[Federal Register Volume 76, Number 89 (Monday, May 9, 2011)]
[Proposed Rules]
[Pages 26806-26851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10689]
[[Page 26805]]
Vol. 76
Monday,
No. 89
May 9, 2011
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 418
Medicare Program; Hospice Wage Index for Fiscal Year 2012; Proposed
Rule
Federal Register / Vol. 76 , No. 89 / Monday, May 9, 2011 / Proposed
Rules
[[Page 26806]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1355-P]
RIN 0938-AQ31
Medicare Program; Hospice Wage Index for Fiscal Year 2012
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would set forth the hospice wage index for
fiscal year 2012 and continue the phase-out of the wage index budget
neutrality adjustment factor (BNAF), with an additional 15 percent BNAF
reduction, for a total BNAF reduction in FY 2012 of 40 percent. The
BNAF phase-out will continue with successive 15 percent reductions from
FY 2013 through FY 2016. This proposed rule would change the hospice
aggregate cap calculation methodology. This proposed rule also would
revise the hospice requirement for a face-to-face encounter for
recertification of a patient's terminal illness. Finally, this proposed
rule would begin implementation of a hospice quality reporting program.
DATES: Comment Date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
eastern time on July 8, 2011.
ADDRESSES: In commenting, please refer to file code CMS-1355-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions under
the ``More Search Options'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1355-P, P.O. Box 8012,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received before
the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1355-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses: a. For delivery in Washington,
DC--Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Room 445-G, Hubert H. Humphrey Building, 200
Independence Avenue, SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is
not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, please
call telephone number (410) 786 9994 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: For information regarding ``Quality
Reporting for Hospices'' and ``Collection of Information Requirements''
sections, please contact Robin Dowell at (410) 786-0060. For
information regarding ``Hospice Wage Index'' and ``Hospice Face-to-Face
Requirement'' sections, please contact Anjana Patel at (410) 786-2120.
For information regarding all other sections, please contact Katie
Lucas at (410) 786-7723.
SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments
from the public on all issues set forth in this rule to assist us in
fully considering issues and developing policies. You can assist us by
referencing the file code CMS-1355-P and the specific ``issue
identifier'' that precedes the section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
I. Background
A. General
1. Hospice Care
2. Medicare Payment for Hospice Care
B. Hospice Wage Index
1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified, Hospital
Wage Index)
2. Changes to Core-Based Statistical Area (CBSA) Designations
3. Definition of Rural and Urban Areas
4. Areas Without Hospital Wage Data
5. CBSA Nomenclature Changes
6. Wage Data for Multi-Campus Hospitals
7. Hospice Payment Rates
II. Summary of Cap Comments Solicited in the FY 2011 Hospice Wage
Index Notice With Comment Period
III. Provisions of the Proposed Rule
A. FY 2012 Hospice Wage Index
1. Background
2. Areas Without Hospital Wage Data
3. FY 2012 Wage Index With an Additional 15 Percent Reduced
Budget Neutrality Adjustment Factor (BNAF)
4. Effects of Phasing Out the BNAF
B. Aggregate Cap Calculation Methodology
1. Cap Determinations for Cap Years Ending On or Before October
31, 2011
2. Cap Determinations for Cap Years Ending On or After October
31, 2012
3. Patient-by-Patient Proportional Methodology
4. Streamlined Methodology
5. Changing Methodologies
6. Other Issues
7. Changes to Regulatory Text
C. Hospice Face-to-Face Requirement
D. Technical Proposals and Clarification
1. Hospice Local Coverage Determinations
2. Definition of Hospice Employee
3. Timeframe for Face-to-Face Encounters
4. Hospice Aide and Homemaker Services
E. Quality Reporting for Hospices
1. Background and Statutory Authority
2. Quality Measures for Hospice Quality Reporting Program for
Payment Year FY 2014
a. Considerations in the Selection of the Proposed Quality
Measures
[[Page 26807]]
b. Proposed Quality Measures for the Quality Reporting Program
for Hospices
c. Proposed Timeline for Data Collection Under the Quality
Reporting Program for Hospices
d. Data Submission Requirements
3. Public Availability of Data Submitted
4. Additional Measures Under Consideration
IV. Updates on Issues Not Proposed for Rulemaking for FY 2012
Rulemaking
A. Update on Hospice Payment Reform and Value Based Purchasing
B. Update on the Redesigned Provider Statistical & Reimbursement
Report
(PS&R)
V. Collection of Information Requirements
A. Structural Measure: Participation in Quality Assessment
Performance Improvement Program That Includes at Least Three
Indicators Related to Patient Care
B. NQF Measure 0209: Percentage of Patients Who Were
Uncomfortable Because of Pain on Admission to Hospice Whose Pain Was
Brought Under Control Within 48 Hours
VI. Response to Comments
VII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impact
4. Detailed Economic Analysis
a. Effects on Hospices
b. Hospice Size
c. Geographic Location
d. Type of Ownership
e. Hospice Base
f. Effects on Other Providers
g. Effects on the Medicare and Medicaid Programs
h. Accounting Statement
i. Conclusion
B. Regulatory Flexibility Act Analysis
C. Unfunded Mandates Reform Act Analysis
VIII. Federalism Analysis
Addendum A: FY 2012 Wage Index for Urban Areas
Addendum B: FY 2012 Wage Index for Rural Areas
I. Background
A. General
1. Hospice Care
Hospice care is an approach to treatment that recognizes that the
impending death of an individual warrants a change in the focus from
curative to palliative care, for relief of pain and for symptom
management. The goal of hospice care is to help terminally ill
individuals continue life with minimal disruption to normal activities
while remaining primarily in the home environment. A hospice uses an
interdisciplinary approach to deliver medical, nursing, social,
psychological, emotional, and spiritual services through use of a broad
spectrum of professional and other caregivers, with the goal of making
the individual as physically and emotionally comfortable as possible.
Counseling services and inpatient respite services are available to the
family of the hospice patient. Hospice programs consider both the
patient and the family as a unit of care.
Section 1861(dd) of the Social Security Act (the Act) provides for
coverage of hospice care for terminally ill Medicare beneficiaries who
elect to receive care from a participating hospice. Section 1814(i) of
the Act provides payment for Medicare participating hospices.
2. Medicare Payment for Hospice Care
Our regulations at 42 CFR part 418 establish eligibility
requirements, payment standards and procedures, define covered
services, and delineate the conditions a hospice must meet to be
approved for participation in the Medicare program. Part 418 subpart G
provides for payment in one of four prospectively-determined rate
categories (routine home care, continuous home care, inpatient respite
care, and general inpatient care) to hospices based on each day a
qualified Medicare beneficiary is under a hospice election.
B. Hospice Wage Index
The hospice wage index is used to adjust payment rates for hospice
agencies under the Medicare program to reflect local differences in
area wage levels. Our regulations at Sec. 418.306(c) require each
hospice's labor market to be established using the most current
hospital wage data available, including any changes by the Office of
Management and Budget (OMB) to the Metropolitan Statistical Areas
(MSAs) definitions. OMB revised the MSA definitions beginning in 2003
with new designations called the Core Based Statistical Areas (CBSAs).
For the purposes of the hospice benefit, the term ``MSA-based'' refers
to wage index values and designations based on the previous MSA
designations before 2003. Conversely, the term ``CBSA-based'' refers to
wage index values and designations based on the OMB revised MSA
designations in 2003, which now include CBSAs. In the August 11, 2004
Inpatient Prospective Payment System (IPPS) final rule (69 FR 48916,
49026), revised labor market area definitions were adopted at Sec.
412.64(b), which were effective October 1, 2004 for acute care
hospitals. We also revised the labor market areas for hospices using
the new OMB standards that included CBSAs. In the FY 2006 hospice wage
index final rule (70 FR 45130), we implemented a 1-year transition
policy using a 50/50 blend of the CBSA-based wage index values and the
Metropolitan Statistical Area (MSA)-based wage index values for FY
2006. The one-year transition policy ended on September 30, 2006. For
fiscal years 2007 and beyond, we use CBSAs.
The original hospice wage index was based on the 1981 Bureau of
Labor Statistics hospital data and had not been updated since 1983. In
1994, because of disparity in wages from one geographical location to
another, a committee was formulated to negotiate a wage index
methodology that could be accepted by the industry and the government.
This committee, functioning under a process established by the
Negotiated Rulemaking Act of 1990, comprised representatives from
national hospice associations; rural, urban, large and small hospices
and multi-site hospices; consumer groups; and a government
representative. On April 13, 1995, the Hospice Wage Index Negotiated
Rulemaking Committee (the Committee) signed an agreement for the
methodology to be used for updating the hospice wage index.
In the August 8, 1997 Federal Register (62 FR 42860), we published
a final rule implementing a new methodology for calculating the hospice
wage index based on the recommendations of the negotiated rulemaking
committee. The Committee's statement was included in the appendix of
that final rule (62 FR 42883).
The reduction in overall Medicare payments if a new wage index were
adopted was noted in the November 29, 1995 notice transmitting the
recommendations of the Committee (60 FR 61264). Therefore, the
Committee also decided that for each year in updating the hospice wage
index, aggregate Medicare payments to hospices would remain budget
neutral to payments as if the 1983 wage index had been used.
As suggested by the Committee, ``budget neutrality'' would mean
that, in a given year, estimated aggregate payments for Medicare
hospice services using the updated hospice values would equal estimated
payments that would have been made for these services if the 1983
hospice wage index values had remained in effect. Although payments to
individual hospice programs would change each year, the total payments
each year to hospices would not be affected by using the updated
hospice wage index because total payments would be budget neutral as if
the 1983 wage index had been used. To implement this policy, a Budget
Neutrality Adjustment Factor (BNAF) would be computed and applied
annually to the pre-floor, pre-reclassified hospital wage index when
deriving the hospice wage index.
[[Page 26808]]
The BNAF is calculated by computing estimated payments using the
most recent, completed year of hospice claims data. The units (days or
hours) from those claims are multiplied by the updated hospice payment
rates to calculate estimated payments. For the FY 2011 Hospice Wage
Index Notice with Comment Period, that meant estimating payments for FY
2011 using FY 2009 hospice claims data, and applying the FY 2011
hospice payment rates (updating the FY 2010 rates by the FY 2011
inpatient hospital market basket update). The FY 2011 hospice wage
index values are then applied to the labor portion of the payment rates
only. The procedure is repeated using the same claims data and payment
rates, but using the 1983 BLS-based wage index instead of the updated
raw pre-floor, pre-reclassified hospital wage index (note that both
wage indices include their respective floor adjustments). The total
payments are then compared, and the adjustment required to make total
payments equal is computed; that adjustment factor is the BNAF.
The FY 2010 Hospice Wage Index Final Rule (74 FR 39384) finalized a
provision for a 7-year phase-out of the BNAF, which is applied to the
wage index values. The BNAF was reduced by 10 percent in FY 2010, an
additional 15 percent in FY 2011, and will be reduced by an additional
15 percent in each of the next 5 years, for complete phase out in 2016.
The hospice wage index is updated annually. Our most recent annual
hospice wage index Notice with Comment Period, published in the Federal
Register (75 FR 42944) on July 22, 2010, set forth updates to the
hospice wage index for FY 2011. As noted previously, that update
included the second year of a 7-year phase-out of the BNAF, which was
applied to the wage index values. The BNAF was reduced by 10 percent in
FY 2010 and by an additional 15 percent in 2011, for a total FY 2011
reduction of 25 percent.
1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified Hospital Wage
Index)
As described in the August 8, 1997 hospice wage index final rule
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index
is used as the raw wage index for the hospice benefit. These raw wage
index values are then subject to either a budget neutrality adjustment
or application of the hospice floor to compute the hospice wage index
used to determine payments to hospices.
Pre-floor, pre-reclassified hospital wage index values of 0.8 or
greater are currently adjusted by a reduced BNAF. As noted above, for
FY 2011, the BNAF was reduced by a cumulative total of 25 percent. Pre-
floor, pre-reclassified hospital wage index values below 0.8 are
adjusted by the greater of: (1) The hospice BNAF, reduced by a total of
25 percent for FY 2011; or (2) the hospice floor (which is a 15 percent
increase) subject to a maximum wage index value of 0.8. For example, if
in FY 2011, County A had a pre-floor, pre-reclassified hospital wage
index (raw wage index) value of 0.3994, we would perform the following
calculations using the budget neutrality factor (which for this example
is an unreduced BNAF of 0.060562, less 25 percent, or 0.045422) and the
hospice floor to determine County A's hospice wage index:
Pre-floor, pre-reclassified hospital wage index value below 0.8
multiplied by the 25 percent reduced BNAF: (0.3994 x 1.045422 =
0.4175).
Pre-floor, pre-reclassified hospital wage index value below 0.8
multiplied by the hospice floor: (0.3994 x 1.15 = 0.4593).
Based on these calculations, County A's hospice wage index would be
0.4593.
The BNAF has been computed and applied annually, in full or in
reduced form, to the labor portion of the hospice payment. Currently,
the labor portion of the payment rates is as follows: for Routine Home
Care, 68.71 percent; for Continuous Home Care, 68.71 percent; for
General Inpatient Care, 64.01 percent; and for Respite Care, 54.13
percent. The non-labor portion is equal to 100 percent minus the labor
portion for each level of care. Therefore the non-labor portion of the
payment rates is as follows: for Routine Home Care, 31.29 percent; for
Continuous Home Care, 31.29 percent; for General Inpatient Care, 35.99
percent; and for Respite Care, 45.87 percent.
2. Changes to Core Based Statistical Area (CBSA) Designations
The annual update to the hospice wage index is published in the
Federal Register and is based on the most current available hospital
wage data, as well as any changes by the OMB to the definitions of
MSAs, which now include CBSA designations. The August 4, 2005 final
rule (70 FR 45130) set forth the adoption of the changes discussed in
the OMB Bulletin No. 03-04 (June 6, 2003), which announced revised
definitions for Micropolitan Statistical Areas and the creation of MSAs
and Combined Statistical Areas. In adopting the OMB CBSA geographic
designations, we provided for a 1-year transition with a blended
hospice wage index for all hospices for FY 2006. For FY 2006, the
hospice wage index consisted of a blend of 50 percent of the FY 2006
MSA-based hospice wage index and 50 percent of the FY 2006 CBSA based
hospice wage index. Subsequent fiscal years have used the full CBSA-
based hospice wage index.
3. Definition of Rural and Urban Areas
Each hospice's labor market is determined based on definitions of
MSAs issued by OMB. In general, an urban area is defined as an MSA or
New England County Metropolitan Area (NECMA), as defined by OMB. Under
Sec. 412.64(b)(1)(ii)(C), a rural area is defined as any area outside
of the urban area. The urban and rural area geographic classifications
are defined in Sec. 412.64(b)(1)(ii)(A) through (C), and have been
used for the Medicare hospice benefit since implementation.
When the raw pre-floor, pre-reclassified hospital wage index was
adopted for use in deriving the hospice wage index, it was decided not
to take into account IPPS geographic reclassifications. This policy of
following OMB designations of rural or urban, rather than considering
some Counties to be ``deemed'' urban, is consistent with our policy of
not taking into account IPPS geographic reclassifications in
determining payments under the hospice wage index.
4. Areas Without Hospital Wage Data
When adopting OMB's new labor market designations in FY 2006, we
identified some geographic areas where there were no hospitals, and
thus, no hospital wage index data on which to base the calculation of
the hospice wage index. Beginning in FY 2006, we adopted a policy to
use the FY 2005 pre-floor, pre-reclassified hospital wage index value
for rural areas when no hospital wage data were available. We also
adopted the policy that for urban labor markets without a hospital from
which a hospital wage index data could be derived, all of the CBSAs
within the State would be used to calculate a statewide urban average
pre-floor, pre-reclassified hospital wage index value to use as a
reasonable proxy for these areas. Consequently, in subsequent fiscal
years, we applied the average pre-floor, pre-reclassified hospital wage
index data from all urban areas in that state, to urban areas without a
hospital. This year the only such CBSA is 25980, Hinesville-Fort
Stewart, Georgia.
Under the CBSA labor market areas, there are no hospitals in rural
locations in Massachusetts and Puerto Rico. Since there was no rural
proxy for more recent
[[Page 26809]]
rural data within those areas, in the FY 2006 hospice wage index
proposed rule (70 FR 22394, 22398), we proposed applying the FY 2005
pre-floor, pre-reclassified hospital wage index value to rural areas
where no hospital wage data were available. In the FY 2006 final rule
and in the FY 2007 update notice, we applied the FY 2005 pre-floor,
pre-reclassified hospital wage index data for areas lacking hospital
wage data in both FY 2006 and FY 2007 for rural Massachusetts and rural
Puerto Rico.
In the FY 2008 final rule (72 FR 50214, 50217) we considered
alternatives to our methodology to update the pre-floor, pre-
reclassified hospital wage index for rural areas without hospital wage
data. We indicated that we believed that the best imputed proxy for
rural areas, would: (1) Use pre-floor, pre-reclassified hospital data;
(2) use the most local data available to impute a rural pre-floor, pre-
reclassified hospital wage index; (3) be easy to evaluate; and, (4) be
easy to update from year-to-year.
Therefore, in FY 2008 through FY 2011, in cases where there was a
rural area without rural hospital wage data, we used the average pre-
floor, pre-reclassified hospital wage index data from all contiguous
CBSAs to represent a reasonable proxy for the rural area. This approach
does not use rural data; however, the approach, which uses pre-floor,
pre-reclassified hospital wage data, is easy to evaluate, is easy to
update from year-to-year, and uses the most local data available. In
the FY 2008 rule (72 FR at 50217), we noted that in determining an
imputed rural pre-floor, pre-reclassified hospital wage index, we
interpret the term ``contiguous'' to mean sharing a border. For
example, in the case of Massachusetts, the entire rural area consists
of Dukes and Nantucket counties. We determined that the borders of
Dukes and Nantucket counties are contiguous with Barnstable and Bristol
counties. Under the adopted methodology, the pre-floor, pre-
reclassified hospital wage index values for the counties of Barnstable
(CBSA 12700, Barnstable Town, MA) and Bristol (CBSA 39300, Providence-
New Bedford-Fall River, RI-MA) would be averaged resulting in an
imputed pre-floor, pre-reclassified rural hospital wage index for FY
2008. We noted in the FY 2008 final hospice wage index rule that while
we believe that this policy could be readily applied to other rural
areas that lack hospital wage data (possibly due to hospitals
converting to a different provider type, such as a Critical Access
Hospital, that does not submit the appropriate wage data), if a similar
situation arose in the future, we would re-examine this policy.
We also noted that we do not believe that this policy would be
appropriate for Puerto Rico, as there are sufficient economic
differences between hospitals in the United States and those in Puerto
Rico, including the payment of hospitals in Puerto Rico using blended
Federal/Commonwealth-specific rates. Therefore, we believe that a
separate and distinct policy is necessary for Puerto Rico. Any
alternative methodology for imputing a pre-floor, pre-reclassified
hospital wage index for rural Puerto Rico would need to take into
account the economic differences between hospitals in the United States
and those in Puerto Rico. Our policy of imputing a rural pre-floor,
pre-reclassified hospital wage index based on the pre-floor, pre-
reclassified hospital wage index (or indices) of CBSAs contiguous to
the rural area in question does not recognize the unique circumstances
of Puerto Rico. While we have not yet identified an alternative
methodology for imputing a pre-floor, pre-reclassified hospital wage
index for rural Puerto Rico, we will continue to evaluate the
feasibility of using existing hospital wage data and, possibly, wage
data from other sources. For FY 2008 through FY 2011, we have used the
most recent pre-floor, pre-reclassified hospital wage index available
for Puerto Rico, which is 0.4047.
5. CBSA Nomenclature Changes
The OMB regularly publishes a bulletin that updates the titles of
certain CBSAs. In the FY 2008 Final Rule (72 FR 50218), we noted that
the FY 2008 rule and all subsequent hospice wage index rules and
notices would incorporate CBSA changes from the most recent OMB
bulletins. The OMB bulletins may be accessed at http://www.whitehouse.gov/omb/bulletins/index.html.
6. Wage Data From Multi-Campus Hospitals
Historically, under the Medicare hospice benefit, we have
established hospice wage index values calculated from the raw pre-
floor, pre-reclassified hospital wage data (also called the IPPS wage
index) without taking into account geographic reclassification under
sections 1886(d)(8) and (d)(10) of the Act. The wage adjustment
established under the Medicare hospice benefit is based on the location
where services are furnished without any reclassification.
For FY 2010, the data collected from cost reports submitted by
hospitals for cost reporting periods beginning during FY 2005 were used
to compute the 2009 raw pre-floor, pre-reclassified hospital wage index
data, without taking into account geographic reclassification under
sections 1886(d)(8) and (d)(10) of the Act. This 2009 raw pre-floor,
pre-reclassified hospital wage index was used to derive the applicable
wage index values for the hospice wage index because these data (FY
2005) were the most recent complete cost data.
Beginning in FY 2008, the IPPS apportioned the wage data for multi-
campus hospitals located in different labor market areas (CBSAs) to
each CBSA where the campuses were located (see the FY 2008 IPPS final
rule with comment period (72 FR 47317 through 47320)). We are
continuing to use the raw pre-floor, pre-reclassified hospital wage
data as a basis to determine the hospice wage index values because
hospitals and hospices both compete in the same labor markets, and
therefore, experience similar wage-related costs. We note that the use
of raw pre-floor, pre-reclassified hospital (IPPS) wage data used to
derive the FY 2012 hospice wage index values, reflects the application
of our policy to use those data to establish the hospice wage index.
The FY 2012 hospice wage index values presented in this proposed rule
were computed consistent with our raw pre-floor, pre-reclassified
hospital (IPPS) wage index policy (that is, our historical policy of
not taking into account IPPS geographic reclassifications in
determining payments for hospice). As implemented in the August 8, 2008
FY 2009 Hospice Wage Index final rule, for the FY 2009 Medicare hospice
benefit, the hospice wage index was computed from IPPS wage data
(submitted by hospitals for cost reporting periods beginning in FY 2004
(as was the FY 2008 IPPS wage index)), which allocated salaries and
hours to the campuses of two multi-campus hospitals with campuses that
are located in different labor areas, one in Massachusetts and another
in Illinois. Thus, in FY 2009 and subsequent fiscal years, hospice wage
index values for the following CBSAs have been affected by this policy:
Boston-Quincy, MA (CBSA 14484), Providence-New Bedford-Falls River, RI-
MA (CBSA 39300), Chicago-Naperville-Joliet, IL (CBSA 16974), and Lake
County-Kenosha County, IL-WI (CBSA 29404).
7. Hospice Payment Rates
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended
section 1814(i)(1)(C)(ii) of the Act to establish updates to hospice
rates for FYs 1998 through 2002. Hospice rates were to be updated by a
factor equal to the market basket index, minus 1
[[Page 26810]]
percentage point. Payment rates for FYs since 2002 have been updated
according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states
that the update to the payment rates for subsequent fiscal years will
be the market basket percentage for the fiscal year. It has been
longstanding practice to use the inpatient hospital market basket as a
proxy for a hospice market basket.
Historically, the rate update has been published through a separate
administrative instruction issued annually in the summer to provide
adequate time to implement system change requirements. Hospices
determine their payments by applying the hospice wage index in this
proposed rule to the labor portion of the published hospice rates.
Section 3401(g) of the Affordable Care Act of 2010 requires that, in 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) be annually
reduced by changes in economy-wide productivity as set out at section
1886(b)(3)(B)(xi)(II) of the Act. Additionally, Section 3401(g) of the
Affordable Care Act requires that in FY 2013 through FY 2019, the
market basket percentage update under the hospice payment system be
reduced by an additional 0.3 percentage point (although the potential
reduction is subject to suspension under conditions set out under new
section 1814(i)(1)(C)(v) of the Act). Congress also required, in
section 3004(c) of the Affordable Care Act, that hospices begin
submitting quality data, based on measures to be specified by the
Secretary, for FY 2014 and subsequent fiscal years. Beginning in FY
2014, hospices which fail to report quality data will have their market
basket update reduced by 2 percentage points.
II. Summary of Cap Comments Solicited in the FY 2011 Hospice Wage Index
Notice With Comment Period
Section 1814(i)(2)(A) through (C) of the Act establishes a cap on
aggregate payments made to a Medicare hospice provider and prescribes a
basic methodology for calculating the aggregate cap. The aggregate cap
limits the total aggregate payment any individual hospice can receive
in a year. A hospice's ``aggregate cap'' is calculated by multiplying
the number of beneficiaries who have elected hospice care during an
accounting year by a per-beneficiary ``cap amount.'' The Act
established the per-beneficiary cap amount and provides an annual
increase to the cap amount based on the rate of increase in the medical
care expenditures category of the Consumer Price Index. The 2010 per-
beneficiary cap amount was $23,874.98.
A hospice's aggregate cap is compared with the total Medicare
payments made to the hospice during the same accounting year. Any
Medicare payments in excess of the aggregate cap are considered
overpayments and must be returned to Medicare by the hospice.
CMS' contractors calculate each hospice's aggregate cap every year,
and establish an overpayment for any hospice that exceeds the aggregate
cap. For the aggregate cap calculation, regulations at 42 CFR 418.309
define the total number of beneficiaries as the number of individuals
who have elected hospice and have not previously been included in any
cap calculation, reduced to reflect the proportion of hospice care that
was provided in another hospice. These regulations also define the
accounting year, or cap year, as the period from November 1st to
October 31st.
In the FY 2011 Hospice Wage Index Notice with Comment Period, we
noted that there have been some technological advances in our data
systems which we believe might enable us to modernize the aggregate cap
calculation process while providing information facilitating the
ability of hospices to better manage their aggregate cap. We provided
details regarding policy options that we are considering for
modernizing the aggregate cap calculation methodology and solicited
comments on those policy options; we also solicited comments or
suggestions for other possible options/alternatives to modernize the
cap calculation methodology, to be considered in possible future
rulemaking.
In that Notice, we described a policy option that would align the
cap year with the federal fiscal year and policy options we were
considering regarding how to count beneficiaries when computing the
aggregate cap. We also described our plans to redesign the Provider
Statistical and Reimbursement Report (PS&R) to show a beneficiary's
full utilization history, and discussed having a uniform schedule for
mailing cap determination letters.
The policy options we described regarding how to count
beneficiaries when computing the aggregate cap were:
Option 1: In this option, we described several approaches
where we would apply a patient-by-patient proportional methodology to
all hospices' aggregate cap calculations. Under the patient-by-patient
proportional methodology, the number of patients for a given cap year
and hospice would be the patient-by-patient proportional share of each
patient's days in that hospice during the cap year, when considering
the patient's total days of Medicare hospice care in multiple cap years
and multiple hospices. One approach we described would apportion each
patient across the year of election and one additional year, as our
analysis showed that 99.98 percent of patients who died in hospice were
admitted to hospice either in the year that they died, or in the
previous year. We also described an approach where a hospice could
request the Medicare contractor recalculate the hospice's aggregate cap
using longer timeframes.
Option 2: In this option, we described an approach which
would defer across-the-board changes to the aggregate cap calculation
methodology for all hospices until we implement hospice payment reform,
but it would allow individual hospices to request the Medicare
contractor to apply a patient-by-patient proportional methodology to
its aggregate cap calculations.
For more information on future hospice payment reform, please see
section IV.A of this proposed rule. For details on these options or
issues, please see the July 22, 2010 Hospice Wage Index for Fiscal Year
2011 Notice with Comment Period (75 FR 42944). We received 27 public
comments about the aggregate cap, with commenters expressing differing
views on issues surrounding the aggregate cap. We also received several
comments which were outside the scope of the solicitation.
Comment: We received public comments from 27 individuals or groups,
with 1 missing an attachment, for a total of 26 comments.
Two commenters supported Option 1, with apportioning of hospice
beneficiaries across 2 years; one noted that this option covers more
than two 180-day periods, while providing a fixed end date. The other
commenter urged us to move forward with Option 1 while additional data
collection and payment reforms are pending.
More commenters suggested we choose Option 2 than any other
approach. Ten commenters supported Option 2, and suggested that we
defer major changes to the aggregate cap methodology until payment
reform occurs, unless a hospice requests multi-year apportioning. These
commenters were concerned about the burden associated with changing the
aggregate cap methodology now, and preferred that we wait until broader
payment reform to make a change. They noted that the majority of
hospices don't exceed their aggregate cap, and therefore don't want to
change. One commenter
[[Page 26811]]
urged CMS to retain the existing methodology, as creating a
complicated, open-ended apportioning approach would disadvantage most
hospices. This commenter stated that very few hospices have an
aggregate cap liability, and asked that we not create an administrative
burden for the vast majority of hospices that do not exceed the
aggregate cap, but instead direct our aggregate cap changes to the
minority of hospices that have some kind of liability.
Some felt that Option 2 was simpler and would provide flexibility
for those who wanted their aggregate cap calculated using a multi-year
apportionment methodology. The major hospice associations urged CMS to
defer any major across-the-board changes to the cap calculation
methodology until the implementation of hospice payment reform, because
of concerns that any changes to the current methodology would result in
additional cost and burden to hospices. One association also suggested
we fully examine the cap and whether other alternatives would better
address patient needs, suggesting that we address alternatives in the
context of broader payment reform.
While these 10 commenters supported allowing individual hospice
programs the option of requesting a recalculation of their cap
determination using a multi-year apportionment methodology, some were
concerned that this could have implications for hospices that had not
requested a recalculation. A commenter suggested that should CMS re-
open cap determinations for hospices that had not requested a
recalculation, we could potentially harm hospices and ultimately risk
access for patients who had been served by more than one hospice. This
commenter added that CMS should `hold harmless' hospice programs that
had not requested cap recalculation against overpayments that may occur
as the result of another hospice program requesting recalculation of
its cap. This commenter also urged CMS to adopt policies allowing
greater flexibility with respect to repayment plans for those with cap
overages.
In contrast to those supporting Option 2, 9 commenters supported an
open-ended multi-year apportioning approach. Many of these commenters
felt that changes to the methodology should be applied to all hospices.
Several of the commenters cited the lawsuits filed against the
Secretary which dispute the methodology for counting beneficiaries in
the aggregate cap calculation. One of these commenters supported
allowing re-opening of prior years' cap reports in conjunction with a
revised regulation allowing a ``true'' patient-by-patient proportional
allocation of beneficiaries' time across all years of service. One
commenter suggested we allow re-opening of any cap demand which
occurred after February 13, 2008, noting that this was the first date
that a court held our regulation to be unlawful. Some of these
commenters requested that we suspend the use of the existing
regulation. Some commenters suggested that the existing regulation
disadvantages patients with non-cancer diagnoses or who are minorities.
Some of these commenters disputed the statistic that 99.98 percent
of patients who died in 2007 were admitted in 2006 or 2007, and argued
that increasing the time limit for a patient-by-patient proportional
calculation to 2 years, as suggested in our options, would not solve
the problem. These commenters, who advocated an open-ended patient-by-
patient proportional calculation, suggested we focus on how many
hospice patients were still alive as of the end of 2007; they stated
that our statistic was based on the percentage of patients who died
rather than on those who were alive at the end of 2007. These
commenters suggested a larger percentage of patients were alive, and
cited data for patients admitted between 2003 and 2007, who were still
alive as of December 31, 2007. They believe these patients are harmed
by our not using an open-ended patient-by-patient proportional
allocation in computing the aggregate cap. A commenter asked that
contractors perform the calculation consistently, and be instructed on
how to handle its detailed mechanics when adjustments occur.
Some of these 9 commenters felt that the current Local Coverage
Determinations (LCDs) were of little use in predicting patient
prognoses, with one noting that the current LCDs led to appropriate but
sometimes long-stay admissions, which often resulted in reimbursements
that exceeded the aggregate cap. They argued that the LCDs were not
evidence-based. One commenter asserted that every patient reviewed for
appropriateness of admission met his contractor's LCDs, and yet these
patients had long lengths of stay.
Also, several of these 9 commenters suggested we support H.R. 3454,
the Medicare Hospice Reform and Savings Act of 2009, parts of which
were adopted into section 3132 of the Affordable Care Act. Commenters
stated that the bill would have resulted in pay-as-you-go reductions in
reimbursements for patients with lengths of stay exceeding 180 days.
They stated that H.R. 3454 would have abolished the cap and eliminated
unintended incentives for long stays, reduced Medicare hospice costs,
and reduced our administrative burden. Commenters said that this
legislation would have increased hospice rates by 20 percent for the
first and last five days of hospice care that ends in the death of the
patient; these reductions would have been offset by another 3 percent
reduction in the daily hospice rates for those patients with lengths of
stay beyond 180 days. They stated that this legislation would have
updated LCDs or created National Coverage Determinations which would be
improved, evidence-based formulas for determining eligibility.
Commenters also stated that this legislation would have paid hospices
more for the first and last few days of care, and less for the interim
days.
Five other commenters chose no option, or presented their own
alternative approaches. One stated that the existing aggregate cap is
supposed to represent the ``average'' cost of caring for a patient, not
the maximum cost, where hospices have a mix of patients with different
diagnoses and lengths of stay. This commenter felt that the current
methodology forces hospices to focus on individual patients rather than
on the average patient mix, and was concerned that some hospices may
refuse patients with certain diagnoses to avoid exceeding their
aggregate cap. This commenter also was concerned about the use of new
patient elections as the methodology for counting the number of
beneficiaries served in computing the aggregate cap.
Another commenter recommended that each beneficiary be counted as 1
every calendar year, because over the years, more non-cancer terminal
diagnoses have appeared, with unpredictable end-of-life trajectories;
the commenter stated that these non-cancer patients require higher
utilization of resources. The commenter suggested that under this
mentioned scenario, each patient on service would begin a new cap year
every January 1 and be counted as a new patient for that year.
A different commenter suggested that we modify the aggregate cap to
focus on hospices instead of beneficiaries. He suggested that we change
the aggregate cap calculation to a 180-day aggregate limit per hospice,
which mirrors the 6 month requirement for hospice benefits to be
elected. This commenter said that by monitoring an average day limit,
all of the multi-year apportioning could be discarded, and replaced
with a simple
[[Page 26812]]
calculation. Another commenter suggested we allow hospices to carry
forward to the following year any ``cap cushion'' remaining at the end
of the year.
Several commenters supported the idea of our aligning the cap year
with the federal fiscal year, with some noting that the change would be
appropriate for a multi-year apportioning approach. Other commenters
stated that we should not change the cap year at this time, and
recommended that we wait for future payment reform to do this. Many
commenters asked that cap determination letters be mailed or sent in a
more timely fashion, and a few said that contractors need to calculate
caps consistently.
Commenters applauded efforts by CMS to address the concerns that
arise when hospices lack access to accurate and timely histories of
patient care. They suggested that the new PS&R include each patient's
total days of care, benefit periods by hospice, indicate the initial
benefit period, and show all benefit periods that have been used.
Commenters also urged that the systems be as ``real-time'' as possible.
Another commenter stated that registration into the IVACS [sic] system
(which is used to access the PS&R) was overly cumbersome, and believed
that if home care is used as a marker of the success of this new
registration system, only 20 percent of home health agencies are
currently registered.
Those who commented on our discussion about establishing a uniform
schedule for contractors' mailing cap determination letters were
supportive of such a process, and felt that this would assist hospices
in their planning and budgeting. One commenter asked that the cap
determination letter be considered a final determination.
A commenter suggested that we factor a hospice's wage index value
when computing a hospice's aggregate cap. The commenter stated that
because hospice payments are adjusted by the wage index to account for
geographic variances in labor costs, a hospice in an area of relatively
high labor costs would have higher aggregate payments in a given cap
year than a hospice in an area with relatively low labor costs. Yet,
the yearly aggregate payments of both hospices are compared to the same
cap amount. The commenter states that high-wage index hospices are
unfairly disadvantaged by not factoring in the wage index values to
their yearly cap amount, and hospices in low-wage index areas are
unfairly advantaged. The commenter felt that our not wage adjusting the
cap amount was contrary to the intent of Congress.
Response: We thank the commenters for their insights on these
issues. We have considered the comments in developing our proposals
related to changing the aggregate cap calculation methodology, which
are described in section III.B in this proposed rule. We will consider
other comments and suggestions for improvements in the future, as we
undertake broader payment reform.
Comment: Some commenters asked for additional data collection on
hospice claims or through cost reports, so that CMS will have full
resource utilization data related to providing hospice care when it
seeks to reform payments. Some commenters stated that they were opposed
to the BNAF phase-out. Others were concerned that rural hospices had
similar or greater costs than urban hospices and yet were typically
paid less due to wage adjustment. A commenter said that the hospital
wage index used to create the hospice wage index was not accurate, as
hospital wage patterns do not mirror those of hospices; this commenter
suggested that we pilot test a hospice-specific wage index. Another
commenter stated her concerns regarding the wage index value for her
hospice's CBSA, and said that a neighboring CBSA was much higher. The
commenter asked to be included in the neighboring CBSA.
Several commenters stated that the Common Working File (CWF) is
burdensome and does not provide complete data on a patient's hospice
history. A commenter added that some information in CWF was pulled from
hospice cost reports, and was unreliable. She added that an industry
association had presented us with a prototype cost report to more
accurately reflect hospice costs rather than trying to force numbers
from hospices into a home care model cost report, but that CMS has been
slow in adopting this software.
One commenter was concerned that CMS waived notice and comment
rulemaking in our FY 2011 Hospice Wage Index Notice.
Response: We thank the commenters, but we note that these comments
are outside the scope of the solicitation.
III. Provisions of the Proposed Rule
A. FY 2012 Hospice Wage Index
1. Background
As previously noted, the hospice final rule published in the
Federal Register on December 16, 1983 (48 FR 56008) provided for
adjustment to hospice payment rates to reflect differences in area wage
levels. We apply the appropriate hospice wage index value to the labor
portion of the hospice payment rates based on the geographic area where
hospice care was furnished. As noted earlier, each hospice's labor
market area is based on definitions of MSAs issued by the OMB. For this
proposed rule, we used the pre-floor, pre-reclassified hospital wage
index, based solely on the CBSA designations, as the basis for
determining wage index values for the proposed FY 2012 hospice wage
index.
As noted above, our hospice payment rules utilize the wage
adjustment factors used by the Secretary for purposes of section
1886(d)(3)(E) of the Act for hospital wage adjustments. We are
proposing again to use the pre-floor and pre-reclassified hospital wage
index data as the basis to determine the hospice wage index, which is
then used to adjust the labor portion of the hospice payment rates
based on the geographic area where the beneficiary receives hospice
care. We believe the use of the pre-floor, pre-reclassified hospital
wage index data, as a basis for the hospice wage index, results in the
appropriate adjustment to the labor portion of the costs. For the FY
2012 update to the hospice wage index, we propose to continue to use
the most recent pre-floor, pre-reclassified hospital wage index
available at the time of publication.
2. Areas Without Hospital Wage Data
In adopting the CBSA designations, we identified some geographic
areas where there are no hospitals, and no hospital wage data on which
to base the calculation of the hospice wage index. These areas are
described in section I.B.4 of this proposed rule. Beginning in FY 2006,
we adopted a policy that, for urban labor markets without an urban
hospital from which a pre-floor, pre-reclassified hospital wage index
can be derived, all of the urban CBSA pre-floor, pre-reclassified
hospital wage index values within the State would be used to calculate
a statewide urban average pre-floor, pre-reclassified hospital wage
index to use as a reasonable proxy for these areas. Currently, the only
CBSA that would be affected by this policy is CBSA 25980, Hinesville-
Fort Stewart, Georgia. We propose to continue this policy for FY 2012.
Currently, the only rural areas where there are no hospitals from
which to calculate a pre-floor, pre-reclassified hospital wage index
are Massachusetts and Puerto Rico. In August 2007 (72 FR 50217), we
adopted a methodology for imputing rural pre-floor, pre-reclassified
hospital wage index values for areas where no hospital wage data are
available as an acceptable proxy; that
[[Page 26813]]
methodology is also described in section I.B.4 of this proposed rule.
In FY 2012, Dukes and Nantucket Counties are the only areas in rural
Massachusetts which are affected. We are again proposing to apply this
methodology for imputing a rural pre-floor, pre-reclassified hospital
wage index for those rural areas without rural hospital wage data in FY
2012.
However, as we noted section I.B.4 of this proposed rule, we do not
believe that this policy is appropriate for Puerto Rico. For FY 2012,
we again propose to continue to use the most recent pre-floor, pre-
reclassified hospital wage index value available for Puerto Rico, which
is 0.4047. This pre-floor, pre-reclassified hospital wage index value
will then be adjusted upward by the hospice 15 percent floor adjustment
in the computing of the proposed FY 2012 hospice wage index.
3. FY 2012 Wage Index With an Additional 15 Percent Reduced Budget
Neutrality Adjustment Factor (BNAF)
The hospice wage index set forth in this proposed rule would be
effective October 1, 2012 through September 30, 2013. We are not
proposing any modifications to the hospice wage index methodology. In
accordance with our regulations and the agreement signed with other
members of the Hospice Wage Index Negotiated Rulemaking Committee, we
are continuing to use the most current hospital data available. For
this proposed rule, the FY 2011 hospital wage index was the most
current hospital wage data available for calculating the FY 2012
hospice wage index values. We used the FY 2011 pre-floor, pre-
reclassified hospital wage index data for this calculation.
As noted above, for FY 2012, the hospice wage index values will be
based solely on the adoption of the CBSA-based labor market definitions
and the hospital wage index. We continue to use the most recent pre-
floor and pre-reclassified hospital wage index data available (based on
FY 2007 hospital cost report wage data). A detailed description of the
methodology used to compute the hospice wage index is contained in the
September 4, 1996 hospice wage index proposed rule (61 FR 46579), the
August 8, 1997 hospice wage index final rule (62 FR 42860), and the
August 6, 2009 FY 2010 Hospice Wage Index final rule (74 FR 39384).
The August 6, 2009 FY 2010 Hospice Wage Index final rule finalized
a provision to phase out the BNAF over 7 years, with a 10 percent
reduction in the BNAF in FY 2010, and an additional 15 percent
reduction in FY 2011, over each of the next 5 years, with complete
phase out in FY 2016. Therefore, in accordance with the August 6, 2009,
FY 2010 Hospice Wage Index final rule, the BNAF for FY 2012 was reduced
by an additional 15 percent for a total BNAF reduction of 40 percent
(10 percent from FY 2010, additional 15 percent from FY 2011, and
additional 15 percent for FY 2012).
An unreduced BNAF for FY 2012 is computed to be 0.059061 (or 5.9061
percent). A 40 percent reduced BNAF, which is subsequently applied to
the pre-floor, pre-reclassified hospital wage index values greater than
or equal to 0.8, is computed to be 0.035437 (or 3.5437 percent). Pre-
floor, pre-reclassified hospital wage index values which are less than
0.8 are subject to the hospice floor calculation; that calculation is
described in section I.B.1.
The proposed hospice wage index for FY 2012 is shown in Addenda A
and B. Specifically, Addendum A reflects the proposed FY 2012 wage
index values for urban areas under the CBSA designations. Addendum B
reflects the proposed FY 2012 wage index values for rural areas under
the CBSA designations.
4. Effects of Phasing Out the BNAF
The full (unreduced) BNAF calculated for FY 2012 is 5.9061 percent.
As implemented in the August 6, 2009 FY 2010 Hospice Wage Index final
rule (74 FR 39384), for FY 2012 we are reducing the BNAF by an
additional 15 percent, for a total BNAF reduction of 40 percent (a 10
percent reduction in FY 2010 plus a 15 percent reduction in FY 2011
plus a 15 percent reduction in FY 2012), with additional reductions of
15 percent per year in each of the next 4 years until the BNAF is
phased out in FY 2016.
For FY 2012, this is mathematically equivalent to taking 60 percent
of the full BNAF value, or multiplying 0.059061 by 0.60, which equals
0.035437 (3.5437 percent). The BNAF of 3.5437 percent reflects a 40
percent reduction in the BNAF. The 40 percent reduced BNAF (3.5437
percent) was applied to the pre-floor, pre-reclassified hospital wage
index values of 0.8 or greater in the proposed FY 2012 hospice wage
index.
The hospice floor calculation would still apply to any pre-floor,
pre-reclassified hospital wage index values less than 0.8. Currently,
the hospice floor calculation has 4 steps. First, pre-floor, pre-
reclassified hospital wage index values that are less than 0.8 are
multiplied by 1.15. Second, the minimum of 0.8 or the pre-floor, pre-
reclassified hospital wage index value times 1.15 is chosen as the
preliminary hospice wage index value. Steps 1 and 2 are referred to in
this proposed rule as the hospice 15 percent floor adjustment. Third,
the pre-floor, pre-reclassified hospital wage index value is multiplied
by the BNAF. Fourth, the greater result of either step 2 or step 3 is
the final hospice wage index value. The hospice floor calculation is
unchanged by the BNAF reduction. We note that steps 3 and 4 will become
unnecessary once the BNAF is eliminated.
We examined the effects of an additional 15 percent reduction in
the BNAF, for a total BNAF reduction of 40 percent, on the FY 2012
hospice wage index compared to remaining with the total 25 percent
reduced BNAF which was used for the FY 2011 hospice wage index. The
additional 15 percent BNAF reduction applied to the FY 2012 wage index
resulted in a 0.9 percent reduction in 84.4 percent of hospice wage
index values, a 0.8 percent reduction in 8.6 percent of hospice wage
index values, a 0.7 percent reduction in 0.7 percent of wage index
values, and no reduction in 6.3 percent of wage index values.
Those CBSAs whose pre-floor, pre-reclassified hospital wage index
values had the hospice 15 percent floor adjustment applied before the
BNAF reduction would not be affected by this proposed phase out of the
BNAF. These CBSAs, which typically include rural areas, are protected
by the hospice 15 percent floor adjustment. We have estimated that 29
CBSAs are already protected by the hospice 15 percent floor adjustment,
and are therefore completely unaffected by the BNAF reduction. There
are 323 hospices in these 29 CBSAs.
Additionally, some CBSAs with pre-floor, pre-reclassified wage
index values less than 0.8 will become newly eligible for the hospice
15 percent floor adjustment as a result of the additional 15 percent
reduction in the BNAF applied in FY 2012. Areas where the hospice floor
calculation would have yielded a wage index value greater than 0.8 if
the 25 percent reduction in BNAF were maintained, but which will have a
final wage index value less than 0.8 after the additional 15 percent
reduction in the BNAF (for a total BNAF reduction of 40 percent) is
applied, will now be eligible for the hospice 15 percent floor
adjustment. These CBSAs will see a smaller reduction in their hospice
wage index values since the hospice 15 percent floor adjustment will
apply. We have estimated that 3 CBSAs will have their pre-floor, pre-
reclassified hospital wage index value become newly protected by the
hospice 15 percent floor adjustment due to the additional 15 percent
reduction in the
[[Page 26814]]
BNAF applied in FY 2012. Because of the protection given by the hospice
15 percent floor adjustment, these CBSAs will see smaller percentage
decreases in their hospice wage index values than those CBSAs that are
not eligible for the hospice 15 percent floor adjustment. This will
affect those hospices with lower hospice wage index values, which are
typically in rural areas. There are 44 hospices located in these 3
CBSAs.
Finally, the hospice wage index values only apply to the labor
portion of the payment rates; the labor portion is described in section
I.B.1 of this proposed rule. Therefore, the projected reduction in
payments due solely to the additional 15 percent reduction of the BNAF
applied in FY 2012 is estimated to be 0.6 percent, as calculated from
the difference in column 3 and column 4 of Table 1 in section VII of
this proposed rule. In addition, the estimated effects of the phase-out
of the BNAF will be mitigated by any inpatient hospital market basket
updates in payments. The estimated inpatient hospital market basket
update for FY 2012 is 2.8 percent; this 2.8 percent does not reflect
the provision in the Affordable Care Act which reduces the inpatient
hospital market basket update for FY 2012 by 0.1 percentage point,
since that reduction does not apply to hospices. The final update will
be communicated through an administrative instruction. The combined
effects of the updated wage data, an additional 15 percent reduction of
the BNAF, and an estimated inpatient hospital market basket update of
2.8 percent for FY 2012, are an overall estimated increase in payments
to hospices in FY 2012 of 2.3 percent (column 5 of Table 1 in section
VII of this proposed rule).
B. Aggregate Cap Calculation Methodology
The existing method for counting Medicare beneficiaries in 42 CFR
418.309 has been the subject of substantial litigation. Specifically,
the lawsuits challenge the way CMS apportions hospice patients with
care spanning more than one year when calculating the cap.
A number of district courts and two appellate courts have concluded
that CMS' current methodology used to determine the number of Medicare
beneficiaries used in the aggregate cap calculation is not consistent
with the statute. We continue to believe that the methodology set forth
in Sec. 418.309(b)(1) is consistent with the Medicare statute.
Nonetheless, we have determined that it is in the best interest of CMS
and the Medicare program to take action to prevent future litigation,
and alleviate the litigation burden on providers, CMS, and the courts.
On April 15, 2011, we issued a Ruling entitled ``Medicare Program;
Hospice Appeals for Review of an Overpayment Determination'' (CMS-1355-
R), related to the aggregate cap calculation for hospices which
provided for application of a patient-by-patient proportional
methodology, as defined in the Ruling, to hospices that have challenged
the current methodology. Specifically, the Ruling provides that, for
any hospice which has a timely-filed administrative appeal of the
methodology set forth at Sec. 418.309(b)(1) used to determine the
number of Medicare beneficiaries used in the aggregate cap calculation
for a cap year ending on or before October 31, 2011, the Medicare
contractors will recalculate that year's cap determination using the
patient-by-patient proportional methodology as set forth in the Ruling.
We are also making several proposals in this Rule that affect cap
determinations from two time periods:
Cap determinations for cap years ending on or before
October 31, 2011; and
Cap determinations for cap years ending on or after
October 31, 2012.
1. Cap Determinations for Cap Years Ending on or Before October 31,
2011
By its terms, the relief provided in Ruling 1355-R applies only to
those cap years for which a hospice has received an overpayment
determination and filed a timely qualifying appeal. For any hospice
that receives relief pursuant to Ruling 1355-R in the form of a
recalculation of one or more of its cap determinations, or for any
hospice that receives relief from a court after challenging the
validity of the cap regulation, we propose that the hospice's cap
determination for any subsequent cap year also be calculated using a
patient-by-patient proportional methodology as opposed to the
methodology set forth in 42 CFR 418.309(b)(1). The patient-by-patient
proportional methodology is defined below in section III.B.3.
Additionally, there are hospices that have not filed an appeal of
an overpayment determination challenging the validity of 42 CFR
418.309(b)(1) and which are awaiting CMS to make a cap determination in
a cap year ending on or before October 31, 2011. We propose to allow
any such hospice provider, as of October 1, 2011, to elect to have its
final cap determination for such cap year(s), and all subsequent cap
years, calculated using the patient-by-patient proportional
methodology.
Finally, we recognize that most hospices have not challenged the
methodology used for determining the number of beneficiaries used in
the cap calculation. Therefore, we propose that those hospices which
would like to continue to have the existing methodology (hereafter
called the streamlined methodology) used to determine the number of
beneficiaries in a given cap year would not need to take any action,
and would have their cap calculated using the streamlined methodology
for cap years ending on or before October 31, 2011. The streamlined
methodology is defined in section III.B.4 below.
We do not see these provisions as being impermissibly retroactive
in effect. To the extent that these provisions could be considered a
retroactive application of a substantive change to a regulation,
section 1871(e)(1)(A) of the Act permits retroactive application of a
substantive change to a regulation if the Secretary determines that
such retroactive application is necessary to comply with statutory
requirements or that failure to apply the change retroactively would be
contrary to the public interest. We determine that for providers who
have successfully sought to have the existing cap methodology set aside
as invalid by the courts, retroactive application of the proposed Rule
would be necessary to continue to comply with the statutory requirement
in section 1814(i)(2) that the Secretary apply an aggregate cap to
these hospices' reimbursements. We also determine that it would be in
the public interest to calculate the aggregate hospice caps for
subsequent years for these providers and for other providers that have
filed appeals challenging the validity of the current methodology using
the patient-by-patient proportional methodology to prevent the over-
counting of beneficiaries for those years and to prevent repetitive
litigation. We further determine that it would be in the public
interest to permit providers that have not appealed their aggregate cap
determinations to elect to have the patient-by-patient proportional
methodology applied to aggregate cap determinations that have not been
issued as of October 1, 2011. Allowing these hospices to elect to use
the patient-by-patient proportional methodology would alleviate the
burden on the hospices and the agency of continued appeals and
litigation regarding the validity of the aggregate hospice cap
calculation.
[[Page 26815]]
2. Cap Determinations for Cap Years Ending on or After October 31, 2012
We continue to believe that the methodology set forth in Sec.
418.309(b)(1) is consistent with the Medicare statute. We emphasize
that nothing in our proposals in section III.B.1 above constitutes an
admission as to any issue of law or fact. In light of the court
decisions, however, we propose to change the hospice aggregate cap
calculation methodology policy for cap determinations ending on or
after October 31, 2012 (the 2012 cap year). Specifically, for the cap
year ending October 31, 2012 (the 2012 cap year) and subsequent cap
years, we propose to revise the methodology set forth at Sec.
418.309(b)(1) to adopt a patient-by-patient proportional methodology
when computing hospices' aggregate caps. We also propose to
``grandfather'' in the current streamlined methodology set forth in
Sec. 418.309(b)(1) for those hospices that elect to continue to have
the current streamlined methodology used to determine the number of
Medicare beneficiaries in a given cap year, for the following reasons.
As described in section II of this proposed rule, we solicited
comments on modernizing the cap calculation in our FY 2011 Hospice Wage
Index Notice with Comment Period. We summarized those comments in
section II of this proposed rule, and noted that many commenters,
including the major hospice associations, were concerned about the
burden to hospices of changing the cap calculation methodology, and
urged us to defer across-the-board changes to the cap methodology until
we analyze the cap in the context of broader payment reform.
Specifically, commenters urged CMS to retain the current methodology,
as it results in a more streamlined and timely cap determination for
providers as compared to other options. Also, commenters noted that
once made, cap determinations usually remain final. Commenters were
concerned that a proportional methodology could result in prior year
cap determination revisions to account for situations in which the
percentage of time a beneficiary received services in a prior cap year
declines as his or her overall hospice stay continues into subsequent
cap years, and these revisions may result in new overpayments for some
providers. And, commenters noted that the vast majority of providers
don't exceed the cap, so burdening these providers with an across-the-
board change isn't justified. We also note that on January 18, 2011,
President Obama issued an Executive Order entitled ``Improving
Regulation and Regulatory Review'' (E.O. 13563), which instructs
federal agencies to consider regulatory approaches that reduce burdens
and maintain flexibility and freedom of choice for the public. We
believe that offering hospices the option to elect to continue to have
the streamlined methodology used in calculating their caps is in
keeping with this Executive Order.
For these reasons, for the cap year ending October 31, 2012 (the
2012 cap year) and subsequent cap years, we propose that the hospice
aggregate cap be calculated using the patient-by-patient proportional
methodology, but propose to allow hospices the option of having their
cap calculated via the current streamlined methodology, as discussed
below. We believe this two-pronged approach is responsive to the
commenters who do not want to be burdened with a change in the cap
calculation methodology at this time, while also conforming with
decisional law and meeting the needs of hospices that would prefer the
patient-by-patient proportional methodology of counting beneficiaries.
This grandfathering proposal to allow hospices the option of having
their caps calculated based on application of the current streamlined
methodology only applies to currently existing hospices that have, or
will have, had a cap determination calculated under the streamlined
methodology. New hospices that have not had their cap determination
calculated using the streamlined methodology do not fall under this
proposed ``grandfather'' policy.
We are in the early stages of the analyses related to payment
reform. As such, the role of the aggregate cap in the reformed payment
system is unknown at this time. If the reformed system and statute
continue to require a limitation on hospice aggregate payments, we
would look to apply one aggregate cap policy consistently to all
hospices, and will consider commenters' suggestions for improvements in
the aggregate cap as we analyze payment reform options.
3. Patient-by-Patient Proportional Methodology
For the cap year ending October 31, 2012 (the 2012 cap year), and
for all subsequent cap years (unless changed by future rulemaking), we
propose that the Medicare contractors would apply the patient-by-
patient proportional methodology (defined below) to a hospice's
aggregate cap calculations unless the hospice elects to have its cap
determination for cap years 2012 and beyond calculated using the
current, streamlined methodology set forth in Sec. 418.309(b)(1).
Under the proposed patient-by-patient proportional methodology, a
hospice includes in its number of Medicare beneficiaries only that
fraction which represents the portion of a patient's total days of care
in all hospices and all years that was spent in that hospice in that
cap year, using the best data available at the time of the calculation.
We propose that the whole and fractional shares of Medicare
beneficiaries' time in a given cap year would then be summed to compute
the total number of Medicare beneficiaries served by that hospice in
that cap year.
When a hospice's cap is calculated using the patient-by-patient
proportional methodology and a beneficiary included in that calculation
survives into another cap year, the contractor may need to make
adjustments to prior cap determinations, subject to existing re-opening
regulations.
4. Streamlined Methodology
As we described above, comments received from hospices and the
major hospice associations urged CMS to defer across-the-board changes
to the cap calculation methodology until we reform hospice payments.
Several of these commenters feared that an across-the-board change in
methodology now may disadvantage them by potentially placing them at
risk for incurring new cap overpayments. Additionally, approximately 90
percent of hospices do not exceed the cap and have not objected to the
current methodology, and commenters expressed concern that adapting to
a process change would be costly and burdensome. In response to these
concerns, we propose that a hospice may exercise a one-time election to
have its cap determination for cap years 2012 and beyond calculated
using the current, streamlined methodology set forth in Sec.
418.309(b). We propose that the option to elect the continued use of
the streamlined methodology for cap years 2012 and beyond would be
available only to hospices that have had their cap determinations
calculated using the streamlined methodology for all years prior to cap
year 2012. In section III.B.5 (``Changing Methodologies'') below, we
describe our detailed rationale for limiting the election. Allowing
hospices which, prior to cap year 2012, have their cap determination(s)
calculated pursuant to a patient-by-patient proportional methodology to
elect the streamlined methodology for cap years 2012 and beyond could
result in over-
[[Page 26816]]
counting patients and introduce a program vulnerability.
Our current policy set forth in the existing Sec. 418.309(b)(2)
describes that when a beneficiary receives care from more than one
hospice during a cap year or years, each hospice includes in its number
of Medicare beneficiaries only that fraction which represents the
portion of a patient's total stay in all hospices that was spent in
that hospice. We propose to revise the regulatory text at Sec.
418.309(b)(2) to clarify that each hospice includes in its number of
Medicare beneficiaries only that fraction which represents the portion
of a patient's total days of care in all hospices and all years that
was spent in that hospice in that cap year, using the best data
available at the time of the calculation. We also propose to add
language to make clear that cap determinations are subject to
reopening/adjustment to account for updated data.
5. Changing Methodologies
We believe our proposed policies, described above, provide hospices
with a reasonable amount of flexibility with regard to their cap
calculation. However, we believe that if we allowed hospices to switch
back and forth between methodologies, it would greatly complicate the
cap determination calculation, would be difficult to administer, and
might lead to inappropriate switching by hospices seeking merely to
maximize Medicare payments. Additionally, in the year of a change in
the calculation methodology, there is a potential for over-counting
some beneficiaries. Allowing hospices to switch back and forth between
methodologies would perpetuate the risk of over-counting beneficiaries.
Therefore, we propose that:
(1) Those hospices that have their cap determination calculated
using the patient-by-patient proportional methodology for any cap year
prior to the 2012 cap year would continue to have their cap calculated
using the patient-by-patient proportional methodology for the 2012 cap
year and all subsequent cap years; and,
(2) All other hospices would have their cap determinations for the
2012 cap year and all subsequent cap years calculated using the
patient-by-patient proportional methodology unless they make a one-time
election to have their cap determinations for cap year 2012 and beyond
calculated using the streamlined methodology.
(3) A hospice can elect the streamlined methodology no later than
60 days following the receipt of its 2012 cap determination.
(4) Hospices which elect to have their cap determination calculated
using the streamlined methodology may later elect to have their cap
determinations calculated pursuant to the patient-by-patient
proportional methodology by either:
a. Electing to change to the patient-by-patient proportional
methodology; or
b. Appealing a cap determination calculated using the streamlined
methodology to determine the number of Medicare beneficiaries.
(5) If a hospice elects the streamlined methodology, and changes to
the patient-by-patient proportional methodology for a subsequent cap
year, the hospice's aggregate cap determination for that cap year and
all subsequent cap years is to be calculated using the patient-by-
patient proportional methodology. As such, past cap year determinations
may be adjusted to prevent the over-counting of beneficiaries,
notwithstanding the ordinary limitations on reopening.
6. Other Issues
Contractors will provide hospices with instructions regarding the
cap determination methodology election process. Regardless of which
methodology is used, the contractor will continue to demand any
additional overpayment amounts due to CMS at the time of the hospice
cap determination. The contractor will continue to include the hospice
cap determination in a letter which serves as a notice of program
reimbursement under 42 CFR 405.1803(a)(3). Cap determinations are
subject to the existing CMS re-opening regulations.
In our FY 2011 Hospice Wage Index Notice with Comment Period, we
discussed aligning the cap year timeframe with that of the federal
fiscal year. Commenters suggested we not make changes to the cap year
timeframe at this time, but defer changes until broader payment reform
occurs. We agree with commenters, and our cap year continues to be
defined as November 1st to October 31st.
In that FY 2011 Hospice Wage Index Notice with Comment Period, we
also discussed the timeframe used for counting beneficiaries under the
streamlined methodology, which is September 28th to September 27th.
This timeframe for counting beneficiaries was implemented because it
allows those beneficiaries who elected hospice near the end of the cap
year to be counted in the year when most of the services were provided.
However, for those hospices whose cap determinations are calculated
using a patient-by-patient proportional methodology for counting the
number of beneficiaries, we propose to count beneficiaries and their
associated days of care from November 1st through October 31st, to
match that of the cap year. This ensures that the proportional share of
each beneficiary's days in that hospice during the cap year is
accurately computed.
Finally, we note that the existing regulatory text at 418.308(b)(1)
refers to the timeframe for counting beneficiaries as ``(1) * * * the
period beginning on September 28 (35 days before the beginning of the
cap period) and ending on September 27 (35 days before the end of the
cap period).'' The period beginning September 28 is actually 34 days
before November 1 (the beginning of the cap year), rather than 35 days.
We propose to correct this in the regulatory text, and to change
references to the ``cap period'' to that of the ``cap year'' to
correctly reference the time frame for cap determinations.
7. Changes to Regulatory Text
As a result of the proposals made in this section, we propose to
change the regulatory text at 42 CFR 418.309 as follows:
We propose to change the title of 418.309 from ``Hospice
Cap Amount'' to ``Hospice Aggregate Cap'' to clarify what this section
covers. The ``cap amount'' is defined as the per-beneficiary dollar
amount which is updated annually, and is only one component of the
aggregate cap calculation. At the beginning of the regulatory text for
this section, we also propose to revise the existing language to refer
to the methodologies given in (b) and (c) which follow.
In Sec. 418.309(b), we propose to add the title
``Streamlined Methodology Defined'' at the beginning of the regulatory
text, and to replace ``Each hospice's cap amount'' with ``A hospice's
aggregate cap.'' In Sec. 418.309(b)(1), we propose to revise the
language to note that it applied to those beneficiaries who have
received care from only one hospice. We also propose to correct the
existing regulatory text which reads ``* * * (35 days before the
beginning of the cap period) * * *'' to read ``* * * (34 days before
the beginning of the cap year) * * *'' and change existing regulatory
text which reads ``* * * and ending on September 27 (35 days before the
end of the cap period) * * *'' to read ``* * * and ending September 27
(35 days before the end of the cap year) * * *.''
We propose to revise Sec. 418.309(b)(2) to describe the
streamlined methodology for computing fractional shares of a
beneficiary when a beneficiary has received care from more
[[Page 26817]]
than one hospice, and to note that the computation considers all cap
years and all hospices, using the best data available at the time of
the calculation. We also propose to add language that notes that the
aggregate cap calculation for a given cap year may be adjusted after
the calculation for that year based on updated data.
We propose to add Sec. 418.309(c), which would be
entitled ``Patient-by-Patient Proportional Methodology Defined.'' We
propose that a hospice's aggregate cap would be calculated by
multiplying the adjusted cap amount by the number of Medicare
beneficiaries. For the purposes of the patient-by-patient proportional
methodology, we propose that a hospice would include in its number of
Medicare beneficiaries only that fraction which represents the portion
of a patient's total days of care in all hospices and all years that
was spent in that hospice in that cap year, using the best data
available at the time of the calculation. We propose that the total
number of Medicare beneficiaries for a given hospice's cap year would
be determined by summing the whole or fractional share of each Medicare
beneficiary that received hospice care during the cap year, from that
hospice.
Finally, we also propose that the aggregate cap calculation for a
given cap year could be adjusted after the calculation for that year
based on updated data.
We propose to add paragraph (d) to section 418.309, which
would be entitled ``Application of Methodologies.'' We propose that for
cap years ending October 31, 2011 and for prior cap years, a hospice's
aggregate cap would be calculated using the streamlined methodology.
However, we propose that a hospice that has not received a cap
determination for a cap year ending on or before October 31, 2011 as of
October 1, 2011, could elect to have its final cap determination for
such cap years calculated using the patient-by-patient proportional
methodology. Additionally, we propose that a hospice that has filed a
timely appeal regarding the methodology used for determining the number
of Medicare beneficiaries in its cap calculation for any cap year would
be deemed to have elected that its cap determination for the challenged
year, and all subsequent cap years, be calculated using the patient-by-
patient proportional methodology.
We also propose that for cap years ending October 31, 2012, and all
subsequent cap years, a hospice's aggregate cap would be calculated
using the patient-by-patient proportional methodology. We also propose
that a hospice that has had its cap calculated using the patient-by-
patient proportional methodology for any cap year(s) prior to the 2012
cap year would not be eligible to elect the streamlined methodology,
and would have to continue to have the patient-by-patient proportional
methodology used to determine the number of Medicare beneficiaries in a
given cap year. We propose that a hospice that is eligible to make a
one-time election to have its cap calculated using the streamlined
methodology would have to make that election no later than 60 days
after receipt of its 2012 cap determination. We also propose that a
hospice's election to have its cap calculated using the streamlined
methodology would remain in effect unless the hospice subsequently
would submit a written election to change the methodology used in its
cap determination to the patient-by-patient proportional methodology;
or the hospice would appeal the streamlined methodology used to
determine the number of Medicare beneficiaries used in the aggregate
cap calculation.
Finally, we propose that if a hospice that elected to have its
aggregate cap calculated using the streamlined methodology subsequently
elected the patient-by-patient proportional methodology or appealed the
streamlined methodology, the hospice's aggregate cap determination for
that cap year and all subsequent cap years would be calculated using
the patient-by-patient proportional methodology. As such, we propose
that past cap year determinations could be adjusted to prevent the
over-counting of beneficiaries, notwithstanding the ordinary
limitations on reopening.
Throughout Sec. 418.309 we propose to delete references
to the intermediary, as this terminology is now outdated.
C. Hospice Face-to-Face Requirement
Section 3132(b) of the Affordable Care Act of 2010 (Pub. L. 111-
148, enacted March 23, 2010) amended section 1814(a)(7) of the Act by
adding an additional certification requirement that beginning January
1, 2011, a hospice physician or nurse practitioner (NP) must have a
face-to-face encounter with every hospice patient prior to the 180-day
recertification of the patient's terminal illness to determine
continued eligibility. The statute also requires that the hospice
physician or NP who performs the encounter attest that such a visit
took place in accordance with procedures established by the Secretary.
Although the provision allows an NP to perform the face-to-face
encounter and attest to it, section 1814(a)(7)(A) of the Act continues
to require that a hospice physician must certify and recertify the
terminal illness.
The requirement for a physician face-to-face encounter for long-
stay hospice patients' was first suggested by Medicare's Payment
Advisory Commission (MedPAC) in their March 2009 Report to the Congress
(MedPAC, Report to the Congress: Medicare Payment Policy, Chapter 6,
March 2009, pp. 365 through 371) (``the MedPAC Report''). MedPAC
recommended that a hospice physician or advance practice nurse visit
hospice patients prior to the 180-day recertification of terminal
illness in order to increase physician accountability in the
recertification and help ensure appropriate use of the benefit.
We implemented section 1814(a)(7), as amended by section 3132(b) of
the Affordable Care Act in the November 17, 2010 final rule (75 FR
70372), published in the Federal Register, entitled ``Home Health
Prospective Payment System Rate Update for CY 2011; Changes in
Certification Requirements for Home Health Agencies and Hospices'',
hereinafter referred to as the CY 2011 HH PPS Final Rule. The statute
requires that for hospice recertifications occurring on or after
January 1, 2011, a face-to-face encounter take place before the 180th-
day recertification. We decided that the 180th-day recertification and
subsequent benefit periods corresponded to the recertification for a
patient's third or subsequent benefit period.
In the CY 2011 HH PPS final rule, we describe our rationale for
defining the 180th-day recertification as the recertification which
occurs at the start of the third benefit period (that is, the benefit
period after the second 90-day benefit period). We considered the
existing language used in the statute and in our regulations, all of
which is structured around the concept of benefit periods which, by
statute, cannot last longer than a maximum number of days (90 days for
the first two and 60 days for subsequent benefit periods). Our
regulatory language at Sec. 418.22 requires certifications at the
beginning of the benefit periods. For these reasons we defined the
180th-day recertification to be the recertification which occurs at the
start of the third benefit period (75 FR 70437).
These new provisions at Sec. 418.22(a) and (b), as set out in the
CY 2011 HH PPS final rule (75 FR 70463) include the following
requirements:
The encounter must occur no more than 30 calendar days
prior to the start of the third benefit period and no more
[[Page 26818]]
than 30 calendar days prior to every subsequent benefit period
thereafter.
The hospice physician or NP who performs the encounter
attests in writing that he or she had a face-to-face encounter with the
patient, and includes the date of the encounter. The attestation, which
includes the physician's signature and the date of the signature, must
be a separate and distinct section of, or an addendum to, the
recertification form, and must be clearly titled.
The physician narrative associated recertifications for
the third and subsequent benefit period recertifications include an
explanation of why the clinical findings of the face-to-face encounter
support a prognosis that the patient has a life expectancy of 6 months
or less.
When an NP performs the encounter, the NP's attestation
must state that the clinical findings of that visit were provided to
the certifying physician, for use in determining whether the patient
continues to have a life expectancy of 6 months or less, should the
illness run its normal course.
The hospice physician or the hospice NP can perform the
encounter. We define a hospice physician as a physician who is employed
by the hospice or working under contract with the hospice, and a
hospice NP must be employed by the hospice.
The hospice physician who performs the face-to-face
encounter and attests to it must be the same physician who certifies
the patient's terminal illness and composes the recertification
narrative (75 FR 70445).
In this proposed rule, we would allow any hospice physician to
perform the encounter and inform the certifying physician for this last
requirement for the following reasons:
Since the publication of the CY 2011 HH PPS final rule, we were
told of the concerns of stakeholders, such as individual hospices,
major hospice associations, physicians, and patient advocacy groups
regarding the hospice physician performing both the face-to-face
encounter and the recertification. Most of the concerns were that this
requirement could potentially result in a substantial risk of harm to
terminally ill patients. We find many of these concerns compelling.
Specifically, stakeholders describe the challenge rural areas and
medically underserved areas have in employing hospice physicians.
Often, the physicians employed are part-time, and sometimes several
part-time physicians are employed by the hospice. These physicians
furnish medically necessary physician services to hospice patients as a
team or group practice would, communicating with each other regarding
the patients' conditions and sharing responsibility for the patients'
care. In requiring the same physician to perform both the face-to-face
encounter and the certification, stakeholders argued that we were
imposing an unnecessary complexity to the face-to-face encounter
requirement which could disadvantage those patients in areas of the
country whom they believed were at the greatest risk and could
negatively affect access-to-care. Many hospices stated that they would
not find it feasible to meet this strict implementation requirement and
they would no longer be able to serve patients in the third and later
benefit periods. In addition, stakeholders stated that when MedPAC
recommended a face-to-face encounter for long-stay hospice patients, it
also expressed a concern that the requirement could pose an access risk
in rural areas (MedPAC Report at 366). To mitigate that risk, MedPAC
recommended that NPs also be allowed to perform the encounter, and the
Congress adopted that recommendation. Further, stakeholders stated that
because the Congress allowed an NP to perform the encounter and inform
the recertifying physician, it would be illogical for CMS to preclude
another hospice physician from performing the encounter and informing
the recertifying physician. The stakeholders stated that in having done
so, CMS inadvertently created an access to care risk that MedPAC and
the Congress had tried to prevent. Stakeholders stated that long-stay
patients in rural and medically underserved areas would be denied
access during a time when many are in the final stages of their disease
trajectory and needed hospice care the most. Stakeholders suggested
that such patients would be denied the pain and symptom management
control that they require as a result of CMS's regulatory limitation.
In addition, they stated that hospices in rural and medically
underserved areas need the flexibility of allowing NPs and any of their
hospice physicians to perform the required patient encounter in order
to serve such patients.
Many stakeholders also stated that requiring the same hospice
physician to perform both the face-to-face encounter and the
recertification was contrary to the intent of the statute. They pointed
out that the statutory language required that a hospice physician or NP
perform the encounter, but the statute did not mandate that the
physician who performs the encounter must be the same physician who
recertifies the patient. In addition, the stakeholders observed that if
the Congress had intended to require the physician who performed the
encounter to be the same physician who recertified the patient, then
the Congress could have included that requirement in the law.
Stakeholders also stated that MedPAC did not recommend that the
physician who performed the encounter be the same physician that
recertified the patient. They referred us to discussions in the MedPAC
Report, which first recommended the face-to-face encounter. (MedPAC
Report, 357 through 371.)
We note that some of these stakeholders were part of the technical
expert panel which MedPAC convened in 2008 to develop the
recommendations contained in the MedPAC Report. The report described
the panel's discussions surrounding the need for more physician
involvement in hospice/palliative care, and concerns regarding some
hospices' practices being motivated by financial incentives (MedPAC
Report, 357 through 367). The report also discussed the panel's concern
that hospice medical directors could at times be influenced by such
incentives and should be more accountable for eligibility
determinations. However, we believe it is possible that the scenario
where the hospice medical director was the certifying physician and a
different hospice physician performed the encounter and informed the
medical director about the patient's condition the result could be
better physician accountability than if the medical director performed
the encounter. The physician who performed the encounter would serve as
an independent assessor of the patient's terminal condition, and would
provide a check and balance to the medical director's possible
financial incentive to recertify.
Stakeholders also asserted that any hospice physician who saw the
patient could achieve the goals described in the MedPAC report and the
statute. The report described the tension between hospice physicians
and non-physician staff and how the emotional attachment to patients of
non-physician staff could lead to inappropriate recertifications.
Stakeholders claim that this risk could be mitigated by any hospice
physician seeing the patient and informing the certifying physician.
More importantly, the stakeholders referred to the MedPAC report
discussion regarding concerns that a physician face-to-face encounter
provision might not be feasible in rural areas where there were
physician shortages. In recommending that non-
[[Page 26819]]
physician practitioners be allowed to perform the encounter, MedPAC
identified a need to allow flexibility regarding the practitioner who
performs the encounter, especially in rural areas. Commenters stated
that MedPAC and the Congress intended for long-stay hospice patients to
be seen by any hospice physician or NP prior to the 180-day
recertification.
In this proposed rule, we propose to revise the policy finalized in
the CY 2011 HH PPS final rule published on November 17, 2010.
Specifically, in the CY 2011 HH PPS final rule, we implemented
section 3132(b) of the Affordable Care Act, which requires that
beginning January 1, 2011, a hospice physician or NP have a face-to-
face encounter with every hospice patient prior to the 180-day
recertification of the patient's terminal illness to determine
continued eligibility. In implementing this provision, in response to
comments in the final rule, we stated that the hospice physician who
performed the face-to-face encounter must be the same physician who
recertifies the patient's terminal illness and composes the
recertification narrative.
As a result of stakeholders concerns resulting from the final rule
policy, we propose to remove this limitation in this proposed rule. We
propose that any hospice physician can perform the face-to-face
encounter regardless of whether that physician recertifies the
patient's terminal illness and composes the recertification narrative.
In keeping with this proposal, we also propose to change the regulatory
text at 418.22(b)(4) to state that the attestation of the nurse
practitioner or a non-certifying hospice physician shall state that the
clinical findings of that encounter were provided to the certifying
physician, for use in determining continued eligibility for hospice.
This proposal reflects the Centers for Medicare and Medicaid Services'
commitment to the general principles of the President's Executive Order
released January 18, 2011 entitled ``Improving Regulation and
Regulatory Review'', as it would reduce burden to hospices and hospice
physicians and increase flexibility in areas of physician shortages. We
are soliciting public comments on this proposal.
D. Technical Proposals and Clarification
1. Hospice Local Coverage Determinations
In the November 17, 2010 ``CY 2011 Home Health Prospective Payment
System Rate Update for Calendar Year 2011; Changes in Certification
Requirements for Home Health Agencies and Hospices Final Rule'', we
implemented new requirements for a face-to-face encounter which were
mandated by the Affordable Care Act of 2010. A commenter asked how the
face-to-face encounter related to Local Coverage Determinations (LCDs),
and if the expectation was that the physician would verify the
patient's condition based on the LCDs. Other commenters asked for
guidance regarding what the encounter should include (that is, elements
that make up an encounter) for purposes of satisfying the requirement.
When describing how to assess patients for recertification, our
response cited the LCDs of several contractors (see 75 FR 70447-70448).
The response also included common text from those LCDs related to
clinical findings to use in making the assessment and determining
whether a patient was terminally ill. We stated that the clinical
findings should include evidence from the three following categories:
(1) Decline in clinical status guidelines (for example, decline in
systolic blood pressure to below 90 or progressive postural
hypotension); (2) Non disease-specific base guidelines (that is,
decline in functional status) as demonstrated by Karnofsky Performance
Status or Palliative Performance Score and dependence in two or more
activities of daily living; and (3) Co-morbidities. We would note that
because the language was not mandatory, there was never any intention
that this response have a legally binding effect on hospices. These are
suggestions as to elements of a certification or recertification which
could be deemed to be indicative of a terminal condition. However, this
was not meant to be an exhaustive or exclusive list. Because there has
been some confusion about the extent to which these items exclude other
possible scenarios, we propose to clarify that the clinical findings
included in the comment response were provided as an example of
findings that can be used in determining continued medical eligibility
for hospice care. The illustrative clinical findings mentioned above
are not mandatory national policy. We reiterate that certification or
recertification is based upon a physician's clinical judgment, and is
not an exact science. Congress made this clear in section 322 of the
Benefits Improvement and Protection Act of 2000 (BIPA), which says that
the hospice certification of terminal illness ``shall be based on the
physician's or medical director's clinical judgment regarding the
normal course of the individual's illness.''
2. Definition of Hospice Employee
As noted above, in the November 17, 2010 ``CY 2011 Home Health
Prospective Payment System Rate Update for Calendar Year 2011; Changes
in Certification Requirements for Home Health Agencies and Hospices
Final Rule,'' we implemented new requirements for a face-to-face
encounter, which were mandated by the Affordable Care Act. As part of
that implementation, we required that a hospice physician or nurse
practitioner must perform the face-to-face encounters. Several
commenters asked us to clarify who is considered a ``hospice physician
or nurse practitioner'' (see 75 FR 70443-70445). We stated that a
hospice physician or nurse practitioner must be employed by the
hospice, and that hospice physicians could also be working under
arrangement with the hospice (i.e., contracted). We added that Section
418.3 defines a hospice employee as someone who is receiving a W-2 form
from the hospice or who is a volunteer. The complete definition of a
hospice employee at 418.3 is as follows: ``Employee means a person who:
(1) Works for the hospice and for whom the hospice is required to issue
a W-2 form on his or her behalf; (2) if the hospice is a subdivision of
an agency or organization, an employee of the agency or organization
who is assigned to the hospice; or (3) is a volunteer under the
jurisdiction of the hospice.'' We received a number of questions from
the industry about the definition of an employee and whether it
included personnel who were employed by an agency or organization that
has a hospice subdivision and who were assigned to that hospice. We are
clarifying that entire definition of employee given at 418.3 (shown
above) applies. Therefore, if the hospice is a subdivision of an agency
or organization, an employee of the agency or organization who is
assigned to the hospice is a hospice employee.
3. Timeframe for Face-to-Face Encounters
In the November 17, 2010 ``CY 2011 Home Health Prospective Payment
System Rate Update for Calendar Year 2011; Changes in Certification
Requirements for Home Health Agencies and Hospices Final Rule,'' we
also implemented policies related to the timeframe for performing a
face-to-face encounter. We cited the statutory language from section
3132 of the Affordable Care Act, which says that on and after January
1, 2011, a hospice physician or nurse practitioner must
[[Page 26820]]
have a face-to-face encounter with the beneficiary to determine
continued eligibility of the beneficiary for hospice care prior to the
180th-day recertification and each subsequent recertification (see 75
FR 70435). We also defined the 180th-day recertification to be the
recertification which occurs at the 3rd benefit period (see 75 FR
70436-70437). We implemented a requirement that the face-to-face
encounter occur no more than 30 calendar days prior to the 3rd or later
benefit periods, to allow hospices flexibility in scheduling the
encounter (see 75 FR 70437-70439). We emphasized throughout the final
rule that the encounter must occur ``prior to'' the 3rd benefit period
recertification, and each subsequent recertification. The regulatory
text associated with these changes is found at 42 CFR 418.22(a)(4), and
reads, ``As of January 1, 2011, a hospice physician or hospice nurse
practitioner must have a face-to-face encounter with each hospice
patient, whose total stay across all hospices is anticipated to reach
the 3rd benefit period, no more than 30 calendar days prior to the 3rd
benefit period recertification, and must have a face-to-face encounter
with that patient no more than 30 calendar days prior to every
recertification thereafter, to gather clinical findings to determine
continued eligibility for hospice care.'' We believe our final policy
states clearly that the face-to-face encounter must occur prior to, but
no more than 30 calendar days prior to, the 3rd benefit period
recertification and each subsequent recertification. However, we are
concerned that our regulation text above could lead a hospice to
believe that the face-to-face encounter could occur in an open-ended
fashion after the start of a benefit period in which it is required,
and that the limitation on the time-frame was only on how far in
advance of the start of the benefit period that the encounter could
occur. Our policy, as stated in the final rule, is that a face-to-face
encounter is required prior to the 3rd benefit period recertification
and each recertification thereafter (75 FR 70454). Therefore, we
propose to revise the regulation text to more clearly state that the
encounter is required ``prior to'' the 3rd benefit period
recertification, and each subsequent recertification. As such, we
propose to change the regulatory text to read ``(4) Face-to-face
encounter. As of January 1, 2011, a hospice physician or hospice nurse
practitioner must have a face-to-face encounter with each hospice
patient whose total stay across all hospices is anticipated to reach
the 3rd benefit period. The face-to-face encounter must occur prior to
but no more than 30 calendar days prior to the 3rd benefit period
recertification, and every benefit period recertification thereafter,
to gather clinical findings to determine continued eligibility for
hospice care.''
4. Hospice Aide and Homemaker Services
The hospice Conditions of Participation (CoPs) were updated in
2008, after being finalized on June 5, 2008 in the Hospice Conditions
of Participation Final Rule (73 FR 32088). Those revised CoPs included
changing the term ``home health aide'' to ``hospice aide''. In our FY
2010 Hospice Wage Index Final Rule (74 FR 39384), we updated language
in several areas of our regulatory text to use this new terminology,
including at 42 CFR 418.202(g). The regulatory text at 418.202(g)
describes hospice aide and homemaker services. The last sentence of the
regulatory text that was finalized is about homemaker services, however
the word ``homemaker'' was inadvertently replaced with ``aide''. The
revised regulatory text also inadvertently deleted the sentence which
read ``Aide services must be provided under the supervision of a
registered nurse.'' Finally, the title of this section of the
regulatory text continues to refer to section 418.94 of the CoPs.
However, section 418.94 no longer exists, and was updated in the 2008
Hospice CoP Final Rule to section 418.76. We propose to correct the
regulatory text at 418.202(g) to update the CoP reference to show
section 418.76, to add back the sentence about supervision which was
deleted, and to correct the last sentence to refer to ``homemakers''
rather than ``aides.''
E. Quality Reporting for Hospices
1. Background and Statutory Authority
CMS seeks to promote higher quality and more efficient health care
for Medicare beneficiaries. Our efforts are furthered by the quality
reporting programs coupled with public reporting of that information.
Such quality reporting programs exist for various settings such as the
Hospital Inpatient Quality Reporting (Hospital IQR) Program. In
addition, CMS has implemented quality reporting programs for hospital
outpatient services, the Hospital Outpatient Quality Data Reporting
Program (HOP QDRP), and for physicians and other eligible
professionals, the Physician Quality Reporting System (PQRS). CMS has
also implemented quality reporting programs for home health agencies
and skilled nursing facilities that are based on conditions of
participation, and an end-stage renal disease quality improvement
program that links payment to performance based on requirements in
section 153(c) of the Medicare Improvement for Patients and Providers
Act of 2008.
Section 3004 of the Affordable Care Act amends the Social Security
Act to authorize additional quality reporting programs, including one
for hospices. Section 1814(i)(5)(A)(i) of the Act requires that
beginning with FY 2014 and each subsequent fiscal year, the Secretary
shall reduce the market basket update by 2 percentage points for any
hospice that does not comply with the quality data submission
requirements with respect to that fiscal year. Depending on the amount
of annual update for a particular year, a reduction of 2 percentage
points may result in the annual market basket update being less than
0.0 percent for a fiscal year and may result in payment rates that are
less than payment rates for the preceding fiscal year. Any reduction
based on failure to comply with the reporting requirements, as required
by section 1814(i)(5)(B) of the Act, would apply only with respect to
the particular fiscal year involved. Any such reduction will not be
cumulative and will not be taken into account in computing the payment
amount for subsequent fiscal years.
Section 1814(i)(5)(C) of the Act requires that each hospice submit
data to the Secretary on quality measures specified by the Secretary.
Such data must be submitted in a form and manner, and at a time
specified by the Secretary. Any measures selected by the Secretary must
have been endorsed by the consensus-based entity which holds a contract
regarding performance measurement with the Secretary under section
1890(a) of the Act. This contract is currently held by the National
Quality Forum (NQF). However, Section 1814(i)(5)(D)(ii) provides that
in the case of a specified area or medical topic determined appropriate
by the Secretary for which a feasible and practical measure has not
been endorsed by the consensus-based entity the Secretary may specify a
measure(s) that is(are) not so endorsed as long as due consideration is
given to measures that have been endorsed or adopted by a consensus-
based organization identified by the Secretary. Under section
1814(i)(5)(D)(iii) of the Act, the Secretary must not later than
October 1, 2012 publish selected measures that will be applicable with
respect to FY 2014.
Section 1814(i)(5)(E) of the Act requires the Secretary to
establish
[[Page 26821]]
procedures for making data submitted under the hospice quality
reporting program available to the public. The Secretary must ensure
that a hospice has the opportunity to review the data that is to be
made public with respect to the hospice program prior to such data
being made public. The Secretary must report quality measures that
relate to hospice care provided by hospices on the Internet Web site of
CMS.
2. Quality Measures for Hospice Quality Reporting Program for Payment
Year FY 2014
a. Considerations in the Selection of the Proposed Quality Measures
In implementing these quality reporting programs, CMS envisions the
comprehensive availability and widespread use of health care quality
information for informed decision making and quality improvement. We
seek to collect data in a manner that balances the need for information
related to the full spectrum of quality performance and the need to
minimize the burden of data collection and reporting. Our purpose is to
help achieve better health care and improve health through the
widespread dissemination and use of performance information. We seek to
efficiently collect data using valid, reliable and relevant measures of
quality and to share the information with organizations that use such
performance information as well as with the public.
We also seek to align new Affordable Care Act reporting
requirements with current HHS high priority conditions, topics and
National Quality Strategy (NQS) goals and to ultimately provide a
comprehensive assessment of the quality of health care delivered. The
hospice quality reporting program will align with the HHS National
Quality Strategy, particularly with the goals of ensuring person and
family centered care and promoting effective communication and
coordination of care. One fundamental element of hospice care is
adherence to patient choice regarding such issues as desired level of
treatment and location of care provision. This closely aligns with the
HHS NQS goal of ensuring person and family centered care. Another
fundamental element of hospice care is the use of a closely coordinated
interdisciplinary team to provide the desired care. This characteristic
is closely aligned with the goal of promoting effective communication
and coordination of care. Patient/family preferences and coordination
of care will be foci of future hospice quality measure selection.
Arriving at such a comprehensive set of quality measures that reflect
high priority conditions and goals of the HHS NQS will be a multi-year
effort.
Other considerations in selecting measures include: Alignment with
other Medicare and Medicaid quality reporting programs as well as other
private sector initiatives; suggestions and input received on measures
including, for example, those received during the Listening Session on
the Hospice Quality Reporting Program held on November 15, 2010;
seeking measures that have a low probability of causing unintended
adverse consequences; and considering measures that are feasible (that
is, measures that can be technically implemented within the capacity of
the CMS infrastructure for data collection, analyses, and calculation
of reporting and performance rates as applicable). We also considered
the burden to hospices when selecting measures to propose. We
considered the January 18, 2011 Executive Order entitled ``Improving
Regulation and Regulatory Review'' (E.O. 13563), which instructs
federal agencies to consider regulatory approaches that reduce burdens
and maintain flexibility and freedom of choice for the public.
In our search for measures appropriate for the first year of the
Hospice Quality Reporting Program, we considered the results of our
environmental scan, literature search, technical expert panel and
stakeholder listening sessions that detailed measures developed by
multiple stewards. Of particular interest were measures from the
National Hospice and Palliative Care Organization (NHPCO), the PEACE
Project conducted by The Carolinas Center for Medical Excellence 2006-
2008 and the AIM Project conducted by the New York QIO, IPRO 2009-2010.
Measures from these three sources can be viewed at the following Web
sites: http://ww.nhpco.org/files/public/Statistics_Research/NHPCO_research_flier.pdf, http://www.thecarolinascenter.org/default.aspx?pageid=46 and http://www.ipro.org/index/cms-filesystem-action/hospice/1_6.pdf.
We are investigating expanding our proposed measures to adopt some
of these measures in the future. However, evaluation of these measures
revealed unique measurement concerns for hospice services generally.
Two major issues were identified. First, all of the measures currently
available for use in measuring hospice quality of care are
retrospective and have to be collected using a chart abstraction
approach. This creates a burden for hospice providers. Secondly, there
is no standardized vehicle for data collection or centralized structure
for hospice quality reporting. We believe these issues limit our
options for measure reporting in the first year of the Hospice Quality
Reporting Program. Our plans to require additional measure reporting
are described below under section 4. Additional Measures Under
Consideration.
We considered measures currently endorsed by NQF that are
applicable to hospice care. Of the nine measures listed by NQF as
applicable to end of life care, seven address patients who specifically
died of cancer and various situations experienced by those patients in
their last days of life regardless of whether they were cared for by a
hospice. These seven measures do not address the provision of hospice
care or the breadth of the hospice patient population. The remaining
two NQF endorsed hospice-related measures address measurement of the
quality of care actually provided by hospices. One of the two hospice
appropriate measures relates to pain control and is discussed below
under section b. The other hospice appropriate measure, 0208:
Percentage of family members of all patients enrolled in a hospice
program who give satisfactory answers to the survey instrument requires
the hospice to administer the Family Evaluation of Hospice Care (FEHC)
survey to families of deceased hospice patients. The FEHC survey itself
contains 54 questions to be returned to the hospice and analyzed/scored
in order to produce a rating for the measure. Though the FEHC survey is
available to all hospices, we are unable to determine the number of
hospices that currently use this survey or the number that analyze the
responses to determine scoring for this NQF endorsed measure. We
believe that the efforts required for hospices to set up systems to
utilize and analyze this survey tool can be burdensome for some
hospices, and that the timeframe required to put the survey
administration and evaluation process in place is insufficient.
Therefore, while we do not propose to use this measure as a requirement
for the FY 2014 payment update, this measure may be included in future
quality reporting requirements because, should the level of burden
prove to be acceptable, the family evaluation of hospice care is an
important perspective on hospice quality. We are not aware of any other
measures applicable to hospice care that have been endorsed or adopted
by a consensus organization other than the NQF.
The current hospice Conditions of Participation (CoPs) at 42 CFR
section 418.58 require that hospices develop,
[[Page 26822]]
implement, and maintain an effective, ongoing, hospice-wide data-driven
quality assessment and performance improvement (QAPI) program and that
the hospice maintain documentary evidence of its quality assessment and
performance improvement program and be able to demonstrate its
operation to CMS. In addition, hospices must measure, analyze, and
track quality indicators, including adverse patient events, and other
aspects of performance that enable the hospice to assess processes of
care, hospice services, and operations as part of their QAPI Program.
Hospices have been required to have QAPI programs in place since
December 2008 in order to comply with the CoPs. As a part of the QAPI
regulations, since February 2, 2009, hospices have been required to
develop, implement, and evaluate performance improvement projects. The
regulations require that
(1) The number and scope of distinct performance improvement
projects conducted annually, based on the needs of the hospice's
population and internal organizational needs, reflect the scope,
complexity, and past performance of the hospice's services and
operations; and
(2) The hospice document what performance improvement projects are
being conducted, the reasons for conducting these projects, and the
measurable progress achieved on these projects.
b. Proposed Quality Measures for the Quality Reporting Program for
Hospices
Proposed Quality Measures
To meet the quality reporting requirements for hospices for the FY
2014 payment determination as set forth in Section 1814(i)(5) of the
Act, we propose that hospices report the NQF-endorsed measure that is
related to pain management, NQF 0209: The percentage of
patients who were uncomfortable because of pain on admission to hospice
whose pain was brought under control within 48 hours. A primary goal of
hospice care is to enable patients to be comfortable and free of pain,
so that they may live each day as fully as possible. The provision of
pain control to hospice patients is an essential function, a
fundamental element of hospice care and therefore we believe the pain
control measure, NQF 0209 is an important and appropriate
measure for the hospice quality reporting program.
Additionally, to meet the quality reporting requirements for
hospices for the FY 2014 payment determination as set forth in Section
1814(i)(5) of the Act, we propose that hospices also report one
structural measure that is not endorsed by NQF. Structural measures
assess the characteristics and capacity of the provider to deliver
quality health care. The proposed structural measure is: Participation
in a Quality Assessment and Performance Improvement (QAPI) Program that
Includes at Least Three Quality Indicators Related to Patient Care. We
believe that participation in QAPI programs that address at least three
indicators related to patient care reflects a commitment not only to
assessing the quality of care provided to patients but also to
identifying opportunities for improvement that pertain to the care of
patients. Examples of domains of indicators related to patient care
include providing care in accordance with documented patient and family
goals, effective and timely symptom management, care coordination, and
patient safety.
Section 1814(i)(5)(D)(ii) provides that ``[i]n the case of a
specified area or medical topic determined appropriate by the Secretary
for which a feasible measure has not been endorsed by an entity with a
contract under section 1890(a), the Secretary may specify a measure
that is not so endorsed as long as due consideration is given to
measures that have been endorsed or adopted by a consensus organization
identified by the Secretary.'' We have proposed to adopt this
structural measure because we believe it is appropriate for use in
evaluating the quality of care provided by hospices. As discussed
above, a majority of the NQF-endorsed measures that relate to end of
life care are not hospice-specific or, in the case of the FEHC survey
instrument, that measure is too burdensome for hospices to implement
for the FY 2014 payment determination. We are also not aware of any
other measures applicable to the hospice setting that have been adopted
by another consensus organization. Accordingly, we propose to adopt the
structural measure under the authority in section 1814(i)(5)(D)(ii).
We propose that each hospice submit data on the proposed structural
measure, including the description of each of their patient-care
focused quality indicators (if applicable) to CMS by January 31, 2013
on a spreadsheet template to be prepared by CMS. Specifically, hospice
programs would be required to report whether or not they have a QAPI
program that addresses at least three indicators related to patient
care. In addition, hospices would be required to list all of their
patient care indicators. Hospice programs will be evaluated for
purposes of the quality reporting program based on whether or not they
respond, not on how they respond.
In addition, we propose a voluntary submission of the proposed
structural measure (not for purposes of a payment determination or
public reporting), including the description of each of their patient-
care focused quality indicators to CMS by January 31, 2012 on a
spreadsheet template to be prepared by CMS. Voluntary reporting of the
structural measure data with specific quality indicators related to
patient care to CMS will allow us to learn what the important patient
care quality issues are for hospices and serves to provide useful
information in the design and structure of the quality reporting
program. Our intent is to require additional standardized and specific
quality measures to be reported by hospices in subsequent years. We
solicit comment on the measures proposed.
The proposed collection and submission of data on the proposed NQF-
endorsed measure will be a new requirement for hospices. However, since
the development, implementation and maintenance of an effective,
ongoing, hospice-wide data driven quality assessment and performance
improvement program have been requirements in the Medicare CoPs since
2008, we do not believe that the collection of the proposed structural
measure on QAPI indicators would be considered new work. There are
numerous data collection tools and quality indicators that are
available to hospices through hospice industry associations and private
companies. In addition to these options, hospices may choose to use the
CMS-sponsored Hospice Assessment Intervention and Measurement (AIM)
Project data elements, data dictionary, data collection tool, and
quality indicator formulas that are freely available to all hospices,
found at http://www.ipro.org/index/hospice-aim.
We invite comment on the proposed quality measurement approach
including whether there are other quality measures currently available
which may be appropriate and advisable for the hospice quality
reporting program starting in FY2014. We will review and carefully
consider the comments that we receive on the proposed measures for the
first hospice quality reporting cycle as we prepare the final rule. We
propose that hospices report the structural measure by January 2013 and
the NQF measure 0209 by April 2013 in order to be used in the
fiscal year 2014 payment determination. In addition, we propose that
hospices voluntarily report the structural
[[Page 26823]]
measure by January 2012 for purposes of program development and design.
It is important to note that the Affordable Care Act allows the
Secretary until October 1, 2012 to publish the measures required to
meet the FY 2014 reporting requirement. As such, we have the
opportunity to also consider commenters' suggestions associated with
this proposed rule in FY 2013 hospice rulemaking.
c. Proposed Timeline for Data Collection Under the Quality Reporting
Program for Hospices
To meet the quality reporting requirements for hospices for the FY
2014 payment determination as set forth in Section 1814(i)(5) of the
Act, we propose that the first hospice quality reporting cycle for the
proposed NQF-endorsed measure and the proposed structural measure will
consist of data collected from October 1, 2012 through December 31,
2012. This timeframe will permit us to determine whether each hospice
is eligible to receive the full market basket update for FY 2014 based
on a full quarter of data. This also provides sufficient time after the
end of the data collection period to accurately determine each
hospice's market basket update for FY 2014. We propose that all
subsequent hospice quality reporting cycles would be based on the
calendar-year basis (e.g., January 1, 2013 through December 31, 2013
for determination of the hospice market basket update for each hospice
in FY 2015, etc.). We welcome comments on the proposed reporting cycle
for the hospice quality reporting program.
To voluntarily submit the structural measure, we propose that the
hospice voluntary quality reporting cycle will consist of data
collected from October 1, 2011 through December 31, 2011. This
timeframe will permit us to analyze the data to learn what the
important patient care quality issues are for hospices as we enhance
the quality reporting program design to require more standardized and
specific quality measures to be reported by hospices in subsequent
years.
d. Data Submission Requirements
We generally propose that hospices submit data in the fiscal year
prior to the payment determination. For the fiscal year 2014 payment
determination, we propose that hospices submit data for the proposed
NQF-endorsed measure based on the measure specifications for that
measure, which can be found at http://www.qualityforum.org, no later
than April 1, 2013. Data submission for the structural measure would
include the hospices' report of whether they have a QAPI program that
addresses at least three indicators related to patient care, and, if
so, the subject matter of all of their patient care indicators for the
period October 1, 2012 through December 31, 2012. Submission of these
reports would be required by January 31, 2013.
We propose that both measures' data be submitted to CMS on a
spreadsheet template to be prepared by CMS. We will announce
operational details with respect to the data submission methods and
format for the hospice quality data reporting program using this CMS
Web site http://www.cms.gov/LTCH-IRF-Hospice-Quality-Reporting by no
later than December 31, 2011 should these measures be finalized.
For the voluntary submission, we propose that hospices submit data
for the proposed structural measure based on the spreadsheet template
to be prepared by CMS, no later than January 31, 2012. Voluntary data
submission for the structural measure would include the hospices'
report of whether they have a QAPI program that addresses at least
three indicators related to patient care, and, if so, the subject
matter of all of their patient care indicators for the period October
1, 2011 through December 31, 2011. Submission of these reports would be
required by January 31, 2012.
3. Public Availability of Data Submitted
Under section 1814(i)(5)(E) of the Act, the Secretary is required
to establish procedures for making any quality data submitted by
hospices available to the public. Such procedures will ensure that a
hospice will have the opportunity to review the data regarding the
hospice's respective program before it is made public. Also, under
section 1814(i)(5)(E) of the Act, the Secretary is authorized to report
quality measures that relate to services furnished by a hospice on the
CMS Internet Web site. At the time of the publication of this proposed
rule, no date has been set for public reporting of data. We recognize
that public reporting of quality data is a vital component of a robust
quality reporting program and are fully committed to developing the
necessary systems for public reporting of hospice quality data.
4. Additional Measures Under Consideration
As described above, we are considering expanding the proposed
measures to include measures from the National Hospice and Palliative
Care Organization (NHPCO), the PEACE Project and the AIM Project. While
in this first year, we propose to build a foundation for quality
reporting by requiring hospices to report one NQF endorsed measure and
one structural measure, we seek to achieve a comprehensive set of
quality measures to be available for widespread use for informed
decision making and quality improvement. We expect to explore and
expand the measures in various ways. Future topics under consideration
for quality data reporting include patient safety, effective symptom
management, patient and family experience of care, and alignment of
care with patient preferences. For quality data reporting in FY2014 or
FY2015, we are also particularly interested in the development of new
measures related to these topics and in the further development of
existing measures that can be found on the following Web sites: http://www.nhpco.org/files/public/Statistics_Research/NHPCO_research_flier.pdf http://www.thecarolinascenter.org/default.aspx?pageid=46 and
http://www.ipro.org/index/cms-filesystem-action/hospice/1_6.pdf.
We welcome comments on whether all, some, any, or none of these
measures should be considered for future rulemaking. We also solicit
comments on ways which CMS can adopt these measures in a standardized
way that is not overly burdensome to hospice providers and reflects
hospice patient input.
To support the standardized collection and calculation of quality
measures specifically focused on hospice services, we believe the
required data elements would potentially require a standardized
assessment instrument.
CMS has developed an assessment instrument for the ``Post-Acute
Care Payment Reform Demonstration Program,'' as required by section
5008 of the 2005 Deficit Reduction Act (DRA). This is a standardized
assessment instrument that could be used across all post-acute care
sites to measure functional status and other factors during treatment
and at discharge from each provider and to test the usefulness of this
standardized assessment instrument (now referred to as the Continuity
Assessment Record & Evaluation, CARE). We believe such an assessment
instrument would be beneficial in supporting the submission of data on
quality measures by requiring standardized data with regard to hospice
patients, similar to the current MDS 3.0 and OASIS-C that support a
variety of quality measures for nursing homes and home health agencies,
respectively. The CARE data set used by hospices would require editing
to
[[Page 26824]]
address the unique and specific assessment needs of the hospice patient
population. We invite comments on the implementation of a standardized
assessment instrument for hospices that would similarly support the
calculation of quality measures.
We invite public comment on considering modifications to the CARE
data set to capture information specifically relevant to measuring the
quality of care and services delivered by hospices such as patient/
family preferences and the degree to which those preferences were met
for care delivery, symptom management, spiritual needs and other
aspects of care pertinent to the hospice patient population. The
current version of the CARE data set can be found at
www.pacdemo.rti.org.
Finally, we are also soliciting comments on ways which CMS can
expand the structural reporting measure to also include hospice
performance on each QAPI indicator reported in the performance period.
IV. Updates on Issues Not Proposed for Rulemaking for FY 2012
Rulemaking
A. Update on Hospice Payment Reform and Value Based Purchasing
Section 3132 of the Affordable Care Act of 2010 (Pub. L. 111-148)
authorized the Secretary to collect additional data and information
determined appropriate to revise payments for hospice care and for
other purposes. The types of data and information described in the
Affordable Care Act attempt to capture resource utilization, which can
be collected on claims, cost reports, and possibly other mechanisms as
we determine to be appropriate. The data collected would be used to
revise hospice payment methodology or routine home care rates in a
budget-neutral manner no earlier than October 1, 2013. In order to
determine the revised hospice payment methodology and types of data to
be collected, we will consult with hospice programs and the Medicare
Payment Advisory Commission (MedPAC).
According to MedPAC's March 2011 ``Report to Congress: Medicare
Payment Policy'' (available at http://www.medpac.gov/chapters/Mar10_Ch02E.pdf), Medicare expenditures for hospice services exceeded $12
billion in 2009 and the aggregate Medicare margin in 2008 was 5.1
percent. In addition, MedPAC found a 50 percent growth in the number of
hospices from 2000 to 2009, of which a majority were for-profit
hospices. The growth in Medicare expenditures, margins, and number of
new hospices raises concern that the current hospice payment
methodology may have created unintended incentives. Over the past
several years, MedPAC, the Government Accountability Office (GAO), and
the Office of Inspector General (OIG) all recommended that CMS collect
more comprehensive data in order to better assess the utilization of
the Medicare hospice benefit. MedPAC has also suggested an alternative
payment model that they believe will address the vulnerabilities in the
current payment system.
We are in the early stages of reform analysis. We have conducted a
literature review, are in the process of conducting initial data
analysis, and our contractor will convene a technical advisory panel in
the spring of 2011. We are also working in collaboration with the
Assistant Secretary of Planning and Evaluation to develop analysis that
may be used to inform the technical advisory panel discussions. We hope
to share the study design in future rulemaking to solicit public
comments on the hospice payment reform methodology.
Section 10326 of the Affordable Care Act directs the Secretary to
conduct a pilot program to test a value-based purchasing program for
hospices no later than January 1, 2016. As described in Section III E.
Quality Reporting for Hospices above, in this rule we have proposed two
measures for hospices to report to CMS no later than January 31, 2013.
We believe that these measures are a quality reporting foundation upon
which CMS will expand. Over the course of the next few years, no later
than beginning in FY 2015, CMS will require hospices to report an
expanded and comprehensive set of quality measures from which CMS can
select for pilot testing a value-based purchasing program. During the
FY 2013, FY 2014 and FY 2015 hospice rulemaking, CMS plans to
iteratively implement the expanded measures, and solicit industry
comments regarding analysis and design options for a hospice value-
based purchasing pilot which would improve the quality of care while
reducing spending. We will also consult with stakeholders in developing
the implementation plan, as well as considering the outcomes of any
recent demonstration projects related to value-based purchasing which
we believe might be relevant to the hospice setting. We will provide
further information on the progress of our efforts in future
rulemaking.
B. Update on the Redesigned Provider Statistical & Reimbursement Report
(PS&R)
In our FY 2011 Hospice Wage Index Notice with Comment Period, we
solicited comments on a redesigned PS&R system, which would allow
hospices easy access to national hospice utilization data on their
Medicare hospice beneficiaries. As described in section II of this
proposed rule, some commenters were supportive of the idea, and said
they needed access to each beneficiary's full utilization history to
better manage their caps and to meet the new face-to-face requirements.
We are moving forward with this project, and expect the redesigned
PS&R system to be able to provide complete utilization data needed for
calculating hospice caps. We believe that the redesigned PS&R system
will provide hospices with a greater ability to monitor their caps by
providing readily accessible information on beneficiary utilization. We
expect it to be available to hospices before year's end. We encourage
all hospices to become familiar with the redesigned PS&R and to use the
information it will make available in managing their respective caps.
In the future, we may consider requiring hospices to self-report their
caps, using PS&R data.
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues in this
proposed rule.
Proposed Quality Measures for the Quality Reporting Program for
Hospices
Section 1814(i)(5)(C) of the Social Security Act requires that each
hospice
[[Page 26825]]
must submit data to the Secretary on quality measures specified by the
Secretary. Such data must be submitted in a form and manner, and at a
time specified by the Secretary. Under section 1814(i)(5)(D)(iii) of
the Act, the Secretary must not later than October 1, 2012 publish
selected measures that will be applicable with respect to FY 2014.
In implementing the Hospice quality reporting program, CMS seeks to
collect measure information with as little burden to the providers as
possible and which reflects the full spectrum of quality performance.
Our purpose in collecting this data is to help achieve better health
care and improve health through the widespread dissemination and use of
performance information.
A. Structural Measure: Participation in a Quality Assessment
Performance Improvement Program That Includes at Least Three Indicators
Related to Patient Care
Consistent with this proposed rule, hospices will voluntarily
report to CMS by January 31, 2012 their participation in a QAPI program
that includes the hospices' report of whether they have a QAPI program
that addresses at least three indicators related to patient care, and
if so, the subject matter of all of their patient care indicators
during the time frame October 1 through December 31, 2011. Data
submitted for the last quarter of calendar year 2011 shall be voluntary
on the part of hospice providers and shall not impact their fiscal year
2014 payment determination.
The information that hospices will be required to report, in both
the voluntary and mandatory phases of reporting, consists of stating
whether or not they participate in a QAPI program that includes at
least three indicators related to patient care and if so, the subject
matter of all of their patient care indicators. Expectations of the
QAPI programs are set forth in the Hospice Conditions of Participation
(CoPs) at 42 CFR 418.58(a) through 418.58(e). These conditions of
participation require that hospices must develop, implement, and
maintain an effective, ongoing, hospice-wide, data-driven QAPI program
and that the hospice must maintain documentary evidence of its QAPI
programs. Hospices have been required to meet all of the standards set
forth in 42 CFR 418.58(a) through 418.58(e) as a condition of
participation in the Medicare and Medicaid programs since 2008.
Therefore, the identification of quality indicators related to patient
care, will not be considered new or additional work.
Under the proposed quality reporting program, hospices will
voluntarily report to CMS by no later than January 31, 2012, data that
would include whether they have a QAPI program that addresses at least
three indicators related to patient care, and if so, the subject matter
of all of their patient care indicators during the time frame via a
CMS-prepared spreadsheet template. CMS anticipates that this reporting
will take no more than 15 minutes of time to prepare the structural
measure report.
Thereafter, each of the 3,531 hospices in the United States will be
required to submit this structural measure information to CMS one time
per year. CMS estimates that it will take approximately 15 minutes to
prepare and complete the submission of this structural measure report.
Therefore, the estimated number of hours spent by all hospices in the
U.S. preparing and submitting such data totals 883 hours. CMS believes
that the compilation and transmission of the data can be completed by
data entry personnel. We have estimated a total cost impact of $18,163
to all hospices for the implementation of the hospice structural
measure quality reporting program, based on 883 total hours for a
billing clerk at $20.57/hour (which includes 30 percent overhead and
fringe benefits, using most recent BLS wage data). We have developed an
information collection request for OMB review and approval.
B. NQF Measure 0209: Percentage of Patients Who Were
Uncomfortable Because of Pain on Admission to Hospice Whose Pain Was
Brought Under Control Within 48 Hours
At this time, CMS has not completed development of the information
collection instrument that Hospices would have to submit in order to
comply with the NQF measure 0209 reporting requirements as
discussed earlier in this proposed rule. Because the instrument for the
reporting of this measure is still under development, we cannot assign
a complete burden estimate at this time. Once the instrument is
available, we will publish the required 60-day and 30-day Federal
Register notices to solicit public comments on the data submission form
and to announce the submission of the information collection request to
OMB for its review and approval. The data collection of the NQF measure
0209 for the fiscal year 2014 payment determination is for the
time period from October 1, 2012 to December 31, 2012.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
CMS-1355-P, Fax: (202) 395-6974; or E-mail: [email protected].
VI. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this proposed rule as required by
Executive Order 12866 (September 30, 1993, Regulatory Planning and
Review), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (September
19, 1980; Pub. L. 96-354) (RFA), section 1102(b) of the Social Security
Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has not been designated an ``economically''
significant rule, under section 3(f)(1) of Executive Order 12866.
However, we have voluntarily prepared a Regulatory Impact Analysis that
to the best of our ability presents the costs and benefits of this
proposed rule.
[[Page 26826]]
2. Statement of Need
This proposed rule follows Sec. 418.306(c) which requires annual
publication, in the Federal Register, of the hospice wage index based
on the most current available CMS hospital wage data, including any
changes to the definitions of Metropolitan Statistical Areas (MSAs).
Also, it implements Section 3004 of the Affordable Care Act of 2010,
which directs the Secretary to specify quality measures for the hospice
program. Lastly, this proposed rule includes proposed changes to the
aggregate cap calculation, to requirements related to physicians who
perform face-to-face encounters, and offers several clarifying
technical corrections.
3. Overall Impacts
The overall impact of this proposed rule is an estimated net
decrease in Federal payments to hospices of $80 million for fiscal year
2012. We estimated the impact on hospices, as a result of the changes
to the FY 2012 hospice wage index and of reducing the BNAF by an
additional 15 percent, for a total BNAF reduction of 40 percent (10
percent in FY 2010, 15 percent in FY 2011, and 15 percent in FY 2012).
The BNAF reduction is part of a 7-year BNAF phase-out that was
finalized in previous rulemaking (74 FR 39384 (August 6, 2009)), and is
not a policy change.
As discussed previously, the methodology for computing the hospice
wage index was determined through a negotiated rulemaking committee and
promulgated in the August 8, 1997 hospice wage index final rule (62 FR
42860). The BNAF, which was promulgated in the August 8, 1997 rule, is
being phased out. This rule updates the hospice wage index in
accordance with the 2010 Hospice Wage Index final rule, which finalized
a 10 percent reduced BNAF for FY 2010 as the first year of a 7-year
phase-out of the BNAF, to be followed by an additional 15 percent per
year reduction in the BNAF in each of the next 6 years. Total phase-out
will be complete by FY 2016.
4. Detailed Economic Analysis
Column 4 of Table 1 shows the combined effects of the updated wage
data (the 2011 pre-floor, pre-reclassified hospital wage index) and of
the additional 15 percent reduction in the BNAF (for a total BNAF
reduction of 40 percent), comparing estimated payments for FY 2012 to
estimated payments for FY 2011. The FY 2011 payments used for
comparison have a 25 percent reduced BNAF applied. We estimate that the
total hospice payments for FY 2012 will decrease by $80 million as a
result of the application of the updated wage data ($+10 million) and
the total 40 percent reduction in the BNAF ($-90 million). This
estimate does not take into account any inpatient hospital market
basket update, which is estimated to be 2.8 percent for FY 2012. This
estimated 2.8 percent does not reflect the provision in the Affordable
Care Act which reduces the inpatient hospital market basket update for
FY 2012 by 0.1 percentage point, since that reduction does not apply to
hospices. The final inpatient hospital market basket update and
associated payment rates will be communicated through an administrative
instruction in the summer. The effect of an estimated 2.8 percent
inpatient hospital market basket update on payments to hospices is
approximately $390 million. Taking into account an estimated 2.8
percent inpatient hospital market basket update (+$390 million), in
addition to the updated wage data ($+10 million) and the total 40
percent reduction in the BNAF ($-90 million), it is estimated that
hospice payments would increase by $310 million in FY 2012 ($390
million + $10 million -$90 million = $310 million). The percent change
in payments to hospices due to the combined effects of the updated wage
data, the additional 15 percent reduction in the BNAF (for a total BNAF
reduction of 40 percent), and the inpatient hospital market basket
update of 2.8 percent is reflected in column 5 of the impact table
(Table 1).
a. Effects on Hospices
This section discusses the impact of the projected effects of the
hospice wage index, including the effects of an estimated 2.8 percent
inpatient hospital market basket update for FY 2012 that will be
communicated separately through an administrative instruction. This
proposed rule continues to use the CBSA-based pre-floor, pre-
reclassified hospital wage index as a basis for the hospice wage index
and continues to use the same policies for treatment of areas (rural
and urban) without hospital wage data. The proposed FY 2012 hospice
wage index is based upon the 2011 pre-floor, pre-reclassified hospital
wage index and the most complete claims data available (FY 2009) with
an additional 15 percent reduction in the BNAF (combined with the 10
percent reduction in the BNAF taken in FY 2010, and the additional 15
percent taken in 2011, for a total BNAF reduction of 40 percent in FY
2012). The BNAF reduction is part of a 7-year BNAF phase-out that was
finalized in previous rulemaking, and would not be a policy change.
For the purposes of our impacts, our baseline is estimated FY 2011
payments with a 25 percent BNAF reduction, using the 2010 pre-floor,
pre-reclassified hospital wage index. Our first comparison (column 3,
Table 1) compares our baseline to estimated FY 2012 payments (holding
payment rates constant) using the updated wage data (2011 pre-floor,
pre-reclassified hospital wage index). Consequently, the estimated
effects illustrated in column 3 of Table 1 show the distributional
effects of the updated wage data only. The effects of using the updated
wage data combined with the additional 15 percent reduction in the BNAF
are illustrated in column 4 of Table 1.
We have included a comparison of the combined effects of the
additional 15 percent BNAF reduction, the updated wage data, and an
estimated 2.8 percent inpatient hospital market basket update for FY
2012 (Table 1, column 5). Presenting these data gives the hospice
industry a more complete picture of the effects on their total revenue
of the hospice wage index discussed in this proposed rule, the BNAF
phase-out, and the estimated FY 2012 inpatient hospital market basket
update. Certain events may limit the scope or accuracy of our impact
analysis, because such an analysis is susceptible to forecasting errors
due to other changes in the forecasted impact time period. The nature
of the Medicare program is such that the changes may interact, and the
complexity of the interaction of these changes could make it difficult
to predict accurately the full scope of the impact upon hospices.
[[Page 26827]]
Table 1--Anticipated Impact on Medicare Hospice Payments of Updating the Pre-Floor, Pre-Reclassified Hospital
Wage Index Data, Reducing the Budget Neutrality Adjustment Factor (BNAF) by an Additional 15 Percent (for a
Total BNAF Reduction of 40 Percent) and Applying an Estimated 2.8 Percent [dagger] Inpatient Hospital Market
Basket Update to the FY 2012 Hospice Wage Index, Compared to the FY 2011 Hospice Wage Index With a 25 Percent
BNAF Reduction
----------------------------------------------------------------------------------------------------------------
Percent
change in
Percent hospice
change in payments
Percent hospice due to wage
Number of change in payments due index
Number of routine hospice to wage change,
hospices home care payments due index additional
days in to FY2012 change, and 15%
thousands wage index additional reduction
change 15% in BNAF,
reduction in and market
BNAF basket
update
(1) (2) (3) (4) (5)
----------------------------------------------------------------------------------------------------------------
ALL HOSPICES................................. 3,440 74,900 0.1 (0.5) 2.3
URBAN HOSPICES........................... 2,388 64,816 0.1 (0.5) 2.3
RURAL HOSPICES........................... 1,052 10,084 (0.2) (0.6) 2.2
BY REGION--URBAN:
NEW ENGLAND.............................. 133 2,425 (0.7) (1.3) 1.5
MIDDLE ATLANTIC.......................... 239 7,131 (0.3) (0.9) 1.9
SOUTH ATLANTIC........................... 347 14,247 0.3 (0.3) 2.5
EAST NORTH CENTRAL....................... 328 9,191 0.2 (0.4) 2.4
EAST SOUTH CENTRAL....................... 177 4,420 (0.1) (0.6) 2.2
WEST NORTH CENTRAL....................... 180 4,280 (0.3) (0.8) 1.9
WEST SOUTH CENTRAL....................... 461 8,657 0.1 (0.4) 2.4
MOUNTAIN................................. 222 5,633 (0.0) (0.6) 2.2
PACIFIC.................................. 264 7,606 0.6 (0.0) 2.8
OUTLYING................................. 37 1,227 (0.4) (0.4) 2.4
BY REGION--RURAL:
NEW ENGLAND.............................. 26 193 (0.1) (0.6) 2.1
MIDDLE ATLANTIC.......................... 45 517 0.4 (0.2) 2.6
SOUTH ATLANTIC........................... 136 2,106 (0.7) (1.1) 1.6
EAST NORTH CENTRAL....................... 147 1,706 (0.6) (1.1) 1.6
EAST SOUTH CENTRAL....................... 153 1,958 0.1 (0.1) 2.7
WEST NORTH CENTRAL....................... 194 1,085 (0.5) (0.9) 1.9
WEST SOUTH CENTRAL....................... 189 1,498 0.8 0.4 3.2
MOUNTAIN................................. 109 585 0.3 (0.1) 2.7
PACIFIC.................................. 52 428 (0.7) (1.3) 1.5
OUTLYING................................. 1 10 0.0 0.0 2.8
ROUTINE HOME CARE DAYS:
0-3499 DAYS (small)...................... 621 1,077 (0.1) (0.6) 2.2
3500-19,999 DAYS (medium)................ 1716 17,231 (0.1) (0.6) 2.2
20,000+ DAYS (large)..................... 1103 56,591 0.1 (0.5) 2.3
TYPE OF OWNERSHIP:
VOLUNTARY................................ 1172 29,742 0.0 (0.5) 2.3
PROPRIETARY.............................. 1796 38,047 0.1 (0.4) 2.4
GOVERNMENT............................... 472 7,111 (0.1) (0.7) 2.1
HOSPICE BASE:
FREESTANDING............................. 2340 58,510 0.1 (0.5) 2.3
HOME HEALTH AGENCY....................... 555 9,922 0.1 (0.5) 2.3
HOSPITAL................................. 526 6,272 (0.0) (0.6) 2.2
SKILLED NURSING FACILITY................. 19 196 0.2 (0.4) 2.4
----------------------------------------------------------------------------------------------------------------
BNAF = Budget Neutrality Adjustment Factor.
Comparison is to FY 2011 data with a 25 percent BNAF reduction.
* OSCAR data as of January 6, 2011 for hospices with claims filed in FY 2009.
** In previous years, there was also a category labeled ``Other''; these were Other Government hospices, and
have been combined with the ``Government'' category.
[dagger] The estimated 2.8 percent inpatient hospital market basket update for FY 2012 does not reflect the
provision in the Affordable Care Act which reduces the inpatient hospital market basket update by 0.1
percentage point since that reduction does not apply to hospices.
REGION KEY: New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle
Atlantic = Pennsylvania, New Jersey, New York; South Atlantic = Delaware, District of Columbia, Florida,
Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East North Central = Illinois,
Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West North
Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central =
Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah,
Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Outlying = Guam, Puerto Rico, Virgin
Islands.
Table 1 shows the results of our analysis. In column 1, we indicate
the number of hospices included in our analysis as of January 6, 2011
which had also filed claims in FY 2009. In column 2, we indicate the
number of routine
[[Page 26828]]
home care days that were included in our analysis, although the
analysis was performed on all types of hospice care. Columns 3, 4, and
5 compare FY 2012 estimated payments with those estimated for FY 2011.
The estimated FY 2011 payments incorporate a BNAF which has been
reduced by 25 percent. Column 3 shows the percentage change in
estimated Medicare payments for FY 2012 due to the effects of the
updated wage data only, compared with estimated FY 2011 payments. The
effect of the updated wage data can vary from region to region
depending on the fluctuations in the wage index values of the pre-
floor, pre-reclassified hospital wage index. Column 4 shows the
percentage change in estimated hospice payments from FY 2011 to FY 2012
due to the combined effects of using the updated wage data and reducing
the BNAF by an additional 15 percent. Column 5 shows the percentage
change in estimated hospice payments from FY 2011 to FY 2012 due to the
combined effects of using updated wage data, an additional 15 percent
BNAF reduction, and an estimated 2.8 percent inpatient hospital market
basket update.
Table 1 also categorizes hospices by various geographic and hospice
characteristics. The first row of data displays the aggregate result of
the impact for all Medicare-certified hospices. The second and third
rows of the table categorize hospices according to their geographic
location (urban and rural). Our analysis indicated that there are 2,388
hospices located in urban areas and 1,052 hospices located in rural
areas. The next two row groupings in the table indicate the number of
hospices by census region, also broken down by urban and rural
hospices. The next grouping shows the impact on hospices based on the
size of the hospice's program. We determined that the majority of
hospice payments are made at the routine home care rate. Therefore, we
based the size of each individual hospice's program on the number of
routine home care days provided in FY 2009. The next grouping shows the
impact on hospices by type of ownership. The final grouping shows the
impact on hospices defined by whether they are provider-based or
freestanding.
As indicated in Table 1, there are 3,440 hospices. Approximately 48
percent of Medicare-certified hospices are identified as voluntary
(non-profit) or government agencies. Because the National Hospice and
Palliative Care Organization estimates that approximately 83 percent of
hospice patients in 2009 were Medicare beneficiaries, we have not
considered other sources of revenue in this analysis.
As stated previously, the following discussions are limited to
demonstrating trends rather than projected dollars. We used the pre-
floor, pre-reclassified hospital wage indexes as well as the most
complete claims data available (FY 2009) in developing the impact
analysis. The FY 2012 payment rates will be adjusted to reflect the
full inpatient hospital market basket update, as required by section
1814(i)(1)(C)(ii)(VII) of the Act. As previously noted, we publish
these rates through administrative instructions rather than in a
proposed rule. The FY 2012 estimated inpatient hospital market basket
update is 2.8 percent. This 2.8 percent does not reflect the provision
in the Affordable Care Act which reduces the inpatient hospital market
basket update by 0.1 percentage point since that reduction does not
apply to hospices. Since the inclusion of the effect of an inpatient
hospital market basket increase provides a more complete picture of
projected total hospice payments for FY 2012, the last column of Table
1 shows the combined impacts of the updated wage data, the additional
15 percent BNAF reduction, and the estimated 2.8 percent inpatient
hospital market basket update. As discussed in the FY 2006 hospice wage
index final rule (70 FR 45129), hospice agencies may use multiple
hospice wage index values to compute their payments based on
potentially different geographic locations. Before January 1, 2008, the
location of the beneficiary was used to determine the CBSA for routine
and continuous home care and the location of the hospice agency was
used to determine the CBSA for respite and general inpatient care.
Beginning January 1, 2008, the hospice wage index CBSA utilized is
based on the location of the site of service. As the location of the
beneficiary's home and the location of the facility may vary, there
will still be variability in geographic location for an individual
hospice. We anticipate that the CBSA of the various sites of service
will usually correspond with the CBSA of the geographic location of the
hospice, and thus we will continue to use the location of the hospice
for our analyses of the impact of the changes to the hospice wage index
in this rule. For this analysis, we use payments to the hospice in the
aggregate based on the location of the hospice.
The impact of hospice wage index changes has been analyzed
according to the type of hospice, geographic location, type of
ownership, hospice base, and size. Our analysis shows that most
hospices are in urban areas and provide the vast majority of routine
home care days. Most hospices are medium-sized followed by large
hospices. Hospices are almost equal in numbers by ownership with 1,644
designated as non-profit or government hospices and 1,796 as
proprietary. The vast majority of hospices are freestanding.
b. Hospice Size
Under the Medicare hospice benefit, hospices can provide four
different levels of care days. The majority of the days provided by a
hospice are routine home care (RHC) days, representing about 97 percent
of the services provided by a hospice. Therefore, the number of RHC
days can be used as a proxy for the size of the hospice, that is, the
more days of care provided, the larger the hospice. As discussed in the
August 4, 2005 final rule, we currently use three size designations to
present the impact analyses. The three categories are: (1) Small
agencies having 0 to 3,499 RHC days; (2) medium agencies having 3,500
to 19,999 RHC days; and (3) large agencies having 20,000 or more RHC
days. The FY 2012 updated wage data without any BNAF reduction are
anticipated to decrease payments to small and medium hospices by 0.1
percent and increase payments to large hospices by 0.1 percent (column
3); the updated wage data and the additional 15 percent BNAF reduction
(for a total BNAF reduction of 40 percent) are anticipated to decrease
estimated payments to small and medium hospices by 0.6 percent, and to
large hospices by 0.5 percent (column 4); and finally, the updated wage
data, the additional 15 percent BNAF reduction (for a total BNAF
reduction of 40 percent), and the estimated 2.8 percent inpatient
hospital market basket update are projected to increase estimated
payments by 2.2 percent for small and medium hospices, and by 2.3
percent for large hospices (column 5).
c. Geographic Location
Column 3 of Table 1 shows updated wage data without the BNAF
reduction. Urban hospices are anticipated to experience an increase of
0.1 percent, while rural hospices will experience a decrease of 0.2
percent. Urban hospices can anticipate a decrease in payments in five
regions; ranging from 0.7 percent in the New England region to 0.1
percent in the East South Central region. Payments in the Mountain
region are estimated to stay stable. Urban hospices are anticipated to
see an increase in payments in four regions; ranging from 0.1 percent
in the West South Central
[[Page 26829]]
region to 0.6 percent in the Pacific region.
Column 3 shows estimated percentages for rural hospices. Rural
hospices are estimated to see a decrease in payments in five regions,
ranging from 0.7 percent in the South Atlantic and Pacific regions to
0.1 percent in the New England region. Rural hospices can anticipate an
increase in payments in four regions, ranging from 0.1 percent in the
East South Central region to 0.8 percent in the West South Central
region. There is no change in payments for Outlying regions due to FY
2012 Wage Index change.
Column 4 shows the combined effect of the updated wage data and the
additional 15 percent BNAF reduction on estimated payments, as compared
to the FY 2011 estimated payments using a BNAF with a 25 percent
reduction. Overall urban are anticipated to experience a 0.5 percent
decrease in payments while rural hospices are anticipated to experience
a 0.6 percent decrease in payments. Nine regions in urban areas are
estimated to see decreases in payments, ranging from 1.3 percent in the
New England region to 0.3 percent in the South Atlantic region.
Payments for the Pacific region are estimated to be relatively stable.
Rural hospices are estimated to experience a decrease in payments
in eight regions, ranging from 1.3 percent in the Pacific region to 0.1
percent in the East South Central and Mountain regions. While the
estimated effect of the additional 15 percent BNAF reduction decreased
payments to rural hospices in the West South Central region, hospices
in this region are still anticipated to experience an estimated
increase in payments of 0.4 percent due to the net effect of the
reduced BNAF and the updated wage index data. Payments to rural
outlying regions are anticipated to remain relatively stable.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction, and the estimated 2.8 percent
inpatient hospital market basket update on estimated payments as
compared to the estimated FY 2011 payments. Note that the FY 2011
payments had a 25 percent BNAF reduction applied to them. Overall,
urban hospices are anticipated to experience a 2.3 percent increase in
payments and rural hospices are anticipated to experience a 2.2 percent
increase in payments. Urban hospices are anticipated to experience an
increase in estimated payments in every region, ranging from 1.5
percent in the New England region to 2.8 percent in the Pacific region.
Rural hospices in every region are estimated to see an increase in
payments, ranging from 1.5 percent in the Pacific region to 3.2 percent
in the West South Central region.
d. Type of Ownership
Column 3 demonstrates the effect of the updated wage data on FY
2012 estimated payments, versus FY 2011 estimated payments. We
anticipate that using the updated wage data would decrease estimated
payments to government hospices by 0.1 percent and payments to
voluntary (non-profit) hospices would remain relatively unchanged. We
estimate an increase in payments for proprietary (for-profit) hospices
of 0.1 percent.
Column 4 demonstrates the combined effects of the updated wage data
and of the additional 15 percent BNAF reduction. Estimated payments to
voluntary (non-profit) hospices are anticipated to decrease by 0.5
percent, while government hospices are anticipated to experience a
decrease of 0.7 percent. Estimated payments to proprietary (for-profit)
hospices are anticipated to decrease by 0.4 percent.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction (for a total BNAF reduction of 40
percent), and an estimated 2.8 percent inpatient hospital market basket
update on estimated payments, comparing FY 2012 to FY 2011 (using a
BNAF with a 25 percent reduction). Estimated FY 2012 payments are
anticipated to increase 2.3 percent for voluntary (non-profit), 2.1
percent for government hospices, and 2.4 percent for proprietary (for-
profit) hospices.
e. Hospice Base
Column 3 demonstrates the effect of using the updated wage data,
comparing estimated payments for FY 2012 to FY 2011. Estimated payments
are anticipated to increase by 0.1 percent for freestanding hospices
and home health agency based hospices, and 0.2 percent for hospices
based out of a skilled nursing facility. Payments to hospital based
hospices are estimated to remain relatively unchanged.
Column 4 shows the combined effects of the updated wage data and
reducing the BNAF by an additional 15 percent, comparing estimated
payments for FY 2012 to FY 2011. All hospice facilities are anticipated
to experience decrease in payments ranging from 0.4 percent for skilled
nursing facility based hospices, to 0.6 percent for hospital based
hospices.
Column 5 shows the combined effects of the updated wage data, the
additional 15 percent BNAF reduction, and an estimated 2.8 percent
inpatient hospital market basket update on estimated payments,
comparing FY 2012 to FY 2011. Estimated payments are anticipated to
increase for all hospices, ranging from 2.2 percent for hospital based
hospices to 2.4 percent for skilled nursing facility based hospices.
f. Effects on Other Providers
This proposed rule only affects Medicare hospices, and therefore
has no effect on other provider types.
g. Effects on the Medicare and Medicaid Programs
This proposed rule only affects Medicare hospices, and therefore
has no effect on Medicaid programs. As described previously, estimated
Medicare payments to hospices in FY 2012 are anticipated to increase by
$10 million due to the update in the wage index data, and to decrease
by $90 million due to the total 40 percent reduction in the BNAF.
However, the estimated market basket update of 2.8 percent is
anticipated to increase Medicare payments by $390 million. Therefore,
the total effect on Medicare hospice payments is estimated to be a $310
million increase. Note that the final market basket update and
associated FY 2012 payment rates will be officially communicated this
summer through an administrative instruction.
h. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 2 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule. This
table provides our best estimate of the decrease in Medicare payments
under the hospice benefit as a result of the changes presented in this
proposed rule using data for 3,440 hospices in our database.
Table 2--Accounting Statement: Classification of Estimated Expenditures,
From FY 2011 to FY 2012
[In $millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers....... $-80. *
[[Page 26830]]
From Whom to Whom.................... Federal Government to Hospices.
------------------------------------------------------------------------
* The $80 million reduction in transfers includes the additional 15
percent reduction in the BNAF and the updated wage data. It does not
include the hospital market basket update, which is estimated at 2.8
percent for FY 2012. This estimated 2.8 percent does not reflect the
provision in the Affordable Care Act (ACA) which reduced the hospital
market basket update by 0.1 percentage point since that reduction does
not apply to hospices.
i. Conclusion
In conclusion, the overall effect of this proposed rule is
estimated to be the $80 million reduction in Federal payments due to
the wage index changes (including the additional 15 percent reduction
in the BNAF). Furthermore, the Secretary has determined that this will
not have a significant impact on a substantial number of small
entities, or have a significant effect relative to section 1102(b) of
the Act.
B. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze options for regulatory relief
of small businesses if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, we estimate that
almost all hospices are small entities as that term is used in the RFA.
The great majority of hospitals and most other health care providers
and suppliers are small entities, either by being nonprofit
organizations or by meeting the Small Business Administration (SBA)
definition of a small business (having revenues of less than $7.0
million to $34.5 million in any 1 year). While the SBA does not define
a size threshold in terms of annual revenues for hospices, it does
define one for home health agencies ($13.5 million; seehttp://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=2465b064ba6965cc1fbd2eae60854b11&rgn=div8&view=text&node=13:1.0.1.1.16.1.266.9&idno=13). For the purposes of this proposed rule,
because the hospice benefit is a home-based benefit, we are applying
the SBA definition of ``small'' for home health agencies to hospices;
we will use this definition of ``small'' in determining if this
proposed rule has a significant impact on a substantial number of small
entities (for example, hospices). Using 2009 Medicare hospice claims
data, we estimate that 96 percent of hospices have Medicare revenues
below $13.5 million and are considered small entities. As indicated in
Table 1 below, there are 3,440 hospices with 2009 claims data as of
January 6, 2011. Approximately 48 percent of those 3,440 Medicare
certified hospices are identified as voluntary or government agencies
and, therefore, are considered small entities. Most of these and most
of the remainder are also small hospice entities because, as noted
above, their revenues fall below the SBA size thresholds.
The effects of this rule on hospices are shown in Table 1. Overall,
Medicare payments to all hospices would decrease by an estimated 0.5
percent over last year's payments in response to the policies that we
are proposing in this NPRM, reflecting the combined effects of the
updated wage data and the additional 15 percent reduction in the BNAF.
The combined effects of the updated wage data and additional 15 percent
reduction in the BNAF on small or medium sized hospices (as defined by
routine home care days rather than by the SBA definition), is -0.6
percent. However, when including the estimated inpatient hospital
market basket update of 2.8 percent into these estimates, the combined
effects on Medicare payment to all hospices would result in an
estimated increase of approximately 2.3 percent. For small and medium
hospices (as defined by routine home care days), the estimated effects
on revenue when accounting for the updated wage data, the additional 15
percent BNAF reduction, and the estimated inpatient hospital market
basket update are increases in payments of 2.2 percent. Overall average
hospice revenue effects will be slightly less than these estimates
since according the National Hospice and Palliative Care Organization,
about 17 percent of hospice patients are non-Medicare.
HHS's practice in interpreting the RFA is to consider effects
economically ``significant'' only if they reach a threshold of 3 to 5
percent or more of total revenue or total costs. As noted above, the
combined effect of only the updated wage data and the additional 15
percent reduced BNAF (for a total BNAF reduction of 40 percent) for all
hospices is -0.5 percent. Since, by SBA's definition of ``small'' (when
applied to hospices), nearly all hospices are considered to be small
entities, the combined effect of only the updated wage data and the
additional 15 percent reduced BNAF (-0.5 percent) does not exceed HHS's
3.0 percent minimum threshold. However, HHS's practice in determining
``significant economic impact'' has considered either total revenue or
total costs. Total hospice revenues include the effect of the market
basket update. When we consider the combined effect of the updated wage
data, the additional 15 percent BNAF reduction, and the estimated 2.8
percent FY 2012 inpatient hospital market basket update, the overall
impact is an increase in estimated hospice payments of 2.3 percent for
FY 2012. Therefore, the Secretary has determined that this proposed
rule would not create a significant economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. This proposed rule only
affects hospices. Therefore, the Secretary has determined that this
proposed rule would not have a significant impact on the operations of
a substantial number of small rural hospitals.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2011, that
threshold is approximately $136 million. This proposed rule with
comment period is not anticipated to have an effect on State, local, or
tribal governments, in the aggregate, or on the private sector of $136
million or more.
VIII. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have reviewed this proposed rule under the threshold
criteria of Executive Order 13132, Federalism, and have determined that
it would not have an impact on the rights, roles, and responsibilities
of State, local, or tribal governments.
[[Page 26831]]
List of Subjects in 42 CFR Part 418
Health facilities, Hospice care, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
1. The authority citation for part 418 continues to read as
follows:
Authority: Secs 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart G--Payment for Hospice Care
2. In Sec. 418.22, paragraphs (a)(4) and (b)(4) are revised to
read as follows:
Sec. 418.22 Certification of terminal illness.
(a) * * *
(4) Face-to-face encounter. As of January 1, 2011, a hospice
physician or hospice nurse practitioner must have a face-to-face
encounter with each hospice patient whose total stay across all
hospices is anticipated to reach the 3rd benefit period. The face-to-
face encounter must occur prior to but no more than 30 calendar days
prior to the 3rd benefit period recertification, and every benefit
period recertification thereafter, to gather clinical findings to
determine continued eligibility for hospice care.
(b) * * *
(4) The physician or nurse practitioner who performs the face-to-
face encounter with the patient described in paragraph (a)(4) of this
section must attest in writing that he or she had a face-to-face
encounter with the patient, including the date of that visit. The
attestation of the nurse practitioner or a non-certifying hospice
physician shall state that the clinical findings of that visit were
provided to the certifying physician for use in determining continued
eligibility for hospice care.
* * * * *
3. Section 418.202 (g) is revised to read:
Sec. 418.202 Covered services.
* * * * *
(g) Home health or hospice aide services furnished by qualified
aides as designated in Sec. 418.76 and homemaker services. Home health
aides (also known as hospice aides) may provide personal care services
as defined in Sec. 409.45(b) of this chapter. Aides may perform
household services to maintain a safe and sanitary environment in areas
of the home used by the patient, such as changing bed linens or light
cleaning and laundering essential to the comfort and cleanliness of the
patient. Aide services must be provided under the general supervision
of a registered nurse. Homemaker services may include assistance in
maintenance of a safe and healthy environment and services to enable
the individual to carry out the treatment plan.
* * * * *
4. In Sec. 418.309, the introductory text and paragraph (b) are
revised, and new paragraphs (c) and (d) are added, to read:
Sec. 418.309 Hospice Aggregate Cap.
A hospice's aggregate cap is calculated by multiplying the adjusted
cap amount (determined in paragraph (a) of this section) by the number
of Medicare beneficiaries, as determined by one of two methodologies
for determining the number of Medicare beneficiaries for a given cap
year described in paragraphs (b) and (c) of this section:
* * * * *
(b) Streamlined Methodology Defined. A hospice's aggregate cap is
calculated by multiplying the adjusted cap amount determined in
paragraph (a) of this section by the number of Medicare beneficiaries
as determined in paragraphs (b)(1) and (2) of this section. For
purposes of the streamlined methodology calculation--
(1) In the case in which a beneficiary received care from only one
hospice, the hospice includes in its number of Medicare beneficiaries
those Medicare beneficiaries who have not previously been included in
the calculation of any hospice cap, and who have filed an election to
receive hospice care in accordance with Sec. 418.24 during the period
beginning on September 28 (34 days before the beginning of the cap
year) and ending on September 27 (35 days before the end of the cap
year), using the best data available at the time of the calculation.
(2) In the case in which a beneficiary received care from more than
one hospice, each hospice includes in its number of Medicare
beneficiaries only that fraction which represents the portion of a
patient's total days of care in all hospices and all years that was
spent in that hospice in that cap year, using the best data available
at the time of the calculation. The aggregate cap calculation for a
given cap year may be adjusted after the calculation for that year
based on updated data.
(c) Patient-by-Patient Proportional Methodology Defined. A
hospice's aggregate cap is calculated by multiplying the adjusted cap
amount determined in paragraph (a) of this section by the number of
Medicare beneficiaries as described in paragraphs (c)(1) and (2) of
this section. For the purposes of the patient-by-patient proportional
methodology--
(1) A hospice includes in its number of Medicare beneficiaries only
that fraction which represents the portion of a patient's total days of
care in all hospices and all years that was spent in that hospice in
that cap year, using the best data available at the time of the
calculation. The total number of Medicare beneficiaries for a given
hospice's cap year is determined by summing the whole or fractional
share of each Medicare beneficiary that received hospice care during
the cap year, from that hospice.
(2) The aggregate cap calculation for a given cap year may be
adjusted after the calculation for that year based on updated data.
(d) Application of Methodologies. (1) For cap years ending October
31, 2011 and for prior cap years, a hospice's aggregate cap is
calculated using the streamlined methodology described in paragraph (b)
of this section, subject to the following:
(i) A hospice that has not received a cap determination for a cap
year ending on or before October 31, 2011 as of October 1, 2011, may
elect to have its final cap determination for such cap years calculated
using the patient-by-patient proportional methodology described in
paragraph (c) of this section; or
(ii) A hospice that has filed a timely appeal regarding the
methodology used for determining the number of Medicare beneficiaries
in its cap calculation for any cap year is deemed to have elected that
its cap determination for the challenged year, and all subsequent cap
years, be calculated using the patient-by-patient proportional
methodology described in paragraph (c) of this section.
(2) For cap years ending October 31, 2012, and all subsequent cap
years, a hospice's aggregate cap is calculated using the patient-by-
patient proportional methodology described in paragraph (c) of this
section, subject to the following:
(i) A hospice that has had its cap calculated using the patient-by-
patient proportional methodology for any cap year(s) prior to the 2012
cap year is not eligible to elect the streamlined methodology, and must
continue to have the patient-by-patient proportional methodology used
to determine the number of Medicare beneficiaries in a given cap year.
(ii) A hospice that is eligible to make a one-time election to have
its cap calculated using the streamlined
[[Page 26832]]
methodology must make that election no later than 60 days after receipt
of its 2012 cap determination. A hospice's election to have its cap
calculated using the streamlined methodology would remain in effect
unless:
(A) The hospice subsequently submits a written election to change
the methodology used in its cap determination to the patient-by-patient
proportional methodology; or
(B) The hospice appeals the streamlined methodology used to
determine the number of Medicare beneficiaries used in the aggregate
cap calculation.
(3) If a hospice that elected to have its aggregate cap calculated
using the streamlined methodology under paragraph (d)(2)(ii) of this
section subsequently elects the patient-by-patient proportional
methodology or appeals the streamlined methodology, under paragraph
(d)(2)(ii)(A) or (B) of this section, the hospice's aggregate cap
determination for that cap year and all subsequent cap years is to be
calculated using the patient-by-patient proportional methodology. As
such, past cap year determinations may be adjusted to prevent the over-
counting of beneficiaries, notwithstanding the ordinary limitations on
reopening.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: April 14, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
Approved: April 19, 2011.
Kathleen Sebelius,
Secretary.
Note: The following Addendums will not be published in the Code
of Federal Regulations.
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[FR Doc. 2011-10689 Filed 4-28-11; 4:15 pm]
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