demonstration, as well as those
sponsored by the private health insurance sector and private
foundations, and along with the testimony of multiple hospice industry
leaders, legislators and hospice families, helped to form the structure
of the Medicare Hospice Benefit.
---------------------------------------------------------------------------
\8\ Cefalu, C., Ruiz, M. (2011). The Medicare Hospice Benefit: A
Changing Philosophy of Care? Annals of Long Term Care: Clinical Care
and Aging. 19 (1); 43-48.
\9\ Connor, S. (2007). Development of Hospice and Palliative
Care in the United States. OMEGA. 56 (1); 89-99.
---------------------------------------------------------------------------
During Congressional committee hearings regarding the development
of a Medicare hospice benefit, testimony by Paul Willging, deputy
administrator of HCFA, expressed caution about embracing benefit
expansions that could lead to unexpected consequences and said that
HCFA ``must clearly define what we would pay for and to whom, in order
to meet our responsibilities to patients, providers and the
taxpayers.'' \10\ Other stakeholders agreed that a Medicare hospice
benefit needed to be structured to promote an optimum movement from a
point of view of controlling costs and offering the most appropriate
means of service without the development of a system that focused on
just getting maximum reimbursement from Medicare.
[[Page 26552]]
Stakeholders also agreed that unique characteristics of hospice care
should be maintained. The goal was not to have the Federal government
provide total support to hospice programs; rather, legislation would be
enacted that would supplement the continued support of the local
community, private sector and other resources which allow hospices to
maintain their unique identity, spirit of volunteerism and altruistic
focus.\11\ The National Hospice Organization president, Dr. Edwin
Olsen, testified at the March 25, 1982 Congressional hearing that, at
that time, most American hospices were community charities by design
and intent, and that hospice offered an integrated service. Hospices
functioned not as an add-on, but as a comprehensive alternative to the
typical ways of caring for the terminally ill and their families. The
hospice industry, as discussed in Dr. Olsen's testimony, was very clear
that their goal was to maintain that alternative service for those who
were approaching end-of-life.
---------------------------------------------------------------------------
\10\ Testimony by Paul Willging, deputy administrator of HCFA,
to the Subcommittee on Health of the Committee of Ways and Means,
House of Representatives, March 25, 1982.
\11\ Testimony by Congressman Leon Panetta, to the Subcommittee
on Health of the Committee of Ways and Means, House of
Representatives, March 25, 1982.
---------------------------------------------------------------------------
Hospice industry leaders also expressed the importance of hospice
program accountability. Hospices would be accountable for and be able
to control the quality and delivery of patients admitted for hospice
care, instead of having to ``broker'' the patients out to other
providers for reimbursement and convenience.\12\ Hospice advocates
stressed the importance of maintaining continuous clinical control over
all aspects of care to ensure a successful hospice program and framers
of the benefit recognized this fact by requiring professional
management responsibility.\13\ Although there were ongoing concerns by
HCFA, the Congress, and the hospice industry about the potential misuse
of a new hospice benefit,14 15 Section 122 of the Tax Equity
and Fiscal Responsibility Act (TEFRA) of 1982 (Pub. L. 97-248, enacted
on September 3, 1982) expanded the scope of Medicare benefits by
authorizing coverage for hospice care for terminally ill beneficiaries.
---------------------------------------------------------------------------
\12\ Written testimony by Dr. Edwin J. Olsen, director of the
National Hospice Organization, to the Subcommittee on Health of the
Committee of Ways and Means, House of Representatives, March 25,
1982.
\13\ Health Care Financing Administration, Office of Research
and Demonstrations. September, 1987. ``Medicare Hospice Benefit
Program Evaluation.'' Health Care Financing Extramural Report. HCFA
Pub. No. 03248.
\14\ Testimony by Paul Willging, deputy administrator of HCFA,
to the Subcommittee on Health of the Committee of Ways and Means,
House of Representatives, March 25, 1982.
\15\ Comments by Congressman Bill Gradison, at the Hearing
before the Subcommittee on Health of the Committee of Ways and
Means, House of Representatives, March 25, 1982.
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2. Legislative History of the Medicare Hospice Benefit
After Medicare coverage of hospice care was authorized by the
Congress, the General Accounting Office (now Government Accountability
Office, or GAO) summarized the legislative intent of the Medicare
hospice benefit in a July 13, 1983 letter. In this letter, the GAO
acknowledged that there was no standard definition of what a hospice
was or what services an organization must provide to be considered a
hospice. However, the GAO stated that it was generally agreed that the
hospice concept in the United States is a program of care in which an
organized interdisciplinary team systematically provides palliative
care (relief of pain and other symptoms) and supportive services to
patients with terminal illnesses.\16\ This letter further states that
the hospice objective is to make a patient's remaining days as
comfortable and meaningful as possible and to help the family cope with
the stress by making the necessary adjustments to the changes in the
patient's illness and death. The GAO letter also reiterates that
hospices must directly provide certain core services including nursing
care, physician services and counseling services and must either
directly, or through arrangements, provide physical therapy,
occupational therapy, speech-language pathology, home hospice aides,
homemaker services, drugs, medical supplies and appliances and short-
term inpatient care. The letter concluded by stating that the Congress
would continue to monitor the effectiveness of the hospice
demonstration program, which was ongoing at the time of enactment, the
equity of the reimbursement system, method and benefit structure put
into effect under the hospice provision, including the feasibility and
advisability of a prospective reimbursement system for hospice care and
other aspects of the hospice program.\17\
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\16\ ``Hospice Care-A Growing Concept in the United States.''
(HRD-79-50), March 6, 1979.
\17\ GAO Letter, ``Comments on the Legislative Intent of
Medicare's Hospice Care Benefit,'' GAO-HRD-83-72, July 12, 1983.
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Further description of the Medicare hospice benefit design was
provided in a report prepared by the Congressional staff for the Senate
Committee on Finance on September 9, 1983. In this report, four basic
principles were presented, which according to hospice advocates,
distinguish hospice care from the traditional health care system:
1. The patient and his/her family are considered the unit of care.
2. A multidisciplinary team is used to assess the physical,
psychological and spiritual needs of the patient and family to develop
an overall plan of care and to provide coordinated care.
3. Pain and collateral symptoms associated with the terminal
illness and previous treatments are controlled, but no heroic efforts
are made to cure the patient.
4. Bereavement follow-up is provided to help the family cope with
their emotional suffering.\18\
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\18\ ``Background Materials on Medicare Hospice Benefit
Including Description of Proposed Implementing Regulations,''
September 9, 1983. Committee on Finance, United States Senate, 24-
525 0.
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It was also noted that the statute provides that an individual,
upon making an election to receive hospice coverage, would be deemed to
have waived payments for certain other benefits in addition to choosing
a palliative mode of treatment, except in ``exceptional and unusual
circumstances'' as the Secretary may provide (section 1812(d)(2)(A) of
the Act). Furthermore, the hospice plan of care must include assessment
of the individual's needs and identification of the services to meet
those needs including the management of discomfort and symptom relief.
Several Senators testified at a September 15, 1983 Hearing before
the Subcommittee on Health of the Committee on Finance regarding
ongoing concerns with the new Medicare hospice benefit. These Senators
made it clear that the new healthcare delivery system--hospice--was to
offer an alternative to institutionalized care for the terminally ill.
Concerns were expressed over the possibility that ``store front''
hospices would crop up as a result of Medicare reimbursement being made
available for this service. The Senators stated that they wanted to
maintain flexibility within the benefit without creating incentives for
fraud and abuse.\19\ Similarly, industry advocates were also concerned
that availability of Medicare reimbursement would attract interest from
those simply interested in a new source of revenue. The hospice
industry agreed that the Medicare hospice benefit was created, not as a
new revenue source for providers, but as a benefit
[[Page 26553]]
choice for patients and their families.\20\ Terminally ill Medicare
beneficiaries could decide not to elect hospice care and they would
continue to be able to receive all other Medicare services available,
such as home health services that include skilled nursing and home
health aide care, inpatient hospital services, supplies, medications,
and DME. For example, in response to recent home health rulemaking we
received anecdotal comments that some home health agencies commented
that they are providing palliative care to homebound terminally ill
individuals who have not elected the hospice benefit. In those
instances, the patient is receiving home health aide services, nursing
care, and supplies needed under the home health benefit and the DME and
medications that the patient needs are still covered under Medicare
Parts B and D. However, we note that, with the exception of home
health, these services typically have associated co-payments and would
be rendered through various different providers or suppliers, perhaps
with a lack of continuity and coordination that would be provided under
the Medicare hospice benefit. Under the Medicare hospice benefit, the
hospice-eligible individual would receive all of those services, and
more, with the hospice provider assuming the clinical and professional
responsibility of coordinating all of the necessary care and services
without the beneficiary assuming responsibility for the associated cost
sharing required outside of the hospice benefit.
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\19\ Testimony by Senators George Mitchell and Roger W. Jepsen.
Testimony before the Subcommittee on Health of the Committee on
Finance, United States Senate, September 15, 1983.
\20\ Position paper submitted by Donald J. Gaetz, president,
National Hospice Organization. ``Subcontracting for Nursing Services
under the Medicare Hospice Benefit.'' Testimony before the
Subcommittee on Health of the Committee on Finance, United States
Senate, September 15, 1983.
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3. Hospice Care Today
The Medicare hospice benefit was a unique addition to the U.S.
health care system. Prior to the implementation of the Medicare hospice
benefit, the government reimbursed providers based on the cost of
delivering care. Reimbursement under the Medicare hospice benefit is a
fixed, per day, per level of care prospective payment structure. By
creating a fixed payment for hospice care, the provider is at risk for
costs that exceed the payment amount; and, if the fixed payment exceeds
the cost of care, the hospice is allowed to keep the gain. Under the
Medicare hospice benefit, the provider has clinical flexibility in how
hospices can render care to best meet the needs of the individual
patient and his or her family. This is viewed as a joint partnership
between the providers of care and the federal government to provide
services and the financial payment for those services for those who are
dying. Hospice advocates, during the development of the benefit,
welcomed this type of reimbursement structure for the flexibility it
afforded in providing individualized hospice services \21\. The hospice
industry continues to recognize that the Medicare hospice benefit has
always been a risk-based clinical and economic model of care stating
that the fixed reimbursement model means ``a fixed sum for all-
inclusive end of life care.'' \22\ Similar to the more recent medical
home model for primary care, hospice has always been patient-centered,
comprehensive, team-based, coordinated, accessible, focused on quality
and safety, and extends throughout the continuum of care.
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\21\ Testimony by Dr. Daniel Hadlock, Hospice, Inc, before the
Select Committee on Aging. House of Representatives, May 25, 1983.
\22\ ``NHPCO Comments on Washington Post Article'', Retrieved on
December 27, 2013. http://www.nhpco.org/press-room/press-releases/nhpco-responds-washington-post
---------------------------------------------------------------------------
Throughout the development of the Medicare hospice benefit, experts
in the hospice field believed that the success or failure of hospice,
under Medicare, would depend on the hospice plan of care, appropriate
implementation of the plan of care, and the hospice team sharing the
same philosophy of patient-centered, comprehensive, and holistic
care.\23\ A coordinated, collaborative approach to each and every
hospice patient and his or her family was considered to be the most
important component of the success of the Medicare hospice benefit.\24\
During the development of the Medicare hospice benefit, there were
concerns by both the Congress and the hospice industry regarding the
potential for fraud and abuse by some providers resulting from the
enactment of a Medicare hospice benefit.\25\ One drafter of the
legislation expressed that he wanted to maintain benefit flexibility by
allowing hospices to render individualized care, promoting access to
needed services, and providing high quality care while maintaining
fiscal integrity of the Medicare Trust Funds.\26\ This was a benefit
founded in trust--trust that hospices would provide the comprehensive
care and services promised during the benefit development and trust
that Medicare would be a partner in helping to share the costs.\27\ It
was very clear throughout the development, and years after the
implementation of the Medicare hospice benefit, that hospices were
expected to make good on their promise to do a better job than
conventional Medicare services for those who were at end-of-life.\28\
Deliberately, the law made no provision for discharging a hospice
patient except under very limited circumstances and only after making
attempts to rectify those circumstances.\29\ This meant that once a
beneficiary elected hospice and was under one of the three 60-day
election periods, a hospice could not just discharge a patient for the
sake of cost or convenience. Currently, there are two 90-day election
periods and unlimited 60-day election periods, as long as the
beneficiary continues to meet eligibility criteria. However, hospices
are still limited in the reasons for discharge, and still cannot
discharge a hospice beneficiary for cost or convenience. Our
regulations at section 418.26(a) state the reasons a hospice can
discharge a beneficiary from hospice services.
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\23\ Cefalau, C., Ruiz, M. The Medicare Hospice Benefit: A
Changing Philosophy of Care? Annals of Long-Term Care: Clinical Care
and Aging. 2011; 19(1): 43-48.
\24\ Cefalau, C., Ruiz, M. The Medicare Hospice Benefit: A
Changing Philosophy of Care? Annals of Long-Term Care: Clinical Care
and Aging. 2011; 19(1): 43-48.
\25\ Comments by Congressman Bill Gradison, at the Hearing
before the Subcommittee on Health of the Committee of Ways and
Means, House of Representatives, March 25, 1982; Testimony by
Rosemary Johnson-Hurzeler, CEO, The Connecticut Hospice, Testimony
before the Subcommittee on Health of the Committee on Finance,
United States Senate, September 15, 1983; Testimony by Margaret
Cushman, MSN, RN, Chairman of Governmental Affairs, National
Association of Home Health and Hospice Care (NAHC) before the
Subcommittee on Health of the Committee on Finance, United States
Senate, September 15, 1983.
\26\ Comments by Congressman Bill Gradison, at the Hearing
before the Subcommittee on Health of the Committee of Ways and
Means, House of Representatives, March 25, 1982.
\27\ Testimony by Congressman Leon Panetta, to the Subcommittee
on Health of the Committee of Ways and Means, House of
Representatives, March 25, 1982.
\28\ Hoyer, T. (1998). A History of the Medicare Hospice
Benefit. The Hospice Journal, 13(1-2), 61-69.
\29\ Hoyer, T. (1998). A History of the Medicare Hospice
Benefit. The Hospice Journal, 13(1-2), 61-69.
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Since the implementation of the Medicare hospice benefit, hospice
utilization continues to grow. More Medicare beneficiaries are becoming
aware and educated of the benefits of hospice care. In recent years,
the percentage of Medicare deaths for patients under a hospice election
has increased from 20 percent in 2000 to 44 percent in 2012. Total
expenditures have increased from over $9.2 billion in 2006 to over
$15.1 billion in 2013. This observed growth far outpaces the annual
market basket increases and it not solely reflective of an increase in
utilization. We note that average spending per
[[Page 26554]]
beneficiary has increased substantially between 2006 and 2013 from
approximately $9,833 in 2006 to $11,458 in 2013.\30\
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\30\ Calendar year 2013 expenditures and average spending per
beneficiary were calculated using hospice claims data from the
Chronic Conditions Data Warehouse (CCW), accessed on February 27,
2014.
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Section 3132(a) of the Affordable Care Act provides statutory
authority for CMS to reform the hospice payment system no earlier than
October 1, 2013. We presented data in the FY 2014 Hospice Wage Index
and Payment Rate Update Final Rule, regarding diagnosis reporting on
hospice claims and opioids paid under Part D for beneficiaries in a
hospice election (78 FR 48234). Recent analysis of other Part A, Part B
and Part D spending in 2012 (including beneficiary cost-sharing
payments of $135.5 million for Parts A and B and $48.2 million for Part
D) shows that there was an additional $1 billion in total Medicare
spending during a hospice election (see section III.A.4). This includes
Part A payments for inpatient hospitalizations and SNF stays, as well
as Part B payments for outpatient and physician services, diagnostic
tests and imagining, and ambulance transports, to name just a few.
There is concern that many of these services should have been provided
under the Medicare hospice benefit as they very likely were for
services related to the terminal illness and related conditions. This
strongly suggests that hospice services are being ``unbundled'',
negating the hospice philosophy of comprehensive, holistic care and
shifting the costs to other parts of Medicare, and creating additional
cost-sharing burden to those vulnerable Medicare beneficiaries who are
at end-of-life. Duplicative payments for hospice-covered services also
threaten the program integrity and fiscal viability of the hospice
benefit.
Reports by both the Medicare Payment Advisory Committee (MedPAC)
and the Office of the Inspector General (OIG) expressed similar
concerns regarding the unbundling of services meant to be covered under
the hospice per diem, capitated payment system. Similar to the analysis
presented above, MedPAC also analyzed non-hospice utilization and
spending patterns through Parts A, B and D for Medicare hospice
beneficiaries. MedPAC also concluded that over $1 billion FFS spending
was attributed to providing services reported as unrelated to the
terminal conditions of hospice enrollees. MedPAC went on to state that
58 percent of Medicare hospice enrollees received a service or drug
outside of the hospice benefit over the course of a hospice episode.
The highest shares of spending were on drugs and inpatient
services.\31\ In addition, the OIG reported in June of 2012 that
Medicare could be paying twice for prescription drugs for beneficiaries
receiving services under the Medicare hospice benefit and recommended
that CMS increase its oversight to make sure that Part D is not paying
for medications already included in the Medicare hospice per diem
payment rates.\32\ As a result of the OIG report, the CMS' Center for
Program Integrity (CPI) began recoupment efforts for analgesics from
Part D plan sponsors.
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\31\ MedPAC, ``Assessing payment adequacy and updating payments:
hospice services'', December 13 2013. Available at: http://www.medpac.gov/transcripts/hospice_December2013_Public.pdf.
\32\ Office of the Inspector General, Department of Health and
Human Services. Medicare Could be Paying Twice for Prescription
Drugs for Beneficiaries in Hospice. June, 2012. A-06-10-00059.
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Ongoing Part D memo guidance has also been issued to clarify
existing coverage and payment policies. The most recent Part D guidance
was provided in the March 10, 2014 memorandum entitled, `Part D Payment
for Drugs for Beneficiaries Enrolled in Hospice--Final 2014 Guidance'
(http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Part-D-Payment-Hospice-Final-2014-Guidance.pdf) In addition,
this rule solicits comments on processes that could be developed to
address the inappropriate Part D reimbursement for medications that
should be covered under the Medicare hospice per diem (see Section
III.I). The purpose of these Part D guidance memos, in response to OIG
reports of possible duplication of payment for drugs under the hospice
per diem and Part D plans, was to outline the expectations regarding
coordination of benefits and coverage responsibility between Part D
plan sponsors and hospices. The ongoing concern is that hospices are
not providing the broad range of medications required by hospice
beneficiaries during a hospice election, especially for those drugs
classified as analgesics, antianxiolytic, antiemetics and laxatives
(generally considered essential medications for palliation in a hospice
population).\33\ Comments received, regarding this memo guidance,
highlighted that there are multiple interpretations as to the meaning
of what are considered ``related conditions.'' Additionally, it was
noted in these comments that the terms, ``terminal illness'',
``terminal diagnosis'', ``qualifying terminal diagnosis'', and
``terminal prognosis'' were used interchangeably and with varying
interpretations as to their meanings.
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\33\ World Health Organization. (January, 2013). Essential
Medications in Palliative Care.
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We believe summary of the ``Development of the Hospice Benefit''
and the ``Legislative history of the Medicare Hospice Benefit'' clearly
captures the expectation that hospices are to provide holistic and
comprehensive services under the Medicare hospice benefit. As stated in
the 1983 proposed and final rules, and reiterated in the FY 2014
Hospice Wage Index and Rate Update proposed and final rules: ``It is
our general view that the waiver required by law is a broad one and
that hospices are required to provide virtually all of the care that is
needed by terminally ill patients'' (48 FR 56010). Our expectation
continues to be that hospices offer and provide comprehensive,
virtually all-inclusive care, and in a better, more humane way, than is
available in other healthcare settings. In order to preserve the
Medicare hospice benefit and ensure that Medicare beneficiaries
continue to have access to comprehensive, high-quality and appropriate
end-of-life hospice care, we will continue to examine program
vulnerabilities and implement appropriate safeguards in the Medicare
hospice benefit, when appropriate.
4. Definition of ``Terminal Illness''
Since the implementation of the Medicare hospice benefit, we have
defined a ``terminally ill'' individual to mean ``that the individual
has a medical prognosis that his or her life expectancy is 6 months or
less if the illness runs its normal course'' (Sec. 418.3). We have
always interpreted ``terminally ill'' to mean a time frame of life
expectancy and expect that the individual's whole condition plays a
role in that prognosis. Comments received in response to prior years'
proposed rules state that longstanding, preexisting conditions should
not be considered related to a patient's terminal illness or related
conditions and that chronic, stable conditions play little to no role
in a patient's terminal illness or related conditions. Commenters also
stated that controlled pain and symptoms are not considered to be
related to a patient's terminal illness or related conditions, that not
all pain is related to the terminal illness and related conditions, and
that comorbidities and the maintenance of comorbidities are not related
to a patient's terminal illness or related conditions. These commenters
believed these types of conditions
[[Page 26555]]
should not be included in the bundle of services covered under the
Medicare hospice benefit. As previously stated in response to those
comments, we believe that these conditions are included in the bundle
of covered hospice services. The original implementing regulations of
the Medicare hospice benefit, beginning with the 1983 Hospice proposed
and final rules (48 FR 38146 and 48 FR 56008), articulates a set of
requirements that do not delineate between pre-existing, chronic, nor
controlled conditions. In order to be eligible to receive hospice
services under the Medicare hospice benefit, the individual must be
entitled to Part A and must be certified as being terminally ill,
meaning that his or her medical prognosis is a life expectancy of 6
months or less if the illness runs its normal course. We have
recognized throughout the federal regulations at Sec. 418 that the
total person is to be assessed, including acute and chronic conditions,
as well as controlled and uncontrolled conditions, in determining an
individual's terminal prognosis. All body systems are interrelated; all
conditions, active or not, have the potential to affect the total
individual. The presence of comorbidities is recognized as potentially
contributing to the overall status of an individual and should be
considered when determining the terminal prognosis. NHPCO defines
``comorbidity,'' as: ``known factors or pathological disease impacting
on the primary health problem and generally attributed to increased
risk for poor health status outcomes.'' \34\
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\34\ National Hospice and Palliative Care Organization:
``Standards of Practices for Hospice Programs'', 2010. Retrieved on
February 20, 2014 from: http://www.nhpco.org/nhpco-standards-practice.
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We have defined palliative care--the nature of the care provided
under the hospice benefit--in our regulations at Sec. 418.3 to mean:
``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.'' Note that, in
this definition, palliative care is to anticipate and prevent, as well
as treat, suffering. This means that hospices are to be proactive in
their care approach and not just reactive to pain and symptoms after
they arise.
Because hospice care is unique in its comprehensive, holistic, and
palliative philosophy and practice, we want to ensure that the hospice
services under the Medicare hospice benefit are preserved and not
diluted, or unbundled in any way. For context, the definition of
illness means ``an abnormal process in which aspects of the social,
physical, emotional, or intellectual condition and function of a person
are diminished or impaired compared with that person's previous
condition''.\35\ An intensive review of the history of hospice, hospice
philosophy and legislative actions described above provided the basis
for discussion among several CMS clinical leaders across several agency
components as to the meaning of ``terminal illness'' within the context
of the Medicare hospice benefit. After a review of all of the history
listed above, the clinical collaborative effort across CMS solicits
comments on defining ``terminal illness'' to mean: ``Abnormal and
advancing physical, emotional, social and/or intellectual processes
which diminish and/or impair the individual's condition such that there
is an unfavorable prognosis and no reasonable expectation of a cure;
not limited to any one diagnosis or multiple diagnoses, but rather it
can be the collective state of diseases and/or injuries affecting
multiple facets of the whole person, are causing progressive impairment
of body systems, and there is a prognosis of a life expectancy of six
months or less''.
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\35\ Mosby's Medical Dictionary, 8th edition, 2009, Elsevier.
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We are soliciting comments on this definition for further
discussion and consideration for potential future rulemaking.
5. Definition of ``Related Conditions''
Section 1812(d)(2) of the Act provides that an individual, upon
making an election to receive hospice coverage, would be deemed to have
waived payments for certain other benefits except in ``exceptional and
unusual circumstances as the Secretary may provide.'' Comments received
on the 1983 Hospice proposed rule specifically asked for further CMS
clarification regarding the concept of ``related conditions.''
Specifically, the commenters suggested a more detailed definition of
what constitutes care for a patient's terminal illness or related
conditions (which is the responsibility of the hospice) and what
constitutes care for unrelated conditions (for which out-of-hospice
Medicare payment may be made) (48 FR 56010). Our response was: ``. . .
we have not received any suggestions for identifying `exceptional or
unusual' circumstances that warranted the inclusion of a specific
provision in the regulations to accommodate them. Most of the comments
that were made attempted to suggest this exception as a means of
routinely providing non-hospice Medicare financing for the expense of
costly services needed by hospice patients, and we do not view this as
an appropriate interpretation of the law'' (48 FR 56011). The law
allows for circumstances in which services needed by a hospice
beneficiary would be completely unrelated to the terminal illness and
related conditions, but we believe that this situation would be the
rare exception rather than the norm. We reiterated this position in the
FY 2014 Hospice Wage Index and Rate Update proposed rule (78 FR 27826)
as a reminder of the expectation of the holistic nature of hospice
services that shall be provided under the hospice benefit, as well as
to remind hospices about diagnosis reporting on hospice claims.
Therefore, in keeping with the tenets of hospice philosophy
described in this section, the intent of the Medicare hospice benefit,
expectations of comprehensive care, and in response to previous and
ongoing stakeholder comments, the CMS clinical collaborative effort
solicits comments on defining ``related conditions'' to mean: ``Those
conditions that result directly from terminal illness; and/or result
from the treatment or medication management of terminal illness; and/or
which interact or potentially interact with terminal illness; and/or
which are contributory to the symptom burden of the terminally ill
individual; and/or are conditions which are contributory to the
prognosis that the individual has a life expectancy of 6 months or
less''.
We solicit comments on this definition for further discussion and
consideration for potential future rulemaking.
C. Guidance on Determining Beneficiaries' Eligibility for Hospice
An individual must be certified by the hospice medical director and
the individual's attending physician (if designated by the individual)
as being terminally ill, meaning that the individual has a medical
prognosis of a life expectancy of 6 months or less in order to receive
the Medicare hospice benefit. However, we also have recognized the
challenges in prognostication. It has always been our expectation that
the certifying physicians will use their best clinical judgment, based
on the initial and updated comprehensive assessments and collaboration
with the hospice interdisciplinary group (IDG) to
[[Page 26556]]
determine if the individual has a life expectancy of six months or less
with each certification and recertification. As stated in previous
rules, in reaching a decision to certify that the patient is terminally
ill, the hospice medical director must consider at least the following
information per our regulations at Sec. 418.25 (b):
Diagnosis of the terminal condition of the patient.
Other health conditions, whether related or unrelated to
the terminal condition.
Current clinically relevant information supporting all
diagnoses.
We do recognize that making a prognosis is not an exact science.
Section 322 of the Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554) amended section 1814(a) of the Act by
clarifying that the certification of an individual who elects hospice
``shall be based on the physician's or medical director's clinical
judgment regarding the normal course of the individual's illness.'' The
amendment clarified that the certification is based on a clinical
judgment regarding the usual course of a terminal illness, and
recognizes the fact that making medical prognostications regarding life
expectancy are not exact. However, the amendment regarding the
physician's clinical judgment does not negate the fact that there must
be a clinical basis for a certification. A hospice is required to make
certain that the physician's clinical judgment can be supported by
clinical information and other documentation that provide a basis for
the certification of 6 months or less if the illness runs its normal
course.
While the expectation remains that the hospice physician will
determine a beneficiary's eligibility for hospice, this is not to say
that this decision cannot be reviewed if there is a question as to
whether the clinical documentation supports or does not support a
patient's hospice eligibility as hospice services provided must be
reasonable and necessary for the palliation and management of the
terminal illness and related conditions. The goal of any review for
eligibility is to ensure that hospices are thoughtful in their
eligibility determinations so that hospice beneficiaries are able to
access their benefits appropriately. CMS' right to review clinical
documentation that supports physician certifications has been
established in federal court and by the agency in an administrative
ruling. (See, for example, HCFA Ruling, 93-1 Weight to be Given to a
Treating Physician's Opinion in Determining Medicare Coverage of
Inpatient Care in a Hospital or Skilled Nursing Facility (May 18,
1993); Maximum Comfort, Inc v. Leavitt (512 F.3d 1081 (9th Cir. 2007);
MacKenzie Medical Supply v. Leavitt (506 F.3d 341 (4th Cir. 2007))). In
order to be covered under Medicare Part A, the care must also be
reasonable and necessary. There has always been a statutory prohibition
(section 1862 (a)(1)(C) of the Act) against payment under the Medicare
program for services which are not reasonable and necessary for the
palliation or management of terminal illness. Additionally, section
1869(a)(1) of the Act makes clear that the Secretary makes
determinations concerning entitlement, coverage and payment of benefits
under part A and part B of Medicare.
We are reminding providers that there are multiple public sources
available to assist in determining whether a patient meets Medicare
hospice eligibility criteria (that is, industry-specific clinical and
functional assessment tools and information on MAC Web sites).
Additionally, we expect that hospices will use their expert clinical
judgment in determining eligibility for hospice services. We expect
that documentation supporting a 6-month or less life expectancy is
included in the beneficiary's medical record and available to the MACs
when requested.
If a beneficiary improves and/or stabilizes sufficiently over time
while in hospice such that he/she no longer has a prognosis of 6 months
or less from the most recent recertification evaluation or definitive
interim evaluation, that beneficiary should be considered for discharge
from the Medicare hospice benefit. Such beneficiaries can be re-
enrolled for a new benefit period when a decline in their clinical
status is such that their life expectancy is again 6 months or less. On
the other hand, beneficiaries in the terminal stage of their illness
that originally qualify for the Medicare hospice benefit but stabilize
or improve while receiving hospice care, yet have a reasonable
expectation of continued decline for a life expectancy of less than 6
months, remain eligible for hospice care. The hospice medical director
must assess and evaluate the full clinical picture of the Medicare
hospice beneficiary to make the determination whether the beneficiary
still has a medical prognosis of 6 months or less, regardless of
whether the beneficiary has stabilized or improved. There are
prognostication tools available for hospices to assist in thoughtful
evaluation of Medicare beneficiaries for terminally ill eligibility for
the Medicare hospice benefit. We expect hospice providers to use the
full range of tools available, including guidelines, comprehensive
assessments, and the complete medical record, as necessary, to make
responsible and thoughtful determinations regarding terminally ill
eligibility. We have always acknowledged the uniqueness of every
Medicare beneficiary and support thorough and thoughtful evaluation in
determining whether beneficiaries meet the eligibility criteria of
being certified as terminally ill. We continue to support the concept
of shared decision-making, patient choice and the right care at the
right time to allow Medicare beneficiaries full and appropriate access
to their Medicare benefits, including hospice care. Furthermore,
Medicare hospice beneficiaries have certain guaranteed rights. If the
hospice or designated attending physician believes that the hospice
beneficiary is no longer eligible for hospice care because his or her
condition has improved, and the beneficiary does not agree with that
determination, the hospice beneficiary has the right to ask for a
review of his or her case. The hospice should provide the hospice
beneficiary with a notice that explains his or her right to an
expedited review by a contracted independent reviewer hired by
Medicare, called a Quality Improvement Organization (QIO). If the
hospice beneficiary asks for this appeal, the QIO will determine if
hospice services should continue. The QIO will determine if the
beneficiary still needs hospice services. The provider is expected to
continue to provide services for the patient following a favorable
decision by a QIO. In the QIO decision, the QIO should advise the
provider as to why it disagrees with the hospice, which should help the
provider to re-evaluate the discharge decision. If at another point in
time following the resumption of covered services the hospice believes
that the patient is no longer hospice eligible, the provider should
timely deliver a CMS-10123 to notify the patent of its decision to
discharge. The patient could again appeal to the QIO. Medicare
beneficiaries have the right to be included in decisions about their
care, the right to a fair process to appeal decisions about payment of
services, and the right to privacy and confidentiality.
D. Proposed Timeframe for Hospice Cap Determinations and Overpayment
Remittances
As described in sections 1861(dd)(2)(A)(iii) and 1814(i)(2)(A)
through (C) of the Act, when the Medicare hospice benefit was
implemented, the Congress included 2 limits on payments to hospices: An
[[Page 26557]]
inpatient cap and an aggregate cap. The hospice inpatient cap limits
the total number of Medicare inpatient days to no more than 20 percent
of a hospice's total Medicare hospice days. The intent of the inpatient
cap was to ensure that hospice remained a home-based benefit. The
hospice aggregate cap limits the total aggregate payment any individual
hospice can receive in a year. The intent of the hospice aggregate cap
was to protect Medicare from spending more for hospice care than it
would for conventional care at the end of life.
The aggregate cap amount was set at $6,500 per beneficiary when
first enacted in 1983; this was an amount hospice advocates agreed was
well above the average cost of caring for a hospice patient.\36\ The
$6,500 amount 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. For the 2013 cap year, the
cap amount was $26,157.50 per beneficiary. The cap year is defined as
the period from November 1st to October 31st, and was set in place in
the December 16, 1983 hospice final rule (48 FR 56022).
---------------------------------------------------------------------------
\36\ National Hospice and Palliative Care Organization (NHPCO),
``A Short History of the Medicare Hospice Cap on Total
Expenditures.'' Retrieved on February 19, 2014 at: http://www.nhpco.org/sites/default/files/public/regulatory/History_of_Hospice_Cap.pdf.
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The cap amount is multiplied by the number of Medicare
beneficiaries who received hospice care from a particular hospice
during the year, resulting in its hospice aggregate cap, which is the
allowable amount of total Medicare payments that hospice can receive
for that cap year. There are two different methods for counting a
hospice's beneficiaries: The streamlined and the patient-by-patient
proportional methods. Which method a hospice can use to count
beneficiaries depends on a number of factors, as described in our
regulations at Sec. 418.309 and in section 90.2.3 of the hospice
Benefit Policy Manual (IOM 100-02, chapter 9, available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c09.pdf). A hospice's total Medicare payments for the cap year
cannot exceed the hospice's aggregate cap. If its aggregate cap is
exceeded, then the hospice must repay the excess back to Medicare.
While hospices rarely exceed the inpatient cap, in its March 2012
Report to the Congress, MedPAC reported that an increasing number of
hospices are exceeding the aggregate cap. MedPAC also noted that above-
cap hospices were almost all for-profit with very long lengths of stay,
high live discharge rates, and very high profit margins before the
return of cap overpayments.\37\ The percentage of hospices exceeding
the aggregate cap rose from 2.6 percent in 2002 to a peak of 12.5
percent in 2009. In 2010, the percentage of hospices exceeding the
aggregate cap decreased to 10.1 percent.\38\
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\37\ MedPAC, ``Report to Congress: Medicare Payment Policy'',
March 2012, pp. 293-295, 302.
\38\ MedPAC, ``Report to Congress: Medicare Payment Policy'',
March 2013, p. 276.
---------------------------------------------------------------------------
Abt Associates, our hospice reform contractor, also performed
analysis on the number of hospices exceeding the aggregate cap with
results similar to MedPAC's, where an increasing percentage of hospices
exceeded their caps from 2006 (9.1 percent) to a peak in 2009 (12.8
percent), followed by a decline through 2011 (10.5 percent). However,
the analysis shows an increase in 2012, with 11.6 percent of hospices
exceeding their aggregate caps. Additionally, analysis of above-cap
hospices showed that the average overpayment per beneficiary has
increased over time, up 35.2 percent from 2006 ($7,384) to 2012
($9,983). Using above-cap hospices, we also found that the average
overpayment amount went from $732,103 in 2006 to $440,727 in 2011, but
that this downward trend is estimated to change in 2012, when the
average overpayment amount is estimated to increase to $547,011.
We also compared hospices' year-end percentage of their aggregate
cap total that they had received in Medicare payments over time.
Specifically, we examined where hospices ended their cap year in terms
of Medicare reimbursements received, relative to that year's aggregate
cap limit, by comparing the 2006 cap year to the 2012 cap year.
Analysis revealed that more hospices ended the 2012 cap year ``just
below'' their aggregate cap than in 2006. The cap analyses which are
referenced in this section are available in the May 2014 Technical
Report which will be posted in May, 2014 on our Hospice Center Web page
at: http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
The results from these recent analyses on the hospice aggregate cap
highlight the importance of hospices monitoring their aggregate cap and
ensuring that the beneficiaries under their care are truly eligible for
hospice services. In the FY 2010 hospice wage index proposed rule we
solicited comments on the aggregate hospice cap (74 FR 18920-18922).
Many commenters wanted more timely notification of cap overpayments.
Many also requested that hospices be given access to beneficiaries'
full hospice utilization history, as having this information would
enable hospices to better manage their aggregate cap. In response to
concerns from hospices, we redesigned the Provider Statistical and
Reimbursement (PS&R) system in 2011, so that hospices can now easily
manage their inpatient and aggregate caps. The redesigned PS&R enables
hospices to calculate estimated caps to monitor their cap status at
different points during the cap year, and also enables them to
calculate their caps after the cap year ends.
Our current practice is for the Medicare Administrative Contractors
(MACs) to complete the hospice cap determinations for both the
inpatient and the aggregate caps 16 to 24 months after the cap year in
order to demand any overpayment. We are concerned about this long
timeframe, particularly given that the percentage of hospices exceeding
the aggregate cap is increasing, along with the average overpayment per
beneficiary. To better safeguard the Medicare Trust Fund, we believe
that demands for cap overpayments should occur sooner. This is now
possible due to the redesigned PS&R system.
Therefore, for the 2014 cap year and subsequent cap years, we
propose to amend Sec. 418.308 and require that hospices complete their
inpatient and aggregate caps determination within 5 months after the
cap year ends (that is, by March 31) and remit any overpayments at that
time. We propose that the MACs would then reconcile all payments at the
final cap determination. If a provider fails to file its inpatient and
aggregate cap determination 150 days after the end of the cap year, we
propose that payments to the provider would be suspended in whole or in
part until the self-determined cap is filed with the Medicare
contractor. We propose to further amend Sec. 418.308 and Sec. 405.371
to state that payments to a hospice would be suspended in whole or in
part, for failure to file a self-determined inpatient and aggregate cap
determination. This is similar to the current practice followed by all
other provider types that file cost reports with MACs.
Hospices would be provided a pro-forma spreadsheet that they would
use to calculate their caps to remit any overpayments. The redesigned
PS&R system provides the inpatient days, total days, beneficiary
counts, and Medicare payments that are needed to calculate any
inpatient or aggregate cap overpayments. The redesigned system can
provide needed data whether a
[[Page 26558]]
hospice uses the streamlined method or the patient-by-patient
proportional method for its aggregate cap calculation. All hospices are
required to register in Individuals Authorized Access to CMS Computer
Services (IACS) and obtain their PS&R report from the PS&R system.
Hospices experiencing difficulties can request a copy of their PS&R
report from their MAC.
We invite comment on this proposal and the associated change in the
regulation at Sec. 418.308 in section VI.
E. Proposed Timeframes for Filing the Notice of Election and Notice of
Termination/Revocation
1. Proposed Timeframe for Filing the Notice of Election
A distinctive characteristic of the Medicare hospice benefit is
that it requires patients (or their representative) to intentionally
choose hospice care through an election. As part of that election,
patients (or their representative) acknowledge that they fully
understand the palliative, rather than curative, nature of hospice
care. Another important aspect of the election is a waiver of
beneficiary rights to Medicare payment for any Medicare services
related to the terminal illness and related conditions during a hospice
election except when provided by, or under arrangement by, the
designated hospice, or by the individual's attending physician if he/
she is not employed by the designated hospice (Sec. 418.24(d)).
Because of this waiver, providers other than the designated hospice
or attending physician cannot receive payment for services to a hospice
beneficiary unless those services are unrelated to the terminal illness
and related conditions. For our claims processing system to properly
enforce this waiver, it is necessary that the hospice election be
recorded in the claims processing system as soon as possible after the
election occurs. A survey of the four Medicare hospice Medicare
Administrative Contractors (MACs) revealed that 16.2 percent of NOEs
are filed within 2 days of the effective date of election, 39.2 percent
of NOEs are filed within 5 days of the effective date of election, and
62.1 percent of NOEs are filed within 10 days of the effective date of
election. Prompt recording of the notice of election (NOE) prevents
inappropriate payments, as claims filed by providers other than the
hospice or the attending physician will be rejected by the system,
unless those claims are for items or services unrelated to the hospice
terminal illness. Prompt filing of the NOE also protects beneficiaries
from financial liability from deductibles and copayments for items or
services provided during a hospice election which are related to the
terminal prognosis.
Once an NOE is filed, the hospice election and benefit period are
established in the Common Working File (CWF) and in the Daily
Transaction Reply Report (DTRR). The CWF is used by Part A and Part B
providers, and the DTRR is used by Part D plan sponsors, to determine
whether a beneficiary is a hospice patient. This information is
necessary for providers and suppliers to properly handle claims for
beneficiaries under a hospice election.
Our hospice reform contractor, Abt Associates, has performed
analyses of Medicare expenditures for drugs and services provided to
hospice beneficiaries during a hospice election. These analyses found
that Medicare Part D was paying for many drugs which should have been
provided by the hospice. We also found that Parts A and B were paying
claims for items or services from non-hospice providers during a
hospice election (See section III.A.4), though some of these claims may
have been appropriate. Once a hospice election is established in the
CWF, in order for claims from other providers to process, the claim
must be from the attending physician and coded with a ``GV'' modifier,
or for items or services unrelated to the terminal illness and related
conditions and must be coded with either a condition code of ``07'' or
a ``GW'' modifier. However, in calendar year 2012, 10,500 claims and
2.4 million line items, totaling $159 million were processed without
the condition code or modifier. Approximately $100 million was from
physician/supplier Part B claims that include claims from, for example,
physicians, laboratories, and ambulance companies, and approximately
$46 million was billed as durable medical equipment. This suggests that
these claims may have been processed in the time between when the
beneficiary elected hospice and when the hospice filed its NOE. When
Parts A, B, or D pay claims for items or services during a hospice
election, there is typically an associated beneficiary liability (such
as deductibles or copayments). For example, in 2012 hospice beneficiary
liability was $135.5 million for Part A or B claims, and $48.2 million
for Part D claims, for items or services provided to hospice
beneficiaries during a hospice election. We want to safeguard hospice
beneficiaries from inappropriate financial liability during a hospice
election for items or services that should be provided by the hospice.
Please see section III.A.4 of this proposed rule and the May 2014
Technical Report, which will be posted on the CMS Hospice Center Web
page in May, 2014 for more details on Medicare payments made to non-
hospice providers during a hospice election for hospice beneficiaries.
The hospice center Web page can be accessed at http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
In the April 1, 2013 CMS Part D Final Call Letter, it was noted
that delays in the flow of hospice election information cause
retroactive updates to the information sent to Part D plan sponsors on
the DTRR, and plan sponsors requested that CMS improve the timeliness
of the hospice data on the DTRR.\39\ More recently, CMS issued a
memorandum on December 6, 2013 entitled ``Part D Payment for Drugs for
Beneficiaries Enrolled in Hospice,'' which sought to clarify the
criteria for determining payment responsibility for drugs for hospice
beneficiaries.\40\ Industry commenters described the lag time in the
notification of Part D plan sponsors that the beneficiary had elected
hospice, revoked hospice, or been discharged alive from hospice as a
key problem in determining payment responsibility. Commenters suggested
that CMS require that the NOE be filed within a short timeframe of
election (for example, within 48 hours).
---------------------------------------------------------------------------
\39\ CMS, ``Calendar Year (CY) 2014 Medicare Advantage
Capitation Rates and Medicare Advantage and Part D Payment Policies
and Final Call Letter,'' issued April 1, 2013; available at http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/Announcement2014.pdf.
\40\ Tudor CG, Wilson L, and Majestic M. ``Part D Payment for
Drugs for Beneficiaries Enrolled in Hospice--Request for Comments,''
memorandum issued December 6, 2013, available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-PartD-Payment.pdf.
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The CWF is also used by hospices to identify the current benefit
period, which helps hospices determine when a face-to-face encounter is
required. We have received requests for assistance from hospices where
a beneficiary was previously admitted to and then discharged from
another hospice, which had not yet filed the NOE, creating a problem
for the current hospice in determining the correct benefit period. This
can lead to the current hospice not meeting the face-to-face
requirement. Additionally, because of sequential billing requirements,
the current hospice would have to cancel its NOE and all its billing
for that beneficiary, to allow the previous hospice to input its NOE
and billing; once the previous hospice files its claims and records the
beneficiary's discharge, the current
[[Page 26559]]
hospice could then resubmit its NOE and its claims. The failure of the
first hospice to file its NOE promptly creates an administrative burden
for the second hospice.
In summary, prompt filing of the NOE avoids compliance problems
with the statutorily mandated face-to-face requirement. It also avoids
creating burdensome situations for hospices when sequential billing
requirements are not met. Finally, because Medicare payments for
services related to the terminal illness and related conditions are
waived once a hospice election is in place, it is crucial that the NOE
be filed promptly to safeguard the integrity of the Medicare Trust
Fund, to enable smooth and efficient operation of other Medicare
benefits (like Part D), and to safeguard hospice beneficiaries from
inappropriate financial liability due to copayments and deductibles for
services related to the terminal prognosis. For all of these reasons,
we propose that a hospice must file the NOE with its MAC within 3
calendar days after the hospice effective date of election, regardless
of how the NOE is filed (by direct data entry, or sent by mail or
messenger). Hospices operate 24 hours per day, 7 days per week, so
meeting this proposed requirement should be a part of normal business
operations. Additionally, we believe that this proposed requirement
will relieve hospices of the burden created when some minority of
hospices do not file their NOEs promptly, will avoid inappropriate
payments to other Part A, Part B, or Part D providers, and will
safeguard beneficiaries from inappropriate liability for copayments or
deductibles.
Currently, payment for hospice services begins on the effective
date of the hospice election, regardless of when the NOE was filed. A
commenter on the December 6, 2013 CMS memorandum clarifying drug
payment responsibility between Part D, hospice, and beneficiaries
suggested that without enforcement actions, hospices would not file
NOEs within a short timeframe. We agree that providing a consequence
for failing to file NOEs timely would encourage compliance. Therefore,
we propose that for those hospices that do not file the NOE timely
(that is, within 3 calendar days after the effective date of election),
Medicare would not cover and pay for days of hospice care from the
effective date of election to the date of filing of the NOE. We propose
that these days be considered the financial responsibility of the
hospice; the hospice could not bill the beneficiary for them. We
believe that this is a reasonable step which would not be burdensome to
hospices and would help us to safeguard the integrity of the Medicare
Trust Fund, and help protect beneficiaries from inappropriate
liability.
Once filed, the process of posting an NOE to the CWF after direct
data entry (DDE) takes 1 to 5 days, depending on the host site. If an
NOE is not submitted by DDE, the current policy requires hospices to
send it to the MAC by mail or messenger. This policy remains in place;
however, hospices may need to use overnight mail or an overnight
messenger to ensure that paper NOEs are received by the MAC within the
proposed 3-calendar-day timeframe after the effective date of election.
Given the extremely low volume of NOEs filed by mail or messenger (an
average of 68 per year), we do not believe this proposed 3-calendar day
filing of the NOE would be burdensome to hospices. Using a speedier
form of delivery will ensure that a paper NOE's filing is not delayed
by the transit time needed to get the document from the hospice to the
MAC.
We invite comment on this proposal and the associated change in the
regulation at Sec. 418.24(a) in section VI.
2. Proposed Timeframe for Filing the Notice of Termination/Revocation
Hospices may discharge patients for only three reasons: (1) Due to
cause; (2) due to the patient's no longer being terminally ill; or (3)
due to the patient's moving outside the hospice's service area. In
contrast, hospice patients are free to revoke their election to hospice
care at any time. Upon discharge or revocation, a beneficiary resumes
the Medicare coverage that had previously been waived by the hospice
election. It is important for hospices to record the beneficiary's
discharge or revocation in the claims processing system in a timely
manner. As previously noted, a number of those commenting on the
December 6, 2013 CMS memorandum clarifying drug payment responsibility
between Part D, hospices, and beneficiaries wrote that it was critical
for beneficiary revocations and live discharges from hospice to be
recorded as soon as possible within CMS claims processing systems.
Commenters wrote that prompt recording of revocations or discharges is
necessary to ensure that the beneficiary is able to access needed items
or services, and to ensure that payment for the item or service is from
the appropriate source. Providers are allowed 12 months to file a
claim, so if a hospice is not prepared to file a final claim quickly,
it should instead file a termination/revocation of election notice, so
that the claims processing systems are updated to no longer show the
beneficiary as being under a hospice election. Hereafter, we will refer
to this as a Notice of Termination or Revocation, or NOTR.
We propose to revise the regulations at Sec. 418.26 and Sec.
418.28 to require hospices to file a NOTR within 3 calendar days after
the effective date of a beneficiary's discharge or revocation, if they
have not already filed a final claim. This would safeguard
beneficiaries from any delays or difficulties in accessing needed
drugs, items, or services that could occur if the CWF or DTRR continued
to show a hospice election in place when in fact it was revoked or a
discharge occurred. It would also avoid costs and administrative burden
to non-hospice providers and to the claims processing system that would
occur for claims for items or services provided after discharge or
revocation, which would be rejected if the claims processing systems
continued to show the beneficiary as being under a hospice election.
We invite comment on this proposal and the associated changes in
the regulations at Sec. 418.26 and Sec. 418.28 in section VI.
F. Proposed Addition of the Attending Physician to the Hospice Election
Form
The term ``attending physician'' is defined differently in
different health care settings. For the Medicare hospice benefit,
``attending physician'' has a specific definition found in the Social
Security Act at 1861(dd)(3)(B):
``The term ``attending physician'' means, with respect to an
individual, the physician (as defined in subsection (r)(1)) or nurse
practitioner (as defined in subsection (aa)(5)), who may be employed by
a hospice program, whom the individual identifies as having the most
significant role in the determination and delivery of medical care to
the individual at the time the individual makes an election to receive
hospice care.''
Our regulations at Sec. 418.3 include a definition for ``attending
physician,'' based on the statutory language above. We define it as
either (1) a doctor of medicine or osteopathy legally authorized to
practice medicine and surgery by the State in which he or she performs
that function or action; or (2) a nurse practitioner who meets the
training, education, and experience requirements described elsewhere in
our regulations. The definition also sets out the requirement that the
patient identify the attending physician at the time he or she elects
to receive hospice care, as having the most significant role in the
determination and delivery of the individual's medical care.
[[Page 26560]]
We require that the National Provider Identifier (NPI) of the
attending physician be included on the NOE and on each claim. An
attending physician can be a physician or a nurse practitioner, as long
as he or she meets the requirements set out above. The hospice patient
(or his or her representative) chooses the attending physician, not the
hospice. This differs from some non-hospice settings, where an
attending may be a clinician assigned to provide care to the patient.
We stress that in hospice, the attending physician, who may be a nurse
practitioner, is chosen by the patient (or his or her representative),
and not by the hospice. This requirement is also included as part of
the CoPs at Sec. 418.52(c)(4), which states that the patient has the
right to choose his or her attending physician. The hospice CoPs at
Sec. 418.64(a)(3) further require that if the attending physician is
unavailable, the hospice medical director, hospice contracted
physician, and/or hospice physician employee is responsible for meeting
the medical needs of the patient. Therefore, the patient should receive
all needed care, whether that care is provided by hospice doctors,
hospice nurse practitioners (NPs), or by the designated attending
physician. Hospices can bill Part A for reasonable and necessary
physician services provided to hospice beneficiaries by its doctors,
regardless of whether those doctors are the designated attending.
However, our regulations at Sec. 418.304(e) do not permit Medicare to
be billed for reasonable and necessary physician services provided by
NPs unless the NP is the attending physician, as defined in Sec.
418.3.
We have recently heard anecdotal reports of hospices changing a
patient's attending physician when the patient moves to an inpatient
setting for inpatient care, often to a nurse practitioner. We have also
heard reports of hospices assigning an attending physician based upon
whoever is available. MACs noted that the NPI of the attending
physician reported on claims was sometimes changing, and differed from
that reported on the NOE. Additionally, using CY 2010 and CY 2011 data,
we found that 35 percent of beneficiaries had Part B claims during
their hospice election from more than one physician who claimed to be
their designated attending physician. The reports of hospices changing
a patient's attending physician are of great concern since the statute
emphasizes that the attending physician must be chosen by the patient
(or his or her representative). Finally, we have also received
anecdotal reports that some hospices are not getting the signature of
the attending physician on the initial certification. If a beneficiary
has designated an attending physician, that physician must sign the
initial certification for Medicare to cover and pay for hospice
services, unless the attending is an NP.
To ensure the attending physician of record is properly documented
in the patient's medical record, we propose to amend the regulations at
Sec. 418.24(b)(1) and require the election statement to include the
patient's choice of attending physician. The proposed information
identifying the attending physician should be recorded on the election
statement in enough detail so that it is clear which physician or NP
was designated as the attending physician. Hospices have the
flexibility to include this information on their election statement in
whatever format works best for them, provided the content requirements
in Sec. 418.24(b) are met. The language on the election form should
include an acknowledgement by the patient (or representative) that the
designated attending physician was the patient's (or representative's)
choice.
In addition, we further propose that if a patient (or
representative) wants to change his or her designated attending
physician, he or she must follow a procedure similar to that which
currently exists for changing the designated hospice. Specifically, the
patient (or representative) must file a signed statement, with the
hospice, that identifies the new attending physician in enough detail
so that it is clear which physician or NP was designated as the new
attending physician. Additionally, we propose that the statement
include the date the change is to be effective, the date that the
statement is signed, and the patient's (or representative's) signature,
along with an acknowledgement that this change in the attending
physician is the patient's (or representative's) choice. The effective
date of the change in attending physician cannot be earlier than the
date the statement is signed. We believe that such a change would help
ensure that any changes in the identity of the attending physician
would be the result of the patient's free choice.
We invite comment on this proposal and the associated changes in
the regulations at Sec. 418.24(b)(1) and Sec. 418.24(f) in section
VI.
G. FY 2015 Hospice Wage Index and Rates Update
1. FY 2015 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 2015 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 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 2015,
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
[[Page 26561]]
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 2015, 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 2015, we would use the 2014 pre-floor, pre-reclassified
hospital wage index to derive the applicable wage index values for the
FY 2015 hospice wage index. 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 2015
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 2015 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 2015 pre-floor, pre-reclassified hospital
wage index does not contain OMB's new area delineations. 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 2015 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 2015 using the FY 2014 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 2015 Hospice Wage
Index proposed rule, that means estimating payments for FY 2015 using
units (days or hours) from FY 2013 hospice claims data, and applying
the FY 2015 hospice payment rates. The FY 2015 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 2015 will be reduced by an additional 15
percent for a total BNAF reduction of 85 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 an additional 15
percent in FY 2014 and an additional 15 percent in FY 2015).
The unreduced BNAF for FY 2015 is 0.062060 (or 6.2060 percent). An
85 percent reduction to the BNAF is computed to be 0.009309 (or 0.9309
percent). For FY 2015, this is mathematically equivalent to taking 15
percent of the unreduced BNAF value, or multiplying 0.062060 by 0.15,
which equals 0.009309 (0.9309 percent). The BNAF of 0.9309 percent
reflects an 85 percent reduction in the BNAF. The 85 percent reduced
BNAF (0.9309 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 0.060438; the additional 15 percent reduced BNAF for FY 2014 (for a
cumulative reduction of 70 percent) was 0.018461, based on a full BNAF
of 0.061538 and the additional 15 percent reduced BNAF for FY 2015 (for
a cumulative reduction of 85 percent) is 0.009309, based on a full BNAF
of 0.062060.
Hospital wage index values which are less than 0.8 are subject to
the hospice floor calculation. For example, if in FY 2014, 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 0.062060, less 85 percent, or 0.009309) and the hospice floor to
determine
[[Page 26562]]
County A's hospice wage index: Pre-floor, pre-reclassified hospital
wage index value below 0.8 multiplied by 1 + 85 percent reduced BNAF:
(0.3994 x 1.009309 = 0.4031); 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 2015 wage index values for
rural and urban areas will not be published in the Federal Register.
The FY 2015 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 2015 set forth in this proposed rule includes the BNAF reduction and
would be effective October 1, 2014 through September 30, 2015.
3. Proposed Hospice Payment Update Percentage
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended
section 1814(i)(1)(C)(ii)(VI) of the Act to establish updates to
hospice rates for FYs 1998 through 2002. Hospice rates were to be
updated by a factor equal to the market basket index, minus 1
percentage point. Payment rates for FYs since 2002 have been updated
according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states
that the update to the payment rates for subsequent FYs must be the
market basket percentage for that FY. The Act requires us to use the
inpatient hospital market basket to determine the hospice payment rate
update. In addition, section 3401(g) of the Affordable Care Act
mandates that, starting with FY 2013 (and in subsequent FYs), the
hospice payment update percentage will be annually reduced by changes
in economy-wide productivity as specified in section
1886(b)(3)(B)(xi)(II) of the Act. 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 2015 is based on the estimated
inpatient hospital market basket update of 2.7 percent (based on IHS
Global Insight, Inc.'s first quarter 2014 forecast with historical data
through the fourth quarter of 2013). 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 2015 of 2.7 percent must
be reduced by a productivity adjustment as mandated by Affordable Care
Act (currently estimated to be 0.4 percentage point for FY 2015). The
estimated inpatient hospital market basket for FY 2015 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
2015 is 2.0 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 2015 market basket
update and the multi-factor productivity MFP adjustment in the FY 2015
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 FY 2015 Hospice Payment Rates
Historically, the hospice rate update has been published through a
separate administrative instruction issued annually in the summer to
provide adequate time to implement system change requirements; however,
beginning in FY 2014 and for subsequent fiscal years, we are using
rulemaking as the means to update payment rates. This change was
proposed in the FY 2014 Hospice Wage Index and Payment Rate Update
proposed rule and finalized in the FY 2014 Hospice Wage Index and
Payment Rate Update final rule (78 FR 48270). It is consistent with the
rate update process in other Medicare benefits, and provides rate
information to hospices as quickly as, or earlier than, when rates are
published in an administrative instruction.
There are four payment categories that are distinguished by the
location and intensity of the services provided. The base payments are
adjusted for geographic differences in wages by multiplying the labor
share, which varies by category, of each base rate by the applicable
hospice wage index. A hospice is paid the 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 FY 2015 payment rates would be the FY 2014 payment rates,
increased by 2.0 percent, which is the proposed hospice payment update
percentage for FY 2015 as discussed in section III.G.3. The preliminary
FY 2015 hospice payment rates would be effective for care and services
furnished on or after October 1, 2014, through September 30, 2015 (see
Table 6 below).
Table 6--FY 2015 Hospice Payment Rates Updated by the Proposed Hospice Payment Update Percentage
----------------------------------------------------------------------------------------------------------------
Multiply by the
FY 2015 proposed FY 2015
Code Description FY 2014 payment hospice payment preliminary
rates update of 2.0 payment rate
percent
----------------------------------------------------------------------------------------------------------------
651............................ Routine Home Care........ $156.06 x 1.02 $159.18
652............................ Continuous Home Care Full 910.78 x 1.02 929.00
Rate = 24 hours of care
$ = 38.71 hourly rate.
655............................ Inpatient Respite Care... 161.42 x 1.02 164.65
656............................ General Inpatient Care... 694.19 x 1.02 708.07
----------------------------------------------------------------------------------------------------------------
[[Page 26563]]
We reiterate in this proposed rule, that the Congress required in
sections 1814(i)(5)(A) through (C) of the Act that hospices begin
submitting quality data, based on measures to be specified by the
Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320
through 47324), we implemented a Hospice Quality Reporting Program
(HQRP) as required by section 3004 of the Affordable Care Act. Hospices
were required to begin collecting quality data in October 2012, and
submit that quality data in 2013. Section 1814(i)(5)(A)(i) of the Act
requires that beginning with FY 2014 and each subsequent FY, the
Secretary shall reduce the market basket update by 2 percentage points
for any hospice that does not comply with the quality data submission
requirements with respect to that FY.). We remind hospices that this
applies to payments in FY 2015 (See Table 7 below). For more
information on the HQRP requirements please see section III.H in this
proposed rule.
Table 7--FY 2015 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 2015 hospice
payment update
FY 2014 payment percentage of FY 2015
Code Description rates 2.0 percent preliminary
minus 2 payment rate
percentage
points (-0.2)
----------------------------------------------------------------------------------------------------------------
651............................ Routine Home care........ $156.06 x 1.00 $156.06
652............................ Continuous Home Care Full 910.78 x 1.00 910.78
Rate = 24 hours of care
$ = 37.95 hourly rate.
655............................ Inpatient Respite Care... 161.42 x 1.00 161.42
656............................ General Inpatient Care... 694.19 x 1.00 694.19
----------------------------------------------------------------------------------------------------------------
A Change Request with the finalized hospice payment rates, a
finalized hospice wage index, the Pricer for FY 2015, and the hospice
cap amount for the cap year ending October 31, 2014 will be issued in
the summer.
To assist the hospice industry in planning and budgeting, CMS is
informing the hospice industry of the aggregate cap amount for the 2014
cap year in advance of the formal CMS administrative notice, which will
be issued this summer. Additionally, we have included information about
how we calculate the aggregate cap amount so that hospices can compute
the amount themselves in the future if they so desire. This information
is also in CMS' Internet-Only Manual 100-2, chapter 9, section 90.2.6.
The manual can be accessed from the ``Manuals and Transmittals''
section of CMS' hospice Web site at http://www.cms.gov/Center/Provider-Type/Hospice-Center.html. Please refer to section III.D of this
proposed rule on the proposal to expedite hospice cap determinations.
The hospice aggregate cap amount for the 2014 cap year will be
$26,725.79. The cap amount is calculated according to Sec.
1814(i)(2)(B) of the Social Security Act. The cap amount for a given
year is $6,500 multiplied by the change in the Consumer Price Index for
All Urban Consumers (CPI-U) medical care expenditure category, from the
fifth month of the 1984 accounting year (March 1984) to the fifth month
the current accounting year (in this case, March 2014). The CPI-U for
medical care expenditures for 1984 to present is available from the
Bureau of Labor Statistics (BLS) Web site at: http://www.bls.gov/cpi/home.htm.
(Step 1) From the BLS Web site given above, the March 2014 CPI-U
for medical care expenditures is 433.369 and the 1984 CPI-U for medical
care expenditures was 105.4.
(Step 2) Divide the March 2014 CPI-U for medical care expenditures
by the 1984 CPI-U for medical care expenditures to compute the change.
433.369/105.4 = 4.111660
(Step 3) Multiply the original cap base amount ($6,500) by the result
from step 2) to get the updated aggregate cap amount for the 2014 cap
year.
$6,500 x 4.111660= $26,725.79
H. Proposed Updates 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.
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
[[Page 26564]]
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 2013IPPS/LTCH PPS final rule (77 FR 53376).
We also take into account national priorities, such as those
established by the National Priorities Partnership at (http://www.qualityforum.org/npp/), the HHS Strategic Plan http://www.hhs.gov/secretary/about/priorities/priorities.html), the National Strategy for
Quality Improvement in Healthcare located at (http://www.ahrq.gov/workingforquality/nqs/nqs2013annlrpt.htm) and the CMS Quality Strategy
at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
To the extent practicable, we have sought to adopt measures that
have been endorsed by the national consensus organization, recommended
by multi-stakeholder organizations, and developed with the input of
providers, purchasers/payers, and other stakeholders.
2. Measures for Hospice Quality Reporting Program and Data Submission
Requirements for Payment Years FY 2014 and FY 2015
As stated in the 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 and in the CY 2013 Home Health
Prospective Payment System (HH PPS) final rule (77 FR 67068, 67133), to
meet the quality reporting requirements for hospices for the FY 2015
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 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.
3. Quality Measures for Hospice Quality Reporting Program and Data
Submission Requirements for Payment Year FY 2016 and Beyond
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule (78 FR 48234, 48256), we finalized that the structural measure
related to QAPI indicators and the NQF 0209 pain measure would
not be required for the HQRP beyond data submission for the FY 2015
payment determination. The data submission period for the FY2015
payment determination closed on April 1, 2014.
As stated in the CY 2013 HH PPS 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 by CMS,
collection of the needed data elements would require a standardized
data collection instrument. We developed and tested a hospice patient-
level item set, the Hospice Item Set (HIS) to be used by all hospices
to collect and submit standardized data items about each patient
admitted to hospice.
In developing the standardized HIS, we considered comments offered
in response to the CY 2013 HH PPS proposed rule (77 FR 41548, 41573).
In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in
compliance with section 1814(i)(5)(C) of the Act, we finalized the
specific collection of data items that support the following six NQF
endorsed measures and one modified measure for hospice:
NQF 1617 Patients Treated with an Opioid who are
Given a Bowel Regimen
NQF 1634 Pain Screening
NQF 1637 Pain Assessment
NQF 1638 Dyspnea Treatment
NQF 1639 Dyspnea Screening
NQF 1641 Treatment Preferences
NQF 1647 Beliefs/Values Addressed (if desired by the
patient) (modified)
To achieve a comprehensive set of hospice quality measures
available for wide spread use for quality improvement and informed
decision making, and to carry out our commitment to develop a quality
reporting program for hospices that uses standardized methods to
collect data needed to calculate quality measures, we finalized that
the HIS will be implemented in July 2014 (78 FR 48257). To meet the
quality reporting requirements for hospices for the FY 2016 payment
determination and each subsequent year, we will require regular and
ongoing electronic submission of the HIS data for each patient
admission to hospice on or after July 1, 2014, regardless of payer or
patient age (78 FR 48234, 48258). Collecting data on all patients will
provide CMS with the most robust, accurate reflection of the quality of
care delivered to Medicare beneficiaries as compared with non-Medicare
patients. Therefore, to measure the quality of care that is delivered
to Medicare beneficiaries in the hospice setting, we will collect
quality data necessary to calculate the adopted measures on all
patients. We are requiring in our regulation that hospices collect data
on all patients in hospice in order to ensure that all patients,
regardless of payer, are receiving the same care and that provider
metrics measure performance across the spectrum of patients (78 FR
48258).
Hospices are required to complete and submit an admission HIS and a
discharge HIS for each patient admission. Hospices failing to report
quality data via the HIS in 2014 will have their market basket update
reduced by 2 percentage points in FY 2016. Although this has been
implemented thus far pursuant to instructions set out in our preamble
statements, we are proposing to codify the HIS submission requirements
at Sec. 418.312 in this proposed rule. The System of Record (SOR)
Notice for the HIS, SOR number 09-07-0548, was published in the Federal
Register on April 8, 2014 (79 FR 19341).
Hospice programs will be evaluated for purposes of the quality
reporting program based on whether or not they submit data, not on
their performance level on required measures. We have provided hospices
with information and details about use of the HIS through postings on
the Hospice Quality Reporting Program Web page, Open Door Forums,
announcements in the CMS MLN Connects Provider e-News (E-News), and
provider training. Electronic data submission is required for HIS
submission in CY 2014 and beyond; there are no other data submission
methods available. CMS will make available submission software for the
HIS to hospices at no cost. We will also provide reports to individual
[[Page 26565]]
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 will be made available have not yet
been determined. We intend to report to providers on the seven
finalized measures on a schedule to be determined.
We provided details on data collection and submission timing at
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html.
Submission of the HIS on all patient admissions to hospice,
regardless of payer or patient age, is required. The data submission
system provides reports upon successful submission and successful
processing of the HIS records. The final validation report may serve as
evidence of submission. This is the same data submission system used by
nursing homes, inpatient rehabilitation facilities and long-term care
hospitals for the submission of Minimum Data Set Version 3.0 (MDS 3.0),
Inpatient Rehabilitation Facility--Patient Assessment Instrument (IRF-
PAI), and Long-Term Care Hospital Continuity Assessment Record &
Evaluation Data Set (LTCH CARE), respectively.
We also propose that newly certified hospices that receive notice
of their CMS certification number on or after November 1, 2014 for
payments to be made in FY 2016 be excluded from the quality reporting
requirements for the FY 2016 payment determination as data submission
and analysis would not be possible for a hospice receiving notification
of their certification this late in the reporting time period.
We propose that in future years, hospices that receive notification
of certification on or after November 1 of the preceding year involved
would continue to be excluded from any payment penalty for quality
reporting purposes for the following FY. We propose to codify this
requirement at Sec. 418.312.
As is common in other quality reporting programs, we propose to
make accommodations in the case of natural disaster or other
extenuating circumstances. Our experience with other quality reporting
programs has shown that there are times when providers are unable to
submit quality data due to extraordinary circumstances beyond their
control (for example, natural or man-made disasters). A disaster may be
widespread or impact multiple structures or be isolated and impact a
single site only. We do not wish to penalize providers in these
circumstances or to unduly increase their burden during these times.
Therefore, we propose a process, for the FY 2016 payment determination
and subsequent payment determinations, for hospices to request and for
CMS to grant extensions/exceptions with respect to the reporting of
required quality data when there are extraordinary circumstances beyond
the control of the provider. When an extension/exception is granted, a
hospice will not incur payment reduction penalties for failure to
comply with the requirements of the HQRP.
Under the proposed process for the FY 2016 payment determination
and subsequent payment determinations, a hospice may request an
extension/exception of the requirement to submit quality data for a
specified time period. We propose a process that, in the event that a
hospice requests an extension/exception for quality reporting purposes
for the FY 2016 payment determination and subsequent payment
determinations, the hospice would submit a written request to CMS.
Requirements for requesting an extension/exception will be available on
the Hospice Quality Reporting Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/index.html.
This proposal does not preclude us from granting extensions/
exceptions to hospices that have not requested them when we determine
that an extraordinary circumstance, such as an act of nature, affects
an entire region or locale. We also propose that we may grant an
extension/exception to a hospice if we determine that a systemic
problem with our data collection systems directly affected the ability
of the hospice to submit data. If we make the determination to grant an
extension/exception to hospices in a region or locale, we are proposing
to communicate this decision through routine communication channels to
hospices and vendors, including, but not limited to, Open Door Forums,
E-News and notices on https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/.
4. Future Measure Development
We are not proposing any new measures for the HQRP at this time.
However, we believe future development of the HQRP should address
existing measure gaps by focusing on two primary opportunities: to
expand measures already in use in other quality reporting programs that
could apply to the HQRP and to develop new measures if no suitable
measures are ready for implementation or expansion. We are particularly
interested in outcome measures for symptom management, particularly
pain. We are also interested in measures of patient reported outcomes.
We welcome comments and input on future measure development.
CMS is also interested in understanding the current state of
electronic health record (EHR) adoption and usage and Health
Information Exchange (HIE) in the hospice community. Therefore, we are
soliciting feedback and input from providers on topics such as decision
support, whether hospices have adopted an EHR, if so, what functional
aspects of the EHR do hospices find most important (for example, the
ability to send or receive transfer of care information, ability to
support medication orders/medication reconciliation); does the EHR used
in the hospice setting support interoperable document exchange with
other healthcare providers (for example, acute care hospitals,
physician practices, and skilled nursing facilities? In addition to
seeking public input on the feasibility and desirability of electronic
health record adoption and use of HIE in hospices, we are also
interested in public comment on the need to develop and the benefits
and limitations of implementing electronic clinical quality measures
for hospice providers.
HHS believes all patients, their families, and their healthcare
providers should have consistent and timely access to their health
information in a standardized format that can be securely exchanged
between the patient, providers, and others involved in the patient's
care. (HHS August 2013 Statement, Principles and Strategies for
Accelerating Health Information Exchange.) The Department is committed
to accelerating health information exchange (HIE) through the use of
electronic health records (EHRs) and other types of health information
technology (HIT) across the broader care continuum through a number of
initiatives including: (1) Alignment of incentives and payment
adjustments to encourage provider adoption and optimization of HIT and
HIE services through Medicare and Medicaid payment policies; (2)
adoption of common standards and certification requirements for
interoperable HIT; (3) support for privacy and security of patient
information across all HIE-focused initiatives; and (4) governance of
health information networks. These initiatives are designed to
encourage
[[Page 26566]]
HIE among all health care providers, including professionals and
hospitals eligible for the Medicare and Medicaid EHR Incentive Programs
and those who are not eligible for the EHR Incentive Programs, and are
designed to improve care delivery and coordination across the entire
care continuum. To increase flexibility in the Office of the National
Coordinator for Health Information Technology's (ONC) HIT Certification
Program and expand HIT certification, ONC has issued a proposed rule
concerning a voluntary 2015 Edition EHR certification criteria which
would more easily accommodate certification of HIT used in other types
of health care settings where individual or institutional health care
providers are not typically eligible for incentive payments under the
Medicare and Medicaid EHR Incentive Programs, such as long-term and
post-acute care and behavioral health settings.
We believe that HIE and the use of certified EHRs by Hospice (and
other types of providers that are ineligible for the Medicare and
Medicaid EHR Incentive Programs) can effectively and efficiently help
providers improve internal care delivery practices, support management
of patient care across the continuum, and enable the reporting of
electronically specified clinical quality measures (eCQMs). More
information on the identification of EHR certification criteria and
development of standards applicable to Hospice can be found at:
http://healthit.gov/policy-researchers-implementers/standards-and-certification-regulations
http://www.healthit.gov/facas/FACAS/health-it-policy-committee/hitpc-workgroups/certificationadoption
http://wiki.siframework.org/LCC+LTPAC+Care+Transition+SWG
http://wiki.siframework.org/Longitudinal+Coordination+of+Care
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. Measures reported publicly will not
display patient identifiable information. 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 that it is
essential that the data made available to the public be meaningful and
that comparing performance between hospices requires that measures be
constructed from data collected in a standardized and uniform manner.
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, since we will begin data collection in CY 2014 (Q3), the
data from CY 2014 (Q3, Q4) will not be used for assessing validity and
reliability of the quality measures. Data collected by hospices during
Q1-3 CY 2015 will be analyzed starting in CY 2015. Decisions about
whether to report some or all of the quality measures publicly will be
based on the findings of analysis of the CY 2015 data. In addition, 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 FY 2017, 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 CAHPS[supreg] Hospice Survey for the FY
2017 Payment Determination
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule (78 FR 48234), we stated that CMS would start national
implementation of the CAHPS[supreg] Hospice Survey as of January 1,
2015. (Previously known as the Hospice Experience of Care Survey,
HECS.) We are maintaining our existing policy and are moving forward
with national implementation of this survey. The CAHPS[supreg] Hospice
Survey is a component of CMS' quality reporting program that emphasizes
the experiences of hospice patients and their primary caregivers listed
in the hospice patients' records. Measures from the survey will be
submitted to the National Quality Forum (NQF) for approval as hospice
quality measures. Please refer to our extensive discussion of the
Hospice Experience of Care Survey in the Hospice Wage Index FY 2014
final rule for a description of the measurements involved and their
relationship to the statutory requirement for hospice quality reporting
(78 FR 48261-482-66).
a. Background and Description of the Survey
Before the development of the CAHPS[supreg] Hospice Survey, there
was no official national standard hospice experience of care survey
that included standard survey administration protocols. The
CAHPS[supreg] Hospice Survey will include detailed survey
administration protocols which will allow for fair comparisons across
hospices.
CMS developed the CAHPS[supreg] Hospice Survey with input from many
stakeholders, including other government agencies, industry
stakeholders, consumer groups and other key individuals and
organizations involved in hospice care. The Survey was designed to
measure and assess the experiences of patients who died while receiving
hospice care as well as the experiences of their informal caregivers.
The goals of the survey are to--
Produce comparable data on patients' and caregivers'
perspectives of care that allow objective and meaningful comparisons
between hospices on domains that are important to consumers;
Create incentives for hospices to improve their quality of
care through public reporting of survey results; and
Hold hospice care providers accountable by informing the
public about the providers' quality of care.
The development process for the survey began in 2012 and included a
[[Page 26567]]
public request for information about publically available measures and
important topics to measure (78 FR 5458); a review of the existing
literature on tools that measure experiences with end-of-life care;
exploratory interviews with caregivers of hospice patients; a technical
expert panel attended by survey development and hospice care quality
experts; cognitive interviews to test draft survey content;
incorporation of public responses to Federal Register notices (78 FR
48234) and a field test conducted by CMS in November and December 2013.
Thirty-three hospice programs from 29 hospice organizations
participated in the field test, which was designed to assess survey
administration procedures among hospices of varying size, geographic
region, chain status, ownership, and urbanicity. Respondents were
primary caregivers of patients who died while receiving hospice care in
the prior 2 to 5 months. In all, 1,136 respondents, representing the
three main settings of hospice care (home, nursing home, and inpatient,
including freestanding hospice inpatient unit, and acute care
hospitals), completed the field test survey. Field test survey data
were analyzed to identify for removal survey questions which exhibited
little variation between hospices or for which there was little room
for hospice improvement. Field test survey data were further analyzed
to identify composite measures of hospice performance, including
Communication, Care Coordination, Getting Timely Care, Treating Your
Family Member with Respect, Providing Emotional Support, and Getting
Help for Symptoms.
The CAHPS[supreg] Hospice Survey treats the dying patient and his
or her informal caregivers (family members or friends) as the unit of
care. The Survey seeks information from the informal caregivers of
patients who died while enrolled in hospices. Caregivers will be
identified using hospice records. Fielding timelines give the
respondent some recovery time (two to three months), while
simultaneously not delaying so long that the respondent is likely to
forget details of the hospice experience. The survey focuses on topics
that are important to hospice users and for which informal caregivers
are the best source for gathering this information. These include
communications with hospice staff, treatment of symptoms, pain
medication, cooperation among caregivers, treating patients with
dignity and respect, and spiritual support offered by the hospice.
Caregivers will 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 are
required to conduct the survey to meet the hospice quality reporting
requirements, but individual caregivers will respond only if they
voluntarily choose to do so. As part of national implementation we will
launch a Web site intended as the primary information resource for
hospices and vendors (www.hospicecahpssurvey.org). The Web site is
expected to launch in the summer of 2014. The launch date will be
announced at the Home Health, Hospice, and Durable Medical Equipment
Open Door forum conducted by CMS (http://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/ODF_HHHDME.html).
The CAHPS[supreg] Hospice Survey will initially be available in
English and Spanish. CMS will provide additional translations of the
survey over time in response to suggestions for any additional language
translations. Requests for additional language translations should be
made to the CMS Hospice CAHPS[supreg] Project Team at
[email protected].
In general, hospice patients and their caregivers are eligible for
inclusion in the survey sample with the exception of the following
ineligible groups: primary caregivers of patients under the age of 18
at the time of death; primary caregivers of patients who died within 48
hours of admission to hospice care; patients for whom no caregiver is
listed or available, or for whom caregiver contact information is not
known; patients whose primary caregiver is a legal guardian unlikely to
be familiar with care experiences; patients for whom the primary
caregiver has a foreign (Non-US or US Territory address) home address;
patients or caregivers of patients who request that they not be
contacted (those who sign ``no publicity'' requests while under the
care of hospice or otherwise directly request not to be contacted) .
Identification of patients and caregivers for exclusion will be based
on hospice administrative data.
Hospices with fewer than 50 decedents during the prior calendar
year are exempt from the CAHPS[supreg] Hospice Survey data collection
and reporting requirements for payment determination. Hospices with 50
to 699 decedents in the prior year (n = 2,326 in 2012) will be required
to survey all cases. For large hospices with 700 or more decedents in
the prior year (n = 274 in 2012), a sample of 700 will be drawn under
an equal-probability design.
For national implementation, we have assumed an eligibility rate of
85% and a response rate of 50%, based on experience in the 2013 field
test of the CAHPS[supreg] Hospice Survey instrument. These rates will
result in an estimated 300 completed questionnaires for each large
hospice (700 or more decedents in the calendar year) and between 21 and
300 completed questionnaires for hospices with between 50 and 699
decedents during the calendar year. Assuming a total of 300 completes
within each hospice and an intraclass correlation coefficient (ICC) of
0.01, which measures the amount of variability between hospices, we
would achieve an interunit reliability of 0.75. Note that in Medicare
CAHPS[supreg] a reliability of 0.75 is regarded as a minimal acceptable
standard.
We will move forward with a model of national survey implementation
which is similar to that of other CMS patient experience of care
surveys. Medicare-certified hospices will contract with a third-party
vendor that is CMS-trained and approved to administer the survey on
their behalf. Hospices are required to contract with independent survey
vendors to ensure that the data are unbiased and collected by an
organization that is trained to collect this type of data. It is
important that survey respondents feel comfortable sharing their
experiences with an interviewer not directly involved in providing the
care. We have successfully used this mode of data collection in other
settings, including for Medicare-certified home health agencies. The
goal is to ensure that we have comparable data across all hospices.
Hospices will be required to provide their vendor with the sampling
frame on a monthly basis. Participation requirements for the survey
begin January 1, 2015 for the FY 2017 Annual Payment Update. For
hospices, this means they will have to start conducting the survey as
of January 1, 2015 and will incur the costs of hiring a survey vendor.
The survey vendor would be the business associate of the hospice.
A list of approved vendors will be provided on the CAHPS[supreg]
Hospice Survey Web site closer to the launch of national
implementation. Beginning summer 2014 interested vendors may apply to
become approved CAHPS[supreg] Hospice Survey vendors. The application
process will be online at www.hospicecahpssurvey.org. In this rule we
propose to codify the requirements for being an approved
[[Page 26568]]
CAHPS[supreg] Hospice Survey vendor for the FY 2017 APU.
Consistent with many other CMS CAHPS[supreg] surveys that are
publicly reported on CMS Web sites, CMS will publicly report hospice
data when at least 12 months of data are available, so that valid
comparisons can be made across hospice providers in the United States,
to help patients, family and friends choose a hospice program for
themselves or their loved ones.
b. Participation Requirements To Meet Quality Reporting Requirements
for the FY 2017 APU
In section 3004 of the Affordable Care Act, the Secretary is
directed to establish quality reporting requirements for Hospice
Programs. The CAHPS[supreg] Hospice Survey is a component of the CMS
Quality Reporting Requirements for the FY 2017 APU and subsequent
years.
The CAHPS[supreg] Hospice Survey is the only nationally implemented
survey of civilian patient and caregiver experiences with hospice that
includes both a standard questionnaire and standard survey
administration protocols. Such standardization is needed in order to
establish that the resulting survey data is comparable across hospices
and is suitable for public reporting.
The CAHPS[supreg] Hospice Survey includes the measures detailed
below. The measures map directly to the CAHPS[supreg] Hospice Survey.
The individual survey questions that comprise each measure are listed
under the measure. These measures are in the process of being submitted
to the National Quality Forum (NQF).
Table 9--Hospice Experience of Care Survey Quality Measures and Their
Items
------------------------------------------------------------------------
-------------------------------------------------------------------------
Hospice Team Communication
How often did the hospice team listen carefully to you when you
talked with them about problems with your family member's hospice
care?
While your family member was in hospice care, how often did the
hospice team listen carefully to you?
While your family member was in hospice care, how often did the
hospice team explain things in a way that was easy to understand?
While your family member was in hospice care, how often did the
hospice team keep you informed about your family's condition?
While your family member was in hospice care, how often did the
hospice team keep you informed about when they would arrive to care
for your family member?
Getting Timely Care
While your family member was in hospice care, when you or your
family member asked for help from the hospice team, how often did
you get help as soon as you needed it?
How often did you get the help you needed from the hospice team
during evenings, weekends, or holidays?
Treating Family Member with Respect
While your family member was in hospice care, how often did the
hospice team treat your family member with dignity and respect?
While your family member was in hospice care, how often did you feel
that the hospice team really cared about your family member?
Providing Emotional Support
In the weeks after your family member died, how much emotional
support did you get from the hospice team?
While your family member was in hospice care, how much emotional
support did you get from the hospice team?
Getting Help for Symptoms
How often did your family member receive the help he or she needed
from the hospice team for feelings of anxiety or sadness?
Did your family member get as much help with pain as he or she
needed?
How often did your family member get the help he or she needed for
constipation?
How often did your family member get the help he or she needed for
trouble breathing?
Information Continuity
While your family member was in hospice care, how often did anyone
from the hospice team give you confusing or contradictory
information about your family member's condition or care?
Understanding the Side Effects of Pain Medication
Side effects of pain medicine include things like sleepiness. Did
any member of the hospice team discuss side effects of pain
medicine with you or your family member?
Getting Hospice Care Training (Home Setting of Care Only)
Did the hospice team give you enough training about what to do if
your family member became restless or agitated?
Did the hospice team give you enough training about if and when to
give more pain medicine to your family member?
Did the hospice team give you enough training about how to help your
family member if he or she had trouble breathing?
Did the hospice team give you enough training about what side
effects to watch for from pain medicine?
------------------------------------------------------------------------
In order to comply with CMS's quality reporting requirements,
hospices will be required to collect data using the Consumer Assessment
of Healthcare Providers and Systems (CAHPS[supreg]) Hospice Survey.
Hospices would be able to comply by utilizing only CMS-approved third
party vendors that are in compliance with the provisions of proposed
Sec. 418.312(e).
In the FY Hospice Wage Index and Rate Update final rule (78 FR
48234), we stated that national implementation of the CAHPS[supreg]
Hospice Survey will begin with a ``dry run'' in the first quarter of CY
2015. Hospices will be required to contract with an approved survey
vendor to conduct a dry run of the survey for at least one month during
January 2015, February 2015, or March 2015. During this period the
survey vendor will follow all the national implementation procedures,
but the data will not be publicly reported. The dry run will provide
hospices and their vendors with the opportunity to work together under
test circumstances.
Beginning April 1, 2015, all hospices would be required to
participate in the survey on an ongoing monthly basis. This means
hospices need to contract with a survey vendor to conduct the survey
monthly on their behalf. Participation for at least 1 month during the
dry run, plus monthly participation for the 9 months between April 2015
and December 2015 (inclusive) will be required to meet the pay for
reporting requirement of the HQRP for the FY 2017 APU.
Approved CAHPS[supreg] Hospice Survey vendors will submit data on
the hospice's behalf to the CAHPS[supreg] Hospice Survey Data Center.
The proposed deadlines for data submission occur quarterly and are
shown in Table 9 below. Deadlines are final. No late submissions will
be accepted. Hospice providers are responsible for making sure that
their vendors are submitting data in a timely manner.
[[Page 26569]]
Table 10--Data Submission Dates 2015-2016 for CAHPS[supreg] Hospice
Survey
------------------------------------------------------------------------
Quarterly data submission
Sample months deadlines
------------------------------------------------------------------------
Dry Run (January-March 2015)......... August 12, 2015.
Monthly data collection April-June November 1, 2015.
2015 (Q2).
Monthly data collection July- February 10, 2016.
September 2015 (Q3).
Monthly data collection October- May 11, 2016.
December 2015 (Q4).
------------------------------------------------------------------------
In the FY 2014 Hospice Wage Index and Rate Update final rule, we
exempted very small hospices from CAHPS[supreg] Hospice Survey
requirements. Hospices that have fewer than 50 survey-eligible deceased
patients in the period from January 1, 2014 through December 31, 2014
will be exempt from CAHPS[supreg] Hospice Survey data collection and
reporting requirements for the 2017 APU. To qualify for the survey
exemption for FY 2017, hospices must submit an exemption request form.
This form will be available on the CAHPS[supreg] Hospice Survey Web
site (www.hospicecahpssurvey.org). Hospices are required to submit to
CMS their total unique patient count for the period of January 1, 2014
through December 31, 2014. The due date for submitting the exemption
request form is August 12, 2015.
c. Participation Requirements To Meet Quality Reporting Requirements
for the FY 2018 APU
To meet participation requirements for the FY 2018 APU, we propose
that hospices collect data on an ongoing monthly basis from January
2016 through December 2016 (inclusive). Data submission deadlines for
the 2018 APU will be announced in future rulemaking.
We propose to exempt very small hospices. Hospices that have fewer
than 50 deceased patients in the period from January 1, 2015 through
December 31, 2015 will be exempt from CAHPS[supreg] Hospice Survey data
collection and reporting requirements for the FY 2018 payment
determination. To qualify, hospices must submit an exemption request
form. This form will be available on the CAHPS[supreg] Hospice Survey
Web site (www.hospicecahpssurvey.org). Hospices are required to submit
to CMS their total unique patient count for the period of January 1,
2015 through December 31, 2015. The due date for submitting the
exemption request form is August 10, 2016.
d. Vendor Participation Requirements for the 2017 APU
We have previously stated that CMS will train and approve vendors
to administer CAHPS[supreg] Hospice Survey on behalf of hospices (78 FR
48233). In addition we stated that hospices will be required to
contract with an approved survey vendor and to provide the sampling
frame to the approved vendor on a monthly basis.
We propose that approved survey vendors must meet all of the
minimum business requirements and follow the detailed technical
specifications for survey administration as published in the
CAHPS[supreg] Hospice Survey specifications manual, which will be
posted on the Survey Web site. In addition, to the specifications
manual, the Web site will include information and updates regarding
survey implementation and technical assistance.
We propose to codify the CAHPS[supreg] Hospice Survey vendor
requirements to be effective with the FY 2017 APU (as proposed in Sec.
418.312). We propose that applicants that wish to become approved
CAHPS[supreg] Hospice Survey vendors must have been in business for a
minimum of 4 years and have conducted surveys for a minimum of 3 years
using each the modes of survey administration for which they are
applying. In addition the organization must have been conducting
``surveys with patients'' for at least 2 years immediately preceding
the application to become a survey vendor for the CAHPS[supreg] Hospice
Survey. For purposes of the approval process for CAHPS[supreg] Hospice
Survey vendors, a ``survey of individual patients'' is defined as the
collection of data from at least 600 individual patients selected by
statistical sampling methods and the data collected are used for
statistical purposes.
Vendors may not use home-based or virtual interviewers to conduct
the CAHPS[supreg] Hospice Survey, nor may they conduct any survey
administration processes (e.g. mailings) from a residence in order to
ensure the confidentiality of data.
The following are examples of data collection activities would not
satisfy the requirement of valid survey experience for approved vendors
as defined for the CAHPS[supreg] Hospice Survey, and these would not be
considered as part of the experience required of an approved vendor for
CAHPS[supreg] Hospice Survey.
Focus groups, cognitive interviews, or any other
qualitative data collection activities;
Surveys of fewer than 600 individuals;
Surveys conducted that did not involve using statistical
sampling methods;
Internet or Web-based surveys; and
Interactive Voice Recognition Surveys.
We also propose that no organization, firm, or business that owns,
operates, or provides staffing for a hospice is permitted to administer
its own Hospice CAHPS[supreg] survey or administer the survey on behalf
of any other hospice in the capacity as a Hospice CAHPS[supreg] survey
vendor. Such organizations will not be approved by CMS as CAHPS[supreg]
Hospice Survey vendors.
e. Annual Payment Update
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, unless
covered by specific exemptions. Any such reduction would not be
cumulative and would not be taken into account in computing the payment
amount for subsequent FYs. We propose to add the CAHPS[supreg] Hospice
Survey to the Hospice Quality Reporting Program requirements for the FY
2017 payment determination and determinations for subsequent years.
To meet the FY 2017 requirements, hospices will
participate in a dry run for at least 1 month of the first quarter of
CY 2015 (January 2015, February 2015, March 2015) and hospices must
collect the survey data on a monthly basis for the months of April 1,
2015 through December 31, 2015 in order to qualify for the full APU.
To meet the HQRP requirements for the FY 2018 payment
determination, hospices would collect survey data on a monthly basis
for the months of January 1, 2016 through December 31, 2016 in order to
qualify for the full APU.
[[Page 26570]]
f. CAHPS[supreg] Hospice Survey Oversight Activities
We propose that vendors and hospice providers be required to
participate in CAHPS[supreg] Hospice Survey oversight activities to
ensure compliance with Hospice CAHPS[supreg] technical specifications
and survey requirements. The purpose of the oversight activities is to
ensure that hospices and approved survey vendors follow the
CAHPS[supreg] Hospice Survey technical specifications and thereby
ensure the comparability of CAHPS[supreg] Hospice Survey data across
hospices.
We propose that the reconsiderations and appeals process for
hospices that fail to meet the Hospice CAHPS[supreg] data collection
requirements will be part of the Reconsideration and Appeals process
already developed for the Hospice Quality Reporting program.
We encourage hospices interested in learning more about the
CAHPS[supreg] Hospice Survey to visit the CAHPS[supreg] Hospice Survey
Web site: www.hospicecahpssurvey.org. The launch date for this Web site
will be announced at the Home Health, Hospice & Durable Medical
Equipment Open Door Forum. We expect the Web site to be launched during
the summer of 2014. You can contact CMS hospice team at
[email protected].
7. Procedures for Payment Year 2016 and Subsequent Years
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule (78 FR 48267), we notified hospice providers of the opportunity to
seek reconsideration of our initial non-compliance decision for the FY
2014 and FY 2015 payment determinations. We stated that we will notify
hospices found to be non-compliant with the HQRP reporting requirements
that they may be subject to the two percentage point reduction in their
annual payment update. The process for filing a request for
reconsideration is described on the CMS Web site at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Reconsideration-Requests.html. We
propose to codify this process at Sec. 418.312.
Finally, we also propose to codify at Sec. 418.306 that beginning
with FY 2014 and each subsequent FY, the Secretary shall reduce the
market basket update by 2 percentage points for any hospice that does
not comply with the quality data submission requirements with respect
to that FY.
We invite public comment on all of the proposals in this section
and the associated regulations text at Sec. 418.312 and in Sec.
418.306 in section VI.
I. Coordination of Benefits Process and Appeals for Part D Payment for
Drugs While Beneficiaries Are Under a Hospice Election
The statutory definition of the term ``covered Part D drug'', as
specified in section 1860D-2(e)(2)(B) of the Social Security Act,
excludes a drug if payment for such a drug, as so prescribed and
dispensed or administered with respect to a Part D eligible individual,
is available (or would be available but for the application of a
deductible) under Part A or B for that individual. Therefore, drugs and
biologicals for which coverage is available under the Medicare Part A
per-diem payment to a hospice program are excluded from coverage under
Part D. Our previous understanding was that hospice coverage of drugs
was very broad and very inclusive. Therefore, Part D payment for drugs
furnished to hospice beneficiaries would be rare and the need for
controls was not critical.
Section 1861(dd) of the Act states the hospice is responsible for
covering all drugs or biologicals for the palliation and management of
the terminal illness and related conditions. Our stated intention in
the 1983 Hospice final rule (48 FR 56010) was that the hospice benefit
provides virtually all care for the terminally ill individual. Despite
our intention for a comprehensive and holistic benefit, claims data
presented in section III.A.4 in this proposed rule shows that in 2012
there was over $1 billion in additional Medicare spending for
beneficiaries during a hospice election. Gross covered drug costs under
Part D for beneficiaries during a hospice election totaled $417.9
million. Of this total, Medicare reimbursed approximately $334.9
million, and beneficiaries contributed $48.2 million in possibly
unnecessary cost-sharing. This suggests that hospice services are
possibly being ``unbundled,'' resulting in duplicate costs to the
Medicare program. To ensure that only costs for drugs that are
unrelated to the terminal illness and related conditions are covered
under Part D, we are considering defining ``terminal illness'' and
``related conditions'' in the regulations at Sec. 418.3 (see section
III.B for more information on the definitions we are considering).
CMS has previously issued a number of policy documents addressing
our expectations concerning how Part D sponsors are to ensure that Part
D drugs are provided only when those drugs are not covered under Part A
or B as so prescribed and dispensed or administered for that
individual. Since the hospice benefit was created with the expectation
that virtually all care that is needed by the terminally ill patient
and all drug needs at end of life would be covered by the hospice
benefit, we believed that Part D coverage would be rare, and that
hospices would make appropriate determinations consistent with the 1983
Hospice final rule (48 FR 56010 through 56011). Prior to the 2014 Final
Call Letter, our guidance included an October 22, 2010 memorandum
(titled, ``Preventing Part D Payment for Hospice Drugs) and a 2012 Call
Letter (dated April 4, 2011 and available at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/Downloads/Announcement2012final.pdf) instructing Part D sponsors that
they should pay for drugs that may be covered under the hospice per-
diem payment, and retrospectively determine payment responsibility
(``pay and chase''). On June 28, 2012, the HHS Office of Inspector
General (OIG) issued a final report documenting the findings of its
review of Medicare payments for prescription drugs for beneficiaries
who had elected hospice.\41\ The OIG's review focused on four
categories of drugs typically used to treat symptoms generally
experienced by beneficiaries in hospice at end of life and concluded
the Medicare program could be paying twice for prescription drugs for
hospice beneficiaries. The OIG recommended that CMS require Part D
sponsors to develop controls to prevent Part D payment for drugs
included in the hospice per diem payments. Therefore, in the 2014 Call
Letter, we stated that when a sponsor receives a Daily Transaction
Reply Report (DTRR) from CMS showing a beneficiary has elected hospice,
the sponsor must have controls in place to comply with the requirement
that Part D does not pay for drugs and biologicals that can be covered
under the Medicare Part A per-diem payment to a hospice. Although we
strongly encouraged sponsors to place beneficiary-level prior
authorization (PA) requirements on the four categories of prescription
drugs identified by the OIG, including: analgesics, antinauseants
(antiemetics), laxatives, and antianxiety drugs, we permitted sponsors
to use other approaches, such as pay-and-chase, to resolve payment
responsibility in these scenarios.
---------------------------------------------------------------------------
\41\ Office of the Inspector General, Department of Health and
Human Services. Medicare Could be Paying Twice for Prescription
Drugs for Beneficiaries in Hospice. June, 2012. A-06-10-00059.
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Following the issuance of this guidance, we received questions
[[Page 26571]]
indicating our policy statements were being misinterpreted by some
parties. The hospice industry expressed uncertainty with the
definitions of ``terminal condition'' and ``related conditions,'' and
Part D sponsors were thus uncertain about whether payment should be the
responsibility of either the hospice (Part A) or the plan (Part D).
Therefore, on December 6, 2013, we issued a memorandum (titled, ``Part
D Payment for Drugs for Beneficiaries Enrolled in Hospice'') providing
clarified guidance for review and requesting comment on whether the
industry's questions had been addressed. We received 130 comments, with
many requesting that CMS undertake rulemaking to clarify for all
parties what is, and is not, related to the terminal illness and
related conditions, thereby providing the basis for clear criteria for
determining payment responsibility between the hospice benefit and Part
D. Therefore, we are considering defining ``terminal illness'' and
``related conditions'' (see section III.B of this proposed rule).
1. Part D Sponsor Coordination of Payment With Hospice Providers
Many commenters on the December 6, 2013 guidance also requested
that CMS establish and require the use of standardized processes for
determining payment responsibility, recovering payment when the wrong
party has paid, and resolving disputes regarding payment
responsibility. We agree with these commenters as well as those who
suggested we seek stakeholder input. Thus, we are not proposing any
requirements at this time, but are only soliciting comments on
processes we are considering to facilitate the coordination of payment
between Part D sponsors and hospices.
Specifically, we are considering amending Sec. 423.464 by adding a
new paragraph (i): ``Coordination with Medicare hospices,'' which would
require that a Part D sponsor communicate and coordinate with Medicare
hospices in determining coverage for drugs whenever a coverage
determination process is initiated or a hospice furnishes information
regarding a beneficiary's hospice election and/or drug profile. We are
not considering establishing a requirement that the Part D sponsor
initiate such communication and coordination. Rather, we are
considering requiring that the Part D sponsor communicate and
coordinate once the hospice initiates communication with the Part D
sponsor to report information concerning a hospice election and/or drug
profile, or the beneficiary or the beneficiary's appointed
representative or the prescriber initiates a coverage determination
request. In other words, a hospice may initiate the communication by
reporting a beneficiary's hospice status, which would include the
notice of election (NOE) or the notice of termination/revocation
(NOTR). The hospice may also provide drug profile information, meaning
identification of any drug that the hospice has determined is unrelated
to the terminal illness or related conditions and an explanation of why
the drug is unrelated. Hospices may identify a beneficiary's Part D
plan by asking the beneficiary for the plan information on his or her
member identification card or by requesting the hospice pharmacy submit
a standard electronic eligibility transaction (that is, an E1) to the
CMS Part D Transaction Facilitation contractor. The Facilitator will
seek to match the beneficiary's identifying information on the E1
request to the contractor's Medicare Part D enrollment data. If a match
is found, the transaction response will identify the Part D plan and
provide on-line billing information and the sponsor's help desk
telephone number.
To facilitate the communication and coordination, CMS reports
hospice election information to Part D plan sponsors on the Daily
Transaction Reply Report (DTRR). This information includes a hospice
indicator, a hospice start date and a hospice termination date. Updated
data are reported to reflect a new benefit period or a termination/
revocation date. Because communication and coordination between the
Part D sponsor and the hospice are necessary to determine coverage for
drugs for beneficiaries who elect hospice, we expect that sponsors will
promptly upload the DTRR data into their systems. As noted previously
in CMS-issued Part D guidance, only a single hospice benefit period can
be reported on the DTRR. As a result, sponsors need to store the
hospice data in their systems so historical data are available when
needed for claims adjudication and adjustments. Sponsors also can
access additional hospice data via the Medicare Advantage and
Prescription Drug system (MARx) User Interface, including the hospice
provider number, prior benefit period start and end dates, and the
hospice termination/revocation indicator.
Although we are proposing changes in this rule at section III.E
that are expected to result in improvement to the timeliness of the
CMS' reporting of the hospice election information, some time lag will
remain in hospices filing their election information and plan sponsors'
ability to access that information. One approach, recommended by
hospice organizations, to address the time lag is to permit hospices to
initiate communication with the beneficiary's Part D sponsor prior to a
claim submission, such as at hospice election, to provide early notice
of the election. When hospices provide this information, we are
considering requiring Part D sponsors to accept it and use it to
adjudicate requests for coverage until the official notice via the DTTR
is received from CMS. We would expect sponsors to have processes in
place to monitor receipt of the information from CMS and communicate
with the hospice to resolve discrepancies between hospice-reported
information and CMS-reported data.
We also are considering requiring that a Part D sponsor determine
Part A versus Part D coverage at point-of-sale for any drugs for
beneficiaries who have elected the hospice benefit as of the date the
prescription is presented to be filled. By this we mean Part D sponsors
would use HIPAA standard transactions to effectuate the Part D prior
authorization requirement. The point of sale transaction related to
Part A versus Part D coverage begins when a Part D sponsor receives a
pharmacy claim for a beneficiary who has elected hospice, and rejects
the claim with the following National Council for Prescription Drug
Programs (NCPDP)-approved reject coding. Currently, this consists of:
(1) reject code A3 ``This Product May Be Covered Under Hospice--
Medicare A''; (2) reject code 75 ``Prior Authorization Required''; and
(3) reject code 569 ``Provide Notice: Medicare Prescription Drug
Coverage and Your Rights.'' In addition to the reject coding, sponsors
would employ point-of-sale messaging that indicates a hospice is
involved and that an explanation is needed that the drug is unrelated
to the terminal illness and related conditions. The point-of-sale
messaging must also include the 24-hour pharmacy help desk phone number
to call with questions.
The beneficiary, the beneficiary's appointed representative, or the
prescriber must contact the sponsor to initiate a coverage
determination request which would require the plan sponsor to obtain
information from the hospice provider that the drug is unrelated to the
terminal illness and related conditions. The standardized pharmacy
notice instructs the enrollee on how to contact his or her plan and
explains an enrollee's right to receive, upon request, a coverage
determination (including a detailed written decision) from the Part D
sponsor regarding his or
[[Page 26572]]
her Part D prescription drug benefits. Part D sponsors must arrange
with their network pharmacies (including mail-order and specialty
pharmacies) to distribute the standardized notice.
After the Part D sponsor receives the coverage determination
request and the PA process is initiated, the Part D sponsor would
expect to receive either a verbal explanation or a completed PA form
from the hospice within the timeframes proposed in this rule in Sec.
418.305. Upon receiving either a verbal explanation of why the
prescribed drug is unrelated to the beneficiary's terminal illness and
related conditions or the completed PA form from the hospice, the Part
D sponsor would be required to use the criteria described in the
definitions of ``terminal illness'' and ``related conditions'', as we
indicate we are considering in in this rule in section III.B, to
determine whether the documentation establishes that the drug as
prescribed and dispensed or administered is unrelated to the terminal
illness and related conditions and, thus, satisfies the beneficiary-
level hospice PA. If it does, the Part D sponsor would instruct the
pharmacy on how to override the edit or provide coding to the pharmacy
that would permit the claim transaction to process. Whenever an
explanation of why the prescribed drug is unrelated to the
beneficiary's terminal illness and related conditions is provided
verbally, CMS is considering requiring the Part D sponsor to accurately
document the date and content of the notice and explanation and to
retain that documentation.
If the sponsor disagrees with the hospice's determination that the
drug is unrelated to the terminal illness and related conditions, or
determines that the documentation is insufficient to satisfy the
beneficiary-level hospice PA, the Part D sponsor would initiate
communication with the hospice and attempt to resolve the dispute. If
the Part D sponsor and the hospice are unable to reach a resolution,
the Part D sponsor may request a review by the independent review
entity (IRE) we indicate in this rule we are considering.
Since the plan sponsor's decision about whether the PA is satisfied
is a coverage determination, the Part D sponsor must notify the
enrollee (and, if applicable, the prescriber) of its decision in
accordance with the applicable adjudication timeframes and notice rules
in Part 423, Subpart M. For example, if an enrollee, the enrollee's
representative, or the prescriber's request is processed as an
expedited coverage determination, the plan sponsor must provide notice
of its decision as expeditiously as the enrollee's health condition
requires, but no later than 24 hours after receiving the request or,
for an exceptions request, the prescriber's supporting statement. If an
appeal is requested following an adverse coverage determination
decision, an expedited redetermination (plan level appeal) requires the
plan to notify the enrollee (and prescriber, if appropriate) of the
decision as expeditiously as the enrollee's health condition requires,
but no later than 72 hours from receiving the request. The 72 hour
expedited timeframe also applies to the IRE reconsideration level of
review.
In those instances in which the Part D sponsor disagrees with the
hospice's determination that the prescribed drug is unrelated to the
terminal illness and related conditions, the denial notice would
explain the Part D sponsor's intention to seek independent review of
the hospice's determination, if applicable. Since Part D coverage of a
drug depends on whether the drug is covered under the hospice benefit,
if the hospice does not respond or refuses to provide the required
explanation regarding why the drug is unrelated to the terminal illness
and related conditions, Part A coverage cannot be ruled out and the PA
would be unfulfilled.
In addition to providing early notice of a hospice election or
termination/revocation, the hospice may identify any drugs determined
to be coverable under Part D for a beneficiary and provide an
explanation of why the drugs are unrelated to the terminal illness and
related conditions. When the hospice furnishes the documentation to
satisfy the PA, prior to a claim submission, we are considering
requiring Part D sponsors to accept the information from the hospice
either verbally or on the PA form. Once the information is received
from the hospice provider, the Part D sponsor would determine whether
it is sufficient to establish that the drug as prescribed and dispensed
or administered is unrelated to the terminal illness and related
conditions. If it does, the Part D sponsor would reflect that the PA is
satisfied for this drug in their system. If the Part D sponsor
determines that the explanation provided is unsatisfactory, the Part D
sponsor would communicate this to the hospice. The Part D sponsor and
hospice may attempt to resolve the coverage issue, but should they be
unable to do so, the plan sponsor would be able to seek review by the
IRE.
We also are considering requiring that a Part D sponsor process
retrospective claims adjustments and issue requests for repayment and
or refunds for drugs that are excluded from Part D by virtue of their
being covered under the hospice benefit in accordance with the
timeframes in Sec. 423.466(a). The amount requested for repayment and
subsequently repaid would be the total amount paid to the pharmacy,
including the negotiated price for the drug paid by the Part D sponsor,
the beneficiary cost sharing and any other payments made on the claim
as reported by the sponsor on the prescription drug event record to
CMS, such as the low-income subsidy and payments made by supplemental
insurers. Under the process we are considering, the Part D sponsor
would be responsible for refunding beneficiary cost-sharing as well as
the amounts paid by supplemental payers on claims for which the sponsor
received an NCPDP reporting (that is, NX) transaction. The
Part D sponsor would also be responsible for refunding amounts the
hospice has paid to the pharmacy for drugs that should have been
covered under Part D, including any beneficiary cost-sharing.
We believe that the definitions of ``terminal illness'' and
``related conditions'' in section III.B of this proposed rule would
guide hospices, prescribers, and Part D sponsors by clarifying and
strengthening the concepts of holistic and comprehensive hospice care.
Thus, through a good faith effort, Part D sponsors and hospices would
be able to resolve issues of payment responsibility for prescription
drugs using the processes under consideration and outlined in this
proposed rule.
While we expect the overwhelming preponderance of cases involving
payment coverage responsibility to be resolved using the communication
and coordination of benefits processes we are considering, we recognize
that there may be some instances where the Part D sponsor and the
hospice will be unable to agree on which entity is responsible for
covering a prescription drug. Therefore, we are considering enabling
the Part D sponsor to request review from the IRE that has contracted
with CMS. As noted above, drugs available under Part A as prescribed
and dispensed or administered are excluded by statute from coverage
under Part D. We believe that the coverage exclusion set forth at
section 1860D-2(e)(2)(B) of the Act provides CMS with the authority to
implement a process whereby the Part D sponsor can request an
independent review of a disagreement over payment responsibility with a
Part A hospice. In addition, section 1860D-24 of the Act requires Part
D sponsors to coordinate
[[Page 26573]]
with other drug plans, including with other health benefit plans or
programs that provide coverage or financial assistance for the purchase
or provision of prescription drug coverage on behalf of Part D eligible
individuals. We believe these statutory provisions support the
coordination and independent review processes being considered, as
these processes would help ensure that payment responsibility is
properly determined and that drugs are not being inappropriately
covered and paid for by the Part D program.
The independent review process considered would be made part of the
regulations at 42 CFR Part 423, Subpart J, given the nexus between the
coordination of benefits processes considered for inclusion at Sec.
423.464(i) and the right to request an independent review if the Part D
sponsor disagrees with the information provided by the hospice or
prescriber. Under the provisions being considered, the Part D sponsor
would have to communicate and coordinate with Medicare hospices in
determining coverage for prescription drugs. As part of this process,
the hospice would be required to furnish information regarding why the
drug is unrelated to the terminal illness and related conditions to
satisfy the beneficiary-level hospice prior authorization (PA)
requirements. The independent review process we are considering would
be separate and distinct from the enrollee appeals process and would
not affect the rights of an enrollee, the enrollee's representative or
the enrollee's prescriber to request an appeal under the administrative
appeal provisions set forth in 42 CFR Part 423, subpart M and subpart
U.
The changes we are considering at Sec. 423.464(i)(4) would enable
the Part D sponsor to request an independent review if the hospice has
furnished information as part of the coordination of benefits and PA
process indicating that the drug is not a covered drug under the Part A
hospice benefit, and the Part D sponsor disagrees with that
determination. To satisfy the beneficiary-level hospice PA requirement,
the hospice would be required to notify the Part D sponsor, verbally or
in writing, of the determination as to whether the need for the
prescription drug is related to the beneficiary's terminal illness and
related conditions and provide a clinical explanation to support that
determination. If the need for the drug is unrelated to the
beneficiary's terminal illness and related conditions, the drug may be
covered under Part D. If the Part D sponsor disagrees with the hospice
or prescriber's explanation, the Part D sponsor would have the right to
file a written request for review with the IRE within 5 calendar days
of the date of notice provided by the hospice or prescriber. If the
hospice or prescriber provides verbal notice of its determination, we
are considering requiring the Part D sponsor to accurately document the
date and content of the notice and explanation and retain that
documentation. We believe that 5 calendar days (from the date the
hospice provider furnishes notice to the plan sponsor that the drug is
unrelated to the beneficiary's terminal illness and related conditions)
would be a reasonable period of time for the hospice provider and plan
sponsor to attempt to resolve any disagreement over payment
responsibility via the coordination processes being considered. In the
interest of promptly resolving disputes over payment responsibility, we
do not believe a longer timeframe for requesting IRE review would be
appropriate, but solicit comments on this 5 calendar day timeframe.
We are considering requiring that the written request for
independent review include relevant clinical documentation and the
explanation provided by the hospice. The IRE would be responsible for
obtaining any additional information it believes is necessary to
determine whether the disputed drug is the payment responsibility of
the hospice or the Part D sponsor. The IRE would notify the hospice
(and prescriber, as appropriate), the Part D sponsor, and the enrollee
of its decision in writing. The IRE's decision would be binding on the
Part D sponsor and the hospice. Decisions made through this review
would not be subject to appeal, but could be reviewed and revised at
the discretion of CMS. We are considering a corresponding change at
418.305(b) specifying the hospice would be bound by the decision made
by the IRE under the change being considered at 423.464(i). If the IRE
review process we are considering were to be proposed and finalized
through future rulemaking, additional guidance related to the IRE's
review, such as adjudication timeframes and specific notice
requirements, would be established in manual guidance or rulemaking.
The following chart summarizes the existing and new requirements
under consideration for Part D sponsor coordination with hospices:
------------------------------------------------------------------------
Process Timeframes
------------------------------------------------------------------------
Communication/Coordination:
Part D sponsors would be required A hospice would be able to
to communicate and coordinate with furnish information to the
a hospice when: Part D sponsor at any time.
The hospice furnishes This communication/coordination
information regarding a process would begin when the
beneficiary's hospice election or beneficiary, the beneficiary's
plan of care; and. appointed representative or
The Part D coverage the prescriber requests a
determination process is coverage determination.
initiated..
Prior Authorization:
Part D sponsors would implement When a coverage determination
beneficiary-level hospice PAs and is requested, sponsors would
NCPDP reject coding at point-of- be required to comply with the
sale (POS) for drugs for existing timeframes of 72
beneficiaries who have elected hours for standard requests
hospice. and 24 hours for expedited
When a claim rejects at POS, the requests, as specified in
beneficiary would be provided with Federal regulation at Sec.
a notice explaining the right to 423.568 and Sec. 423.572
request a coverage determination respectively.
from the plan.
Payment Recovery:
When a Part D sponsor has paid for Once payment responsibility is
drugs prior to receiving determined, the sponsor would
notification of the beneficiary's be required to process any
hospice election, the sponsor adjustments and issue refunds
would be required to determine or recovery notices within 45
payment responsibility for the days, as specified in Federal
drugs, process retrospective regulations at Sec.
claims adjustments, and issue 423.466(a).
refunds or recovery requests.
Independent Review:
[[Page 26574]]
If a sponsor disagrees with a Sponsors would be required to
hospice determination that a drug request an IRE review within 5
is unrelated, the sponsor would be business days of receiving the
able to request an IRE review. IRE hospice's explanation of why a
decisions would be binding on the drug is unrelated and not
sponsor and hospice. covered under the hospice
benefit.
------------------------------------------------------------------------
In formulating the requirements under consideration, we have become
aware that the regulatory requirement for a Part D sponsor to
coordinate with other health benefit plans or programs at Sec. 423.464
(f)(1)(ix) is narrower than the requirement specified in statute.
Section 1860D-24 of the Act requires Part D sponsors to coordinate with
other drug plans, including, as specified in paragraph Sec. 423.464
(b)(5), with other health benefit plans or programs that provide
coverage or financial assistance for the purchase or provision of
prescription drug coverage on behalf of Part D eligible individuals.
However, in codifying this requirement in the regulations at Sec.
423.464(f)(1)(ix), we specified that the other plans or programs are
those that provide coverage or financial assistance for the purchase of
or provision of Part D (emphasis added) prescription drugs. As a
result, the regulation does not include the requirement for Part D
sponsors to coordinate with providers of drugs covered under Part A,
such as hospices, since as noted above, drugs covered as so prescribed
and dispensed or administered under Part A are excluded from the
definition of a covered Part D drug. Since coordination between Part D
sponsors and the Medicare hospices is essential to ensure Part D
statutory coverage requirements are met, to reduce the potential for
erroneous payment under Part D, and to facilitate the recovery of
erroneous payments when they do occur, we also are considering amending
the Part D regulations at Sec. 423.464(f) to align the definition of
other prescription drug coverage in paragraph Sec. 423.464(f)(1)(ix)
with the statute by removing the phrase ``Part D.''
We solicit comments on the changes under consideration regarding
the coordination of benefits process and appeals for Part D payment for
drugs while beneficiaries are under a hospice election.
2. Hospice Coordination of Payment With Part D Sponsors and Other
Payers
As specified in section 1861(dd) of the Act, and in regulation at
42 CFR Part 418, the hospice is responsible for covering all drugs and
biologicals for the palliation and management of the terminal illness
and related conditions. As noted in 418.202(f), drugs and biologicals
for palliation of pain and symptom management are included in the
Medicare Part A per-diem payment to a hospice. Therefore, such drugs
and biologicals are excluded from coverage under Part D (see section
III.I.1). Additionally, our payment regulations at Sec. 418.200
require that, to be covered, hospice services must be consistent with
the plan of care, which must include the drugs and treatment necessary
to meet the needs of the patient (Sec. 418.56(c)(2)).
We have received anecdotal reports from Medicare hospice
beneficiaries that they are not receiving medications related to their
terminal illness and related conditions from their hospice because,
among other stated reasons, those medications are not on the hospice's
formulary. These reports also have stated that hospice beneficiaries
were advised to obtain drugs related to the terminal illness and
related conditions from their Part D prescription drug plans. Per the
regulations at Sec. 418.202(f), hospices must provide all drugs which
are reasonable and necessary to meet the needs of the patient in order
to provide palliation and symptom management of the terminal illness
and related conditions. If the drugs on the hospice formulary are not
providing the relief needed, then the hospice must provide alternatives
in order to relieve pain and symptoms, even if it means providing drugs
that are not on their formularies.
In addition, several hospices have stated that pre-existing,
chronic and/or controlled conditions are not related to the prognosis
of the hospice beneficiary and should not be the responsibility of the
hospice--a concept which is contrary to the hospice philosophy of
providing comprehensive coordinated care to patients at end of life as
described in sections II and III.B of this proposed rule. One hospice
illustrated the issue with an example, a patient that was admitted with
a primary terminal diagnosis of COPD. In the example, the patient also
has diabetes which pre-dates the COPD; the patient uses corticosteroids
to manage the COPD. The diabetes is well managed with an oral
hypoglycemic agent and the patient needs to continue the medication to
manage the diabetes. The hospice argues that since the diabetes is
unrelated to the COPD, the oral hypoglycemic agent medication should
not be covered by hospice. However, increased glucose levels are a
common manifestation of corticosteroid use. While the hospice states
that the admission to hospice is a result of COPD, treatment for the
COPD has the potential to affect glucose levels, and hence the
hypoglycemic agent would be covered by the hospice and not through Part
D. As we stated above, and as required by Sec. 418.202(f), hospices
are to cover all drugs which are reasonable and necessary to meet the
needs of the patient in order to provide palliation and symptom
management of the individual's terminal illness and related conditions.
Treatment decisions should not be driven by costs, as opposed to
clinical appropriateness. Hospices should use thoughtful clinical
judgment, with a patient-centered focus, when developing the hospice
plan of care, including the recommendations for medication management.
As outlined in section III.A.4, $1.2 billion in non-hospice
Medicare spending and beneficiary cost-sharing occurred in CY 2012 for
beneficiaries in hospice elections. In addition, we examined drug costs
incurred by hospices from 2004 to 2012 using hospice cost report data
adjusted to constant 2010 dollars. That analysis revealed a declining
trend in the drug costs per patient-day, with costs declining from a
mean of $20 per patient-day in 2004 to $11 per patient-day in 2012. As
of 2010, MedPAC reports that the aggregate hospice Medicare margin was
7.5 percent, up from 7.4 percent in 2009. Margins varied widely across
the sector. For example, MedPAC reports that the Medicare margins were
19.9 percent at the 75th percentile.\42\ This may suggest that some
hospices could be unbundling items, services, and drugs included in the
per-diem hospice payments they are receiving, and other parts of the
Medicare program are being billed for services that the hospice should
have provided. For example, during a hospice election hospice
beneficiaries have received care and/or services from hospitals,
laboratories, DME suppliers, non-hospice clinicians, which were billed
to Medicare as being unrelated to the terminal illness and related
conditions. We believe that most of these claims were likely related to
the
[[Page 26575]]
hospice terminal illness and related conditions.
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\42\ MedPAC ``Report to the Congress: Medicare Payment Policy'',
March 2013, pp.278.
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To safeguard the integrity of the Medicare Trust Funds and
encourage hospices to coordinate with other providers and payers, and
to ensure that beneficiaries have access to needed services and
medications, we are considering how hospices can coordinate with Part D
plan sponsors and comply with a standardized process for determining
payment responsibility (prior authorization (PA) process), for
recovering payment when the wrong party has paid, and for resolving
disputes regarding payment responsibility. We are not proposing any
requirements at this time, but are soliciting comments on approaches to
these issues.
Currently, the CoPs at Sec. 418.56(e)(5) require hospices to share
information with other non-hospice healthcare providers furnishing
services unrelated to the terminal illness and related conditions. As
described in Sec. 418.100(c)(2), hospices must be available 24 hours a
day and 7 days a week to address beneficiary and family needs. We
expect that any PA process would result in minimal disruption to access
to the drugs presumed to be unrelated to the terminal illness or
related conditions. It would be vital for the hospice to provide
information to respond to a PA as soon as possible to minimize any
potential disruption to the medication needs of the beneficiary. We
believe the information necessary to satisfy a request from any payer
or non-hospice provider would be readily available, since hospices are
required to maintain clinical records per the regulations at Sec.
418.104. We expect the beneficiary's needs for drugs and biologicals at
the end of life would be addressed as soon as possible to maximize
quality of care and access to critical drugs and biologicals. We are
soliciting comments on whether hospices need to determine, in a
specific amount of time, a beneficiary's drug and biological needs and
communicate with the Part D plan sponsor or to the other payer and/or
provider, verbally or in writing, to ensure there is no lapse of
reasonable and necessary drugs and biologicals or other items or
services for the beneficiary. We are particularly interested in the
experiences of Part D sponsors and hospices that successfully
communicate with each other and how both parties ensured that the
beneficiary did not experience any delay in drug coverage. While the
solicitation of comments is focused on coordination between the hospice
and Part D sponsor, the solicitation would apply broadly to any payer
or non-hospice provider.
The PA process described in Section III.I.1 would be a mechanism
that would emphasize the recognition of the hospice and hospice
physician as the clinical point of contact and enable the hospice and
hospice physician to better maintain the professional and clinical
responsibility for hospice patients. Hospices are health care leaders
in coordinating care for beneficiaries at the end of life, and thus we
believe this solicitation fits well within a hospice's usual care
paradigm. The solicitations outlined, above in section III.I.1, could
ensure that hospices and hospice physicians are notified of any
beneficiary medications prescribed by a non-hospice provider, as well
as non-hospice care the beneficiary has initiated without the hospice's
knowledge.
We are also soliciting comments on the steps hospices should take
to reconcile payment responsibility within a specified timeframe that
could be similar to an established timeframe set forth in Part 423,
Subpart M, which also requires that payment responsibility be resolved
within 45 days. We are soliciting comments on whether the determination
of payment responsibility should be resolved within 45 days from the
date of receipt of a repayment request from either the Part D plan
sponsor or the hospice. We are soliciting comments on whether the
hospice would issue a request for a refund from the other payer or
provider for the total amount paid for the item or service within a
specific timeframe and refund to the beneficiary any associated cost-
sharing.
As described in section III.I.1, we believe a majority of cases
involving payment coverage responsibility could be resolved under the
communication and coordination of benefits process. However, we
recognize that there may be instances where the hospice and the Part D
sponsor will be unable to agree on which entity is responsible for the
prescription drug. We are soliciting comments on the impact to hospices
regarding the potential independent review process described in section
III.I.1.
3. Beneficiary Rights and Appeals
Sometimes a beneficiary requests a certain medication that a
hospice cannot or will not provide because the hospice has deemed that
the specific medication is not reasonable and necessary for the
palliation and management of the terminal illness and related
conditions. Coverage of such medication would not be permissible under
Part D coverage since the medication is not for any condition
completely separate and distinct from the terminal illness and related
conditions, nor is it covered under Part A since it is not reasonable
and necessary for the palliation and management of the terminal illness
and related conditions. If the hospice does not provide the medication,
the hospice is not obligated to provide any notice of non-coverage
(including the Advance Beneficiary Notice of Non-coverage or ABN). If
the hospice provides medication it believes is not reasonable and
necessary for the palliation and management of the terminal illness and
related conditions, the hospice must first issue an ABN in order to
charge the beneficiary for the cost of such medication. Regardless of
whether or not the hospice furnishes the drug, if the beneficiary
independently obtains the drug, but believes that the Medicare hospice
should have furnished or covered the cost of the drug as part of the
hospice benefit, the beneficiary may submit a claim for the medication
directly to Medicare on Form CMS-1490S (http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-Items/CMS012949.html). If the claim is
denied, the beneficiary may file an appeal of that determination under
the appeals process set forth in part 405, subpart I.
Beneficiaries who disagree with such medication coverage
determinations may use the Medicare fee-for-service appeals process if
the determination relates to Part A or B coverage, and the Part D
appeals process if the determination relates to Part D coverage.
There may also be instances where a beneficiary prefers a non-
formulary drug because, for example, he or she believes it to be more
efficacious than the formulary drug prescribed by the hospice. In such
instances, the hospice may have determined that the formulary drug
prescribed is reasonable and necessary for the palliation and
management of the terminal illness and related conditions; however, the
beneficiary may prefer another brand of such drug that is off
formulary, which the hospice believes is not reasonable and necessary,
or more expensive but no more effective than the drug in the formulary.
In those cases, the beneficiary may submit quality of care complaints
to a Quality Improvement Organization. We plan to increase our
beneficiary outreach efforts to advise beneficiaries and their
families/caregivers of their rights and the available appeals process
described in this section.
[[Page 26576]]
J. Update on the International Classification of Diseases, 10th
Revision, Clinical Modification (ICD-10-CM) and Coding Guidelines for
Hospice Claims Reporting
3. International Classification of Diseases, 10th Revision, Clinical
Modification (ICD-10-CM)
On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93), was enacted. Section 212 of PAMA, titled
``Delay in Transition from ICD-9 to ICD-10 Code Sets,'' provides that
``[t]he Secretary of Health and Human Services may not, prior to
October 1, 2015, adopt ICD-10 code sets as the standard for code sets
under section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c))
and section 162.1002 of title 45, Code of Federal Regulations.'' As of
now, the Secretary has not implemented this provision under HIPAA. This
means that ICD-9-CM diagnosis codes will continue to be used for
hospice claims reporting until an implementation date for ICD-10-CM is
announced. Diagnosis reporting on hospice claims must adhere to ICD-9-
CM coding conventions and guidelines regarding the selection of
principal diagnosis and the reporting of additional diagnoses.
Additionally, the CMS' Hospice Claims Processing manual (Pub 100-04,
chapter 11) requires that hospice claims include the reporting of
additional/other diagnoses as required by ICD-9-CM coding guidelines.
In the HIPAA 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 current ICD-9-CM Coding Guidelines use the
International Classification of Diseases, 9th Revision, Clinical
Modification (ICD-9-CM) and are available through the CMS Web site at:
http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html or on the CDC's Web site at http://www.cdc.gov/nchs/icd/icd9cm.htm.
4. Coding Guidelines for Hospice Claims Reporting
In the FY 2014 Hospice Wage Index and Payment Rate Update, we
reiterated that diagnosis reporting on hospice claims should include
the appropriate selection of principal diagnoses as well as the other,
additional and coexisting diagnoses related to the terminal illness and
related conditions (78 FR 48254). Additionally, 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 and related
conditions should be reported on the hospice claim. The expectation was
that hospices would report all diagnoses related to the terminal
illness and related conditions on hospice claims to provide accurate
information regarding the hospice beneficiaries for which they are
providing hospice services.
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule, we stated that beginning on October 1, 2014, any claims with
``debility'' or ``adult failure to thrive'' in the principal diagnosis
field will be returned to the provider for more definitive coding (78
FR48252). ``Debility'' and ``adult failure to thrive'' do not provide
enough information to accurately describe Medicare hospice
beneficiaries and the conditions that hospices are managing. Once these
claims are resubmitted with more appropriate diagnosis codes, following
the ICD-9-CM Coding Guidelines, these claims will be processed
accordingly. This is a reminder that claims with ``debility'' and
``adult failure to thrive'' coded in the principal diagnosis field will
be returned to providers for more definitive coding effective October
1, 2014 (for those claims submitted on and after October 1, 2014).
Also in the FY 2014 Hospice Wage Index and Payment Rate Update
final rule, we advised hospice providers to pay particular attention to
dementia diagnoses which are found under two separate ICD-9-CM
classifications: ``Mental, Behavioral, and Neurodevelopmental
Disorders'' and ``Diseases of the Nervous System and Sense Organs''(78
FR48252-48253). Many of the codes relating to dementia manifestations
found under the ICD-9-CM classification, ``Mental, Behavioral, and
Neurodevelopmental Disorders'', are not appropriate as principal
diagnoses because of etiology/manifestation guidelines or sequencing
conventions under the ICD-9-CM Coding Guidelines. ICD-9-CM Coding
Guidelines for this classification state that dementia is most commonly
a secondary manifestation of an underlying causal condition. Codes
found under this classification identify the common behavioral
disturbances of dementia manifestations. Many of the dementia codes
under the ICD-9-CM classification, ``Mental, Behavioral and
Neurodevelopmental Disorders'' have coding conventions that require to
code first the associated neurological condition. Many of the
associated neurological conditions can be found under the
classification, ``Diseases of the Nervous System'', including such
conditions as ``Alzheimer's disease'' and ``Senile Degeneration of the
Brain''. We advise hospices to pay close attention to the various
coding and sequencing conventions found within The Official ICD-9-CM
Guidelines for Coding and Reporting when reporting diagnoses on hospice
claims.
To ensure additional compliance with ICD-9-CM Coding Guidelines we
will implement certain edits from Medicare Code Editor (MCE), which
detect and report errors in the coding of claims data, for all hospice
claims effective October 1, 2014 (for those claims submitted on or
after October 1, 2014). Hospice claims containing inappropriate
principal or secondary diagnosis codes, per ICD-9-CM coding conventions
and guidelines, will be returned to the provider and will have to be
corrected and resubmitted to be processed and paid.
We will implement edits related to etiology/manifestation code
pairs from the MCE; therefore, it is important for hospice providers to
follow the ICD-9-CM Coding Guidelines regarding codes that fall under
this coding convention. The etiology/manifestation coding convention
states that there are certain conditions which have both an underlying
cause (etiology) and subsequent multiple body system manifestations.
For such conditions, ICD-9-CM coding convention requires the underlying
condition be sequenced first, followed by the manifestation. Whenever
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. In most cases, the manifestation codes will have in the code
title, ``in diseases classified elsewhere.'' ``In diseases classified
elsewhere'' codes are never permitted to be used as first-listed or
principal diagnosis codes. They must be used in conjunction with an
underlying condition code and they must be listed following the
underlying condition. An example of this can be found under the
category 294, ``Persistent mental disorders due to conditions
classified elsewhere.'' However, there are manifestation codes that do
not have ``in diseases classified elsewhere'' in the title. For such
codes, there is ``use an additional code'' note at the etiology code
and a ``code first'' note at the manifestation code and the rules for
sequencing apply.
[[Page 26577]]
There are sequencing conventions under ICD-9-CM coding guidelines
that are not accounted for in the MCE edits. There are several dementia
codes under the classification, ``Mental Behavioral and
Neurodevelopmental Disorders'' that have a sequencing convention that
require the underlying physiological condition to be coded first, but
for which there is no edit in the MCE. We will be issuing technical
guidance through a Change Request to include these codes for edits in
the MCE to be consistent for claims processing under ICD-9-CM Coding
Guidelines. We are reminding providers to utilize the ICD-9-CM coding
guidelines when submitting hospice claims to ensure they are following
the appropriate guidelines for coding so that claims are not returned
to providers as a result of MCE edits. Following the ICD-9-CM coding
guidelines will help hospice providers with appropriate code selection
for hospice claims processing. This is not to say that hospice
beneficiaries with various dementia conditions are not appropriate for
hospice services, rather, this is merely a clarification regarding the
ICD-9-CM coding guidelines for claims processing. We expect hospice
providers to follow ICD-9-CM coding guidelines to ensure that the most
accurate information is provided regarding the patients for whom
hospices are providing services.
Additional details describing the specific MCE edits that will be
applied will be announced through a change request, an accompanying
Medicare Learning Network article, and other CMS communication
channels, such as the Home Health, Hospice, and DME Open Door Forum.
We have clarified in previous rules that hospice providers are
expected to report on hospice claims all ICD-9-CM codes to provide an
accurate description of the patients' conditions. In the Hospice Wage
Index for Fiscal Year 2013 (77FR 44247) and again in the Hospice Wage
Index for Fiscal Year 2014 (78 FR 48240), we reminded providers to
follow ICD-9-CM Coding Guidelines for reporting diagnoses on hospice
claims. HIPAA, federal regulations, and the Medicare claims processing
manual all require that ICD-9-CM Coding Guidelines be applied to the
coding and reporting of diagnoses on hospice claims. In the FY 2013
hospice notice, we reported that our analyses showed that 77.2 percent
of hospice claims from 2010 only reported a single, principal
diagnosis. We provided in-depth information regarding longstanding,
existing ICD-9-CM Coding Guidelines that require the reporting of all
additional or co-existing diagnoses on hospice claims. We went on to
state that coexisting or additional diagnoses could be related or
unrelated to the hospice patient's terminal illness. As the Medicare
hospice benefit covers hospice services for the palliation and
management of the terminal illness and related conditions, we said, at
that time, that hospice providers ``should report on hospice claims all
coexisting or additional diagnoses that are related to the terminal
illness; they should not report coexisting or additional diagnoses that
are unrelated to the terminal illness'' (77FR 44248). We also stated
that we do not believe that requiring reporting of coexisting or
additional diagnoses that are related to the terminal illness would
create a burden for hospice and that some providers already report
these diagnoses on their claims.
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule, we reported that for the first quarter of FY 2013 (October 1,
2012 through December 31, 2012) 72 percent of hospice claims only
reported a single, principal diagnosis (78 FR 48240). 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 claim. Information on a patient's related and unrelated
diagnoses should already be included as part of the hospice
comprehensive assessment and appropriate interventions should be
incorporated into the patient's plan of care, as determined by the
hospice IDG.
Analysis conducted on FY 2013 hospice claims shows that 67 percent
of hospice claims still only report a single, principal hospice
diagnosis.\43\ Though this is a trend in the right direction, there
still appears to be some confusion by the majority of hospice providers
as to the requirements for diagnosis reporting on hospice claims. We
are reminding providers to follow the ICD-9-CM Coding Guidelines, per
longstanding policy, in regard to diagnosis reporting on claims.
---------------------------------------------------------------------------
\43\ FY 2013 hospice claims data from the Chronic Conditions
Data Warehouse (CCW) accessed on February 26, 2014.
---------------------------------------------------------------------------
The ICD-9-CM Official Guidelines for Coding and Reporting state
that for accurate reporting of ICD-9-CM diagnosis codes, ``The
documentation should describe the patient's condition, using
terminology which includes specific diagnoses, as well as symptoms,
problems, and reasons for the encounter. List first the ICD-9-CM code
for the diagnosis, condition, problem, or other reason for the
encounter/visit shown in the medical record to be chiefly responsible
for services provided.'' The coding guidelines also state to code all
documented conditions that coexist at the time of the encounter/visit
and require or affect patient care treatment or management. Therefore,
this is a reminder that all diagnoses should be reported on the hospice
claim for the terminal illness and related conditions, including those
that can affect the care and management of the beneficiary. We will
condition to monitor hospice claims to see if all conditions are being
reported as required by ICD-9-CM Coding Guidelines.
K. Technical Regulatory Text Change
We propose to make at technical correction in Sec. 418.3 to delete
the definition for ``social worker.'' This definition is no longer
accurate, and we intended to remove it as part of the June 5, 2008
final rule that amended the conditions of participation (CoPs) for
hospices (73 FR 32088). The 2008 final rule established new
requirements for social workers at Sec. 418.114(b)(3), making the
definition of ``social worker'' at Sec. 418.3 obsolete. However, the
technical amendatory language included in the 2008 final rule did not
instruct the Federal Register to delete the ``social worker''
definition. We propose this technical correction in order to remedy
this oversight.
We invite comments on this technical correction and associated
change in the regulations at Sec. 418.3 in section VI.
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.
[[Page 26578]]
We are soliciting public comment on each of these issues for this
section of this document that contains information collection
requirements (ICRs). This section includes ICR information on data
collection A) related to hospice payment policy, including proposed
changes to the election statement and proposed changes to inpatient and
aggregate cap determination reporting; and B) related to the
CAHPS[supreg] Hospice Survey.
A. Proposed Changes Related to Hospice Payment Policy
Sections A.1, A.2, and A.3 are associated with the information
collection request (ICR) previously approved under OMB control number
as 0938-1067. We are currently seeking to have the ICR reinstated under
notice and comment periods separate from those associated with this
notice of proposed rulemaking. The following assumptions were used in
estimating the burden for the proposed changes related to hospice
payment policy:
Table 10--Hospice Payment Policy Burden Estimate Assumptions
------------------------------------------------------------------------
------------------------------------------------------------------------
of Medicare-participating hospices nationwide, 3,897
CY 2012................................................
of Medicare-billing hospices, from CY 2012 3,727
claims.................................................
of Part D prescriptions per hospice, from CY 481
2012 claims............................................
Hourly rate of registered nurse......................... $41
Hourly rate of accountant............................... $40
Hourly rate of office employee.......................... $17
Hourly rate of administrator............................ $63
------------------------------------------------------------------------
Note: CY = Calendar year.
All salary information is from the Bureau of Labor Statistics (BLS)
Web site at http://www.bls.gov/oes/current/naics4_621600.htm and
includes a fringe benefits package worth 30 percent of the base salary.
Hourly rates are based on May 2012 BLS data for each discipline, for
those providing ``home health care services.''
1. Proposed Changes to the Election Statement (Sec. 418.24)
Section 1812(d) of the Act requires that patients elect hospice
care in order for Medicare to cover and pay for hospice services.
Section 1861(dd)(3)(B) of the Act defines an attending physician and
requires that the patient, not the hospice, designate an attending
physician at the time of election. Our regulations at Sec. 418.24
outline current requirements for completion of a hospice election
statement, but do not require that the attending physician designated
by the patient be identified. To safeguard the patient's right to
choose his or her attending physician, we proposed to change our
regulations at Sec. 418.24(b) to require that the election statement
be modified to identify the attending physician chosen by the patient
and to include language that the patient acknowledges that the
attending physician was his or her choice. Note that all hospices,
including those that are not Medicare-participating, are required by
the Conditions of Participation to have patients elect hospice care.
We estimated that the burden for this requirement is the one-time
burden to modify the election statement to include a place for
identifying the attending physician and acknowledging that he or she
was chosen by the patient or representative. Hospices are currently
required to explain these processes to patients, so we do not believe
there is any additional burden for discussing that part of the election
statement with patients or their representatives. We estimate that it
would take a hospice clerical staff person 20 minutes (20/60 = 0.33333
hours) to modify the election form, and the hospice administrator 15
minutes (15/60 = 0.25 hours) to review the revised form. The clerical
time plus administrator time equals a one-time burden of 35 minutes or
(35/60) = 0.58333 hours per hospice; for all 3,897 hospices, the total
time required would be (0.58333 x 3,897) = 2,273 hours. At $17 per hour
for an office employee, the cost per hospice would be (0.33333 x $17) =
$5.66. At $63 per hour for the administrator's time, the cost per
hospice would be (0.25 x $63) = $15.75. Therefore, the total one-time
cost per hospice would be $21.41, and the total one-time cost for all
hospices would be ($21.41 x 3,897) = $83,435.
Because of concerns related to the potential inappropriate changing
of attending physicians by hospices, we also proposed to add paragraph
(f) to our regulations at Sec. 418.24, to require that the patient (or
representative) provide a statement identifying the new attending
physician and the date the change is to be effective, and that the
patient (or representative) sign and date the form. The form should
also include an acknowledgement that this change is the patient's
choice. The one-time burden to hospices is the time to develop a form
for the patient to use. We estimate that it would take a hospice
clerical staff person 20 minutes (20/60 = 0.33333 hours) to develop
this form, and the hospice administrator 15 minutes (15/60 = 0.25
hours) to review the new form. The clerical time plus administrator
time equals a one-time burden of 35 minutes or (35/60) = 0.58333 hours
per hospice; for all 3,897 hospices, the total time required would be
(0.58333 x 3,897) = 2,273 hours. At $17 per hour for an office
employee, the cost per hospice would be (0.33333 x $17) = $5.66. At $63
per hour for the administrator's time, the cost per hospice would be
(0.25 x $63) = $15.75. Therefore, the total one-time cost per hospice
to develop this new form for changing attending physicians would be
$21.41, and the total one-time cost for all hospices would be ($21.41 x
3,897) = $83,435.
2. Proposed Changes to Inpatient and Aggregate Cap Determination
Reporting (Sec. 418.308)
Congress mandated two caps on hospice payments: an inpatient cap
and an aggregate cap. The hospice cap year is November 1 through
October 31. Medicare contractors complete the hospice cap determination
approximately twelve to eighteen months after the cap year in order to
demand any overpayments from the hospices. A cap determination consists
in determining whether a hospice exceeds the inpatient cap and the
aggregate hospice cap. Medicare hospice inpatient stays in excess of
twenty percent of total Medicare hospice days are to be reimbursed at
the routine homecare rate; the hospice must be repay any excess due to
receiving payments at the higher inpatient rates for the excess
inpatient days. Additionally, Medicare hospice payments are limited by
an aggregate cap, which is computed by multiplying the ``cap amount''
by the number of beneficiaries. If the actual Medicare payments exceed
the aggregate cap, the hospice must repay the difference. We are
proposing to change our regulations as Sec. 418.308(c) to require
hospices to
[[Page 26579]]
calculate their inpatient and aggregate caps five months after the cap
year and remit any overpayment. This is similar to the process in Sec.
413.24(f), which requires other provider types that file a Medicare
cost report to file their cost reports five months after the end of
their cost reporting year. The regulation at Sec. 413.24(f) also
requires other provider types that file a Medicare cost report to remit
any amount due the program at the time of the cost report filing.
Although hospices file cost reports, the cap determination is not based
on the cost report; the hospice caps serve to limit total Medicare
payments similar to the way cost reports limit those payments for other
provider types that file a Medicare cost report. Requiring hospices to
complete a cap determination and remit any overpayment is consistent
with what is currently required of all other provider types that file a
Medicare cost report.
We expect that it would take a hospice about 1.5 hours to complete
its cap determination. All information needed to file the cap
determination is available in the Provider Statistical and
Reimbursement (PS&R) system. For all 3,727 hospices that bill Medicare,
this would be (1.5 x 3,727) = 5,591 hours. We estimate that it would
take one hour for an accountant to complete the cap determination
worksheet provided by CMS for the cap year. At $40 per hour for an
accountant, the cost would be (1 x $40) = $40 per hospice, and (3,727 x
$40) = $149,080 for all hospices. We estimate that it would take a half
hour for the administrator to review the worksheet prepared by the
accountant. At $63 per hour for the administrator's time, the cost per
hospice would be (0.5 x $63) = $31.50, and for all hospices would be
(3,727 x $31.50) = $117,401. Therefore the total estimated cost per
hospice would be ($40 + $31.50) = $71.50, and the total cost for all
hospices would be (3,727 x $71.50) = $266,481.
C. CAHPS[supreg] Hospice Survey
This section is associated with a new information collection
request that is required to start in January 2015. The Hospice Survey
data collected in 2015 is required for the FY 2017 HQRP quality
reporting requirements along with the submission of the clinical
structural measures for the same payment period. This is a new
information collection request seeking approval to assess experiences
of care with hospice reported by primary caregivers (i.e., bereaved
family members of friends) of patients who died while receiving hospice
care. This information data collection request are required to (1)
assess experience of care at the respondent (caregiver) level, and (2)
provide sufficient response to generate hospice experience reports.
Here are the estimates for the approximate annual cost of the
CAHPS[supreg] Survey (Table 11).
Table 11--Assumptions and Estimates for CAHPS[supreg] Hospice Survey
------------------------------------------------------------------------
------------------------------------------------------------------------
Approximate of hospices 2,600.
required to do the CAHPS[supreg] Survey
annually.
Approximate Cost to each hospice $3,300.
annually for the CAHPS[supreg] Survey.
Approximate Cost for all CAHPS[supreg] $8.5 million.
Hospices annually for the CAHPS[supreg]
Survey.
Respondent Cost burden.................. $3.8 million.
Approximate Total Cost of CAHPS[supreg] $12.3 million.
Survey annually.
------------------------------------------------------------------------
In implementing the HQRP, we seek to collect measure information
with as little burden to the providers as possible, but which reflects
the full spectrum of quality performance. As such, we are moving
forward toward the implementation of the CAHPS[supreg] Hospice Survey
to provide data to the public about the patients' families' and
friends' perspectives of care of their loved ones who passed way while
in hospices.
The CAHPS[supreg] Hospice Survey data will provide the peoples'
voices to hospice care in the United States. Based on the criteria
outlined in the Preamble, some hospices that are too new and very small
will be exempt from the HQRP. We estimate that 2,600 hospices will
qualify to participate in the survey. From CMS experiences with
surveys, we estimate an annual cost of $3,300 per hospice to
participate in the CAHPS[supreg] Hospice Survey. The cost of $3,300
includes the preparation of a monthly sampling frame for their approved
vendor, as well as estimated vendor costs to conduct the data
collection. The estimated annual cost for all hospices to do the survey
is $8.5 million. As part of the survey requirement, all participating
hospices will contract with an approved hospice survey vendor, and each
hospice will be required to submit a monthly list of deceased patients'
caregivers contact information, for patients that passed away in the
hospice care two months prior to the date of the list. This list
(essentially the sampling frame) for most hospices can be generated
from existing databases with minimal effort. For some small hospices,
preparation of a monthly sample frame may require more time. However,
data elements needed on the sample frame will be kept at a minimum to
reduce the burden on the hospices.
The survey contains 47 items and is estimated to require an average
administration time of 10.4 minutes in English, and 12.5 minutes in
Spanish, for an average response time of 10.505 minutes or 0.175 hours,
assuming that 5 percent of the survey respondents complete the survey
in Spanish. These burden estimates are based on CMS' experiences with
surveys of similar lengths that were fielded with Medicare
beneficiaries. We estimate that approximately six surveys can be done
an hour, at an hourly wage of $22.77. With a total estimate of 550,000
respondents, we estimate a total respondent burden at $3.8 million.
This cost is not an additional cost to the hospices; the cost to the
participating hospices is $8.5 million.
Table 12 below provides a summary of the burden and cost estimates
associated with both the hospice payment policy changes and the
CAHPS[supreg] Hospice Survey requirements.
Table 12--Burden and Cost Estimates Associated With All Information Collection Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly
Burden per Total labor cost Total labor
Regulation section(s) OMB Control Number of Number of response annual of cost of Total cost
No. respondents responses (hours) burden reporting reporting ($)
(hours) ($) ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
418.24(b)....................................... 0938-1067 3,897 3,897 0.583333 2,273 $21.41 $83,435 $83,435
418.24(f)....................................... 0938-1067 3,897 3,897 0.583333 2,273 21.41 83,435 83,435
[[Page 26580]]
418.308(c)...................................... 0938-1067 3,727 3,727 1.500000 5,591 71.50 266,481 266,481
418.312......................................... 0938--New 1,100,000 550,000 0.175 95,029.55 22.77 2,163,823 2,163,823
------------------------------------------------------------------------------------------
Totals...................................... ........... 1,107,624 561,521 ........... 105,167 ........... 2,597,174 2,597,174
--------------------------------------------------------------------------------------------------------------------------------------------------------
There are no capital/maintenance costs associated with the information
collection requirements contained in this rule; therefore, we have
removed the associated column from Table 13.
If you comment on these information collection and recordkeeping
requirements, please submit your comments electronically as specified
in the ADDRESSES section of this proposed rule.
Please identify which Collection of Information requirement you are
commenting on by indicating whether it is from subsection:
A.1. Proposed Changes to the Election Statement (Sec.
418.24);
A.2. Proposed Changes to Inpatient and Aggregate Cap
Determination Reporting (Sec. 418.308); or
B. CAHPS[supreg] Hospice Survey (Sec. 418.312).
V. 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 Core-Based Statistical Areas (CBSAs), or
previously used Metropolitan Statistical Areas (MSAs). This proposed
rule also updates payment rates for each of the categories of hospice
care described in Sec. 418.302(b) for FY 2015as required under section
1814(i)(1)(C)(ii)(VII) of the Act. The payment rate updates are subject
to changes in economy-wide productivity as specified in section
1886(b)(3)(B)(xi)(II) of the Act. In addition, the payment rate updates
may be reduced by an additional 0.3 percentage point (although for FY
2014 to FY 2019, the potential 0.3 percentage point reduction is
subject to suspension under conditions specified in section
1814(i)(1)(C)(v) of the Act). In 2010, the Congress amended section
1814(i)(6) of the Act with section 3132(a) of the Affordable Care Act.
The amendment authorized the Secretary to collect additional data and
information determined appropriate to revise payments for hospice care
and for other purposes. The data collected may be used to revise the
methodology for determining the payment rates for routine home care and
other services included in hospice care, no earlier than October 1,
2013, as described in section 1814(i)(6)(D) of the Act. In accordance
with section 1814(i)(6)(D) of the Act, this proposed rule provides an
update on hospice payment reform analysis.
This proposed rule also proposes that, in accordance with section
1814(i)(2)(A) through (C), that providers complete their hospice
aggregate cap determination within 5 months after the cap year ends and
remit any overpayments at that time. Furthermore, in accordance with
section 1860D-24 of the Act, drugs and biologicals that may be covered
under the Medicare Part A per-diem payment to a hospice program are
excluded from coverage under Part D. Section 1861(dd) of the Act states
the hospice is responsible for covering all drugs or biologicals for
the palliation and management of the terminal illness and related
conditions. This proposed rule, in accordance with sections 1860D-24
and 1861(dd) of the Act, solicits comments on a coordination of
benefits process and appeals for Part D payment for drugs and
biologicals while beneficiaries are under a hospice election. At this
time, we are not making any proposals on the coordination of benefits
process and appeals for Part D payment for drugs and biologicals while
beneficiaries are under a hospice election.
Finally, section 3004 of the Affordable Care Act amended the Act to
authorize a quality reporting program for hospices and this rule
discusses changes in the requirements for the hospice quality reporting
program in accordance with section 1814(i)(5) of the Act.
B. Introduction
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (UMRA, March 22, 1995; Pub. L.
104-4), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. A regulatory impact analysis (RIA) must be prepared for
major rules with economically significant effects ($100 million or more
in any 1 year). This proposed rule has been designated as economically
significant under section 3(f)(1) of Executive Order 12866 and thus a
major rule under the Congressional Review Act. Accordingly, we have
prepared a regulatory impact analysis (RIA), that to the best of our
ability, presents the costs and benefits of the rulemaking. Finally,
this rule has been reviewed by OMB.
C. Overall Impact
The overall impact of this proposed rule is an estimated net
increase in Federal payments to hospices of $230 million, or 1.3
percent, for FY 2015. This estimated impact on hospices is a result of
the proposed hospice payment update percentage for FY 2015 of 2.0
percent and changes to the FY 2015 hospice wage index, including a
reduction to the BNAF by an additional 15 percent, for a total BNAF
reduction of 85 percent (10 percent in FY 2010, and 15 percent per year
for FY 2011 through FY 2015). An 85 percent reduced BNAF is computed to
be 0.009309 (or 0.9309 percent). The BNAF reduction is part of a 7-year
BNAF
[[Page 26581]]
phase-out that was finalized in the FY 2010 Hospice Wage Index final
rule (74 FR 39384), and is not a policy change.
1. Detailed Economic Analysis
Column 4 of Table 13 shows the combined effects of the updated wage
data (the 2013 pre-floor, pre-reclassified hospital wage index) and of
the additional 15 percent reduction in the BNAF (for a total BNAF
reduction of 85 percent), comparing estimated payments for FY 2014 to
estimated payments for FY 2015. The FY 2014 payments used for
comparison have a 70 percent reduced BNAF applied. We estimate that the
total hospice payments for FY 2015 would decrease by 0.7 percent. This
0.7 percent is the result of a 0.1 percent reduction due to the use of
updated wage data ($-20 million), and a 0.6 percent reduction due to
the additional 15 percent reduction in the BNAF ($-110 million). This
estimate does not take into account the proposed hospice payment update
percentage of 2.0 percent (+$360 million) for FY 2015.
Column 5 of Table 13 shows the combined effects of the updated wage
data (the 2013 pre-floor, pre-reclassified hospital wage index), the
additional 15 percent reduction in the BNAF (for a total BNAF reduction
of 85 percent), and the proposed hospice payment update percentage of
2.0 percent. The proposed 2.0 percent hospice payment update percentage
is based on a 2.7 percent estimated inpatient hospital market basket
update for FY 2015 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 2.0 percent proposed hospice
payment update percentage is an increase in payments to hospices of
approximately $360 million. Taking into account the 2.0 percent
proposed hospice payment update percentage (+$360 million), the use of
updated wage data ($-20 million), and the additional 15 percent
reduction in the BNAF ($-110 million), it is estimated that hospice
payments would increase by $230 million in FY 2015 ($360 million - $20
million - $110 million = $230 million) or 1.3 percent in FY 2015.
a. Effects on Hospices
This section discusses the impact of the projected effects of the
hospice wage index and the effects of a proposed 2.0 percent hospice
payment update percentage for FY 2015. 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 2015 hospice wage index is based upon the FY 2013 pre-
floor, pre-reclassified hospital wage index and the most complete
hospice claims data available (FY 2013 hospice claims submitted as of
December 31, 2013) with an additional 15 percent reduction in the BNAF
(for a total BNAF reduction of 85 percent).
For the purposes of our impacts, our baseline is estimated FY 2014
payments with a 70 percent BNAF reduction, using the FY 2012 pre-floor,
pre-reclassified hospital wage index. Our first comparison (column 3 of
Table 13) compares our baseline to estimated FY 2015 payments (holding
payment rates constant) using the updated wage data (FY 2013 pre-floor,
pre-reclassified hospital wage index). Consequently, the estimated
effects illustrated in column 3 of Table 13 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 13.
We have included a comparison of the combined effects of the
additional 15 percent BNAF reduction, the updated wage data, and the
proposed 2.0 percent hospice payment update percentage for FY 2015
(Table 13, 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 2015 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 13--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 85 Percent) and Applying a 2.0 Percent Hospice Payment Update Percentage, Compared to
the FY 2014 Hospice Wage Index With a 70 Percent BNAF Reduction
----------------------------------------------------------------------------------------------------------------
Percent change
Percent change in hospice
in hospice payments due
payments due to wage index
Number of Percent change 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
index change budget neutrality
neutrality adjustment and
adjustment market basket
update
(1) (2) (3) (4) (5)
----------------------------------------------------------------------------------------------------------------
ALL HOSPICES.................... 3,702 87,456 -0.1 -0.7 1.3
URBAN HOSPICES.................. 2,736 76,784 -0.1 -0.7 1.3
RURAL HOSPICES.................. 966 10,672 -0.2 -0.5 1.5
BY REGION--URBAN:
NEW ENGLAND................. 128 2,771 0.0 -0.7 1.3
MIDDLE ATLANTIC............. 252 7,880 0.5 -0.1 1.9
SOUTH ATLANTIC.............. 388 16,778 -0.6 -1.2 0.8
EAST NORTH CENTRAL.......... 358 11,949 -0.1 -0.8 1.2
EAST SOUTH CENTRAL.......... 156 4,467 -0.3 -0.7 1.2
[[Page 26582]]
WEST NORTH CENTRAL.......... 209 4,775 -0.8 -1.4 0.5
WEST SOUTH CENTRAL.......... 545 10,402 -0.2 -0.8 1.2
MOUNTAIN.................... 276 6,596 -0.3 -0.9 1.1
PACIFIC..................... 389 9,964 0.9 0.2 2.2
OUTLYING.................... 35 1,201 0.7 0.7 2.7
BY REGION--RURAL:
NEW ENGLAND................. 24 236 -0.1 -0.7 1.3
MIDDLE ATLANTIC............. 44 567 0.3 -0.3 1.7
SOUTH ATLANTIC.............. 136 2,308 -0.6 -1.0 1.0
EAST NORTH CENTRAL.......... 137 1,763 -0.7 -1.3 0.7
EAST SOUTH CENTRAL.......... 131 1,888 0.0 0.0 2.0
WEST NORTH CENTRAL.......... 180 1,190 0.4 -0.1 1.9
WEST SOUTH CENTRAL.......... 172 1,526 -0.3 -0.3 1.7
MOUNTAIN.................... 94 681 0.5 0.1 2.1
PACIFIC..................... 47 500 0.8 0.1 2.1
OUTLYING.................... 1 13 0.0 0.0 2.0
BY SIZE/DAYS:
0-3499 DAYS (small)......... 631 1,113 0.1 -0.4 1.6
3500-19,999 DAYS (medium)... 1795 18,345 0.0 -0.5 1.5
20,000+ DAYS (large)........ 1276 67,998 -0.1 -0.7 1.3
TYPE OF OWNERSHIP:
VOLUNTARY................... 1042 29,537 0.0 -0.6 1.4
PROPRIETARY................. 2142 48,415 -0.1 -0.7 1.3
GOVERNMENT.................. 518 9,505 -0.2 -0.7 1.3
HOSPICE BASE:
FREESTANDING................ 2734 72,437 -0.1 -0.7 1.3
HOME HEALTH AGENCY.......... 502 9,435 0.1 -0.5 1.5
HOSPITAL.................... 445 5,345 0.2 -0.4 1.6
SKILLED NURSING FACILITY.... 21 238 0.2 -0.4 1.6
----------------------------------------------------------------------------------------------------------------
Source: FY 2013 Hospice claims data from the Standard Analytic Files for CY 2012 (as of June 30, 2013) and CY
2013 (as of December 31, 2013).
Note: The proposed 2.0 percent hospice payment update percentage for FY 2015 is based on an estimated 2.7
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 13 shows the results of our analysis. In column 1, we
indicate the number of hospices included in our analysis as of December
31, 2013, which had also filed claims in FY 2013. 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 2014 estimated payments with those
estimated for FY 2015. The estimated FY 2014 payments incorporate a
BNAF, which has been reduced by 70 percent. Column 3 shows the
percentage change in estimated Medicare payments for FY 2015 due to the
effects of the updated wage data only, compared with estimated FY 2014
payments. The effect of the updated wage data can vary from region to
region
[[Page 26583]]
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 2014 to FY 2015
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 2014 to FY 2015 due to the
combined effects of using updated wage data, an additional 15 percent
BNAF reduction, and the proposed 2.0 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 13 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 2,736 hospices located in urban areas and 966
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 2013. 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 13, there are 3,702 hospices
included in the regulatory impact analysis. Approximately 42.1 percent
of Medicare-certified hospices are identified as voluntary (non-profit)
or government agencies; a majority (57.9 percent) are proprietary (for-
profit), with 1,560 designated as non-profit or government hospices,
and 2,142 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 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 2015 updated wage data before
any BNAF reduction are anticipated to decrease payments to large
hospices by 0.1 percent, and increase 0.1 for small hospices. Medium
hospices payment would stay stable (column 3). The updated wage data
and the additional 15 percent BNAF reduction (for a total BNAF
reduction of 85 percent) are anticipated to decrease estimated payments
to small hospices by 0.4 percent, to medium hospices by 0.5 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 85 percent), and the proposed 2.0 percent hospice payment
update percentage are projected to increase estimated payments by 1.6
percent for small hospices, by 1.5 percent for medium hospices, and by
1.3 percent for large hospices (column 5).
c. Geographic Location
Column 3 of Table 13 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 Middle Atlantic of 0.5 percent,
in the Pacific of 0.9 percent and in the Outlying area of 0.7 percent.
Urban hospices can anticipate a decrease in payments ranging from 0.8
percent in the West North Central region to 0.1 percent in the East
North Central region. Urban hospices in New England are not anticipated
to be affected by the updated wage data.
Rural hospices are estimated to see a decrease in payments in four
regions, ranging from 0.7 percent in the East North Central region to
0.1 percent in the New England region. Rural hospices can anticipate an
increase in payments in four regions ranging from 0.3 percent in the
Middle Atlantic region to 0.8 percent in the Pacific 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 2014 estimated payments using a BNAF with a 70 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 0.5 percent. All urban areas other than Outlying
and Pacific are estimated to see decreases in payments, ranging from
1.4 percent in the West North Central region to 0.7 percent in the New
England and East South Central region. Rural hospices are estimated to
experience a decrease in payments in six regions, ranging from 1.3
percent in the East North Central region to 0.1 percent in the West
North Central 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 2.0 percent
hospice payment update percentage on estimated FY 2015 payments as
compared to estimated FY 2014 payments. Overall, hospices are
anticipated to experience a 1.3 percent increase in payments, with
urban hospices anticipated to experience a 1.3 percent increase in
payments, and rural hospices anticipated to experience a 1.5 percent
increase in payments. Urban hospices are anticipated to experience an
increase in estimated payments in every region, ranging from 0.5
percent in the West North Central region to 2.2 percent in Outlying
area. Rural hospices in every region are estimated to see an increase
in payments ranging from 0.7 percent in East North Central to 2.1
percent in the Mountain and Pacific regions.
d. Type of Ownership
Column 3 demonstrates the effect of the updated wage data on FY
2015 estimated payments, versus FY 2014 estimated payments. We
anticipate that using the updated wage data would decrease estimated
payments to proprietary (for-profit) and Government hospices by 0.1
percent and 0.2 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),
[[Page 26584]]
proprietary (for-profit) and government hospices are anticipated to
decrease by 0.6 percent, 0.7 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 85
percent), and the proposed 2.0 percent hospice payment update
percentage on estimated payments, comparing FY 2015 to FY 2014.
Estimated FY 2015 payments are anticipated to increase for voluntary
(non-profit) hospices by 1.4 percent, for proprietary (for-profit)
hospices by 1.3 percent, and government hospices by 1.3 percent.
e. Hospice Base
Column 3 demonstrates the effect of using the updated wage data,
comparing estimated payments for FY 2015 to FY 2014. Estimated payments
are anticipated to decrease for freestanding hospices by 0.1 percent.
Estimated payments are anticipated to increase for Home Health Agency,
hospital and Skilled Nursing Facility based hospices by 0.1 percent,
0.2 percent, and by 0.2 percent, respectively. 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 2015 to FY
2014. All hospice facilities are anticipated to experience decrease in
payments ranging from 0.7 percent for freestanding hospices to 0.4
percent for hospital and skilled nursing facility based hospices.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction, and the proposed 2.0 percent
hospice payment update percentage on estimated payments, comparing FY
2015 to FY 2014. Estimated payments are anticipated to increase for all
hospices, ranging from 1.3 percent for freestanding hospices to 1.6
percent for hospital and skilled nursing facility based hospices.
f. Effects on Other Providers
This proposed rule would only affect Medicare hospices, and
therefore has no effect on other provider types. We note that our
suggested approaches with respect to Part D coordination with hospice
payments may ultimately have an effect on Part D spending, if proposed
and adopted.
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 2015 are anticipated to decrease by
$20 million due to the update in the wage index data, and to decrease
by $110 million due to the additional 15 percent reduction in the BNAF
(for a total 85 percent reduction in the BNAF). However, the proposed
hospice payment update percentage of 2.0 percent is anticipated to
increase Medicare payments by $360 million. Therefore, the total effect
on Medicare hospice payments is estimated to be a $230 million increase
(1.3 percent).
h. Alternatives Considered
In continuing the reduction to the BNAF by an additional 15
percent, for a total BNAF reduction of 85 percent (10 percent in FY
2010, and 15 percent per year for FY 2011 through FY 2015), and
implementing the hospice payment update percentage and the updated wage
index, the aggregate impact will be a net increase of $230 million in
payments to hospices. In the proposed rule for FY 2015, we did not
consider discontinuing the additional 15 percent reduction to the BNAF
as the 7-year phase-out of the BNAF was finalized in the FY 2010
Hospice Wage Index final rule (74 FR 39384). However, if we were to
discontinue the reduction to the BNAF by an additional 15 percent,
Medicare would pay an estimated $110 million more to hospices in FY
2015.
Since the hospice payment update percentage is determined based on
statutory requirements, we did not consider not updating hospice
payment rates by the payment update percentage. The proposed 2.0
percent hospice payment update percentage for FY 2015 is based on a
proposed 2.7 percent inpatient hospital market basket update for FY
2015, reduced by a 0.4 percentage point productivity adjustment and by
an additional 0.3 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).
We also considered proposing a waiver of the consequences for not
filing the NOE within 3 calendar days after the effective date of
election, to account for exceptional circumstances. However, since
hospices are to operate 24 hours a day, 7 days a week, and should have
back-up systems in place so that they can care for their patients
without interruption, we did not believe that this would be necessary.
To ensure the attending physician of record is properly documented
in the patient's medical record, we proposed, in section III.F, to
amend the regulations at Sec. 418.24(b)(1) and require the election
statement to include the patient's choice of attending physician. We
considered limiting the number of times that a beneficiary can change
his/her attending to once per election period (similar to the current
regulations at Sec. 418.30(a) that only allows a beneficiary to change
a hospice provider once during an election period). However, we first
want to conduct additional analyses of hospice Part A billing for
physician services provided by nurse practitioners and Part B attending
physician billing to determine how frequently beneficiaries change
attending physicians.
i. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 14 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with this proposed rule. Table 14 provides our
best estimate of the increase in Medicare payments under the hospice
benefit as a result of the changes presented in this proposed rule for
3,702 hospices in our impact analysis file constructed using FY 2013
claims as of December 31, 2013. Table 14 also includes the costs
associated with (1) a hospice accountant to complete the cap
determination worksheet, and for a hospice administrator to review the
final worksheet, for a total annual burden of $266,481 as proposed in
section III.D; and (2) the cost to hospices to participate in the
CAHPS[supreg] survey, including the preparation of a monthly sampling
frame for their approved vendor, as well as estimated survey vendor
costs, for an estimated total annual cost of $8.5 million to all
hospices in the survey. Table 14 below does not reflect a one-time cost
of modifying the current hospice election
[[Page 26585]]
statement to record the patient's choice of attending physician
($83,435) and the one-time cost of creating a new hospice form for
changing the attending physician ($83,435), for a total one-time burden
of $166,870 as proposed in section III.E.
Table 14--Accounting Statement: Classification of Estimated Transfers,
From FY 2014 to FY 2015
[In $millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
FY 2015 Hospice Wage Index and Payment Rate Update
------------------------------------------------------------------------
Annualized Monetized Transfers............ $230.
From Whom to Whom? Federal Government to
Hospices.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized Costs for Hospice $8.77.
Providers\1\
------------------------------------------------------------------------
\1\ Costs associated with hospice cap reporting and with the
CAHPS[supreg] Hospice Survey.
j. Conclusion
In conclusion, the overall effect of this proposed rule is an
estimated $230 million increase in 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 2.0
percent. Also, starting in FY 2015, hospices are estimated to incur
annual burden costs of $266,481 for a hospice accountant to complete
the cap determination worksheet, and for a hospice administrator to
review the final worksheet. Finally, starting in FY 2015 hospices are
estimated to incur annual burden costs of $8.5 million for
participation in the CAHPS[supreg] hospice survey.
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 $35.5 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 2015 hospice payment update
percentage of 2.0 percent results in an increase in estimated hospice
payments of 1.3 percent for FY 2015. 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 2015 hospice payment update
percentage reflect increases in payments of 1.6 percent and 1.5
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 2014, 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.
VI. 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
42 CFR Part 405
Administrative practice and procedure, Health facilities, Medicare,
Reporting and recordkeeping requirements.
42 CFR Part 418
Health facilities, Hospice care, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
and Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority citation for part 405, subpart C continues to read:
Authority: Secs. 1102, 1815, 1833, 1842, 1862, 1866, 1870, 1871,
1879 and 1892 of the Social Security Act (42 U.S.C. 1302, 1395g,
1395l, 1395u, 1395y, 1395cc, 1395gg, 1395hh, 1395pp and 1395ccc) and
31 U.S.C. 3711.
0
2. Section 405.371 is amended by revising paragraph (c)(1) and adding
paragraph (e) to read as follows:
Sec. 405.371 Suspension, offset, and recoupment of Medicare payments
to providers and suppliers of services.
* * * * *
(c) * * *
(1) Except as provided in paragraphs (d) and (e) of this section,
CMS or the Medicare contractor suspends payments only after it has
complied with the
[[Page 26586]]
procedural requirements set forth at Sec. 405.372.
* * * * *
(e) Suspension of payment in the case of unfiled hospice cap
determination reports.
(1) If a provider has failed to timely file an acceptable hospice
cap determination report, payment to the provider is immediately
suspended in whole or in part until a cap determination report is filed
and determined by the Medicare contractor to be acceptable.
(2) In the case of an unfiled hospice cap determination report, the
provisions of Sec. 405.372 do not apply. (See Sec. 405.372(a)(2)
concerning failure to furnish other information.)
PART 418--HOSPICE CARE
0
3. The authority citation for part 418 is revised to read as follows:
Authority: Secs. 1102, 1812(a)(5), 1812(d), 1813(a)(4),
1814(a)(7), 1814(i), and 1861(dd) of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 418.3 [Amended]
0
4. Section 418.3 is amended by removing the definition of ``social
worker.''
0
5. Section 418.24 is amended by--
0
A. Revising paragraph (a).
0
B. Revising paragraph (b)(1).
0
C. Adding a new paragraph (f).
The addition and revisions read as follows:
Sec. 418.24 Election of hospice care.
(a) Filing an election statement. (1) An individual who meets the
eligibility requirement of Sec. 418.20 may file an election statement
with a particular hospice. If the individual is physically or mentally
incapacitated, his or her representative (as defined in Sec. 418.3)
may file the election statement.
(2) The hospice chosen by the eligible individual (or his or her
representative) must file the Notice of Election with its Medicare
claims processing contractor within 3 calendar days after the effective
date of the election statement.
(3) Consequences of failure to submit a timely Notice of Election.
When a hospice does not file the required Notice of Election for its
Medicare patients within 3 calendar days after the effective date of
election, Medicare will not cover and pay for days of hospice care from
the effective date of election to the date of filing of the NOE. These
days are a provider liability, and the provider may not bill the
beneficiary for them.
(b) * * *
(1) Identification of the particular hospice and of the attending
physician that will provide care to the individual. The individual or
representative must acknowledge that the identified attending physician
was his or her choice.
* * * * *
(f) Changing the attending physician. To change the designated
attending physician, the individual (or representative) must file a
signed statement with the hospice that states that he or she is
changing his or her attending physician.
(1) The statement must identify the new attending physician, and
include the date the change is to be effective and the date signed by
the individual (or representative).
(2) The individual (or representative) must acknowledge that the
change in the attending physician is due to his or her choice.
(3) The effective date of the change in attending physician cannot
be prior to the date the statement is signed.
0
6. Section 418.26 is amended by adding a new paragraph (e) to read as
follows:
Sec. 418.26 Discharge from hospice care.
* * * * *
(e) Filing a Notice of Termination of Election. When the hospice
election is ended due to discharge, the hospice must file a notice of
termination/revocation of election with its Medicare claims processing
contractor within 3 calendar days after the effective date of the
discharge, unless it has already filed a final claim for that
beneficiary.
0
7. Section 418.28 is amended by adding a new paragraph (d) to read as
follows:
Sec. 418.28 Revoking the election of hospice care.
* * * * *
(d) Filing a Notice of Revocation of Election. When the hospice
election is ended due to revocation, the hospice must file a notice of
termination/revocation of election with its Medicare claims processing
contractor within 3 calendar days after the effective date of the
revocation, unless it has already filed a final claim for that
beneficiary.
0
8. Section 418.306 is amended by adding paragraph (b)(6) to read as
follows:
Sec. 418.306 Determination of payment rates.
* * * * *
(b) * * *
(6) For FY 2014 and subsequent fiscal years, in the case of a
Medicare-certified hospice that does not submit hospice quality data,
as specified by the Secretary, the payment rates are equal to the rates
for the previous fiscal year increased by the applicable market basket
percentage increase, minus 2 percentage points. Any reduction of the
percentage change will apply only to the fiscal year involved and will
not be taken into account in computing the payment amounts for a
subsequent fiscal year.
* * * * *
0
9. Section 418.308 is amended by revising paragraph (c) to read as
follows:
Sec. 418.308 Limitation on the amount of hospice payments.
* * * * *
(c) The hospice must file its cap determination notice with its
Medicare contractor no later than 5 months after the end of the cap
year (that is, by March 31st) and remit any overpayment due at that
time. The Medicare contractor will notify the hospice of the final
determination of program reimbursement in accordance with procedures
similar to those described in Sec. 405.1803 of this chapter. If a
provider fails to file its self-determined cap determination with its
Medicare contractor within 150 days after the cap year, payments to the
hospice would be suspended in whole or in part, until a self-determined
cap determination is filed with the Medicare contractor, in accordance
withSec. 405.371(e).
* * * * *
0
10. Subpart G is amended by adding a new Sec. 418.312 to read as
follows:
Sec. 418.312 Data Submission Requirements Under the Hospice Quality
Reporting Program.
General rule. Except as provided in paragraph (f) of this section,
Medicare-certified hospices must submit to CMS data on measures
selected under section 1814(i)(5)(C)of the Act in a form and manner,
and at a time, specified by the Secretary.
(a) Submission of Hospice Quality Reporting Program data. Hospices
are required to complete and submit an admission Hospice Item Set (HIS)
and a discharge HIS for each patient admission to hospice, regardless
of payer or patient age. The HIS is a standardized set of items
intended to capture patient-level data.
(b) A hospice that receives notice of its CMS certification number
before November 1 of the calendar year before the fiscal year for which
a payment determination will be made must submit data for the calendar
year.
(c) Medicare-certified hospices must contract with CMS-approved
vendors to collect the CAHPS[supreg] Hospice Survey data on their
behalf and submit the data to the Hospice CAHPS[supreg] Data Center.
[[Page 26587]]
(d) If the hospice's total, annual, unique, survey-eligible,
deceased patient count for the prior calendar year is less than 50
patients, the hospice is eligible to be exempt from the CAHPS[supreg]
Hospice Survey reporting requirements in the current calendar year. In
order to qualify for this exemption the hospice must submit to CMS its
total, annual, unique, survey-eligible, deceased patient count for the
prior calendar year.
(e) Vendors that want to become CMS-approved CAHPS[supreg] Hospice
Survey vendors must meet the minimum business requirements. Survey
vendors must have been in business for a minimum of 4 years, have
conducted surveys in the approved survey mode for a minimum of 3 years,
and have conducted surveys of individual patients for a minimum of 2
years. For Hospice CAHPS[supreg], a ``survey of individual patients''
is defined as the collection of data from at least 600 individual
patients selected by statistical sampling methods, and the data
collected are used for statistical purposes. Vendors may not use home-
based or virtual interviewers to conduct the CAHPS[supreg] Hospice
Survey, nor may they conduct any survey administration processes (e.g.
mailings) from a residence.
(f) No organization, firm, or business that owns, operates, or
provides staffing for a hospice is permitted to administer its own
Hospice CAHPS[supreg] survey or administer the survey on behalf of any
other hospice in the capacity as a Hospice CAHPS[supreg] survey vendor.
Such organizations will not be approved by CMS as CAHPS[supreg] Hospice
Survey vendors.
(g) Reconsiderations and appeals of Hospice Quality Reporting
Program decisions.
(1) A hospice may request reconsideration of a decision by CMS that
the hospice has not met the requirements of the Hospice Quality
Reporting Program for a particular reporting period. A hospice must
submit a reconsideration request to CMS no later than 30 days from the
date identified on the annual payment update notification provided to
the hospice.
(2) Reconsideration request submission requirements are available
on the CMS Hospice Quality Reporting Web site on CMS.gov.
(3) A hospice that is dissatisfied with a decision made by CMS on
its reconsideration request may file an appeal with the Provider
Reimbursement Review Board under part 405, subpart R of this chapter.
Dated: April 18, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: April 22, 2014.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2014-10505 Filed 5-2-14; 4:15 pm]
BILLING CODE 4120-01-P