Proposed Hospice Wage Index

Vol. 80 Tuesday, No. 86 May 5, 2015

Part III

Department of Health and Human Services

Centers for Medicare & Medicaid Services 42 CFR Part 418 Medicare Program; FY 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements; Proposed Rule

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DEPARTMENT OF HEALTH AND Human Services, Attention: CMS– SUPPLEMENTARY INFORMATION: HUMAN SERVICES 1629–P, P.O. Box 8010, Baltimore, Wage index addenda will be available MD 21244–8010. only through the internet on the CMS Centers for Medicare & Medicaid Please allow sufficient time for mailed Web site at: (http://www.cms.gov/ Services comments to be received before the Medicare/Medicare-Fee-for-Service- close of the comment period. Payment/Hospice/index.html.) 42 CFR Part 418 3. By express or overnight mail. You Inspection of Public Comments: All [CMS–1629–P] may send written comments to the comments received before the close of following address ONLY: the comment period are available for RIN 0938–AS39 Centers for Medicare & Medicaid viewing by the public, including any Services, Department of Health and personally identifiable or confidential Medicare Program; FY 2016 Hospice Human Services, Attention: CMS– business information that is included in Wage Index and Payment Rate Update 1629–P, Mail Stop C4–26–05, 7500 a comment. We post all comments and Hospice Quality Reporting Security Boulevard, Baltimore, MD received before the close of the Requirements 21244–1850. comment period on the following Web AGENCY: Centers for Medicare & 4. By hand or courier. Alternatively, site as soon as possible after they have Medicaid Services (CMS), HHS. you may deliver (by hand or courier) been received: http:// ACTION: Proposed rule. your written comments ONLY to the www.regulations.gov. Follow the search following addresses prior to the close of instructions on that Web site to view SUMMARY: This proposed rule would the comment period: public comments. update the hospice payment rates and a. For delivery in Washington, DC— Comments received timely will also the wage index for fiscal year (FY) 2016, Centers for Medicare & Medicaid be available for public inspection as including implementing the last year of Services, Department of Health and they are received, generally beginning the phase-out of the wage index budget Human Services, Room 445–G, Hubert approximately 3 weeks after publication neutrality adjustment factor (BNAF). H. Humphrey Building, 200 of a document, at the headquarters of This proposed rule also discusses recent Independence Avenue SW., the Centers for Medicare & Medicaid hospice payment reform research and Washington, DC 20201. Services, 7500 Security Boulevard, analyses and proposes to differentiate Baltimore, Maryland 21244, Monday (Because access to the interior of the payments for routine home care (RHC) through Friday of each week from 8:30 Hubert H. Humphrey Building is not based on the beneficiary’s length of stay a.m. to 4 p.m. To schedule an readily available to persons without and to implement a service intensity appointment to view public comments, Federal government identification, add-on (SIA) payment for services phone 1–800–743–3951. commenters are encouraged to leave provided in the last 7 days of a their comments in the CMS drop slots beneficiary’s life, if certain criteria are Table of Contents located in the main lobby of the met. In addition, this rule would I. Executive Summary building. A stamp-in clock is available implement changes to the aggregate cap A. Purpose for persons wishing to retain a proof of calculation mandated by the Improving B. Summary of the Major Provisions filing by stamping in and retaining an Medicare Post-Acute Care C. Summary of Costs, Benefits, and extra copy of the comments being filed.) Transformation Act of 2014 (IMPACT Transfers II. Background Act), align the cap accounting year for b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid A. Hospice Care both the inpatient cap and the hospice B. History of the Medicare Hospice Benefit aggregate cap with the federal fiscal year Services, Department of Health and C. Services Covered by the Medicare starting in FY 2017, make changes to the Human Services, 7500 Security Hospice Benefit hospice quality reporting program, and Boulevard, Baltimore, MD 21244– D. Medicare Payment for Hospice Care would include a clarification regarding 1850. 1. Omnibus Budget Reconciliation Act of diagnosis reporting on the hospice If you intend to deliver your comments 1989 claim. to the Baltimore address, call telephone 2. Balanced Budget Act of 1997 number (410) 786–9994 in advance to 3. FY 1998 Hospice Wage Index Final Rule DATES: To be assured consideration, 4. FY 2010 Hospice Wage Index Final Rule comments must be received at one of schedule your arrival with one of our 5. The Affordable Care Act the addresses provided below, no later staff members. 6. FY 2012 Hospice Wage Index Final Rule than 5 p.m. on June 29, 2015. Comments erroneously mailed to the 7. FY 2015 Hospice Rate Update Final Rule 8. Impact Act of 2014 ADDRESSES: In commenting, please refer addresses indicated as appropriate for E. Trends in Medicare Hospice Utilization to file code CMS–1629–P. Because of hand or courier delivery may be delayed and received after the comment period. III. Provisions of the Proposed Rule staff and resource limitations, we cannot A. Hospice Payment Reform: Research and accept comments by facsimile (FAX) For information on viewing public comments, see the beginning of the Analyses transmission. 1. Pre-Hospice Spending You may submit comments in one of SUPPLEMENTARY INFORMATION section. 2. Non-Hospice Spending for Hospice four ways (please choose only one of the FOR FURTHER INFORMATION CONTACT: Beneficiaries During an Election ways listed): Debra Dean-Whittaker, (410) 786–0848 3. Live Discharge Rates 1. Electronically. You may submit for questions regarding the CAHPS® B. Proposed Routine Home Care Rates and electronic comments on this regulation Hospice Survey. Michelle Brazil, (410) Service Intensity Add-On (SIA) Payment to http://www.regulations.gov. Follow 786–1648 for questions regarding the 1. Background and Statutory Authority hospice quality reporting program. For a. U-Shaped Payment Model the ‘‘Submit a comment’’ instructions. b. Tiered Payment Model 2. By regular mail. You may mail general questions about hospice c. Visits During the Beginning and End of written comments to the following payment policy please send your a Hospice Election address ONLY: inquiry via email to: hospicepolicy@ 2. Proposed Routine Home Care Rates Centers for Medicare & Medicaid cms.hhs.gov. 3. Proposed Service Intensity Add-on Services, Department of Health and Payment

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C. Proposed FY 2016 Hospice Wage Index F. Clarification Regarding Diagnosis HCFA Healthcare Financing Administration and Rates Update Reporting on Hospice Claims HHS Health and Human Services 1. Proposed FY 2016 Hospice Wage Index 1. Background HIPPA Health Insurance Portability and a. Background 2. Current Discussions About Hospice Accountability Act b. Elimination of the Wage Index Budget Vulnerabilities HIS Hospice Item Set Neutrality Factor (BNAF) 3. Medicare Hospice Eligibility HQRP Hospice Quality Reporting Program c. Proposed Implementation of New Labor Requirements IACS Individuals Authorized Access to Market Delineations 4. Assessment of Conditions and CMS Computer Services 2. Proposed Hospice Payment Update Comorbidities Required by Regulation ICD–9–CM International Classification of Percentage 5. Clarification Regarding Diagnosis Diseases, Ninth Revision, Clinical 3. Proposed FY 2016 Hospice Payment Reporting on Hospice Claims Modification Rates IV. Collection of Information Requirements ICD–10–CM International Classification of 4. Hospice Aggregate Cap and the IMPACT V. Regulatory Impact Analysis Diseases, Tenth Revision, Clinical Act of 2014 A. Statement of Need Modification D. Proposed Alignment of the Inpatient B. Introduction ICR Information Collection Requirement and Aggregate Cap Accounting Year with C. Overall Impact IDG Interdisciplinary Group the Federal Fiscal Year 1. Detailed Economic Analysis IMPACT Act Improving Medicare Post- 1. Streamlined Method and Patient-by- a. Effects on Hospices Acute Care Transformation Act of 2014 Patient Proportional Method for b. Hospice Size IOM Institute of Medicine Counting Beneficiaries to Determine c. Geographic Location IPPS Inpatient Prospective Payment System Each Hospice’s Aggregate Cap Amount d. Type of Ownership IRC Inpatient Respite Care 2. Proposed Inpatient and Aggregate Cap e. Hospice Base LCD Local Coverage Determination Accounting Year Timeframe f. Effects on Other Providers MAC Medicare Administrative Contractor E. Proposed Updates to the Hospice g. Effects on the Medicare and Medicaid MAP Measure Applications Partnership Quality Reporting Program Programs MedPAC Medicare Payment Advisory 1. Background and Statutory Authority h. Alternatives Considered Commission 2. General Considerations Used for i. Accounting Statement MFP Multifactor Productivity Selection of Quality Measures for the j. Conclusion MSA Metropolitan Statistical Area HQRP 2. Regulatory Flexibility Act Analysis MSS Medical Social Services 3. Proposed Policy for Retention on HQRP 3. Unfunded Mandates Reform Act NHPCO National Hospice and Palliative Measures Adopted for Previous Payment Analysis Care Organization Determination VI. Federalism Analysis and Regulations Text NF Long Term Care Nursing Facility 4. Previously Adopted Measures for FY NOE Notice of Election 2016 and FY 2017 Payment Acronyms NOTR Notice of Termination/Revocation Determination Because of the many terms to which NP Nurse Practitioner 5. HQRP Quality Measures and Concepts NPI National Provider Identifier Under Consideration for Future Years we refer by acronym in this proposed NQF National Quality Forum 6. Form, Manner, and Timing of Quality rule, we are listing the acronyms used OIG Office of the Inspector General Data Submission and their corresponding meanings in OACT Office of the Actuary a. Background alphabetical order below: b. Proposed Policy for New Facilities to APU Annual Payment Update OMB Office of Management and Budget Begin Submitting Quality Data ASPE Assistant Secretary of Planning and PRRB Provider Reimbursement Review c. Previously Finalized Data Submission Evaluation Board Mechanism, Collection Timelines, and BBA Balanced Budget Act of 1997 PS&R Provider Statistical and Submission Deadlines for the FY 2017 BETOS Berenson-Eggers Types of Service Reimbursement Report Payment Determination BIPA Benefits Improvement and Protection Pub. L Public Law d. Proposed Data Submission Timelines Act of 2000 QAPI Quality Assessment and Performance and Requirements for FY 2018 Payment BNAF Budget Neutrality Adjustment Factor Improvement Determination and Subsequent Years BLS Bureau of Labor Statistics RHC Routine Home Care e. Proposed HQRP Data Submission and CAHPS® Consumer Assessment of RN Registered Nurse Compliance Thresholds for the FY 2018 Healthcare Providers and Systems SBA Small Business Administration Payment Determination and Subsequent CBSA Core-Based Statistical Area SEC Securities and Exchange Commission Years CCN CMS Certification Number SIA Service Intensity Add-on 7. HQRP Submission Exception and CCW Chronic Conditions Data Warehouse SNF Skilled Nursing Facility Extension Requirements for the FY 2017 CFR Code of Federal Regulations TEFRA Tax Equity and Fiscal Payment Determination and Subsequent CHC Continuous Home Care Responsibility Act of 1982 Years CHF Congestive Heart Failure TEP Technical Expert Panel 8. Adoption of the CAHPS Hospice Survey CMS Centers for Medicare & Medicaid UHDDS Uniform Hospital Discharge Data for the FY 2017 Payment Determination Services Set a. Background Description of the Survey COPD Chronic Obstructive Pulmonary U.S.C. United States Code b. Participation Requirements to Meet Disease I. Executive Summary for This Quality Reporting Requirements for the CoPs Conditions of Participation FY 2017 APU CPI Center for Program Integrity Proposed Rule c. Participation Requirements to Meet CPI–U Consumer Price Index-Urban A. Purpose Quality Reporting Requirements for the Consumers FY 2018 APU CR Change Request This rule proposes updates to the d. Vendor Participation Requirements for CVA Cerebral Vascular Accident payment rates for hospices for fiscal the FY 2017 APU Annual Payment CWF Common Working File year (FY) 2016, as required under Update CY Calendar Year section 1814(i) of the Social Security 9. Previously Finalized HQRP DME Durable Medical Equipment Act (the Act) and reflects the final year Reconsideration and Appeals Procedures DRG Diagnostic Related Group of the 7-year Budget Neutrality for the FY 2016 Payment Determination ER Emergency Room Adjustment Factor (BNAF) phase-out and Subsequent Years FEHC Family Evaluation of Hospice Care 10. Public Display of Quality Measures FR Federal Register finalized in the FY 2010 Hospice Wage Data for HQRP FY Fiscal Year Index final rule (74 FR 39407). Our 11. Public Display of other Hospice GAO Government Accountability Office proposed update to payment rates for Information GIP General Inpatient Care hospices also includes a proposal to

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change the hospice wage index by multiplied by the amount of direct efforts for possible future hospice incorporating the new Office of patient care provided by a RN or social refinements. We believe that reporting Management and Budget (OMB) core- worker that occurred during the last 7 of all diagnoses on the hospice claim based statistical area (CBSA) definitions, days of a beneficiary’s life, if certain aligns with current coding guidelines as changes to the aggregate cap calculation criteria were met. well as admission requirements for required by section 1814(i)(2)(B)(ii) of In section III.C.1 of this rule, we hospice certifications. the Act, and includes a proposal to align propose to update the hospice wage C. Summary of Impacts the cap accounting year for both the index using a 50/50 blend of the inpatient cap and the hospice aggregate existing CBSA designations and the new TABLE 1—IMPACT SUMMARY TABLE cap with the federal fiscal year starting CBSA designations outlined in a in FY 2017. In addition, in accordance February 28, 2013, OMB bulletin. Provision with section 1814(i)(6)(D)(i) of the Act, Section III.C.2 of this rule implements description Transfers this rule proposes to create two different year 7 of the 7-year BNAF phase-out payment rates for routine home care finalized in the FY 2010 Hospice Wage FY 2016 Hos- The overall economic impact (RHC) that would result in a higher base Index final rule (74 FR 39407). In pice Wage of this proposed rule is es- payment rate for the first 60 days of section III.C.3, we propose to update the Index and timated to be $200 million hospice care and a reduced base hospice payment rates for FY 2016 by Payment in increased payments to payment rate days 61 or over of hospice 1.8 percent. Section III.C.4 would Rate Update. hospices during FY 2016. care. Also, in accordance with section implement changes mandated by the 1814(i)(6)(d)(i) of the Act, this rule Improving Medicare Post-Acute Care II. Background proposes a service intensity add-on Transformation Act of 2014 (IMPACT A. Hospice Care (SIA) payment that would result in an Act), in which the aggregate cap for Hospice care is an approach to add-on payment equal to the accounting years that end after treatment that recognizes that the Continuous Home Care (CHC) hourly September 30, 2016 and before October impending death of an individual payment rate multiplied by the amount 1, 2025, would be updated by the warrants a change in the focus from of direct patient care provided by a hospice payment update rather than curative care to palliative care for relief registered nurse (RN) or social worker using the CPI–U. Specifically, the 2016 of pain and for symptom management. provided during the last 7 days of a cap year, starting on November 1, 2015 The goal of hospice care is to help beneficiary’s life, if certain criteria are and ending on October 31, 2016, would terminally ill individuals continue life met. In addition, section 3004(c) of the be updated by the FY 2016 percentage with minimal disruption to normal Affordable Care Act established a update for hospice care. In addition, in activities while remaining primarily in quality reporting program for hospices. section III.D, we are proposing to align In accordance with section 1814(i)(5)(A) the cap accounting year for both the the home environment. A hospice uses of the Act, starting in FY 2014, hospices inpatient cap and the hospice aggregate an interdisciplinary approach to deliver that have failed to meet quality cap with the fiscal year for FY 2017 and medical, nursing, social, psychological, reporting requirements receive a 2 later. We believe that this would allow emotional, and spiritual services percentage point reduction to their for the timely implementation of the through use of a broad spectrum of payment update percentage. Although IMPACT Act changes while better professionals and other caregivers, with this proposed rule does not propose aligning the cap accounting year with the goal of making the individual as new quality measures, it provides the timeframe described in the IMPACT physically and emotionally comfortable updates on the hospice quality reporting Act. as possible. Hospice is compassionate program. Finally, this proposed rule In section III.E of this rule, we discuss patient and family-centered care for includes a clarification regarding updates to the hospice quality reporting those who are terminally ill. It is a diagnosis reporting on the hospice claim program, including participation comprehensive, holistic approach to form. requirements for current year (CY) 2015 treatment that recognizes that the regarding the Consumer Assessment of impending death of an individual B. Summary of the Major Provisions Healthcare Providers and Systems necessitates a change from curative to Section III.A of this proposed rule (CAHPS®) Hospice Survey, and remind palliative care. provides an update on hospice payment the hospice industry that last year we Medicare regulations define reform research and analysis. As a result set the July 1, 2014 implementation date ‘‘palliative care’’ as ‘‘patient and family- of the hospice payment reform research for the Hospice Item Set (HIS) and the centered care that optimizes quality of and analysis conducted over the past January 1, 2015 implementation date for life by anticipating, preventing, and several years, some of which is the CAHPS® Hospice Survey. More than treating suffering. Palliative care described in section III.A of this seven new quality measures will be throughout the continuum of illness proposed rule and in various technical derived from these tools; therefore, no involves addressing physical, reports available on the CMS Hospice new measures were proposed this year. intellectual, emotional, social, and Center Web page (http://www.cms.gov/ Also, Section III.E of this rule will make spiritual needs and to facilitate patient Center/Provider-Type/Hospice- changes related to the reconsideration autonomy, access to information, and Center.html). Section III.B proposes to process, extraordinary circumstance choice.’’ (42 CFR 418.3) Palliative care create two different payment rates for extensions or exemptions, hospice is at the core of hospice philosophy and RHC that would result in a higher base quality reporting program (HQRP) care practices, and is a critical payment rate for the first 60 days of eligibility requirements for newly component of the Medicare hospice hospice care and a reduced base certified hospices and new data benefit. See also Hospice Conditions of payment rate for days 61 or over of submission timeliness requirements and Participation final rule (73 FR 32088) hospice care. Section III.B also proposes compliance thresholds. Finally, in (2008). The goal of palliative care in SIA payment, in addition to the per Section III.F, we clarify that hospices hospice is to improve the quality of life diem rate for the RHC level of care, that must report all diagnoses of the of individuals, and their families, facing would result in an add-on payment beneficiary on the hospice claim as a the issues associated with a life- equal to the CHC hourly payment rate part of the ongoing data collection threatening illness through the

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prevention and relief of suffering by end-of-life may necessitate short-term As stated in the August 22, 1983 means of early identification, inpatient admission to a hospital, proposed rule entitled ‘‘Medicare assessment and treatment of pain and skilled nursing facility (SNF), or hospice Program; Hospice Care’’ (48 FR 38146), other issues. This is achieved by the facility for procedures necessary for ‘‘the hospice experience in the United hospice interdisciplinary team working pain control or acute or chronic States has placed emphasis on home with the patient and family to develop symptom management that cannot be care. It offers physician services, a comprehensive care plan focused on managed in any other setting. These specialized nursing services, and other coordinating care services, reducing acute hospice care services are to ensure forms of care in the home to enable the unnecessary diagnostics or ineffective that any new or worsening symptoms terminally ill individual to remain at therapies, and offering ongoing are intensively addressed so that the home in the company of family and conversations with individuals and individual can return to his or her home friends as long as possible.’’ The their families about changes in their environment at a home level of care. concept of a patient ‘‘electing’’ the condition. It is expected that this Short-term, intermittent, inpatient hospice benefit and being certified as comprehensive care plan will shift over respite services are also available to the terminally ill were two key components time to meet the changing needs of the family of the hospice patient when of the legislation responsible for the patient and family as the individual needed to relieve the family or other approaches the end of life. caregivers. Additionally, an individual creation of the Medicare Hospice Medicare hospice care is palliative can receive continuous home care Benefit (section 122 of the Tax Equity care for individuals with a prognosis of during a period of crisis in which an and Fiscal Responsibility Act of 1982 living 6 months or less if the terminal individual requires primarily (TEFRA), (Pub. L. 97–248)). Section 122 illness runs its normal course. When an continuous nursing care to achieve of TEFRA created the Medicare Hospice individual is terminally ill, many health palliation or management of acute benefit, which was implemented on problems are brought on by underlying medical symptoms so that the November 1, 1983. Under sections condition(s), as bodily systems are individual can remain at home. 1812(d) and 1861(dd) of the Act, interdependent. In the June 5, 2008 Continuous home care may be covered codified at 42 U.S.C. 1395d(d) and Hospice Conditions of Participation on a continuous basis for as much as 24 1395x(dd), we provide coverage of final rule (73 FR 32088), we stated that hours a day, and these periods must be hospice care for terminally ill Medicare ‘‘the medical director must consider the predominantly nursing care in beneficiaries who elect to receive care primary terminal condition, related accordance with our regulations at from a Medicare-certified hospice. Our diagnoses, current subjective and § 418.204. A minimum of 8 hours of regulations at § 418.54(c) stipulate that objective medical findings, current nursing, or nursing and aide, care must the comprehensive hospice assessment medication and treatment orders, and be furnished on a particular day to must identify the patient’s physical, information about unrelated conditions qualify for the continuous home care psychosocial, emotional, and spiritual when considering the initial rate (§ 418.302(e)(4)). needs related to the terminal illness and certification of the terminal illness.’’ As Hospices are expected to comply with related conditions, and address those referenced in our regulations at all civil rights laws, including the needs in order to promote the hospice § 418.22(b)(1), to be eligible for provision of auxiliary aids and services patient’s well-being, comfort, and Medicare hospice services, the patient’s to ensure effective communication with attending physician (if any) and the dignity throughout the dying process. patients or patient care representatives The comprehensive assessment must hospice medical director must certify with disabilities consistent with Section that the individual is ‘‘terminally ill,’’ as take into consideration the following 504 of the Rehabilitation Act of 1973 factors: The nature and condition defined in section 1861(dd)(3)(A) of the and the Americans with Disabilities Act, Social Security Act (the Act) and our causing admission (including the and to provide language access for such presence or lack of objective data and regulations at § 418.3 that is, the persons who are limited in English subjective complaints); complications individual’s prognosis is for a life proficiency, consistent with Title VI of and risk factors that affect care expectancy of 6 months or less if the the Civil Rights Act of 1964. Further planning; functional status; imminence terminal illness runs its normal course. information about these requirements of death; and severity of symptoms The certification of terminal illness may be found at http://www.hhs.gov/ must include a brief narrative ocr/civilrights. (§ 418.54(c)). The Medicare hospice explanation of the clinical findings that benefit requires the hospice to cover all supports a life expectancy of 6 months B. History of the Medicare Hospice reasonable and necessary palliative care or less as part of the certification and Benefit related to the terminal prognosis, as recertification forms, as set out at Before the creation of the Medicare described in the patient’s plan of care. § 418.22(b)(3). hospice benefit, hospice programs were The December 16, 1983 Hospice final The goal of hospice care is to make originally operated by volunteers who rule (48 FR 56008) requires hospices to the hospice patient as physically and cared for the dying. During the early cover care for interventions to manage emotionally comfortable as possible, development stages of the Medicare pain and symptoms. Additionally, the with minimal disruption to normal hospice benefit, hospice advocates were hospice Conditions of Participation activities, while remaining primarily in clear that they wanted a Medicare (CoP) at § 418.56(c) require that the the home environment. Hospice care benefit that provided all-inclusive care hospice must provide all reasonable and uses an interdisciplinary approach to for terminally-ill individuals, provided necessary services for the palliation and deliver medical, nursing, social, pain relief and symptom management, management of the terminal illness, psychological, emotional, and spiritual and offered the opportunity to die with services through the use of a broad related conditions and interventions to dignity in the comfort of one’s home manage pain and symptoms. Therapy spectrum of professional and other rather than in an institutional setting.1 caregivers and volunteers. While the and interventions must be assessed and goal of hospice care is to allow for the managed in terms of providing 1 Connor, Stephen. (2007). Development of palliation and comfort without undue individual to remain in his or her home Hospice and Palliative Care in the United States. environment, circumstances during the OMEGA. 56(1), p89–99. symptom burden for the hospice patient

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or family.2 In the December 16, 1983 of the Act establishes the services that March 1983. The project summarized Hospice final rule (48 FR 56010 through are to be rendered by a Medicare the hospice care philosophy and 56011), regarding what is related versus certified hospice program. These principles as the following: unrelated to the terminal illness, we covered services include: Nursing care; • Patient and family know of the stated: ‘‘. . .we believe that the unique physical therapy; occupational therapy; terminal condition. physical condition of each terminally ill speech-language pathology therapy; • Further medical treatment and individual makes it necessary for these medical social services; home health intervention are indicated only on a decisions to be made on a case-by-case aide services (now called hospice aide supportive basis. basis. It is our general view that services); physician services; • Pain control should be available to hospices are required to provide homemaker services; medical supplies patients as needed to prevent rather virtually all the care that is needed by (including drugs and biologics); medical than to just ameliorate pain. • terminally ill patients.’’ Therefore, appliances; counseling services Interdisciplinary teamwork is unless there is clear evidence that a (including dietary counseling); short- essential in caring for patient and term inpatient care (including both family. condition is unrelated to the terminal • prognosis; all conditions are considered respite care and procedures necessary Family members and friends should to be related to the terminal illness. It for pain control and acute or chronic be active in providing support during symptom management) in a hospital, the death and bereavement process. is also the responsibility of the hospice • physician to document why a patient’s nursing facility, or hospice inpatient Trained volunteers should provide medical needs will be unrelated to the facility; continuous home care during additional support as needed. The cost data and the findings on terminal prognosis. periods of crisis and only as necessary As stated in the December 16,1983 to maintain the terminally ill individual what services hospices provided in the Hospice final rule, the fundamental at home; and any other item or service demonstration project were used to premise upon which the hospice benefit which is specified in the plan of care design the Medicare hospice benefit. was designed was the ‘‘revocation’’ of and for which payment may otherwise The identified hospice services were traditional curative care and the be made under Medicare, in accordance incorporated into the service ‘‘election’’ of hospice care for end-of-life with Title XVIII of the Act. requirements under the Medicare symptom management and Section 1814(a)(7)(B) of the Act hospice benefit. Importantly, in the maximization of quality of life (48 FR requires that a written plan for August 22, 1983 Hospice proposed rule, 56008). After electing hospice care, the providing hospice care to a beneficiary we stated ‘‘the hospice benefit and the patient typically returns to the home who is a hospice patient be established resulting Medicare reimbursement is not from an institutionalized setting or before care is provided by, or under intended to diminish the voluntary remains in the home, to be surrounded arrangements made by, that hospice spirit of hospices’’ (48 FR 38149). by family and friends, and to prepare program and that the written plan be D. Medicare Payment for Hospice Care periodically reviewed by the emotionally and spiritually for death Sections 1812(d), 1813(a)(4), while receiving expert symptom beneficiary’s attending physician (if any), the hospice medical director, and 1814(a)(7), 1814(i), and 1861(dd) of the management and other supportive Act, and our regulations in part 418, services. Election of hospice care also an interdisciplinary group (described in section 1861(dd)(2)(B) of the Act). The establish eligibility requirements, includes waiving the right to Medicare payment standards and procedures, payment for curative treatment for the services offered under the Medicare hospice benefit must be available, as define covered services, and delineate terminal prognosis, and instead the conditions a hospice must meet to receiving palliative care to manage pain needed, to beneficiaries 24 hours a day, 7 days a week (section 1861(dd)(2)(A)(i) be approved for participation in the or symptoms. Medicare program. Part 418, subpart G, The benefit was originally designed to of the Act). Upon the implementation of provides for a per diem payment in one cover hospice care for a finite period of the hospice benefit, the Congress of four prospectively-determined rate time that roughly corresponded to a life expected hospices to continue to use categories of hospice care (RHC, CHC, expectancy of 6 months or less. Initially, volunteer services, though these inpatient respite care, and general beneficiaries could receive three services are not reimbursed by Medicare inpatient care), based on each day a election periods: Two 90-day periods (see Section 1861(dd)(2)(E) of the Act qualified Medicare beneficiary is under and one 30-day period. Currently, and (48 FR 38149)). As stated in the hospice care (once the individual has Medicare beneficiaries can elect hospice August 22, 1983 Hospice proposed rule, elected). This per diem payment is to care for two 90-day periods and an the hospice interdisciplinary group include all of the hospice services unlimited number of subsequent 60-day should be comprised of paid hospice needed to manage the beneficiaries’ periods; however, the expectation employees as well as hospice volunteers care, as required by section 1861(dd)(1) remains that beneficiaries have a life (48 FR 38149). This expectation of the Act. There has been little change expectancy of 6 months or less if the supports the hospice philosophy of holistic, comprehensive, compassionate, in the hospice payment structure since terminal illness runs its normal course. end-of-life care. the benefit’s inception. The per diem C. Services Covered by the Medicare Before the Medicare hospice benefit rate based on level of care was Hospice Benefit was established, the Congress requested established in 1983, and this payment One requirement for coverage under a demonstration project to test the structure remains today with some the Medicare Hospice benefit is that feasibility of covering hospice care adjustments, as noted below: hospice services must be reasonable and under Medicare. The National Hospice Study was initiated in 1980 through a 1. Omnibus Budget Reconciliation Act necessary for the palliation and of 1989 management of the terminal illness and grant sponsored by the Robert Wood Section 6005(a) of the Omnibus related conditions. Section 1861(dd)(1) Johnson and John A. Hartford Foundations and CMS (then, the Health Budget Reconciliation Act of 1989 (Pub. L. 101–239) amended section 2 Paolini, DO, Charlotte. (2001). Symptoms Care Financing Administration (HCFA)). Management at End of Life. JAOA. 101(10). p609– The demonstration project was 1814(i)(1)(C) of the Act and provided for 615. conducted between October 1980 and the following two changes in the

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methodology concerning updating the to the pre-floor, pre-reclassified hospital section 3132(a) of the Affordable Care daily payment rates: (1) Effective wage index when deriving the hospice Act, require hospices to begin January 1, 1990, the daily payment rates wage index, subject to a wage index submitting quality data, based on for RHC and other services included in floor. measures to be specified by the hospice care were increased to equal Secretary of the Department of Health 4. FY 2010 Hospice Wage Index Final 120 percent of the rates in effect on and Human Services (the Secretary), for Rule September 30, 1989; and (2) the daily FY 2014 and subsequent FYs. Beginning payment rate for RHC and other services Inpatient hospital pre-floor and pre- in FY 2014, hospices which fail to included in hospice care for fiscal years reclassified wage index values, as report quality data will have their (FYs) beginning on or after October 1, described in the August 8, 1997 Hospice market basket update reduced by 2 1990, were the payment rates in effect Wage Index final rule, are subject to percentage points. during the previous Federal fiscal year either a budget neutrality adjustment or Section 1814(a)(7)(D)(i) of the Act was increased by the hospital market basket application of the wage index floor. amended by section 3132(b)(2)(D)(i) of percentage increase. Wage index values of 0.8 or greater are the Affordable Care Act, and requires, adjusted by the (BNAF). Starting in FY effective January 1, 2011, that a hospice 2. Balanced Budget Act of 1997 2010, a 7-year phase-out of the BNAF physician or nurse practitioner have a Section 4441(a) of the Balanced began (August 6, 2009 FY 2010 Hospice face-to-face encounter with the Budget Act of 1997 (BBA) (Pub. L. 105– Wage Index final rule, (74 FR 39384)), beneficiary to determine continued 33) amended section 1814(i)(1)(C)(ii)(VI) with a 10 percent reduction in FY 2010, eligibility of the beneficiary’s hospice of the Act to establish updates to an additional 15 percent reduction for a care prior to the 180th-day hospice rates for FYs 1998 through total of 25 percent in FY 2011, an recertification and each subsequent 2002. Hospice rates were updated by a additional 15 percent reduction for a recertification, and to attest that such factor equal to the hospital market total 40 percent reduction in FY 2012, visit took place. When implementing basket percentage increase, minus 1 an additional 15 percent reduction for a this provision, we finalized in the CY percentage point. Payment rates for FYs total of 55 percent in FY 2013, and an 2011 Home Health Prospective Payment from 2002 have been updated according additional 15 percent reduction for a System final rule (75 FR 70435) that the to section 1814(i)(1)(C)(ii)(VII) of the total 70 percent reduction in FY 2014. 180th-day recertification and Act, which states that the update to the The phase-out will continue with an subsequent recertification’s payment rates for subsequent FYs will additional 15 percent reduction for a corresponded to the beneficiary’s third be the hospital market basket percentage total reduction of 85 percent in FY 2015, or subsequent benefit periods. Further, increase for the FY. The Act requires us and an additional 15 percent reduction section 1814(i)(6) of the Act, as to use the inpatient hospital market for complete elimination in FY 2016. amended by section 3132(a)(1)(B) of the basket to determine hospice payment We note that the BNAF is an adjustment Affordable Care Act, authorizes the rates. which increases the hospice wage index Secretary to collect additional data and value. Therefore, the BNAF reduction is 3. FY 1998 Hospice Wage Index Final information determined appropriate to a reduction in the amount of the BNAF Rule revise payments for hospice care and increase applied to the hospice wage other purposes. The types of data and In the August 8, 1997 FY 1998 index value. It is not a reduction in the information suggested in the Affordable Hospice Wage Index final rule (62 FR hospice wage index value or in the Care Act would capture accurate 42860), we implemented a new hospice payment rates. resource utilization, which could be methodology for calculating the hospice 5. The Affordable Care Act collected on claims, cost reports, and wage index based on the possibly other mechanisms, as the recommendations of a negotiated Starting with FY 2013 (and in Secretary determines to be appropriate. rulemaking committee. The original subsequent FYs), the market basket The data collected may be used to revise hospice wage index was based on 1981 percentage update under the hospice the methodology for determining the Bureau of Labor Statistics hospital data payment system referenced in sections payment rates for RHC and other and had not been updated since 1983. 1814(i)(1)(C)(ii)(VII) and services included in hospice care, no In 1994, because of disparity in wages 1814(i)(1)(C)(iii) of the Act will be earlier than October 1, 2013, as from one geographical location to annually reduced by changes in described in section 1814(i)(6)(D) of the another, the Hospice Wage Index economy-wide productivity, as Act. In addition, we are required to Negotiated Rulemaking Committee was specified in section 1886(b)(3)(B)(xi)(II) consult with hospice programs and the formed to negotiate a new wage index of the Act, as amended by section Medicare Payment Advisory methodology that could be accepted by 3132(a) of the Patient Protection and Commission (MedPAC) regarding the industry and the government. This Affordable Care Act (Pub. L. 111–148) as additional data collection and payment Committee was comprised of amended by the Health Care and revision options. representatives from national hospice Education Reconciliation Act (Pub. L. associations; rural, urban, large and 111–152) (collectively referred to as the 6. FY 2012 Hospice Wage Index Final small hospices, and multi-site hospices; Affordable Care Act)). In FY 2013 Rule consumer groups; and a government through FY 2019, the market basket When the Medicare Hospice benefit representative. The Committee decided percentage update under the hospice was implemented, the Congress that in updating the hospice wage payment system will be reduced by an included an aggregate cap on hospice index, aggregate Medicare payments to additional 0.3 percentage point payments, which limits the total hospices would remain budget neutral (although for FY 2014 to FY 2019, the aggregate payments any individual to payments calculated using the 1983 potential 0.3 percentage point reduction hospice can receive in a year. The wage index, to cushion the impact of is subject to suspension under Congress stipulated that a ‘‘cap amount’’ using a new wage index methodology. conditions as specified in section be computed each year. The cap amount To implement this policy, a Budget 1814(i)(1)(C)(v) of the Act). was set at $6,500 per beneficiary when Neutrality Adjustment Factor (BNAF) In addition, sections 1814(i)(5)(A) first enacted in 1983 and is adjusted will be computed and applied annually through (C) of the Act, as amended by annually by the change in the medical

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care expenditure category of the paid. Upon live discharge or revocation, 8. IMPACT Act of 2014 consumer price index for urban the beneficiary immediately resumes the The Improving Medicare Post-Acute consumers from March 1984 to March of Medicare coverage that had been waived Care Transformation Act (IMPACT Act) the cap year (section 1814(i)(2)(B) of the when he or she elected hospice. The FY of 2014 became law on October 6, 2014 Act). The cap year is defined as the 2015 Hospice Rate Update final rule (Pub. L. 113–185). Section 3(a) of the period from November 1st to October also finalized a requirement that IMPACT Act mandates that all Medicare 31st. As we stated in the August 4, 2011 requires hospices to file a notice of certified hospices be surveyed every 3 FY 2012 Hospice Wage Index final rule termination/revocation within 5 years beginning April 6, 2015 and (76 FR 47308 through 47314) for the calendar days of a beneficiary’s live ending September 30, 2025, as it was 2012 cap year and subsequent cap years, discharge or revocation, unless the found that surveys of hospices were the hospice aggregate cap will be hospices have already filed a final being performed on an infrequent basis. calculated using the patient-by-patient claim. This requirement helps to protect In addition, the IMPACT Act also proportional methodology, within beneficiaries from delays in accessing implements a provision set forth in the certain limits. We will allow existing needed care (79 FR 50509). Affordable Care Act that requires hospices the option of having their cap medical review of hospice cases calculated via the original streamlined A hospice ‘‘attending physician’’ is involving patients receiving more than methodology, also within certain limits. described by the statutory and 180 days care in select hospices that New hospices will have their cap regulatory definitions as a medical show a preponderance of such patients, determinations calculated using the doctor, osteopath, or nurse practitioner and the IMPACT Act contains a new patient-by-patient proportional whom the patient identifies, at the time provision mandating that the aggregate methodology. The patient-by-patient of hospice election, as having the most proportional methodology and the significant role in the determination and cap amount for accounting years that streamlined methodology are two delivery of his or her medical care. We end after September 30, 2016, and different methodologies for counting received reports of problems with the before October 1, 2025 be updated by beneficiaries when calculating the identification of the patient’s designated the hospice payment update rather than hospice aggregate cap. A detailed attending physician and a third of using the consumer price index for explanation of these methods is found hospice patients had multiple providers urban consumers (CPI–U) for medical in the August 4, 2011 FY 2012 Hospice submit Part B claims as the ‘‘attending care expenditures. Specifically, the 2016 Wage Index final rule (76 FR 47308 physician’’ using a modifier. The FY cap year, which starts on November 1, through 47314). If a hospice’s total 2015 Hospice Rate Update final rule 2015 and ends on October 31, 2016, will Medicare reimbursement for the cap finalized a requirement that the election be updated by the FY 2016 payment year exceeded the hospice aggregate form must include the beneficiary’s update percentage for hospice care. In cap, then the hospice must repay the choice of attending physician and that accordance with the statute, we will excess back to Medicare. the beneficiary provide the hospice with continue to do this through any cap year a signed document when he or she ending before October 1, 2025 (that is, 7. FY 2015 Hospice Rate Update Final chooses to change attending physicians through cap year 2025). Rule (79 FR 50479). E. Trends in Medicare Hospice When electing hospice, a beneficiary Hospice providers are required to Utilization waives Medicare coverage for any care begin using a Hospice Experience of for the terminal illness and related Since the implementation of the Care Survey for informal caregivers of hospice benefit in 1983, and especially conditions except for services provided hospice patients surveyed in 2015. The by the designated hospice and attending within the last decade, there has been FY 2015 Hospice Rate Update final rule physician. A hospice is to file a Notice substantial growth in hospice provided background and a description of Election (NOE) as soon as possible to utilization. The number of Medicare of the development of the Hospice establish the hospice election within the beneficiaries receiving hospice services Experience of Care Survey, including claims processing system. Late filing of has grown from 513,000 in FY 2000 to the model of survey implementation, the NOE can result in inaccurate benefit over 1.3 million in FY 2013. Similarly, the survey respondents, eligibility period data and leaves Medicare Medicare hospice expenditures have criteria for the sample, and the vulnerable to paying non-hospice claims risen from $2.8 billion in FY 2000 to an languages in which the survey is related to the terminal illness and estimated $15.3 billion in FY 2013. Our offered. The FY 2015 Hospice Rate related conditions and beneficiaries Office of the Actuary (OACT) projects possibly liable for any cost-sharing Update final rule also outlined that hospice expenditures are expected associated costs. The FY 2015 Hospice participation requirements for CY 2015 to continue to increase, by Rate Update final rule (79 FR 50452) and discussed vendor oversight approximately 8 percent annually, finalized a requirement that requires the activities and the reconsideration and reflecting an increase in the number of NOE be filed within 5 calendar days appeals process (79 FR 50496). Medicare beneficiaries, more beneficiary after the effective date of hospice Finally, the FY 2015 Hospice Rate awareness of the Medicare Hospice election. If the NOE is filed beyond this Update final rule requires providers to Benefit for end-of-life care, and a 5 day period, hospice providers are complete their aggregate cap growing preference for care provided in liable for the services furnished during determination within 5 months after the home and community-based settings. the days from the effective date of cap year, but not sooner than 3 months However, this increased spending is hospice election to the date of NOE after the end of the cap year, and remit partly due to an increased average filing (79 FR 50454, 50474). Similar to any overpayments. Those hospices that lifetime length of stay for beneficiaries, the NOE, the claims processing system do not submit their aggregate cap from 54 days in 2000 to 98.5 days in FY must be notified of a beneficiary’s determinations will have their payments 2013, an increase of 82 percent. discharge from hospice or hospice suspended until the determination is There have also been changes in the benefit revocation. This update to the completed and received by the Medicare diagnosis patterns among Medicare beneficiary’s status allows claims from Administrative Contractor (MAC) (79 FR hospice enrollees. Specifically, there non-hospice providers to process and be 50503). were notable increases between 2002

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and 2007 in neurologically-based diagnoses. Effective October 1, 2014, 2015 hospice rate update final rule. As diagnoses, including various dementia hospice claims were returned to the a result of this, there has been a shift in diagnoses. Additionally, there have provider if ‘‘debility’’ and ‘‘adult failure coding patterns on hospice claims. For been significant increases in the use of to thrive’’ were coded as the principal FY 2014, the most common hospice non-specific, symptom-classified hospice diagnosis as well as other ICD– principal diagnoses were Alzheimer’s diagnoses, such as ‘‘debility’’ and ‘‘adult 9–CM codes that are not permissible as disease, Congestive Heart Failure, Lung failure to thrive.’’ In FY 2013, ‘‘debility’’ principal diagnosis codes per ICD–9– Cancer, Chronic Airway Obstruction and ‘‘adult failure to thrive’’ were the CM coding guidelines. We reminded the and Senile Dementia which constituted first and sixth most common hospice hospice industry that this policy would approximately 32 percent of all claims- diagnoses, respectively, accounting for go into effect and claims would start to reported principal diagnosis codes approximately 14 percent of all be returned October 1, 2014 in the FY reported in FY 2014 (see Table 2 below).

TABLE 2—THE TOP TWENTY PRINCIPAL HOSPICE DIAGNOSES, FY 2002, FY 2007, FY 2013, FY 2014

Rank ICD–9/Reported Principal Diagnosis Count Percentage

Year: FY 2002

1 ...... 162.9 Lung Cancer ...... 73,769 11 2 ...... 428.0 Congestive Heart Failure ...... 45,951 7 3 ...... 799.3 Debility Unspecified ...... 36,999 6 4 ...... 496 COPD ...... 35,197 5 5 ...... 331.0 Alzheimer’s Disease ...... 28,787 4 6 ...... 436 CVA/Stroke ...... 26,897 4 7 ...... 185 Prostate Cancer ...... 20,262 3 8 ...... 783.7 Adult Failure To Thrive ...... 18,304 3 9 ...... 174.9 Breast Cancer ...... 17,812 3 10 ...... 290.0 Senile Dementia, Uncomp ...... 16,999 3 11 ...... 153.0 Colon Cancer ...... 16,379 2 12 ...... 157.9 Pancreatic Cancer ...... 15,427 2 13 ...... 294.8 Organic Brain Synd Nec ...... 10,394 2 14 ...... 429.9 Heart Disease Unspecified ...... 10,332 2 15 ...... 154.0 Rectosigmoid Colon Cancer ...... 8,956 1 16 ...... 332.0 Parkinson’s Disease ...... 8,865 1 17 ...... 586 Renal Failure Unspecified ...... 8,764 1 18 ...... 585 Chronic Renal Failure (End 2005) ...... 8,599 1 19 ...... 183.0 Ovarian Cancer ...... 7,432 1 20 ...... 188.9 Bladder Cancer ...... 6,916 1

Year: FY 2007

1 ...... 799.3 Debility Unspecified ...... 90,150 9 2 ...... 162.9 Lung Cancer ...... 86,954 8 3 ...... 428.0 Congestive Heart Failure ...... 77,836 7 4 ...... 496 COPD ...... 60,815 6 5 ...... 783.7 Adult Failure To Thrive ...... 58,303 6 6 ...... 331.0 Alzheimer’s Disease ...... 58,200 6 7 ...... 290.0 Senile Dementia Uncomp ...... 37,667 4 8 ...... 436 CVA/Stroke ...... 31,800 3 9 ...... 429.9 Heart Disease Unspecified ...... 22,170 2 10 ...... 185 Prostate Cancer ...... 22,086 2 11 ...... 174.9 Breast Cancer ...... 20,378 2 12 ...... 157.9 Pancreas Unspecified ...... 19,082 2 13 ...... 153.9 Colon Cancer ...... 19,080 2 14 ...... 294.8 Organic Brain Syndrome NEC ...... 17,697 2 15 ...... 332.0 Parkinson’s Disease ...... 16,524 2 16 ...... 294.10 Dementia In Other Diseases w/o Behav. Dist ...... 15,777 2 17 ...... 586 Renal Failure Unspecified ...... 12,188 1 18 ...... 585.6 End Stage Renal Disease ...... 11,196 1 19 ...... 188.9 Bladder Cancer ...... 8,806 1 20 ...... 183.0 Ovarian Cancer ...... 8,434 1

Year: FY 2013

1 ...... 799.3 Debility Unspecified ...... 127,415 9 2 ...... 428.0 Congestive Heart Failure ...... 96,171 7 3 ...... 162.9 Lung Cancer ...... 91,598 6 4 ...... 496 COPD ...... 82,184 6 5 ...... 331.0 Alzheimer’s Disease ...... 79,626 6 6 ...... 783.7 Adult Failure To Thrive ...... 71,122 5 7 ...... 290.0 Senile Dementia, Uncomp ...... 60,579 4 8 ...... 429.9 Heart Disease Unspecified ...... 36,914 3 9 ...... 436 CVA/Stroke ...... 34,459 2 10 ...... 294.10 Dementia In Other Diseases w/o Behavioral Dist ...... 30,963 2 11 ...... 332.0 Parkinson’s Disease ...... 25,396 2

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TABLE 2—THE TOP TWENTY PRINCIPAL HOSPICE DIAGNOSES, FY 2002, FY 2007, FY 2013, FY 2014—Continued

Rank ICD–9/Reported Principal Diagnosis Count Percentage

12 ...... 153.9 Colon Cancer ...... 23,228 2 13 ...... 294.20 Dementia Unspecified w/o Behavioral Dist ...... 23,224 2 14 ...... 174.9 Breast Cancer ...... 23,059 2 15 ...... 157.9 Pancreatic Cancer ...... 22,341 2 16 ...... 185 Prostate Cancer ...... 21,769 2 17 ...... 585.6 End-Stage Renal Disease ...... 19,309 1 18 ...... 518.81 Acute Respiratory Failure ...... 15,965 1 19 ...... 294.8 Other Persistent Mental Dis.—classified elsewhere ...... 14,372 1 20 ...... 294.11 Dementia In Other Diseases w/Behavioral Dist ...... 13,687 1

Year: FY 2014

1 ...... 331.0 Alzheimer’s disease ...... 127,438 9 2 ...... 428.0 Congestive heart failure, unspecified ...... 106,570 8 3 ...... 162.9 Lung Cancer ...... 89,726 6 4 ...... 496 COPD ...... 78,643 6 5 ...... 290.0 Senile dementia, uncomplicated ...... 40,120 3 6 ...... 429.9 Heart disease, unspecified ...... 36,929 3 7 ...... 436 CVA/Stroke ...... 33,466 2 8 ...... 294.20 Dementia, unspecified, without behavioral disturbance ...... 33,119 2 9 ...... 332.0 Parkinson’s Disease ...... 30,070 2 10 ...... 153.9 Colon Cancer ...... 23,385 2 11 ...... 174.9 Breast Cancer ...... 23,343 2 12 ...... 157.9 Pancreatic Cancer ...... 22,521 2 13 ...... 185 Prostate Cancer ...... 22,136 2 14 ...... 585.6 End stage renal disease ...... 21,467 2 15 ...... 294.10 Dementia in conditions classified elsewhere w/o behav disturb- 19,523 1 ance. 16 ...... 331.2 Senile degeneration of brain ...... 18,660 1 17 ...... 518.81 Acute respiratory failure ...... 17,347 1 18 ...... 290.40 Vascular dementia, uncomplicated ...... 17,220 1 19 ...... 491.21 Obstructive chronic bronchitis with (acute) exacerbation ...... 15,985 1 20 ...... 429.2 Cardiovascular disease, unspecified ...... 14,186 1 Note(s): The frequencies shown represent beneficiaries that had a least one claim with the specific ICD–9–CM code reported as the principal diagnosis. Beneficiaries could be represented multiple times in the results if they have multiple claims during that time period with different principal diagnoses. Source: FY 2002 and 2007 hospice claims data from the Chronic Conditions Data Warehouse (CCW), accessed on February 14 and February 20, 2013. FY 2013 hospice claims data from the CCW, accessed on June 26, 2014 and preliminary FY 2014 hospice claims data from the CCW, accessed on January 26, 2015.

III. Provisions of the Proposed Rule on hospice claims regarding drugs and updates on findings from our research certain durable medical equipment and A. Hospice Payment Reform Research and analyses and reform options in the and Analyses effective October 1, 2014, we finalized FY 2014 and FY 2015 Hospice Wage changes to the hospice cost report to Index and Payment Rate Update In 2010, the Congress amended improve data collection on the costs of proposed and final rules (78 FR 48234 section 1814(i)(6) of the Act with providing hospice care.3 In addition, and 79 FR 50452); and updated the section 3132(a) of the Affordable Care our research contractor Abt Associates hospice industry on reform work Act. The amendment authorizes the conducted a hospice literature review; through Open Door Forums, industry Secretary to collect additional data and held stakeholder meetings; and 4 information determined appropriate to conferences and academic conferences. developed and maintained an analytic We have taken into consideration the revise payments for hospice care and for plan, which supports effort towards other purposes. The data collected may recommendations from MedPAC on implementing hospice payment reform. reforming hospice payment, as be used to revise the methodology for During the stakeholder meetings, RHC and other hospice services (in a articulated in the MedPAC Reports to attendees articulated concerns of budget-neutral manner in the first year), Congress since 2009. The MedPAC sweeping payment reform changes and no earlier than October 1, 2013, as recommendations and research encouraged us to consider incremental described in section 1814(i)(6)(D) of the provided a foundation for our steps or to use existing regulatory Act. The Secretary is required to consult development of an analytic plan and authority to refine the hospice program. with hospice programs and the MedPAC additional payment reform concepts. We also held five industry technical regarding additional data collection and Furthermore, MedPAC participated in expert panels (TEPs) via webinar and in- payment reform options. post-TEP meeting briefings with other person meetings; consulted with federal Since 2010, we have undertaken federal hospice experts. These meetings hospice experts; provided annual efforts to collect the data needed to provided valuable feedback regarding establish what revisions to the the TEP’s comments and discussed methodology for determining the 3 CMS Transmittal 2864, ‘‘Additional Data Reporting Requirements for Hospice claim’’. hospice payment rates may be Available at http://www.cms.gov/Regulations-and- 4 http://www.cms.gov/Medicare/Medicare-Fee-for- necessary. Effective April 1, 2014, we Guidance/Guidance/Transmittals/Downloads/ Service-Payment/Hospice/Downloads/Hospice- began requiring additional information R2864P.pdf. Project-Background.pdf.

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potential research and analyses to vulnerabilities of the Medicare hospice and 30 days prior to electing hospice consider for hospice payment reform. benefit. care. We then categorized patients The FY 2012 Hospice Wage Index 1. Pre-Hospice Spending according to the principal diagnosis final rule (76 FR 47324) noted our reported on the hospice claim. The collaboration with the Assistant In 1982, the Congress introduced analysis revealed that for some patients, Secretary of Planning and Evaluation hospice into the Medicare program as an the Medicare payments in the 180 days (ASPE) to develop analyses that were alternative to aggressive treatment at the prior to the hospice election were lower used to inform our research efforts. The end of life. During the development of than Medicare payments associated results from such analyses were used by the benefit, multiple testimonies from with hospice care once the benefit was Abt Associates to facilitate discussion, industry leaders and hospice families, it elected (see Table 3 and Figure 1 in 2012, of potential payment reform was reported that hospices provided below). Specifically, median Medicare options and to guide the identification high-quality, compassionate and spending for a beneficiary with a of topics for further analysis. In early humane care while also offering a diagnosis of Alzheimer’s disease, non- reduction in Medicare costs.5 2014, we began working with Acumen, Alzheimer’s dementia, or Parkinson’s in Additionally, a Congressional Budget LLC, using real-time claims data, to the 180 days prior to hospice admission Office (CBO) study asserted that hospice monitor the vulnerabilities identified in (about 20 percent of patients) was care would result in sizable savings over the 2013 and 2014 Abt Associates’ $66.84 per day compared to the RHC conventional hospital care.6 Those Hospice Payment Reform Technical rate of $153.45 in FY 2013 during a savings estimates were based on a Reports. On September 18, 2014, the hospice election (see Table 3 below). comparison of spending in the last 6 IMPACT Act, mandated that the Centers months of life for a cancer patient not Closer to the hospice admission, the for Medicare & Medicaid (CMS) utilizing hospice care versus the cost of median Medicare payments per day undertake additional hospice hospice care for the 6 months preceding increase, as would be expected as the monitoring and oversight activities. As death.7 The original language for section patient approaches the end of life and noted previously, the IMPACT Act 1814(i) of the Act (prior to August 29, patient needs intensify. However, 30 requires CMS to survey hospices at least 1983) set the hospice aggregate cap days prior to a hospice election, median as frequently as every 3 years for the amount at 40 percent of the average Medicare spending was $105.24 for next 10 years and review medical Medicare per capita expenditure patients with Alzheimer’s disease, non- records of hospice beneficiaries on the amount for cancer patients in the last 6 Alzheimer’s dementia, or Parkinson’s. hospice benefit for 180 days or greater months of life. When the hospice benefit In contrast, the median Medicare as specified by the Secretary. CMS is was created, the average lifetime length payments prior to hospice election for actively engaged in cross-agency of stay for a hospice patient was patients with a principal hospice collaboration to meet the intent of the between 55 and 75 days. Since the diagnosis of cancer were $143.56 in the IMPACT Act to increase monitoring and implementation of the Medicare hospice 180 days prior to hospice admission and oversight of hospice providers. benefit, the principal diagnosis for increased to $289.85 in the 30 days The majority of the research and patients electing the hospice benefit has prior to hospice admission. The average analyses conducted by CMS and changed from primarily cancer length of stay for hospice elections summarized in this rule were based on diagnoses in 1983 to primarily non- where the principal diagnosis was analyses of FY 2013 Medicare claims cancer diagnoses in FY 2014.8 reported as Alzheimer’s disease, non- and cost report data conducted by our Alzheimer’s disease and Congestive Alzheimer’s Dementia, or Parkinson’s is research contractor, Abt Associates, Heart Failure (CHF) were the most greater than patient’s with other unless otherwise specified. In addition, reported principal diagnoses comprising diagnoses, such as cancer, CVA/stroke, we cite research and analyses, 17 percent of all diagnoses reported (see chronic kidney disease, and Chronic conducted by Acumen, LLC that are Table 2 in section II.E) in FY 2014. Obstructive Pulmonary Disease (COPD). based on real-time claims data from the Analysis was conducted to evaluate For example, the average lifetime length Integrated Data Repository (IDR). In the pre-hospice spending for beneficiaries of stay for an Alzheimer’s, non- sections below, analysis conducted on who ever used hospice that died in FY Alzheimer’s Dementia, or Parkinson’s pre-hospice spending, non-hospice 2013. To evaluate pre-hospice spending, patient in FY 2013 was 119 days spending for hospice beneficiaries we calculated the median daily compared to 47 days for patients with during a hospice election, and live Medicare payments for such a principal diagnosis of cancer (or in discharge rates highlight potential beneficiaries for the 180 days, 90 days, other words, 150 percent longer). TABLE 3—MEDIAN PRE-HOSPICE DAILY SPENDING ESTIMATES AND INTERQUARTILE RANGE BASED ON 180, 90, AND 30 DAY LOOK-BACK PERIODS PRIOR TO INITIAL HOSPICE ADMISSION WITH ESTIMATES OF AVERAGE LIFETIME LENGTH OF STAY (LOS) BY PRIMARY DIAGNOSIS AT HOSPICE ADMISSION, FY 2013

Estimates of daily non-hospice Medicare spending prior to first hospice admission Mean 180 day look-back 90 day look-back 30 day look-back lifetime LOS 25th pct. Median 75th pct. 25th pct. Median 75th pct. 25th pct. Median 75th pct.

All Diagnoses...... $47.04 $117.73 $240.73 $55.75 $157.89 $337.97 $57.66 $266.84 $545.44 73.8 Alzheimer’s, Dementia, and Parkinson’s ...... 23.39 66.84 162.60 23.06 82.00 220.12 21.02 105.24 368.30 119.3 CVA/Stroke ...... 56.18 116.86 239.30 82.32 170.40 352.74 150.21 352.41 622.23 47.4

5 Subcommittee of Health of the Committee of 7 Fogel, Richard. (1983): Comments on the Ways and Means, House of Representatives, March Legislative Intent of Medicare’s Hospice Benefit 25, 1982. (GAO/HRD–83–72). 6 Mor V. Masterson-Allen S. (1987): Hospice care 8 Connor, S. (2007). Development of Hospice and systems: Structure, process, costs and outcome. Palliative Care in the Unites States. OMEGA. 56(1), New York: Springer Publishing Company. 89–99. doi:102190/OM.5.1.h.

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TABLE 3—MEDIAN PRE-HOSPICE DAILY SPENDING ESTIMATES AND INTERQUARTILE RANGE BASED ON 180, 90, AND 30 DAY LOOK-BACK PERIODS PRIOR TO INITIAL HOSPICE ADMISSION WITH ESTIMATES OF AVERAGE LIFETIME LENGTH OF STAY (LOS) BY PRIMARY DIAGNOSIS AT HOSPICE ADMISSION, FY 2013—Continued

Cancers ...... 62.81 143.56 265.58 78.30 188.08 360.92 81.52 289.85 569.67 47.1 Chronic Kidney Disease...... 94.78 217.46 402.10 126.41 293.18 541.41 199.01 466.25 820.78 27.3 Heart (CHF and Other Heart Disease) ...... 61.28 135.48 255.53 80.62 186.52 364.24 101.80 325.15 588.50 77.2 Lung (COPD and Pneumonias) ...... 65.53 142.78 272.13 90.68 201.02 401.12 126.51 367.68 685.17 67.5 All Other Diagnoses ...... 36.00 99.80 222.25 39.45 132.88 316.15 38.96 213.84 504.57 85.3 Source: All Medicare Parts A, B, and D claims for FY 2013 from the Chronic Conditions Data Warehouse (CCW) retrieved March, 2015. Note(s): Estimates drawn from FY2013 hospice decedents who were first-time hospice admissions, ages 66+ at hospice admission, admitted since 2006, and not enrolled in Medicare Advantage prior to admission. All payments are inflation-adjusted to September 2013 dollars using the Consumer Price Index (Medical Care; All Urban Consumers).

In the FY 2014 Hospice Wage Index the necessary data on the hospice claim based on the principal diagnosis and Payment Rate Update proposed and form at this time to conduct more reported on the hospice claim. Table 3 final rules (78 FR 27843 and 78 FR thorough research to determine whether and Figure 1 above indicate that hospice 48272), we discussed whether a case- a case-mix system is appropriate, patients with the longest length of stay mix system could be created in future analyzing pre-hospice spending was had lower pre-hospice spending relative refinements to differentiate hospice undertaken as an initial step in to hospice patients with shorter lengths payments according to patient determining whether patients required of stay. These hospice patients tend to characteristics. While we do not have different resource needs prior to hospice be those with neurological conditions,

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including those with Alzheimer’s 2. Non-Hospice Spending for Hospice hospice spending occurred mostly for disease, other related dementias and Beneficiaries During an Election hospice beneficiaries who were at home Parkinson’s disease. Typically, these When a beneficiary elects the (56.0 percent). We also found that on conditions are associated with longer Medicare hospice benefit, he or she hospice service days in which non- disease trajectories, progressive loss of waives the right to Medicare payment hospice spending occurred, 25.7 percent functional and cognitive abilities, and for services related to the terminal of hospice beneficiaries were in a more difficult prognostication. Research illness and related conditions, except nursing facility, 1.9 percent were in an has shown that the majority of dementia for services provided by the designated inpatient setting, 15.1 percent were in patients are cared for at home, thereby hospice and the attending physician as an assisted living facility, and 1.3 causing informal costs that put an described in section II.D.7. However, percent were in other settings. Although economic burden on families rather Medicare payment is allowed for the average daily rate of expenditures than on healthcare systems.9 covered Medicare items or services that outside the hospice benefit was $7.65, Additionally, research using the are unrelated to the terminal illness and we found geographic differences where National Long-Term Care Survey related conditions (that is, the terminal beneficiaries receive care. The highest (NLCS) merged with Medicare claims; prognosis). When a hospice beneficiary rates per day occurred for hospice researchers found that patients with receives items or services unrelated to beneficiaries residing in West Virginia Alzheimer’s disease and related the terminal illness and related ($13.74), Delaware ($12.76), Mississippi conditions do not have higher Medicare conditions from a non-hospice provider, ($12.31), South Florida ($12.24), and expenditures over the last 5 years of that provider can bill Medicare for the Texas ($12.10) their life than the non-demented items or services, but must include on Table 4 below details the various elderly.10 Finally, research conducted the claim a GW (service not related to components of Part D spending for by the RAND Corporation and the hospice patient’s terminal patients receiving hospice care. The published in the Annals of Internal condition) modifier (if billed on a portion of the $439.5 million total Part Medicine in February of 2004 found that professional claim),13 or condition code D spending which was paid by ‘‘adjusted mean [Medicare] 07 (if billed on an institutional claim).14 Medicare is the sum of the Low Income expenditures were 4.0 percent higher Prescription Drug Events (PDEs) Cost-Sharing Subsidy and the Covered overall among hospice enrollees than unrelated to the terminal prognosis for Drug Plan Paid Amount, or $347.1 among non-enrollees. Adjusted mean which hospice beneficiaries are million. [Medicare] expenditures were 1 percent receiving hospice care are billed to Part lower for hospice enrollees with cancer D and do not require a modifier or a TABLE 4—DRUG COST SOURCES FOR than for patients with cancer who did condition code. We reported initial HOSPICE BENEFICIARIES’ FY 2013 not use hospice. Savings were highest (7 findings on CY 2012 non-hospice DRUGS RECEIVED THROUGH PART D percent to 17 percent) among enrollees spending during a hospice election in with lung cancer and other very the FY 2015 Hospice Wage Index and Component FY 2013 expenditures aggressive types of cancer diagnosed in Payment Rate Update final rule (79 FR the last year of life. [Medicare] 50452). This section updates our (Patient Pay Expenditures for hospice enrollees analysis of non-hospice spending during Amount) ...... $50,871,517 (Low Income Cost- without cancer were 11 percent higher a hospice election using FY 2013 data. For FY 2013, we found that Medicare Sharing Subsidy) 116,890,745 than for non-enrollees, ranging from 20 (Other True Out-of percent to 44 percent for patients with paid $694.1 million for Part A and Part B items or services while a beneficiary Pocket Amount) 2,125,071 dementia and 0 percent to 16 percent for (Patient Liability those with chronic heart failure or was receiving hospice care. The $694.1 Reduction due to failure of most other organ systems’’.11 million paid for Part A and Part B items Other Payer While analysis examining pre-hospice or services was for durable medical Amount) ...... 6,678,561 spending for hospice patients according equipment (6.4 percent), inpatient care (Covered Drug to their diagnosis reported on the (care in long- term care hospitals, Plan Paid inpatient rehabilitation facilities, acute Amount) ...... 230,216,153 hospice claim has some limitations, it (Non-Covered Plan does show that, depending on the type care hospitals; 28.6 percent), outpatient Part B services (16.6 percent), other Part Paid Amount ..... 28,733,518 of research study design selected, (Six Payment different conclusions can be drawn B services (also known as physician, practitioner and supplier claims, such Amount Totals) .. 435,515,566 regarding the effect of Alzheimer’s (Unknown/ disease and dementia on medical care as labs and diagnostic tests, ambulance Unreconciled) .... 3,945,667 transports, and physician office visits; costs.12 (Gross Total Drug 38.8 percent), skilled nursing facility Costs, Reported) 439,461,233 9 Schaller, S., Mauskopf, J., Kriza, C., Wahlster, P., care (5.3 percent), and home health care (4.3 percent). Part A and Part B non- Source: Abt Associates analysis of 100% Kolominsky-Rabas, P. (2015). The main cost drivers FY 2013 Medicare Claim Files. For more infor- in dementia: a systematic review. International mation on the components above and on Part Journal of Geriatric Psychiatry. 15, 111–129. doi: Research, 47(4), 1660–1678. doi:10.1111/j.1475– D data, go to the Research Data Assistance 10.1002/gps.4198. 6773.2011.01365.x. Center’s (ResDAC’s) Web site at: http:// 10 Ayyagari, P., M. Salm, and F. Sloan. 2008. 13 Medicare Claims Processing Manual, Chapter www.resdac.org/. ‘‘Effects of Diagnosed Dementia on Medicare and 11-Processing Hospice Claims, Section 30.4-Claims Medicaid Program Costs.’’ Inquiry 44 (Winter 2007/ from Medicare Advantage Organizations, B-Billing Non-hospice Medicare expenditures 2008): 481–94. Lamb, V., F. Sloan, and A. Nathan. of Covered Services. http://www.cms.gov/ occurring during a hospice election in 2008. ‘‘Dementia and Medicare at Life’s End.’’ Regulations-and-Guidance/Guidance/Manuals/ Health Services Research 43 (2): 714–32. downloads/clm104c11.pdf. FY 2013 were $694.1 million for Parts 11 http://www.rand.org/pubs/external_ 14 Medicare Claims Processing Manual, Chapter A and B spending plus $347.1 million publications/EP20040207.html. Accessed on April 11-Processing Hospice Claims, Section 30.3-Data for Part D spending, or approximately 23, 2015. Required on the Institutional Claim to Medicare $1 billion dollars total. This figure is 12 Yang, Z., Zhang, K., Lin, P., Clevenger, C., & Contractors, Conditions Codes. http:// comparable to the estimated $1 billion Atherly, A. (2012). A Longitudinal Analysis of the www.cms.gov/Regulations-and-Guidance/ Lifetime Cost of Dementia. Health Services Guidance/Manuals/downloads/clm104c11.pdf. MedPAC reported during its December

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2013 public meeting.15 Associated with Durable Medical Equipment, TABLE 6—CONCURRENT PAYMENTS this $1 billion in Medicare spending Prosthetics, Orthotics, and Supplies FOR ALL DME USE INITIATED DUR- were cost sharing liabilities such as co- Across Terminal Conditions ING A HOSPICE STAY BY TOP 20 payments and deductibles that Durable Medical Equipment, PRINCIPAL DIAGNOSIS REPORTED ON beneficiaries incurred. Hospice HOSPICE CLAIM, CY 2013—Contin- beneficiaries had $132.5 million in cost- Prosthetics, Orthotics, and Supplies (DMEPOS) products whose use was ued sharing for items and services that were initiated during a hospice stay are likely billed to Medicare Parts A and B, and related to the terminal prognosis. Table Total payment for $50.9 million in cost-sharing for drugs Principal diagnosis related DME 5 and 6 below summarizes total that were billed to Medicare Part D, concurrent billing for DMEPOS Chronic airways while they were in a hospice election. products by Berenson-Eggers Types of In total, this represents an FY 2013 obstruction, not Service (BETOS) categories and elsewhere classi- beneficiary liability of $183.4 million concurrent Durable Medical Equipment fied ...... 2,610,628 for Parts A, B, and D items or services (DME) billing by the top 20 principal Senile and pre- provided to hospice beneficiaries during diagnoses as reported on hospice claims senile organic a hospice election. Therefore, the total in CY 2013.18 These diagnoses psychotic condi- non-hospice costs paid by Medicare or comprised 2.3 million hospice stays, tions ...... 2,868,760 beneficiaries for items or services Other ill-defined and accounted for $27.1 million in total and unknown provided to hospice beneficiaries during concurrent spending for DME products. a hospice election were over $1.2 billion causes of mor- This amount does not include spending bidity and mor- in FY 2013. for DME rental products that tality ...... 2,349,855 In a recent report, the HHS Office of beneficiaries began using prior to a Ill-defined descrip- Inspector General (OIG) identified hospice stay. tions and com- instances where Medicare may be plications of paying under Part D for drugs that TABLE 5—CONCURRENT PAYMENTS heart disease .... 1,584,522 Acute but ill-de- should be provided by the hospice as FOR ALL DME USE INITIATED DUR- fined cerebro- part of the plan of care.16 To assist CMS ING A HOSPICE STAY BY BETOS vascular disease 1,092,772 in identifying and evaluating instances CATEGORY, CY 2013 Other diseases of where drugs, supplies, durable medical lung ...... 412,501 equipment (DME), and Part B services DMEPOS BETOS Total payment for Chronic renal fail- provided to hospice patients appear to category related DME ure ...... 415,800 be related to the principal diagnosis Symptoms con- Hospital Beds ...... $943,731 cerning nutrition, reported on the hospice claim, but were Wheelchairs ...... 2,295,038 metabolism, and billed separately to other parts of the Oxygen and Sup- development ...... 1,390,685 Medicare program, Acumen, LLC plies ...... 2,412,281 Malignant neo- developed case studies that were Orthotics and Pros- plasm of pan- reviewed and evaluated by CMS clinical thetics ...... 4,400,353 creas ...... 297,573 staff.17 Although hospice beneficiaries Medical/Surgical Malignant neo- are allowed to continue receiving care Supplies ...... 7,467,616 plasm of female Other DME ...... 9,585,003 breast ...... 486,019 outside the hospice benefit for Malignant neo- conditions that are unrelated to the Total ...... 27,104,022 plasm of colon ... 521,690 terminal illness and related conditions Parkinson’s dis- (that is, unrelated to the terminal ease ...... 955,390 prognosis), § 418.56(c) requires hospices TABLE 6—CONCURRENT PAYMENTS Malignant neo- to provide all services necessary for the FOR ALL DME USE INITIATED DUR- plasm of pros- palliation and management of the ING A HOSPICE STAY BY TOP 20 tate ...... 312,754 Late effects of terminal illness and related conditions. PRINCIPAL DIAGNOSIS REPORTED ON cerebrovascular HOSPICE CLAIM, CY 2013 disease ...... 559,253 15 MedPAC, ‘‘Assessing payment adequacy and Other forms of updating payments: hospice services’’, December 13 Principal diagnosis Total payment for chronic ischemic 2013. Available at: http://www.medpac.gov/ related DME heart disease .... 670,947 documents/december-2013-meeting-transcript.pdf. Malignant neo- 16 oig.hhs.gov/oas/region6/61000059.pdf Heart failure ...... $3,365,348 ‘‘Medicare Could Be Paying Twice for Prescriptions plasm of liver Malignant neo- and intrahepatic For Beneficiaries in Hospice’’. plasm of tra- 17 bile ducts ...... 170,470 The case studies were developed using CY chea, bronchus, 2013 claims data for only those beneficiaries with and lung ...... 1,519,514 Parts A, B and D coverage throughout their hospice. We noted that hospice beneficiaries In identifying services that overlapped with a Other cerebral de- hospice election, we used two methods. The first generations ...... 2,979,399 with hospice claims-reported principal method identified a match between the first three Other organic psy- diagnoses of chronic airway obstruction, diagnosis codes of the hospice claim and the chotic conditions congestive heart failure, cerebral diagnosis codes of the overlapping services in the (chronic) ...... 2,540,146 degeneration and lung cancer were Part A, Part B, and Part D claim for the same beneficiary. The second method identified a match receiving services clinically indicated between the hospice diagnoses and the diagnosis 18 DMEPOS HCPCS codes are summarized by and recommended for these conditions codes of the overlapping services in the Part A, Part Berenson-Eggers Types of Service (BETOS) outside of the hospice benefit, which is B and Part D based on a diagnosis code on the categories. BETOS categories were developed by the in violation of requirements regarding overlapping claim and any diagnosis on the hospice American Medical Association (AMA) and claim mapping to the same Healthcare Cost and aggregate HCPCS codes into clinically coherent the Medicare hospice benefit. This Utilization Project (HCUP). groups. could be attributed to hospices

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incorrectly classifying conditions as of breath, chest pain, metastatic bone decrease the sensation of unrelated and referring patients to non- pain, and anorexia and weight loss. breathlessness.21 hospice providers, not communicating Clinical practice guidelines for end- Our assessment of concurrently billed and coordinating the care and services stage cancer recommend treatment and Part D drugs included 89,925 stays for needed to manage the needs of the management of refractory symptoms beneficiaries with ICD–9 code 162 listed hospice beneficiary, or deliberately, to including pain, mucositis, dyspnea, as a primary diagnosis on the hospice avoid costs. The case studies below are fatigue, depression and anorexia claim. Our assessment of concurrently focused on four of the most commonly through the use of pharmacological billed Part B services included 153,199 reported principal hospice diagnoses on interventions including nonsteroidal stays. In CY 2013, concurrent billing for hospice claims (see Table 2 in section anti-inflammatories, corticosteroids, all services related this terminal II.E) based on evidence based clinical opioids and antidepressants.19 condition comprised $3.4 million. Table guidelines as described for each Additionally, evidence shows that 7 below summarizes concurrent principal hospice diagnosis. payments for services that were palliative chemotherapy and potentially related to this class of Malignant Neoplasm of the Trachea, radiotherapy can provide symptom conditions. Part D drugs that should Bronchus, and Lung 20 relief from bone and brain metastasis. have been covered under the hospice Malignant neoplasm of the trachea, Recommended interventions for benefit for the treatment of this bronchus, and lung (or lung cancer) is dyspnea include treatment of the condition accounted for $2.1 million. defined by ICD–9 diagnosis codes underlying reason such as, thoracentesis DME services that were billed during beginning with 162 and describes for pleural effusion, bronchodilators and hospice stays related to this condition malignant cancers affecting various part systemic corticosteroids for during the same time cost $640,166. of the pulmonary system. Symptoms for inflammation and secretions, and Concurrent services provided in Part B this class of conditions may include supportive measures such supplemental institutional settings accounted for chronic and worsening cough, shortness oxygen, opioids and anxiolytics to $591,772.

TABLE 7—CONCURRENT PAYMENTS FOR SERVICES PROVIDED TO HOSPICE BENEFICIARIES WITH MALIGNANT NEOPLASM OF THE TRACHEA, BRONCHUS, AND LUNG, CY 2013

Type of service Description Total payment

Drugs/Part D ...... Common Palliative Drugs ...... $851,639 Drugs/Part D ...... Anti-neoplastics (chemotherapy) ...... 1,321,507 DME ...... Oxygen Equipment and Supplies ...... 454,068 DME ...... Hospital Beds ...... 47,781 DME ...... Wheelchairs ...... 138,316 Part B Inst...... Diagnostic Imaging ...... 341,601 Part B Inst...... Radiation ...... 250,171

Total ...... 3,405,083

Chronic Airway Obstruction walking aids, respiratory assist devices services included 198,098 such stays. and pursed-lip breathing in the Table 8 below summarizes concurrent Chronic airway obstruction is defined management of dyspnea in the payments for services that are by ICD–9 diagnosis codes beginning individual patient with advanced potentially related to this class of with 496 and includes chronic lung COPD.22 Oxygen is recommended for conditions. In CY 2013, concurrent disease with unspecified cause, and is COPD patients with resting hypoxemia billing for all services related this characterized by inflammation of the 23 for symptomatic benefit. Additionally, terminal condition comprised $10.4 lungs and airways. Typical symptoms of clinical practice guidelines recommend million. Part D drugs that should have these pulmonary diseases include inhaled bronchodilators, systemic been covered under the hospice benefit increasing and disabling shortness of corticosteroids, and pulmonary for the treatment of this condition breath, labored breathing, increased physiotherapy for the management of accounted for $8.6 million. DME coughing, increased heart rate, COPD exacerbations.24 Analysis decreased functional reserve, increased conducted by Acumen, LLC, shows services that were billed during hospice infections and unintentional, concurrently billed Part D drugs stays related to this condition during the progressive weight loss. Evidence-based included 130,283 stays for beneficiaries same time amounted to $1.2 million 25 practice supports the benefits of oral with ICD–9 code 469 listed as a primary dollars. Finally, concurrent services opioids, neuromuscular electrical diagnosis on the hospice claim. provided in Part B institutional settings stimulation, chest wall vibration, Additionally, concurrently billed Part B accounted for $605,110. 19 Qaseem A, Snow V, Shekelle P, Casey DE, 21 ibid. obstructive pulmonary disease in adults in primary Cross JT, Owens DK, et al. Evidence-Based 22 DD Marciniuk, D Goodridge, P Hernandez, et and secondary care. London (UK): National Institute Interventions to Improve the Palliative Care of Pain, al. (2011). Canadian Thoracic Society COPD for Health and Clinical Excellence (NICE); 2010 Jun. Dyspnea, and Depression at the End of Life: A Committee Dyspnea Expert Working Group. 61 p. (Clinical guideline; no. 101). Retrieved from Clinical Practice Guideline from the American Managing dyspnea in patients with advanced the National Guideline Clearinghouse on February College of Physicians. Ann Intern Med. chronic obstructive pulmonary disease: A Canadian 19, 2015. http://www.guideline.gov/ 2008;148:141–146. doi:10.7326/0003–4819–148–2– Thoracic Society clinical practice guideline. 25 DMEPOS HCPCS codes are summarized by 200801150–00009 Canadian Respiratory Journal. 18(2), 1–10. Berenson-Eggers Types of Service (BETOS) 20 Palliative care in lung cancer*: accp evidence- 23 ibid categories. BETOS categories were developed by the based clinical practice guidelines (2nd edition) 24 National Clinical Guideline Centre for Acute American Medical Association (AMA) and Kvale PA, Selecky PA, Prakash US. Chest. and Chronic Conditions. Chronic obstructive aggregate HCPCS codes into clinically coherent 2007;132(3_suppl):368S–403S. pulmonary disease. Management of chronic groups.

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TABLE 8—CONCURRENT PAYMENTS FOR SERVICES PROVIDED TO HOSPICE BENEFICIARIES WITH CHRONIC AIRWAY OBSTRUCTION, CY 2013

Type of service Description Total payment

Drugs/Part D ...... Common Palliative Drugs 26 ...... $1,757,326 Drugs/Part D ...... Antiasthmatics & Bronchodilators ...... 6,545,089 Drugs/Part D ...... Corticosteroids ...... 141,179 Drugs/Part D ...... Respiratory Agents ...... 148,793 DME ...... Oxygen Equipment and Supplies 27 ...... 525,276 DME ...... Hospital Beds ...... 480,854 DME ...... Wheelchairs ...... 196,692 Part B Institutional ...... Diagnostic Imaging ...... 605,110

Total ...... 10,400,319

Cerebral Degeneration urinary tract infections. Clinical practice beneficiaries with ICD–9 code 331 listed guidelines for the treatment of cerebral as a primary diagnosis on the hospice Cerebral degeneration is defined by degenerative conditions includes claim. Our assessment of concurrently ICD–9 diagnosis codes beginning with pharmacological interventions billed Part B services included 318,044 331, and includes conditions such as including Angiotensin Converting stays. In CY 2013, concurrent billing for Alzheimer’s disease and Reye’s Enzyme inhibitors, memantine or all services related to this principal syndrome. These conditions are combination therapy depending on diagnosis comprised $11.2 million. typically characterized by a progressive severity of disease, as well as Table 9 below summarizes concurrent loss of cognitive function with antidepressants, antipsychotics, payments for services that are symptoms including the loss of memory psychostimulants, mood stabilizers, potentially related to this class of and changes in language ability, benzodiazepines and neuroleptics, conditions. Part D drugs that should behavior, and personality. Additionally, depending on behavioral as these cerebral degenerations progress, manifestations. Non-pharmacological have been covered under the hospice other clinical manifestations occur such interventions recommended include benefit for the treatment of this as dysphagia, motor dysfunction, mental, behavioral and cognitive condition accounted for $10.3 million. impaired mobility, increased need for therapy, speech language pathology to Concurrently billed DME products that activities of daily living assistance, address swallowing issues, and other were related this condition cost urinary and fecal incontinence, weight interventions to treat and manage Medicare an additional $390,476. loss and muscle wasting. Individuals manifestations including pressure Concurrent services provided in Part B with these conditions are also at ulcers, cachexia and infections.28 institutional settings accounted for increased risk for aspiration, falls, Our assessment of concurrently billed $496,790. pneumonias, decubitus ulcers and Part D drugs included 208,346 stays for

TABLE 9—CONCURRENT PAYMENTS FOR SERVICES PROVIDED TO HOSPICE BENEFICIARIES WITH CEREBRAL DEGENERATION, CY 2013

Type of service Description Total payment

Drugs/Part D ...... Common Palliative Drugs ...... $1,184,005 Drugs/Part D ...... Antipsychotic/Antimanic Agents ...... 2,336,504 Drugs/Part D ...... Psychotherapeutic & Neurological Agents ...... 6,752,270 DME ...... Hospital Beds ...... 138,249 DME ...... Wheelchairs ...... 252,228 Part B Inst...... Diagnostic Imaging ...... 496,790

Total ...... 11,160,046

Congestive Heart Failure congestive heart failure, clinical practice nonresponse to other treatments.29 Congestive heart failure (CHF) is guidelines recommend pharmacological Nonpharmacological interventions defined by ICD–9 diagnosis codes interventions including beta blockers, recommended include continuous beginning with 428. CHF is angiotensin converting enzyme positive airway pressure and characterized by symptoms such as inhibitors, angiotensin receptor shortness of breath, edema, diminished blockers, diuretics, anti-platelets, anti- endurance, angina, productive cough coagulants and digoxin, depending on and fatigue. For the management of symptomology and response or

26 Includes all analgesics, anxiolytics, 28 Development Group of the Clinical Practice National Guideline Clearinghouse on February 19, antiemetics, and laxatives. These four drug types Guideline [trunc]. Clinical practice guideline on the 2015. http://www.guideline.gov/. are considered ‘‘nearly always covered under the comprehensive care of people with Alzheimer’s 29 Scottish Intercollegiate Guidelines Network hospice benefit’’ and as such are rarely expected to disease and other dementias. Barcelona (Spain): (SIGN). Management of chronic heart failure. A be billed separately during a hospice stay. Agency for Health Quality and Assessment of national clinical guideline. Edinburgh (Scotland): 27 For COPD, we also include respiratory assist Catalonia (AQuAS); 2010. 499 p. Retrieved from the Scottish Intercollegiate Guidelines Network (SIGN); devices (RADs) in this category. 2007 Feb. 53 p. (SIGN publication; no. 95).

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supplemental oxygen for those with stays. In CY 2013, concurrent billing for benefit for the treatment of this coexisting pulmonary disease.30 all services related this terminal condition accounted for $3.8 million. Our assessment of concurrently billed condition comprised $5.8 million. Table DME services that were billed during Part D drugs included 158,220 stays for 10 below summarizes concurrent hospice stays related to this condition beneficiaries with ICD–9 code 428 listed payments for services that are during this time cost $843,534. as a primary diagnosis on the hospice potentially related to this class of Concurrent services provided in Part B claim. Our assessment of concurrently conditions. Part D drugs that should institutional settings accounted for $1.2 billed Part B services included 256,236 have been covered under the hospice million.

TABLE 10—CONCURRENT PAYMENTS FOR SERVICES PROVIDED TO HOSPICE BENEFICIARIES WITH CONGESTIVE HEALTH FAILURE, CY 2013

Type of service Description Total payment

Drugs/Part D ...... Common Palliative Drugs ...... $1,229,748 Drugs/Part D ...... Diuretics ...... 334,700 Drugs/Part D ...... Beta Blockers ...... 363,480 Drugs/Part D ...... Anti-hypertensives ...... 584,799 Drugs/Part D ...... Anti-anginal Agents ...... 468,333 Drugs/Part D ...... Cardiovascular Agents—Misc ...... 799,605 Drugs/Part D ...... Vasopressors ...... 43,496 DME ...... Oxygen Equipment and Supplies ...... 471,376 DME ...... Hospital Beds ...... 96,219 DME ...... Wheelchairs ...... 275,940 Part B Inst...... Diagnostic Imaging ...... 690,726 Part B Inst...... EKGs ...... 72,933 Part B Inst...... Cardiac Devices ...... 242,819 Part B Inst...... Diagnostic Clinical Labs ...... 79,999 Part B Prof...... Diagnostic Clinical Labs ...... 64,698

Total ...... 5,818,871

Our regulations at § 418.56(c) require between revocation/discharge and the not be zero, given the uncertainties of that hospices provide all services re-election of the hospice benefit, prognostication and the ability of necessary for the palliation and Medicare coverage would resume for patients and their families to revoke the management of the terminal illness and those Medicare benefits previously hospice election at any time. On July 1, related conditions. We have discussed waived. A revocation can only be made 2012, we began collecting discharge recommended evidence-based practice by the beneficiary, in writing, that he or information on the claim to capture the clinical guidelines for the hospice she is revoking the hospice election and reason for all types of discharges which claims-reported principal diagnoses the effective date of the revocation. A includes, death, revocation, transfer to mentioned in this section. However, this hospice cannot ‘‘revoke’’ a beneficiary’s another hospice, moving out of the analysis reveals that these hospice election, nor is it appropriate hospice’s service area, discharge for recommended practices are not being for hospices to encourage, request or cause, or due to the patient no longer covered under the Medicare hospice demand that the beneficiary revoke his being considered terminally ill (that is, benefit. We believe the case studies in or her hospice election. Like the hospice no longer qualifying for hospice this section highlight the potential election, a hospice revocation is to be an services). Based upon the additional systematic unbundling of the Medicare informed choice based on the discharge information, Abt Associates, hospice benefit and may be valuable beneficiary’s goals, values and our research contractor performed analysis to inform policy stakeholders. preferences for the services they wish to analysis on FY 2013 claims to identify receive. those beneficiaries who were discharged 3. Live Discharge Rates Federal regulations only provide alive. The details of this analysis will be Currently, federal regulations allow a limited opportunity for a Medicare reported in the 2015 technical report patient who has elected to receive hospice provider to discharge a patient and will be made available on the Medicare hospice services to revoke from its care. In accordance with Hospice Center Web page. In order to their hospice election at any time and § 418.26, discharge from hospice care is better understand the characteristics of for any reason. Specifically, the permissible when the patient moves out hospices with high live discharge rates, regulations state that if the hospice of the provider’s service area, is we examined the aggregate cap status, patient (or his/her representative) determined to be no longer terminally skilled visit intensity; average lengths of revokes the hospice election, Medicare ill, or for cause. Hospices may not stay; and non-hospice spending rates coverage of hospice care for the automatically or routinely discharge the per beneficiary. remainder of that period is forfeited. patient at its discretion, even if the care Between 2000 and 2013, the overall The patient may, at any time, re-elect to may be costly or inconvenient. As we rate of live discharges increased from receive hospice coverage for any other indicated in the FY 2015 Hospice Wage 13.2 percent in 2000 to 18.3 percent in hospice election period that he or she is Index and Payment Rate Update 2013. Among hospices with 50 or more eligible to receive (§ 418.28(c)(3) and proposed and final rules, we understand discharges (discharged alive or § 418.24(e)). During the time period that the rate of live discharges should deceased), there is significant variation

30 Lindenfeld J, Albert NM, Boehmer JP, Collins DK, Rogers JG, Starling RC, Stevenson WG, Tang HFSA 2010 Comprehensive Heart Failure Practice SP, Ezekowitz JA, Givertz MM, Klapholz M, Moser WHW, Teerlink JR, Walsh MN. Executive Summary: Guideline. J Card Fail 2010;16:475e539.

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in the rate of live discharge between the We analyzed hospices’ aggregate cap received at the end of the cap year of 10th and 90th percentiles (see Table 11 status to determine whether there is a November 2012 through October 2013 below). Most notably, hospices at the relationship between live discharge relative to the total cap amount. 95th percentile discharged 50 percent or rates and their aggregate cap status. As Hospices under 100 percent on the X- more of their patients alive. described in section III.4.C and section axis are below the cap and those 100 III.D, when the Medicare Hospice percent or higher on the X-axis are TABLE 11—DISTRIBUTION OF LIVE DIS- Benefit was implemented, the Congress above the cap. Our analysis found that CHARGE RATES IN FY 2013 FOR included an aggregate cap on hospice hospices with higher live discharge HOSPICES WITH 50 OR MORE LIVE payments, which limits the total rates are also above the cap. aggregate payments any individual DISCHARGES Specifically, the top of the rectangle hospice can receive in a year. Our FY represents the 75th percentile of live 2013 analytic file contained 3,061 Live discharge rates, the middle line discharge hospices with aggregate cap information Statistic rate and with more than 50 discharges in FY represents the median for that group, (%) 2013. We found that 40.3 percent of and the bottom of the rectangle is the hospices above the 90th percentile were 25th percentile of live discharge rates 5th Percentile ...... 8.1 also above the aggregate cap for the 2013 among all hospices ending the year 10th Percentile ...... 9.5 cap year. Conversely, only 3.8 percent of within the range of cap percentages of 25th Percentile ...... 12.9 hospices below the 90th percentile were live discharge rates as indicated by the Median ...... 18.3 above the aggregate cap. As illustrated horizontal axis (see Figure 2 below). We 75th Percentile ...... 26.6 by the box plot below, the vertical axis found that there appears to be a 90th Percentile ...... 39.1 relationship with hospices with high 95th Percentile ...... 50.0 represents the hospices’ live discharge rates in FY 2013 and the horizontal axis live discharge rates and those that are Note: n=3,096 represents the total payments hospices above the aggregate cap.

In FY 2013, we found that hospices at or above the 90th percentile provide, average, 4.48 visits per week. We also with high live discharge rates also, on on average, 3.97 visits per week. found in FY 2013 that, when focusing average, provide fewer visits per week. Hospices with live discharge rates on visits classified as skilled nursing or Those hospices with live discharge rates below the 90th percentile provide, on medical social services, hospices with

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live discharge rates at or above the 90th studies, where Medicare appeared to be spending while in a hospice election percentile provide, on average, 1.91 paying for services twice because we (decile 1 in Table 12 and Figure 3 visits per week versus hospices with would expect them to be covered by the below) had live discharge rates that live discharge rates below the 90th hospice base payment rate. Hospices were, on average, about 19.2 percent percentile that provide, on average, 2.35 with patients that, on average, and an average lifetime length of stay of visits per week. accounted for $30 per day in non- 103 days. In other words, hospices in We examined whether there was a hospice spending while in hospice the highest decile, according to their relationship between hospices with high (decile 10 in Table 12 and Figure 3 level of non-hospice spending for live discharge rates, average lengths of below) had live discharge rates that patients in a hospice election, had live stay, and non-hospice spending per were, on average, about 33.8 percent discharge rates and average lifetime beneficiary per day (see Table 12 and and had an average lifetime length of lengths of stay that averaged 76 percent Figure 3 below). As described above in stay of 156 days. In contrast, hospices and 52 percent higher, respectively, section III.A.2, we identified instances, with patients that, on average, in the aggregate and illustrated by case accounted for $4 per day in non-hospice than the hospices in lowest decile.

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The analytic findings presented above the Secretary, no earlier than October 1, utilization of the benefit.31 MedPAC suggests that some hospices may 2013, to implement revisions to the stated that a revised payment system consider the Medicare Hospice program methodology for determining the would encourage hospice stays as a long-term custodial benefit rather payment rates for RHC and other consistent with meeting the eligibility than an end of life benefit for services included in hospice care as the requirements of a medical prognosis of beneficiaries with a medical prognosis Secretary determines to be appropriate. 6 months or less if the illness runs its of 6 months or less if the illness runs its The revisions may be based on an normal course and increase greater normal course. As previously discussed analysis of new data and information provider accountability to monitor in reports by MedPAC and the OIG, collected and such revisions may patients’ conditions. In that same report, there is a concern that hospices may be include adjustments to per diem MedPAC stated that their goal was to admitting individuals who do not meet payments that reflect changes in ‘‘strengthen the hospice payment system hospice eligibility criteria. We continue resource intensity in providing such and not discourage enrollment in to communicate and collaborate across hospice, while deterring program care and services during the course of CMS to improve monitoring and abuse.’’ the entire episode of hospice care. In oversight activities. We expect to As described in section III.A, CMS has addition, we are required to consult analyze the additional claims and cost transparently conducted payment with hospice programs and MedPAC on report data reported by hospices in the reform activities and released research the revised hospice payment future to determine whether additional findings to the public since 2010. At regulatory proposals to reform and methodology. that time, Abt Associates conducted a strengthen the Medicare Hospice benefit This legislation emerged largely in literature review and carried out are warranted. response to MedPAC’s March 2009 original research to provide background B. Proposed Routine Home Care Rates Report to Congress, which cited rapid on the current state of the Medicare and Service Intensity Add-On Payment growth of for-profit hospices and longer lengths of stay that raised concerns 31 Medicare Payment Advisory Commission 1. Statutory Authority and Background regarding a per diem payment structure (MedPAC). ‘‘Reforming Medicare’s Hospice Benefit.’’ Report to the Congress: Medicare Payment Section 3132(a) of the Affordable Care that encouraged inappropriate Policy. March, 2009. Web. 18 Feb. 2015. http:// Act amended 1814(i) of the Act by medpac.gov/documents/reports/Mar09_Ch06.pdf? adding paragraph (6)(D), that instructs sfvrsn=0.

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hospice benefit. The initial contract also the services provided by hospices to life care for which the benefit was included several technical expert panel Medicare beneficiaries by level of care. originally designed. meetings with national hospice In its March 2009 report, ‘‘Reforming a. U-Shaped Payment Model association representatives, academic Medicare’s Hospice Benefit,’’ MedPAC researchers, and a cross-section of For over a decade, MedPAC and other recommended that the Congress require hospice programs that provided organizations have reported findings CMS to implement a payment system valuable insights and feedback on that suggest that the hospice benefit’s that would adjust per-diem hospice baseline empirical analyses provided by fixed per-diem payment system is rates based on the day’s timing within the ASPE. A subsequent award to Abt inconsistent with the true variance of the hospice episode, with the express Associates continues to support the service costs over the course of an goal of mitigating the apparent dissemination of research analyses and episode. Specifically, MedPAC cited inconsistency between payments and findings, which are located in the both academic and non-academic resource utilization (that is, costs) in ‘‘Research and Analyses’’ section of the studies, as well as its own analyses (as hospice episodes.42 Specifically, Hospice Center Web page (http:// summarized and articulated in MedPAC recommended that payments cms.hhs.gov/Center/Provider-Type/ MedPAC’s 2002,34 2004,35 2006,36 near the beginning and ending of a stay Hospice-Center.html). In addition, 2008,37 and 2009 38 Reports to be set at higher levels (weighted research findings and payment reform Congress), demonstrating that the upwards) and payments during the concepts were set out in a 2013 intensity of services over the duration of middle portion of care be set at lower technical report and a 2014 technical a hospice stay manifests in a ‘U-Shaped’ levels (weighted downwards) to better report, as well as in the FY 2014 pattern (that is, the intensity of services mirror documented variation in cost Hospice Wage Index and Payment Rate provided is higher both at admission over an episode’s duration. Two Update final rule (78 FR 48234) and in and near death and, conversely, is primary weighting schemes were the FY 2015 Hospice Wage Index and relatively lower during the middle outlined in MedPAC’s 2009 Report: A Payment Rate Update final rule (79 FR period of the hospice episode). ‘‘larger intensity adjustment’’ 50452). These research findings and According to MedPAC’s 2008 Report to (essentially a deeper U-shaped payment concepts provide a basis for an Congress, after the high costs at model, paying twice the base rate in the important initial step toward payment admission, the ‘turning point’ or ‘break- first 30/last 7 days and just a quarter of reform outlined in section III.B.2 below. even’ point of profitability was found to the daily rate in days 181+) and a 39 Over the past several years, MedPAC, be about 3 weeks (21 days). Beyond 21 ‘‘smaller intensity adjustment’’ (a the Government Accountability Office days, the magnitude of profitability relatively shallower U-shaped model, (GAO), and OIG, have all recommended deficits or ‘marginal costs’ declined and paying 1.5 times the base rate in the first that CMS collect more comprehensive the lengths of stay became profitable— 40 30/last 7 days and 0.375 times the daily data to better evaluate trends in and more so—with longer stays. Since rate in days 181+). utilization of the Medicare hospice hospice care is most profitable during In its March 2015 Report to the benefit. Furthermore, section the long, low-cost middle portions of an Congress,43 MedPAC reiterated its 3132(a)(1)(C) of the Affordable Care Act episode, longer episodes would continued concerns regarding the specifies that the Secretary may collect potentially have very profitable, long ‘‘mismatch between payments and additional data and information on cost middle segments. This financial hospice service intensity’’ in the current reports, claims, or other mechanisms as incentive appears to have resulted in hospice system and the ongoing need the Secretary determines to be hospices enrolling beneficiaries that are for payment reform. The Commission appropriate. We have received many not truly eligible for the benefit (that is, stated that ‘‘Medicare’s hospice suggestions for ways to improve data do not have a life expectancy of 6 payment system is not well aligned with collection to support larger payment months or less) and ‘‘may lead some the costs of providing care throughout a reform efforts in the future. Based on patients, families, and providers to hospice episode. As a result, long those suggestions and industry implicitly regard hospice as a source of hospice stays are generally more feedback, we began collecting additional basic health care for failing patients who profitable than short stays.’’ The did not qualify for skilled nursing information on the hospice claim form Commission previously ‘‘recommended facility or home health care and did not as of April 1, 2014.32 Additionally, that the hospice payment system be qualify for Medicaid or otherwise could revisions to the cost report form for reformed to better match service not afford other sources of long-term freestanding hospices became effective intensity throughout a hospice episode custodial care’’,41 rather than the end-of- for cost reporting periods beginning on of care (higher per diem payments at the or after October 1, 2014. The beginning of the episode and at the end 34 http://www.medpac.gov/documents/contractor- instructions for completing the revised reports/report-to-the-congress-medicare- of the episode near the time of death freestanding hospice cost report form beneficiaries’-access-to-hospice-(may-2002).pdf. and lower payments in the middle)’’. are found in the Medicare Provider 35 http://www.medpac.gov/documents/reports/ Other organizations have also Reimbursement Manual-Part 2, chapter June04_ch6.pdf. explored the concept of a U-shaped 33 36 http://www.medpac.gov/documents/reports/ 43. Once available, we expect the data _ payment model. The ASPE, in from hospice claims and cost reports to Jun06 Ch03.pdf. conjunction with its contractor, Acumen 37 http://www.medpac.gov/documents/reports/ provide more comprehensive Jun08_Ch08.pdf. LLC, analyzed hospice enrollment and information on the costs associated with 38 http://www.medpac.gov/documents/reports/ utilization data. ASPE’s research Mar09_Ch06.pdf. 32 CMS Transmittal 2864. ‘‘Additional Data 39 http://www.medpac.gov/documents/reports/ 42 Medicare Payment Advisory Commission Reporting Requirements for Hospice Claims’’. Jun08_Ch08.pdf. (MedPAC). ‘‘Reforming Medicare’s Hospice Available at: http://www.cms.gov/Regulations-and- 40 Cheung, L., K. Fitch, and B. Pyenson. 2001. The Benefit.’’ Report to the Congress: Medicare Payment Guidance/Guidance/Transmittals/Downloads/ costs of hospice care: An actuarial evaluation of the Policy. March, 2009. Web. 18 Feb. 2015. http:// R2864CP.pdf. Medicare hospice benefit. Report by Milliman USA medpac.gov/documents/reports/Mar09_Ch06.pdf? 33 http://www.cms.gov/Regulations-and- for the National Hospice and Palliative Care sfvrsn=0. Guidance/Guidance/Manuals/Paper-Based- Organization, August 1. New York: Milliman USA. 43 http://medpac.gov/documents/reports/chapter- Manuals-Items/CMS021935.html?DLPage= 41 http://www.medpac.gov/documents/reports/ 12-hospice-services-(march-2015-report).pdf? 1&DLSort=0&DLSortDir=ascending. Mar09_Ch06.pdf?sfvrsn=0. sfvrsn=0.

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demonstrated that the resource use others, our payment reform contractor, receiving needed hospice care and curve becomes more pronounced as Abt Associates, examined hospice support at the very end of life. If episode lengths increase for hospice utilization data and modeled a hospices are actively engaging with the users, indicating that this effect occurs hypothetical ‘‘tiered’’ payment system beneficiary and the family throughout because resource use declines more similar to MedPAC’s U-shaped payment the election, we would expect to see substantially for the middle days model by paying different per-diem skilled visits during those last days of relative to beginning and ending days in rates for RHC according to the timing of life. Therefore, in the tiered payment longer episodes of hospice care than it the RHC day in the patient’s episode of model, making the increased payment at does for shorter episodes. The decline in care. However, because analysis of the end of life contingent on whether the center of the ‘U’ is deeper for those hospice claims data found that a skilled visits occurred in the last 2 days users who receive RHC only during relatively high percentage of patients of life was thought of as one way to their hospice episode, which is the case were not receiving skilled visits during provide additional incentive for care to for the majority of hospice patients. the last days of life, the ‘‘tiered payment be provided when the patient needs it Recently, CMS’s contracting partner, model’’ made the increased payments at most. Abt Associates, conducted analysis of end of life contingent on whether FY 2013 hospice claims data, showing skilled services were provided. As The groupings in the tiered payment that of the approximately 92 million reported in the FY 2015 Hospice model, presented in Table13 below, hospice days billed, 97.45 percent are Payment Rate Update final rule, in CY were developed through Abt Associates’ categorized as RHC. 2012, approximately 14 percent analyses of resource utilization over the beneficiaries did not receive any skilled hospice episode and clinical input. b. Tiered Payment Model visits in the last 2 days of life (79 FR Using a sample of 100 percent RHC As required under section 3132(a) of 50461). While this could be explained, hospice service days from 2011, Abt the Affordable Care Act, CMS also in part, by sudden or unexpected death, then developed payment weights for explored other options for hospice the high percentage of beneficiaries with each grouping by calculating its relative payment reform. Taking into no skilled visits in the last 2 days of life resource utilization rate compared to the consideration the research and analysis causes concern as to whether overall estimate of resource use across performed by MedPAC, ASPE, and beneficiaries and their families are not all RHC days (see Table 13 below).

TABLE 13—AVERAGE DAILY RESOURCE USE BY PAYMENT GROUPS IN THE TIERED PAYMENT MODEL, CY 2011

Group Days of hospice Implied weight

Group 1: RHC Days 1–5 ...... 2,800,144 2.3 Group 2: RHC Days 6–10 ...... 2,493,004 1.11 Group 3: RHC Days 11–30 ...... 7,767,918 0.97 Group 4: RHC Days 31+ ...... 65,958,740 0.86 Group 5: RHC During Last Seven Days, Skilled Visits During Last 2 Days ...... 2,832,620 2.44 Group 6: RHC During Last Seven Days, No Skilled Visits During Last 2 Days ...... 476,809 0.91 Group 7: RHC When Hospice Length of Stay is 5 Days or Less, Patient Discharged as ‘‘Expired’’...... 510,787 3.64

Total ...... 82,840,022 1.0

The payment weighting scheme in model was discussed in more detail in U-Shaped pattern in of resource use. this system, derived from observed the FY2014 Hospice Wage Index final Increased utilization at both the resource utilization across the entire rule (78 FR 48271) and in the Hospice beginning and end of a stay is episode, would produce higher Study Technical Report issued in April demonstrated in Figure 4 below, where payments during times when service is of 2013.44 FY 2013 resource costs (as captured by more intensive (the beginning of a stay wage-weighted minutes) are markedly c. Visits During the Beginning and End or the end of life) and produce lower higher in the first two days of a hospice of a Hospice Election payments during times when service is election and once again in the six days less intensive (such as the ‘‘middle Updated analysis of FY 2013 hospice preceding the date of death and on the period’’ of the stay). The tiered payment claims data continues to demonstrate a date of death itself.

44 http://www.cms.gov/Medicare/Medicare-Fee- for-Service-Payment/Hospice/Downloads/Hospice- Study-Technical-Report.pdf.

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Analysis of skilled nursing and social second day of a hospice election. In of a hospice election. The percentage of work visits provided on the first day of accordance with the hospice CoPs at patients that did not receive a skilled a hospice election shows that nearly 89 § 418.54(a), hospices are required to nursing or social work visit on any percent of patients received a visit have a RN complete an initial given day increased to about 65 percent totaling 15 minutes or more, while 11 assessment of the hospice patient within by the sixth day of a hospice election. percent did not receive a skilled nursing 48 hours of election; therefore, we Overall, on any given day during the visit or social work visit on the first day would expect to see a nursing visit first 7 days of a hospice election, nearly of a hospice election (see Table 14 occurring within the first 2 days of an 50 percent of the time the patient is not below). The percentage of patients that election in order to be in compliance receiving a skilled visit (skilled nursing did not receive a skilled nursing or with the CoPs. We found that, in FY or social worker visit). social work visit on a given day 2013, 96 percent of hospice patients did increased to nearly 38 percent on the receive a skilled visit in the first 2 days

TABLE 14—FREQUENCY AND LENGTH OF SKILLED NURSING AND SOCIAL WORK VISITS (COMBINED) DURING THE FIRST SEVEN DAYS OF A HOSPICE ELECTION, FY 2013

First First day Second day Third day Fourth day Fifth day Sixth day Seventh day through Visit length (percent) (percent) (percent) (percent) (percent) (percent) (percent) seventh day (percent)

No Visit...... 11.0 37.7 56.0 59.1 62.0 65.6 64.2 49.3 15mins to 1 hr ...... 12.8 27.1 22.2 20.6 20.4 20.1 22.3 20.7 1hr15m to 2 hrs ...... 32.0 21.4 14.3 13.4 12.2 10.4 10.2 16.9 2hrs15m to 3 hrs...... 22.8 8.6 4.8 4.5 3.6 2.5 2.2 7.5 3hrs15m to 3hrs45m...... 8.5 2.6 1.3 1.2 0.9 0.6 0.5 2.4 4 or more hrs...... 13.0 2.6 1.3 1.2 0.9 0.7 0.6 3.2

Total ...... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: FY 2013 hospice claims data from the Standard Analytic Files for CY 2012 (as of June 30, 2013) and CY 2014 (as of December 31, 2013).

As we noted above, we are concerned analysis of FY 2013 claims data shows below). Moreover, on the day of death that many beneficiaries are not receiving that on any given day during the last 7 nearly 30 percent of beneficiaries did skilled visits during the last few days of days of a hospice election, nearly 50 not receive a skilled visit (skilled life. At the end of life, patient needs percent of the time the patient is not nursing or social work visit). typically surge and more intensive receiving a skilled visit (skilled nursing services are warranted. However, or social worker visit) (see table 15

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TABLE 15—FREQUENCY AND LENGTH OF SKILLED NURSING AND SOCIAL WORK VISITS (COMBINED) DURING THE LAST SEVEN DAYS OF A HOSPICE ELECTION, FY 2013

One day Two days Three days Four days Five days Six days Last seven Visit length Day of before before before before before before days (percent) death death death death death death death combined (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)

No Visit...... 27.8 38.7 45.2 49.8 53.2 55.8 58.0 46.3 15mins to 1 hr ...... 23.9 27.9 26.5 25.1 24.2 23.5 22.8 24.9 1hr15m to 2 hrs ...... 24.2 19.3 17.4 15.9 14.5 13.6 12.7 17.1 2hrs15m to 3 hrs...... 12.3 7.2 5.9 5.1 4.5 4.1 3.8 6.3 3hrs15m to 3hrs45m...... 4.4 2.4 1.9 1.6 1.4 1.2 1.1 2.1 4 or more hrs...... 7.4 4.3 3.0 2.4 2.1 1.9 1.6 3.4

We would expect that skilled visits beneficiaries.’’ However, as discussed in and 6 below, the daily cost of care, as are provided to the patient and family section III.B.1 above, there is evidence measured wage-weighted minutes, at end of life as the changing condition of a misalignment between the current declines quickly for individual patients of the individual and the imminence of RHC per diem payment rate and the cost during their hospice episodes, and for death often warrants frequent changes to of providing RHC. In order to help long episode patients, remains low for a care to alleviate and minimize ensure that hospices are paid adequately significant portion of the episode. Thus, symptoms and to provide support for for providing care to patients regardless long episode patients are potentially the family. Although previous public of their palliative care needs during the more profitable than shorter episode comments stated that patients and stay, while at the same time encouraging patients under the current per diem families sometimes request no visits at hospices to more carefully determine payments system in which the payment the end of life, and there are rare patient eligibility relative to the rate is the same for the entire episode. instances where a patient passes away statutory requirement that the patients’ At the same time, the percent of unexpectedly, we would expect that life expectancy be 6 months or less, we beneficiaries that enter hospice less than these instances would be rare and are using the authority under section 7 days prior to death has remained represent a small proportion of the 1814(i)(6)(D) of the Act, as amended by relatively constant (approximately 30 noted days without visits at the end of section 3132(a) of the Affordable Care percent) over this time period, meaning life. However, the data presented in Act to propose a revision to the current the increase in the average episode Table 15 above suggests that it is not RHC per diem payment rate to more length can be attributed to an increasing rare for patients and families to have not accurately align the per diem payments number of long stay patients. We found received skilled visits (skilled nursing with visit intensity (that is, the cost of that the percent of episodes that are or social work visits) at the end of life. providing care for the clinical service more than 6 months in length has nearly In the FY 2015 Hospice Wage Index and (labor) components of the RHC rate). We doubled from about 7 percent in 1999 to Payment Rate Update final rule, we are proposing, in conjunction with a 13 percent in 2013. noted that nearly 5 percent of hospices SIA payment discussed in section III.B.3 Figure 5 displays the pattern of wage- did not provide any skilled visits in the below, two different RHC rates that last 2 days of life to more than 50 weighted minutes by time period within would result in a higher base payment beneficiary episodes, but excluding the percent of their decedents receiving rate for the first 60 days of hospice care routine home care on those last 2 days last 7 days of the episode for decedents. and a reduced base payment rate for The wage-weighted minutes for the last and 34 hospices did not make any days 61 or over of hospice care. skilled visits in the last 2 days of life to 7 days are displayed separately by the any of their decedents who died while The two proposed rates for RHC are bar furthest to the right of the Figure 5. receiving routine home care (79 FR based on an extensive body of research The visit intensity curve declines 50462). concerning visit intensity during a rapidly after 7 days and then at a slower hospice episode as cited throughout this rate until 60 days when the curve 2. Proposed Routine Home Care Rates section. We consider a hospice becomes flat throughout the remainder RHC is the basic level of care under ‘‘episode’’ of care to be a hospice of episodes (excluding the last 7 days the Hospice benefit, where a beneficiary election period or series of election prior to death). It is for this reason we receives hospice care, but remains at periods. Visit intensity is commonly are proposing to pay the higher rate for home. With this level of care, hospice measured in terms of wage-weighted the first 60 days and a lower rate providers are currently reimbursed per minutes and reflects variation in the thereafter. It is clear from the figure that day regardless of the volume or provision of care for the clinical service visit utilization is constant from day 61 intensity of services provided to a (labor) components of the RHC rate. The on, until the last 7 days for decedents. beneficiary on any given day. As stated labor components of the RHC rate We believe the most important reason in the FY 2014 Hospice Wage Index and comprise nearly 70 percent of the RHC for proposing a different RHC rate for Payment Rate Update final rule (78 FR rate (78 FR 48272). Therefore, visit the first 60 days versus days 61 and 48234), ‘‘it is CMS’ intent to ensure that intensity is a close proxy for the beyond is that we must account for reimbursement rates under the Hospice reasonable cost of providing hospice differences in average visit intensity benefit align as closely as possible with care absent data on the non-labor between episodes that will end within the average costs hospices incur when components of the RHC rate, such as 60 days and those that will go on for efficiently providing covered services to drugs and DME. As shown in Figures 5 longer episodes.

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As Figure 6 demonstrates, with longer stays. Using 60 days for the quality care to patients (for example, 1 beneficiaries whose entire episode is high RHC rate as opposed to an earlier through 60 days) whose average daily between 8 and 60 days do have higher time assured that hospices would have visit intensity is higher than for longer wage-weighted minute usage than those sufficient resources for providing high stay patients.

The SIA payments based on actual reflect the rapid increase in visit FY 2014, calculated both in specific visits provided would be added to the intensity during that time period. phases within an episode as well as applicable rate during the last 7 days to Table 16 below describes the average overall. wage-weighted minutes for RHC days in

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TABLE 16—AVERAGE WAGE WEIGHTED MINUTES PER RHC DAY, FY 2014

Ratio of wage weighted minutes Average wage- for each row Phase of days in episode weighted minutes RHC Days divided by wage weighted minutes for days 1–7

1–7 Days ...... 39.32 5,401,497 1.0000 8–14 Days ...... 20.12 4,276,570 0.5118 15–30 Days ...... 17.96 7,693,966 0.4567 31–60 Days ...... 16.10 10,679,971 0.4095 61–90 Days ...... 15.44 8,061,934 0.3927 91–180 Days ...... 14.93 16,156,969 0.3797 181–272 Days ...... 14.79 10,056,928 0.3762 273–365 Days ...... 14.91 6,844,692 0.3791 365 up Days ...... 15.05 15,962,038 0.3828

Total RHC Days ...... 17.21 85,134,565 0.4377

In Table 16, the average wage- utilizing FY 2014 RHC days multiplied for days 1 through 60 to the overall weighted minutes per day for days 1 by the 2013 Bureau of Labor Statistics average wage-weighted minutes per day through 7 describe the baseline for the (BLS) average hourly wage values for multiplied by the labor portion of the other phases of care, set at a value of the relevant disciplines, as follows: FY 2015 RHC rate (column 4 in Table one. Given the demands of the initial Skilled Nursing: $40.07; Physical 17 below), which equals ($21.69/ care in an episode, resource intensity is Therapy: $55.93; Occupational Therapy: $17.21)*$109.48 = $137.98. Similarly, highest during this first week of an $55.57; Speech Language Pathology: the RHC payment rate for days 61+ episode, and resource needs decline $60.21; Medical Social Services: $38.25; equals the average wage-weighted steadily over the course of an episode. and Aide: $14.28. The average wage- minutes per day for days 61+ divided by The overall average wage-weighted weighted minute cost for days 1 through the overall average wage-weighted minutes per day across all RHC days 60 equals to $21.69 while the average minutes per day multiplied by the labor equals $17.21 as described in the last wage weighted minutes for days 61 or portion of the FY 2015 RHC rate row in table 16 above. We then more equals $15.01. calculated the average wage-weighted To calculate the RHC payment rate for (column 4 in Table 17 below), which minute costs for the two groups of days days 1 through 60, we compare the equals ($15.01/$17.21)*$109.48 = (Days 1 through 60 and Days 61+) average wage-weighted minutes per day $95.48.

TABLE 17—FY 2015 RHC RATE REVISED LABOR PORTION CALCULATION

(1) (2) (3) (4) (5) (6) FY 2015 Average wage weighted FY 2015 RHC Labor- RHC minutes for RHC Revised FY RHC related payment differential rate/ 2015 labor payment share rate—labor overall RHC average portion rate portion wage weighted minutes

Days 1–60 ...... $159.34 × 0.6871 $109.48 × 1.2603 $137.98 ($21.69/$17.21) Days 61+ ...... 159.34 × 0.6871 109.48 × 0.8722 95.48 ($15.01/$17.21)

As discussed in section III.C of this $49.86. After determining the labor current single rate for RHC to the rule, currently, the labor-related share of portion for the RHC rate for the first 60 estimated total labor payments for RHC the hospice payment rate for RHC is days and the labor portion for the RHC using the two proposed rates for RHC. 68.71 percent. The non-labor share is rate for days 61 and over, we add the This ratio results in a budget neutrality equal to 100 percent minus the labor– non-labor portion ($49.86) to the revised adjustment of 0.9985 as shown in related share, or 31.29 percent. Given labor portions as described in column 6 column 3 in Table 18 below. Finally, the current base rate for RHC for FY in Table 17 above and in column 2 in adding the revised labor portion with 2015 of $159.34, the labor and non-labor Table 18 below. In order to maintain budget neutrality to the non-labor components are as follows: for the labor- budget neutrality, as required under portion results in revised FY 2015 RHC share portion, $159.34 multiplied by section 1814(i)(6)(D)(ii) of the Act, the payment rates of $187.63 for days 1 68.71 percent equals $109.48; for the proposed RHC rates would need to be through 60 and $145.21 for days 61 and non-labor share portion, $159.34 adjusted by a ratio of the total labor over. multiplied by 31.29 percent equals payments for RHC under using the

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TABLE 18—RHC BUDGET NEUTRALITY ADJUSTMENT FOR RHC RATES

(1) (2) (3) (4) (5) (6) Revised FY 2015 FY 2015 Revised Revised FY 2015 Budget neutrality FY 2015 Non- 1 labor portion with RHC payment labor portion factor budget neutrality labor portion rates

Days 1–60 ...... $137.98 × 0.9985 $137.77 $49.86 $187.63 Days 61+ ...... 95.49 × 0.9985 95.35 49.86 145.21 1 The budget neutrality adjustment is required due to differences in the average wage index for days 1–60 compared to days 61 and over.

The proposed RHC rates for days 1 the proposed SIA payment described in 7 days of life, only about 50 percent of through 60 and days 61 and over section III.B.3 below. the time are visits being made. In our view, increasing payments at the (column 6 of Table 18 above) would 3. Proposed Service Intensity Add-On beginning of a hospice election and at replace the current single RHC per diem (SIA) Payment payment rate with two new RHC per the end of life for days where visits are diem rates for patients who require RHC Section 1814(i)(1)(A) of the Act states not occurring does not align with the level of care during a hospice election. that payment for hospice services must requirements of reasonable cost In order to mitigate potential high rates be equal to the costs which are articulated in statute in section of discharge and readmissions, we reasonable and related to the cost of 1814(i)(A) of the Act. Therefore, as one further propose that the count of days providing hospice care or which are of the first steps in addressing the follow the patient. For hospice patients based on such other tests of observed misalignment between who are discharged and readmitted to reasonableness as the Secretary may resource use and associated Medicare hospice within 60 days of that prescribe in regulations. In addition, payments and in improving patient care discharge, his or her prior hospice days section 1814(i)(6)(D) of the Act, as through the promotion of skilled visits amended by section 3132(a) of the will continue to follow the patient and at end of life with minimal claims Affordable Care Act, requires the count toward his or her patient days for processing systems changes, CMS Secretary to implement revisions to the the receiving hospice upon hospice proposes to implement a SIA payment methodology for determining the election. The hospice days would if the criteria outlined below are met payment rates for RHCs and other continue to follow the patient solely to To qualify for the SIA payment, we services included in hospice care under determine whether the receiving propose that the following criteria must Medicare Part A as the Secretary hospice may bill at the 1 through 60 or be met: (1) The day is billed as a RHC determines to be appropriate as level of care day; (2) the day occurs 61+ RHC rate. The proposed policy does described in section III.B.1 above. Given during the last 7 days of life (and the not preclude the receiving hospice that independent analyses demonstrate beneficiary is discharged dead); (3) (same or different hospice) from billing a U-shaped cost pattern across hospice direct patient care is provided by a RN for a per diem payment for each hospice episodes, CMS believes that or a social worker (as defined by day. Therefore, we consider an implementing revisions to the payment § 418.114(c) and § 418.114(b)(3), ‘‘episode’’ of care to be a hospice system that align with this concept respectively) that day; and (4) the election period or series of election supports the requirements of reasonable service is not provided in a skilled periods separated by no more than a 60 cost in section 1814(i)(A) of the Act. As nursing facility/nursing facility (SNF/ day gap. We will monitor this proposal articulated above, CMS considered NF). The proposed SIA payment would and trends in discharges and implementing a tiered payment model be equal to the CHC) hourly payment revocations for potential future as described in the FY 2014 Hospice rate (the current FY 2015 CHC rate is refinements to address perverse Wage Index final rule (78 FR 48271) and $38.75 per hour), multiplied by the incentives. This policy proposal in the Hospice Study Technical Report attempts to better align RHC payment amount of direct patient care provided issued in April of 2013,45 in order to rates with resource use and is not by a RN or social worker for up to 4 better align payments with observed intended to place an arbitrary limit on hours total, per day, as long as the four resource use over the length of a hospice hospice services. We continue to expect criteria listed above are met. The stay. However, operational concerns and hospices to adhere to the long-standing proposed SIA payment would be paid in programmatic complexity led us to policy to provide ‘‘virtually all’’ care addition to the current per diem rate for explore the concept of a SAI that could during a hospice election as articulated the RHC level of care. be implemented with minimal systems in the 1983 Hospice Care proposed and CMS would create two separate G- changes that limit reprocessing of final rules as well as most recently in FY codes for use when billing skilled hospice claims due to sequential billing 2015 Hospice Wage Index and Payment nursing visits (revenue center 055x), one requirements. In addition, while the Rate Update final rule. Furthermore, for a RN and one for a Licensed tiered model represented a move toward program integrity and oversight efforts Practical Nurse (LPN). During periods of better aligning payments with resource including but not limited to, medical crisis, such as the precipitous decline use, it only accounted for whether review, MAC audits, Zone Program before death, RNs are more highly skilled services were provided in the Integrity Contractor actions, Recovery trained clinicians with commensurately last 2 days of life (Groups 5 and 6 in Auditor activities, or suspension of higher payment rates. Moreover, our Table 13 above). Section III.B.1.c, above provider billing privileges, are being rules at § 418.56(a)(1) require the RN notes that on any given day during the considered to address fraud and abuse. member of the hospice interdisciplinary first 7 days of a hospice election and last We are soliciting public comment on all group to be responsible for ensuring that aspects of the proposed RHC payment 45 http://www.cms.gov/Medicare/Medicare-Fee- the needs of the patient and family are rates as articulated in this section as for-Service-Payment/Hospice/Downloads/Hospice- continually assessed. We would expect well as this policy in conjunction with Study-Technical-Report.pdf. that at end of life the needs of the

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patient and family would need to be recommendation, we are proposing to regarding a possible short stay add-on frequently assessed; thus the skills of exclude SNF/NF sites of service from payment. Since the proposed SIA the interdisciplinary group RN are eligibility for the SIA payment. payment would be applicable to any 7- required. We note that social workers The for-profit provider community day period of time ending in the also often play a crucial role in has frequently highlighted its concerns patient’s death, hospice elections with providing support for the patient and regarding the lack of adequate short lengths of stay would receive an family when a patient is at end of life. reimbursement for hospice short stays additional payment that would help While the nature of the role of the social in its public filings with the Securities mitigate the marginally higher costs worker does facilitate interaction via the and Exchange Commission (SEC) as associated with short lengths of stay, telephone, CMS proposes to only pay an described in MedPAC’s 2008 Report to consistent with the ‘reasonable cost’ SIA for those social work services Congress.47 Specifically, MedPAC cited structure of the hospice payment provided by means of in-person visits. records from the SEC for publicly traded system. For FY 2013, 32 percent of Analysis conducted by Abt Associates for-profit hospice chains as evidence of hospice stays were 7 days or less with on the FY 2013 hospice claims data a general acknowledgement of the 60 percent of stays lasting 30 days or shows that in the last 7 days of life only nonlinear cost function of resource use less. The median length of stay in FY approximately 10 percent of within hospice episodes. For instance: 2013 was 17 days. beneficiaries received social work visits • VistaCare: ‘‘Our profitability is Although Figure 4 above of any kind. Moreover, we also found largely dependent on our ability to demonstrates that there is increased that only about 13 percent of social manage costs of providing services and resource use during the first 2 days of work ‘‘visits’’ are provided via to maintain a patient base with a an election, we are not proposing an telephone; therefore, the proportion of sufficiently long length of stay to attain additional SIA payment for the first or social work calls likely represents a very profitability,’’ and that ‘‘cost pressures second day of a hospice election when small fraction of visits overall in the last resulting from shorter patient lengths of the length of stay is beyond 7 days. few days of life. The SIA payment stay . . . could negatively impact our According to MedPAC, the breakeven would be in addition to the RHC profitability.’’ 48 point for a hospice election is about payment amount and the costs • Odyssey HealthCare: ‘‘Length of three weeks after admission.51 The associated with social work phone stay impacts our direct hospice care proposed SIA payment for the last 7 conversations; visits by LPNs, aides, and expenses as a percentage of net patient days of life would provide additional therapists; counseling; drugs; medical service revenue because, if lengths of reimbursement to help to mitigate the supplies; DME; and any other item or stay decline, direct hospice care higher costs for stays lasting 3 weeks or service usually covered by Medicare expenses, which are often highest less where spreading out the initial would still be covered by the existing during the earliest and latter days of costs in the first 2 days of the election RHC payment amount in accordance care for a patient, are spread against over a smaller number of days is not with section 1861(dd)(1) of the Act. fewer days of care.’’ 49 enough to make the overall stay In 2011, the OIG published a report Short lengths of stay were also cited profitable. Once a hospice stay reaches that focused specifically on Medicare as a source of financial difficulties for 3 weeks or more, the initial costs payments to hospices who served a high small rural hospices (implying that associated with the first 2 days of a percentage of nursing facility residents. longer stays were more profitable).50 In hospice election can be spread out over The OIG found that from 2005 to 2009, the FY 2014 Hospice Wage Index and a larger number of days, making the the total Medicare spending for hospice Payment Rate Update proposed rule, we overall stay profitable. A stay of 7 days care for nursing facility residents stated that ‘‘analysis conducted by Abt or less before death would be eligible for increased from $2.55 billion to $4.31 Associates found that very short hospice SIA payment on all days. billion, an increase of almost 70 percent stays have a flatter curve than the U- We believe that the proposed SIA (OIG, 2011). When looking at hospices shaped curve seen for longer stays, and payment helps to address MedPAC and that had more than two-thirds of their that average hospice costs are much industry concerns regarding the visit beneficiaries in nursing facilities, the higher. These short stays are less U- intensity at end of life and the concerns OIG found that 72 percent of these shaped because there is not a lower-cost associated with the profitability of facilities were for-profit and received, middle period between the time of hospice short stays. The proposed RHC on average, $3,182 more per beneficiary admission and the time of death.’’ The rates described in section III.B2 and SIA in Medicare payments than hospices FY 2014 Hospice Wage Index and payment would advance hospice overall. High-percentage hospices were Payment Rate Update proposed rule payment reform incrementally, as found to serve beneficiaries who spent went on to note that a ‘‘short stay add- mandated by the Affordable Care Act more days in hospice care, to the on’’ was under consideration as a while simultaneously maintaining magnitude of 3 weeks longer than the possible reform option (78 FR 27843). flexibility for future refinements. Since average beneficiary. In addition, when Public comments received in response this approach would be implemented looking at distributions in diagnoses, to the proposed rule were favorable within the current constructs of the OIG found that high-percentage hospice payment system, no major hospices enrolled beneficiaries who 47 http://www.medpac.gov/documents/reports/ overhaul of the claims processing required less skilled care. In response to Jun08_Ch08.pdf. system or related claims/cost report these findings, OIG recommended that 48 Health Care Strategic Management. 2004. forms would be required, minimizing Hospice companies benefit from favorable Medicare CMS modify the current hospice rates. Health Care Strategic Management 22, no. 1: burden for hospices as well as for reimbursement system to reduce the 13–14. Medicare. CMS needs to further assess incentive for hospices to seek out 49 Odyssey HealthCare, Inc. 2004. Annual report whether the four levels of care and the beneficiaries in nursing facilities, who to shareholders, form 10–K. Filed with the current payment amounts, as well as the often receive longer but less complex Securities and Exchange Commission, Washington, amounts after implementation of the DC, March 11. Dallas, TX: Odyssey HealthCare, Inc. 46 and costly care. Per the OIG 50 Virnig, B. A., I. S. Moscovice, S. B. Durham, et SIA, will align with the actual cost of al. 2004. Do rural elders have limited access to 46 http://oig.hhs.gov/oei/reports/oei-02-10- Medicare hospice services? Journal of the American 51 http://www.medpac.gov/documents/reports/ 00070.pdf. Geriatrics Society 52, no. 5: 731–735. Jun08_Ch08.pdf.

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providing hospice services. The hospice factors used by the Secretary for statewide urban average pre-floor, pre- cost report was redesigned, effective for purposes of section 1886(d)(3)(E) of the reclassified hospital wage index value to cost reporting periods beginning on Act for hospital wage adjustments. Our use as a reasonable proxy for these October 1, 2014, and additional data are regulations at § 418.306(c) require each areas. In FY 2016, the only CBSA now being collected on the hospice labor market to be established using the without a hospital from which hospital claim form, effective April 1, 2014. most current hospital wage data wage data could be derived is 25980, Once additional data is available, CMS available, including any changes made Hinesville-Fort Stewart, Georgia. will continue to assess additional by OMB to the Metropolitan Statistical In the FY 2008 Hospice Wage Index refinements that may inform more Areas (MSAs) definitions. final rule (72 FR 50214), we extensive policy and payment We use the previous fiscal year’s implemented a new methodology to approaches, in accordance with the hospital wage index data to calculate update the hospice wage index for rural payment methodology reform required the hospice wage index values. For FY areas without a hospital, and thus no by the Affordable Care Act. 2016, the hospice wage index will be hospital wage data. In cases where there As required by section based on the FY 2015 hospital pre-floor, was a rural area without rural hospital 1814(i)(6)(D)(ii) of the Act, any changes pre-reclassified wage index. This means wage data, we used the average pre- to the hospice payment system must be that the hospital wage data used for the floor, pre-reclassified hospital wage made in a budget neutral manner in the hospice wage index is not adjusted to index data from all contiguous CBSAs to first year of implementation. Based on take into account any geographic represent a reasonable proxy for the the desire to improve patient care reclassification of hospitals including rural area. The term ‘‘contiguous’’ through the promotion of skilled visits those in accordance with section means sharing a border (72 FR 50217). at end of life, regardless of the patient’s 1886(d)(8)(B) or 1886(d)(10) of the Act. Currently, the only rural area without a lifetime length of stay, we are proposing The appropriate wage index value is hospital from which hospital wage data to make the SIA payments budget applied to the labor portion of the could be derived is Puerto Rico. neutral through a reduction to the payment rate based on the geographic However, our policy of imputing a rural overall RHC rate. The SIA payment area in which the beneficiary resides pre-floor, pre-reclassified hospital wage budget neutrality factor (SBNF) used to when receiving RHC or CHC. The index based on the pre-floor, pre- reduce the overall RHC rate is outlined appropriate wage index value is applied reclassified hospital wage index (or in section III.C.3 and is reflected in the to the labor portion of the payment rate indices) of CBSAs contiguous to a rural proposed RHC payment rate tables. based on the geographic location of the area without a hospital from which We also propose to continue to make facility for beneficiaries receiving hospital wage data could be derived the SIA payments budget neutral General Inpatient care (GIP) or Inpatient does not recognize the unique through an annual determination of the Respite Care (IRC). circumstances of Puerto Rico. In this SBNF, which will then be applied to the In the FY 2006 Hospice Wage Index proposed rule, for FY 2016, we propose RHC payment rate. The SBNF for the final rule (70 FR 45130), we adopted the to continue to use the most recent pre- SIA payments would be calculated for changes discussed in the OMB Bulletin floor, pre-reclassified hospital wage each FY using the most current and No. 03–04 (June 6, 2003). This bulletin index value available for Puerto Rico, complete fiscal year utilization data announced revised definitions for MSAs which is 0.4047. available at the time of rulemaking. and the creation of micropolitan b. Elimination of the Wage Index Budget Finally, we are soliciting public statistical areas and combined statistical Neutrality Factor (BNAF) comment on all aspects of the proposed areas. The bulletin is available online at SIA payment as articulated in this http://www.whitehouse.gov/omb/ This proposed rule would update the section as well as the corresponding bulletins/b03-04.html. In adopting the hospice wage index values for FY 2016 proposed changes to the regulations at CBSA geographic designations for FY using the FY 2015 pre-floor, pre- § 418.302 in section VI. We are also 2006, we provided for a 1-year reclassified hospital wage index. As proposing to change the word transition with a blended wage index for described in the August 8, 1997 Hospice ‘‘Intermediary’’ to ‘‘Medicare all providers. For FY 2006, the wage Wage Index final rule (62 FR 42860), the Administrative Contractor’’ in the index for each geographic area consisted pre-floor and pre-reclassified hospital regulations text at § 418.302 and of a blend of 50 percent of the FY 2006 wage index is used as the raw wage proposing technical regulations text MSA-based wage index and 50 percent index for the hospice benefit. These raw changes to § 418.306 as described in of the FY 2006 CBSA-based wage index. wage index values were then subject to section VI. As more data become As discussed in the Hospice Wage Index either a budget neutrality adjustment or available, CMS will continue to analyze final rule for FY 2006 (70 FR 45138), application of the hospice floor to hospice payments, costs, and utilization since the expiration of this 1-year compute the hospice wage index used to and will consider refining the SIA transition on September 30, 2006, we determine payments to hospices. Pre- payment criteria if needed. have used the full CBSA-based wage floor, pre-reclassified hospital wage index values. index values below 0.8 were adjusted by C. Proposed FY 2016 Hospice Wage When adopting OMB’s new labor either: (1) The hospice BNAF; or (2) the Index and Rate Update market designations in FY 2006, we hospice floor—a 15 percent increase 1. Proposed FY 2016 Hospice Wage identified some geographic areas where subject to a maximum wage index value Index there were no hospitals, and thus, no of 0.8; whichever results in the greater hospital wage index data, which to base value. a. Background the calculation of the hospice wage The FY 2010 Hospice Wage Index rule The hospice wage index is used to index. In the FY 2010 Hospice Wage finalized a provision to phase-out the adjust payment rates for hospice Index final rule (74 FR 39386), we also BNAF over 7 years, with a 10 percent agencies under the Medicare program to adopted the policy that for urban labor reduction in the BNAF in FY 2010, and reflect local differences in area wage markets without a hospital from which an additional 15 percent reduction in levels based on the location where hospital wage index data could be each of the next 6 years, with complete services are furnished. The hospice derived, all of the CBSAs within the phase out in FY 2016 (74 FR 39384). wage index utilizes the wage adjustment state would be used to calculate a The 10 percent reduced BNAF for FY

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2010 was 0.055598, based on a full 37246–37252) and Census Bureau data.’’ i. Micropolitan Statistical Areas BNAF of 0.061775; the additional 15 In the FY 2015 Hospice Wage Index As discussed in the FY 2006 Hospice percent reduced BNAF for FY 2011 (for final rule (79 FR 50483), we stated that Wage Index proposed rule (70 FR a cumulative reduction of 25 percent) if CMS incorporates OMB’s new area 22397) and final rule (70 FR 45132), was 0.045422, based on a full BNAF of delineations, based on the 2010 Census, CMS considered how to use the 0.060562; the additional 15 percent in the FY 2015 hospital wage index, Micropolitan Statistical Area definitions reduced BNAF for FY 2012 (for a those changes would also be reflected in in the calculation of the wage index. cumulative reduction of 40 percent) was the FY 2016 hospice wage index. In the OMB defines a ‘‘Micropolitan Statistical 0.035156, based on a full BNAF of FY 2015 Inpatient Prospective Payment Area’’ as a CBSA ‘‘associated with at 0.058593; the additional 15 percent System (IPPS) final rule (79 FR 49951), least one urban cluster that has a reduced BNAF for FY 2013 (for a we finalized the proposal to use OMB’s population of at least 10,000, but less cumulative reduction of 55 percent) was new area delineations, based on the than 50,000 (75 FR 37252). We refer to 0.027197, based on a full BNAF of 2010 Census, in the FY 2015 hospital these as Micropolitan Areas. After 0.060438; the additional 15 percent wage index. In addition, the new area extensive impact analysis, consistent BNAF for FY 2014 (for a cumulative delineations have been incorporated with the treatment of these areas under reduction of 70 percent) was 0.018461, into the FY 2015 SNF PPS (79 FR the IPPS as discussed in the FY 2005 based on a full BNAF of 0.061538 and 45628) and the CY 2015 Home Health IPPS final rule (69 FR 49029 through the additional 15 percent reduced BNAF (HH) PPS (79 FR 66032) using a 1-year 49032), CMS determined the best course for FY 2015 (for a cumulative reduction transition with a blended wage index. of action would be to treat Micropolitan of 85 percent) is 0.009313, based on a Areas as ‘‘rural’’ and include them in full BNAF of 0.062804. For FY 2016, the While the revisions OMB published BNAF is reduced by an additional and on February 28, 2013, are not as the calculation of each state’s Hospice final 15 percent for a cumulative sweeping as the changes made when we rural wage index (see 70 FR 22397 and reduction of 100 percent. Therefore, for adopted the CBSA geographic 70 FR 45132). Thus, the hospice FY 2016, the BNAF is completely designations for FY 2006, the February statewide rural wage index is phased-out and eliminated. 28, 2013 bulletin does contain a number determined using IPPS hospital data Hospital wage index values which are of significant changes. For example, from hospitals located in non-MSA areas. less than 0.8 are still subject to the there are new CBSAs, urban counties Based upon the 2010 Decennial hospice floor calculation. The hospice that have become rural, rural counties Census data, a number of urban counties floor equates to a 15 percent increase, that have become urban, and existing have switched status and have joined or subject to a maximum wage index value CBSAs that have been split apart. We became Micropolitan Areas, and some of 0.8. For example, if County A has a believe it is important for the hospice counties that once were part of a pre-floor, pre-reclassified hospital wage wage index to use the latest OMB Micropolitan Area, have become urban. index value of 0.3994, we would delineations available in order to multiply 0.3994 by 1.15, which equals Overall, there are fewer Micropolitan maintain a more accurate and up-to-date Areas (541) under the new OMB 0.4593. Since 0.4593 is not greater than payment system that reflects the reality 0.8, then County A’s hospice wage delineations based on the 2010 Census of population shifts and labor market than existed under the latest data from index would be 0.4593. In another conditions. While CMS and other example, if County B has a pre-floor, the 2000 Census (581). We believe that stakeholders have explored potential the best course of action would be to pre-reclassified hospital wage index alternatives to the current CBSA-based value of 0.7440, we would multiply continue the policy established in the labor market system (we refer readers to FY 2006 Hospice Wage Index final rule 0.7440 by 1.15 which equals 0.8556. the CMS Web site at: www.cms.gov/ Because 0.8556 is greater than 0.8, and include Micropolitan Areas in each Medicare/Medicare-Fee-for-Service- state’s rural wage index. These areas County B’s hospice wage index would Payment/AcuteInpatientPPS/Wage- be 0.8. continue to be defined as having Index-Reform.html), no consensus has relatively small urban cores c. Proposed Implementation of New been achieved regarding how best to (populations of 10,000 to 49,999). Labor Market Delineations implement a replacement system. As Therefore, in conjunction with our OMB has published subsequent discussed in the FY 2005 IPPS final rule proposal to implement the new OMB bulletins regarding CBSA changes. On (69 FR 49027), ‘‘While we recognize that labor market delineations beginning in February 28, 2013, OMB issued OMB MSAs are not designed specifically to FY 2016 and consistent with the Bulletin No. 13–01, announcing define labor market areas, we believe treatment of Micropolitan Areas under revisions to the delineation of MSAs, they do represent a useful proxy for this the IPPS, we are proposing to continue Micropolitan Statistical Areas, and purpose.’’ We further believe that using to treat Micropolitan Areas as ‘‘rural’’ Combines Statistical Areas, and the most current OMB delineations and to include Micropolitan Areas in guidance on uses of the delineation in would increase the integrity of the the calculation of each state’s rural wage these areas. A copy of this bulletin is hospice wage index by creating a more index. available online at: http:// accurate representation of geographic www.whitehouse.gov/sites/default/files/ variation in wage levels. We have ii. Urban Counties Becoming Rural omb/bulletins/2013/b-13-01.pdf. This reviewed our findings and impacts If we adopt the new OMB bulletin states that it ‘‘provides the relating to the new OMB delineations, delineations (based upon the 2010 delineations of all Metropolitan and have concluded that there is no decennial Census data), a total of 37 Statistical Areas, Metropolitan compelling reason to further delay counties (and county equivalents) that Divisions, Micropolitan Statistical implementation. We are proposing to are currently considered urban would Areas, Combined Statistical Areas, and implement the new OMB delineations be considered rural beginning in FY New England City and Town Areas in as described in the February 28, 2013 2016. Table 19 below lists the 37 the United States and Puerto Rico based OMB Bulletin No. 13–01 for the hospice counties that would change to rural on the standards published on June 28, wage index effective beginning in FY status if we finalize our proposal to 2010, in the Federal Register (75 FR 2016. implement the new OMB delineations.

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TABLE 19—COUNTIES THAT WOULD CHANGE TO RURAL STATUS

CBSA number from FY 2015 County State hospice wage CBSA name index

Greene County ...... IN ...... 14020 Bloomington, IN. Anson County ...... NC ..... 16740 Charlotte-Gastonia-Rock Hill, NC-SC. Franklin County ...... IN ...... 17140 Cincinnati-Middletown, OH-KY-IN. Stewart County ...... TN ..... 17300 Clarksville, TN-KY. Howard County ...... MO .... 17860 Columbia, MO. Delta County ...... TX ..... 19124 Dallas-Fort Worth-Arlington, TX. Pittsylvania County ...... VA ..... 19260 Danville, VA. Danville City ...... VA ..... 19260 Danville, VA. Preble County ...... OH .... 19380 Dayton, OH. Gibson County ...... IN ...... 21780 Evansville, IN-KY. Webster County ...... KY ..... 21780 Evansville, IN-KY. Franklin County ...... AR ..... 22900 Fort Smith, AR-OK. Ionia County ...... MI ...... 24340 Grand Rapids-Wyoming, MI. Newaygo County ...... MI ...... 24340 Grand Rapids-Wyoming, MI. Greene County ...... NC ..... 24780 Greenville, NC. Stone County ...... MS .... 25060 Gulfport-Biloxi, MS. Morgan County ...... WV .... 25180 Hagerstown-Martinsburg, MD-WV. San Jacinto County ...... TX ..... 26420 Houston-Sugar Land-Baytown, TX. Franklin County ...... KS ..... 28140 Kansas City, MO-KS. Tipton County ...... IN ...... 29020 Kokomo, IN. Nelson County ...... KY ..... 31140 Louisville/Jefferson County, KY-IN. Geary County ...... KS ..... 31740 Manhattan, KS. Washington County ...... OH .... 37620 Parkersburg-Marietta-Vienna, WV-OH. Pleasants County ...... WV .... 37620 Parkersburg-Marietta-Vienna, WV-OH. George County ...... MS .... 37700 Pascagoula, MS. Power County ...... ID ...... 38540 Pocatello, ID. Cumberland County ...... VA ..... 40060 Richmond, VA. King and Queen County ...... VA ..... 40060 Richmond, VA. Louisa County ...... VA ..... 40060 Richmond, VA. Washington County ...... MO .... 41180 St. Louis, MO-IL. Summit County ...... UT ..... 41620 Salt Lake City, UT. Erie County ...... OH .... 41780 Sandusky, OH. Franklin County ...... MA .... 44140 Springfield, MA. Ottawa County ...... OH .... 45780 Toledo, OH. Greene County ...... AL ..... 46220 Tuscaloosa, AL. Calhoun County ...... TX ..... 47020 Victoria, TX. Surry County ...... VA ..... 47260 Virginia Beach-Norfolk-Newport News, VA-NC.

iii. Rural Counties Becoming Urban (based upon the 2010 decennial Census urban beginning in FY 2016. Table 20 data), a total of 105 counties (and below lists the 105 counties that would If we finalize our proposal to county equivalents) that are currently change to urban status. implement the new OMB delineations designated rural would be considered

TABLE 20—COUNTIES THAT WOULD CHANGE TO URBAN STATUS

County State CBSA number CBSA name

Utuado Municipio ...... PR ..... 10380 Aguadilla-Isabela, PR. Linn County ...... OR .... 10540 Albany, OR. Oldham County ...... TX ..... 11100 Amarillo, TX. Morgan County ...... GA ..... 12060 Atlanta-Sandy Springs-Roswell, GA. Lincoln County ...... GA ..... 12260 Augusta-Richmond County, GA-SC. Newton County ...... TX ..... 13140 Beaumont-Port Arthur, TX. Fayette County ...... WV .... 13220 Beckley, WV. Raleigh County ...... WV .... 13220 Beckley, WV. Golden Valley County ...... MT ..... 13740 Billings, MT. Oliver County ...... ND ..... 13900 Bismarck, ND. Sioux County ...... ND ..... 13900 Bismarck, ND. Floyd County ...... VI ...... 13980 Blacksburg-Christiansburg-Radford, VA. De Witt County ...... IL ...... 14010 Bloomington, IL. Columbia County ...... PA ..... 14100 Bloomsburg-Berwick, PA. Montour County ...... PA ..... 14100 Bloomsburg-Berwick, PA. Allen County ...... KY ..... 14540 Bowling Green, KY. Butler County ...... KY ..... 14540 Bowling Green, KY. St. Mary’s County ...... MD .... 15680 California-Lexington Park, MD. Jackson County ...... IL ...... 16060 Carbondale-Marion, IL. Williamson County ...... IL ...... 16060 Carbondale-Marion, IL.

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TABLE 20—COUNTIES THAT WOULD CHANGE TO URBAN STATUS—Continued

County State CBSA number CBSA name

Franklin County ...... PA ..... 16540 Chambersburg-Waynesboro, PA. Iredell County ...... NC ..... 16740 Charlotte-Concord-Gastonia, NC-SC. Lincoln County ...... NC ..... 16740 Charlotte-Concord-Gastonia, NC-SC. Rowan County ...... NC ..... 16740 Charlotte-Concord-Gastonia, NC-SC. Chester County ...... SC ..... 16740 Charlotte-Concord-Gastonia, NC-SC. Lancaster County ...... SC ..... 16740 Charlotte-Concord-Gastonia, NC-SC. Buckingham County ...... VA ..... 16820 Charlottesville, VA. Union County ...... IN ...... 17140 Cincinnati, OH-KY-IN. Hocking County ...... OH .... 18140 Columbus, OH. Perry County ...... OH .... 18140 Columbus, OH. Walton County ...... FL ...... 18880 Crestview-Fort Walton Beach-Destin, FL. Hood County ...... TX ..... 23104 Dallas-Fort Worth-Arlington, TX. Somervell County ...... TX ..... 23104 Dallas-Fort Worth-Arlington, TX. Baldwin County ...... AL ..... 19300 Daphne-Fairhope-Foley, AL. Monroe County ...... PA ..... 20700 East Stroudsburg, PA. Hudspeth County ...... TX ..... 21340 El Paso, TX. Adams County ...... PA ..... 23900 Gettysburg, PA. Hall County ...... NE ..... 24260 Grand Island, NE. Hamilton County ...... NE ..... 24260 Grand Island, NE. Howard County ...... NE ..... 24260 Grand Island, NE. Merrick County ...... NE ..... 24260 Grand Island, NE. Montcalm County ...... MI ...... 24340 Grand Rapids-Wyoming, MI. Josephine County ...... OR .... 24420 Grants Pass, OR. Tangipahoa Parish ...... LA ..... 25220 Hammond, LA. Beaufort County ...... SC ..... 25940 Hilton Head Island-Bluffton-Beaufort, SC. Jasper County ...... SC ..... 25940 Hilton Head Island-Bluffton-Beaufort, SC. Citrus County ...... FL ...... 26140 Homosassa Springs, FL. Butte County ...... ID ...... 26820 Idaho Falls, ID. Yazoo County ...... MS .... 27140 Jackson, MS. Crockett County ...... TN ..... 27180 Jackson, TN. Kalawao County ...... HI ...... 27980 Kahului-Wailuku-Lahaina, HI. Maui County ...... HI ...... 27980 Kahului-Wailuku-Lahaina, HI. Campbell County ...... TN ..... 28940 Knoxville, TN. Morgan County ...... TN ..... 28940 Knoxville, TN. Roane County ...... TN ..... 28940 Knoxville, TN. Acadia Parish ...... LA ..... 29180 Lafayette, LA. Iberia Parish ...... LA ..... 29180 Lafayette, LA. Vermilion Parish ...... LA ..... 29180 Lafayette, LA. Cotton County ...... OK ..... 30020 Lawton, OK. Scott County ...... IN ...... 31140 Louisville/Jefferson County, KY-IN. Lynn County ...... TX ..... 31180 Lubbock, TX. Green County ...... WI ..... 31540 Madison, WI. Benton County ...... MS .... 32820 Memphis, TN-MS-AR. Midland County ...... MI ...... 33220 Midland, MI. Martin County ...... TX ..... 33260 Midland, TX. Le Sueur County ...... MN .... 33460 Minneapolis-St. Paul-Bloomington, MN-WI. Mille Lacs County ...... MN .... 33460 Minneapolis-St. Paul-Bloomington, MN-WI. Sibley County ...... MN .... 33460 Minneapolis-St. Paul-Bloomington, MN-WI. Maury County ...... TN ..... 34980 Nashville-Davidson-Murfreesboro-Franklin, TN. Craven County ...... NC ..... 35100 New Bern, NC. Jones County ...... NC ..... 35100 New Bern, NC. Pamlico County ...... NC ..... 35100 New Bern, NC. St. James Parish ...... LA ..... 35380 New Orleans-Metairie, LA. Box Elder County ...... UT ..... 36260 Ogden-Clearfield, UT. Gulf County ...... FL ...... 37460 Panama City, FL. Custer County ...... SD ..... 39660 Rapid City, SD. Fillmore County ...... MN .... 40340 Rochester, MN. Yates County ...... NY ..... 40380 Rochester, NY. Sussex County ...... DE ..... 41540 Salisbury, MD-DE. Worcester County ...... MA .... 41540 Salisbury, MD-DE. Highlands County ...... FL ...... 42700 Sebring, FL. Webster Parish ...... LA ..... 43340 Shreveport-Bossier City, LA. Cochise County ...... AZ ..... 43420 Sierra Vista-Douglas, AZ. Plymouth County ...... IA ...... 43580 Sioux City, IA-NE-SD. Union County ...... SC ..... 43900 Spartanburg, SC. Pend Oreille County ...... WA .... 44060 Spokane-Spokane Valley, WA. Stevens County ...... WA .... 44060 Spokane-Spokane Valley, WA. Augusta County ...... VA ..... 44420 Staunton-Waynesboro, VA. Staunton City ...... VA ..... 44420 Staunton-Waynesboro, VA. Waynesboro City ...... VA ..... 44420 Staunton-Waynesboro, VA. Little River County ...... AR ..... 45500 Texarkana, TX-AR. Sumter County ...... FL ...... 45540 The Villages, FL.

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TABLE 20—COUNTIES THAT WOULD CHANGE TO URBAN STATUS—Continued

County State CBSA number CBSA name

Pickens County ...... AL ..... 46220 Tuscaloosa, AL. Gates County ...... NC ..... 47260 Virginia Beach-Norfolk-Newport News, VA-NC. Falls County ...... TX ..... 47380 Waco, TX. Columbia County ...... WA .... 47460 Walla Walla, WA. Walla Walla County ...... WA .... 47460 Walla Walla, WA. Peach County ...... GA ..... 47580 Warner Robins, GA. Pulaski County ...... GA ..... 47580 Warner Robins, GA. Culpeper County ...... VA ..... 47894 Washington-Arlington-Alexandria, DC-VA-MD-WV. Rappahannock County ...... VA ..... 47894 Washington-Arlington-Alexandria, DC-VA-MD-WV. Jefferson County ...... NY ..... 48060 Watertown-Fort Drum, NY. Kingman County ...... KS ..... 48620 Wichita, KS. Davidson County ...... NC ..... 49180 Winston-Salem, NC. Windham County ...... CT ..... 49340 Worcester, MA-CT.

iv. Urban Counties Moving to a Different inconsequential changes with respect to and Philadelphia). If we adopt the new Urban CBSA the hospice wage index. However, in OMB delineations, Montgomery, Bucks, other cases, if we adopt the new OMB and Chester counties would split off and In addition to rural counties becoming delineations, counties would shift form the new CBSA 33874 (Montgomery urban and urban counties becoming between existing and new CBSAs, County-Bucks County-Chester County, rural, several urban counties would shift changing the constituent makeup of the PA Metropolitan Division of MSA from one urban CBSA to another urban CBSAs. In one type of change, an entire 37980), while Delaware and CBSA under our proposal to adopt the CBSA would be subsumed by another Philadelphia counties would remain in new OMB delineations. In other cases, CBSA. For example, CBSA 37380 (Palm CBSA 37964. Finally, in some cases, a applying the new OMB delineations Coast, FL) currently is a single county CBSA would lose counties to another would involve a change only in CBSA (Flagler, FL) CBSA. Flagler County existing CBSA if we adopt the new OMB name or number, while the CBSA would be a part of CBSA 19660 delineations. For example, Lincoln continues to encompass the same (Deltona-Daytona Beach-Ormond Beach, County and Putnam County, WV would constituent counties. For example, FL) under the new OMB delineations. In move from CBSA 16620 (Charleston, CBSA 29140 (Lafayette, IN), would another type of change, some CBSAs WV) to CBSA 26580 (Huntington- experience both a change to its number have counties that would split off to Ashland, WV KY OH). CBSA 16620 and its name, and would become CBSA become part of or to form entirely new would still exist in the new labor market 29200 (Lafayette-West Lafayette, IN), labor market areas. For example, CBSA delineations with fewer constituent while all of its three constituent 37964 (Philadelphia Metropolitan counties. Table 21 lists the urban counties would remain the same. We are Division of MSA 37980) currently is counties that would move from one not discussing these proposed changes comprised of 5 Pennsylvania counties urban CBSA to another urban CBSA if in this section because they are (Bucks, Chester, Delaware, Montgomery, we adopt the new OMB delineations.

TABLE 21—COUNTIES THAT WOULD CHANGE TO A DIFFERENT CBSA

Previous CBSA New CBSA County State

11300 ...... 26900 Madison County...... IN. 11340 ...... 24860 Anderson County...... SC. 14060 ...... 14010 McLean County...... IL. 37764 ...... 15764 Essex County...... MA. 16620 ...... 26580 Lincoln County...... WV. 16620 ...... 26580 Putnam County...... WV. 16974 ...... 20994 DeKalb County...... IL. 16974 ...... 20994 Kane County...... IL. 21940 ...... 41980 Ceiba Municipio...... PR. 21940 ...... 41980 Fajardo Municipio...... PR. 21940 ...... 41980 Luquillo Municipio...... PR. 26100 ...... 24340 Ottawa County...... MI. 31140 ...... 21060 Meade County...... KY. 34100 ...... 28940 Grainger County...... TN. 35644 ...... 35614 Bergen County...... NJ. 35644 ...... 35614 Hudson County...... NJ. 20764 ...... 35614 Middlesex County...... NJ. 20764 ...... 35614 Monmouth County...... NJ. 20764 ...... 35614 Ocean County...... NJ. 35644 ...... 35614 Passaic County...... NJ. 20764 ...... 35084 Somerset County...... NJ. 35644 ...... 35614 Bronx County...... NY. 35644 ...... 35614 Kings County...... NY. 35644 ...... 35614 New York County ...... NY. 35644 ...... 20524 Putnam County...... NY. 35644 ...... 35614 Queens County...... NY. 35644 ...... 35614 Richmond County...... NY.

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TABLE 21—COUNTIES THAT WOULD CHANGE TO A DIFFERENT CBSA—Continued

Previous CBSA New CBSA County State

35644 ...... 35614 Rockland County...... NY. 35644 ...... 35614 Westchester County...... NY. 37380 ...... 19660 Flagler County...... FL. 37700 ...... 25060 Jackson County...... MS. 37964 ...... 33874 Bucks County...... PA. 37964 ...... 33874 Chester County...... PA. 37964 ...... 33874 Montgomery County...... PA. 39100 ...... 20524 Dutchess County...... NY. 39100 ...... 35614 Orange County...... NY. 41884 ...... 42034 Marin County...... CA. 41980 ...... 11640 Arecibo Municipio...... PR. 41980 ...... 11640 Camuy Municipio...... PR. 41980 ...... 11640 Hatillo Municipio...... PR. 41980 ...... 11640 Quebradillas Municipio...... PR. 48900 ...... 34820 Brunswick County...... NC. 49500 ...... 38660 Gua´nica Municipio ...... PR. 49500 ...... 38660 Guayanilla Municipio...... PR. 49500 ...... 38660 Pen˜uelas Municipio ...... PR. 49500 ...... 38660 Yauco Municipio...... PR.

v. Transition Period delineations. We invite comments on A in place of the CBSA number where Overall, we believe that implementing our proposed transition methodology. appropriate. For counties located in the new OMB delineations would result The proposed wage index applicable CBSAs and rural areas that still in wage index values being more to FY 2016 is set forth in Addendum A correspond to only one wage index representative of the actual costs of available on the CMS Web site at http:// value, the CBSA number would still be labor in a given area. Among the 458 www.cms.gov/Medicare/Medicare-Fee- used. for-Service-Payment/Hospice/ total CBSA and statewide rural areas, 20 2. Proposed Hospice Payment Update index.html. Addendum A will not be (4 percent) would have a higher wage Percentage index using the newer delineations. published in the Federal Register. The However, 34 (7.4 percent) would have a proposed hospice wage index for FY Section 4441(a) of the Balanced lower wage index using the newer 2016 would be effective October 1, 2015 Budget Act of 1997 (BBA) amended delineations. Therefore, to remain through September 30, 2016. section 1814(i)(1)(C)(ii)(VI) of the Act to consistent with the manner in which we Addendum A provides a crosswalk establish updates to hospice rates for ultimately adopted the revised OMB between the FY 2016 wage index using FYs 1998 through 2002. Hospice rates delineations for FY 2006 (70 FR 45138), the current OMB delineations in effect were to be updated by a factor equal to we are proposing to implement a 1-year in FY 2015 and the FY 2016 wage index the market basket index, minus 1 transition to the new OMB delineations. using the proposed revised OMB percentage point. Payment rates for FYs Specifically, we propose to apply a delineations, as well as the proposed since 2002 have been updated according blended wage index for one year (FY transition wage index values that would to section 1814(i)(1)(C)(ii)(VII) of the 2016) for all geographic areas that be in effect in FY 2016 if these proposed Act, which states that the update to the would consist of a 50/50 blend of the changes are finalized. Addendum A payment rates for subsequent FYs must wage index values using OMB’s old area shows each state and county and its be the market basket percentage for that delineations and the wage index values corresponding proposed transition wage FY. The Act requires us to use the using OMB’s new area delineations. index along with the previous CBSA inpatient hospital market basket to That is, for each county, a blended wage number, the new CBSA number, and the determine the hospice payment rate index would be calculated equal to 50 new CBSA name. update. In addition, section 3401(g) of percent of the FY 2016 wage index Due to the way that the transition the Affordable Care Act mandates that, using the old labor market area wage index is calculated, some CBSAs starting with FY 2013 (and in delineation and 50 percent of the FY and statewide rural areas may have subsequent FYs), the hospice payment 2016 wage index using the new labor more than one transition wage index update percentage will be annually market area delineation. This results in value associated with that CBSA or rural reduced by changes in economy-wide an average of the two values. We refer area. However, each county will have productivity as specified in section to this blended wage index as the FY only one transition wage index. For 1886(b)(3)(B)(xi)(II) of the Act. The 2016 hospice transition wage index. counties located in CBSAs and rural statute defines the productivity This proposed 1-year transition policy areas that correspond to more than one adjustment to be equal to the 10-year is also consistent with the transition transition wage index value, the CBSA moving average of changes in annual policies adopted by both the FY 2015 number will not be able to be used for economy-wide private nonfarm business SNF PPS (79 FR 25767) and the CY 2015 FY 2016 claims. In these cases, a multifactor productivity (MFP) (as HH PPS (79 FR 66032). This transition number other than the CBSA number projected by the Secretary for the 10- policy would be for a 1-year period, would be necessary to identify the year period ending with the applicable going into effect on October 1, 2015, and appropriate wage index value on claims FY, year, cost reporting period, or other continuing through September 30, 2016. for hospice care provided in FY 2016. annual period) (the ‘‘MFP adjustment’’). Thus, beginning October 1, 2016, the These numbers are five digits in length A complete description of the MFP wage index for all hospice payments and begin with ‘‘50.’’ These codes are projection methodology is available on would be fully based on the new OMB shown in the last column of Addendum our Web site at http://www.cms.gov/

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Research-Statistics-Data-and-Systems/ 54.13 percent. The non-labor portion is different RHC payment rates, one RHC Statistics-Trends-and-Reports/ equal to 100 percent minus the labor rate for the first 60 days and a second MedicareProgramRatesStats/ portion for each level of care. Therefore, RHC rate for days 60 and beyond. As MarketBasketResearch.html. the non-labor portion of the payment discussed in section III.B.3, we are In addition to the MFP adjustment, rates is as follows: For RHC, 31.29 proposing to make a SIA payment, in section 3401(g) of the Affordable Care percent; for CHC, 31.29 percent; for addition to the daily RHC payment, Act also mandates that in FY 2013 General Inpatient Care, 35.99 percent; when direct patient care is provided by through FY 2019, the hospice payment and for Respite Care, 45.87 percent. a RN or social worker during the last 7 update percentage will be reduced by an 3. Proposed FY 2016 Hospice Payment days of the patient’s life. The SIA additional 0.3 percentage point Rates payment would be equal to the CHC (although for FY 2014 to FY 2019, the hourly rate multiplied by the hours of potential 0.3 percentage point reduction Historically, the hospice rate update nursing or social work provided (up to is subject to suspension under has been published through a separate 4 hours total) that occurred on the day administrative instruction issued conditions specified in section of service. The SIA payment would also annually in the summer to provide 1814(i)(1)(C)(v) of the Act). The be adjusted by the appropriate wage adequate time to implement system proposed hospice payment update index. In order to maintain budget change requirements; however, percentage for FY 2016 is based on the neutrality, as required under section beginning in FY 2014 and for estimated inpatient hospital market 1814(i)(6)(D)(ii) of the Act, for the subsequent FY, we are using rulemaking basket update of 2.7 percent (based on proposed SIA payment, the proposed as the means to update payment rates. IHS Global Insight, Inc.’s first quarter This change was proposed in the FY RHC rates would need to be adjusted by 2015 forecast with historical data 2014 Hospice Wage Index and Payment a budget neutrality factor. The budget through the fourth quarter of 2014). Due Rate Update proposed rule and finalized neutrality adjustment that would apply to the requirements at in the FY 2014 Hospice Wage Index and to days 1 through 60 is equal to 1 minus 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) Payment Rate Update final rule (78 FR the ratio of SIA payments for days 1 of the Act, the estimated inpatient 48270). It is consistent with the rate through 60 to the total payments for hospital market basket update for FY update process in other Medicare days 1 through 60 and is calculated to 2016 of 2.7 percent must be reduced by benefits, and provides rate information be 0.9853. The budget neutrality a MFP adjustment as mandated by to hospices as quickly as, or earlier than, adjustment that would apply to days 61 Affordable Care Act (currently estimated when rates are published in an and beyond is equal to 1 minus the ratio to be 0.6 percentage point for FY 2016). administrative instruction. of SIA payments for days 61 and beyond The estimated inpatient hospital market There are four payment categories that to the total payments for days 61 and basket update for FY 2016 is reduced are distinguished by the location and beyond and is calculated to be 0.9967. further by a 0.3 percentage point, as intensity of the services provided. The Lastly, the RHC rates would be mandated by the Affordable Care Act. In base payments are adjusted for increased by the proposed FY 2016 effect, the proposed hospice payment geographic differences in wages by hospice payment update percentage of update percentage for FY 2016 is 1.8 multiplying the labor share, which 1.8 percent as discussed in section percent. We are also proposing that if varies by category, of each base rate by III.C.3. The proposed FY 2016 RHC rates more recent data are subsequently the applicable hospice wage index. A are shown in Table 22. The proposed FY available (for example, a more recent hospice is paid the RHC rate for each 2016 payment rates for CHC, IRC, and estimate of the inpatient hospital market day the beneficiary is enrolled in GIP would be the FY 2015 payment basket update and MFP adjustment), we hospice, unless the hospice provides rates increased by 1.8 percent. The would use such data, if appropriate, to continuous home care, IRC, or general proposed rates for these three levels of determine the FY 2016 market basket inpatient care. CHC is provided during care are shown in Table 23. The update and the MFP adjustment in the a period of patient crisis to maintain the proposed FY 2016 rates for hospices FY 2016 Hospice Rate Update final rule. patient at home; IRC is short-term care that do not submit the required quality Currently, the labor portion of the to allow the usual caregiver to rest; and data are shown in Tables 24 and 25. The hospice payment rates is as follows: For GIP is to treat symptoms that cannot be proposed FY 2016 hospice payment RHC, 68.71 percent; for CHC, 68.71 managed in another setting. rates would be effective for care and percent; for General Inpatient Care, As discussed in section III.B.2, of this services furnished on or after October 1, 64.01 percent; and for Respite Care, proposed rule, we are proposing two 2015, through September 30, 2016.

TABLE 22—PROPOSED FY 2016 HOSPICE PAYMENT RATES FOR RHC

Proposed SIA Proposed FY Proposed budget 2016 hospice Proposed FY Code Description 1 neutrality fac- payment 2016 payment rates tor adjustment update rates (1–0.0081) percentage

651 ...... Routine Home Care (days 1–60) ..... $187.63 × 0.9853 × 1.018 $188.20 651 ...... Routine Home Care (days 61+) ...... 145.21 0.9967 × 1.018 147.34 1 See section III.B.2 for the proposed RHC rates for days 1–60, and days 61 and beyond before accounting for the proposed Service Intensity Add-on (SIA) payment budget neutrality factor and the proposed FY 2016 hospice payment update percentage of 1.8 percent as required by section 1814(i)(1)(C) of the Act.

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TABLE 23—PROPOSED FY 2016 HOSPICE PAYMENT RATES FOR CHC, IRC, AND GIP

Proposed FY 2016 hospice Proposed FY Code Description FY 2015 payment 2016 payment payment rates update of 1.8 rate percent

652 ...... Continuous Home Care ...... $929.91 × 1.018 $946.65 Full Rate = 24 hours of care $=39.44 FY 2016 hourly rate 655 ...... Inpatient Respite Care ...... 164.81 × 1.018 167.78 656 ...... General Inpatient Care ...... 708.77 × 1.018 721.53

We reiterate in this proposed rule, required by section 3004 of the hospice that does not comply with the that the Congress required in sections Affordable Care Act. Hospices were quality data submission requirements 1814(i)(5)(A) through (C) of the Act that required to begin collecting quality data with respect to that FY. We remind hospices begin submitting quality data, in October 2012, and submit that quality hospices that this applies to payments based on measures to be specified by the data in 2013. Section 1814(i)(5)(A)(i) of in FY 2016 (See Tables 24 and 25 Secretary. In the FY 2012 Hospice Wage the Act requires that beginning with FY below). For more information on the Index final rule (76 FR 47320 through 2014 and each subsequent FY, the HQRP requirements please see section 47324), we implemented a Hospice Secretary shall reduce the market basket III.E. in this proposed rule. Quality Reporting Program (HQRP) as update by 2 percentage points for any

TABLE 24—PROPOSED FY 2016 HOSPICE PAYMENT RATES FOR RHC FOR HOSPICES THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA

Proposed FY Proposed SIA 2016 hospice budget neu- payment Proposed FY Code Description Proposed trality factor update of 1.8 2016 payment RHC rates 1 percent minus adjustment 2 percentage rates (1–0.0081) points = ¥0.2 percent

651 ...... Routine Home Care (days 1–60) ..... $187.63 × 0.9853 × 0.998 $184.50 651 ...... Routine Home Care (days 61+) ...... 145.21 0.9967 × 0.998 144.44 1 See section III.B.2 for the proposed RHC rates for days 1–60, and days 61 and beyond before accounting for the proposed Service Intensity Add-on (SIA) payment budget neutrality factor and the proposed FY 2016 hospice payment update percentage of 1.8 percent as required by section 1814(i)(1)(C) of the Act.

TABLE 25—PROPOSED FY 2016 HOSPICE PAYMENT RATES FOR CHC, IRC, AND GIP FOR HOSPICES THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA

Proposed FY 2016 hospice payment FY 2015 update of 1.8 Proposed FY Code Description payment rates percent minus 2016 payment 2 percentage rate points = ¥0.2 percent

652 ...... Continuous Home Care Full Rate= 24 hours $929.91 × 0.998 $928.05 of care $=38.67 hourly rate. 655 ...... Inpatient Respite Care ...... 164.81 × 0.998 164.48 656 ...... General Inpatient Care ...... 708.77 × 0.998 707.35

4. Hospice Aggregate Cap and the (general inpatient care and respite care) The aggregate cap amount was set at IMPACT Act of 2014 to no more than 20 percent of a $6,500 per beneficiary when first hospice’s total Medicare hospice days. enacted in 1983; this was an amount When the Medicare hospice benefit The intent of the inpatient cap was to hospice advocates agreed was well was implemented, the Congress ensure that hospice remained a home- above the average cost of caring for a included 2 limits on payments to based benefit. The hospice aggregate cap hospice patient.52 Since 1983, the hospices: An inpatient cap and an limits the total aggregate payment any aggregate cap. As set out in sections individual hospice can receive in a year. 52 National Hospice and Palliative Care 1861(dd)(2)(A)(iii) and 1814(i)(2)(A) The intent of the hospice aggregate cap Organization (NHPCO), ‘‘A Short History of the through (C) of the Act, respectively, the Medicare Hospice Cap on Total Expenditures.’’ Web was to protect Medicare from spending 19 Feb. 2014. http://www.nhpco.org/sites/default/ hospice inpatient cap limits the total more for hospice care than it would for files/public/regulatory/History_of_Hospice_ number of Medicare inpatient days conventional care at the end of life. Cap.pdf.

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$6,500 amount has been adjusted Step 3: Multiply the original cap base of the hospice election and is not annually by the change in the medical amount ($6,500) by the result from step counted in subsequent cap years. care expenditure category of the 2) to get the updated aggregate cap Specifically, the hospice includes in its consumer price index for urban amount for the 2015 cap year. number of Medicare beneficiaries those consumers (CPI–U) from March 1984 to $6,500 × 4.174763 = $27,135.96 Medicare beneficiaries who have not March of the cap year, as required by As required by section previously been included in the section 1814(i)(2)(B) of the Act. The cap 1814(i)(2)(B)(ii) of the Act, the hospice calculation of any hospice cap, and who amount is multiplied by the number of aggregate cap amount for the 2016 cap have filed an election to receive hospice Medicare beneficiaries who received year, starting on November 1, 2015 and care in accordance with § 418.24 during hospice care from a particular hospice ending on October 31, 2016, will be the the period beginning on September 28th during the year, resulting in its hospice 2015 cap amount updated by the FY (34 days before the beginning of the cap aggregate cap, which is the allowable 2016 hospice payment update year) and ending on September 27th (35 amount of total Medicare payments that percentage (see section III.C.2 above). As days before the end of the cap year), hospice can receive for that cap year. such, the 2016 cap amount will be using the best data available at the time The cap year is currently November 1 to $27,624.41 ($27,135.96 * 1.018 = of the calculation. This is applicable for October 31, and was set in place in the $27,624.41). A Change Request with the cases in which a beneficiary received December 16, 1983 Hospice final rule finalized hospice payment rates, a care from only one hospice. If a (48 FR 56022). finalized hospice wage index, the Pricer beneficiary received care from more Section 1814(i)(2)(B)(i) and (ii) of the for FY 2016, and the hospice cap than one hospice, each hospice includes Act, as added by section 3(b) of the amount for the cap year ending October in its number of Medicare beneficiaries IMPACT Act requires, effective for the 31, 2015 will be issued in the summer. only that fraction which represents the 2016 cap year (November 1, 2015 portion of a patient’s total days of care through October 31, 2016), that the cap D. Proposed Alignment of the Inpatient with that hospice in that cap year, using amount for the previous year to be and Aggregate Cap Accounting Year the best data available at the time of the updated by the hospice payment update With the Federal Fiscal Year calculation. Using the streamlined percentage, rather than the original As noted in section III.C.4, when the method, a different timeframe from the $6,500 being annually adjusted by the Medicare hospice benefit was cap year is used to count the number of change in the CPI–U for medical care implemented, the Congress included 2 Medicare beneficiaries because it allows expenditures since 1984. This new limits on payments to hospices: an those beneficiaries who elected hospice provision will sunset for cap years aggregate cap and an inpatient cap. The near the end of the cap year to be ending after September 30, 2025, at intent of the hospice aggregate cap was counted in the year when most of the which time the annual update to the cap to protect Medicare from spending more services were provided (48 FR 38158). amount will revert back to the original for hospice care than it would for During FY 2012 rulemaking, in methodology. This provision is conventional care at the end-of-life. If a addition to the streamlined method, estimated to result in $540 million in hospice’s total Medicare payments for CMS added a ‘‘patient-by-patient savings over 10 years starting in 2017. the cap year exceed such hospice’s proportional’’ method as a way of As a result, we are proposing to aggregate cap amount, then the hospice calculating the number of Medicare update § 418.309 to reflect the new must repay the excess back to Medicare. beneficiaries who received hospice language added to section 1814(i)(2)(B) The intent of the inpatient cap was to services during the year in determining of the Act. ensure that hospice remained a home- the aggregate cap amount for any given In accordance with section based benefit. If a hospice’s inpatient hospice (76 FR 47309). This method 1814(i)(2)(B)(i) of the Act, the hospice days (GIP and respite) exceed 20 percent specifies that a hospice should include aggregate cap amount for the 2015 cap of all hospice days then, for inpatient in its number of Medicare beneficiaries year, starting on November 1, 2014 and care, the hospice is paid: (1) the sum of only that fraction which represents the ending on October 31, 2015, will be the total reimbursement for inpatient portion of a patient’s total days of care $27,135.96. This amount was calculated care multiplied by the ratio of the in all hospices and all years that was by multiplying the original cap amount maximum number of allowable spent in that hospice in that cap year, of $6,500 by the change in the CPI–U inpatient days to actual number of all using the best data available at the time medical care expenditure category, from inpatient days; and (2) the sum of the of the calculation. The total number of the fifth month of the 1984 accounting actual number of inpatient days in Medicare beneficiaries for a given year (March 1984) to the fifth month the excess of the limitation by the routine hospice’s cap year is determined by current accounting year (in this case, home care rate. summing the whole or fractional share March 2015). The CPI–U for medical of each Medicare beneficiary that 1. Streamlined Method and Patient-by- received hospice care during the cap care expenditures for 1984 to present is Patient Proportional Method for available from the Bureau of Labor year, from that hospice. Under the Counting Beneficiaries To Determine patient-by-patient proportional Statistics (BLS) Web site at: http:// Each Hospice’s Aggregate Cap Amount www.bls.gov/cpi/home.htm. methodology, the timeframe for The aggregate cap amount for any counting the number of Medicare Step 1: From the BLS Web site given given hospice is established by beneficiaries is the same as the cap above, the March 2015 CPI–U for multiplying the cap amount by the accounting year (November 1 through medical care expenditures is 444.020 number of Medicare beneficiaries who October 31). The aggregate cap amount and the 1984 CPI–U for medical care received hospice services during the for each hospice is now calculated using expenditures was 105.4. year. Originally, the number of the patient-by-patient proportional Step 2: Divide the March 2015 CPI– Medicare beneficiaries who received method, except for those hospices that U for medical care expenditures by the hospice services during the year was had their cap determination calculated 1984 CPI–U for medical care determined using a ‘‘streamlined’’ under the streamlined method prior to expenditures to compute the change. methodology whereby each beneficiary the 2012 cap year, did not appeal the 440.020/105.4 = 4.174763 is counted as ‘‘1’’ in the initial cap year streamlined method used to determine

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the number of Medicare beneficiaries of complexity that can lead to hospices September 30, 2016 and before October used in the aggregate cap calculation, unintentionally calculating their 1, 2025. and opted to continue to have their aggregate cap determinations In shifting the cap year to match the hospice aggregate cap calculated using incorrectly. In addition, shifting the cap federal fiscal year, we are proposing to the streamlined method no later than 60 accounting year timeframes to coincide also align the timeframes in which days after receipt of its 2012 cap with the hospice rate update year (the beneficiaries and payments are counted determination federal fiscal year) would better align for the purposes of determining each 2. Proposed Inpatient and Aggregate Cap with the intent of the new cap individual hospice’s aggregate cap Accounting Year Timeframe calculation methodology required by the amount (see table 26 below) as well as IMPACT Act of 2014, as discussed in the timeframes in which days of hospice As stated in section III.C.4, the cap section III.C.4. Therefore, we are accounting year is currently November care are counted for the purposes proposing to align the cap accounting determining whether a given hospice 1 to October 31. In the past, CMS has year for both the inpatient cap and the considered changing the cap accounting exceeded the inpatient cap. In the year hospice aggregate cap with the federal of transition (2017 cap year), for the year to coincide with the hospice rate fiscal year for FYs 2017 and later. Under update year, which is the federal fiscal inpatient cap, we propose to calculate this proposal, in addition to aligning the the percentage of all hospice days of year (October 1 through September 30). cap accounting year with the federal In the FY 2011 Hospice Wage Index care that were provided as inpatient fiscal year, we would also align the days (GIP care and respite care) from notice (75 FR 42951), CMS solicited timeframe for counting the number of comments on aligning the cap November 1, 2016 through September beneficiaries with the federal fiscal year. 30, 2017 (11 months). For those accounting year for both the inpatient This proposal would eliminate and aggregate hospice cap to coincide hospices using the patient-by-patient timeframe complexities associating with proportional method for their aggregate with the FY. In the FY 2012 Hospice counting payments and beneficiaries Wage Index proposed rule, we cap determinations, for the 2017 cap differently from the federal fiscal year year, we would count beneficiaries from summarized the comments we received, and would help hospices avoid mistakes stating that ‘‘several commenters November 1, 2016 to September 30, in calculating their aggregate cap 2017. For those hospices using the supported the idea of our aligning the determinations. cap year with the federal fiscal year; streamlined method for their aggregate with some noting that the change would In shifting the cap accounting year to cap determinations, we propose to allow be appropriate for a multi-year match the federal fiscal year, we note 3 extra days to count beneficiaries in the apportioning approach (the patient-by- that new section 1814(i)(2)(B)(ii) of the year of transition. Specifically, for the patient proportional method).’’ Other Act, as added by section 3(b) of the 2017 cap year (October 1, 2016 to commenters stated that we should not IMPACT Act, requires the cap amount September 30, 2017), we would count change the cap year at this time, and for 2016 to be updated by the hospice beneficiaries from September 28, 2016 recommended that we wait for this to be payment update percentage in effect to September 30, 2017, which is 12 accomplished as part of hospice ‘‘during the FY beginning on the months plus 3 days, in that cap year’s payment reform (76 FR 26812). October 1 preceding the beginning of calculation. For hospices using either In FY 2012, we decided not to finalize the accounting year’’. In other words, the streamlined method or the patient- changing the cap accounting year to the we interpret this to mean that the statute by-patient proportional method, we FY, partly because of a concern that a requires the 2016 cap amount to be propose to count 11 months of large portion of providers could still be updated using the most current hospice payments from November 1, 2016 to using the streamlined method. As stated payment update percentage in effect at September 30, 2017 for the 2017 cap earlier, the streamlined method has a the start of that cap year. For the 2016 year. For the 2018 cap year (October 1, different timeframe for counting the cap year, the 2015 cap amount would be 2017 to September 30, 2018), we would number of beneficiaries than the cap updated by the FY 2016 hospice count both beneficiaries and payments accounting year, allowing those payment update percentage outlined in for hospices using the streamlined or beneficiaries who elected hospice near section III.C.2. For the 2017 cap year the patient-by-patient proportional the end of the cap year to be counted in through the 2025 cap year, we would methods from October 1, 2017 to the year when most of the services were update the previous year’s cap amount September 30, 2018. Likewise, for the provided. However, for the 2013 cap by the hospice payment update 2018 cap year would calculate the year, only 486 hospices used the percentage for that current federal fiscal percentage of all hospice days of care streamlined method to calculate the year. For the 2026 cap year and beyond, that were provided as inpatient days number of Medicare hospice patients changing the cap accounting year to (GIP care or respite care) from October and the remaining providers used the coincide with the federal fiscal year will 1, 2017 to September 30, 2018. Because patient-by-patient proportional method. require us to use the CPI–U for February of the non-discretionary language used Since the majority of providers now use when updating the cap amount, instead by Congress in determining the cap for the patient-by-patient proportional of the current process which uses the a year, the actual cap amount for the method, we believe there is no longer an March CPI–U to update the cap amount. adjustment year would not be prorated advantage to defining the cap Section 1814(i)(2)(B) of the Act requires for a shorter time frame. We are accounting year differently from the us to update the cap amount by the soliciting public comment on all aspects hospice rate update year and same percentage as the percentage of the proposed alignment of the cap maintaining a cap accounting year (as increase or decrease in the medical care accounting year with the federal fiscal well as the period for counting expenditure category of the CPI–U from year, as articulated in this section, as beneficiaries under the streamlined March 1984 to the ‘‘fifth month of the well as the corresponding proposed method) that is different from the accounting year ’’ for all years except changes to the regulations at federal fiscal year creates an added layer those accounting years that end after § 418.308(c) in section VI.

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TABLE 26—HOSPICE AGGREGATE CAP TIMEFRAMES FOR COUNTING BENEFICIARIES AND PAYMENTS FOR THE PROPOSED ALIGNMENT OF THE CAP ACCOUNTING YEAR WITH THE FEDERAL FISCAL YEAR

Beneficiaries Payments Cap year Patient-by-patient Patient-by-patient Streamlined method proportional method Streamlined method proportional method

2016 ...... 9/28/15–9/27/16 11/1/15–10/31/16 11/1/15–10/31/16 11/1/15–10/31/16 Proposed 2017 (Transition Year) .... 9/28/16–9/30/17 11/1/16–9/30/17 11/1/16–9/30/17 11/1/16–9/30/17 Proposed 2018 ...... 10/1/17–9/30/18 10/1/17–9/30/18 10/1/17–9/30/18 10/1/17–9/30/18

E. Proposed Updates to the Hospice consideration is given to measures that 3. Proposed Policy for Retention of Quality Reporting Program (HQRP) have been endorsed or adopted by a HQRP Measures Adopted for Previous consensus-based organization identified Payment Determinations 1. Background and Statutory Authority by the Secretary. Our paramount Beginning with the FY 2018 payment Section 3004(c) of the Affordable Care concern is the successful development determination, for the purpose of Act amended section 1814(i)(5) of the of a Hospice Quality Reporting Program streamlining the rulemaking process, we Act to authorize a quality reporting (HQRP) that promotes the delivery of propose that when we adopt measures program for hospices. Section high quality healthcare services. We for the HQRP beginning with a payment 1814(i)(5)(A)(i) of the Act requires that seek to adopt measures for the HQRP determination year, these measures are beginning with FY 2014 and each that promote patient-centered, high automatically adopted for all subsequent FY, the Secretary shall quality, and safe care. Our measure subsequent years’ payment reduce the market basket update by 2 selection activities for the HQRP take determinations, unless we propose to percentage points for any hospice that into consideration input from the remove, suspend, or replace the does not comply with the quality data Measure Applications Partnership measures. submission requirements with respect to (MAP), convened by the NQF, as part of Quality measures may be considered that FY. Depending on the amount of the established CMS pre-rulemaking for removal by CMS if: the annual update for a particular year, process required under section 1890A of • Measure performance among a reduction of 2 percentage points could the Act. The MAP is a public-private hospices is so high and unvarying that result in the annual market basket partnership comprised of multi- meaningful distinctions in update being less than 0.0 percent for a stakeholder groups convened by the improvements in performance can be no FY and may result in payment rates that NQF for the primary purpose of longer be made; are less than payment rates for the • providing input to CMS on the selection Performance or improvement on a preceding FY. Any reduction based on of certain categories of quality and measure does not result in better patient failure to comply with the reporting efficiency measures, as required by outcomes; requirements, as required by section • section 1890A(a)(3) of the Act. By A measure does not align with 1814(i)(5)(B) of the Act, would apply February 1st of each year, the NQF must current clinical guidelines or practice; only for the particular FY involved. Any • provide that input to CMS. Input from A more broadly applicable measure such reduction would not be cumulative (across settings, populations, or the MAP is located at: (http:// or be taken into account in computing conditions) for the particular topic is www.qualityforum.org/Setting_ the payment amount for subsequent available; Priorities/Partnership/Measure_ • FYs. Section 1814(i)(5)(C) of the Act _ A measure that is more proximal in requires that each hospice submit data Applications Partnership.aspx. We also time to desired patient outcomes for the to the Secretary on quality measures take into account national priorities, particular topic is available; specified by the Secretary. The data such as those established by the • A measure that is more strongly must be submitted in a form, manner, National Priorities Partnership at associated with desired patient and at a time specified by the Secretary. (http://www.qualityforum.org/npp/), the outcomes for the particular topic is HHS Strategic Plan http://www.hhs.gov/ available; or 2. General Considerations Used for secretary/about/priorities/ • Collection or public reporting of a Selection of Quality Measures for the priorities.html), the National Strategy measure leads to negative unintended HQRP for Quality Improvement in Healthcare, consequences. Any measures selected by the (http://www.ahrq.gov/ For any such removal, the public will Secretary must be endorsed by the workingforquality/nqs/ be given an opportunity to comment consensus-based entity, which holds a nqs2013annlrpt.htm) and the CMS through the annual rulemaking process. contract regarding performance Quality Strategy (http://www.cms.gov/ However, if there is reason to believe measurement with the Secretary under Medicare/Quality-Initiatives-Patient- continued collection of a measure raises section 1890(a) of the Act. This contract AssessmentInstruments/ potential safety concerns, we will take is currently held by the National Quality QualityInitiativesGenInfo/CMS-Quality- immediate action to remove the measure Forum (NQF). However, section Strategy.html). To the extent from the HQRP and will not wait for the 1814(i)(5)(D)(ii) of the Act provides that practicable, we have sought to adopt annual rulemaking cycle. The measures in the case of a specified area or medical measures endorsed by member will be promptly removed and we will topic determined appropriate by the organizations of the National Consensus immediately notify hospices and the Secretary for which a feasible and Project recommended by multi- public of such a decision through the practical measure has not been endorsed stakeholder organizations, and usual HQRP communication channels, by the consensus-based entity, the developed with the input of providers, including listening sessions, memos, Secretary may specify measures that are purchasers/payers, and other email notification, and Web postings. In not so endorsed as long as due stakeholders. such instances, the removal of a

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measure will be formally announced in Collecting data on all patients provides measure set is also an important the next annual rulemaking cycle. CMS with the most robust, accurate consideration for future measure CMS is not proposing to remove any reflection of the quality of care development areas; future measure measures for the FY 2017 reporting delivered to Medicare beneficiaries as development areas should complement cycle. We invite public comment on our compared with non-Medicare patients. the current HQRP measure set, which proposal that once a quality measure is Therefore, to measure the quality of care includes HIS measures and CAHPS® adopted, it be retained for use in the delivered to Medicare beneficiaries in Hospice Survey measures. Based on subsequent fiscal year payment the hospice setting, we collect quality input from stakeholders, CMS has determinations unless otherwise stated. data necessary to calculate the adopted identified several high priority concept measures on all patients. We finalized areas for future measure development: 4. Previously Adopted Quality Measures in the FY 2014 Hospice Wage Index (78 • Patient reported pain outcome for FY 2016 and FY 2017 Payment FR 48258) that hospice providers collect measure that incorporates patient and/ Determination data on all patients in order to ensure or proxy report regarding pain As stated in the CY 2013 HH PPS final that all patients regardless of payer or management; rule (77 FR 67068, 67133), CMS patient age are receiving the same care • Claims-based measures focused on expanded the set of required measures and that provider metrics measure care practice patterns including skilled to include additional measures performance across the spectrum of visits in the last days of life, endorsed by NQF. We also stated that to patients. burdensome transitions of care for support the standardized collection and Hospices are required to complete and patients in and out of the hospice calculation of quality measures by CMS, submit an HIS-Admission and an HIS- benefit, and rates of live discharges from collection of the needed data elements Discharge record for each patient hospice; would require a standardized data admission. Hospices failing to report • Responsiveness of hospice to collection instrument. In response, CMS quality data via the HIS in FY 2015 will patient and family care needs; developed and tested a hospice patient- have their market basket update reduced • Hospice team communication and level item set, the HIS. Hospices are by 2 percentage points in FY 2017 care coordination. required to submit an HIS-Admission beginning in October 1, 2016. In the FY These measure concepts are under record and an HIS-Discharge record for 2015 Hospice Wage Index final rule (79 development, and details regarding each patient admission to hospice on or FR 50485, 50487), we finalized the measure definitions, data sources, data after July 1, 2014. In developing the proposal to codify the HIS submission collection approaches, and timeline for standardized HIS, we considered requirement at § 418.312. The System of implementation will be communicated comments offered in response to the CY Record (SOR) Notice titled ‘‘Hospice in future rulemaking. CMS invites 2013 HH PPS proposed rule (77 FR Item Set (HIS) System,’’ SOR number comments about these four high priority 41548, 41573). In the FY 2014 Hospice 09–70–0548, was published in the concept areas for future measure Wage Index final rule (78 FR 48257), Federal Register on April 8, 2014 (79 FR development. and in compliance with section 19341). 6. Form, Manner, and Timing of Quality 1814(i)(5)(C) of the Act, we finalized the 5. HQRP Quality Measures and Data Submission specific collection of data items that Concepts Under Consideration for a. Background support the following six NQF endorsed Future Years measures and one modified measure for Section 1814(i)(5)(C) of the Act hospice: We are not currently proposing any requires that each hospice submit data • NQF #1617 Patients Treated with new measures for FY 2017. However, to the Secretary on quality measures an Opioid who are Given a Bowel we are working with our measure specified by the Secretary. Such data Regimen, development and maintenance must be submitted in a form and • NQF #1634 Pain Screening, contractor to identify measure concepts manner, and at a time specified by the • NQF #1637 Pain Assessment, for future implementation in the HQRP. Secretary. Section 1814(i)(5)(A)(i) of the • NQF #1638 Dyspnea Treatment, In identifying priority areas for future Act requires that beginning with the FY • NQF #1639 Dyspnea Screening, measure enhancement and 2014 and for each subsequent FY, the • NQF #1641 Treatment Preferences, development, CMS takes into • Secretary shall reduce the market basket NQF #1647 Beliefs/Values consideration input from numerous update by 2 percentage points for any Addressed (if desired by the patient) stakeholders, including the Measures hospice that does not comply with the (modified). Application Partnership (MAP), the quality data submission requirements To achieve a comprehensive set of Medicare Payment Advisory with respect to that FY. hospice quality measures available for Commission (MedPAC), Technical widespread use for quality improvement Expert Panels, and national priorities, b. Proposed Policy for New Facilities To and informed decision making, and to such as those established by the Begin Submitting Quality Data carry out our commitment to develop a National Priorities Partnership, the HHS In the FY 2015 Hospice Wage Index quality reporting program for hospices Strategic Plan, the National Strategy for and Payment Rate Update final rule (79 that uses standardized methods to Quality Improvement in Healthcare, and FR 50488) we finalized a policy stating collect data needed to calculate quality the CMS Quality Strategy. In addition, that any hospice that receives its CCN measures, we finalized the HIS effective CMS takes into consideration vital notification letter on or after November July 1, 2014 (78 FR 48258). To meet the feedback and input from research 1 of the preceding year involved is quality reporting requirements for published by our payment reform excluded from any payment penalty for hospices for the FY 2016 payment contractor as well as from the Institute quality reporting purposes for the determination and each subsequent of Medicine (IOM) report, titled ‘‘Dying following FY. For example, if a hospice year, we require regular and ongoing in America,’’ released in September provider receives their CCN notification electronic submission of the HIS data 2014.53 Finally, the current HQRP letter on November 2, 2015 they would for each patient admission to hospice on or after July 1, 2014, regardless of payer 53 IOM (Institute of Medicine). 2014. Dying in individual preferences near the end of life. or patient age (78 FR 48234, 48258). America: Improving quality and honoring Washington, DC: The National Academies Press.

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not be required to submit quality data complete or submit HIS data. In the FY The submission date for any given for the current reporting period ending 14 Hospice Wage Index (78 FR 48258) HIS record is defined as the date on December 31, 2015 (which would affect we finalized that, to complete HIS which a provider submits the completed the FY 2017 APU). In this instance, the records, providers can use either the record. The submission date is the date hospice would begin with the next Hospice Abstraction Reporting Tool on which the completed record is reporting period beginning January 1, (HART) software, which is free to submitted and accepted by the QIES 2016 and all subsequent years. download and use, or a vendor-designed ASAP system. Beginning with the FY However, if a hospice provider receives software. HART provides an alternative 2018 payment determination, we their CCN notification letter on October option for hospice providers to collect propose that hospices must submit all 31, 2015, they would be required to and maintain facility, patient, and HIS HIS records within 30 days of the Event submit quality data for the current Record information for subsequent Date, which is the patient’s admission reporting period ending December 31, submission to the QIES ASAP system. date for HIS-Admission records or 2015 (which would affect the FY 2017 Once HIS records are complete, discharge date for HIS-Discharge APU) and all subsequent years. This electronic HIS files must be submitted records. requirement was codified at § 418.312. to CMS via the QIES ASAP system. • For HIS-Admission records, the We are proposing to modify our Electronic data submission via the QIES submission date should be no later than policies for the timing of new providers ASAP system is required for all HIS the admission date plus 30 calendar to begin reporting to CMS. Beginning submissions; there are no other data days. The submission date can be equal with the FY 2018 payment submission methods available. Hospices to the admission date, or no greater than determination and for each subsequent have 30 days from a patient admission 30 days later. The QIES ASAP system payment determination, we propose that or discharge to submit the appropriate will issue a warning on the Final a new hospice be responsible for HQRP HIS record for that patient through the Validation Report if the submission date quality data reporting beginning on the QIES ASAP system. CMS will continue is more than 30 days after the patient’s date they receive their Certification to make HIS completion and submission admission date. Number (CCN) (also known as the software available to hospices at no cost. • For HIS-Discharge records, the Medicare Provider Number) notification We provided details on data collection submission date should be no later than letter from CMS. Under this proposal, and submission timing at http:// the discharge date plus 30 calendar hospices would be responsible for www.cms.gov/Medicare/Quality- days. The submission date can be equal reporting quality data on patient Initiatives-Patient-Assessment- to the discharge date, or no greater than admissions beginning on the date they Instruments/Hospice-Quality-Reporting/ 30 days later. The QIES ASAP system receive their CCN notification. Hospice-Item-Set-HIS.html. will issue a warning on the Final Currently, new hospices may The QIES ASAP system provides Validation Report if the submission date experience a lag between Medicare reports upon successful submission and is more than 30 days after the patient’s certification and receipt of their actual processing of the HIS records. The final discharge date. CCN Number. Since hospices cannot validation report may serve as evidence The QIES ASAP system validation submit data to the Quality Improvement of submission. This is the same data edits are designed to monitor the and Evaluation System (QIES) submission system used by nursing timeliness and ensure that providers Assessment Submission and Processing homes, inpatient rehabilitation submitted records conform to the HIS (ASAP) system without a valid CCN facilities, home health agencies, and data submission specifications. Number, CMS proposes new hospices long-term care hospitals for the Providers are notified when timing begin collecting HIS quality data submission of Minimum Data Set criteria have not been met by warnings beginning on the date they receive their Version 3.0 (MDS 3.0), Inpatient that appear on their Final Validation CCN notification letter by CMS. We Rehabilitation Facility—Patient Reports. A standardized data collection believe this policy will provide Assessment Instrument (IRF–PAI), approach that coincides with timely sufficient time for new hospices to Outcome Assessment Information Set submission of data is essential in order establish appropriate collection and (OASIS), and Long-Term Care Hospital to establish a robust quality reporting reporting mechanisms to submit the Continuity Assessment Record & program and ensure the scientific required quality data to CMS. We invite Evaluation Data Set (LTCH CARE), reliability of the data received. We public comment on this proposal that a respectively. We have provided invite comments on the proposal that new hospice be required to begin hospices with information and details hospices must submit all HIS records reporting quality data under HQRP about use of the HIS through postings within 30 days of the Event Date, which beginning on the date they receive their on the HQRP Web page, Open Door is the patient’s admission date for HIS- CCN notification letter from CMS. Forums, announcements in the CMS Admission records or discharge date for MLN Connects Provider e-News (E- HIS-Discharge records. c. Previously Finalized Data Submission News), and provider training. Mechanism, Collection Timelines and e. Proposed HQRP Data Submission and Submission Deadlines for the FY 2017 d. Proposed Data Submission Timelines Compliance Thresholds for the FY 2018 Payment Determination and Requirements for FY 2018 Payment Payment Determination and Subsequent In the FY 15 Hospice Wage Index Determination and Subsequent Years Years final rule (79 FR 50486) we finalized our Hospices are evaluated for purposes In order to accurately analyze quality policy requiring that, for the FY 2017 of the quality reporting program based reporting data received by hospice reporting requirements, hospices must on whether or not they submit data, not providers, it is imperative we receive complete and submit HIS records for all on their substantive performance level ongoing and timely submission of all patient admissions to hospice on or after with respect to the required quality HIS-Admission and HIS-Discharge July 1, 2014. Electronic submission is measures. In order for CMS to records. To date, the timeliness criteria required for all HIS records. Although appropriately evaluate the quality for submission of HIS Admission and electronic submission of HIS records is reporting data received by hospice HIS-Discharge records has never been required, hospices do not need to have providers, it is essential HIS data be proposed and finalized through an electronic medical record to received in a timely manner. rulemaking process. We believe this

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matter should be addressed by defining submission timeframe for the year or be Assessment-Instruments/ a clear standard for timeliness and subject to a 2 percentage point reduction HospiceQuality-Reporting/index.html. compliance at this time. In response to to their market basket update for FY If a provider is granted an exception input from our stakeholders seeking 2019. or extension, timeframes for which an additional specificity related to HQRP • Beginning on or after January 1, exception or extension is granted will be compliance affecting FY payment 2018 to December 31, 2018, hospices applied to the new timeliness determinations and, due to the must score at least 90 percent for all HIS requirement so providers are not importance of ensuring the integrity of records received within the 30 day penalized. If a hospice is granted an quality data submitted to CMS, we are submission timeframe for the year or be exception, we will not require that the proposing to set specific HQRP subject to a 2 percentage point reduction hospice submit any quality data for a thresholds for timeliness of submission to their market basket update for FY given period of time. If we grant an of hospice quality data beginning with 2020. extension to a hospice, the hospice will data affecting the FY 2018 payment We invite public comment on our still remain responsible for submitting determination and subsequent years. proposal to implement the new data quality data collected during the Beginning with the FY 2018 payment submission and compliance threshold timeframe in question, although we will determination and subsequent FY requirement, as described previously, specify a revised deadline by which the payment determinations, we propose for the HQRP. hospice must submit this quality data. that all HIS records must be submitted This process does not preclude us within 30 days of the Event Date, which 7. HQRP Submission Exception and from granting extensions/exceptions to is the patient’s admission date or Extension Requirements for the FY 2017 hospices that have not requested them discharge date. To coincide with this Payment Determination and Subsequent when we determine that an requirement, we propose to establish an Years extraordinary circumstance, such as an act of nature, affects an entire region or incremental threshold for compliance In the FY 2015 Hospice Wage Index locale. We may grant an extension/ with this timeliness requirement; the and Payment Rate Update final rule (79 exception to a hospice if we determine proposed threshold would be FR 50488), we finalized our proposal to that a systemic problem with our data implemented over a 3 year period. To be allow hospices to request and for CMS compliant with timeliness requirements, collection systems directly affected the to grant exemptions/extensions with we propose that hospices would have to ability of the hospice to submit data. If respect to the reporting of required submit no less than 70 percent of their we make the determination to grant an quality data when there are total number of HIS-Admission and extension/exception to hospices in a extraordinary circumstances beyond the HIS-Discharge records by no later than region or locale, we will communicate control of the provider. When an 30 days from the Event Date for the FY this decision through routine extension/exception is granted, a 2018 APU determination. The communication channels to hospices hospice will not incur payment timeliness threshold would be set at 80 and vendors, including, but not limited reduction penalties for failure to comply percent for FY 2019 and at 90 percent to, Open Door Forums, ENews and with the requirements of the HQRP. For for FY 2020 and subsequent years. The notices on https://www.cms.gov/ threshold corresponds with the overall the FY 2016 payment determination and Medicare/Quality-Initiatives-Patient- amount of HIS records received from subsequent payment determinations, a Assessment-Instruments/Hospice- each provider that fall within the hospice may request an extension/ Quality-Reporting/. We propose to established 30 day submission exception of the requirement to submit codify the HQRP Submission Exception timeframes. Our ultimate goal is to quality data for a specified time period. and Extension Requirements at require all hospices to achieve a In the event that a hospice requests an § 418.312. timeliness requirement compliance rate extension/exception for quality reporting purposes, the hospice would 8. Hospice CAHPS Participation of 90 percent or more. Requirements for the 2018 APU and For example, beginning in FY 2018, submit a written request to CMS. In 2019 APU hospices will have met the timeliness general, exceptions and extensions will requirement threshold if at the end of not be granted for hospice vendor In the FY 2015 Hospice Wage Index the reporting period 70 percent of all issues, fatal error messages preventing and Payment Rate Update final rule (79 their HIS reporting data for the year has record submission, or staff error. FR 50452), we stated that CMS would been received within the 30 day In the event that a hospice seeks to start national implementation of the ® submission timeframe. request an exception or extension for CAHPS Hospice Survey as of January To summarize, we propose to quality reporting purposes, the hospice 1, 2015. We started national implement the timeliness threshold must request an exception or extension implementation of this survey as ® requirement beginning with all HIS within 30 days of the date that the planned. The CAHPS Hospice Survey admission and discharge records that extraordinary circumstances occurred is a component of CMS’ Hospice Quality occur on or after January 1, 2016, in by submitting the request to CMS via Reporting Program that emphasizes the accordance with the following schedule. email to the HQRP mailbox at experiences of hospice patients and • Beginning on or after January 1, [email protected]. their primary caregivers listed in the 2016 to December 31, 2016, hospices Exception or extension requests sent to hospice patients’ records. Measures must submit at least 70 percent for all CMS through any other channel would from the survey will be submitted to the required HIS records within the 30 day not be considered as a valid request for National Quality Forum (NQF) for submission timeframe for the year or be an exception or extension from the endorsement as hospice quality subject to a 2 percentage point reduction HQRP’s reporting requirements for any measures. We refer readers to our to their market basket update for FY payment determination. In order to be extensive discussion of the Hospice 2018. considered, a request for an exception or Experience of Care Survey in the • Beginning on or after January 1, extension must contain all of the Hospice Wage Index FY 2015 final rule 2017 to December 31, 2017, hospices finalized requirements as outlined on for a description of the measurements must score at least 80 percent for all HIS our Web site at http://www.cms.gov/ involved and their relationship to the records received within the 30 day Medicare/Quality-Initiatives-Patient- statutory requirement for hospice

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quality reporting (79 FR 50450 also refer of the hospice experience. The survey survey-eligible decedents/caregivers in to 78 FR 48261). focuses on topics that are important to the prior year, a sample of 700 will be hospice users and for which informal drawn under an equal-probability a. Background and Description of the caregivers are the best source for design. Survey-eligible decedents/ Survey gathering this information. Caregivers caregivers are defined as that group of ® The CAHPS Hospice Survey is the are presented with a set of standardized decedent and caregiver pairs that meet first national hospice experience of care questions about their own experiences all the criteria for inclusion in the survey that includes standard survey and the experiences of the patient in survey sample. administration protocols that allow for hospice care. During national We moved forward with a model of fair comparisons across hospices. ® implementation of this survey, hospices national survey implementation, which CMS developed the CAHPS Hospice are required to conduct the survey to Survey with input from many is similar to that of other CMS patient meet the Hospice Quality Reporting experience of care surveys. Medicare- stakeholders, including other requirements, but individual caregivers government agencies, industry certified hospices are required to will respond only if they voluntarily contract with a third-party vendor that stakeholders, consumer groups and choose to do so. A survey Web site is other key individuals and organizations is CMS-trained and approved to the primary information resource for administer the survey on their behalf. A involved in hospice care. The Survey hospices and vendors was designed to measure and assess the list of approved vendors can be found (www.hospicecahpssurvey.org). The at this Web site: experiences of patients who died while ® CAHPS Hospice Survey is currently www.hospicecahpssurvey.org. Hospices receiving hospice care as well as the available in English, Spanish, experiences of their informal caregivers. are required to contract with Traditional Chinese, and Simplified independent survey vendors to ensure The goals of the survey are to— Chinese. CMS will provide additional • Produce comparable data on that the data are unbiased and collected translations of the survey over time in patients’ and caregivers’ perspectives of by an organization that is trained to response to suggestions for any care that allow objective and meaningful collect this type of data. It is important comparisons between hospices on additional language translations. that survey respondents feel comfortable domains that are important to Requests for additional language sharing their experiences with an translations should be made to the CMS consumers; ® interviewer not directly involved in • Create incentives for hospices to Hospice CAHPS Project Team at providing the care. We have improve their quality of care through [email protected]. successfully used this mode of data public reporting of survey results; and In general, hospice patients and their collection in other settings, including • Hold hospice care providers caregivers are eligible for inclusion in for Medicare-certified home health accountable by informing the public the survey sample with the exception of agencies. The goal is to ensure that we about the providers’ quality of care. the following ineligible groups: primary have comparable data across all The development process for the caregivers of patients under the age of hospices. survey began in 2012 and included a 18 at the time of death; primary caregivers of patients who died within Consistent with many other CMS public request for information about CAHPS® surveys that are publicly publicly available measures and 48 hours of admission to hospice care; patients for whom no caregiver is listed reported on CMS Web sites, CMS will important topics to measure (78 FR publicly report hospice data when at 5458, January 25, 2013); a review of the or available, or for whom caregiver contact information is not known; least 12 months of data are available, so existing literature on tools that measure that valid comparisons can be made experiences with end-of-life care; patients whose primary caregiver is a across hospice providers in the United exploratory interviews with caregivers legal guardian unlikely to be familiar States, to help patients, family and of hospice patients; a technical expert with care experiences; patients for friends choose a hospice program for panel attended by survey development whom the primary caregiver has a themselves or their loved ones. and hospice care quality experts; foreign (Non-US or US Territory cognitive interviews to test draft survey address) home address; patients or b. Participation Requirements To Meet content; incorporation of public caregivers of patients who request that Quality Reporting Requirements for the responses to Federal Register notices they not be contacted (those who sign FY 2018 APU (78 FR 48234, August 7, 2013) and a ‘‘no publicity’’ requests while under the field test conducted by CMS in care of hospice or otherwise directly In section 3004(c) of the Affordable November and December 2013. request not to be contacted). Care Act, the Secretary is directed to The CAHPS® Hospice Survey treats Identification of patients and caregivers establish quality reporting requirements ® the dying patient and his or her for exclusion will be based on hospice for Hospice Programs. The CAHPS informal caregivers (family members or administrative data. Additionally, Hospice Survey is a component of the friends) as the unit of care. The Survey caregivers under 18 are excluded. CMS Hospice Quality Reporting seeks information from the informal Hospices with fewer than 50 survey- Requirements for the FY 2018 APU and caregivers of patients who died while eligible decedents/caregivers during the subsequent years. enrolled in hospices. Survey-eligible prior calendar year are exempt from the The CAHPS® Hospice Survey patients and caregivers are identified CAHPS® Hospice Survey data collection includes the measures detailed in Table using hospice records. Fielding and reporting requirements for payment 27. The individual survey questions that timelines give the respondent some determination. Hospices with 50 to 699 comprise each measure are listed under recovery time (2 to 3 months), while survey-eligible decedents/caregivers in the measure. These measures are in the simultaneously not delaying so long that the prior year will be required to survey process of being submitted to the the respondent is likely to forget details all cases. For hospices with 700 or more National Quality Forum (NQF).

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Table 27—Hospice Experience of Care Survey Quality Measures and Constituent Items

Hospice team communication • While your family member was in hospice care, how often did the hospice team keep you informed about when they would arrive to care for your family member? • While your family member was in hospice care, how often did the hospice team explain things in a way that was easy to understand? • How often did the hospice team listen carefully to you when you talked with them about problems with your family member’s hospice care? • While your family member was in hospice care, how often did the hospice team keep you informed about your family member’s condition? • While your family member was in hospice care, how often did the hospice team listen carefully to you? Getting timely care • While your family member was in hospice care, when you or your family member asked for help from the hospice team, how often did you get help as soon as you needed it? • How often did you get the help you needed from the hospice team during evenings, weekends, or holidays? Treating family member with respect • While your family member was in hospice care, how often did the hospice team treat your family member with dignity and respect? • While your family member was in hospice care, how often did you feel that the hospice team really cared about your family member? Providing emotional support • While your family member was in hospice care, how much emotional support did you get from the hospice team? • In the weeks after your family member died, how much emotional support did you get from the hospice team? Getting help for symptoms • Did your family member get as much help with pain as he or she needed? • How often did your family member get the help he or she needed for trouble breathing? • How often did your family member get the help he or she needed for trouble with constipation? • How often did your family member get the help he or she needed from the hospice team for feelings of anxiety or sadness? Getting hospice care training • Did the hospice team give you the training you needed about what side effects to watch for from pain medicine? • Did the hospice team give you the training you needed about if and when to give more pain medicine to your family member? • Did the hospice team give you the training you needed about how to help your family member if he or she had trouble breathing? • Did the hospice team give you the training you needed about what to do if your family member became restless or agitated?

Single Item Measures

Providing support for religious and spiritual beliefs • (Support for religious or spiritual beliefs includes talking, praying, quiet time, or other ways of meeting your religious or spiritual needs.) While your family member was in hospice care, how much support for your religious and spiritual beliefs did you get from the hospice team? Information continuity • While your family member was in hospice care, how often did anyone from the hospice team give you confusing or contradictory information about your family member’s condition or care? Understanding the side effects of pain medication • Side effects of pain medicine include things like sleepiness. Did any member of the hospice team discuss side effects of pain medicine with you or your family member?

Global Measures

Overall rating of hospice • Using any number from 0 to 10, where 0 is the worst hospice care possible and 10 is the best hospice care possible, what number would you use to rate your family member’s hospice care? Recommend hospice • Would you recommend this hospice to your friends and family?

To comply with CMS’s quality 2016 for compliance with the FY 2018 will be accepted. However, in the event reporting requirements for the FY 2018 APU. of extraordinary circumstances beyond APU, hospices will be required to Approved CAHPS® Hospice Survey the control of the provider, the provider collect data using the CAHPS® Hospice vendors will submit data on the will be able to request an exemption as ® Survey. Hospices would be able to hospice’s behalf to the CAHPS Hospice previously noted in the Quality comply by utilizing only CMS-approved Survey Data Center. The deadlines for Measures for Hospice Quality Reporting third party vendors that are in data submission occur quarterly and are Program and Data Submission compliance with the provisions at shown in Table 28 below. Deadlines are Requirements for Payment Year FY 2016 § 418.312(e). Ongoing monthly the second Wednesday of the and Beyond section. Hospice providers participation in the survey is required submission months, which are August, are responsible for making sure that January 1, 2016 through December 31, November, February, and May. their vendors are submitting data in a Deadlines are final; no late submissions timely manner.

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TABLE 28—CAHPS® HOSPICE SURVEY DATA SUBMISSION DATES FY2017 APU, FY2018 APU, AND FY2019 APU

Quarterly data Sample months (that is, month of death) 1 submission deadlines 2

FY2017 APU

Dry Run January–March 2015 (Q1) ...... August 12, 2015. April–June 2015 (Q2) ...... November 11, 2015.3 July–September 2015 (Q3) ...... February 10, 2016. October–December 2015 (Q4) ...... May 11, 2016.

FY2018 APU

January–March 2016 (Q1) ...... August 10, 2016. April–June 2016 (Q2) ...... November 9, 2016. July–September 2016 (Q3) ...... February 8, 2017. October–December 2016 (Q4) ...... May 10, 2017.

FY2019 APU

January–March 2017 (Q1) ...... August 9, 2017. April–June 2017 (Q2) ...... November 8, 2017. July–September 2017 (Q3) ...... February, 14, 2018. October–December 2017 (Q4) ...... May 9, 2018. 1 Data collection for each sample month initiates two months following the month of patient death (for example, in April for deaths occurring in January). 2 Data submission deadlines are the second Wednesday of the submission month. 2 Corrected from the Final Rule published August 22, 2014, 79 FR 50493.

In the FY 2014 Hospice Wage Index CAHPS® Hospice Survey data collection 1, 2016 through December 31, 2016 to and Rate Update final rule, we stated and reporting requirements for the FY qualify for the full APU. that we would exempt very small 2019 payment determination. To • ® To meet the HQRP requirements for hospices from CAHPS Hospice Survey qualify, hospices must submit an the FY 2019 payment determination, requirements. We propose to continue exemption request form. This form will hospices would collect survey data on a that exemption: Hospices that have be available in first quarter 2017 on the monthly basis for the months of January fewer than 50 survey-eligible decedents/ CAHPS® Hospice Survey Web site 1, 2017 through December 31, 2017 to caregivers in the period from January 1, http://www.hospicecahpssurvey.org. 2015 through December 31, 2015 are qualify for the full APU. ® Hospices are required to submit to exempt from CAHPS Hospice Survey CMS their total unique patient count for e. CAHPS® Hospice Survey Oversight data collection and reporting the period of January 1, 2016 through Activities requirements for the 2018 APU. To December 31, 2016. The due date for qualify for the survey exemption for the submitting the exemption request form We propose to continue a requirement FY 2018 APU, hospices must submit an for the FY 2018 APU is August 10, 2016. that vendors and hospice providers exemption request form. This form will participate in CAHPS® Hospice Survey ® be available on the CAHPS Hospice d. Annual Payment Update oversight activities to ensure ® Survey Web site http:// The Affordable Care Act requires that compliance with Hospice CAHPS www.hospicecahpssurvey.org. Hospices beginning with FY 2014 and each technical specifications and survey are required to submit to CMS their total subsequent fiscal year, the Secretary requirements. The purpose of the unique patient count for the period of shall reduce the market basket update oversight activities is to ensure that January 1, 2015 through December 31, by 2 percentage points for any hospice hospices and approved survey vendors 2015. The due date for submitting the that does not comply with the quality follow the CAHPS® Hospice Survey exemption request form for the FY 2018 data submission requirements with technical specifications and thereby APU is August 10, 2016. respect to that fiscal year, unless ensure the comparability of CAHPS® c. Participation Requirements To Meet covered by specific exemptions. Any Hospice Survey data across hospices. Quality Reporting Requirements for the such reduction will not be cumulative We propose that the reconsiderations FY 2019 APU and will not be taken into account in and appeals process for hospices failing computing the payment amount for To meet participation requirements to meet the Hospice CAHPS® data subsequent fiscal years. In the FY 2015 for the FY 2019 APU, we proposed that collection requirements will be part of hospices collect data on an ongoing Hospice Wage Index we added the ® the Reconsideration and Appeals monthly basis from January 2017 CAHPS Hospice Survey to the Hospice Quality Reporting Program requirements process already developed for the through December 2017 (inclusive). Hospice Quality Reporting program. We Data submission deadlines for the 2019 for the FY 2017 payment determination and determinations for subsequent encourage hospices interested in APU will be announced in future ® years. learning more about the CAHPS rulemaking. ® Hospices that have fewer than 50 • To meet the HQRP requirements for Hospice Survey to visit the CAHPS survey-eligible decedents/caregivers in the FY 2018 payment determination, Hospice Survey Web site: http:// the period from January 1, 2016 through hospices would collect survey data on a www.hospicecahpssurvey.org. December 31, 2016 are exempt from monthly basis for the months of January

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9. HQRP Reconsideration and Appeals use the Quality Improvement and robust quality reporting program and are Procedures for the FY 2016 Payment Evaluation System (QIES) National fully committed to developing the Determination and Subsequent Years System for Certification and Survey necessary systems for public reporting In the FY 2015 Hospice Wage Index Provider Enhanced Reports (CASPER) of hospice quality data. We also and Payment Rate Update final rule (79 Reporting as an additional mechanism recognize that it is essential that the FR 50496), we notified hospice to communicate to hospices regarding data made available to the public be providers on how to seek their compliance with the reporting meaningful and that comparing reconsideration if they received a requirements for the given reporting performance between hospices requires noncompliance decision for the FY 2016 cycle. The electronic APU letters would that measures be constructed from data payment determination and subsequent be accessed using the CASPER collected in a standardized and uniform years. A hospice may request Reporting Application. Requesting manner. Hospices have been required to reconsideration of a decision by CMS access to the CMS systems is performed use a standardized data collection in two steps. Details are provided on the that the hospice has not met the approach (HIS) since July 1, 2014. Data QIES Technical Support Office Web site requirements of the Hospice Quality from July 1, 2014 onward is currently (direct link), https://www.qtso.com/ Reporting Program for a particular being used to establish the scientific hospice.html. Once successfully period. Reporting compliance is soundness of the quality measures prior registered, access the CMS QIES to determined by successfully fulfilling to the onset of public reporting of the Success Welcome page https:// both the Hospice CAHPS® Survey seven quality measures implemented in web.qiesnet.org/qiestosuccess/ requirements and the HIS data the HQRP. We believe it is critical to index.html and select the ‘‘CASPER submission requirements. establish the reliability and validity of Reporting’’ link. Additional information We wish to clarify that any hospice the quality measures prior to public about how to access the letters will be that wishes to submit a reconsideration reporting in order to demonstrate the provided prior to the release of the request must do so by submitting an ability of the quality measures to letters. email to CMS containing all of the distinguish the quality of services We propose to disseminate provided. To establish reliability and requirements listed on the HQRP Web communications regarding the site at http://www.cms.gov/Medicare/ validity of the quality measures, at least availability of hospice compliance four quarters of data will be analyzed. Quality-Initiatives-Patient-Assessment- reports in CASPER files through routine Instruments/Hospice-Quality-Reporting/ Typically, the first one or two quarters channels to hospices and vendors, of data reflect the learning curve of the Reconsideration-Requests.html. including, but not limited to issuing Electronic email sent to facilities as they adopt standardized memos, emails, Medicare Learning data collection procedures; these data [email protected] is Network (MLN) announcements, and the only form of submission that will be often are not used to establish reliability notices on http://www.cms.gov/ and validity. We began data collection accepted. Any reconsideration requests Medicare/Quality-Initiatives-Patient- received through any other channel in CY 2014; the data from CY 2014 for Assessment-Instruments/Hospice- Quarter 3 (Q3) will not be used for including U.S. postal service or phone Quality-Reporting/Reconsideration- will not be considered as a valid assessing validity and reliability of the Requests.html. quality measures. We are analyzing data reconsideration request. We codified We further propose to publish a list of this process at § 418.312. In addition, collected by hospices during Quarter 4 hospices who successfully meet the (Q4) CY 2014 and Q1–Q3 CY 2015. we codified at § 418.306 that beginning reporting requirements for the with FY 2014 and each subsequent FY, Decisions about whether to report some applicable payment determination on or all of the quality measures publicly the Secretary shall reduce the market the HQRP Web site http://www.cms.gov/ basket update by 2 percentage points for will be based on the findings of analysis Medicare/Quality-Initiatives-Patient- of the CY 2015 data. any hospice that does not comply with Assessment-Instruments/Hospice- the quality data submission Quality-Reporting.html. We propose In addition, the Affordable Care Act requirements with respect to that FY updating the list after reconsideration requires that reporting be made public and solicited comments on all of the requests are processed on an annual on a CMS Web site and that providers proposals and the associated regulations basis. have an opportunity to review their data text at § 418.312 and in § 418.306 in We invite comment on the proposals prior to public reporting. CMS will section VI. to add CASPER Reporting as an develop the infrastructure for public In the past, only hospices found to be additional communication mechanism reporting, and provide hospices an non-compliant with the reporting for the dissemination of compliance opportunity to review their quality requirements set forth for a given notifications and to publish a list of measure data prior to publicly reporting payment determination received a compliant hospices on the HQRP Web information about the quality of care notification of this finding along with site. provided by ‘‘Medicare-certified’’ instructions for requesting hospice agencies throughout the nation. reconsideration in the form of a certified 10. Public Display of Quality Measures CMS also plans to make available United States Postal Service (USPS) and Other Hospice Data for the HQRP provider-level feedback reports in the letter. In an effort to communicate as Under section 1814(i)(5)(E) of the Act, Certification and Survey Provider quickly, efficiently, and broadly as the Secretary is required to establish Enhances Reports (CASPER) system. possible with hospices regarding annual procedures for making any quality data These provider-level feedback reports or compliance, we are proposing additions submitted by hospices available to the ‘‘quality reports’’ will be separate from to our communications method public. The procedures must ensure that public reporting and will be for provider regarding annual notification of a hospice would have the opportunity to viewing only, for the purposes of reporting compliance in the HQRP. In review the data regarding the hospice’s internal provider quality improvement. addition to sending a letter via regular respective program before it is made As is common in other quality reporting USPS mail, beginning with the FY 2017 public. programs, quality reports would contain payment determination and for We recognize that public reporting of feedback on facility-level performance subsequent fiscal years, we propose to quality data is a vital component of a on quality metrics, as well as

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benchmarks and thresholds. For the CY F. Clarification Regarding Diagnosis individual disease or injury states. The 2014 Reporting Cycle, there were no Reporting on Hospice Claims goal of hospice care is to help terminally ill individuals continue life with quality reports available in CASPER; 1. Background however, CMS anticipates that provider- minimal disruption to normal activities level quality reports will begin to be During the grass roots movement of while remaining primarily in the home available sometime in CY 2015. CMS hospice growth in the United States in environment. We continue to support anticipates that providers would use the the 1970s, healthcare providers the philosophy of holistic, recognized the need for a care delivery quality reports as part of their Quality comprehensive, virtually all-inclusive model to address the needs of those Assessment and Performance hospice care and seek to protect individuals who no longer wanted to Improvement (QAPI) efforts. beneficiary access and coverage under seek out the curative care for advancing the Medicare hospice benefit. As part of our ongoing efforts to make illnesses and injuries. In the early stages healthcare more transparent, affordable, of development, hospice leaders worked 2. Current Discussions About Hospice and accountable, the HQRP is prepared with key legislative leaders to develop Vulnerabilities to post hospice data on a public data set, a system to reimburse hospice care in The Institute of Medicine (IOM) the Medicare Provider Utilization and the United States.54 However, it was recently released the report, Dying in Payment Data: Physician and Other evident that before governmental America: Improving Quality and Supplier Public Use File located at reimbursement could occur, data had to Honoring Individual Preferences Near https://data.cms.hhs.gov. This site be collected and analyzed to the End of Life. This report discussed includes information on services and demonstrate what hospices actually vulnerabilities in the current health care procedures provided to Medicare provided and what costs were involved system, especially as it relates to those beneficiaries by physicians and other in rendering hospice care. The Health who are approaching the end of life, and healthcare professionals and serves as a Care Financing Administration stated that one of the largest barriers in helpful resource to the healthcare (HCFA)—now known as the Centers for providing efficient, quality end-of-life community. A timeline for posting Medicare & Medicaid Services (CMS)— care is the lack of coordination and hospice data on a public data set has not conducted a demonstration that communication among different been determined by CMS. Should a included 26 hospices located components of the health care system.55 timeline become available prior to the throughout the country to study the The report states that better next annual rulemaking cycle, details effect of Medicare-reimbursed hospice coordination of care is essential in would be announced via regular HQRP care. The results of this demonstration, improving patient outcomes and that communication channels, including as well as those sponsored by the end-of-life care should be private health insurance sector and listening sessions, memos, email individualized based on patient values, private foundations, along with the notification, and Web postings. goals, needs, and informed preferences testimony of multiple hospice industry with a recognition that individual Furthermore, to meet the requirement leaders, legislators, and hospice service needs and intensity will change for making such data public, we will families, helped to form the structure of over time.56 develop a CMS Compare Web site for the Medicare hospice benefit. Recent news articles on hospice care hospice, which will list hospice Stakeholders agreed that a Medicare highlight the same concerns expressed providers geographically. Consumers hospice benefit needed to be structured in the IOM report regarding can search for all Medicare approved to promote cost control and appropriate vulnerabilities in the current health care hospice providers that serve their city or service provision, while discouraging system. While recent news articles agree zip code (which would include the providers from entering the hospice that hospice care is a valuable and ® quality measures and CAHPS Hospice market with the intent of maximizing needed service for patients who are near Survey results) and then find the reimbursement from Medicare. death, the articles identified issues with agencies offering the types of services Both the Congress and the hospice hospice quality of care, the lack of they need. Like other CMS Compare industry wanted the Medicare hospice services provided, conflicts of interest, Web sites, the Hospice Compare Web benefit to provide a coordinated range of and the current Medicare payment site will feature a quality rating system services to ensure that terminally ill structure that may incentivize the that gives each hospice a rating of individuals would have access to provision of fewer services.57 Overall, between one (1) and five (5) stars. comprehensive care aimed at addressing the IOM report and recent news articles Hospices will have prepublication their physical, emotional, psychosocial raise concerns regarding fragmented and access to their own agency’s quality and spiritual needs as they approached uncoordinated care for those who are data, which enables each agency to the end of life. As stated in the 1983 terminally ill. know how it is performing before public hospice final rule, and reiterated As mentioned in previous rules, and posting of data on the Compare Web throughout hospice rules since in section III.A of this proposed rule, site. Decisions regarding how the rating implementation of the benefit, it is our there is data suggesting a significant system will determine a providers star general view that the waiver required by amount of ‘‘unbundling’’ is occurring rating and methods used for the law is a broad one and that hospices for services that should be included in calculations, as well as a proposed are required to provide virtually all the the hospice bundled payment. As timeline for implementation will be care that is needed by terminally ill announced via regular HQRP patients (48 FR 56010). Therefore, 55 Institute of Medicine (IOM), ‘‘Dying in hospices are to provide pain and America: Improving Quality and Honoring communication channels, including Individual Preferences Near End-of-Life,’’ 2014, listening sessions, memos, email symptom management, as an alternative to the curative model of care, focused on p.5–10. notification, provider association calls, 56 Institute of Medicine (IOM), ‘‘Dying in the ‘‘total person’’ as opposed to Open Door Forums, and Web postings. America: Improving Quality and Honoring We will announce the timeline for Individual Preferences Near End-of-Life,’’ 2014, 54 Connor, S. (2007). Development of Hospice and p.5–52. public reporting of quality measure data Palliative Care in the United States. OMEGA. 56 (1); 57 http://www.washingtonpost.com/sf/business/ in future rulemaking. 89–99. collection/business-of-dying/

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discussed previously above, our data this to be counter to the holistic, evaluation of Medicare beneficiaries for analysis shows that $1.3 billion is being comprehensive, and coordinated determining eligibility for the Medicare paid outside of the Medicare hospice hospice care model promoted during the hospice benefit. We expect hospice benefit for those under an active hospice development of the Medicare hospice providers to use the full range of tools election. With such a significant amount benefit.58 It was very clear throughout available, including guidelines, of services being provided outside of the the development, and years after the comprehensive assessments, and the Medicare hospice benefit, it raises implementation, of the Medicare complete medical record, as necessary, questions whether hospices are hospice benefit that hospices were to make responsible and thoughtful providing full disclosure of the nature of expected to make good on their promise clinical determinations regarding hospice care, which focuses on to do a better job in the provision and prognosis eligibility. improving quality of life as one is coordination of care than conventional As mentioned earlier in this section, approaching the end of life while Medicare services for those who were at the hospice industry has come under eliminating the need for unnecessary, the end of life.59 However, if hospices increased media scrutiny, much of it futile and possibly harmful diagnostics, are not making good on that promise, it related to hospices enrolling patients treatments, and therapies. Additionally, results in increased burden on hospice who may not be eligible for the benefit we have received anecdotal reports from beneficiaries and their families—both because they are not terminally ill and non-hospice providers who have clinically and financially—and is not in enrolling patients with certain rendered care and services to hospice keeping with the intent of the Medicare diagnoses that typically have a longer beneficiaries in which the non-hospice hospice benefit as originally developed length of stay, mainly non-cancer provider states that the care given was and implemented in 1983. diagnoses. In the December 26, 2013 related to the terminal prognosis of the Washington Post article, ‘‘Hospice firms 3. Medicare Hospice Eligibility individual. These reports go on to say draining billions from Medicare’’, the Requirements that they have contacted hospices to author discusses the incentives for coordinate the care of the hospice The Medicare hospice regulations at hospices to recruit patients who are not beneficiary only to be told by those § 418.25(b) state that in reaching a yet terminally ill or not yet ready to hospices that they disagreed with the decision to certify that a patient is elect the hospice benefit. This article non-hospice providers’ clinical terminally ill, meaning that the patient also goes on to describe allegations from judgment that the care was related to the has a medical prognosis of a life former hospice employees who say that terminal prognosis. We have been told expectancy of 6 months or less, the some hospices knowingly admitted that hospices are refusing to reimburse certifying physician(s) must consider at patients who were not declining in 60 the non-hospice provider for care least the following information: health. To address some of these noted • related to the terminal prognosis. These Diagnosis of the terminal condition hospice vulnerabilities, the recent non-hospice providers also informed us of the patient. IMPACT Act legislation, as summarized • that the hospices told them to code the Other health conditions, whether in Section II.D.8. of this proposed rule, claim with a different diagnosis or to related or unrelated to the terminal requires increased hospice program condition. oversight through more frequent hospice code condition code 07 (treatment of • Non-terminal Condition for Hospice) or Current clinically relevant surveys and medical review efforts. All the modifier ‘‘GW’’ (service not related information supporting all diagnoses. of these efforts seek to protect the to the hospice patient’s terminal Eligibility for the Medicare hospice Medicare hospice beneficiaries, as well as, the integrity of the Medicare hospice condition) on their claims to ensure that benefit has always been based on the benefit. the non-hospice provider would prognosis of the individual. As we have mentioned in previous rules, prognosis consequently get paid through 4. Assessment of Conditions and is not necessarily established through Medicare. These non-hospice providers Comorbidities Required by Regulation stated that they disagreed with this just a single diagnosis or even multiple diagnoses; rather, it is based on the We have recognized throughout the practice, and considered it fraudulent. federal regulations at part 418 that the As such, they were unable to be totality of the individual and everything that affects their life expectancy. In the total person is to be assessed, including reimbursed by the hospice or by acute and chronic conditions, as well as, Medicare for services provided that they FY 2015 Hospice Payment Rate Update final rule (79 FR 50471), we reminded controlled and uncontrolled conditions, felt were the responsibility of hospice. and comorbidities, in order to determine We have also received anecdotal reports providers that there are multiple public sources available to assist in an individual’s terminal prognosis. We from hospice beneficiaries and their have also been clear that the original families that they have been told by the determining whether a patient meets Medicare hospice prognosis eligibility intent of the Medicare hospice benefit is hospice to revoke their hospice election to provide comprehensive, integrated to receive high-cost services that should criteria (that is, industry-specific clinical and functional assessment tools and holistic care for those who have a be covered by the hospice, such as terminal prognosis. While hospices are palliative chemotherapy and radiation. and information on MAC Web sites, including Local Coverage responsible for the palliation and Given the legislative history, the Determinations (LCDs)). We have management of the terminal illness and statements provided by hospices during mentioned that there are related conditions, in the 1983 hospice the development of the benefit, and prognostication tools available for proposed rule (48 FR 38147) we stated anecdotal reports from non-hospice hospices to assist in thoughtful that upon hospice election, the providers and hospice beneficiaries, we individual waives payment for certain are concerned that some hospices are 58 ‘‘Background Materials on Medicare Hospice other benefits except in ‘‘exceptional making determinations of hospice Benefit Including Description of Proposed and unusual circumstances.’’ In that coverage based solely on cost and Implementing Regulations,’’ September 9, 1983. reimbursement as opposed to being Committee on Finance, United States Senate, S. Prt. 60 http://www.washingtonpost.com/business/ 98–88, p. 1. based on patient-centered needs, economy/medicare-rules-create-a-booming- 59 Hoyer, T. (1998). A History of the Medicare business-in-hospice-care-for-people-who-arent- preferences and goals for those Hospice Benefit. The Hospice Journal, 13(1–2), 61– dying/2013/12/26/4ff75bbe-68c9-11e3-ae56- approaching the end of life. We believe 69. 22de072140a2_story.html.

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proposed rule, we did not specify these that longstanding, preexisting, chronic, overall general health, treatment choice, ‘‘exceptional and unusual stable and controlled conditions and prognosis, and is a predictor of poor circumstances’’ because we did not yet disease states as well as comorbidities, survival.62 A study of U.S. hospice know what specific types of should not be considered related to a patients also showed that hospice circumstances would warrant the use of patient’s terminal illness or related patients with higher comorbidity index this exception and invited comments on conditions. Some commenters went on scores were more likely to— this point. In the 1983 hospice final rule to say that not all pain and symptoms • Be admitted to the ER and hospital; (48 FR 56010 through 56011), we stated are related to a patient’s terminal • Die in the hospital; • 63 that we did not receive any suggestions prognosis. Many commenters stated that Be discharged from hospice. for identifying exceptional and unusual determining ‘‘related conditions’’ was It is not an uncommon clinical circumstances that warranted the often very difficult, while others practice for some clinicians to stop inclusion of a specific provision in the reported that it wasn’t difficult at all. drugs for comorbid conditions regulations to accommodate them. We Many commenters felt that the arbitrarily because the person has a stated this because most of the management and maintenance of progressive life-limiting illness; comments that were made attempted to comorbidities is not the responsibility of however, withdrawing long term drugs suggest this exception as a means of hospice as they felt that these from comorbidities without considering routinely providing non-hospice comorbidities are not related to the the natural course of the illness can lead Medicare financing for the expense of reason why an individual is terminally to serious problems, such as rebound hypertension, tachycardia, depression costly services needed by hospice ill. These commenters believed that and death.64 It is imperative for hospice patients and we do not view this as an these types of conditions should not be patients with comorbidities to have appropriate interpretation of the law (48 included in the bundle of services careful management and for clinicians FR 56011). We reiterated that we believe covered under the Medicare hospice to consider both the physical and that the unique physical condition of benefit. As we have previously stated in psychological effects of treatment.65 each terminally ill individual makes it response to those comments, we believe The National Hospice and Palliative necessary for these decisions to be made these conditions are included in the Care Organization (NHPCO) recognizes on a case by case basis and that it is our bundle of hospice services as hospices the importance of comorbidities. They general rule that the waiver required by are required to provide reasonable and define ‘‘comorbidity’’ as known factors law is a broad one. necessary services for both palliation or pathological disease impacting on the and management of all conditions that Since the implementation of the primary health problem and generally contribute to a terminal prognosis. Medicare hospice benefit, there have attributed to contributing to increased Conversely, several commenters were in been many questions and requests for risk for poor health status outcomes 66 agreement that all medical problems CMS to provide those ‘‘exceptional and This aligns with the Medicare hospice will affect a person’s prognosis and will unusual’’ circumstances for which a benefit requirements in which the relate, in some way, to the disease that condition would be unrelated to the physical, psychosocial, emotional and prognosis of the terminally ill will ultimately end that person’s life. Defined at § 418.3, ‘‘terminally ill’’ spiritual needs of the individual and his individual. We continue to state that or her family must be assessed to those circumstances would be means that the individual has a medical prognosis that his or her life expectancy develop the hospice plan of care. The ‘‘exceptional and unusual’’ and that individualized plan of care is developed hospices continue to be required to is 6 months or less if the illness runs its normal course. The original and refined, as necessary, through the provide virtually all the care that is course of an individual’s hospice needed by terminally ill patients. To implementing regulations of the Medicare hospice benefit, beginning election and is based on the initial and respond to the many requests for greater ongoing comprehensive assessments. clarification, in the Medicare Program; with the 1983 hospice propose and final rules (48 FR 318146 and 48 FR 56008), FY 2015 Payment Rate Update proposed 62 Yancik, R., Ganz, P, Varricchio, C., Conley, B. rule (79 FR 26554 through 26555), we articulate a set of requirements that do (2001). Perspectives on Comorbidity and Cancer in solicited comments on definitions we not delineate between preexisting, Older Patients: Approaches to Expand the chronic, controlled or comorbid Knowledge Base. American Society of Clinical provided for ‘‘terminal illness’’ and Oncology. PAGE #. ‘‘related conditions.’’ Based on conditions. The presence of comorbidities is recognized as an Repetto, L., Comandini, D., Mammoliti, S. (2001). comments received in response to those Life expectancy, comorbidity and quality of life: definitions and from comments received important factor contributing to the The treatment equation in the older cancer patients. in prior year’s proposed rules, it appears overall status of an individual and Critical Reviews in Oncology/Hematology, 37(2001), 148. that there continues to be widely should be considered when determining terminal prognosis. Mental health Escarrabill, J., Cataluna, J., Hernandez, C., varying interpretation as to what Servera, E. (2009). Recommendations for End-of- constitutes ‘‘terminal illness’’ and comorbidities must also be considered Life Care in Patients with Chronic Obstructive ‘‘related conditions’’ and hence the as it is not uncommon for terminally ill Pulmonary Disease. Archivos de services that should be provided and individuals to have underlying mental Bronconeumologia, 45(6), 297–303. 63 Legler et al. (2011). The effect of comorbidity covered by hospices. Similar to the 1983 health conditions that could contribute to their prognosis and/or affect the plan burden on health care utilization for patients with hospice final rule, some commenters cancer using hospice. Journal of Palliative Care appear to have a very broad of care. Health care researchers agree the Medicine. 14(6), 751–756. interpretation stating that all conditions importance of comorbidity is clear, due 64 Stevenson, J., Abernethy, A., Miller, C, Currow, to its high prevalence in older D. (2004). Managing comorbidities in patients at the are related to the terminal prognosis. end of life. British Medical Journal. 324(2004), 909– Other commenters have a very narrow populations and its impact on health and health care.61 It is also well- 912. interpretation as to what illnesses and 65 Stevenson, J., Abernethy, A., Miller, C, Currow, conditions would be and would not be documented that comorbidities affect D. (2004). Managing comorbidities in patients at the the responsibility of hospice, and felt end of life. British Medical Journal. 324(2004), 909– 61 Gijsen, R., Hoeymans, N., Schellevis, F., 912. that those conditions are limited to a Ruwaard, Satariano, W., van den Bos, G., (2001). 66 National Hospice and Palliative Care single diagnosis. Additionally, some Causes and consequences of comorbidity: A review. Organization. (2010). Standards of Practice for comments previously received stated Journal of Clinical Epidemiology, 54(2001), 661. Hospice Programs.

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Our regulations at § 418.54(c) require to the hospital for care. In the case of average, five or more chronic that the comprehensive assessment selection of a principal diagnosis for conditions.68 These chronic, comorbid must take into consideration the hospice care, this would mean the conditions include: Hypertension, following factors: diagnosis most contributory to the anemia, congestive heart failure, chronic • The nature and condition causing terminal prognosis of the individual. In obstructive pulmonary disease, admission (including the presence or the instance where two or more ischemic heart disease, depression, lack of objective data and subjective diagnoses equally meet the criteria for diabetes and atrial fibrillation, to name complaints). principal diagnosis, ICD–10–CM coding a few. • Complications and risk factors that guidelines do not provide sequencing In the Medicare Program; Hospice affect care planning. direction, and thus, any one of the Wage Index for Fiscal Year 2013 Notice • Functional status, including the diagnoses may be sequenced first, (77 FR 44248) we stated that hospices patient’s ability to understand and meaning to report all of those diagnoses should report on hospice claims all participate in his or her own care. meeting the criteria as a principal coexisting or additional diagnoses that • Imminence of death. diagnosis. Per ICD–10–CM Coding are related to the terminal illness; they • Severity of symptoms. • Guidelines, for diagnosis reporting should not report coexisting or Drug profile. A review of all of the purposes, the definition for ‘‘other additional diagnoses that are unrelated patient’s prescription and over-the- diagnoses’’ is interpreted as additional to the terminal illness, even though counter drugs, herbal remedies and conditions that affect patient care in coding guidelines required the reporting other alternative treatments that could terms of requiring: of all diagnoses that affect patient affect drug therapy. • • Clinical evaluation; or assessment and planning. However, as Bereavement. An initial • therapeutic treatment; or discussed earlier in this section, there is bereavement assessment of the needs of • diagnostic procedures; or widely varying interpretation as to what the patient’s family and other • extended length of hospital stay; or factors influence the terminal prognosis individuals focusing on the social, • increased nursing care and/or of the individual (that is, what spiritual, and cultural factors that may monitoring. conditions render the individual impact their ability to cope with the The UHDDS item #11–b defines Other terminally ill and which conditions are patient’s death. Information gathered Diagnoses as all conditions that coexist related). Furthermore, based on the from the initial bereavement assessment at the time of admission, that develop numerous comments received in must be incorporated into the plan of subsequently, or that affect the previous rulemaking, and anecdotal care and considered in the bereavement treatment received and/or the length of reports from hospices, hospice plan of care. stay. ICD–10–CM coding guidelines are beneficiaries, and non-hospice • The need for referrals and further clear that all diagnoses affecting the providers discussed above, we are evaluation by appropriate health management and treatment of the concerned that hospices may not be professionals. individual within the healthcare setting The hospice CoPs at § 418.56(c) conducting a comprehensive assessment are requirement to be reported. This has nor updating the plan of care as require that the hospice plan of care been longstanding existing policy. reflect patient and family goals and have articulated by the CoPs to recognize the Adherence to coding guidelines when conditions that affect an individual’s measurable outcomes. Furthermore, the assigning ICD–9–CM and ICD–10–CM plan of care is a dynamic and fluid terminal prognosis. diagnosis and procedure codes is Therefore, we are clarifying that document that will change as the required under the Health Insurance hospices will report all diagnoses individual’s condition changes Portability and Accountability Act identified in the initial and throughout the course of a hospice (HIPAA) as well as our regulations at 45 comprehensive assessments on hospice election. A comprehensive, holistic, CFR 162.1002. claims, whether related or unrelated to integrated and coordinated approach to However, though established coding the terminal prognosis of the individual. service delivery is the hallmark of guidelines are required, it does not This is in keeping with the requirements hospice care and a valued service for appear that all hospices are coding on of determining whether an individual is Medicare beneficiaries and families as hospice claims per these guidelines. In terminally ill. This would also include the individual approaches the end-of- 2010, over 77 percent of hospice claims the reporting of any mental health life. We believe that many hospices reported only one diagnosis. Previous disorders and conditions that would practice this comprehensive approach rules have discussed requirements for affect the plan of care as hospices are to as they recognize that it is the hospices’ hospice diagnosis reporting on claims assess and provide care for identified responsibility to provide all medical, and the importance of complete and psychosocial and emotional needs, as emotional, psychosocial and spiritual accurate coding. Preliminary analysis of well as, for the physical and spiritual services for all component conditions of FY 2014 claims data demonstrates that needs. Our regulations at § 418.25(b) the terminal prognosis along the hospice diagnosis coding is improving; state, ‘‘in reaching a decision to certify continuum of care. however, challenges remain. Analysis of that the patient is terminally ill, the 5. Clarification Regarding Diagnosis FY 2014 claims data indicates that 49 hospice medical director must consider Reporting on Hospice Claims percent of hospice claims listed only at least the following information: one diagnosis.67 We conducted • International Classification of Diagnosis of the terminal condition additional analysis on instances where Diseases, Tenth Revision, Clinical of the patient. only one diagnosis was reported on the • Other health conditions, whether Modification (ICD–10–CM) Coding FY 2014 hospice claim and found that related or unrelated to the terminal Guidelines state the following regarding 50 percent of these beneficiaries had, on condition. the selection of the principal diagnosis: average, eight or more chronic • Current clinically relevant The principal diagnosis is defined in the conditions and 75 percent had, on information supporting all diagnoses. Uniform Hospital Discharge Data Set (UHDDS) as that condition established 67 Preliminary FY 2014 hospice claims data from 68 Preliminary FY 2014 hospice claims data from after study to be chiefly responsible for the Chronic Conditions Data Warehouse (CCW), the Chronic Conditions Data Warehouse (CCW), occasioning the admission of the patient accessed on January 13, 2015. accessed on January 21, 2015.

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ICD–10–CM Coding Guidelines state authorized the Secretary to collect C. Overall Impact that diagnoses should be reported that additional data and information The overall impact of this proposed develop subsequently, coexist or affect determined appropriate to revise rule is an estimated net increase in the treatment of the individual. payments for hospice care and for other Federal Medicare payments to hospices Furthermore, having these diagnoses purposes. The data collected may be of $200 million, or 1.3 percent, for FY reported on claims falls under the used to revise the methodology for 2016. The $200 million increase in authority of the Affordable Care Act for determining the payment rates for estimated payments for FY 2016 reflects the collection of data to inform hospice routine home care and other services the distributional effects of the 1.8 payment reform. Section 3132 a(1)(C) of included in hospice care, no earlier than percent proposed FY 2016 hospice the Affordable Care Act states that the October 1, 2013. In accordance with payment update percentage ($290 Secretary may collect the additional section 1814(i)(6)(D) of the Act, this million increase), the use of updated proposed rule would provide an update data and information on cost reports, wage index data and the phase-out of on hospice payment reform research claims, or other mechanisms as the the wage index budget neutrality and analyses and proposes a SIA Secretary determines to be appropriate. adjustment factor (-0.7 percent/$120 payment in accordance with the Having adequate data on hospice patient million decrease) and the proposed requirement to revise the methodology characteristics will help to inform implementation of the new OMB CBSA for determining hospice payments in a thoughtful, appropriate, and clinically delineations for the FY 2016 hospice budget-neutral manner. Finally, section relevant policy for future rulemaking. wage index with a one-year transition 3004 of the Affordable Care Act We will monitor compliance with (0.2 percent/$30 million increase). The amended the Act to authorize a quality required coding practices and elimination of the wage index budget reporting program for hospices and this collaborate with all relevant CMS neutrality adjustment factor (BNAF) was components to determine whether rule discusses changes in the requirements for the hospice quality part of a 7-year phase-out that was further policy changes are needed or if finalized in the FY 2010 Hospice Wage additional program integrity oversight reporting program in accordance with section 1814(i)(5) of the Act. Index final rule (74 FR 39384), and is actions need to be implemented. not a policy change. The proposed RHC IV. Collection of Information B. Introduction rates and the proposed SIA payment, Requirements We have examined the impacts of this outlined in section III.B, would be implemented in a budget neutral This document does not impose proposed rule as required by Executive manner in the first year of information collection requirements, Order 12866 on Regulatory Planning implementation, as required per section that is, reporting, recordkeeping or and Review (September 30, 1993), 1814(i)(6)(D)(ii) of the Act. In section third-party disclosure requirements. Executive Order 13563 on Improving III.B., we also proposed continuing to Consequently, there is no need for Regulation and Regulatory Review make the SIA payments budget neutral review by the Office of Management and (January 18, 2011), the Regulatory annually. The RHC rate budget Budget under the authority of the Flexibility Act (RFA) (September 19, neutrality factors and the SBNF used to Paperwork Reduction Act of 1995. 1980, Pub. L. 96–354), section 1102(b) of the Act, section 202 of the Unfunded reduce the overall RHC rate are outlined V. Regulatory Impact Analysis Mandates Reform Act of 1995 (UMRA, in section III.C.3. Therefore, the proposed RHC rates and the proposed A. Statement of Need March 22, 1995; Pub. L. 104–4), and the Congressional Review Act (5 U.S.C. SIA payment would not result in an This proposed rule meets the 804(2)). overall payment impact for the requirements of our regulations at Executive Orders 12866 and 13563 Medicare program or hospices. § 418.306(c), which requires annual direct agencies to assess all costs and 1. Detailed Economic Analysis issuance, in the Federal Register, of the benefits of available regulatory hospice wage index based on the most alternatives and, if regulation is Table 29, Column 3 shows the current available CMS hospital wage necessary, to select regulatory combined effects of the use of updated data, including any changes to the approaches that maximize net benefits wage data (the FY 2015 pre-floor, pre- definitions of Core-Based Statistical (including potential economic, reclassified hospital wage index) and Areas (CBSAs), or previously used environmental, public health and safety the phase-out of the BNAF (for a total Metropolitan Statistical Areas (MSAs). effects, distributive impacts, and BNAF reduction of 100 percent), This proposed rule would also update equity). Executive Order 13563 resulting in an estimated decrease in FY payment rates for each of the categories emphasizes the importance of 2016 payments of 0.7 percent ($¥120 of hospice care described in § 418.302(b) quantifying both costs and benefits, of million). Column 4 of Table 29, shows for FY 2016 as required under section reducing costs, of harmonizing rules, the effects of the proposed 50/50 blend 1814(i)(1)(C)(ii)(VII) of the Act. The and of promoting flexibility. A of the FY 2016 hospice wage index payment rate updates are subject to regulatory impact analysis (RIA) must values (based on the use of FY 2015 pre- changes in economy-wide productivity be prepared for major rules with floor, pre-reclassified hospital wage as specified in section economically significant effects ($100 index data) under the old and the new 1886(b)(3)(B)(xi)(II) of the Act. In million or more in any 1 year). This CBSA delineations, resulting in an addition, the payment rate updates may proposed rule has been designated as estimated increase in FY 2016 payments be reduced by an additional 0.3 economically significant under section of 0.2 percent ($30 million). Column 5 percentage point (although for FY 2014 3(f)(1) of Executive Order 12866 and displays the estimated effects of the to FY 2019, the potential 0.3 percentage thus a major rule under the proposed RHC rates, resulting in no point reduction is subject to suspension Congressional Review Act. Accordingly, overall change in FY 2016 payments for under conditions specified in section we have prepared a regulatory impact hospices as this proposal would be 1814(i)(1)(C)(v) of the Act). In 2010, the analysis (RIA) that, to the best of our implemented in a budget neutral Congress amended section 1814(i)(6) of ability, presents the costs and benefits of manner. Column 6 shows the estimated the Act with section 3132(a) of the the rulemaking. This proposed rule was effects of the proposed SIA payment, Affordable Care Act. The amendment also reviewed by OMB. resulting in no change in FY 2016

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payments for hospices as this proposal hospice wage index ($30 million), complete hospice claims data available would be implemented in a budget Column 8 shows that hospice payments at the time of rulemaking (FY 2014 neutral manner through a reduction to are estimated to increase by $200 hospice claims submitted as of the overall RHC rate for FY 2016. million ($290 million ¥ $120 million + December 31, 2014). Presenting these Column 7 shows the effects of the $30 million = $200 million), or 1.3 data gives the hospice industry a more proposed FY 2016 hospice payment percent, in FY 2016. complete picture of the effects on their update percentage. The proposed 1.8 a. Effects on Hospices total revenue based on the use of percent hospice payment update updated hospital wage index data and This section discusses our analysis of percentage is based on a 2.7 percent the BNAF phase-out, the proposed the estimated impacts on FY 2016 inpatient hospital market basket update adoption of the new OMB CBSA payments to hospices due to: (1) The for FY 2016 reduced by a 0.6 percentage delineations with a one-year transition, point productivity adjustment and by use of updated wage index data for the the proposed SIA payment, and the 0.3 percentage point as mandated by the proposed FY 2016 hospice wage index proposed FY 2016 hospice payment Affordable Care Act. The estimated (using FY 2015 hospital pre-floor, pre- effects of the 1.8 percent proposed reclassified hospital wage data) and the update percentage as discussed in this hospice payment update percentage phase-out of the BNAF, (2) the proposed proposed rule. Certain events may limit would result in an increase in payments FY 2016 hospice wage index that adopts the scope or accuracy of our impact to hospices of approximately $290 the new OMB CBSA delineations with analysis, because such an analysis is million. Taking into account the 1.8 a one-year transition, (3) the proposed susceptible to forecasting errors due to percent proposed hospice payment RHC rates, (4) the proposed SIA other changes in the forecasted impact update percentage ($290 million payment, and (5) the proposed 1.8 time period. The nature of the Medicare increase), the use of updated wage data percent hospice payment update program is such that the changes may and the phase-out of the BNAF (¥$120 percentage. Table 29 below shows the interact, and the complexity of the million), and the proposed adoption of results of our analysis. For the purposes interaction of these changes could make the new OMB CBSA delineations with of our impact analysis, we use the it difficult to predict accurately the full a one-year transition for the FY 2016 utilization observed in the most scope of the impact upon hospices. TABLE 29—ESTIMATED HOSPICE IMPACTS BY FACILITY TYPE AND AREA OF THE COUNTRY, FY 2016

Proposed 50/50 blend Proposed Updated FY of FY 2016 routine Proposed 2016 wage wage index home care Proposed FY 2016 Total FY index data values rates (days FY 2016 hospice 2016 Providers and phase- under old 1 thru 60 SIA payment proposed out of BNAF and new and days payment update policies (% change) CBSA 61+) (% change) percentage (% change) delineations (%) (% change) (% change)

(1) (2) (3) (4) (5) (6) (7) (8)

All Hospices ...... 4,010 ¥0.7 0.2 0.0 0.0 1.8 1.3 Urban Hospices ...... 3,015 ¥0.7 0.3 0.0 0.0 1.8 1.4 Rural Hospices ...... 995 ¥0.3 ¥0.2 0.4 0.0 1.8 1.7 Urban Hospices—New England ...... 140 0.0 0.1 1.3 ¥0.1 1.8 3.1 Urban Hospices—Middle Atlantic ...... 251 ¥0.7 ¥0.2 0.8 0.0 1.8 1.7 Urban Hospices—South Atlantic ...... 410 ¥1.1 0.3 ¥0.7 ¥0.1 1.8 0.2 Urban Hospices—East North Central ...... 388 ¥0.8 0.7 ¥0.2 0.0 1.8 1.5 Urban Hospices—East South Central ...... 165 ¥0.7 0.5 ¥0.3 0.0 1.8 1.3 Urban Hospices—West North Central ...... 221 ¥0.7 0.6 0.7 0.0 1.8 2.4 Urban Hospices—West South Central ...... 593 ¥1.1 0.6 ¥1.2 ¥0.2 1.8 ¥0.1 Urban Hospices—Mountain ...... 299 ¥0.6 0.2 ¥0.4 0.0 1.8 1.0 Urban Hospices—Pacific ...... 511 ¥0.1 0.0 1.0 0.2 1.8 2.9 Urban Hospices—Outlying ...... 37 0.0 0.3 ¥1.1 ¥0.2 1.7 0.7 Rural Hospices—New England ...... 24 ¥0.3 0.0 3.3 0.3 1.8 5.1 Rural Hospices—Middle Atlantic ...... 42 0.3 ¥0.1 1.8 0.5 1.8 4.3 Rural Hospices—South Atlantic ...... 141 ¥0.6 0.1 ¥0.2 0.0 1.8 1.1 Rural Hospices—East North Central ...... 135 ¥0.7 ¥0.4 0.8 0.2 1.8 1.7 Rural Hospices—East South Central ...... 133 ¥0.1 ¥0.1 ¥0.9 ¥0.2 1.8 0.5 Rural Hospices—West North Central ...... 184 ¥0.3 ¥0.1 2.2 ¥0.1 1.8 3.5 Rural Hospices—West South Central ...... 184 ¥0.1 ¥0.1 ¥1.0 ¥0.2 1.8 0.4 Rural Hospices—Mountain ...... 102 ¥1.4 ¥0.7 0.3 0.1 1.8 0.1 Rural Hospices—Pacific...... 47 2.1 0.1 3.3 0.3 1.8 7.6 Rural Hospices—Outlying ...... 3 ¥0.8 ¥0.2 1.9 0.2 1.8 2.9 0–3,499 RHC Days (Small) ...... 840 ¥0.5 0.1 3.0 0.1 1.8 4.5 3,500–19,999 RHC Days (Medium) ...... 1,924 ¥0.6 0.2 0.6 0.0 1.8 2.0 20,000+ RHC Days (Large) ...... 1,246 ¥0.7 0.3 ¥0.2 0.0 1.8 1.2 Non-Profit Ownership ...... 1,070 ¥0.6 0.2 1.2 0.1 1.8 2.7 For Profit Ownership ...... 2,398 ¥0.7 0.3 ¥1.0 ¥0.1 1.8 0.3 Govt/Other Ownership ...... 542 ¥0.6 0.3 0.6 0.1 1.8 2.2 Freestanding Facility Type ...... 3,016 ¥0.7 0.3 ¥0.4 0.0 1.8 1.0 HHA/Facility-Based Facility Type ...... 994 ¥0.4 0.2 1.8 0.2 1.8 3.6 Rate of RHC NF/SNF Days is in Lowest Quartile (Less than or equal to 3.1%) ...... 1,002 ¥0.5 0.1 0.7 0.0 1.8 2.1 Rate of RHC NF/SNF Days is in 2nd Quartile (Greater than 3.1 and Less than or equal to 16.7%) ...... 1,003 ¥0.6 0.1 0.4 0.2 1.8 1.9 Rate of RHC NF/SNF Days is in 3rd Quartile (Greater than 16.7 and less than or equal to 35.5%) ...... 1,003 ¥0.7 0.3 ¥0.1 0.0 1.8 1.3

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TABLE 29—ESTIMATED HOSPICE IMPACTS BY FACILITY TYPE AND AREA OF THE COUNTRY, FY 2016—Continued

(1) (2) (3) (4) (5) (6) (7) (8)

Rate of RHC NF/SNF Days is in Highest Quartile (Greater than 35.5%) ...... 1,002 ¥0.7 0.4 ¥0.6 ¥0.2 1.8 0.7 Source: FY 2014 hospice claims data from the Standard Analytic Files for CY 2013 (as of June 30, 2014) and CY 2014 (as of December 31, 2014). Note: The proposed 1.8 percent hospice payment update percentage for FY 2016 is based on an estimated 2.7 percent inpatient hospital market basket update, reduced by a 0.6 percentage point productivity adjustment and by 0.3 percentage point. Starting with FY 2013 (and in subsequent fiscal years), the market basket percentage update under the hospice payment system as described in section 1814(i)(1)(C)(ii)(VII) or section 1814(i)(1)(C)(iii) of the Act will be annually reduced by changes in economy-wide productivity as set out at section 1886(b)(3)(B)(xi)(II) of the Act. In FY 2013 through FY 2019, the market basket percentage update under the hospice payment system will be reduced by an additional 0.3 percentage point (although for FY 2014 to FY 2019, the potential 0.3 percentage point reduction is subject to suspension under conditions set out under section 1814(i)(1)(C)(v) of the Act). REGION KEY: New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic=Pennsylvania, New Jersey, New York; South Atlantic=Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East North Central=Illinois, Indiana, Michi- gan, Ohio, Wisconsin; East South Central=Alabama, Kentucky, Mississippi, Tennessee; West North Central=Iowa, Kansas, Minnesota, Missouri, Nebraska, North Da- kota, South Dakota; West South Central=Arkansas, Louisiana, Oklahoma, Texas; Mountain=Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyo- ming; Pacific=Alaska, California, Hawaii, Oregon, Washington; Outlying=Guam, Puerto Rico, Virgin Islands.

Table 29 above also presents the proposed RHC rates are anticipated to and Pacific are estimated to see impact of the changes in this proposed decrease payments by 0.2 percent for increases in payments, ranging from 0.7 rule according to the type of hospice, large hospices. The proposed FY 2016 percent in the East North Central region geographic location, type of ownership, SIA payment is projected to result in an to 0.1 percent in the New England hospice base, size, and percentage of increase in FY 2016 payments of 0.1 region. No change in FY 2016 payments RHC days in a SNF/NF. The majority of percent for small hospices and no for hospices in urban areas in the Pacific hospice payments are made at the change in payments for medium and region is expected. In contrast, rural routine home care rate; therefore, we large hospices (column 6). hospices are estimated to experience a based the size of each individual small decrease in payments in seven c. Geographic Location hospice’s program on the number of regions, ranging from 0.1 percent in the routine home care days provided in FY Column 3 of Table 29 shows the East South Central, Middle Atlantic, and 2014. As indicated in column 2 of Table combined estimated effects of using West North Central regions to 0.7 29, there are 4,010 hospices included in updated wage data and the BNAF percent in the Mountain region. the regulatory impact analysis. phase-out and results in a decrease in Payments in the New England region are Approximately 40 percent of Medicare- FY 2016 payments of 0.7 percent for anticipated to remain unchanged and certified hospices are identified as urban hospices and 0.3 percent for rural payments in the South Atlantic and voluntary (non-profit) or government hospices. Urban hospices can anticipate Pacific regions are estimated to increase agencies (1,612 hospices) and 60 a decrease in payments ranging from 1.1 slightly by 0.1 percent. percent are proprietary (for-profit) percent in the South Atlantic and West Column 5 shows the anticipated (2,398 hospices). In addition, our South Central regions to 0.1 percent for effects of the proposed RHC rates, that analysis shows that most hospices are in hospices in the Pacific. No change in is, paying separate rates for days 1 urban areas, are medium-sized, and are payments is expected for urban hospices through 60 and days beyond 60. Overall, freestanding. in the New England and outlying areas. hospices would experience no change in Rural hospices are estimated to see a overall payments for FY 2016 due to the b. Hospice Size decrease in payments in eight regions, proposed RHC rates. FY 2016 payments The use of updated wage data ranging from 1.4 percent in the are estimated to range from an increase combined with the BNAF phase-out is Mountain region to 0.1 percent in the of 3.3 percent for rural hospices in New anticipated to decrease FY 2016 East South Central and West South England and Pacific regions to a payments to large hospices by 0.7 Central regions. Rural hospices can decrease of 1.2 percent for urban percent and to decrease payments to anticipate an increase in payments in hospices in the West South Central small and medium hospices by 0.5 the Middle Atlantic region of 0.3 region. percent and 0.6 percent respectively percent and an increase of 2.1 percent Column 6 shows the effects of (column 3). The proposed 50/50 Blend in the Pacific region. proposed FY 2016 SIA Payment. for FY 2016 wage index values under Column 4 shows the effect of the Overall, hospices are anticipated to the old and the new CBSA delineations proposed 50/50 Blend of the FY2016 experience no change in overall is anticipated to result in an increase in wage index values under the old and the payments for FY 2016. However, FY payments to small hospices of 0.1 new CBSA delineations. Overall, 2016 payments are estimated to range percent, an increase in payments to hospices are anticipated to experience a from an increase of 0.5 percent for rural medium hospices of 0.2 percent, and an 0.2 percent increase in payments, with hospices in the Middle Atlantic region increase to large hospices of 0.3 percent urban hospices experiencing an to a decrease of 0.2 percent for urban (column 4). The proposed RHC rates are estimated increase of 0.3 percent and hospices in the West South Central projected to increase payments by 3.0 rural hospices experiencing an region and the Outlying region. percent for small hospices and 0.6 estimated decrease of 0.2 percent. All Column 8 shows the total anticipated percent for medium hospices. The urban areas other than Middle Atlantic impact of the FY 2016 proposed policy

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changes. Overall, all hospices are expected to decrease by 0.4 percent Medicare payments to hospices in FY anticipated to receive a 1.3 percent while payments to HHA/facility-based 2016 are anticipated to increase by 1.3 increase in payment. Rural hospices in hospices are expected to increase by 1.8 percent, or $200 million. the Pacific Region show the largest percent. Column 6 shows the effects of h. Alternatives Considered anticipated payment increase of 7.6 the proposed SIA payment. Payments to percent. Rural hospices in New England freestanding hospices are expected to For the FY 2016 proposed rule, we are anticipated to receive an increase of neither increase nor decrease due to the considered several alternatives to the 5.1 percent, Middle Atlantic hospices SIA proposal, while payments for HHA/ proposals articulated in section III.B. As are anticipated to receive an increase of facility-based hospices are expected to described in Table 13 in section III.B.1 4.3 percent and rural hospices in the increase by 0.2 percent. of this preamble, previous work on a outlying regions are estimated to receive Table 29 also shows the effects of the tiered payment model indicates that a an increase of 2.9 percent in payments. proposed changes in this rule by the rate different RHC payment could begin at of RHC NF/SNF days in quartiles. day 31. Therefore, we considered d. Type of Ownership Column 3 shows that all four quartiles proposing that the higher rate of the Column 3 demonstrates the effect of (lowest quartile being less than or equal RHC payment to be the first 30 days of the use of updated wage data and BNAF to 3.1 percent of RHC days in a SNF/NF hospice care given the results above and phase-out on estimated FY 2016 to the highest quartile being greater than given that MedPAC identified in their payments. We estimate that using the 35.5 percent of RHC days in a SNF/NF) 2008 Report to Congress that the ‘break- updated wage data and BNAF phase-out are anticipated to experience a decrease even’ point of profitability was found to would decrease estimated payments to in payments ranging from 0.5 percent be about three weeks. However, because voluntary (non-profit) and government for the first quartile to 0.7 percent for our analysis found that ‘marginal costs’ hospices by 0.6 percent. Proprietary the third and fourth quartiles. Column continued to decline slightly between (for-profit) hospices are expected to 4 shows the effect of the proposed 50/ days 15–30 and days 31–60 (see figure have a decrease in payments of 0.7 50 Blend of FY 2016 wage index values 5 in section III.B.2 of this preamble), we percent. Column 4 demonstrates the under the old and the new CBSA proposed to begin the lower RHC effects of the proposed 50/50 Blend of delineations. All four quartiles are payment rate on day 61. In addition, we FY 2016 wage index values under the anticipated to experience an increase in proposed to have the ‘‘count of days’’ old and the new CBSA delineations. payments under this proposal with the follow the patient (that is, count the Estimated FY 2016 payments to first and second quartiles anticipated to days relative to the patient’s lifetime voluntary (non-profit), proprietary (for- experience increases of 0.1percent, the length of stay) to mitigate potential high profit) and government hospices are third quartile anticipated to experience rates of live discharge and readmission anticipated to increase by 0.2 percent, an increase of 0.3 percent, and the due to the proposed RHC payment rates 0.3 percent and 0.3 percent, highest quartile to experience an based on the days of care. For hospice respectively. Column 5 shows the increase in payments of 0.4 percent. patients who are discharged and anticipated impacts for the two Column 5 shows the anticipated impact readmitted to hospice within 60 days of proposed RHC rates. Estimated FY 2016 of the proposed RHC rates on hospices that discharge, his/her prior hospice payments are anticipated to increase for by their rates of RHC days in a SNF/NF. days will continue to follow the patient voluntary (non-profit) and government The first and second quartiles are and count toward his/her patient days hospices by 1.2 percent and 0.6 percent anticipated to see an increase in for the receiving hospice upon hospice respectively and to decrease for payments of 0.7 percent and 0.4 percent election. We also considered a longer proprietary (for-profit) hospices by 1.0 respectively. The third and fourth (that is, 90 days) window of time percent. Column 6 shows the estimated quartiles are anticipated to see decreases between a discharge and a subsequent effects of the proposed SIA payment. of 0.1 percent and 0.6 percent hospice election as a basis of Estimated FY 2016 payments are respectively due to the proposed RHC determining which RHC payment rate anticipated to increase for voluntary rates. Column 6 shows the anticipated would be applied based on the days (non-profit) and government hospices effect of the proposed FY 2016 SIA following the beneficiary. However, we by 0.1 percent and decrease for payment on hospices by their rates of proposed the 60 day time period. We proprietary (for-profit) hospices by 0.1 RHC days in a SNF/NF. The second also considered not applying the higher percent. quartile is anticipated to see an increase initial RHC rate (1 through 60 days) to in payments of 0.2 percent. The first and beneficiaries in nursing homes. e. Hospice Base and Percentage of RHC For the SIA payment, we considered Days in a SNF/NF third quartile is expected to experience no change in payments under the FY allowing the first two days of a new Column 3 demonstrates the combined 2016 SIA payment proposal and the hospice election with a unique hospice effects of using the updated wage data highest quartile is anticipated to provider to also be eligible for the SIA and the BNAF phase-out on estimated experience a decrease in FY 2016 payment. The reason for not proposing payments for FY 2016. Estimated payments of 0.2 percent under this to allow the SIA payment to apply to the payments are anticipated to decrease for proposal. first two days of a new hospice election freestanding hospices by 0.7 percent with a unique hospice was outlined in and decrease for HHA/facility-based f. Effects on Other Providers section III.B. In addition, because the hospices by 0.4 percent. Column 4 This proposed rule would only affect SIA payment is required to be shows the effects of the proposed 50/50 Medicare hospices, and therefore has no implemented in a budget neutral Blend of FY 2016 wage index values effect on other provider types. manner in the first year of under the old and new CBSA implementation, per section delineations. Payments are estimated to g. Effects on the Medicare and Medicaid 1814(i)(6)(D)(ii), allowing the first two increase by 0.3 percent for freestanding Programs days of the hospice election with a hospices and by 0.2 percent for HHA/ This proposed rule only affects unique hospice provider to be eligible facility-based hospices. Column 5 shows Medicare hospices, and therefore has no for the SIA payment would result in a the effects of the proposed RHC rates. effect on Medicaid programs. As larger decrease to the RHC rate for all Payments to freestanding hospices are described previously, estimated hospice providers. We estimate that the

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RHC would need to be reduced by 1.26 and most other health care providers VI. Federalism Analysis and percent (rather than the proposed 0.81 and suppliers are small entities by Regulations Text percent). meeting the Small Business Executive Order 13132, Federalism Administration (SBA) definition of a i. Accounting Statement (August 4, 1999) requires an agency to small business (in the service sector, provide federalism summary impact As required by OMB Circular A–4 having revenues of less than $7.5 (available at http:// statement when it promulgates a million to $38.5 million in any 1 year), proposed rule (and subsequent final www.whitehouse.gov/omb/circulars/ or being nonprofit organizations. For rule) that has federalism implications a004/a-4.pdf), in Table 30 below, we purposes of the RFA, we consider all and which imposes substantial direct have prepared an accounting statement hospices as small entities as that term is requirement costs on State and local showing the classification of the used in the RFA. HHS’s practice in governments which are not required by expenditures associated with this interpreting the RFA is to consider statute. We have reviewed this proposed proposed rule. Table 30 provides our effects economically ‘‘significant’’ only rule under these criteria of Executive best estimate of the increase in Medicare if they reach a threshold of 3 to 5 Order 13132, and have determined that payments under the hospice benefit as percent or more of total revenue or total it will not impose substantial direct a result of the changes presented in this costs. As noted above, the combined costs on State or local governments. proposed rule for 3,879 hospices in our effect of the updated wage data and the impact analysis file constructed using BNAF phase-out (¥0.7 percent decrease List of Subjects in 42 CFR Part 418 FY 2014 claims as of December 31, or ¥$120 million) the proposed Health facilities, Hospice care, 2014. implementation of the new OMB CBSA Medicare, Reporting and recordkeeping delineations for FY 2016 hospice wage requirements. TABLE 30—ACCOUNTING STATEMENT: index with a one-year transition (0.2 CLASSIFICATION OF ESTIMATED percent increase or $30 million), the For the reasons set forth in the TRANSFERS, FROM FY 2015 TO FY proposed SIA payment (no estimated preamble, the Centers for Medicare and 2016 aggregate impact on payments), and the Medicaid Services propose to amend 42 CFR chapter IV as set forth below: [In $millions] proposed FY 2016 hospice payment update percentage (1.8 percent increase PART 418—HOSPICE CARE Category Transfers or $290 million) results in an overall increase in estimated hospice payments ■ 1. The authority citation for part 418 FY 2015 Hospice Wage Index and Payment of 1.3 percent, or $200 million, for FY continues to read as follows: Rate Update 2016. Therefore, the Secretary has determined that this proposed rule will Authority: Secs. 1102 and 1871 of the Annualized Monetized $200. not create a significant economic impact Social Security Act (42 U.S.C. 1302 and Transfers. 1395hh). From Whom to Federal Government on a substantial number of small Whom? to Hospices. entities. Subpart G—Payment for Hospice Care In addition, section 1102(b) of the Act requires us to prepare a regulatory ■ 2. Section 418.302 is amended by— j. Conclusion impact analysis if a rule may have a ■ a. Adding paragraphs (b)(1)(i) and (ii). In conclusion, the overall effect of this significant impact on the operations of ■ b. Amending paragraphs (d)(1), (d)(2), proposed rule is an estimated $200 a substantial number of small rural (e) introductory text, (f)(2) and (f)(5)(ii) million increase in Medicare payments hospitals. This analysis must conform to by removing the word ‘‘intermediary’’ to hospices. The $200 million increase the provisions of section 604 of the and adding in its place the words in estimated payments for FY 2016 RFA. For purposes of section 1102(b) of ‘‘Medicare Administrative Contractor’’. reflects the distributional effects of the the Act, we define a small rural hospital ■ c. Revising paragraph (e)(1). 1.8 percent proposed FY 2016 hospice as a hospital that is located outside of The revisions and additions read as payment update percentage ($290 a metropolitan statistical area and has follows: million increase), the use of updated fewer than 100 beds. This proposed rule wage index data and the phase-out of only affects hospices. Therefore, the § 418.302 Payment procedures for hospice the wage index budget neutrality Secretary has determined that this care. adjustment factor (¥0.7 percent/$120 proposed rule would not have a * * * * * million decrease) and the proposed significant impact on the operations of (b) * * * implementation of the new OMB CBSA a substantial number of small rural (1) * * * delineations for FY 2016 hospice wage hospitals. (i) Service intensity add-on. Except as index with a one-year transition (0.2 provided in paragraph (b)(1)(ii) of this 3. Unfunded Mandates Reform Act percent/$30 million increase). The section, routine home care days that Analysis proposed SIA payment does not result occur during the last 7 days of a hospice in aggregate changes to estimate hospice Section 202 of the Unfunded election ending with a patient payments for FY 2016 as this proposal Mandates Reform Act of 1995 also discharged as ‘‘expired’’ are eligible for would be implemented in a budget requires that agencies assess anticipated a service intensity add-on payment. neutral manner through an overall costs and benefits before issuing any Such payment must be equal to the reduction to the RHC payment rate for rule whose mandates require spending continuous home care hourly payment all hospices. in any 1 year of $100 million in 1995 rate, as described in paragraph (e)(4) of dollars, updated annually for inflation. this section, multiplied by the amount 2. Regulatory Flexibility Act Analysis In 2015, that threshold is approximately of direct patient care provided by a RN The RFA requires agencies to analyze $144 million. This proposed rule is not and/or social worker, up to 4 hours total options for regulatory relief of small anticipated to have an effect on State, per day. businesses if a rule has a significant local, or tribal governments, in the (ii) Routine home care days provided impact on a substantial number of small aggregate, or on the private sector of to patients residing in a skilled nursing entities. The great majority of hospitals $144 million or more. facility (SNF) or a long-term care

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nursing facility (NF) are not eligible for (2) For fiscal year 2014 and determining the number of Medicare the service intensity add-on payment. subsequent fiscal years, per section beneficiaries for a given cap year * * * * * 1814(i)(5)(A)(i) of the Act, in the case of described in paragraphs (b) and (c) of (e) * * * a Medicare-certified hospice that does this section. (1) Payment is made to the hospice for not submit hospice quality data, as (a) Cap amount. The cap amount was each day during which the beneficiary specified by the Secretary, the payment set at $6,500 in 1983 and is updated is eligible and under the care of the rates are equal to the rates for the using one of two methodologies hospice, regardless of the amount of previous fiscal year increased by the described in paragraphs (a)(1) and (2) of services furnished on any given day applicable hospice payment update this section. (except as set out in paragraph (b)(1)(i) percentage increase, minus 2 percentage of this section). points. Any reduction of the percentage (1) For accounting years that end on or before September 30, 2016 and end * * * * * change will apply only to the fiscal year ■ 3. Section 418.306 is amended by involved and will not be taken into on or after October 1, 2025, the cap revising the section heading and account in computing the payment amount is adjusted for inflation by using paragraphs (a), (b), and (c) to read as amounts for a subsequent fiscal year. the percentage change in the medical follows: (c) Adjustment for wage differences. care expenditure category of the Each hospice’s labor market is Consumer Price Index (CPI) for urban § 418.306 Annual update of the payment determined based on definitions of consumers that is published by the rates and adjustment for area wage Metropolitan Statistical Areas (MSAs) Bureau of Labor Statistics. This differences. issued by OMB. CMS will issue adjustment is made using the change in (a) Applicability. CMS establishes annually, in the Federal Register, a the CPI from March 1984 to the fifth payment rates for each of the categories hospice wage index based on the most month of the cap year. of hospice care described in current available CMS hospital wage (2) For accounting years that end after § 418.302(b). The rates are established data, including changes to the definition September 30, 2016, and before October using the methodology described in of MSAs. The urban and rural area 1, 2025, the cap amount is the cap section 1814(i)(1)(C) of the Act and in geographic classifications are defined in amount for the preceding accounting accordance with section 1814(i)(6)(D) of § 412.64(b)(1)(ii)(A) through (C) of this year updated by the percentage update the Act. chapter. The payment rates established (b) Annual update of the payment to payment rates for hospice care for by CMS are adjusted by the Medicare services furnished during the fiscal year rates. The payment rates for routine contractor to reflect local differences in home care and other services included beginning on the October 1 preceding wages according to the revised wage the beginning of the accounting year as in hospice care are the payment rates in data. effect under this paragraph during the determined pursuant to section previous fiscal year increased by the * * * * * 1814(i)(1)(C) of the Act (including the application of any productivity or other hospice payment update percentage § 418.308 [Amended] adjustments to the hospice percentage increase (as defined in ■ 4. Section 418.308(c) is amended by update). sections1814(i)(1)(C) of the Act), removing the phrase ‘‘(that is, by March applicable to discharges occurring in the 31st)’’. * * * * * fiscal year. ■ 5. Section 418.309 is amended by Dated: April 23, 2015. (1) For fiscal year 2014 and revising the introductory text and Andrew M. Slavitt, subsequent fiscal years, per section paragraph (a) to read as follows: 1814(i)(5)(A)(i) of the Act, in the case of Acting Administrator, Centers for Medicare & Medicaid Services. a Medicare-certified hospice that § 418.309 Hospice aggregate cap. submits hospice quality data, as A hospice’s aggregate cap is Approved: April 27, 2015. specified by the Secretary, the payment calculated by multiplying the adjusted Sylvia M. Burwell, rates are equal to the rates for the cap amount (determined in paragraph Secretary, Department of Health and Human previous fiscal year increased by the (a) of this section) by the number of Services. applicable hospice payment update Medicare beneficiaries, as determined [FR Doc. 2015–10422 Filed 4–30–15; 4:15 pm] percentage increase. by one of two methodologies for BILLING CODE 4120–01–P

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