Thursday, August 4, 2005 Part IV Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Part 418 Medicare Program; Hospice Wage Index for Fiscal Year 2006; Final Rule VerDate jul<14>2003 15:36 Aug 03, 2005 Jkt 205001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\04AUR3.SGM 04AUR3 45130 Federal Register / Vol. 70, No. 149 / Thursday, August 4, 2005 / Rules and Regulations DEPARTMENT OF HEALTH AND 2. Medicare Payment for Hospice Care adjustment factor. Budget neutrality HUMAN SERVICES Our regulations at 42 CFR part 418 means that, in a given year, estimated establish eligibility requirements, aggregate payments for Medicare Centers for Medicare & Medicaid payment standards and procedures, hospice services using the updated wage Services define covered services, and delineate index values will equal estimated the conditions a hospice must meet to payments that would have been made 42 CFR Part 418 be approved for participation in the for these services if the 1983 wage index [CMS–1286–F] Medicare program. Part 418 subpart G values had remained in effect. To achieve this budget neutrality, the raw provides for payment in one of four RIN 0938–AN89 wage index is multiplied by a budget prospectively-determined rate categories neutrality adjustment factor. The budget (routine home care, continuous home Medicare Program; Hospice Wage neutrality adjustment factor is care, inpatient respite care, and general Index for Fiscal Year 2006 calculated by comparing what we would inpatient care) to hospices based on have paid using current rates and the AGENCY: Centers for Medicare & each day a qualified Medicare 1983 wage index to what would be paid Medicaid Services (CMS), HHS. beneficiary is under a hospice election. using current rates and new wage index. ACTION: Final rule. B. Hospice Wage Index The budget neutrality adjustment factor SUMMARY: This final rule sets forth the The hospice wage index is used to is computed and applied annually. For hospice wage index for fiscal year 2006 adjust payment rates for hospice the FY 2006 hospice wage index, the FY and identifies the revised labor market agencies under the Medicare program to 2005 hospice payment rate was used in and metropolitan core based statistical reflect local differences in area wage the budget neutrality adjustment factor areas. In addition, this final rule levels. The original hospice wage index calculation. Raw wage index values below 0.8 are responds to public comments and was based on the 1981 Bureau of Labor adjusted by the greater of: (1) The implements provisions of sections 408 Statistics hospital data and had not been hospice budget neutrality adjustment and 946 of the Medicare Prescription updated since 1983. In 1994, because of factor; or (2) the hospice wage index Drug, Improvement, and Modernization disparity in wages from one floor (a 15 percent increase) subject to Act of 2003. geographical location to another, a a maximum wage index value of 0.8. For DATES: These regulations are effective committee was formulated to negotiate example, County A has a prefloor, pre- on October 1, 2005. a wage index methodology that could be reclassified hospital wage index (raw FOR FURTHER INFORMATION CONTACT: accepted by the industry and the wage index value) of 0.4000. We would Terri Deutsch, (410) 786–9462. government. This committee, perform the following calculations using functioning under a process established SUPPLEMENTARY INFORMATION: the budget neutrality factor and the by the Negotiated Rulemaking Act of hospice wage index floor to determine I. Background 1990, was comprised of national County A’s hospice wage index: (Raw hospice associations; rural, urban, large, A. General wage index value below 0.8 × budget and small hospices; multisite hospices; neutrality adjustment factor) = 0.4000 1. Hospice Care consumer groups; and a government (1.060988) = 0.4244 (Raw wage index Hospice care is an approach to representative. On April 13, 1995, the value below 0.8 × hospice wage index treatment that recognizes that the Hospice Wage Index Negotiated floor) = 0.400 (1.15) = 0.4600. Based on impending death of an individual Rulemaking Committee signed an these calculations, County A’s hospice warrants a change in the focus from agreement for the methodology to be wage index would be 0.4600. curative care to palliative care for relief used for updating the hospice wage of pain and for symptom management. index. C. Hospice Provisions of the Medicare The goal of hospice care is to help In the August 8, 1997 Federal Prescription Drug, Improvement, and terminally ill individuals continue life Register (62 FR 42860), we published a Modernization Act of 2003 with minimal disruption to normal final rule implementing a new On December 8, 2003, the Congress activities while remaining primarily in methodology for calculating the hospice enacted the Medicare Prescription Drug, the home environment. A hospice uses wage index based on the Improvement, and Modernization Act an interdisciplinary approach to deliver recommendations of the negotiated (MMA) of 2003 (Pub. L. 108–173). This medical, social, psychological, rulemaking committee. The committee legislation provided for the following emotional, and spiritual services statement was included in the appendix provisions affecting hospice services: through use of a broad spectrum of of that final rule (62 FR 42883). • Section 408, Recognition of professional and other caregivers, with The annual update to the hospice Attending Nurse Practitioners as the goal of making the individual as wage index is published in the Federal Attending Physicians to Serve Hospice physically and emotionally comfortable Register and is based on the most Patients. as possible. Counseling services and current available hospital wage data, as • Section 512, Coverage of Hospice inpatient respite services are available well as any changes by the Office of Consultation Services. to the family of the hospice patient. Management and Budget (OMB) to the • Section 946, Authorizing Use of Hospice programs consider both the definitions of Metropolitan Statistical Arrangements to Provide Core Hospice patient and the family as a unit of care. Areas (MSAs). Raw wage index values Services in Certain Circumstances. Section 1861(dd) of the Social (inpatient hospital pre-floor and pre- Section 408 of the MMA amended Security Act (the Act) provides for reclassified wage index values) as sections 1861(dd)(3)(B) and 1814(a)(7) coverage of hospice care for terminally described in the August 8, 1997 hospice of the Act to add nurse practitioners ill Medicare beneficiaries who elect to wage index final rule are subject to (NPs) to the definition of an attending receive care from a participating either a budget neutrality adjustment or physician for beneficiaries who have hospice. Section 1814(i) of the Act application of the wage index floor. Raw elected the hospice benefit. In other provides payment for Medicare wage index values of 0.8 or greater are words, if a beneficiary’s primary care participating hospices. adjusted by the budget neutrality provider before the determination of the VerDate jul<14>2003 15:36 Aug 03, 2005 Jkt 205001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR3.SGM 04AUR3 Federal Register / Vol. 70, No. 149 / Thursday, August 4, 2005 / Rules and Regulations 45131 terminal illness and election of the definitions of geographical statistical to define labor market areas. Section hospice benefit is an NP, the NP can areas, and proposed implementation of 1814(i)(2)(D) of the Act requires remain as the attending physician, if the several provisions of the MMA. In this Medicare to pay for hospice services beneficiary chooses, after a hospice section of the final rule, we will discuss based on the geographic location where election. If the beneficiary does not have these proposals, the public comments the service is furnished. The wage index an attending physician or NP at the time received, and our responses. We note value used is based upon the location of of the terminal diagnosis, the receipt of approximately 80 timely items the beneficiary’s home for routine home beneficiary may choose to designate of correspondence that raised 8 issues. care and continuous home care and the either a physician or an NP as his or her location of the hospice agency for A. Changes to the Hospice Wage Index attending physician when electing the general inpatient and respite care. hospice benefit. Section 408 of the for FY 2006 In the April 29, 2005 proposed rule, MMA was implemented through an 1. Revised OMB Definition for we addressed the new OMB definitions administrative issuance (Change Geographical Statistical Areas and their application to the hospice Request (CR) 3226, Transmittals 22 and wage index. Since our regulations As required by § 418.306(c), each 304, September 24, 2004). require the use of the acute care hospital hospice’s labor market is established Section 512 of the MMA provides for inpatient prospective payment system using the most current hospital wage a one-time evaluation and consultation (IPPS) wage data as the basis for data available, including any changes to to Medicare beneficiaries who have determining the hospice wage index, we the MSA definitions issued by OMB. In been determined to have a 6-month provided a summary of the revised the September 4, 1996 hospice wage prognosis if the disease runs its normal geographical statistical areas adopted in index proposed rule (61 FR 46579), we course, and who require the expertise of the FY 2005 IPPS final rule. (For a more explained that the MSA definitions the medical director or physician detailed discussion of the changes in the were issued by OMB on December 28, employed by a hospice in order to be hospital wage index based on the new 1992, based on the 1990 census, and able to make end-of-life decisions.