[Federal Register Volume 82, Number 84 (Wednesday, May 3, 2017)]
[Proposed Rules]
[Pages 20750-20792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08563]



[[Page 20749]]

Vol. 82

Wednesday,

No. 84

May 3, 2017

Part III





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; FY 2018 Hospice Wage Index and Payment Rate Update 
and Hospice Quality Reporting Requirements; Proposed Rule

  Federal Register / Vol. 82 , No. 84 / Wednesday, May 3, 2017 / 
Proposed Rules  

[[Page 20750]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1675-P]
RIN 0938-AT00


Medicare Program; FY 2018 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the hospice wage index, 
payment rates, and cap amount for fiscal year (FY) 2018. Additionally, 
this rule proposes changes to the hospice quality reporting program, 
including proposing new quality measures, soliciting feedback on an 
enhanced data collection instrument, and describing plans to publicly 
display quality measures and other hospice data.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on June 26, 2017.

ADDRESSES: In commenting, please refer to file code CMS-1675-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1675-P, P.O. Box 8010, 
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-1675-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:
    Debra Dean-Whittaker, (410) 786-0848 for questions regarding the 
CAHPS[supreg] Hospice Survey.
    Cindy Massuda, (410) 786-0652 for questions regarding the hospice 
quality reporting program.
    For general questions about hospice payment policy, please send 
your inquiry via email to: [email protected].

SUPPLEMENTARY INFORMATION: Wage index addenda will be available only 
through the internet on our Web site at: (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.)
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of the Major Provisions
    C. Summary of Impacts
II. Background
    A. Hospice Care
    B. History of the Medicare Hospice Benefit
    C. Services Covered by the Medicare Hospice Benefit
    D. Medicare Payment for Hospice Care
    1. Omnibus Budget Reconciliation Act of 1989
    2. Balanced Budget Act of 1997
    3. FY 1998 Hospice Wage Index Final Rule
    4. FY 2010 Hospice Wage Index Final Rule
    5. The Affordable Care Act
    6. FY 2012 Hospice Wage Index Final Rule
    7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
    8. IMPACT Act of 2014
    9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
    10. FY 2017 Hospice Wage Index and Payment Rate Update Final 
Rule
    E. Trends in Medicare Hospice Utilization
III. Provisions of the Proposed Rule
    A. Monitoring for Potential Impacts--Affordable Care Act Hospice 
Reform
    1. Hospice Payment Reform: Research and Analyses
    a. Length of Stay and Live Discharges
    b. Skilled Visits in the Last Days of Life
    c. Non-Hospice Spending
    2. Initial Analysis of Revised Hospice Cost Report Data
    a. Background
    b. Methodology
    c. Overall Payments and Costs and Costs by Level of Care
    B. Proposed FY 2018 Hospice Wage Index and Rate Update
    1. Proposed FY 2018 Hospice Wage Index
    2. Proposed FY 2018 Hospice Payment Update Percentage
    3. Proposed FY 2018 Hospice Payment Rates
    4. Hospice Cap Amount for FY 2018
    C. Discussion and Solicitation of Comments Regarding Sources of 
Clinical Information for Certifying Terminal Illness
    D. Proposed Updates to the Hospice Quality Reporting Program
    1. Background and Statutory Authority
    2. General Considerations Used for Selection of Quality Measures 
for the HQRP
    3. Policy for Retention of HQRP Measures Adopted for Previous 
Payment Determination
    4. Policy for Adopting Changes to Previously Adopted Measures

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    5. Previously Adopted Quality Measures for FY 2018 Payment 
Determination and Future Years
    6. Proposed Removal of Previously Adopted Measures
    7. Measure Concepts Under Consideration for Future Years
    8. Form, Manner, and Timing of Quality Data Submission
    9. Previously Adopted APU Determination and Compliance Criteria 
for the HQRP
    10. HQRP Submission Exemption and Extension Requirements for the 
FY 2019 Payment Determination and Subsequent Years
    11. CAHPS[supreg] Hospice Survey Participation Requirements for 
the FY 2020 APU and Subsequent Years
    12. HQRP Reconsideration and Appeals Procedures for the FY 2018 
Payment Determination and Subsequent Years
    13. Confidential Feedback Reports
    14. Public Display of Quality Measures and Other Hospice Data 
for the HQRP
IV. Collection of Information Requirements
    A. Hospice Item Set
    B. Summary of CAHPS[supreg] Hospice Survey Information 
Collection Requirements (OMB Control Number 0938-1257)
V. Response to Comments
VI. Request for Information on Medicare Flexibilities and 
Efficiencies
VII. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impacts
    C. Anticipated Effects
    D. Detailed Economic Analysis
    E. Alternatives Considered
    F. Accounting Statement
    G. Reducing Regulation and Controlling Regulatory Costs
    H. Conclusion

Acronyms

    Because of the many terms to which we refer by acronym in this 
proposed rule, we are listing the acronyms used and their corresponding 
meanings in alphabetical order:

APU Annual Payment Update
ASPE Assistant Secretary of Planning and Evaluation
BBA Balanced Budget Act of 1997
BIPA Benefits Improvement and Protection Act of 2000
BNAF Budget Neutrality Adjustment Factor
BLS Bureau of Labor Statistics
CAHPS[supreg] Consumer Assessment of Healthcare Providers and 
Systems
CASPER Certification and Survey Provider Enhanced Reports
CBSA Core-Based Statistical Area
CCN CMS Certification Number
CCW Chronic Conditions Data Warehouse
CFR Code of Federal Regulations
CHC Continuous Home Care
CHF Congestive Heart Failure
CMS Centers for Medicare & Medicaid Services
COPD Chronic Obstructive Pulmonary Disease
CoPs Conditions of Participation
CPI-U Consumer Price Index-Urban Consumers
CVA Cerebral Vascular Accident
CWF Common Working File
CY Calendar Year
DME Durable Medical Equipment
DRG Diagnostic Related Group
FEHC Family Evaluation of Hospice Care
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
GIP General Inpatient Care
HCFA Healthcare Financing Administration
HHS Health and Human Services
HIS Hospice Item Set
HQRP Hospice Quality Reporting Program
ICD-9-CM International Classification of Diseases, Ninth Revision, 
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision, 
Clinical Modification
ICR Information Collection Requirement
IDG Interdisciplinary Group
IMPACT Act Improving Medicare Post-Acute Care Transformation Act of 
2014
IPPS Inpatient Prospective Payment System
IRC Inpatient Respite Care
LCD Local Coverage Determination
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015
MAP Measure Applications Partnership
MedPAC Medicare Payment Advisory Commission
MFP Multifactor Productivity
MSA Metropolitan Statistical Area
NF Long Term Care Nursing Facility
NOE Notice of Election
NOTR Notice of Termination/Revocation
NP Nurse Practitioner
NPI National Provider Identifier
NQF National Quality Forum
OIG Office of the Inspector General
OACT Office of the Actuary
OMB Office of Management and Budget
PEPPER Program for Evaluating Payment Patterns Electronic Report
PRRB Provider Reimbursement Review Board
PS&R Provider Statistical and Reimbursement Report
Pub. L. Public Law
POC Plan of Care
QAPI Quality Assessment and Performance Improvement
QIO Quality Improvement Organization
RHC Routine Home Care
RN Registered Nurse
SBA Small Business Administration
SEC Securities and Exchange Commission
SIA Service Intensity Add-on
SNF Skilled Nursing Facility
TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEP Technical Expert Panel
UHDDS Uniform Hospital Discharge Data Set
U.S.C. United States Code

I. Executive Summary

A. Purpose

    This rule proposes updates to the hospice payment rates for fiscal 
year (FY) 2018, as required under section 1814(i) of the Social 
Security Act (the Act). This rule also discusses and solicits comments 
on the source of the clinical information used to certify an individual 
as terminally ill (that is, having a life expectancy of 6 months or 
less as defined in section 1861(dd)(3)(A)) as required by section 
1814(a)(7)(A) of the Act. Finally, this rule also proposes new quality 
measures and provides an update on the hospice quality reporting 
program (HQRP) consistent with the requirements of section 1814(i)(5) 
of the Act. In accordance with section 1814(i)(5)(A) of the Act, 
starting in FY 2014, hospices that fail to meet quality reporting 
requirements receive a 2 percentage point reduction to their payments.

B. Summary of the Major Provisions

    Section III.A of this proposed rule describes monitoring activities 
intended to identify potential impacts related to the hospice reform 
policies finalized in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule and analyzes current trends in hospice utilization 
and expenditures. Section III.B.1 updates the hospice wage index with 
updated wage data and makes the application of the updated wage data 
budget neutral for all four levels of hospice care. In section III.B.2, 
we discuss the FY 2018 hospice payment update percentage of 1.0 
percent. Sections III.B.3 and III.B.4 update the hospice payment rates 
and hospice cap amount for FY 2018 by the hospice payment update 
percentage discussed in section III.B.2.
    In section III.C of this proposed rule, we discuss and solicit 
comments on the appropriate source(s) of the required clinical 
information for certification of a medical prognosis of a life 
expectancy of 6 months or less.
    Finally, in section III.D of this proposed rule, we discuss updates 
to HQRP, including proposed changes to the CAHPS[supreg] Hospice Survey 
measures as well as the possibility of utilizing a new assessment 
instrument to collect quality data. In section III.D, we will also 
discuss proposed enhancements to the current Hospice Item Set (HIS) 
data collection instrument to be more in line with other post-acute 
care settings. The new data collection instrument would be a 
comprehensive patient assessment instrument, rather than the current 
chart abstraction tool. Additionally, in this section we discuss our 
plans for sharing HQRP data publicly later in Calendar Year (CY) 2017, 
as well as plans to provide public reporting via a Compare Site in CY 
2017 and future years.

C. Summary of Impacts

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                      Table 1--Impact Summary Table
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       Provision description                      Transfers
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FY 2018 Hospice Wage Index and      The overall economic impact of this
 Payment Rate Update.                proposed rule is estimated to be an
                                     estimated $180 million in increased
                                     payments to hospices during FY
                                     2018.
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II. Background

A. Hospice Care

    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes that the impending death of an individual, upon his or 
her choice, warrants a change in the focus from curative care 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 a collaboration of professionals and other 
caregivers, with the goal of making the beneficiary as physically and 
emotionally comfortable as possible. Hospice is compassionate 
beneficiary and family/caregiver-centered care for those who are 
terminally ill.
    Medicare regulations define ``palliative care'' as patient and 
family-centered care that optimizes quality of life by anticipating, 
preventing, and treating suffering. Palliative care throughout the 
continuum of illness involves addressing physical, intellectual, 
emotional, social, and spiritual needs and to facilitate patient 
autonomy, access to information, and choice (Sec.  418.3). Palliative 
care is at the core of hospice philosophy and care practices, and is a 
critical component of the Medicare hospice benefit. See also ``Medicare 
and Medicaid Programs: Hospice Conditions of Participation'' final rule 
(73 FR 32088, June 5, 2008). The goal of palliative care in hospice is 
to improve the quality of life of beneficiaries and their families and 
caregivers through early identification and management of pain and 
other issues associated with a life limiting condition. The hospice 
interdisciplinary group works with the beneficiary, family, and 
caregivers to develop a coordinated, comprehensive care plan; reduce 
unnecessary diagnostics or ineffective therapies; and maintain ongoing 
communication with individuals and their families about changes in 
their condition. The beneficiary's care plan will shift over time to 
meet the changing needs of the individual, family, and caregiver(s) as 
the individual approaches the end of life.
    Medicare hospice care is palliative care for individuals with a 
prognosis of living 6 months or less if the terminal illness runs its 
normal course. When a beneficiary is terminally ill, many health 
problems are related to the underlying condition(s), as bodily systems 
are interdependent. In the 2008 Hospice Conditions of Participation 
final rule, we stated that ``the [hospice] medical director must 
consider the primary terminal condition, related diagnoses, current 
subjective and objective medical findings, current medication and 
treatment orders, and information about unrelated conditions when 
considering the initial certification of the terminal illness'' (73 FR 
32176). As referenced in our regulations at Sec.  418.22(b)(1), to be 
eligible for Medicare hospice services, the patient's attending 
physician (if any) and the hospice medical director must certify that 
the individual is ``terminally ill,'' as defined in section 
1861(dd)(3)(A) of the Act and our regulations at Sec.  418.3; that is, 
the individual's prognosis is for a life expectancy of 6 months or less 
if the terminal illness runs its normal course. The regulations at 
Sec.  418.22(b)(3) require that the certification and recertification 
forms include a brief narrative explanation of the clinical findings 
that support a life expectancy of 6 months or less.
    While the goal of hospice care is to allow the beneficiary to 
remain in his or her home, circumstances during the end-of-life may 
necessitate short-term inpatient admission to a hospital, skilled 
nursing facility (SNF), or hospice facility for necessary pain control 
or acute or chronic symptom management that cannot be managed in any 
other setting. These acute hospice care services ensure that any new or 
worsening symptoms are intensively addressed so that the beneficiary 
can return to his or her home. Limited, short-term, intermittent, 
inpatient respite care (IRC) is also available because of the absence 
or need for relief of the family or other caregivers. Additionally, an 
individual can receive continuous home care (CHC) during a period of 
crisis in which an individual requires continuous care to achieve 
palliation or management of acute medical symptoms so that the 
individual can remain at home. Continuous home care may be covered for 
as much as 24 hours a day, and these periods must be predominantly 
nursing care, in accordance with our regulations at Sec.  418.204. A 
minimum of 8 hours of nursing care, or nursing and aide care, must be 
furnished on a particular day to qualify for the continuous home care 
rate (Sec.  418.302(e)(4)).
    Hospices are expected to comply with all civil rights laws, 
including the provision of auxiliary aids and services to ensure 
effective communication with patients and patient care representatives 
with disabilities consistent with section 504 of the Rehabilitation Act 
of 1973 and the Americans with Disabilities Act. Additionally, they 
must provide language access for such persons who are limited in 
English proficiency, consistent with Title VI of the Civil Rights Act 
of 1964. Further information about these requirements may be found at 
http://www.hhs.gov/ocr/civilrights.

B. History of the Medicare Hospice Benefit

    Before the creation of the Medicare hospice benefit, hospice 
programs were originally operated by volunteers who cared for the 
dying. During the early development stages of the Medicare hospice 
benefit, hospice advocates were clear that they wanted a Medicare 
benefit that provided all-inclusive care for terminally-ill 
individuals, provided pain relief and symptom management, and offered 
the opportunity to die with dignity in the comfort of one's home rather 
than in an institutional setting.\1\ As stated in the August 22, 1983 
proposed rule entitled ``Medicare Program; Hospice Care'' (48 FR 
38146), ``the hospice experience in the United States has placed 
emphasis on home care. It offers physician services, specialized 
nursing services, and other forms of care in the home to enable the 
terminally ill individual to remain at home in the company of family 
and friends as long as possible.'' The concept of a beneficiary 
``electing'' the hospice benefit and being certified as terminally ill 
were two key components of the legislation responsible for the creation 
of the Medicare Hospice

[[Page 20753]]

Benefit (section 122 of the Tax Equity and Fiscal Responsibility Act of 
1982 (TEFRA), (Pub. L. 97-248)). Section 122 of TEFRA created the 
Medicare Hospice benefit, which was implemented on November 1, 1983. 
Under sections 1812(d) and 1861(dd) of the Act, we provide coverage of 
hospice care for terminally ill Medicare beneficiaries who elect to 
receive care from a Medicare-certified hospice. Our regulations at 
Sec.  418.54(c) stipulate that the comprehensive hospice assessment 
must identify the beneficiary's physical, psychosocial, emotional, and 
spiritual needs related to the terminal illness and related conditions, 
and address those needs in order to promote the beneficiary's well-
being, comfort, and dignity throughout the dying process. The 
comprehensive assessment must take into consideration the following 
factors: The nature and condition causing admission (including the 
presence or lack of objective data and subjective complaints); 
complications and risk factors that affect care planning; functional 
status; imminence of death; and severity of symptoms (Sec.  418.54(c)). 
The Medicare hospice benefit requires the hospice to cover all 
reasonable and necessary palliative care related to the terminal 
prognosis, as well as, care for interventions to manage pain and 
symptoms, as described in the beneficiary's plan of care. Additionally, 
the hospice Conditions of Participation (CoPs) at Sec.  418.56(c) 
require that the hospice must provide all reasonable and necessary 
services for the palliation and management of the terminal illness, 
related conditions, and interventions to manage pain and symptoms. 
Therapy and interventions must be assessed and managed in terms of 
providing palliation and comfort without undue symptom burden for the 
hospice patient or family.\2\ In the December 16, 1983 Hospice final 
rule (48 FR 56010), regarding what is related versus unrelated to the 
terminal illness, we stated: ``. . . we believe that the unique 
physical condition of each terminally ill individual makes it necessary 
for these decisions to be made on a case by case basis. It is our 
general view that hospices are required to provide virtually all the 
care that is needed by terminally ill patients.'' Therefore, unless 
there is clear evidence that a condition is unrelated to the terminal 
prognosis, all conditions are considered to be related to the terminal 
prognosis and the responsibility of the hospice to address and treat.
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    \1\ Connor, Stephen. (2007). Development of Hospice and 
Palliative Care in the United States. OMEGA. 56(1), p. 89-99.
    \2\ Paolini, DO, Charlotte. (2001). Symptoms Management at End 
of Life. JAOA. 101(10). p. 609-615.
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    As stated in the December 16, 1983 Hospice final rule, the 
fundamental premise upon which the hospice benefit was designed was the 
``revocation'' of traditional curative care and the ``election'' of 
hospice care for end-of-life symptom management and maximization of 
quality of life (48 FR 56008). After electing hospice care, the 
beneficiary typically returns home from an institutional setting or 
remains in the home, to be surrounded by family and friends, and to 
prepare emotionally and spiritually, if requested, for death while 
receiving expert symptom management and other supportive services. 
Election of hospice care also requires waiving the right to Medicare 
payment for curative treatment for the terminal prognosis, and instead 
receiving palliative care to manage pain or other symptoms.
    The benefit was originally designed to cover hospice care for a 
finite period of time that roughly corresponded to a life expectancy of 
6 months or less. Initially, beneficiaries could receive three election 
periods: Two 90-day periods and one 30-day period. Currently, Medicare 
beneficiaries can elect hospice care for two 90-day periods and an 
unlimited number of subsequent 60-day periods; however, at the 
beginning of each period, a physician must certify that the beneficiary 
has a life expectancy of 6 months or less if the terminal illness runs 
its normal course.

C. Services Covered by the Medicare Hospice Benefit

    One requirement for coverage under the Medicare Hospice benefit is 
that hospice services must be reasonable and necessary for the 
palliation and management of the terminal illness and related 
conditions. Section 1861(dd)(1) of the Act establishes the services 
that are to be rendered by a Medicare-certified hospice program. These 
covered services include: Nursing care; physical therapy; occupational 
therapy; speech-language pathology therapy; medical social services; 
home health aide services (now called hospice aide services); physician 
services; homemaker services; medical supplies (including drugs and 
biologicals); medical appliances; counseling services (including 
dietary counseling); short-term inpatient care in a hospital, nursing 
facility, or hospice inpatient facility (including both respite care 
and procedures necessary for pain control and acute or chronic symptom 
management); continuous home care during periods of crisis, and only as 
necessary to maintain the terminally ill individual at home; and any 
other item or service which is specified in the plan of care and for 
which payment may otherwise be made under Medicare, in accordance with 
Title XVIII of the Act.
    Section 1814(a)(7)(B) of the Act requires that a written plan for 
providing hospice care to a beneficiary who is a hospice patient be 
established before care is provided by, or under arrangements made by, 
that hospice program and that the written plan be periodically reviewed 
by the beneficiary's attending physician (if any), the hospice medical 
director, and an interdisciplinary group (described in section 
1861(dd)(2)(B) of the Act). The services offered under the Medicare 
hospice benefit must be available to beneficiaries as needed, 24 hours 
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the 
implementation of the hospice benefit, the Congress expected hospices 
to continue to use volunteer services, though these services are not 
reimbursed by Medicare (see section 1861(dd)(2)(E) of the Act). As 
stated in the August 22, 1983 Hospice proposed rule, the hospice 
interdisciplinary group should comprise paid hospice employees as well 
as hospice volunteers (48 FR 38149). This expectation supports the 
hospice philosophy of community based, holistic, comprehensive, and 
compassionate end-of-life care.
    Before the Medicare hospice benefit was established, the Congress 
requested a demonstration project to test the feasibility of covering 
hospice care under Medicare.\3\ The National Hospice Study was 
initiated in 1980 through a grant sponsored by the Robert Wood Johnson 
and John A. Hartford Foundations and CMS (then, the Health Care 
Financing Administration (HCFA)). The demonstration project was 
conducted between October 1980 and March 1983. The project summarized 
the hospice care philosophy and principles as the following:
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    \3\ Greer, D., Mor, V., Sherwood, S. (1983) National hospice 
study analysis plan. Journal of Chronic Diseases, Vol 36, 11, 737-
780. https://doi.org/10.1016/0021-9681(83)90069-3.
---------------------------------------------------------------------------

     Patient and family know of the terminal condition.
     Further medical treatment and intervention are indicated 
only on a supportive basis.
     Pain control should be available to patients as needed to 
prevent rather than to just ameliorate pain.
     Interdisciplinary teamwork is essential in caring for 
patient and family.
     Family members and friends should be active in providing 
support during the death and bereavement process.

[[Page 20754]]

     Trained volunteers should provide additional support as 
needed.
    The cost data and the findings on what services hospices provided 
in the demonstration project were used to design the Medicare hospice 
benefit. The identified hospice services were incorporated into the 
service requirements under the Medicare hospice benefit. Importantly, 
in the August 22, 1983 Hospice proposed rule, we stated ``the hospice 
benefit and the resulting Medicare reimbursement is not intended to 
diminish the voluntary spirit of hospices'' (48 FR 38149).

D. Medicare Payment for Hospice Care

    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and our regulations in part 418, establish eligibility 
requirements, payment standards and procedures; define covered 
services; and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart 
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (Routine Home Care (RHC), 
Continuous Home Care (CHC), inpatient respite care, and general 
inpatient care), based on each day a qualified Medicare beneficiary is 
under hospice care (once the individual has elected). This per diem 
payment is to include all of the hospice services needed to manage the 
beneficiary's care, as required by section 1861(dd)(1) of the Act. 
There has been little change in the hospice payment structure since the 
benefit's inception. The per diem rate based on level of care was 
established in 1983, and this payment structure remains today with some 
adjustments, as noted below:
1. Omnibus Budget Reconciliation Act of 1989
    Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided 
for the following two changes in the methodology concerning updating 
the daily payment rates: (1) Effective January 1, 1990, the daily 
payment rates for RHC and other services included in hospice care were 
increased to equal 120 percent of the rates in effect on September 30, 
1989; and (2) the daily payment rate for RHC and other services 
included in hospice care for fiscal years (FYs) beginning on or after 
October 1, 1990, were the payment rates in effect during the previous 
federal fiscal year increased by the hospital market basket percentage 
increase.
2. Balanced Budget Act of 1997
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish 
updates to hospice rates for FYs 1998 through 2002. Hospice rates were 
updated by a factor equal to the hospital market basket percentage 
increase, minus 1 percentage point. Payment rates for FYs from 2002 
have been updated according to section 1814(i)(1)(C)(ii)(VII) of the 
Act, which states that the update to the payment rates for subsequent 
FYs will be the hospital market basket percentage increase for the FY. 
The Act requires us to use the inpatient hospital market basket to 
determine hospice payment rates.
3. FY 1998 Hospice Wage Index Final Rule
    In the August 8, 1997 FY 1998 Hospice Wage Index final rule (62 FR 
42860), we implemented a new methodology for calculating the hospice 
wage index based on the recommendations of a negotiated rulemaking 
committee. The original hospice wage index was based on 1981 Bureau of 
Labor Statistics hospital data and had not been updated since 1983. In 
1994, because of disparity in wages from one geographical location to 
another, the Hospice Wage Index Negotiated Rulemaking Committee was 
formed to negotiate a new wage index methodology that could be accepted 
by the industry and the government. This Committee was composed of 
representatives from national hospice associations; rural, urban, large 
and small hospices, and multi-site hospices; consumer groups; and a 
government representative. The Committee decided that in updating the 
hospice wage index, aggregate Medicare payments to hospices would 
remain budget neutral to payments calculated using the 1983 wage index, 
to cushion the impact of using a new wage index methodology. To 
implement this policy, a Budget Neutrality Adjustment Factor (BNAF) was 
computed and applied annually to the pre-floor, pre-reclassified 
hospital wage index when deriving the hospice wage index, subject to a 
wage index floor.
4. FY 2010 Hospice Wage Index Final Rule
    Inpatient hospital pre-floor and pre-reclassified wage index 
values, as described in the August 8, 1997 Hospice Wage Index final 
rule, were subject to either a budget neutrality adjustment or 
application of the wage index floor. Wage index values of 0.8 or 
greater were adjusted by the BNAF. Starting in FY 2010, a 7-year phase-
out of the BNAF began (FY 2010 Hospice Wage Index final rule, (74 FR 
39384, August 6, 2009)), with a 10 percent reduction in FY 2010, an 
additional 15 percent reduction for a total of 25 percent in FY 2011, 
an additional 15 percent reduction for a total 40 percent reduction in 
FY 2012, an additional 15 percent reduction for a total of 55 percent 
in FY 2013, and an additional 15 percent reduction for a total 70 
percent reduction in FY 2014. The phase-out continued with an 
additional 15 percent reduction for a total reduction of 85 percent in 
FY 2015, and an additional, and final, 15 percent reduction for 
complete elimination in FY 2016. We note that the BNAF was an 
adjustment which increased the hospice wage index value. Therefore, the 
BNAF phase-out reduced the amount of the BNAF increase applied to the 
hospice wage index value. It was not a reduction in the hospice wage 
index value itself or in the hospice payment rates.
5. The Affordable Care Act
    Starting with FY 2013 (and in subsequent FYs), the market basket 
percentage update under the hospice payment system referenced in 
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act is 
subject to annual reductions related to changes in economy-wide 
productivity, as specified in section 1814(i)(1)(C)(iv) of the Act. In 
FY 2013 through FY 2019, the market basket percentage update under the 
hospice payment system will be reduced by an additional 0.3 percentage 
point (although for FY 2014 to FY 2019, the potential 0.3 percentage 
point reduction is subject to suspension under conditions specified in 
section 1814(i)(1)(C)(v) of the Act).
    In addition, sections 1814(i)(5)(A) through (C) of the Act, as 
added by section 3132(a) of the Affordable Care Act, require hospices 
to begin submitting quality data, based on measures to be specified by 
the Secretary of the Department of Health and Human Services (the 
Secretary), for FY 2014 and subsequent FYs. Beginning in FY 2014, 
hospices that fail to report quality data will have their market basket 
percentage increase reduced by 2 percentage points.
    Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) 
of the Affordable Care Act, requires, effective January 1, 2011, that a 
hospice physician or nurse practitioner have a face-to-face encounter 
with the beneficiary to determine continued eligibility of the 
beneficiary's hospice care prior to the 180th-day

[[Page 20755]]

recertification and each subsequent recertification, and to attest that 
such visit took place. When implementing this provision, we finalized 
in the CY 2011 Home Health Prospective Payment System final rule (75 FR 
70435) that the 180th-day recertification and subsequent 
recertifications would correspond to the beneficiary's third or 
subsequent benefit periods. Further, section 1814(i)(6) of the Act, as 
added by section 3132(a)(1)(B) of the Affordable Care Act, authorizes 
the Secretary to collect additional data and information determined 
appropriate to revise payments for hospice care and other purposes. The 
types of data and information suggested in the Affordable Care Act 
could capture accurate resource utilization, which could be collected 
on claims, cost reports, and possibly other mechanisms, as the 
Secretary determined to be appropriate. The data collected could be 
used to revise the methodology for determining the payment rates for 
RHC and other services included in hospice care, no earlier than 
October 1, 2013, as described in section 1814(i)(6)(D) of the Act. In 
addition, we were required to consult with hospice programs and the 
Medicare Payment Advisory Commission (MedPAC) regarding additional data 
collection and payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
    When the Medicare Hospice benefit was implemented, the Congress 
included an aggregate cap on hospice payments, which limits the total 
aggregate payments any individual hospice can receive in a year. The 
Congress stipulated that a ``cap amount'' be computed each year. The 
cap amount was set at $6,500 per beneficiary when first enacted in 1983 
and has been adjusted annually by the change in the medical care 
expenditure category of the consumer price index for urban consumers 
from March 1984 to March of the cap year (section 1814(i)(2)(B) of the 
Act). The cap year was defined as the period from November 1st to 
October 31st. In the August 4, 2011 FY 2012 Hospice Wage Index final 
rule (76 FR 47308 through 47314) for the 2012 cap year and subsequent 
cap years, we announced that subsequently, the hospice aggregate cap 
would be calculated using the patient-by-patient proportional 
methodology, within certain limits. We allowed existing hospices the 
option of having their cap calculated via the original streamlined 
methodology, also within certain limits. As of FY 2012, new hospices 
have their cap determinations calculated using the patient-by-patient 
proportional methodology. The patient-by-patient proportional 
methodology and the streamlined methodology are two different 
methodologies for counting beneficiaries when calculating the hospice 
aggregate cap. A detailed explanation of these methods is found in the 
August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR 47308 
through 47314). If a hospice's total Medicare payments for the cap year 
exceed the hospice aggregate cap, then the hospice must repay the 
excess back to Medicare.
7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
    When electing hospice, a beneficiary waives Medicare coverage for 
any care for the terminal illness and related conditions except for 
services provided by the designated hospice and attending physician. 
The FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 
FR 50452) finalized a requirement that requires the Notice of Election 
(NOE) be filed within 5 calendar days after the effective date of 
hospice election. If the NOE is filed beyond this 5 day period, hospice 
providers are liable for the services furnished during the days from 
the effective date of hospice election to the date of NOE filing (79 FR 
50474). Similar to the NOE, the claims processing system must be 
notified of a beneficiary's discharge from hospice or hospice benefit 
revocation. This update to the beneficiary's status allows claims from 
non-hospice providers to be processed and paid. Late filing of the NOE 
can result in inaccurate benefit period data and leaves Medicare 
vulnerable to paying non-hospice claims related to the terminal illness 
and related conditions and beneficiaries possibly liable for any cost-
sharing of associated costs. Upon live discharge or revocation, the 
beneficiary immediately resumes the Medicare coverage that had been 
waived when he or she elected hospice. The FY 2015 Hospice Wage Index 
and Payment Rate Update final rule also finalized a requirement that 
requires hospices to file a notice of termination/revocation within 5 
calendar days of a beneficiary's live discharge or revocation, unless 
the hospices have already filed a final claim. This requirement helps 
to protect beneficiaries from delays in accessing needed care (Sec.  
418.26(e)).
    A hospice ``attending physician'' is described by the statutory and 
regulatory definitions as a medical doctor, osteopath, or nurse 
practitioner whom the beneficiary identifies, at the time of hospice 
election, as having the most significant role in the determination and 
delivery of his or her medical care. Over time, we have received 
reports of problems with the identification of the person's designated 
attending physician and a third of hospice patients had multiple 
providers submit Part B claims as the ``attending physician,'' using a 
claim modifier. The FY 2015 Hospice Wage Index and Payment Rate Update 
final rule finalized a requirement that the election form include the 
beneficiary's choice of attending physician and that the beneficiary 
provide the hospice with a signed document when he or she chooses to 
change attending physicians (79 FR 50479).
    Hospice providers are required to begin using a Hospice Experience 
of Care Survey for informal caregivers of hospice patients as of 2015. 
The FY 2015 Hospice Wage Index and Payment Rate Update final rule 
provided background and a description of the development of the Hospice 
Experience of Care Survey, including the model of survey 
implementation, the survey respondents, eligibility criteria for the 
sample, and the languages in which the survey is offered. The FY 2015 
Hospice Rate Update final rule also set out participation requirements 
for CY 2015 and discussed vendor oversight activities and the 
reconsideration and appeals process for entities that failed to win CMS 
approval as vendors (79 FR 50496).
    Finally, the FY 2015 Hospice Wage Index and Payment Rate Update 
final rule required providers to complete their aggregate cap 
determination not sooner than 3 months after the end of the cap year, 
and not later than 5 months after, and remit any overpayments. Those 
hospices that fail to timely submit their aggregate cap determinations 
will have their payments suspended until the determination is completed 
and received by the Medicare Administrative Contractor (MAC) (79 FR 
50503).
8. IMPACT Act of 2014
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(Pub. L. 113-185) (IMPACT Act) became law on October 6, 2014. Section 
3(a) of the IMPACT Act mandated that all Medicare certified hospices be 
surveyed every 3 years beginning April 6, 2015 and ending September 30, 
2025. In addition, section 3(c) of the IMPACT Act requires medical 
review of hospice cases involving beneficiaries receiving more than 180 
days care in select hospices that show a preponderance of such 
patients; section 3(d) of the IMPACT Act contains a new provision

[[Page 20756]]

mandating that the cap amount for accounting years that end after 
September 30, 2016, and before October 1, 2025 be updated by the 
hospice payment update rather than using the consumer price index for 
urban consumers (CPI-U) for medical care expenditures.
9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2016 Hospice Rate Update final rule, we created two 
different payment rates for RHC that resulted in a higher base payment 
rate for the first 60 days of hospice care and a reduced base payment 
rate for subsequent days of hospice care (80 FR 47172). We also created 
a Service Intensity Add-on (SIA) payment payable for services during 
the last 7 days of the beneficiary's life, equal to the CHC hourly 
payment rate multiplied by the amount of direct patient care provided 
by a registered nurse (RN) or social worker that occurs during the last 
7 days (80 FR 47177).
    In addition to the hospice payment reform changes discussed, the FY 
2016 Hospice Wage Index and Payment Rate Update final rule implemented 
changes mandated by the IMPACT Act, in which the cap amount for 
accounting years that end after September 30, 2016 and before October 
1, 2025 is updated by the hospice payment update percentage rather than 
using the CPI-U. This was applied to the 2016 cap year, starting on 
November 1, 2015 and ending on October 31, 2016. In addition, we 
finalized a provision to align the cap accounting year for both the 
inpatient cap and the hospice aggregate cap with the fiscal year for FY 
2017 and later (80 FR 47186). This allows for the timely implementation 
of the IMPACT Act changes while better aligning the cap accounting year 
with the timeframe described in the IMPACT Act.
    Finally, the FY 2016 Hospice Wage Index and Payment Rate Update 
final rule clarified that hospices must report all diagnoses of the 
beneficiary on the hospice claim as a part of the ongoing data 
collection efforts for possible future hospice payment refinements. 
Reporting of all diagnoses on the hospice claim aligns with current 
coding guidelines as well as admission requirements for hospice 
certifications.
10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2017 Hospice Wage Index and Payment Rate Update final 
rule, we finalized several new policies and requirements related to the 
HQRP. First, we codified our policy that if the National Quality Forum 
(NQF) makes non-substantive changes to specifications for HQRP measures 
as part of the NQF's re-endorsement process, we will continue to 
utilize the measure in its new endorsed status, without going through 
new notice-and-comment rulemaking (81 FR 52160). We will continue to 
use rulemaking to adopt substantive updates made by the NQF to the 
endorsed measures we have adopted for the HQRP; determinations about 
what constitutes a substantive versus non-substantive change will be 
made on a measure-by-measure basis. Second, we finalized two new 
quality measures for the HQRP for the FY 2019 payment determination and 
subsequent years: Hospice Visits when Death is Imminent Measure Pair 
and Hospice and Palliative Care Composite Process Measure-Comprehensive 
Assessment at Admission (81 FR 52173). The data collection mechanism 
for both of these measures is the HIS, and the measures are effective 
April 1, 2017. Regarding the CAHPS[supreg] Hospice Survey, we finalized 
a policy that hospices that receive their CMS Certification Number 
(CCN) after January 1, 2017 for the FY 2019 Annual Payment Update (APU) 
and January 1, 2018 for the FY 2020 APU will be exempted from the 
Hospice CAHPS[supreg] requirements due to newness (81 FR 52182). The 
exemption is determined by CMS and is for 1 year only.

E. Trends in Medicare Hospice Utilization

    Since the implementation of the hospice benefit in 1983, and 
especially within the last decade, there has been substantial growth in 
hospice benefit utilization. The number of Medicare beneficiaries 
receiving hospice services has grown from 513,000 in FY 2000 to nearly 
1.4 million in FY 2016. Similarly, Medicare hospice expenditures have 
risen from $2.8 billion in FY 2000 to approximately $16.5 billion in FY 
2016. Our Office of the Actuary (OACT) projects that hospice 
expenditures are expected to continue to increase, by approximately 7 
percent annually, reflecting an increase in the number of Medicare 
beneficiaries, more beneficiary awareness of the Medicare Hospice 
Benefit for end-of-life care, and a growing preference for care 
provided in home and community-based settings.
    There have also been changes in the diagnosis patterns among 
Medicare hospice enrollees. Specifically, as described in Table 2, 
there have been notable increases between 2002 and 2016 in 
neurologically-based diagnoses, including diagnoses of Alzheimer's 
disease. Additionally, there have been significant increases in the use 
of non-specific, symptom-classified diagnoses, such as ``debility'' and 
``adult failure to thrive.'' In FY 2013, ``debility'' and ``adult 
failure to thrive'' were the first and sixth most common hospice 
claims-reported diagnoses, respectively, accounting for approximately 
14 percent of all diagnoses. Effective October 1, 2014, hospice claims 
are returned to the provider if ``debility'' and ``adult failure to 
thrive'' are coded as the principal hospice diagnosis as well as other 
ICD-9-CM (and as of October 1, 2015, ICD-10-CM) codes that are not 
permissible as principal diagnosis codes per ICD-9-CM (or ICD-10-CM) 
coding guidelines. In the FY 2015 Hospice Wage Index and Payment Rate 
Update final rule (79 FR 50452), we reminded the hospice industry that 
this policy would go into effect and claims would start to be returned 
to the provider effective October 1, 2014. As a result of this, there 
has been a shift in coding patterns on hospice claims. For FY 2016, the 
most common hospice principal diagnoses were Alzheimer's disease, Heart 
Failure, Chronic Obstructive Pulmonary Disease, Lung Cancer, and Senile 
Degeneration of the Brain, which constituted approximately 30 percent 
of all claims-reported principal diagnosis codes reported in FY 2016 
(see Table 2).

             Table 2--The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007, FY 2013, FY 2016
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
             Rank                      ICD-9/Reported Principal Diagnosis              Count        Percentage
----------------------------------------------------------------------------------------------------------------
                                                  Year: FY 2002
----------------------------------------------------------------------------------------------------------------
1............................  162.9                   Lung Cancer..............          73,769              11
2............................  428.0                   Congestive Heart Failure.          45,951               7
3............................  799.3                   Debility Unspecified.....          36,999               6
4............................  496                     COPD.....................          35,197               5
5............................  331.0                   Alzheimer's Disease......          28,787               4

[[Page 20757]]

 
6............................  436                     CVA/Stroke...............          26,897               4
7............................  185                     Prostate Cancer..........          20,262               3
8............................  783.7                   Adult Failure To Thrive..          18,304               3
9............................  174.9                   Breast Cancer............          17,812               3
10...........................  290.0                   Senile Dementia, Uncomp..          16,999               3
11...........................  153.0                   Colon Cancer.............          16,379               2
12...........................  157.9                   Pancreatic Cancer........          15,427               2
13...........................  294.8                   Organic Brain Synd Nec...          10,394               2
14...........................  429.9                   Heart Disease Unspecified          10,332               2
15...........................  154.0                   Rectosigmoid Colon Cancer           8,956               1
16...........................  332.0                   Parkinson's Disease......           8,865               1
17...........................  586                     Renal Failure Unspecified           8,764               1
18...........................  585                     Chronic Renal Failure               8,599               1
                                                        (End 2005).
19...........................  183.0                   Ovarian Cancer...........           7,432               1
20...........................  188.9                   Bladder Cancer...........           6,916               1
----------------------------------------------------------------------------------------------------------------
                                                  Year: FY 2007
----------------------------------------------------------------------------------------------------------------
1............................  799.3                   Debility Unspecified.....          90,150               9
2............................  162.9                   Lung Cancer..............          86,954               8
3............................  428.0                   Congestive Heart Failure.          77,836               7
4............................  496                     COPD.....................          60,815               6
5............................  783.7                   Adult Failure To Thrive..          58,303               6
6............................  331.0                   Alzheimer's Disease......          58,200               6
7............................  290.0                   Senile Dementia Uncomp...          37,667               4
8............................  436                     CVA/Stroke...............          31,800               3
9............................  429.9                   Heart Disease Unspecified          22,170               2
10...........................  185                     Prostate Cancer..........          22,086               2
11...........................  174.9                   Breast Cancer............          20,378               2
12...........................  157.9                   Pancreas Unspecified.....          19,082               2
13...........................  153.9                   Colon Cancer.............          19,080               2
14...........................  294.8                   Organic Brain Syndrome             17,697               2
                                                        NEC.
15...........................  332.0                   Parkinson's Disease......          16,524               2
16...........................  294.10                  Dementia in Other                  15,777               2
                                                        Diseases w/o Behavior
                                                        Dist..
17...........................  586                     Renal Failure Unspecified          12,188               1
18...........................  585.6                   End Stage Renal Disease..          11,196               1
19...........................  188.9                   Bladder Cancer...........           8,806               1
20...........................  183.0                   Ovarian Cancer...........           8,434               1
----------------------------------------------------------------------------------------------------------------
                                                  Year: FY 2013
----------------------------------------------------------------------------------------------------------------
1............................  799.3                   Debility Unspecified.....         127,415               9
2............................  428.0                   Congestive Heart Failure.          96,171               7
3............................  162.9                   Lung Cancer..............          91,598               6
4............................  496                     COPD.....................          82,184               6
5............................  331.0                   Alzheimer's Disease......          79,626               6
6............................  783.7                   Adult Failure to Thrive..          71,122               5
7............................  290.0                   Senile Dementia, Uncomp..          60,579               4
8............................  429.9                   Heart Disease Unspecified          36,914               3
9............................  436                     CVA/Stroke...............          34,459               2
10...........................  294.10                  Dementia in Other                  30,963               2
                                                        Diseases w/o Behavioral
                                                        Dist..
11...........................  332.0                   Parkinson's Disease......          25,396               2
12...........................  153.9                   Colon Cancer.............          23,228               2
13...........................  294.20                  Dementia Unspecified w/o           23,224               2
                                                        Behavioral Dist..
14...........................  174.9                   Breast Cancer............          23,059               2
15...........................  157.9                   Pancreatic Cancer........          22,341               2
16...........................  185                     Prostate Cancer..........          21,769               2
17...........................  585.6                   End-Stage Renal Disease..          19,309               1
18...........................  518.81                  Acute Respiratory Failure          15,965               1
19...........................  294.8                   Other Persistent Mental            14,372               1
                                                        Dis.--classified
                                                        elsewhere.
20...........................  294.11                  Dementia In Other                  13,687               1
                                                        Diseases w/Behavioral
                                                        Dist..
----------------------------------------------------------------------------------------------------------------
                                                  Year: FY 2016
----------------------------------------------------------------------------------------------------------------
1............................  G30.9                   Alzheimer's disease,              162,845              11
                                                        unspecified.
2............................  I50.9                   Heart failure,                     84,088               6
                                                        unspecified.
3............................  J44.9                   Chronic obstructive                74,131               5
                                                        pulmonary disease,
                                                        unspecified.
4............................  C34.90                  Malignant Neoplasm of              57,077               4
                                                        Unsp Part of Unsp
                                                        Bronchus or Lung.
5............................  G31.1                   Senile degeneration of             55,305               4
                                                        brain, not elsewhere
                                                        classified.
6............................  G20                     Parkinson's disease......          37,245               2
7............................  I25.10                  Atherosclerotic heart              33,647               2
                                                        disease of native
                                                        coronary art without
                                                        angina pectoris.
8............................  J44.1                   Chronic obstructive                32,851               2
                                                        pulmonary disease with
                                                        (acute) exacerbation.
9............................  G30.1                   Alzheimer's disease with           29,223               2
                                                        late onset.
10...........................  I67.2                   Cerebral atherosclerosis.          27,629               2
11...........................  C61                     Malignant neoplasm of              24,576               2
                                                        prostate.

[[Page 20758]]

 
12...........................  N18.6                   End stage renal disease..          22,261               1
13...........................  C18.9                   Malignant neoplasm of              22,203               1
                                                        colon, unspecified.
14...........................  I51.9                   Heart disease,                     21,868               1
                                                        unspecified.
15...........................  C25.9                   Malignant neoplasm of              20,400               1
                                                        pancreas, unspecified.
16...........................  I63.9                   Cerebral infarction,               18,546               1
                                                        unspecified.
17...........................  I67.9                   Cerebrovascular disease,           14,879               1
                                                        unspecified.
18...........................  C50.919                 Malignant neoplasm of              14,022               1
                                                        unspecified site of
                                                        unspecified female
                                                        breast.
19...........................  A41.9                   Sepsis, unspecified                12,723               1
                                                        organism.
20...........................  I50.22                  Chronic systolic                   12,083               1
                                                        (congestive) heart
                                                        failure.
----------------------------------------------------------------------------------------------------------------
Note(s): The frequencies shown represent beneficiaries that had at least one claim with the specific ICD-9-CM/
  ICD-10 code reported as the principal diagnosis. Beneficiaries could be represented multiple times in the
  results if they have multiple claims during that time period with different principal diagnoses.
Source: FY 2002 and 2007 hospice claims data from the Chronic Conditions Data Warehouse (CCW), accessed on
  February 14 and February 20, 2013. FY 2013 hospice claims data from the CCW, accessed on June 26, 2014, and FY
  2016 hospice claims data from the CCW, accessed and merged with ICD-10 codes on January 9, 2017.

    While there has been a shift in the reporting of the principal 
diagnosis as a result of diagnosis clarifications, a significant 
proportion of hospice claims (49 percent) in FY 2014 only reported a 
single principal diagnosis, which may not fully explain the 
characteristics of Medicare beneficiaries who are approaching the end 
of life. To address this pattern of single diagnosis reporting, the FY 
2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 
50498) reiterated ICD-9-CM coding guidelines for the reporting of the 
principal and additional diagnoses on the hospice claim. We reminded 
providers to report all diagnoses on the hospice claim for the terminal 
illness and related conditions, including those that affect the care 
and clinical management for the beneficiary. Additionally, in the FY 
2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 
47201), we provided further clarification regarding diagnosis reporting 
on hospice claims. We clarified that hospices will report all diagnoses 
identified in the initial and comprehensive assessments on hospice 
claims, whether related or unrelated to the terminal prognosis of the 
individual, effective October 1, 2015. Analysis of FY 2016 hospice 
claims shows that 100 percent of hospices reported more than one 
diagnosis, with 86 percent submitting at least two diagnoses and 77 
percent including at least three diagnoses.

III. Provisions of the Proposed Rule

A. Monitoring for Potential Impacts--Affordable Care Act Hospice Reform

1. Hospice Payment Reform: Research and Analyses
    This section of the proposed rule describes current trends in 
hospice utilization and provider behavior, such as lengths of stay, 
live discharge rates, skilled visits during the last days of life, and 
non-hospice spending. Utilization data on these metrics were examined 
to determine the potential impacts related to the hospice reform 
policies finalized in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47142), if any. Moreover, in response to 
Office of Inspector General (OIG) report ``Hospice Inappropriately 
Billed Medicare Over $250 Million for General Inpatient Care'' (OEI-02-
10-00491) released in March 2016, which identified the drugs paid for 
by Part D and provided to beneficiaries during general inpatient care 
(GIP) stays, we have also continued to monitor non-hospice spending 
during a hospice election as described in this section. Additionally, 
we have included preliminary information on the costs of hospice care 
using data from the new hospice Medicare cost report, effective for 
cost reporting periods that began on or after October 1, 2014 (FY 
2015). Section 1814(i)(6) of the Act, as amended by section 
3132(a)(1)(B) of the Affordable Care Act, authorized the Secretary to 
collect additional data and information determined appropriate to 
revise payments for hospice care and other purposes, including such 
data sources as the Medicare cost reports. These preliminary analyses 
may inform future work that could include such refinements to hospice 
payment rates.
a. Length of Stay and Live Discharges
Hospice Length of Stay
    Eligibility under the Medicare hospice benefit is predicated on the 
individual being certified as terminally ill. Medicare regulations at 
Sec.  418.3 define ``terminally ill'' to mean that the individual has a 
medical prognosis that his or her life expectancy is 6 months or less 
if the illness runs its normal course. However, we have recognized in 
previous rules that prognostication is not an exact science (79 FR 
50470), and thus, a beneficiary may be under a hospice election longer 
than 6 months, as long as there remains a reasonable expectation that 
the individual has a life expectancy of 6 months or less.
    The number of days that a hospice beneficiary receives care under a 
hospice election is referred to as the hospice length of stay. Hospice 
length of stay can be influenced by a number of factors including 
disease course, timing of referral, decision to resume curative 
treatment, and/or stabilization or improvement where the individual is 
no longer certified as terminally ill. Longer lengths of stay in 
hospice may reflect admission to hospice earlier in the disease 
trajectory or miscalculation of prognosis, among other situations. 
Shorter lengths of stay in hospice may reflect hospice election late in 
the disease trajectory or a rapidly progressing acute condition. This 
also may be due to individual reluctance to accept that his or her 
condition is terminal and choose the hospice benefit; inadequate 
knowledge regarding the breadth of services available under hospice 
care; cultural, ethnic, and/or religious backgrounds inhibiting or even 
precluding the use of hospice services; and other reasons.\4\ As such, 
hospice lengths of stay are variable.
---------------------------------------------------------------------------

    \4\ Vig, E., Starks, H., Taylor, J., Hopley, E., Fryer-Edwards, 
K. (2010). ``Why Don't Patients Enroll in Hospice? Can We Do 
Anything About It?'' Journal of General Internal Medicine. 25(10): 
1009-19. Doi: 10.1007/s11606-010-1423-9.
---------------------------------------------------------------------------

    We examined length of stay, meaning the number of hospice days 
during a single hospice election at the date of live discharge or 
death. We also examined total lifetime length of stay, which would 
include the sum of all days of hospice care across all hospice 
elections. This would mean if a beneficiary had one hospice election, 
was discharged alive, and then re-elected the benefit at a later date, 
the sum of both elections would count towards their lifetime length of 
stay. In FY 2016, the average length of stay in hospice was 79 days and 
the average lifetime length of stay in hospice was

[[Page 20759]]

96.1 days. The average length of stay remained virtually the same 
between FY 2015 and FY 2016, 78 days compared to 79 days, respectively. 
The average lifetime length of stay similarly remained virtually the 
same between FY 2015 and FY 2016, 95.2 and 96.1 days, respectively.
    The median (50th percentile) length of stay in FY 2016 was 18 days. 
This means that half of hospice beneficiaries received care for fewer 
than 18 days and half received care for more than 18 days. While the 
median length of stay has remained relatively constant over the past 
several years, the average length of stay has typically increased from 
year to year.
    The Medicare hospice benefit provides four levels of care: Routine 
home care (RHC), general inpatient care (GIP), continuous home care 
(CHC), and inpatient respite care (IRC). The majority of hospice 
patient care is provided at the RHC level of care and can be provided 
wherever the patient calls ``home,'' including nursing homes and 
assisted living facilities. As indicated in Table 3 below, most hospice 
care (98 percent) provided is routine home care (RHC). Approximately 56 
percent of all hospice days are provided at the RHC level of care in 
the patient's residence whereas 41 percent is provided at the RHC level 
of care to patients that reside in a nursing home or assisted living 
facility.

   Table 3--Share of Hospice Days by Level of Care and Site of Service, for Beneficiaries Discharged Alive or
                                               Deceased in FY 2016
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of       % of all
             Level of care                           Site of service               hospice days    hospice days
----------------------------------------------------------------------------------------------------------------
RHC....................................  Home + Hospice Residential Facility....      59,818,337           55.75
                                         SNF/NF.................................      25,953,198           24.19
                                         Assisted Living Facility...............      18,182,931           16.95
                                         Other..................................       1,224,979            1.14
                                                                                 -------------------------------
                                            Total...............................     105,179,445           98.02
----------------------------------------------------------------------------------------------------------------
GIP....................................  Inpatient Hospital.....................         378,792            0.35
                                         Inpatient Hospice Facility.............       1,060,487            0.99
                                         Skilled Nursing Facility...............          59,158            0.06
                                         Other..................................           5,571            0.01
                                                                                 -------------------------------
                                            Total...............................       1,504,008            1.40
----------------------------------------------------------------------------------------------------------------
CHC....................................  Home + Hospice Residential Facility....         180,206            0.17
                                         SNF/NF.................................          42,224            0.04
                                         Assisted Living Facility...............          69,849            0.07
                                         Other..................................             484            0.00
                                                                                 -------------------------------
                                            Total...............................         292,763            0.27
----------------------------------------------------------------------------------------------------------------
IRC....................................  Inpatient Hospital.....................          29,895            0.03
                                         Inpatient Hospice Facility.............         111,004            0.10
                                         SNF/NF.................................         185,351            0.17
                                         Other..................................           1,490            0.00
                                                                                 -------------------------------
                                            Total...............................         327,740            0.31
                                                                                 -------------------------------
    Total..............................  .......................................     107,303,956             100
----------------------------------------------------------------------------------------------------------------
Source: Common Working File (CWF). All hospice claims from 2006 to 2016 were included, for beneficiaries whose
  final claim in FY 2016, according to through date, for a hospice discharge (excluded status code ``30'',
  indicating a continuing patient). Hospice days with invalid or missing site of service HCPCS code are
  excluded.

    In addition to analyzing the hospice average and average lifetime 
lengths of stay, we examined the average lifetime lengths of stay 
associated with hospice principal diagnoses by site of service at 
admission in FY 2015 (see Table 4 below). We limited our analysis to 
those beneficiaries that were receiving RHC at admission. As noted in 
Table 3 above, RHC was the level of care for 98 percent of all hospice 
days. We found that beneficiaries with chronic, progressive 
neurological diseases such as Alzheimer's disease and related 
dementias, and Parkinson's disease had the longest average lifetime 
lengths of stay at 165.3 days in FY 2015. Beneficiaries with Chronic 
Kidney Disease and cancer had shorter average lifetime lengths of stay, 
57 and 63.7 days, respectively. For all diagnoses, the average lifetime 
length of stay was 113.5 days in FY 2015 when level of care at 
admission is RHC.

  Table 4--Average Lifetime Length of Stay by Diagnosis and Site of Service on the Day of Admission in FY 2015, When Level of Care at Admission Is RHC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Home + hospice        Assisted living      SNF + LTC or non-           Other         All sites of service
                                            residential facility        facility           skilled nursing   -------------------------------------------
                                           --------------------------------------------       facility
                                                                                       ----------------------             Average               Average
  Primary hospice diagnosis at admission                Average               Average               Average   Number of   lifetime  Number of   lifetime
                                            Number of   lifetime  Number of   lifetime  Number of   lifetime    benes    length of    benes    length of
                                              benes    length of    benes    length of    benes    length of                stay                  stay
                                                          stay                  stay                  stay
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Diagnoses.............................    576,657     106.75    101,085     159.77    208,747     106.21      9,530      90.90    897,298     113.51

[[Page 20760]]

 
Alzheimer's, Dementia, and Parkinson's....     83,527     172.45     39,019     186.89     67,438     140.34      2,314     143.33    192,593     165.32
CVA/Stroke................................     32,329      95.82      9,359      98.97     23,927      77.17        971      53.56     66,668      90.06
Cancers...................................    233,771      62.04     11,773      93.90     30,437      63.23      1,964      46.41    278,047      63.69
Chronic Kidney Disease....................     14,328      58.41      1,655      82.34      6,644      47.60        273      48.84     22,907      57.01
Heart (CHF and Other Heart Disease).......    101,243     121.77     19,784     131.11     35,052      83.54      1,771      84.69    158,167     115.14
Lung (COPD and Pneumonias)................     58,183     131.97      6,866     127.83     16,631      82.42        870      65.42     82,656     122.11
All Other Diagnoses.......................     53,276     163.47     12,629     254.83     28,618     150.98      1,367     125.28     96,260     173.36
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Common Working File (CWF). All hospice claims from 2006 to 2015 were included, for beneficiaries whose final claim in FY 2015, according to
  through date, for a hospice discharge (excluded status code ``30'', indicating a continuing patient). Diagnosis code and site of service were
  determined by the first hospice claim for a beneficiary. Diagnosis categories are consistent with those outlined in Abt's 2015 technical report
  (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/December-2015-Technical-Report.pdf).
Note 1: ``Other'' category includes inpatient hospital, inpatient hospice facility, LTCH, IPF, and places not otherwise specified. Although dementia was
  no longer a valid primary diagnosis for the hospice benefit, our study time period examines primary diagnoses dating back to 2006.
Note 2: The data used for this table spans multiple years (2006 and forward). We were not able to convert ICD-9-CM diagnosis codes to ICD-10-CM codes,
  given the inherent complexities with appropriately mapping ICD-9-CM codes to ICD-10-CM codes, in time for this proposed rule. Therefore, we limited
  this analysis to those hospice patients that were discharged (alive or deceased) in FY 2015.

    As we indicated above, the average lifetime length of stay across 
all levels of care at admission was 96.1 days in FY 2016. However, the 
average lifetime length of stay was 114 days in FY 2016 when the level 
of care was RHC at admission (see Table 5 below). This suggests that 
beneficiaries not receiving RHC level of care at admission had shorter 
lifetime lengths of stay compared to the beneficiaries whose level of 
care was RHC at admission. In particular, those beneficiaries who are 
admitted to hospice at the GIP level of care typically are more acute 
and often die without transitioning to RHC and thus, have overall 
shorter lengths of stay. Therefore, the shorter lengths of stay for 
those admitted at the GIP level of care affect the overall average 
lifetime length of stay across all levels of care.

           Table 5--Average Lifetime Length of Stay Level of Care to RHC at Admission, FY 2015-FY 2016
----------------------------------------------------------------------------------------------------------------
                                                           FY 2015                           FY 2016
                                             -------------------------------------------------------------------
                                                 Number of    Average lifetime     Number of    Average lifetime
                                                   benes       length of stay        benes       length of stay
----------------------------------------------------------------------------------------------------------------
Any Level of Care at Admission..............       1,111,967             95.16       1,117,643             96.14
RHC at Admission............................         897,298            113.51         909,961            114.02
----------------------------------------------------------------------------------------------------------------
Source: Common Working File (CWF). All hospice claims from 2006 to 2016 were included, for beneficiaries whose
  final claim in FY 2016, according to through date, for a hospice discharge (excluded status code ``30'',
  indicating a continuing patient).

Live Discharges
    A beneficiary who has elected hospice may revoke his or her hospice 
election at any time and for any reason. The regulations state that if 
the hospice beneficiary (or his or her representative) revokes the 
hospice election, the beneficiary may, at any time, re-elect to receive 
hospice coverage for any other hospice election period that he or she 
is eligible to receive (Sec.  418.24(e) and Sec.  418.28(c)(3)). 
Immediately upon hospice revocation, Medicare coverage resumes for 
those Medicare benefits previously waived with the hospice election. A 
revocation can only be made by the beneficiary, in writing, and must 
specify the effective date of the revocation. A hospice cannot 
``revoke'' a beneficiary's hospice election, nor is it appropriate for 
hospices to encourage, request, or demand that the beneficiary or his 
or her representative revoke his or her hospice election. Like the 
hospice election, a hospice revocation is to be an informed choice 
based on the beneficiary's goals, values and preferences for the 
services the person wishes to receive through Medicare.
    Federal regulations limit the circumstances in which a Medicare 
hospice provider may discharge a patient from its care. In accordance 
with Sec.  418.26, discharge from hospice care is permissible when the 
patient moves out of the provider's service area, is determined to be 
no longer terminally ill, or for cause. Hospices may not discharge the 
patient at their discretion, even if the care may be costly or 
inconvenient for the hospice program. As we indicated in the FY 2015 
Hospice Wage Index and Payment Rate Update proposed and final rules, we 
understand that the rate of live discharges should not be zero, given 
the uncertainties of prognostication and the ability of beneficiaries 
and their families to revoke the hospice election at any time (79 FR 
26549 and 79 FR 50463). On July 1, 2012, we began collecting discharge 
information on the claim to capture the reason for all types of 
discharges which includes, death, revocation, transfer to another 
hospice, moving out of the hospice's service area, discharge for cause, 
or due to the beneficiary no longer being considered terminally ill 
(that is, no longer qualifying for hospice services). In FY 2016, 
approximately 17 percent of hospice beneficiaries were discharged alive 
(see Figure 1 below). Beneficiary revocations represented 38 percent of 
all live discharges whereas 51 percent of live discharges were 
instances where the beneficiary was discharged because the beneficiary 
was considered no longer terminally ill, and 11 percent of live 
discharges were instances where beneficiaries transferred to other 
hospices. In analyzing hospice live discharge rates

[[Page 20761]]

over time, Figure 1 demonstrates an incremental decrease in average 
annual rates of live discharge rates from FY 2007 to FY 2015, but an 
increase in the live discharge rate between FY 2015 and FY 2016. 
Between FY 2007 and FY 2016, there has been a reduction in the live 
discharge rate of 22.8 percent over this time period.
[GRAPHIC] [TIFF OMITTED] TP03MY17.000

    As part of our ongoing monitoring efforts, we analyzed the 
distribution of live discharge rates among hospices with 50 or more 
discharges (discharged alive or deceased). Table 6 shows that there is 
significant variation in the rate of live discharge between the 10th 
and 90th percentiles. Most notably, hospices at the 95th percentile 
discharged 49.1 percent of their patients alive in FY 2016. While the 
live discharge rate in FY 2016 for every percentile has decreased 
compared to FY 2014, the median live discharge rate remains around 17 
percent.

 Table 6--Distribution of Live Discharge Rates for Hospices With 50 or More Live Discharges, FY 2014 to FY 2016
----------------------------------------------------------------------------------------------------------------
                                                                                Live discharge rate
                           Statistics                            -----------------------------------------------
                                                                      FY 2014         FY 2015         FY 2016
----------------------------------------------------------------------------------------------------------------
5th Percentile..................................................            7.5%            6.9%            6.8%
10th Percentile.................................................            9.0%            8.5%            8.4%
25th Percentile.................................................           12.4%           11.6%           11.6%
Median..........................................................           17.6%           16.8%           16.9%
75th Percentile.................................................           26.5%           24.6%           25.4%
90th Percentile.................................................           39.4%           35.9%           37.2%
95th Percentile.................................................           50.0%           45.6%           49.1%
# Providers.....................................................           3,160           3,215           3,232
----------------------------------------------------------------------------------------------------------------
Source: FY 2014, FY 2015, and FY 2016 hospice claims data from Common Working File (CWF) that list a discharge
  status code (meaning claims were excluded if they listed status code 30, indicating a continuing patient).
  Live discharges were defined as hospice claims with a status code of ``01''.

    Finally, we looked at the distribution of live discharges by length 
of stay intervals. In looking at the length of stay intervals, 26 
percent of the live discharges occurred within 30 days of the start of 
hospice care, 13 percent between 31 to 60 days, 14 percent between 61 
to 90 days, 19 percent between 91 to 180 days, and 28 percent of live 
discharges occurred after a length of stay over 180 days of hospice 
care (see Figure 2 below). The proportion of live discharges occurring 
between the length of stay intervals was relatively constant from FY 
2013 to FY 2016. Overall, our analyses do not reveal any anomalies in 
trends in lengths of stay and rates of live discharge at this time. 
However, we will continue to monitor the data available so as to 
identify any concerning behavior in response to recent payment policy 
reforms.

[[Page 20762]]

[GRAPHIC] [TIFF OMITTED] TP03MY17.001

b. Skilled Visits in the Last Days of Life
    As we noted in both the FY 2016 and FY 2017 Hospice Wage Index and 
Payment Rate Update final rules (80 FR 47164 and 81 FR 52143, 
respectively), we are concerned that many hospice beneficiaries may not 
be receiving skilled visits during the last days of life. In the period 
of time immediately preceding death, patient needs typically surge and 
more intensive services are warranted, so we expect that the provision 
of care would proportionately escalate in order to meet the increased 
clinical, emotional, and other needs of the hospice beneficiary and his 
or her family and caregiver(s). The last week of life is typically the 
period within the terminal illness trajectory that is associated with 
the highest symptom burden, typically marked by impactful physical and 
emotional symptoms, necessitating attentive care and engagement from 
the integrated hospice team.
    In the FY 2016 Hospice Wage Index and Payment Rate Update final 
rule (80 FR 47164 through 47177), the Service Intensity Add-on (SIA) 
payment policy was finalized with an implementation date of January 1, 
2016. This payment was developed in part with the objective of 
encouraging visits during the last days of life. Additionally, in the 
FY 2017 Hospice Wage Index and Payment Rate Update final rule (81 FR 
52143) we finalized two new hospice quality reporting program (HQRP) 
measures, effective April 1, 2017: (1) Hospice Visits When Death is 
Imminent, assessing hospice staff visits to patients and caregivers in 
the last week of life; and (2) Hospice and Palliative Care Composite 
Process Measure, assessing the percentage of hospice patients who 
received care processes consistent with existing guidelines. These 
efforts represent meaningful advances in encouraging visits to hospice 
beneficiaries during the time period preceding death.
    In the FY 2016 Hospice Wage Index and Payment Rate Update final 
rule (80 FR 47164), commenters expressed concern regarding potential 
impacts of the new payment policies. Some noted that the new payment 
structures could potentially impact patient access to hospice care and 
articulated concerns around provider jettisoning of hospice 
beneficiaries, specifically around the 60-day mark of a hospice stay. 
In response to these concerns, we pledged to monitor real-time hospice 
data, evaluating for any shifts in utilization or provision of services 
to Medicare beneficiaries.
    As part of our monitoring efforts, we assessed the delivery of 
hospice care during the period of time preceding death. Analysis of FY 
2016 claims data, which encompasses hospice claims from October 1, 2015 
through September 30, 2016, shows that on any given day during the last 
7 days of a hospice election, nearly 44 percent of the time the patient 
has not received a skilled visit (skilled nursing or social worker 
visit) (see Table 7 below). This figure represents an incremental 
improvement when compared to the figures presented in our FY 2017 
Hospice Wage Index and Payment Rate Update proposed rule (81 FR 25515), 
where FY 2014 claims showed approximately 46 percent for this metric. 
Additionally, Table 7 shows that approximately 21 percent of 
beneficiaries did not receive a skilled visit (skilled nursing or 
social work visit) on the day of death in FY 2016. This value also 
indicates an improvement compared to the FY 2014 claims data, in which 
nearly 26 percent of hospice beneficiaries did not receive a skilled 
visit on the day of death (81 FR 25515).

[[Page 20763]]



Table 7--Frequency and Length of Skilled Nursing and Social Work Visits (Combined) During the Last 7 Days of a Hospice Election Ending in Death, FY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Days Before Death
                                      -------------------------------------------------------------------------------------------  All 7 days
             Visit length              0 days (day                                                                                  combined
                                        of death)    1 day (%)    2 days (%)   3 days (%)   4 days (%)   5 days (%)   6 days (%)      (%)
                                           (%)
---------------------------------------------------------------------------------------------------------------------------------------------
No Visit.............................         21.2         36.7         43.7         48.9         53.1         55.8         58.0         43.6
15 Minutes to 1 Hour.................         25.6         30.0         28.2         26.7         25.2         24.4         23.7         26.5
1 Hour, 15 Minutes to 2 Hours........         26.8         20.0         17.8         15.9         14.5         13.5         12.6         17.9
2 Hours, 15 Minutes to 3 Hours.......         13.8          7.1          5.8          4.9          4.3          3.9          3.5          6.6
3 Hours, 15 Minutes to 3 Hours, 45             4.8          2.3          1.8          1.5          1.2          1.1          1.0          2.1
 Minutes.............................
4 or More Hours......................          7.8          3.9          2.7          2.1          1.7          1.4          1.2          3.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016).

    While Table 7 above shows the frequency and length of skilled 
nursing and social work visits combined during the last 7 days of a 
hospice election in FY 2016, Tables 8 and 9 below show the frequency 
and length of visits for skilled nursing and social work separately. 
Analysis of FY 2016 claims data shows that on any given day during the 
last 7 days of a hospice election, almost 47 percent of the time the 
patient had not received a visit by a skilled nurse, and 90 percent of 
the time the patient had not received a visit by a social worker (see 
Tables 8 and 9, respectively). We believe it is important to ensure 
that beneficiaries and their families and caregivers are, in fact, 
receiving the level of care necessary during critical periods such as 
the very end of life.

              Table 8--Frequency and Length of Skilled Nursing Visits During the Last 7 Days of a Hospice Election Ending in Death, FY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Days Before Death
                                      -------------------------------------------------------------------------------------------  All 7 days
             Visit length              0 days (day                                                                                  combined
                                        of death)    1 day (%)    2 days (%)   3 days (%)   4 days (%)   5 days (%)   6 days (%)      (%)
                                           (%)
---------------------------------------------------------------------------------------------------------------------------------------------
No Visit.............................         22.7         39.6         46.9         52.2         56.5         59.2         61.5         46.5
15 Minutes to 1 Hour.................         26.4         31.5         29.1         27.0         25.2         24.1         23.2         27.0
1 Hour, 15 Minutes to 2 Hours........         27.3         19.0         16.8         14.9         13.4         12.5         11.5         17.2
2 Hours, 15 Minutes to 3 Hours.......         13.2          5.4          4.2          3.5          3.0          2.7          2.4          5.4
3 Hours, 15 Minutes to 3 Hours, 45             4.1          1.6          1.2          0.9          0.7          0.7          0.6          1.5
 Minutes.............................
4 or More Hours......................          6.2          2.9          1.9          1.4          1.2          1.0          0.8          2.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016).


                Table 9--Frequency and Length of Social Work Visits During the Last 7 Days of a Hospice Election Ending in Death, FY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Days Before Death
                                      -------------------------------------------------------------------------------------------
             Visit length              0 days (day                                                                                 All 7 days
                                        of death)    1 day (%)    2 days (%)   3 days (%)   4 days (%)   5 days (%)   6 days (%)    combined
                                           (%)
---------------------------------------------------------------------------------------------------------------------------------------------
No Visit.............................         89.9         87.1         88.6         89.7         90.5         91.1         91.4         89.6
15 Minutes to 1 Hour.................          6.3          8.8          7.8          7.1          6.6          6.3          6.1          7.1
1 Hour, 15 Minutes to 2 Hours........          2.7          3.4          3.0          2.7          2.5          2.3          2.2          2.7
2 Hours, 15 Minutes to 3 Hours.......          0.7          0.5          0.4          0.4          0.3          0.3          0.3          0.4
3 Hours, 15 Minutes to 3 Hours, 45             0.2          0.1          0.1          0.0          0.0          0.0          0.0          0.1
 Minutes.............................
4 or More Hours......................          0.2          0.1          0.1          0.0          0.0          0.0          0.0          0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016).

    Additionally, we have analyzed the overall levels of nursing and 
medical social services provided during the 7 days prior to death. In 
an assessment of FY 2015 claims, we estimate that the total number of 
hours of skilled services, including skilled nursing (as reported with 
code G0154) and medical social services visits, provided to

[[Page 20764]]

Medicare hospice beneficiaries in the RHC level of care in the 7 days 
preceding death was approximately 1.61 hours per day. As depicted in 
Figure 3 below, from our analysis of FY 2016 hospice claims data that 
begins January 1, 2016 and spans through December 31, 2016, a 
relatively consistent level of nursing and medical social services 
visits are being provided among RHC days in the 7 days prior to death, 
averaging around 1.6 hours per day. For the period spanning January 1, 
2016 through December 31, 2016, our analysis shows that approximately 
1.24 hours of services were provided by RNs, 0.18 hours were provided 
by LPNs, and 0.18 hours were provided by social workers per day. We 
note that for purposes of the SIA payment, only those hours of service 
provided by an RN, which became separately categorized as G0299 
beginning January 1, 2016, and medical social worker count toward the 
calculation of the SIA payment. Additionally, we note that G0154 was 
retired as of January 1, 2016; however, this code was still reported by 
some providers in the months of January and February 2016, and thus was 
included in Figure 3.
[GRAPHIC] [TIFF OMITTED] TP03MY17.002

    Given this evaluation of the initial wave of data, which now 
encompasses the payment policy changes that began on January 1, 2016, 
we do not believe that the results highlight any immediate concerns 
regarding behavior changes among hospices, and it appears that 
beneficiaries are receiving similar levels of care when compared to 
time periods prior to the implementation of the payment policy reforms. 
As more complete data become available, we will continue to monitor the 
provision of services at end-of-life and impacts of the SIA payment and 
other policies.
c. Non-Hospice Spending
    When a beneficiary elects the Medicare hospice benefit, he or she 
waives the right to Medicare payment for services related to the 
treatment of the individual's condition with respect to which a 
diagnosis of terminal illness has been made, except for services 
provided by the designated hospice and the attending physician. Hospice 
services are comprehensive and we have reiterated since 1983 that 
``virtually all'' care needed by the terminally ill individual would be 
provided by hospice. We believe that it would be unusual and 
exceptional to see services provided outside of hospice for those 
individuals who are approaching the end of life. However, we continue 
to conduct ongoing analysis of non-hospice spending during a hospice 
election and the results of our analysis seems to suggest the 
unbundling of items and services that perhaps should have been provided 
and covered under the Medicare hospice benefit.
    We first reported findings on 2012 non-hospice spending during a 
hospice election in the FY 2015 Hospice Wage Index and Payment Rate 
Update final rule (79 FR 50452). This proposed rule updates our 
analysis of non-hospice spending during a hospice election using FY 
2016 data. We found that in FY 2016, Medicare paid over $900 million 
for items and services under Parts A, B, and D for beneficiaries during 
a hospice election. Medicare payments for non-hospice Part A and Part B 
items and services received by hospice beneficiaries during hospice 
election were $748 million in FY 2012, $712 million in FY 2013, $624 
million in FY 2014, $593 million in FY 2015,

[[Page 20765]]

and $534 million in FY 2016 (see Figure 4 below). The beneficiary cost 
sharing amount in FY 2016 was $129.6 million. Non-hospice spending for 
Part A and Part B items and services has decreased each year since we 
began reporting these findings. Overall, from FY 2012 to FY 2016 non-
hospice Medicare spending for Parts A and B during hospice election 
declined 25 percent. However, there continues to be a non-trivial 
amount of non-hospice Parts A and B spending on beneficiaries under a 
hospice election, and we will continue to monitor data regarding this 
issue
[GRAPHIC] [TIFF OMITTED] TP03MY17.003

We also examined Part D spending from FY 2012 to FY 2016 for those 
beneficiaries under a hospice election. The data shows Medicare 
payments for non-hospice Part D drugs received by hospice beneficiaries 
during a hospice election were $331.3 million in FY 2012, $348 million 
in FY 2013, $294 million in FY 2014, $315.2 million in FY 2015, and 
$347.5 million in FY 2016 (see Figure 5). In contrast to non-hospice 
spending during a hospice election for Medicare Parts A and B items and 
services, non-hospice spending for Part D drugs increased in FY 2016 
compared to FY 2012.
    Recent analyses of Part D prescription drug event (PDE) data 
suggest that the current prior authorization (PA) has reduced Part D 
program payments for drugs in four targeted categories (analgesics, 
anti-nauseants, anti-anxiety, and laxatives). However, under Medicare 
Part D there has been an increase in hospice beneficiaries filling 
prescriptions for a separate category of drugs we refer to as 
maintenance drugs, as recently analyzed by CMS.\5\ Currently, 
maintenance drugs for beneficiaries under a hospice election are not 
subject to the Part D PA process. After a hospice election, many 
maintenance drugs as well as drugs used to treat or cure a condition 
are typically discontinued as the focus of care shifts to palliation 
and comfort measures. However, there are maintenance drugs that are 
appropriate to continue as they may offer symptom relief for the 
palliation and management of the terminal illness and related 
conditions, and therefore should be covered under the hospice benefit, 
not Part D. Examples of maintenance drugs are those used to treat high 
blood pressure, heart disease, asthma and diabetes. These categories 
include beta blockers, calcium channel blockers, corticosteroids, and 
insulin.
---------------------------------------------------------------------------

    \5\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.

---------------------------------------------------------------------------

[[Page 20766]]

[GRAPHIC] [TIFF OMITTED] TP03MY17.004

    Table 10 below details the various components of Part D spending 
for patients receiving hospice care for FY 2016. The portion of the 
$436.1 million total Part D spending that was paid by Medicare is the 
sum of the Low Income Cost-Sharing Subsidy (row 2 in Table 10) and the 
Covered Drug Plan Paid Amount (row 5), or approximately $347.5 million. 
The beneficiary cost sharing amount was approximately $64.9 million, 
including patient pay amount (row 1), other true out-of-pocket amount 
(row 3), and patient liability reduction due to other payer amount (row 
4).

  Table 10--Drug Cost Sources for Hospice Beneficiaries' FY 2016 Drugs
                         Received Through Part D
------------------------------------------------------------------------
                                                              FY 2016
                        Component                          expenditures
------------------------------------------------------------------------
Patient Pay Amount......................................     $47,289,374
Low Income Cost-Sharing Subsidy.........................     103,715,821
Other True Out-of-Pocket Amount.........................       1,749,182
Patient Liability Reduction due to Other Payer Amount...      15,868,623
Covered Drug Plan Paid Amount...........................     243,791,919
Non-Covered Plan Paid Amount............................       7,878,966
Six Payment Amount Totals...............................     420,293,884
Unknown/Unreconciled....................................      15,836,435
  Gross Total Drug Costs, Reported......................     436,130,318
------------------------------------------------------------------------
Source: Analysis of 100% FY 2016 Medicare Claim Files. For more
  information on the components above and on Part D data, go to the
  Research Data Assistance Center's (ResDAC's) Web site at: http://www.resdac.org/.

    Hospices are responsible for covering drugs and biologicals related 
to the palliation and management of the terminal illness and while the 
patient is under hospice care. For a prescription drug to be covered 
under Part D for an individual enrolled in hospice, the drug must be 
for treatment unrelated to the terminal illness or related conditions. 
After a hospice election, many maintenance drugs or drugs used to treat 
or cure a condition are typically discontinued as the focus of care 
shifts to palliation and comfort measures. However, those same drugs 
may be appropriate to continue as they may offer symptom relief for the 
palliation and management of the terminal prognosis.\5\ In our ongoing 
analysis of non-hospice spending, we remain concerned that common 
palliative and other disease-specific drugs for hospice beneficiaries 
that should be covered under the Part A Medicare hospice benefit are 
instead being covered and paid for through Part D. Based on our own 
analysis as demonstrated in the data provided above and similar 
analyses conducted by the Office of the Inspector General (OIG) 
regarding Part D drug expenditures for Medicare hospice beneficiaries, 
we believe that Medicare could be paying twice for drugs that are 
already covered under the hospice per diem payment by also paying for 
them under Part D.\6\
---------------------------------------------------------------------------

    \5\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.
    \6\ https://oig.hhs.gov/oas/reports/region6/61000059.asp, 
``Medicare Could Be Paying Twice for Prescriptions for Beneficiaries 
in Hospice.''
---------------------------------------------------------------------------

    We continue to expect that hospices should be providing virtually 
all of the care needed by terminally ill individuals, including related 
prescription drugs. The comprehensive nature of the services covered 
under the Medicare hospice benefit is structured such that hospice 
beneficiaries should not have to routinely seek items, services, and/or 
medications beyond those provided by hospice. The hospice medical 
director, the attending physician (if any), and the hospice IDG

[[Page 20767]]

determine, on a case-by-case basis, what items and services are related 
and unrelated to the palliation and management of the terminal illness 
and related conditions during the admission process, the initial and 
comprehensive assessments, and in the development of the hospice plan 
of care (Sec. Sec.  418.25, 418.54, and 418.56).
    To the extent that individuals receive services outside of the 
Medicare hospice benefit, Medicare coverage is determined by whether or 
not the services are for the treatment of a condition completely 
unrelated to the individual's terminal illness and related conditions 
(48 FR 38148). However, we have presented hospice monitoring data from 
the past several years, as seen above, that continue to show a non-
trivial amount of items, services, and medications being furnished 
outside of the Medicare hospice benefit to beneficiaries under a 
hospice election. We encourage hospices to educate beneficiaries 
regarding the comprehensive nature of the hospice benefit. Although it 
should be rare, if any conditions are identified by the hospice as 
unrelated to the terminal illness and related conditions, we further 
encourage hospices to inform the beneficiary (or representative) at or 
near the time of election and provide the clinical rationale for such 
determinations. The regulations at Sec.  476.78 state that providers 
must inform Medicare beneficiaries at the time of admission, in 
writing, that the care for which Medicare payment is sought will be 
subject to Quality Improvement Organization (QIO) review. If a 
beneficiary disagrees with the hospice determination of what conditions 
are unrelated to the terminal illness and related conditions (and thus 
arguably not provided as part of the hospice benefit), we strongly 
encourage hospices to work to resolve the disagreement with the 
beneficiary (or representative), taking into consideration his or her 
wishes, treatment preferences and goals. If a resolution cannot be 
reached, the beneficiary and the hospice can agree to participate in a 
flexible, dialogue-based resolution process, called immediate advocacy, 
which is coordinated by the QIO. We will continue to monitor non-
hospice spending during a hospice election and consider ways to address 
this issue through future regulatory and/or program integrity efforts, 
if needed.
2. Initial Analysis of Revised Hospice Cost Report Data
a. Background
    As mentioned in section II.B of this proposed rule, the Medicare 
hospice per diem payment amounts were developed to cover all services 
needed for the palliation and management of the terminal illness and 
related conditions, as described in section 1861(dd)(1) of the Act. 
Services provided under a written plan of care could include: Nursing 
care provided by or under the supervision of a registered professional 
nurse; physical therapy, occupational therapy, speech-language 
pathology services; counseling (including dietary counseling); medical 
social services under the direction of a physician; services of a home 
health aide; homemaker services; medical supplies (including drugs and 
biologicals) and the use of durable medical equipment; physician 
services; short-term inpatient care (including both respite care and 
care necessary for pain control and acute and chronic symptom 
management) in a qualified inpatient facility; or any other item or 
service which has been specified in the plan of care for which payment 
may be made under Medicare. Under the current payment system, hospices 
are paid for each day that a beneficiary is enrolled in hospice care, 
regardless of whether services are rendered on any given day.
    As described in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule, we finalized changes to the hospice cost report form 
in order to broaden the scope and detail of data we collect regarding 
the costs of providing hospice care (80 FR 47150).\7\ We believed that 
changes were needed to the hospice cost report in order to collect data 
on the costs of services provided at each level of care, rather than by 
costs per day, regardless of the level of care. The revisions to the 
cost report form for freestanding hospices became effective for cost 
reporting periods beginning on or after October 1, 2014. The 
instructions for completing the revised freestanding hospice cost 
report form are found in the Medicare Provider Reimbursement Manual--
Part 2, chapter 43.\8\ Medicare-certified institutional providers are 
required to submit an annual cost report to a Medicare Administrative 
Contractor (MAC). The cost report contains provider information such as 
facility characteristics, utilization data, costs by cost center (for 
all payers as well as Medicare), Medicare settlement data, and 
financial statement data.
---------------------------------------------------------------------------

    \7\ CMS Transmittal 2864. ``Additional Data Reporting 
Requirements for Hospice Claims'', Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864CP.pdf.
    \8\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1P243.pdf.
---------------------------------------------------------------------------

b. Methodology
    Section 1814(i)(6) of the Act, as amended by section 3132(a)(1)(B) 
of the Affordable Care Act, authorized the Secretary to collect 
additional data and information determined appropriate to revise 
payments for hospice care and other purposes. The data collected may be 
used to revise the methodology for determining the payment rates for 
RHC and other services included in hospice care. Effective October 1, 
2014, we finalized changes to the hospice cost report to improve data 
collection on the costs of providing hospice care. We conducted a 
preliminary analysis of the new cost report data (CMS Form 1984-14) for 
freestanding hospices with cost reporting periods in FY 2015, which 
totaled 2,675 reports. Using this data we calculated preliminary 
estimates of total costs per day by level of care. It is important to 
note that the values we computed for cost per day include all payer 
sources, both Medicare and non-Medicare; however, we believe that the 
total cost figures represent a reasonable proxy for estimating costs 
related to the provision of care for Medicare beneficiaries. In order 
to compute total Medicare-related costs by level of care, we multiplied 
the computed cost per day by level of care (as reported on Worksheet C) 
for each hospice by the number of Medicare days by level of care. We 
then calculated total payments by level of care for each hospice by 
multiplying the FY 2015 Medicare hospice payments by level of care by 
the number of Medicare days by level of care. Total costs, payments, 
and days by level of care were summed for each unique hospice. In order 
to more accurately account for the hourly CHC cost per day, we used 
data from Medicare claims in order to quantify the hours of CHC 
provided by summing the hours of CHC reported in revenue center 0652, 
which tallies the units of CHC care. We then divided the CHC costs by 
the number of CHC hours as reported in revenue center 0652 to calculate 
a CHC per-hour value. In order to mitigate the impact of statistical 
outliers, we applied trims on the outer bounds of cost per day by level 
of care, set at the 1st and 99th percentile of the distribution.
c. Overall Payments and Costs and Costs by Level of Care
    For the purposes of evaluating calculated costs per day by level of 
care

[[Page 20768]]

compared to Medicare payment amounts, we compared the reported costs on 
the Medicare cost report to the FY 2015 per diem payment rates by level 
of care, as follows (79 FR 50485). We note that these amounts were not 
adjusted by geographic differences in wage rates and are meant to serve 
as a general benchmark:
 $159.34 for RHC
 $929.91 for 24 hours of CHC (hourly rate of $38.75)
 $164.81 for IRC
 $708.77 for GIP

    Table 11 shows the distribution of the calculated Average Cost Per 
Day by Level of Care, using data from Worksheet C--Rows 3, 8, 13, 18--
Column 3.

                                     Table 11--Summary Statistics: Medicare Costs Per Day By Level of Care, FY 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               FY2015 per
                                Number of               Weighted     Minimum      25th                    75th       Maximum      diem
        Level of care             cost        Mean        mean        value    Percentile    Median    Percentile     value      payment
                                 reports                                                                                         amounts
-----------------------------------------------------------------------------------------------------------------------------------------
CHC cost per day, per hour...       1,088         $91         $49          $4         $18         $51         $95      $1,853     $929.91
                                                                                                                                   for 24
                                                                                                                                    hours
                                                                                                                                  ($38.75
                                                                                                                                   hourly
                                                                                                                                   rate).
RHC cost per day.............       2,578         133         123          50         105         125         150         399     159.34.
IRC cost per day.............       1,930         632         467          38         221         343         549      17,813     164.81.
GIP cost per day.............       1,782       1,079         792          64         564         879       1,251      10,858     708.77.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Medicare hospice cost report data for FY 2015.

    As mentioned above, the data analyzed were trimmed to minimize the 
effect of statistical anomalies. Nevertheless, there is substantial 
variation in the reported cost per day by hospices. Total cost per day 
values in the four levels of care span from a minimum of $4 to maximum 
values in the tens of thousands. Because of this wide range of values 
in the distribution, we used the median as well as the mean values 
weighted by the number of days by level of care as reference points in 
these preliminary analyses. When compared with the FY 2015 per diem 
payment rates, the calculated median and weighted mean costs associated 
with providing RHC are lower than the base payment rates. As noted in 
section III.A of this proposed rule, the RHC level of care accounts for 
over 98 percent of all hospice days based on our analysis of claims for 
FY 2016. The median and weighted mean costs for the provision of RHC 
are estimated at $125 and $123 respectively, with both figures 
presenting lower values than the FY 2015 per diem payment rate of 
$159.34, a difference of approximately $35 per day.
    Conversely, for CHC the estimated median and weighted mean costs 
per day, per hour are $51 and $49, respectively. The FY 2015 payment 
rate for CHC was $38.75 per hour. The CHC level of care accounts for 
approximately 0.27 percent of all hospice days in FY 2016, as noted in 
section III.A of this proposed rule. Similarly, the median and weighted 
mean costs per day associated with the provision of GIP care is 
estimated at $879 and $792, respectively, while the FY 2015 per diem 
payment amount for GIP was $708.77. As noted in section III.A of this 
proposed rule, the GIP level of care accounts for approximately 1.40 
percent of all hospice days based on our analysis of FY 2016 claims. 
Likewise, the median and weighted mean costs per day associated with 
the IRC level of care are estimated at $343 and $467, respectively, 
while the per diem payment amount for FY 2015 was $164.81, and we 
estimate that IRC days represent approximately 0.31 percent of all 
hospice days in FY 2016 claims as described in section III.A above.
    We recognize that this is the first period in which hospices have 
supplied cost information on the revised cost report that became 
effective for cost reporting periods beginning on or after October 1, 
2014 and expect that some of the early trends may be the result of 
hospices learning how to accurately report this information. Therefore, 
any interpretations regarding the overall alignment between costs and 
payment would likely be premature given the newness of the data. 
Moreover, this preliminary analysis did not incorporate factors that 
merit consideration in future analyses, such as the exclusion of 
providers surpassing the hospice inpatient and aggregate caps as well 
as the application of a more robust trimming process to the cost report 
dataset. As we continue to gather more cost report data, we plan to 
conduct more thorough analyses of the cost report data and fully assess 
Medicare-related hospice costs as compared with Medicare hospice 
payments by level of care. We encourage hospices to continue to submit 
the most accurate data possible on Medicare cost reports.

B. Proposed FY 2018 Hospice Wage Index and Rate Update

1. Proposed FY 2018 Hospice Wage Index
    The hospice wage index is used to adjust payment rates for hospice 
agencies under the Medicare program to reflect local differences in 
area wage levels, based on the location where services are furnished. 
The hospice wage index utilizes the wage adjustment factors used by the 
Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital 
wage adjustments. Our regulations at Sec.  418.306(c) require each 
labor market to be established using the most current hospital wage 
data available, including any changes made by OMB to the Metropolitan 
Statistical Areas (MSAs) definitions.
    We use the previous FY's hospital wage index data to calculate the 
hospice wage index values. For FY 2018, the hospice wage index will be 
based on the FY 2017 hospital pre-floor, pre-reclassified wage index. 
This means that the hospital wage data used for the hospice wage index 
is not adjusted to take into account any geographic reclassification of 
hospitals including those in accordance with section 1886(d)(8)(B) or 
1886(d)(10) of the Act. The appropriate wage index value is applied to 
the labor portion of the payment rate based on the geographic area in 
which the beneficiary resides when receiving routine home care (RHC) or 
continuous home care (CHC). The appropriate wage index value is applied 
to the labor portion of the

[[Page 20769]]

payment rate based on the geographic location of the facility for 
beneficiaries receiving general inpatient care (GIP) or Inpatient 
Respite Care (IRC).
    There exist 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. In the FY 2008 Hospice Wage Index final rule 
(72 FR 50214), we implemented a methodology to update the hospice wage 
index for such areas. In cases where there was a rural area without 
rural hospital wage data, we use the average pre-floor, pre-
reclassified hospital wage index data from all contiguous Core-Based 
Statistical Areas (CBSAs), to represent a reasonable proxy for the 
rural area. The term ``contiguous'' means sharing a border (72 FR 
50217). Currently, the only rural area without a hospital from which 
hospital wage data could be derived is Puerto Rico. However, for rural 
Puerto Rico, we would not apply this methodology due to the distinct 
economic circumstances that exist there (for example, due to the close 
proximity to one another of almost all of Puerto Rico's various urban 
and non-urban areas, this methodology would produce a wage index for 
rural Puerto Rico that is higher than that in half of its urban areas); 
instead, we would continue to use the most recent wage index previously 
available for that area. For FY 2018, we propose to continue to use the 
most recent pre-floor, pre-reclassified hospital wage index value 
available for Puerto Rico, which is 0.4047.
    In the FY 2010 Hospice Wage Index final rule (74 FR 39386), we 
adopted the policy that for urban labor markets without a hospital from 
which hospital wage index data could be derived, all of the CBSAs 
within the state would be used to calculate a statewide urban average 
pre-floor, pre-reclassified hospital wage index value to use as a 
reasonable proxy for these areas. For FY 2018, the only CBSA without a 
hospital from which hospital wage data can be derived is 25980, 
Hinesville-Fort Stewart, Georgia.
    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 subject to application of the hospice floor to compute 
the hospice wage index used to determine payments to hospices. Pre-
floor, pre-reclassified hospital wage index values below 0.8 are 
adjusted by a 15 percent increase subject to a maximum wage index value 
of 0.8. For example, if County A has a pre-floor, pre-reclassified 
hospital wage index value of 0.3994, we would multiply 0.3994 by 1.15, 
which equals 0.4593. Since 0.4593 is not greater than 0.8, then County 
A's hospice wage index would be 0.4593. In another example, if County B 
has a pre-floor, pre-reclassified hospital wage index value of 0.7440, 
we would multiply 0.7440 by 1.15 which equals 0.8556. Because 0.8556 is 
greater than 0.8, County B's hospice wage index would be 0.8.
    On February 28, 2013, OMB issued OMB Bulletin No. 13-01, announcing 
revisions to the delineation of MSAs, Micropolitan Statistical Areas, 
and Combines Statistical Areas, and guidance on uses of the delineation 
in these areas. In the FY 2016 Hospice Wage Index final rule (80 FR 
47178), we adopted the OMB's new area delineations using a 1-year 
transition. In the FY 2016 Hospice Wage Index and Payment Rate Update 
final rule (80 FR 47178), we stated that beginning October 1, 2016, the 
wage index for all hospice payments would be fully based on the new OMB 
delineations. The most recent bulletin (No. 15-01) concerning the 
revised delineations was published by the OMB on July 15, 2015.
    The proposed hospice wage index applicable for FY 2018 (October 1, 
2017 through September 30, 2018) is available on the Web site at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.
2. Proposed Hospice Payment Update Percentage
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish 
updates to hospice rates for FYs 1998 through 2002. Hospice rates were 
to be updated by a factor equal to the inpatient hospital market basket 
percentage increase set out under section 1886(b)(3)(B)(iii) of the 
Act, minus 1 percentage point. Payment rates for FYs since 2002 have 
been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, 
which states that the update to the payment rates for subsequent FYs 
must be the inpatient market basket percentage increase for that FY. 
The Act historically required us to use the inpatient hospital market 
basket as the basis for the hospice payment rate update.
    Section 3401(g) of the Affordable Care Act mandated that, starting 
with FY 2013 (and in subsequent FYs), the hospice payment update 
percentage would be annually reduced by changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
The statute defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm 
business multifactor productivity (MFP). In addition to the MFP 
adjustment, section 3401(g) of the Affordable Care Act also mandated 
that in FY 2013 through FY 2019, the hospice payment update percentage 
would be reduced by an additional 0.3 percentage point (although for FY 
2014 to FY 2019, the potential 0.3 percentage point reduction is 
subject to suspension under conditions specified in section 
1814(i)(1)(C)(v) of the Act).
    Normally, the proposed hospice payment update percentage for FY 
2018 would have been based on the estimated inpatient hospital market 
basket update of 2.9 percent (based on IHS Global Insight, Inc.'s 
fourth quarter 2016 forecast with historical data through the third 
quarter of 2016 of the proposed 2014-based IPPS market basket). Due to 
the requirements at section 1886(b)(3)(B)(xi)(II) of the Act, the 
estimated FY 2018 inpatient hospital market basket update of 2.9 
percent would have been reduced by a MFP adjustment as mandated by 
Affordable Care Act (currently estimated to be 0.4 percentage point for 
FY 2018). Section 1814(i)(1)(C)(v) of the Act requires that the 
estimated inpatient hospital market basket update for FY 2018 would be 
reduced further by 0.3 percentage point. In effect, the proposed 
hospice payment update percentage for FY 2018 would be 2.2 percent. 
However, section 411(d) of the Medicare Access and CHIP Reauthorization 
Act of 2015, Public Law 114-10 (April 16, 2015) (MACRA) amended section 
1814(i)(1)(C) of the Act such that for hospice payments for FY 2018, 
the market basket percentage increase, after application of the 
productivity adjustment and the 0.3 percent reduction, if applicable, 
shall be 1 percent. Therefore, for FY 2018, the hospice payment update 
percentage will be 1 percent.
    Currently, the labor portion of the hospice payment rates is as 
follows: For RHC, 68.71 percent; for CHC, 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 RHC, 31.29 percent; for CHC, 31.29 percent; 
for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 
percent. Beginning with cost reporting periods starting on or after 
October 1, 2014, freestanding hospice providers are

[[Page 20770]]

required to submit cost data using CMS Form 1984-14 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospice-2014.html). We are currently analyzing 
this data for possible use in updating the labor portion of the hospice 
payment rates. Any changes to the labor portions will be proposed in 
future rulemaking and will be subject to public comments.
3. Proposed FY 2018 Hospice Payment Rates
    There are four payment categories that are distinguished by the 
location and intensity of the services provided. The base payments are 
adjusted for geographic differences in wages by multiplying the labor 
share, which varies by category, of each base rate by the applicable 
hospice wage index. A hospice is paid the RHC rate for each day the 
beneficiary is enrolled in hospice, unless the hospice provides CHC, 
IRC, or GIP. CHC is provided during a period of patient crisis to 
maintain the patient at home; IRC is short-term care to allow the usual 
caregiver to rest and be relieved from caregiving; and GIP is to treat 
symptoms that cannot be managed in another setting.
    As discussed in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47172), we implemented two different RHC 
payment rates, one RHC rate for the first 60 days and a second RHC rate 
for days 61 and beyond. In addition, in the final rule, we adopted a 
Service Intensity Add-on (SIA) payment for RHC for when direct patient 
care is provided by a RN or social worker during the last 7 days of the 
beneficiary's life. The SIA payment is equal to the CHC hourly rate 
multiplied by the hours of nursing or social work provided (up to 4 
hours total) that occurred on the day of service, if certain criteria 
are met. In order to maintain budget neutrality, as required under 
section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were adjusted 
by a SIA budget neutrality factor.
    As discussed in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47177), we will continue to make the SIA 
payments budget neutral through an annual determination of the SIA 
budget neutrality factor (SBNF), which will then be applied to the RHC 
payment rates. The SBNF will be calculated for each FY using the most 
current and complete FY utilization data available at the time of 
rulemaking. For FY 2018, we calculated the SBNF using FY 2016 
utilization data. We examined skilled nursing and social work visit 
data for the last 7 days of life where RHC was billed and found that, 
from January 1 through September 30, 2016, approximately 86 percent of 
nursing visits were identified as RN visits (using G0299) and 14 
percent of nursing visits were identified as LPN visits (using G0300). 
For skilled nursing visits during the last 7 days of life where RHC was 
billed and that occurred between October 1 and December 31, 2015, we 
assumed that 86 percent of the line item visits reported using G0154 
were RN and 14 percent were LPN. For FY 2018, the budget neutrality 
adjustment that would apply to days 1 through 60 is calculated to be 
1.0018. The budget neutrality adjustment that would apply to days 61 
and beyond is calculated to be 1.0005.
    In the FY 2017 Hospice Wage Index and Payment Rate Update final 
rule (82 FR 52156), we initiated a policy of applying a wage index 
standardization factor to hospice payments in order to eliminate the 
aggregate effect of annual variations in hospital wage data. In order 
to calculate the wage index standardization factor, we simulate total 
payments using the proposed FY 2018 hospice wage index and compare it 
to our simulation of total payments using the FY 2017 hospice wage 
index. By dividing payments for each level of care using the proposed 
FY 2018 wage index by payments for each level of care using the FY 2017 
wage index, we obtain a wage index standardization factor for each 
level of care (RHC days 1-60, RHC days 61+, CHC, IRC, and GIP). The 
wage index standardization factors for each level of care are shown in 
the tables below.
    Lastly, the hospice payment rates for hospices that submit the 
required quality data would be increased by the proposed FY 2018 
hospice payment update percentage of 1.0 percent as discussed in 
section III.B.2. The proposed FY 2018 RHC rates are shown in Table 12. 
The proposed FY 2018 payment rates for CHC, IRC, and GIP are shown in 
Table 13.

                                                  Table 12--Proposed FY 2018 Hospice RHC Payment Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              FY 2018
                                                                                                           Wage index        proposed         FY 2018
               Code                             Description                 FY 2017          SBNF        standardization      hospice        Proposed
                                                                        payment  rates                       factor           payment      payment rates
                                                                                                                              update
--------------------------------------------------------------------------------------------------------------------------------------------------------
651...............................  Routine Home Care (days 1-60).....         $190.55        x 1.0018          x 1.0000          x 1.01         $192.80
651...............................  Routine Home Care (days 61+)......         $149.82        x 1.0005          x 1.0001          x 1.01         $151.41
--------------------------------------------------------------------------------------------------------------------------------------------------------


                       Table 13--Proposed FY 2018 Hospice CHC, IRC, and GIP Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                                                      FY 2018
                                                                   Wage index        proposed         FY 2018
         Code                 Description           FY 2017      standardization      hospice        proposed
                                                payment  rates       factor           payment     payment  rates
                                                                                      update
----------------------------------------------------------------------------------------------------------------
652...................  Continuous Home Care..         $964.63          x 1.0022          x 1.01         $976.42
                        Full Rate = 24 hours
                         of care.
                        $40.68 = FY 2018
                         hourly rate.
655...................  Inpatient Respite Care          170.97          x 1.0006          x 1.01          172.78
656...................  General Inpatient Care          734.94          x 1.0017          x 1.01          743.55
----------------------------------------------------------------------------------------------------------------

    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data, based on measures to be specified by the 
Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320 
through 47324), we

[[Page 20771]]

implemented a Hospice Quality Reporting Program (HQRP) as required by 
section 3004 of the Affordable Care Act. Hospices were required to 
begin collecting quality data in October 2012, and submit that quality 
data in 2013. Section 1814(i)(5)(A)(i) of the Act requires that 
beginning with FY 2014 and each subsequent FY, the Secretary shall 
reduce the market basket update by 2 percentage points for any hospice 
that does not comply with the quality data submission requirements with 
respect to that FY. The proposed FY 2018 rates for hospices that do not 
submit the required quality data would be updated by the proposed FY 
2018 hospice payment update percentage of 1 percent minus 2 percentage 
points. These rates are shown in Tables 14 and 15.

                     Table 14--Proposed FY 2018 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      FY 2018
                                                                                                                     proposed
                                                                                                                      hospice                      FY 2018
                                                                    FY 2017                        Wage index         payment         FY 2018     Proposed
             Code                         Description           payment  rates       SBNF        standardization   update of 1%      proposed      Payment
                                                                                                     factor           minus 2     payment  rates    Rates
                                                                                                                    percentage
                                                                                                                  points = -0.1%
------------------------------------------------------------------------------------------------------------------------------------------------ ----------
651...........................  Routine Home Care (days 1-60).         $190.55        x 1.0018          x 1.0000          x 0.99         $188.98
651...........................  Routine Home Care (days 61+)..         $149.82        x 1.0005          x 1.0001          x 0.99          148.41
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 15--Proposed FY 2018 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required
                                                  Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                      FY 2018
                                                                   Wage index        proposed         FY 2018
         Code                 Description           FY 2017      standardization      hospice        Proposed
                                                payment  rates       factor           payment      payment rates
                                                                                      update
----------------------------------------------------------------------------------------------------------------
652...................  Continuous Home Care..         $964.63          x 1.0022          x 0.99         $957.08
                        Full Rate = 24 hours
                         of care.
                        $39.88 = FY 2018
                         hourly rate.
655...................  Inpatient Respite Care         $170.97          x 1.0006          x 0.99         $169.36
656...................  General Inpatient Care          734.94          x 1.0017          x 0.99          728.83
----------------------------------------------------------------------------------------------------------------

4. Hospice Cap Amount for FY 2018
    As discussed in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47183), we implemented changes mandated by the 
Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT 
Act). Specifically, for accounting years that end after September 30, 
2016 and before October 1, 2025, the hospice cap is updated by the 
hospice payment update percentage rather than using the consumer price 
index for urban consumers (CPI-U). The hospice cap amount for the 2018 
cap year will be $28,689.04, which is equal to the 2017 cap amount 
($28,404.99) updated by the FY 2018 hospice payment update percentage 
of 1.0 percent.

C. Discussion and Solicitation of Comments Regarding Sources of 
Clinical Information for Certifying Terminal Illness

    Hospice provides relief from pain and symptoms, provides 
psychosocial and spiritual comfort, and allows an individual to die 
with dignity and surrounded by family and friends. Despite the 
invaluable support hospices offer, it is not an easy decision and not 
one individuals generally arrive at on their own. Election of hospice 
is a significant decision and one which patients and their physicians 
do not take lightly, as it involves a shift in traditional health care 
philosophy from curative to palliative care. In general, the majority 
of hospice referrals do come from family physicians who have often 
cared for patients with chronic illnesses for long periods of time.\9\ 
These providers are in the unique position of understanding and 
identifying the individualized progression of the patient's illness and 
recognizing when the condition becomes terminal. To be eligible to 
elect the Medicare hospice benefit, the individual must have Medicare 
Part A and be certified as terminally ill as articulated at Sec.  
418.20. The regulations define ``terminally ill'' to mean that the 
individual has a medical prognosis that his or her life expectancy is 6 
months or less if the illness runs its normal course (Sec.  418.3). The 
regulations at Sec.  418.22(c) require that for the initial 90-day 
period of hospice care, the hospice must obtain written certification 
statements from the medical director of the hospice or the physician 
member of the hospice interdisciplinary group, and the individual's 
attending physician, if the individual has an attending physician. The 
current regulations at Sec.  418.25(b) state that in reaching a 
decision to certify, the hospice medical director, or hospice physician 
designee reviews the clinical information for each hospice patient and 
provides written certification that it is anticipated that the 
patient's life expectancy is 6 months or less if the illness runs its 
normal course. These regulations require that the hospice medical 
director consider at least the following information:
---------------------------------------------------------------------------

    \9\ Michelle T. Weckmann, MD, MS, University of Iowa Hospitals 
and Clinics, Iowa The Role of the Family Physician in the Referral 
and Management of Hospice Patients. Am Fam Physician, 2008 Mar 
15;77(6):807-812.
---------------------------------------------------------------------------

    1. Diagnosis of the terminal condition of the patient.
    2. Other health conditions, whether related or unrelated to the 
terminal condition.
    3. Current clinically relevant information supporting all 
diagnoses.
    The admission requirements at Sec.  418.22(b)(2) require that this 
clinical information and other documentation that supports the medical 
prognosis must accompany the certification and be filed in the medical 
record with the

[[Page 20772]]

written certification. Whereas the regulations at Sec.  418.25(b) 
provide the type of clinical information the hospice medical director 
or hospice physician designee must consider in the certification of 
terminal illness, the source of this clinical information is not 
clearly identified. This raises the question as to what clinical 
information the hospice medical director (or hospice physician 
designee) is relying on to support his or her certification that the 
individual is terminally ill and from where this information was 
obtained.
    Multiple clinical tools and guidelines, and more specifically the 
Medicare Administrative Contractor (MAC) Local Coverage Determinations 
(LCDs), exist to assist the patient-designated attending physician and 
hospice medical director/hospice physician designee in determining the 
patient's terminal prognosis. These guidelines provide indicators that 
support a decline in clinical status, including, but not limited to: 
History of recurrent infections, worsening symptoms that are non- 
responsive to treatment, increasing emergency department and clinician 
visits, laboratory results supporting progression of disease, and 
change in functional status.\10\ However, documentation of these 
indicators would likely not exist without some degree of long-term 
monitoring and evaluation by a physician separate from the hospice 
medical director/hospice physician designee. As such, this information 
would typically be found in the referring physician's and/or acute/
post- acute care facility's medical records.
---------------------------------------------------------------------------

    \10\ https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx.
---------------------------------------------------------------------------

    Understandably, many family physicians typically take on the role 
of the attending physician once the patient chooses to elect hospice. 
They have played an invaluable role in coordinating care throughout the 
spectrum of the patient's life, and as such, have in depth ``knowledge 
of the patient's values, family issues, and communication style.'' \11\ 
However, in accordance with our regulation at Sec.  418.22(c)(1)(ii), 
only the initial certification has to involve the attending physician 
and only IF the patient has designated one. There is currently no 
requirement that a patient must designate an attending physician and 
therefore the responsibility for certification can solely reside with 
the hospice medical director or the physician member of the hospice 
interdisciplinary group. Furthermore, this regulation does not require 
that the hospice medical director or physician member of the hospice 
interdisciplinary group designee has a face-to-face encounter with the 
patient when initially certifying the patient as terminally ill. 
Rather, a face-to-face encounter with a hospice physician or allowed 
non-physician practitioner is not required until the third election 
period and each subsequent recertification thereafter. Consequently, a 
patient may never be seen by the hospice physician who is certifying 
that he or she is terminally ill.
---------------------------------------------------------------------------

    \11\ Michelle T. Weckmann, MD, MS, University of Iowa Hospitals 
and Clinics, Iowa City, Iowa The Role of the Family Physician in the 
Referral and Management of Hospice Patients. Am Fam Physician, 2008 
Mar 15;77(6):807-812.
---------------------------------------------------------------------------

    No visits to the patient are covered under the Medicare hospice 
benefit until the individual has been certified as terminally ill, an 
election statement has been signed, and a plan of care has been 
established (Sec.  418.200). Therefore, any information regarding the 
patient's health status from hospice staff (for example, registered 
nurses) should not be the sole documentation used to support the 
initial certification requirement as the patient has yet to meet the 
eligibility requirement. Because Medicare hospice coverage depends on 
being certified as terminally ill and requires an individual to waive 
rights to Medicare payment for services for the terminal illness and 
related conditions, except when provided by the designated hospice or 
attending physician, the expectation is that the hospice physician 
certifying terminal illness will be thorough and accountable in his 
review of clinical information. As discussed in the 1983 final rule 
``Medicare Program; Hospice Care'', ``written certification is the only 
true assurance that the patient's condition has been assessed at or 
before the time of admission to a hospice program'' (48 FR 56010). This 
is important to both the hospice who will be assuming virtually all of 
the care needs of the terminally ill individual and to the patient, who 
must have a thorough basis for his or her decision to elect hospice 
rather than continue curative care.
    There are ongoing concerns that some hospice patients may be 
inappropriately certified as terminally ill. Operation Restore Trust 
(ORT), an anti-fraud and abuse initiative by the Department of Health 
and Human Services Office of Inspector General (OIG) to identify 
vulnerabilities in the Medicare program and to pursue ways to reduce 
Medicare's exposure to fraud and abuse, identified several areas of 
weakness in the hospice benefit, primarily in the area of hospice 
eligibility. Specifically, it uncovered instances of insufficient 
hospice documentation and inappropriately reported diagnoses.\4\ In 
1995, in response to ORT's initial report, CMS issued program memoranda 
requiring submission of clinical information and other documentation 
that supports the medical prognosis. The Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000 amended section 1814(a) 
of the Social Security Act (The Act) clarifying that certification is 
based on the physician or medical director's clinical judgment. 
Regardless, subsequent ORT reports and CMS Regional Offices and 
Regional Home Health Intermediary (now called Medicare Administrative 
Contractors) reviews continued to raise concerns regarding 
inappropriate certifications, specifically, certifications made for 
patients who are chronically ill, but who are without complications or 
other circumstances that indicate a life expectancy of 6 months or 
less.\12\
---------------------------------------------------------------------------

    \12\ Department of Health and Human Services: Office of the 
Inspector General. Operation Restore Trust Activities by June Gibbs 
Brown, IG. November 1995.
---------------------------------------------------------------------------

    In response to those concerns, the ``Medicare Program; Hospice Care 
Amendments'' proposed rule (67 FR 70363, November 22, 2002), which 
proposed the implementation of revisions required by the Balanced 
Budget Act of 1997, the Medicare, Medicaid, and SCHIP Balanced Budget 
Refinement Act of 1999, and the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 to the existing regulations at 
the time governing coverage and payment for hospice care under the 
Medicare program, proposed revisions to Sec.  418.22, Certification of 
Terminal Illness, requiring that specific clinical findings and other 
documentation supporting the medical prognosis accompany the written 
certification and be filed in the hospice medical record. Additionally, 
the 2002 rule proposed adding Sec.  418.25 Admission to Hospice Care, 
which established general guidance on hospice admission procedures. 
These changes acknowledged that ``the amendment regarding the 
physician's clinical judgment does not negate the fact that there must 
be a basis for certification'' and that ``a mere signed certification, 
absent a medically sound basis that supports the clinical judgment, is 
not sufficient for application of the hospice benefit under Medicare.'' 
Ultimately, the final rule, ``Medicare Program; Hospice Care 
Amendments'' (70 FR 70532, November 22, 2005) codified the requirements 
and the expectations about the clinical information needed to

[[Page 20773]]

support the certification of a medical prognosis of 6 months or less at 
Sec.  418.22 (70 FR 70538). The final rule also set out the specific 
admission requirements indicating that the hospice medical director 
along with the patient's attending physician, if any, is responsible 
for admitting the patient, and identifies what information he or she 
must consider when certifying a patient as terminally ill (Sec.  
418.25).
    Additionally, the Medicare Payment Advisory Commission's (MedPAC) 
March 2009 report entitled ``Report to the Congress: Medicare's Payment 
Policy'' noted specific concerns regarding trends towards an increasing 
proportion of hospice patients with stays exceeding 180 days.\13\ An 
analysis of this trend by a hospice expert panel illuminated limited 
medical director engagement in the certification or recertification 
process as a possible cause of this utilization pattern, reviving 
concerns that patients were again being inappropriately certified as 
terminally ill and were not actually eligible to elect the benefit. The 
panel determined that ``physicians responsible for certifying and 
recertifying a patient's eligibility for hospice may inappropriately 
delegate much of this responsibility to other parties.'' In response to 
these concerns, we finalized a policy requiring that certifications and 
recertifications include a brief narrative describing the clinical 
basis for the patient's prognosis. The FY 2010 Hospice Wage Index final 
rule (74 FR 39398) codified this narrative requirement for the 
certification of terminal illness at Sec.  418.22(b)(3), in order to 
increase accountability and add oversight to the physician 
certification/recertification process
---------------------------------------------------------------------------

    \13\ Medicare Payment Advisory Commission. Report to the 
Congress: Medicare's Payment Policy. Washington, DC, March 
2009_Accessed on March 31, 2017 at: http://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    In the ``Medicare Program; Hospice Wage Index and Payment Rate 
Update FY 2015'' final rule (79 FR 50470), we again provided guidance 
on determining beneficiaries' eligibility for hospice, reiterating that 
the hospice ``is required to make certain that the physician's clinical 
judgment can be supported by clinical information and other 
documentation that provide a basis for the certification of a life 
expectancy of 6 months or less if the illness runs its normal course.'' 
This discussion reinforced the importance of ensuring that hospices are 
thorough in their eligibility determinations so that hospice 
beneficiaries are able to access all of their Medicare benefits 
appropriately and added additional oversight to the physician 
certification and recertification process. The inherent challenges in 
prognostication make it critical for a hospice to obtain, and the 
certifying hospice medical director or hospice physician designee to 
comprehensively review, the patient's clinical information when making 
the determination that the patient is terminally ill, and thus eligible 
for the Medicare hospice benefit. By increasing physician engagement 
and accountability, patients can be assured they are making the most 
informed decision possible, without limiting their treatment choices. 
In the FY 2006 Hospice Wage Index final rule (70 FR 70538), we received 
comments stating that it is common practice for hospices to obtain 
clinical information from the referring physician, which is then 
documented in the patient's hospice medical record.
    Accordingly, we are soliciting comments for possible future 
rulemaking, on amending the regulations at Sec.  418.25 to specify that 
the referring physician's and/or the acute/post-acute care facility's 
medical record would serve as the basis for initial hospice eligibility 
determinations. Clinical information from the referring physician and/
or acute/post-acute care facility supporting a terminal prognosis would 
be obtained by the hospice prior to election of the benefit, when 
determining certification and subsequent eligibility. This potential 
clarifying regulatory text change would be in alignment with benefit 
eligibility criteria that the individual must be certified as 
terminally ill prior to receiving hospice services, and fundamentally 
could not be determined by hospice documentation obtained after 
admission. We are also soliciting comments on amending the regulations 
text at Sec.  418.25 to specify that documentation of an in-person 
visit from the hospice Medical Director or the hospice physician member 
of the interdisciplinary group could be used as documentation to 
support initial hospice eligibility determinations, only if needed to 
augment the clinical information from the referring physician/
facility's medical records. Comments on current processes used by 
hospices to ensure comprehensive clinical review to support 
certification and any alternate suggestions for supporting clinical 
documentation sources are also encouraged.

D. Proposed Updates to the Hospice Quality Reporting Program (HQRP)

1. Background and Statutory Authority
    Section 3004(c) of the Affordable Care Act amended section 
1814(i)(5) of the Act to authorize a quality reporting program for 
hospices. Section 1814(i)(5)(A)(i) of the Act requires that beginning 
with FY 2014 and each subsequent FY, the Secretary shall reduce the 
market basket update by 2 percentage points for any hospice that does 
not comply with the quality data submission requirements for that FY. 
Depending on the amount of the annual update for a particular year, a 
reduction of 2 percentage points could result in the annual market 
basket update being less than 0 percent for a FY and may result in 
payment rates that are less than payment rates for the preceding FY. 
Any reduction based on failure to comply with the reporting 
requirements, as required by section 1814(i)(5)(B) of the Act, would 
apply only for the particular year involved. Any such reduction would 
not be cumulative or be taken into account in computing the payment 
amount for subsequent FYs. Section 1814(i)(5)(C) of the Act requires 
that each hospice submit data to the Secretary on quality measures 
specified by the Secretary. The data must be submitted in a form, 
manner, and at a time specified by the Secretary.
2. General Considerations Used for Selection of Quality Measures for 
the HQRP
    Any measures selected by the Secretary must be endorsed by the 
consensus-based entity, which holds a contract regarding performance 
measurement, including the endorsement of quality measures, with the 
Secretary under section 1890(a) of the Act. This contract is currently 
held by the National Quality Forum (NQF). However, section 
1814(i)(5)(D)(ii) of the Act provides that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the 
consensus-based entity, the Secretary may specify measures that are not 
so endorsed as long as due consideration is given to measures that have 
been endorsed or adopted by a consensus-based organization identified 
by the Secretary. Our paramount concern is the successful development 
of a HQRP that promotes the delivery of high quality healthcare 
services. We seek to adopt measures for the HQRP that promote person-
centered, high quality, and safe care. Our measure selection activities 
for the HQRP take into consideration

[[Page 20774]]

input from the Measure Applications Partnership (MAP), convened by the 
NQF, as part of the established CMS pre-rulemaking process required 
under section 1890A of the Act. The MAP is a public-private partnership 
comprised of multi-stakeholder groups convened by the NQF for the 
primary purpose of providing input to CMS on the selection of certain 
categories of quality and efficiency measures, as required by section 
1890A(a)(3) of the Act. By February 1st of each year, the NQF must 
provide that input to CMS. Input from the MAP is located at: http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx. We also take into account 
national priorities, such as those established by the HHS Strategic 
Plan (http://www.hhs.gov/secretary/about/priorities/priorities.html), 
the National Strategy for Quality Improvement in Healthcare, (http://www.ahrq.gov/workingforquality/reports/annual-reports/nqs2015annlrpt.htm) and the CMS Quality Strategy (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html). To the extent 
practicable, we have sought to adopt measures endorsed by member 
organizations of the National Consensus Project (NCP) (http://www.nationalconsensusproject.org/Default.aspx), recommended by multi-
stakeholder organizations, and developed with the input of providers, 
purchasers/payers, and other stakeholders.
    We consider related factors that may affect measures in the HQRP. 
We understand that social risk factors such as income, education, race 
and ethnicity, employment, disability, community resources, and social 
support (certain factors of which are also sometimes referred to as 
socioeconomic status (SES) factors or socio-demographic status (SDS) 
factors) play a major role in health. One of our core objectives is to 
improve beneficiary outcomes including reducing health disparities, and 
we want to ensure that all beneficiaries, including those with social 
risk factors, receive high quality care. In addition, we seek to ensure 
that the quality of care furnished by providers and suppliers is 
assessed as fairly as possible under our programs while ensuring that 
beneficiaries have adequate access to excellent care.
    We have been reviewing reports prepared by the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) \14\ and the 
National Academies of Sciences, Engineering, and Medicine on the issue 
of measuring and accounting for social risk factors in CMS' value-based 
purchasing and quality reporting programs, and considering options on 
how to address the issue in these programs. On December 21, 2016, ASPE 
submitted a Report to Congress on a study it was required to conduct 
under section 2(d) of the Improving Medicare Post-Acute Care 
Transformation (IMPACT) Act of 2014. The study analyzed the effects of 
certain social risk factors of Medicare beneficiaries on quality 
measures and measures of resource use used in one or more of nine 
Medicare value-based purchasing programs.\15\ The report also included 
considerations for strategies to account for social risk factors in 
these programs. In a January 10, 2017 report released by The National 
Academies of Sciences, Engineering, and Medicine, that body provided 
various potential methods for measuring and accounting for social risk 
factors, including stratified public reporting.\16\
---------------------------------------------------------------------------

    \14\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \15\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \16\ National Academies of Sciences, Engineering, and Medicine. 
2017. Accounting for social risk factors in Medicare payment. 
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------

    In addition, the NQF has undertaken a 2-year trial period in which 
new measures, measures undergoing maintenance review, and measures 
endorsed with the condition that they enter the trial period can be 
assessed to determine whether risk adjustment for selected social risk 
factors is appropriate for these measures. This trial entails 
temporarily allowing inclusion of social risk factors in the risk-
adjustment approach for these measures. At the conclusion of the trial, 
NQF will issue recommendations on the future inclusion of social risk 
factors in risk adjustment for quality measures.
    As we continue to consider the analyses and recommendations from 
these reports and await the results of the NQF trial on risk adjustment 
for quality measures, we are continuing to work with stakeholders in 
this process. As we have previously communicated, we are concerned 
about holding providers to different standards for the outcomes of 
their patients with social risk factors because we do not want to mask 
potential disparities or minimize incentives to improve the outcomes 
for disadvantaged populations. Keeping this concern in mind, while we 
sought input on this topic previously, we continue to seek public 
comment on whether we should account for social risk factors in 
measures in the HQRP, and if so, what method or combination of methods 
would be most appropriate for accounting for social risk factors. 
Examples of methods include: Confidential reporting to providers of 
measure rates stratified by social risk factors, public reporting of 
stratified measure rates, and potential risk adjustment of a particular 
measure as appropriate based on data and evidence.
    In addition, we are also seeking public comment on which social 
risk factors might be most appropriate for reporting stratified measure 
scores and/or potential risk adjustment of a particular measure. 
Examples of social risk factors include, but are not limited to, dual 
eligibility/low-income subsidy, race and ethnicity, and geographic area 
of residence. We are seeking comments on which of these factors, 
including current data sources where this information would be 
available, could be used alone or in combination, and whether other 
data should be collected to better capture the effects of social risk. 
We will take commenters' input into consideration as we continue to 
assess the appropriateness and feasibility of accounting for social 
risk factors in the HQRP. We note that any such changes would be 
proposed through future notice and comment rulemaking.
    We look forward to working with stakeholders as we consider the 
issue of accounting for social risk factors and reducing health 
disparities in our programs. Of note, implementing any of the above 
methods would be taken into consideration in the context of how this 
and our other programs operate (for example, data submission methods, 
availability of data, statistical considerations relating to 
reliability of data calculations, among others), so we also welcome 
comment on operational considerations. We are committed to ensuring 
that its beneficiaries have access to and receive excellent care, and 
that the quality of care furnished by providers and suppliers is 
assessed fairly in our programs.
3. Policy for Retention of HQRP Measures Adopted for Previous Payment 
Determinations
    For the purpose of streamlining the rulemaking process, we 
finalized our policy in the FY 2016 Hospice Wage Index final rule (80 
FR 47187) that when we adopt measures for the HQRP beginning with a 
payment determination year, these measures

[[Page 20775]]

would automatically be adopted for all subsequent years' payment 
determinations, unless we proposed to remove, suspend, or replace the 
measures. Quality measures would be considered for removal by us for 
reasons including, but not limited to:
     Measure performance among hospices was so high and 
unvarying that meaningful distinction in improvements in performance 
could no longer be made;
     Performance or improvement on a measure did not result in 
better patient outcomes;
     A measure did not align with current clinical guidelines 
or practice;
     A more broadly applicable measure (across settings, 
populations, or conditions) for the particular topic was available;
     A measure that was more proximal in time to desired 
patient outcomes for the particular topic was available;
     A measure that was more strongly associated with desired 
patient outcomes for the particular topic was available; or
     Collection or public reporting of a measure led to 
negative unintended consequences.
    For any such removal, the public would be given an opportunity to 
comment through the annual rulemaking process. However, if there was 
reason to believe continued inclusion of a measure in the HQRP would 
encourage delivery of care that raised potential safety concerns, we 
would take immediate action to remove the measure from the HQRP and not 
wait for the annual rulemaking cycle. The measures would be promptly 
removed and we would immediately notify hospices and the public of such 
a decision through the CMS HQRP Web site, listserv messages via the 
Post-Acute Care QRP listserv,\17\ MLN Connects[supreg] National 
Provider Calls & Events, MLN Connects[supreg] Provider eNews. Following 
immediate removal of the measures, we would also notify the public of 
any such removal in the next annual rulemaking cycle. CMS expects 
immediate removal of a measure due to safety concerns to be an unlikely 
event, given the rigorous testing and analysis all measures undergo 
prior to adoption in the HQRP.
---------------------------------------------------------------------------

    \17\ CMS, Post-Acute Care QRP listerv, available at: https://public-dc2.govdelivery.com/accounts/USCMS/subscriber/new?topic_id=USCMS_12265.
---------------------------------------------------------------------------

4. Policy for Adopting Changes to Previously Adopted Measures
    To further streamline the rulemaking process, we finalized in the 
FY 2017 Hospice Wage Index final rule that if measures in the HQRP 
undergo non-substantive changes in specifications as part of their NQF 
re-endorsement process, we would subsequently utilize the measure with 
their new endorsed status in the HQRP without going through new notice-
and-comment rulemaking (81 FR 52159). As mentioned previously, quality 
measures selected for the HQRP must be endorsed by the NQF unless they 
meet the statutory criteria for exception under section 
1814(i)(5)(D)(ii) of the Act. The NQF is a voluntary consensus 
standard-setting organization with a diverse representation of 
consumer, purchaser, provider, academic, clinical, and other healthcare 
stakeholder organizations. The NQF was established to standardize 
healthcare quality measurement and reporting through its consensus 
measure development process (http://www.qualityforum.org/About_NQF/Mission_and_Vision.aspx). The NQF undertakes review of: (a) New quality 
measures and national consensus standards for measuring and publicly 
reporting on performance, (b) regular maintenance processes for 
endorsed quality measures, (c) measures with time-limited endorsement 
for consideration of full endorsement, and (d) ad hoc review of 
endorsed quality measures, practices, consensus standards, or events 
with adequate justification to substantiate the review. Through NQF's 
or the measure steward's measure maintenance process, measures are 
sometimes updated to incorporate changes that we believe do not 
substantively change the intent of the measure. Examples of such 
changes may include updated diagnosis or procedure codes or changes to 
exclusions to the patient population or definitions. While we address 
such changes on a case-by case basis, we generally believe these types 
of maintenance changes are distinct from substantive changes to 
measures that result in what are considered new or different measures. 
Additionally, since the NQF endorsement and measure maintenance process 
is one that ensures transparency, public input, and discussion among 
representatives across the healthcare enterprise,\18\ we believe that 
the NQF measure endorsement and maintenance process itself is 
transparent, scientifically rigorous, and provides opportunity for 
public input. Thus, we finalized our proposal to codify at Sec.  
418.312 that if the NQF makes only non-substantive changes to 
specifications for HQRP measures in the NQF's re-endorsement process, 
we would continue to utilize the measure in its new endorsed status (81 
FR 52159 through 52160). If NQF-endorsed specifications change and we 
do not adopt those changes, then we would propose the measure as a 
modification. A modification of a NQF-endorsed quality measure is 
utilized in instances when we have identified a need to use a NQF-
endorsed measure in a QRP but need to use it with one or more 
modifications to the quality measure's specifications. These 
modifications pertain to, but are not limited to, one or more of the 
following aspects of a NQF-endorsed quality measure: (a) Numerator, (b) 
denominator, (c) setting, (d) look-back period, (e) calculation period, 
(f) risk adjustment, and (g) revisions to data elements used to collect 
the data required for the measure, etc. CMS may adopt a quality measure 
for the HQRP under section 1814(i)(5)(D)(ii) of the Act, which states, 
``[i]n 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 NQF], 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.'' Reasons for not adopting changes in 
measure specifications to a measure may include any of the 
aforementioned criteria in the prior section, including that the new 
specification does not align with clinical guidelines or practice or 
that the new specification leads to negative unintended consequences.
---------------------------------------------------------------------------

    \18\ [thinsp]``NQF: How Endorsement Happens--National Quality 
Forum.'' 2010. 26 Jan. 2016 http://www.qualityforum.org/Measuring_Performance/ABCs/How_Endorsement_Happens.aspx.
---------------------------------------------------------------------------

    Finally, we will continue to use rulemaking to adopt substantive 
updates made by the NQF to the endorsed measures we have adopted for 
the HQRP. We continue to make these determinations about what 
constitutes a substantive versus non-substantive change on a measure-
by-measure basis. A change would be deemed substantive if the intent of 
the measure changes, the facility/setting changes, the data sources 
changes, the level of analysis changes, and/or the measure is removed. 
We will continue to provide updates about changes to measure 
specifications as a result of NQF endorsement or maintenance processes 
through the CMS HQRP Web site, listserv messages on the Post-Acute Care 
QRP listserv, MLN Connects[supreg] National Provider Calls & Events, 
MLN Connects[supreg] Provider eNews and announcements on Open Door 
Forums and Special Open Door Forums.

[[Page 20776]]

5. Previously Adopted Quality Measures for FY 2018 Payment 
Determination and Future Years
    In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in 
compliance with section 1814(i)(5)(C) of the Act, we finalized the 
specific collection of data items that support the following 7 NQF-
endorsed measures for hospice:
     NQF #1617 Patients Treated with an Opioid who are Given a 
Bowel Regimen,
     NQF #1634 Pain Screening,
     NQF #1637 Pain Assessment,
     NQF #1638 Dyspnea Treatment,
     NQF #1639 Dyspnea Screening,
     NQF #1641 Treatment Preferences,
     NQF #1647 Beliefs/Values Addressed (if desired by the 
patient).\19\
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    \19\ Previously finalized as a ``modified measure'' in the FY17 
and prior rules (81 FR 52160). Following NQF maintenance 
endorsement, NQF #1647 measure specifications where updated and now 
aligns with the measure data lookback period for this program.
---------------------------------------------------------------------------

    We finalized the following two additional measures in the FY 2017 
Hospice Wage Index final rule effective April 1, 2017. Data collected 
will, if not reported, affect payments for FY 2019 and subsequent 
years. (81 FR 52163 through 52173):

 Hospice Visits when Death is Imminent
 Hospice and Palliative Care Composite Process Measure--
Comprehensive Assessment at Admission

    We finalized the HIS effective July 1, 2014 (78 FR 48258). The HIS 
is the data collection mechanism for all of the aforementioned 
measures. To meet the quality reporting requirements for hospices for 
the FY 2016 payment determination and each subsequent year, we require 
regular and ongoing electronic submission of the HIS data for each 
patient admission to hospice after July 1, 2014, regardless of payer or 
patient age (78 FR 48234 through 48258). For the two measures finalized 
in the FY 2017 Hospice Wage Index final rule, we require regular and 
ongoing electronic submission for each patient admission to hospice 
after April 1, 2017. We finalized a requirement in the FY 2014 Hospice 
Wage Index final rule (78 FR 48258) that hospice providers collect data 
on all patients to ensure that all patients regardless of payer or 
patient age are receiving the same care and that provider metrics 
measure performance across the spectrum of patients. Table 16 below 
provides a summary of measures previously finalized affecting the FY 
2019 APU, data collection mechanism, and data submission deadline.
    Hospices are required to complete and submit a HIS-Admission and a 
HIS-Discharge record for each patient admission. Hospices failing to 
report quality data via the HIS for patient admissions occurring in 
2017 will have their market basket update reduced by 2 percentage 
points in FY 2019 (beginning in October 1, 2018). In the FY 2015 
Hospice Wage Index final rule (79 FR 50485 through 50487), we finalized 
the proposal to codify the HIS submission requirement at Sec.  418.312. 
The System of Record (SOR) Notice titled ``Hospice Item Set (HIS) 
System,'' SOR number 09-70-0548, was published in the Federal Register 
on April 8, 2014 (79 FR 19341).
    The 7 NQF endorsed HIS measures adopted in FY 2014 Hospice Wage 
Index final rule successfully underwent NQF Endorsement Maintenance in 
2016.\20\ We recognize that the NQF endorsement process is an important 
part of measure development and plan to submit the two measures 
finalized in the FY 2017 Hospice Wage Index final rule for NQF 
endorsement once sufficient measure data are available and we conduct 
the analyses necessary to support NQF submission for endorsement (for 
example, reliability and validity analyses). Typically, we need at 
least 4 quarters worth of data to conduct the necessary analyses and 
establish measure reliability and validity. Because the Hospice and 
Palliative Care Composite Process Measure--Comprehensive Assessment at 
Admission did not require any new data collection and can be calculated 
using existing data, CMS's measure development contractor, RTI 
International, has already conducted the analyses necessary to support 
submission of the measure for NQF endorsement. We have already 
submitted the Hospice and Palliative Care Composite Process Measure for 
consideration for endorsement at NQF (NQF #3235); the measure is 
currently under review. Data for the Hospice Visits when Death is 
Imminent measure pair will be collected using new items added to the 
HIS V2.00.0, effective April 1, 2017. Once data collection for the 
measure pair begins, we will need at least 4 quarters of reliable data 
to conduct the necessary analyses to support submission to NQF. We will 
also need to assess the quality of data submitted in the first quarter 
of item implementation to determine whether they can be used in the 
analyses. Pending analysis, we will submit the Hospice Visits when 
Death is Imminent measure pair to NQF for endorsement review in 
accordance with NQF project timelines and call for measures. In the FY 
2015 Hospice Wage Index final rule (79 FR 50491 through 50496), we also 
finalized the Consumer Assessment of Healthcare Providers and Systems 
(CAHPS[supreg]) Hospice Survey to support quality measures based on 
patient and family experience of care. We refer readers to section 
III.D.11 of this notice of proposed rulemaking for details regarding 
the CAHPS[supreg] Hospice Survey, including public reporting of 
selected survey measures.
---------------------------------------------------------------------------

    \20\ National Quality Forum, NQF Palliative and End-of-Life Care 
2015-2016 Report, available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=84242.

Table 16--Previously Finalized Quality Measures Affecting the FY 2019 Payment Determination and Subsequent Years
----------------------------------------------------------------------------------------------------------------
                                            Payment determination
                                            (APU) year for which      Data  collection        Data submission
     NQF No.            Measure name         the quality measure          mechanism               deadline
                                              was first adopted
----------------------------------------------------------------------------------------------------------------
1641.............  Treatment Preferences.  FY 2016...............  Hospice Item Set......  Rolling--within 30
                                                                                            days of patient
                                                                                            admission or
                                                                                            discharge (event
                                                                                            date).
1647.............  Beliefs/Values          FY 2016...............
                    Addressed (if desired
                    by the patient).
1634.............  Pain Screening........  FY 2016...............
1637.............  Pain Assessment.......  FY 2016...............

[[Page 20777]]

 
1639.............  Dyspnea Screening.....  FY 2016...............
1638.............  Dyspnea Treatment.....  FY 2016...............
1617.............  Patients Treated with   FY 2016...............
                    an Opioid Who Are
                    Given a Bowel Regimen.
N/A..............  Hospice and Palliative  FY 2019...............  ......................  Rolling--within 30
                    Care Composite                                                          days of patient
                    Process Measure--                                                       admission or
                    Comprehensive                                                           discharge (event
                    Assessment at                                                           date) for patient
                    Admission.                                                              admissions to
                                                                                            hospice on 04/01/
                                                                                            2017 and onward.
N/A..............  Hospice Visits When     FY 2019...............
                    Death is Imminent
                    Measure Pair.
----------------------------------------------------------------------------------------------------------------

6. Proposed Removal of Previously Adopted Measures
    We are not proposing to remove any of the current HQRP measures at 
this time. Any future proposals regarding removal, suspension, or 
replacement of measures will be proposed in this section of future 
rules. As stated in section III.D.3, a quality measure that is adopted 
and implemented in the HQRP will be retained for all subsequent years, 
unless the measure is proposed for removal, suspension, or replacement 
by CMS. Policies and criteria for removing a measure include those 
identified in section III.D.3 of this proposed rule.
7. Measure Concepts Under Consideration for Future Years
    Although we are not proposing any HIS-based measures in this 
proposed rule, we have measure concepts under consideration for future 
years.
    Our paramount concern is to develop quality measures that promote 
care that is person-centered, high quality, and safe. We continue to 
work with our measure development contractor, RTI International, to 
identify measure concepts for future implementation in the HQRP. In 
identifying priority areas for future measure enhancement and 
development, we take into consideration input from numerous 
stakeholders, including the MAP, the MedPAC, Technical Expert Panels 
(TEP), and national priorities, such as those established by the HHS 
Strategic Plan, the National Strategy for Quality Improvement in 
Healthcare, and the CMS Quality Strategy. In addition, we take into 
consideration vital feedback and input from research published by our 
payment reform contractor. The current HQRP measure set is also an 
important consideration for future measure development areas; future 
measure development areas should complement the current HQRP measure 
set, including current HIS measures and CAHPS[supreg] Hospice Survey 
measures, without creating unnecessary burden or redundant reporting. 
Based on input from stakeholders, we identified two high priority areas 
that will be addressed by claims-based measure development. Developing 
quality measures using claims does not require new data collection, 
thus minimizing provider burden and expediting implementation.
 Priority Area 1: Potentially Avoidable Hospice Care 
Transitions
    The concept of a claims-based measure focusing on transitions of 
care was first introduced in the FY 2016 Hospice Wage Index final rule 
(80 FR 47188 through 47189). Comments received during this rule were 
overall supportive of our efforts to develop more robust quality 
measures that capture hospice performance and show links to patient and 
family outcomes. We refer readers to the FY 2016 Hospice Wage Index 
final rule (80 FR 47188 through 47189) for additional detail: https://www.gpo.gov/fdsys/pkg/FR-2015-08-06/pdf/2015-19033.pdf.
    Potentially avoidable hospice care transitions at end of life are 
burdensome to patients, families, and the health care system at large, 
because they are associated with adverse health outcomes, lower patient 
and family satisfaction, higher health care costs, and fragmentation of 
care delivery.21 22 23 24 25 By encouraging hospice 
providers to assess and manage patients' risk of care transitions, this 
measure concept has the potential to improve quality care at the end of 
life by reducing potentially avoidable hospice care transitions.
---------------------------------------------------------------------------

    \21\ Aldridge MDP, MBA; Epstein, Andrew J. Ph.D.; Brody, Abraham 
A. RN, Ph.D.; Lee, Eric J. MPH; Cherlin, Emily Ph.D., MSW; Bradley, 
Elizabeth H. Ph.D. The Impact of Reported Hospice Preferred 
Practices on Hospital Utilization at the End of Life Medical Care. 
2016;54(7):657-663.
    \22\ Wang S-Y, Aldridge MD, Gross CP, et al. Transitions Between 
Healthcare Settings of Hospice Enrollees at the End of Life. Journal 
of the American Geriatrics Society. 2016;64(2):314-322.
    \23\ Carlson MDA, Herrin J, Du Q, et al. Impact of Hospice 
Disenrollment on Health Care Use and Medicare Expenditures for 
Patients With Cancer. Journal of Clinical Oncology. 
2010;28(28):4371-4375.
    \24\ Teno JM, Bowman J, Plotzke M, et al. Characteristics of 
Hospice Programs With Problematic Live Discharges. Journal of Pain 
and Symptom Management. 2015;50(4):548-552.
    \25\ Prsic E, Plotzke M, Christian TJ, Gozalo P, Teno JM. A 
National Study of Live Hospice Discharges between 2000 and 2012. 
Journal of Palliative Medicine. 2016;19(9):987-990.
---------------------------------------------------------------------------

 Priority Area 2: Access to Levels of Hospice Care
    The Medicare Hospice Benefit covers four levels of care to meet 
patients' and families' clinical needs: Routine home care (RHC), 
continuous home care (CHC), general inpatient care (GIP), and inpatient 
respite care. The goal of this measure concept is to assess the rates 
at which hospices provide different levels of hospice care. The measure 
has the potential to improve access to various levels of care for 
patients and caregivers. Appropriate use of CHC and GIP increases the 
likelihood of a hospice patient dying in his or her location of choice, 
decreases health resource utilization resulting in potential cost 
savings, and increases patient and caregiver 
satisfaction.26 27 Measuring use of levels of care will 
incentivize hospice providers to continuously assess patient

[[Page 20778]]

and caregiver needs and provide the appropriate level of care to meet 
these needs.
---------------------------------------------------------------------------

    \26\ Barclay, J., et al., Association of hospice patients' 
income and care level with place of death. JAMA Internal Medicine, 
2013. 173(6): p. 450-456.
    \27\ Casarett, D., et al., Does Continuous Hospice Care Help 
Patients Remain at Home? Journal of Pain and Symptom Management, 
2015. 50(3): p. 297-304.
---------------------------------------------------------------------------

    These two measure concepts are under development, and details 
regarding measure definitions, specifications and timeline for 
implementation will be communicated in future rulemaking. We are 
soliciting comments regarding high priority concept areas for future 
measure development.
8. Form, Manner, and Timing of Quality Data Submission
a. Background
    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. Section 1814(i)(5)(A)(i) of the Act 
requires that beginning with the FY 2014 and for each subsequent FY, 
the Secretary shall reduce the market basket update by 2 percentage 
points for any hospice that does not comply with the quality data 
submission requirements for that FY.
b. Policy for New Facilities To Begin Submitting Quality Data
    In the FY 2015 Hospice Wage Index final rule (79 FR 50488), we 
finalized a policy stating that any hospice that receives its CMS 
Certification Number (CCN) (also known as the Medicare Provider Number) 
notification letter dated on or after November 1 of the preceding year 
involved is excluded from any payment penalty for quality reporting 
purposes for the following FY. This requirement was codified at Sec.  
418.312.
    In the FY 2016 Hospice Wage Index final rule (80 FR 47189), we 
further clarified and finalized our policy for the timing of new 
providers to begin reporting data to CMS. The clarified policy 
finalized in the FY 2016 Hospice Wage Index final rule (80 FR 47189) 
distinguished between when new hospice providers are required to begin 
submitting HIS data and when providers will be subject to the potential 
2 percentage point annual payment update (APU) reduction for failure to 
comply with HQRP requirements. In summary, the policy finalized in the 
FY 2016 Hospice Wage Index final rule (80 FR 47189 through 47190) 
clarified that providers must begin submitting HIS data on the date 
listed in the letterhead of the CCN Notification letter received from 
CMS but will be subject to the APU reduction based on whether the CCN 
Notification letter was dated before or after November 1 of the 
reporting year involved. Thus, beginning with the FY 2018 payment 
determination and for each subsequent payment determination, we 
finalized our policy that a new hospice be responsible for HQRP quality 
data submission beginning on the date of the CCN notification letter; 
we retained our prior policy that hospices not be subject to the APU 
reduction if the CCN notification letter was dated after November 1 of 
the year involved. For example, if a provider receives their CCN 
notification letter and the date in the letterhead is November 5, 2017, 
that provider will begin submitting HIS data for patient admissions 
occurring after November 5, 2017. However, since the CCN notification 
letter was dated after November 1st, they would not be evaluated for, 
or subject to any payment penalties for, the relevant FY APU update 
(which in this instance is the FY 2019 APU, which is associated with 
patient admissions occurring January 1, 2017 through December 31, 
2017).
    This policy allows us to receive HIS data on all patient admissions 
on or after the date a hospice receives their CCN notification letter, 
while at the same time allowing hospices flexibility and time to 
establish the necessary accounts for data submission before they are 
subject to the potential APU reduction for a given reporting year. 
Currently, new hospices may experience a lag between Medicare 
certification and receipt of their actual CCN Number. Since hospices 
cannot submit data to the QIES ASAP system without a valid CCN Number, 
we finalized that new hospices begin collecting HIS quality data 
beginning on the date noted on the CCN notification letter. We believe 
this policy provides sufficient time for new hospices to establish 
appropriate collection and reporting mechanisms to submit the required 
quality data to CMS. Requiring quality data reporting beginning on the 
date listed in the letterhead of the CCN notification letter aligns our 
policy requirements for new providers with the functionality of the HIS 
data submission system (QIES ASAP).
c. Previously Finalized Data Submission Mechanisms, Timelines, and 
Deadlines
    In the FY 2015 Hospice Wage Index final rule (79 FR 50486), we 
finalized our policy requiring that hospices complete and submit HIS 
records for all patient admissions to hospice after July 1, 2014. For 
each HQRP program year, we require that hospices submit data on each of 
the adopted measures in accordance with the reporting requirements 
specified in sections III.C.9.b through III.C.9.c of the FY 2015 rule 
for the designated reporting period. This requirement applies to 
previously finalized and adopted measures, as well as new measures 
proposed through the rulemaking process. Electronic submission is 
required for all HIS records. Although electronic submission of HIS 
records is required, hospices do not need to have an electronic medical 
record to complete or submit HIS data. In the FY 2014 Hospice Wage 
Index final rule (78 FR 48258), we finalized a provision requiring that 
providers use either the Hospice Abstraction Reporting Tool (HART) 
(which is free to download and use) or vendor-designed software to 
complete HIS records. HART provides an alternative option for hospice 
providers to collect and maintain facility, patient, and HIS Record 
information for subsequent submission to the QIES ASAP system. Once HIS 
records are complete, electronic HIS files must be submitted to CMS via 
the QIES ASAP system. Electronic data submission via the QIES ASAP 
system is required for all HIS submissions; there are no other data 
submission methods available. Hospices have 30 days from a patient 
admission or discharge to submit the appropriate HIS record for that 
patient through the QIES ASAP system. We will continue to make HIS 
completion and submission software available to hospices at no cost. We 
provided details on data collection and submission timing under the 
downloads section of the HIS Web page on the CMS.gov Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html.
    The QIES ASAP system provides reports upon successful submission 
and processing of the HIS records. The final validation report may 
serve as evidence of submission. This is the same data submission 
system used by nursing homes, inpatient rehabilitation facilities, home 
health agencies, and long-term care hospitals for the submission of 
Minimum Data Set Version 3.0 (MDS 3.0), Inpatient Rehabilitation 
Facility-patient assessment instrument (IRF-PAI), Outcome Assessment 
Information Set (OASIS), and Long-Term Care Hospital Continuity 
Assessment Record & Evaluation Data Set (LTCH CARE), respectively. We 
have provided hospices with information and details about use of the 
HIS through postings on the HQRP Web site, Open Door Forums, 
announcements in the CMS MLN Connects[supreg] Provider e-News (E-News), 
and provider training.

[[Page 20779]]

    Hospices are evaluated for purposes of the quality reporting 
program based on whether or not they submit data, not on their 
substantive performance level for the required quality measures. In 
order for us to appropriately evaluate the quality reporting data 
received by hospice providers, it is essential HIS data be received in 
a timely manner.
    The submission date is the date on which the completed record is 
submitted and accepted by the QIES ASAP system. In the FY 2016 Hospice 
Wage Index final rule (80 FR 47191), we finalized our policy that 
beginning with the FY 2018 payment determination, hospices must submit 
all HIS records within 30 days of the event date, which is the 
patient's admission date for HIS-Admission records or discharge date 
for HIS-Discharge records.
    For HIS-Admission records, the submission date must be no later 
than the admission date plus 30 calendar days. The submission date can 
be equal to the admission date, or no greater than 30 days later. The 
QIES ASAP system will issue a warning on the Final Validation Report if 
the submission date is more than 30 days after the patient's admission 
date.
    For HIS-Discharge records, the submission date must be no later 
than the discharge date plus 30 calendar days. The submission date can 
be equal to the discharge date, or no greater than 30 days later. The 
QIES ASAP system will issue a warning on the Final Validation Report if 
the submission date is more than 30 days after the patient's discharge 
date.
    The QIES ASAP system validation edits are designed to monitor the 
timeliness of submission and ensure that providers' submitted records 
conform to the HIS data submission specifications. Providers are 
notified when timing criteria have not been met by warnings that appear 
on their Final Validation Reports. A standardized data collection 
approach that coincides with timely submission of data is essential to 
establish a robust quality reporting program and ensure the scientific 
reliability of the data received. In the FY 2016 Hospice Wage Index 
final rule (80 FR 47191), we also clarified the difference between the 
completion deadlines and the submission deadlines. Current sub-
regulatory guidance produced by CMS (for example, HIS Manual, HIS 
trainings) states that the completion deadlines for HIS records are 14 
days after the Event Date for HIS-Admission records and 7 days after 
the Event Date for HIS-Discharge records. Completion deadlines continue 
to reflect CMS guidance only; these guidelines are not statutorily 
specified and are not designated through regulation. These guidelines 
are intended to offer clear direction to hospice agencies in regards to 
the timely completion of HIS-Admission and HIS-Discharge records. The 
completion deadlines define only the latest possible date on which a 
hospice should complete each HIS record. This guidance is meant to 
better align HIS completion processes with clinical workflow processes; 
however, hospices may develop alternative internal policies to complete 
HIS records. Although it is at the discretion of the hospice to develop 
internal policies for completing HIS records, we will continue to 
recommend that providers complete and attempt to submit HIS records 
early, prior to the previously finalized submission deadline of 30 
days, beginning in FY 2018. Completing and attempting to submit records 
early allows providers ample time to address any technical issues 
encountered in the QIES ASAP submission process, such as correcting 
fatal error messages. Completing and attempting to submit records early 
will ensure that providers are able to comply with the 30 day 
submission deadline. HQRP guidance documents, including the CMS HQRP 
Web site, HIS Manual, HIS trainings, Frequently Asked Questions, and 
Fact Sheets, continue to offer the most up-to-date CMS guidance to 
assist providers in the successful completion and submission of HIS 
records. Availability of updated guidance will be communicated to 
providers through the CMS HQRP Web site, listserv messages via the 
Post-Acute Care QRP listserv, MLN Connects[supreg] National Provider 
Calls & Events, MLN Connects[supreg] Provider eNews and announcements 
on Open Door Forums and Special Open Door Forums.
d. New Data Collection and Submission Mechanisms Under Consideration: 
Hospice Evaluation & Assessment Reporting Tool (HEART)
    We have made great progress in implementing the objectives set 
forth in the quality reporting and data collection activities required 
by sections 3004 of the Affordable Care Act. To date, we have 
established the HQRP, which includes clinical quality measures from the 
HIS and patient experience of care measures from the CAHPS[supreg] 
Hospice Survey. We have also finalized payment reform measures, 
including changes to the RHC payment rate and the implementation of a 
Service Intensity Add-On (SIA) payment, effective January 1st, 2016.
    As discussed in the FY 2017 final rule (81 FR 52177), to facilitate 
continued progress towards the requirements set forth in section 3004 
of the Affordable Care Act, we are in the early stages of the 
development of a new data collection mechanism for use by hospices. 
This new data collection mechanism would be a hospice patient 
assessment tool, which would serve two primary objectives concordant 
with the Affordable Care Act legislation: (1) To provide the quality 
data necessary for HQRP requirements and the current function of the 
HIS; and (2) provide additional clinical data that could inform future 
payment refinements. In the FY 2017 final rule (81 FR 52176 through 
52179), we solicited input from the public on the development of a 
hospice patient assessment tool that would collect quality, clinical, 
and other data with the ability to be used to inform future payment 
refinement efforts. Overall, feedback from the public was supportive of 
the move towards a standardized patient assessment instrument, and 
commenters offered some guiding principles for CMS to keep in mind in 
the development of a patient assessment tool, given the unique nature 
of hospice care. For a detailed discussion of the public comments and 
responses, as well as CMS's guiding principles and motivation behind 
the development of a hospice patient assessment tool, we refer readers 
to the FY 2017 final rule (81 FR 52177 through 52179).
    As noted in the FY 2017 final rule, we envision the hospice patient 
assessment tool itself as an expanded HIS. The hospice patient 
assessment tool would include current HIS items, as well as additional 
clinical items that could also be used for payment refinement purposes 
or to develop new quality measures. The hospice patient assessment tool 
would not replace existing requirements set forth in the Medicare 
Hospice CoPs (such as the initial and comprehensive assessment), but 
would be designed to complement data that are collected as part of 
high-quality clinical care. The new data collection effort would 
replace the current HIS, but would not replace other HQRP data 
collection efforts (that is, the CAHPS[supreg] Hospice Survey), nor 
would it replace regular submission of claims data. We envision that 
patient assessment data would be collected upon a patient's admission 
to and discharge from any Medicare-certified hospice provider; 
additional interim data collection efforts are also possible.
    We are not proposing a hospice patient assessment tool at this 
time; we are still in the early stages of development of an assessment 
tool to determine the appropriate content and

[[Page 20780]]

feasibility of such a tool. As such, we have made progress over the 
past year in the development of a hospice patient assessment tool, 
preliminarily called the Hospice Evaluation & Assessment Reporting Tool 
(HEART). CMS's measure development contractor, RTI International, has 
begun preliminary HEART development activities, including: Conducting 
environmental scans and engaging clinical experts to determine which 
domains of care are important to capture in a hospice patient 
assessment; posting a national provider call and forming a Clinical 
Committee comprised of hospice organizations from across the U.S. to 
participate in the early development of an assessment; and 
collaborating within CMS to assess various stakeholder needs and 
encourage collaboration within CMS and across other HHS agencies. As we 
move forward with the development of the HEART patient assessment tool, 
we will continue to keep the public informed of our progress and 
solicit input as we establish and finalize domains of care to include 
in the assessment, and as we move towards specific item wording and 
development. Once we move past the preliminary phases of development 
and conceptualization, we will communicate a timeline for the HEART 
development, testing, and implementation in future rulemaking cycles.
    As mentioned in the FY 2017 final rule, it is important for CMS to 
develop a hospice patient assessment tool that is scientifically 
rigorous and clinically appropriate for the hospice population, thus we 
believe that continued and transparent involvement of stakeholders is 
critical. We will continue to receive stakeholder input from MedPAC and 
ongoing input from the provider community, Medicare beneficiaries, and 
technical experts. Additionally, it is important for CMS to minimize 
data collection burden on providers; in the development of HEART. We 
will ensure that hospice patient assessment data items are not 
duplicative or overly burdensome to providers, patients, caregivers, or 
their families. We will also work with the public and other 
stakeholders to ensure that HEART takes into account the unique aspects 
of hospice care delivery including symptom burden and psychosocial 
needs, patient and family preferences, care of imminently dying 
patients, and the complexity of providing hospice care in multiple 
settings and at multiple intensity levels.
9. Previously Adopted APU Determination and Compliance Criteria for the 
HQRP
a. Background
    The HQRP is currently designed as a ``pay-for-reporting'' system, 
meaning that it is the act of submitting data that determines 
compliance with HQRP requirements. Performance level is not a 
consideration when determining market basket updates/APU. Reporting 
compliance is determined by successfully fulfilling both the Hospice 
CAHPS[supreg] Survey requirements and the HIS data submission 
requirements.
b. Previously Finalized HIS Data Submission Timelines and Compliance 
Thresholds for FY 2018 Payment Determination and Subsequent Years
    To accurately analyze quality reporting data received by hospice 
providers, it is imperative we receive ongoing and timely submission of 
all HIS-Admission and HIS-Discharge records. In the FY 2016 Hospice 
Wage Index final rule (80 FR 47192), we finalized the timeliness 
criteria for submission of HIS-Admission and HIS-Discharge records. The 
finalized timeliness criteria were in response to input from our 
stakeholders seeking additional specificity related to HQRP compliance 
affecting FY payment determinations and, due to the importance of 
ensuring the integrity of quality data submitted.
    As stated in that rule, beginning with the FY 2018 payment 
determination and subsequent FY payment determinations, all HIS records 
would have to be submitted within 30 days of the event date, which is 
the patient's admission date or discharge date.
    In conjunction with the timeliness criteria for submission of HIS-
Admission and HIS-Discharge records, in the FY 2016 Hospice Wage Index 
final rule (80 FR 47192) we also finalized a policy to establish an 
incremental threshold for compliance over a 3-year period. To be 
compliant for the FY 2018 APU determination, hospices must submit no 
less than 70 percent of their total number of HIS-Admission and HIS-
Discharge records by no later than 30 days from the event date. The 
timeliness threshold is set at 80 percent for the FY 2019 APU 
determination and at 90 percent for the FY 2020 APU determination and 
subsequent years. The threshold corresponds with the overall amount of 
HIS records received from each provider that fall within the 
established 30 day submission timeframes. Our ultimate goal is to 
require all hospices to achieve a compliance rate of 90 percent or 
more.
    To summarize, in the FY 2016 Hospice Wage Index final rule (80 FR 
47193), we finalized our policy to implement the timeliness threshold 
requirement beginning with all HIS-Admission and HIS-Discharge records 
that occur after January 1, 2016, in accordance with the following 
schedule:
     Beginning January 1, 2016 to December 31, 2016, hospices 
must submit at least 70 percent of all required HIS records within the 
30 day submission timeframe for the year or be subject to a 2 
percentage point reduction to their market basket update for FY 2018.
     Beginning January 1, 2017 to December 31, 2017, hospices 
must submit at least 80 percent of all required HIS records within the 
30 day submission timeframe for the year or be subject to a 2 
percentage point reduction to their market basket update for FY 2019.
     Beginning January 1, 2018 to December 31, 2018, hospices 
must submit at least 90 percent of all required HIS records within the 
30 day submission timeframe for the year or be subject to a 2 
percentage point reduction to their market basket update for FY 2020.
    In July of 2016, we released the Hospice Timeliness Compliance 
Threshold Report in the Certification and Survey Provider Enhanced 
Reports (CASPER) system. This report allows providers with a QIES ASAP 
User ID to check their preliminary compliance with the 70/80/90 
timeliness compliance threshold described above. For more information 
on the Hospice Timeliness Compliance Threshold Report, we refer readers 
to the Timeliness Compliance Threshold Fact Sheet, available on the HIS 
portion of the CMS HQRP Web site: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html and Chapter 3 of the CASPER User's Manual, 
available on the QTSO Web site: https://www.qtso.com/hospicetrain.html.
    In the FY 2016 Hospice Wage Index final rule (80 FR 47192 through 
47193), we provided clarification regarding the methodology used in 
calculating the 70 percent/80 percent/90 percent compliance thresholds. 
In general, HIS records submitted for patient admissions and discharges 
occurring during the reporting period (January 1st to December 31st of 
the reporting year involved) will be included in the denominator for 
the compliance threshold calculation. The numerator of the compliance 
threshold calculation would include any records from the

[[Page 20781]]

denominator that were submitted within the 30 day submission deadline. 
In the FY 2016 Hospice Wage Index final rule (80 FR 47192), we also 
stated that we would make allowances in the calculation methodology for 
two circumstances. First, the calculation methodology will be adjusted 
following the applicable reporting period for records for which a 
hospice is granted an extension or exemption by CMS. Second, 
adjustments will be made for instances of modification/inactivation 
requests (Item A0050. Type of Record = 2 or 3). Additional helpful 
resources regarding the timeliness compliance threshold for HIS 
submissions can be found under the downloads section of the HIS Web 
page at  CMS.gov at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html. Lastly, as further details of the data submission and 
compliance threshold are determined by CMS, we anticipate communicating 
these details through the CMS HQRP Web site, listserv messages via the 
Post-Acute Care QRP listserv, MLN Connects[supreg] National Provider 
Calls & Events, MLN Connects[supreg] Provider eNews and announcements 
on Open Door Forums and Special Open Door Forums.
c. CAHPS[supreg] Participation Requirements for FY 2018 APU 
Determination and Determinations for Subsequent Years
    In the FY 2015 Hospice Wage Index final rule, we added the 
CAHPS[supreg] Hospice Survey to the Hospice Quality Reporting Program 
requirements for the FY 2017 payment determination and determinations 
for subsequent FY APU years (79 FR 50491).
    In the FY 2017 Hospice Wage Index final rule, we finalized that to 
meet the HQRP requirements for the FY 2018, FY 2019 and FY 2020 APU 
payment determinations, hospices would collect survey data on a monthly 
basis for the months of January 1, 2016 through December 31, 2016 to 
qualify for the full FY 2018 APU; hospices would collect survey data on 
a monthly basis for the months of January 1, 2017 through December 31, 
2017, to qualify for the full FY 2019 APU, and hospices would collect 
survey data on a monthly basis for the months of January 1, 2018 
through December 31, 2018 for the full FY 2020 APU (81 FR 25529-25530). 
We are proposing in this FY 2018 proposed rule, that to meet the HQRP 
requirements for the FY 2021 APU payment determination, hospices would 
collect survey data on a monthly basis for the months of January 1, 
2019 through December 31, 2019 to qualify for the FY 2021 APU. We are 
additionally proposing in this FY 2018 proposed rule, that to meet the 
HQRP requirements for the FY 2022 APU payment determination, hospices 
would collect survey data on a monthly basis for the months of January 
1, 2020 through December 31, 2020 to qualify for the FY 2022 APU.
10. HQRP Submission Exemption and Extension Requirements for the FY 
2019 Payment Determination and Subsequent Years
a. Extraordinary Circumstances Exemption and Extension
    In the FY 2015 Hospice Wage Index final rule (79 FR 50488), we 
finalized our proposal to allow hospices to request, and for CMS to 
grant, exemptions/extensions for the reporting of required HIS quality 
data when there are extraordinary circumstances beyond the control of 
the provider. Such extraordinary circumstances may include, but are not 
limited to, acts of nature or other systemic issues with our data 
systems. We further finalized that hospices must request such an 
exemption or extension within 30 days of the date that the 
extraordinary circumstances occurred.
    In certain instances, however, it may be difficult for hospices to 
timely evaluate the impact of extraordinary circumstances within 30 
calendar days. For other quality reporting programs such as the 
Hospital Inpatient Quality Reporting (81 FR 57182), Inpatient 
Rehabilitation Facility Quality Reporting Program (81 FR 52125) and the 
Long-term Care Hospital Quality Reporting Program (81 FR 25205), we 
have reevaluated our policy and subsequently finalized through 
rulemaking an extension of that period of time to 90 calendar days. We 
are therefore proposing to extend the deadline for submitting an 
exemption or extension request to 90 calendar days from the qualifying 
event which is preventing a hospice from submitting their quality data 
for the HQRP. We believe that extending the deadline to 90 calendar 
days would allow hospices more time to determine whether it is 
necessary and appropriate to submit an exemption or extension request 
and to provide a more comprehensive account of the qualifying event in 
their request form to CMS. For example, if a hospice has suffered 
damage due to a hurricane on January 1st, it would have until March 
31st to submit a request form to CMS via email to the HQRP mailbox at 
[email protected].
    Further, while we finalized our policy in the past for exception/
extension for the submission of the HIS data, we propose to extend this 
policy beyond the submission of the HIS date to submission of the 
CAHPS[supreg] Hospice Survey data, given that multiple data submission 
processes could be impacted by the same qualifying event.
    Therefore, we are proposing for FY 2019 payment determination and 
subsequent payment determinations to extend the period of time a 
hospice may have to submit a request for an extension or exception for 
quality reporting purposes from 30 calendar days to 90 calendar days 
after the date that the extraordinary circumstances occurred, by 
submitting a request to CMS via email to the HQRP mailbox at 
[email protected]. Exemption or extension requests 
sent to us through any other channel will not be considered valid. The 
request for an exemption or extension must contain all of the finalized 
requirements as outlined on our Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Extensions-and-Exemption-Requests.html.
    If a hospice is granted an exemption or extension, timeframes for 
which an exemption or extension is granted will be applied to the new 
timeliness requirement so such hospices are not penalized. If a hospice 
is granted an exemption, we will not require that the hospice submit 
HIS and/or CAHPS[supreg] Hospice Survey data for a given period of 
time. By contrast, if we grant an extension to a hospice, the hospice 
will still remain responsible for submitting data collected during the 
timeframe in question, although we will specify a revised deadline by 
which the hospice must submit these quality data.
    This process does not preclude us from granting extensions/
exemptions to hospices that have not requested them when we determine 
that an extraordinary circumstance, such as an act of nature, affects 
an entire region or locale. We may grant an extension/exemption to a 
hospice if we determine that a systemic problem with our data 
collection systems directly affected the ability of the hospice to 
submit data. If we make the determination to grant an extension/
exemption to hospices in a region or locale, we will communicate this 
decision through the various means, including the CMS HQRP Web site, 
listserv messages via the Post-Acute Care QRP listserv, MLN 
Connects[supreg] National Provider Calls & Events, MLN Connects[supreg] 
Provider eNews and announcements on Open Door Forums

[[Page 20782]]

and Special Open Door Forums. We are soliciting comments on these 
proposals.
b. Volume-Based Exemption for CAHPS[supreg] Hospice Survey Data 
Collection and Reporting Requirements
    We previously finalized a volume-based exemption for CAHPS[supreg] 
Hospice Survey Data Collection and Reporting requirements in the FY 
2017 Final Rule (81 FR 52181). Hospices that have fewer than 50 survey-
eligible decedents/caregivers in the period from January 1, 2017 
through December 31, 2017 are eligible to apply for an exemption from 
CAHPS[supreg] Hospice Survey data collection and reporting requirements 
for the FY 2020 payment determination (corresponds to the CY 2018 data 
collection period). To qualify, hospices must submit an exemption 
request form for the FY 2020 APU. The exemption request form is 
available on the official CAHPS[supreg] Hospice Survey Web site http://www.hospiceCAHPSsurvey.org. Hospices that intend to claim the size 
exemption are required to submit to CMS their total unique patient 
count for the period of January 1, 2017 through December 31, 2017. The 
due date for submitting the exemption request form for the FY 2020 APU 
is December 31, 2018. Small hospices that meet the exemption for size 
criteria for FY 2020 must complete an exemption form for FY 2020. 
Exemptions for size are active for 1 year only. If a hospice continues 
to meet the eligibility requirements for this exemption in future FY 
APU periods, the organization needs to request the exemption annually 
for every applicable FY APU period.
    Hospices that have fewer than 50 survey-eligible decedents/
caregivers in the period from January 1, 2018 through December 31, 2018 
are eligible to apply for an exemption from CAHPS[supreg] Hospice 
Survey data collection and reporting requirements for the FY 2021 
payment determination. Hospices that intend to claim the size exemption 
are required to submit to CMS their total unique patient count for the 
period of January 1, 2018 through December 31, 2018. The due date for 
submitting the exemption request form for the FY 2021 APU is December 
31, 2019. Small hospices that meet the exemption for size criteria for 
FY 2021 must complete an exemption form for FY 2021.
    Hospices that have fewer than 50 survey-eligible decedents/
caregivers in the period from January 1, 2019 through December 31, 2019 
are eligible to apply for an exemption from CAHPS[supreg] Hospice 
Survey data collection and reporting requirements for the FY 2022 
payment determination. Hospices that intend to claim the size exemption 
are required to submit to CMS their total unique patient count for the 
period of January 1, 2019 through December 31, 2019. The due date for 
submitting the exemption request form for the FY 2022 APU is December 
31, 2020. If a hospice continues to meet the eligibility requirements 
for this exemption in future FY APU periods, the organization should 
request the exemption annually for every applicable FY APU period.
c. Newness Exemption for CAHPS[supreg] Hospice Survey Data Collection 
and Reporting Requirements
    CMS previously finalized a one-time newness exemption for hospices 
that meet the criteria (81 FR 52181). Accordingly, hospices that are 
notified about their Medicare CCN after January 1, 2018 are exempted 
from the FY 2020 APU CAHPS[supreg] Hospice Survey requirements due to 
newness. No action is required on the part of the hospice to receive 
this exemption. The newness exemption is a one-time exemption from the 
survey. Likewise, hospices notified about their Medicare CCN after 
January 1, 2019 are exempted from the FY 2021 APU CAHPS[supreg] Hospice 
Survey and hospices notified about their Medicare CCN after January 1, 
2020 are exempted from the FY 2022 APU CAHPS[supreg] Hospice Survey 
requirements.
11. CAHPS[supreg] Hospice Survey Participation Requirements for the FY 
2020 APU and Subsequent Years
    The CAHPS[supreg] Hospice Survey of CMS' Hospice Quality Reporting 
Program is used to collect data on the experiences of hospice patients 
and the primary caregivers listed in their hospice records. Readers who 
want more information are referred to our extensive discussion of the 
Hospice Experience of Care prior to our proposal for the public 
reporting of measures should refer to 79 FR 50452 and 78 FR 48261.
a. Background and Description of the CAHPS[supreg] Hospice Survey
    The CAHPS[supreg] Hospice Survey is the first standardized national 
survey available to collect information on patient's and informal 
caregiver's experience of hospice care. Patient-centered experience 
measures are a key component of the CMS Quality Strategy, emphasizing 
patient-centered care by rating experience as a means to empower 
patients and their caregivers and improving the quality of their 
care.\28\ In addition, the survey introduces standard survey 
administration protocols that allow for fair comparisons across 
hospices.
---------------------------------------------------------------------------

    \28\ CMS National Quality Strategy 2016. Available at: https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/qualityinitiativesgeninfo/downloads/cms-quality-strategy.pdf.
---------------------------------------------------------------------------

    Details regarding CAHPS[supreg] Hospice Survey national 
implementation, survey administration, participation requirements, 
exemptions from the survey's requirements, hospice patient and 
caregiver eligibility criteria, fielding schedules, sampling 
requirements, survey instruments, and the languages that are available 
for the survey, are all available on the official CAHPS[supreg] Hospice 
Survey Web site, www.HospiceCAHPSsurvey.org and in the CAHPS[supreg] 
Hospice Survey Quality Assurance Guidelines (QAG), which is posted on 
the Web site.
b. Overview of Proposed Measures
    The CAHPS Hospice Survey was developed in line with the U.S. 
Department of Health and Human Services' Transparency Initiative to 
measure patient experience. Unlike the Hospital CAHPS[supreg] Survey 
deployed in 2006 (71 FR 48037 through 48039) and other subsequent 
CAHPS[supreg] surveys, the CAHPS[supreg] Hospice Survey is administered 
after the patient is deceased and queries the decedent's primary 
caregiver regarding the patient and family experience of care. National 
implementation of the CAHPS[supreg] Hospice Survey commenced January 1, 
2015 as stated in the FY 2015 Hospice Wage Index and Payment Rate 
Update final rule (79 FR 50452).
    The survey consists of 47 questions and is available (using the 
mailed version) in English, Spanish, Chinese, Russian, Portuguese, 
Vietnamese, Polish, and Korean. It covers topics such as access to 
care, communications, experience at hospice facilities, and 
interactions with hospice staff. The survey also contains two global 
rating questions and asks for self-reported demographic information 
(race/ethnicity, educational attainment level, languages spoken at 
home, among others).
    The CAHPS[supreg] Hospice Survey measures received NQF endorsement 
on October 26th, 2016 (NQF number 2651). Measures derived from the 
CAHPS[supreg] Hospice Survey include six multi-item (composite) 
measures and two global ratings measures under NQF 2651. We are 
proposing to adopt these eight survey-based measures for the CY 2018 
data collection period and for subsequent years. We believe these 
survey-based measures will be useful in assessing aspects of hospice 
care where the family/primary caregiver is the most useful or only 
source of information, and to allow meaningful and objective 
comparisons between hospice

[[Page 20783]]

providers. The six CAHPS[supreg] Hospice Survey composite survey-based 
measures are:
     Hospice Team Communication;
     Getting Timely Care;
     Treating Family Member with Respect;
     Getting Emotional and Religious Support;
     Getting Help for Symptoms; and
     Getting Hospice Care Training.
    Each of the six composite survey-based measures consists of two or 
more questions. The two global survey-based measures are:
     Rating of Hospice; and
     Willingness to Recommend Hospice.
    The two global survey-based measures are comprised of a single 
question each and ask the primary caregiver of the decedent to rate the 
care provided by the hospice facility and his or her willingness to 
recommend the hospice to family and friends. More information about 
these measures can be found on the official CAHPS[supreg] Hospice 
Survey Web site, www.HospiceCAHPSsurvey.org and in the CAHPS[supreg] 
Hospice Survey Quality Assurance Guidelines (QAG), which is posted on 
the Web site.
    The eight survey-based measures we are proposing were included on 
the CY 2016 MUC \29\ list, and reviewed by the MAP.\30\
---------------------------------------------------------------------------

    \29\ CMS, List of Measures Under Consideration for December 1, 
2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/Measures-under-Consideration-List-for-2016.pdf.
    \30\ The National Quality Forum. MAP 2016-2017 Preliminary 
Recommendations. National Quality Forum, 2016 Recommendations for 
Measures Under Consideration, Jan. 2017. Available at: http://www.qualityforum.org/map/.
---------------------------------------------------------------------------

     CAHPS[supreg] Hospice Survey: Rating of Hospice (MUC ID: 
MUC16-31)
     CAHPS[supreg] Hospice Survey: Hospice Team Communications 
(MUC16-32)
     CAHPS[supreg] Hospice Survey: Willingness to Recommend 
(MUC16-33)
     CAHPS[supreg] Hospice Survey: Getting Hospice Care 
Training (MUC16-35)
     CAHPS[supreg] Hospice Survey: Getting Timely Care (MUC16-
36)
     CAHPS[supreg] Hospice Survey: Getting Emotional and 
Religious Support (MUC16-37)
     CAHPS[supreg] Hospice Survey: Getting Help for Symptoms 
(MUC16-39)
     CAHPS[supreg] Hospice Survey: Treating Family Member with 
Respect (MUC16-40)
    The MAP supported rulemaking for all eight ``patient-reported'' 
measures derived from the CAHPS[supreg] Hospice Survey. The MAP noted 
that the CAHPS[supreg] Hospice Survey measures may offer an indication 
of global quality of care by including the perspective of both patients 
and their caregivers.
c. Data Sources
    As discussed in the CAHPS[supreg] Hospice Survey Quality Assurance 
Guidelines V3.0 (QAG V3.0) (http://www.hospicecahpssurvey.org/en/quality-assurance-guidelines/), the survey has three administration 
methods: Mail-only, telephone only, and mixed mode (mail with telephone 
follow-up of non-respondents). We previously finalized the 
participation requirements for the FY 2018 and FY 2019 Annual Payment 
Updates (80 FR 47194). To summarize, to meet the CAHPS[supreg] Hospice 
Survey requirements for the HQRP, we are proposing that hospice 
facilities must contract with a CMS-approved vendor to collect survey 
data for eligible patients on a monthly basis and report that data to 
CMS on the hospice's behalf by the quarterly deadlines established for 
each data collection period. The list of approved vendors is available 
at: http://www.hospicecahpssurvey.org/en/approved-vendor-list.
    Hospices are required to provide lists of the patients who died 
under their care, along with the associated primary caregiver 
information, to their respective survey vendors to form the samples for 
the CAHPS[supreg] Hospice Survey. We emphasize the importance of 
hospices providing complete and accurate information to their 
respective survey vendors in a timely manner. Hospices must contract 
with an approved CAHPS[supreg] Hospice Survey vendor to conduct the 
survey on their behalf. Hospices are responsible for making sure their 
respective survey vendors meet all data submission deadlines. Vendor 
failures to submit data on time are the responsibility of the hospices.
i. Requirements for the FY 2020 Annual Payment Update
    To meet participation requirements for the FY 2020 annual payment 
update (APU), Medicare-certified hospices must collect CAHPS[supreg] 
Hospice Survey data on an ongoing monthly basis from January 2018 
through December 2018 (all 12 months) in order to receive their full 
payment for the FY 2020 APU. All data submission deadlines for the FY 
2020 APU are in Table 17. CAHPS[supreg] Hospice Survey vendors must 
submit data by the deadlines listed in Table 17 for all APU periods 
listed in the table and moving forward. There are no late submissions 
permitted after the deadlines, except for extraordinary circumstances 
beyond the control of the provider as discussed above.

Table 17--CAHPS[supreg] Hospice Survey Data Submission Dates for the APU
                    in FY 2020, FY 2021, and FY 2022
------------------------------------------------------------------------
  Sample months (that is, month of death)     Quarterly data submission
                    \1\                             deadlines \2\
------------------------------------------------------------------------
                               FY 2020 APU
------------------------------------------------------------------------
January-March 2018 (Q1)...................  August 8, 2018.
April-June 2018 (Q2)......................  November 14, 2018.
July-September 2018 (Q3)..................  February 13, 2019.
October-December 2018 (Q4)................  May 8, 2019.
------------------------------------------------------------------------
                               FY 2021 APU
------------------------------------------------------------------------
January-March 2019 (Q1)...................  August 14, 2019.
April-June 2019 (Q2)......................  November 13, 2019.
July-September 2019 (Q3)..................  February 12, 2020.
October-December 2019 (Q4)................  May 13, 2020.
------------------------------------------------------------------------
                               FY 2022 APU
------------------------------------------------------------------------
January-March 2020 (Q1)...................  August 12, 2020.
April-June 2020 (Q2)......................  November 12, 2020.\3\
July-September 2020 (Q3)..................  February 10, 2021.
October-December 2020 (Q4)................  May 12, 2021.
------------------------------------------------------------------------
\1\ Data collection for each sample month initiates 2 months following
  the month of patient death (for example, in April for deaths occurring
  in January).
\2\ Data submission deadlines are the second Wednesday of the submission
  months, which are the months August, November, February, and May.
\3\ Second Wednesday is Veterans Day Holiday.

ii. Requirements for the FY 2021 Annual Payment Update
    To meet participation requirements for the FY 2021 APU, Medicare-
certified hospices must collect CAHPS[supreg] Hospice Survey data on an 
ongoing monthly basis from January 2019 through December 2019 (all 12 
months) in order to receive their full payment for the FY 2021 APU. All 
data submission deadlines for the FY 2021 APU are in Table 17. 
CAHPS[supreg] Hospice Survey vendors must submit data by the deadlines 
listed in Table 17 for all APU periods listed in the table and moving 
forward. There are no late submissions permitted after the deadlines, 
except for extraordinary circumstances beyond the control of the 
provider as discussed above.

[[Page 20784]]

iii. Requirements for the FY 2022 Annual Payment Update
    To meet participation requirements for the FY 2022 APU, Medicare-
certified hospices must collect CAHPS[supreg] Hospice Survey data on an 
ongoing monthly basis from January 2020 through December 2020 (all 12 
months) in order to receive their full payment for the FY 2022 APU. All 
data submission deadlines for the FY 2022 APU are in Table 17. 
CAHPS[supreg] Hospice Survey vendors must submit data by the deadlines 
listed in Table 17 for all APU periods listed in the table and moving 
forward. There are no late submissions permitted after the deadlines, 
except for extraordinary circumstances beyond the control of the 
provider as discussed above.
d. Measure Calculations
    As noted above, we are proposing to adopt six composite 
CAHPS[supreg] Hospice Survey-based measures and two global survey-based 
measures. As with other measures adopted for HQRP, a hospice's 
performance for a given payment determination year will be based upon 
the successful submission of data required in accordance with the 
administrative, form, manner and timing requirements established for 
the program. Therefore, hospices' scores on the CAHPS[supreg] Hospice 
Survey-based measures will not affect whether they are subject to the 
2.0 percentage point payment reduction for hospices that fail to report 
data required to be submitted.
    We propose that CAHPS Hospice Survey scores for a given hospice be 
displayed as ``top-box'' scores, with the national average top-box 
score for participating hospices provided for comparison. Top-box 
scores reflect the proportion of caregiver respondents that endorse the 
most positive response(s) to a given measure, such as the proportion 
that rate the hospice a 9 or 10 out of 10 on a 0 to 10 scale, or the 
proportion that report that they ``always'' received timely care. The 
top-box numerator for each question within a measure is the number of 
respondents that endorse the most positive response(s) to the question. 
The denominator includes all respondents eligible to respond to the 
question, with one exception. The exception is the Getting Hospice Care 
Training measure; for this measure, the measure score is calculated 
only among those respondents who indicated that their family member 
received hospice care at home or in an assisted living facility.
    For additional information on the specifications of these measures, 
including details regarding top-box scoring methodology and mode and 
case-mix adjustment, please refer to the CAHPS[supreg] Hospice Survey 
Web page at http://www.hospicecahpssurvey.org/en/.
i. Composite Survey-Based Measures
    Unadjusted hospice scores on each composite CAHPS[supreg] Hospice 
Survey-based measure would be calculated by determining the proportion 
of ``top-box'' responses for each question within the composite and 
averaging these proportions over all the questions in the composite 
measure. For example, to assess hospice performance on the composite 
measure CAHPS[supreg] Hospice Survey--Hospice Team Communication, we 
would calculate the proportion of top-box responses for each of the 
measure's six questions, add those proportions together, and divide by 
the number of questions in the composite measure (in this case, six).
    As a specific example, we take a theoretical hospice facility that 
had 50 surveys completed and received the proportions of ``top-box'' 
responses through sample calculations:

 25 ``top-box'' responses out of 50 total responses on Question 
One
 40 ``top-box'' responses out of 50 total responses on Question 
Two
 50 ``top-box'' responses out of 50 total responses on Question 
Three
 35 ``top-box'' responses out of 50 total responses on Question 
Four
 45 ``top-box'' responses out of 50 total responses on Question 
Five
 40 ``top-box'' responses out of 50 total responses on Question 
Six

    Based on the above responses, we would calculate that hospice's 
unadjusted measure score for public reporting as follows:
[GRAPHIC] [TIFF OMITTED] TP03MY17.005

    This calculation would give this example hospice an unadjusted 
score of 0.78 or 78 percent for the Hospice Team Communication measure 
for purposes of public reporting. We note that an adjusted hospice 
score would be calculated by adjusting the score for each question for 
differences in the characteristics of decedents and caregivers across 
hospices and for mode as described in section 11.e, and then averaging 
across questions within the measure as described here. Further detailed 
information regarding scoring and risk adjustment can be found at the 
CAHPS[supreg] Hospice Survey Web site (http://www.hospicecahpssurvey.org/en/technical-specifications/).
ii. Global Survey-Based Measures
    We are proposing to adopt two global CAHPS[supreg] Hospice Survey 
measures. CAHPS[supreg] Hospice Survey--Rating of Hospice asks the 
primary caregiver of the decedent to rate the care provided by the 
hospice on a scale of 0 to 10, and CAHPS[supreg] Hospice Survey--
Willingness to Recommend asks about the caregiver's willingness to 
recommend the hospice to family and friends on a scale of ``Definitely 
No'' to ``Definitely Yes''. Unadjusted hospice performance on each of 
the two global CAHPS[supreg] Hospice Survey-based measures would be 
calculated by the proportion of respondents providing high-value 
responses (that is, a 9 to 10 rating or ``Definitely Yes'') to the 
survey questions over the total number of respondents. For example, if 
a hospice received 45 9- and 10-point ratings out of 50 responses, this 
hospital would receive a 0.9 or 90 percent unadjusted score, which 
would then be adjusted for differences in the characteristics of 
decedents and caregivers across hospices and modes, as described in 
section 12.E.
iii. Cohort
    The CAHPS[supreg] Hospice Survey is administered to all eligible 
patients/caregivers--or a random sample thereof--who meet the 
eligibility criteria. Eligible patients, regardless of insurance or 
payment, can participate.
    For purposes of each survey-based measure captured in the 
CAHPS[supreg] Hospice Survey, an ``eligible patient'' is a decedent 18 
years or older:
 With death at least 48 hours following last admission to 
hospice care
 for whom there is a caregiver of record
 whose caregiver is someone other than a non-familial legal 
guardian
 for whom the caregiver has a U.S. or U.S. Territory home 
address
    Patients who are still alive or whose admission to the hospice 
resulted in a

[[Page 20785]]

live discharge, are not eligible to participate in the survey. In 
addition, decedents/caregivers who initiate or voluntarily request that 
the hospice not reveal the patient's identity; and/or not survey the 
patient/caregiver (``no publicity patients/caregivers'') are excluded 
from the sample.
e. Risk Adjustment
    The CAHPS[supreg] Hospice Survey measures assess activities that 
are fully under the control of hospice care professionals and/or 
hospice organizations. In order to ensure fair comparisons in public 
reporting, we believe it is necessary and appropriate to adjust for 
factors that are not directly related to hospice performance, such as 
patient mix, for these CAHPS[supreg] Hospice Survey measures. The 
survey based measures are adjusted for decedent and caregiver 
characteristics (including the lag time between patient death and 
survey response; decedent's age, payer for hospice care, decedent's 
primary diagnosis, decedent's length of final episode of hospice care, 
caregiver's education, decedent's relationship to caregiver, 
caregiver's preferred language and language in which the survey was 
completed, and caregiver's age) known to be associated with systematic 
difference in survey responses.
i. Patient Mix Adjustment
    Previous research, on both CAHPS[supreg] surveys and other types of 
surveys, has identified respondent characteristics that are not under 
the control of the entities being assessed but tend to be related to 
survey responses. Hence, variations in the proportion of respondents 
with such characteristics will be associated with variations in survey 
responses that are unrelated to the actual quality of hospice care. To 
ensure that comparisons between hospices reflect differences in 
performance rather than differences in patient and/or caregiver 
characteristics, publicly reported hospice scores will be adjusted for 
variations of such characteristics across hospices. This adjustment is 
performed using a linear regression model applied to all data within a 
quarter, with indicator variables for each hospice and each 
characteristic as an independent variable in the model.
ii. Mode Adjustment
    We conducted an experiment to determine whether survey mode 
adjustments were needed to fairly compare CAHPS[supreg] Hospice Survey 
scores. The experiment found that mode adjustments are needed. Publicly 
reported CAHPS[supreg] Hospice Survey scores will be adjusted for the 
mode of survey administration, which affects scores but is not related 
to quality of hospice care. (Authorized survey modes are: Mail-only, 
telephone-only, and mail with telephone follow up, also called mixed 
mode.) Mode adjustment is performed prior to patient-mix adjustment; a 
mode adjustment value is added/subtracted (depending on the mode) to 
each response to the survey by mail-only mode or mixed mode. Responses 
obtained using telephone-only mode are not adjusted since this is the 
reference mode.
    As a result of the risk adjustment methodologies proposed here, the 
final percentages may vary from the unadjusted percentage as calculated 
in the examples provided above.
f. For Further Information About the CAHPS[supreg] Hospice Survey
    We encourage hospices and other entities to learn more about the 
survey on www.hospicecahpssurvey.org. For direct questions, please 
contact the CAHPS[supreg] Hospice Survey Team at 
[email protected] or telephone 1-844-472-4621.
12. HQRP Reconsideration and Appeals Procedures for the FY 2018 Payment 
Determination and Subsequent Years
    In the FY 2015 Hospice Wage Index final rule (79 FR 50496), we 
notified hospice providers on how to seek reconsideration if they 
received a noncompliance decision for the FY 2016 payment determination 
and subsequent years. A hospice may request reconsideration of a 
decision by CMS that the hospice has not met the requirements of the 
HQRP for a particular period.
    We clarified that any hospice that wishes to submit a 
reconsideration request must do so by submitting an email to CMS 
containing all of the requirements listed on the HQRP Web site at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Reconsideration-Requests.html. 
Electronic email sent to [email protected] is the 
only form of submission that will be accepted. Any reconsideration 
requests received through any other channel including the United States 
Postal Service (USPS) or phone will not be considered as a valid 
reconsideration request. In the FY 2017 final rule we further clarified 
that providers should submit reconsideration requests of decision by 
CMS that the hospice has not met the CAHPS[supreg] Hospice Survey 
requirements using the same process (81 FR 52181) (Details about the 
reports and emails received after data submission are in the 
CAHPS[supreg] Hospice Quality Assurance Guidelines, which is available 
on the official CAHPS[supreg] Hospice Survey Web site, 
www.hospicecahpssurvey.org). We codified this process at Sec.  
418.312(h). In addition, we codified at Sec.  418.306(b)(2) that 
beginning with FY 2014 and each subsequent FY, the Secretary shall 
reduce the market basket update by 2 percentage points for any hospice 
that does not comply with the quality data submission requirements for 
that FY and solicited comments on all of the proposals and the 
associated regulations text at Sec.  418.312 and in Sec.  418.306 in 
section VI. Official instructions regarding the payment reduction 
reconsideration process can be located under the Regulations and 
Guidance, Transmittals, 2015 Transmittals Web site at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017-Transmittals.html.
    In the past, only hospices found to be non-compliant with the 
reporting requirements set forth for a given payment determination 
received a notification from CMS of this finding along with 
instructions for requesting reconsideration in the form of a USPS 
letter. In the FY 2016 Hospice Wage Index final rule (80 FR 47198), we 
stated that we would use the QIES CASPER reporting system as an 
additional mechanism to communicate to hospices regarding their 
compliance with the reporting requirements for the given reporting 
cycle. We have implemented this additional communication mechanism via 
the CASPER Hospice Timeliness Compliance Threshold Report previously 
discussed in the FY 2017 Hospice Wage Index rule at 81 FR 25527 and 
25528. We will continue to send notification of noncompliance via 
delivery of a letter via the USPS. We previously finalized our proposal 
(80 FR 47198) to publish a list of hospices who successfully meet the 
reporting requirements for the applicable payment determination on the 
CMS HQRP Web site. The list of providers found to be compliant with the 
FY 2017 APU requirements can be found on the CMS HQRP Web site here: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HQRP-Requirements-and-Best-Practices.html.
13. Confidential Feedback Reports
    As part of our effort to promote use of standardized quality data 
to improve quality of care, in December 2016, we made available two new 
provider feedback reports: The Hospice-Level

[[Page 20786]]

Quality Measure Report and the Patient Stay-Level Quality Measure 
Report. These confidential feedback reports are available to each 
hospice using the CASPER system, and are part of the class of CASPER 
reports known as Quality Measure (QM) Reports. These reports are 
separate from public reporting and are for provider viewing only, for 
the purposes of internal provider quality improvement. These reports 
are on-demand and thus enable hospice providers to view and compare 
their performance to the national average for a reporting period of 
their choice.
    Providers are able to view their data and information at both the 
hospice and patient stay levels for it's HIS based quality measures. 
The CASPER hospice-level QM Reports contain information such as the 
numerator, denominator, hospice-level QM score, and national average. 
The CASPER patient stay-level QM Reports show whether each patient stay 
is counted toward each quality measure. The HIS based QMs reported in 
both reports include:

 NQF #1641 Treatment Preferences
 NQF #1647 Beliefs/Values
 NQF #1634 Pain Screening
 NQF #1637 Pain Assessment
 NQF #1639 Dyspnea Screening
 NQF #1638 Dyspnea Treatment
 NQF #1617 Bowel Regimen

    For more information on the CASPER QM Reports, we refer readers to 
the CASPER QM Factsheet on the HQRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HQRP-Requirements-and-Best-Practices.html. This fact 
sheet contains detailed information about each CASPER QM report 
currently available, the data included in the reports, and how 
providers can use the reports as part of their Quality Assessment and 
Performance Improvement (QAPI) efforts. For technical information on 
the reports and how to access the CASPER QM Reports, we refer readers 
to: https://www.qtso.com/hospicetrain.html.
    As new HIS measures are implemented in the HQRP, we will continue 
to expand the functionality of the QM reports to allow providers to 
view data on additional HIS measures. We will announce refinements and 
additions to the QM reports through sub-regulatory communication 
channels and in future rulemaking cycles.
    We also propose to provide hospices with preview reports of their 
data prior to the quarterly publication of CAHPS[supreg] Hospice Survey 
data on the Compare site. The reports will be provided through the 
CASPER reporting system. Each hospice will receive only its own, 
individual reports.
14. Public Display of Quality Measures and Other Hospice Data for the 
HQRP
    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. These procedures shall ensure that a 
hospice has the opportunity to review the data that is to be made 
public for the hospice prior to such data being made public. The 
Secretary shall report quality measures that relate to hospice care 
provided by hospice programs on a publicly available CMS Web site.
    In the FY 2017 rule, we discussed our analysis of HIS data to 
inform which measures were eligible for public reporting and 
reportability analysis to determine data selection period and minimum 
denominator size for measures to be publicly reported. Based on 
analysis results, we determined that all 7 HIS quality measures adopted 
for the FY 2016 and beyond (NQF #1634, NQF #1637, NQF #1639, NQF #1638, 
NQF #1641, NQF #1647, NQF #1617), calculated based on a rolling 12 
month data selection period, to be eligible for public reporting with a 
minimum denominator size of 20 patient stays. For additional details on 
these analyses, we refer readers to the FY 2017 final rule (81 FR 52183 
through 52184).
    In the FY 2017 final rule we also clarified policies for 
reportability analyses for new measures. As stated in the FY 2017 final 
rule, new measures will undergo reportability analysis to determine (1) 
appropriateness for public reporting and (2) appropriate data selection 
period. In accordance with discussion in the prior year's rule, we will 
use the same analytic approach used in previous reportability analyses 
to determine data selection period and minimum denominator size for the 
Hospice and Palliative Care Composite Process Measure--Comprehensive 
Assessment at Admission. We will begin reportability analyses for the 
Hospice Visits When Death is Imminent Measure Pair once data for the 
measure are available. Results of reportability analyses conducted for 
these new measures will be communicated through future rulemaking.
    To meet the Affordable Care Act's requirement for making quality 
measure data public, we are developing a CMS Hospice Compare Web site, 
which will allow consumers, providers and stakeholders to search for 
all Medicare-certified hospice providers and view their information and 
quality measure scores. We anticipate that public reporting of HQRP 
data on the CMS Compare Web site will begin sometime in the summer of 
CY 2017. To help providers prepare for public reporting, we will offer 
opportunities for stakeholder engagement and education prior to the 
rollout of a CMS Hospice Compare site. We will offer outreach 
opportunities for providers through CMS HQRP Public reporting Web page: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Quality-Public-Reporting.html, listserv messages via the Post-Acute Care QRP listserv, 
MLN Connects[supreg] National Provider Calls & Events, MLN 
Connects[supreg] Provider eNews and announcements on Open Door Forums 
and Special Open Door Forums. Finally, we will offer educational 
support and outreach to all hospice providers on the systems and 
processes for reviewing their data prior to public reporting; 
availability of educational support and outreach opportunities will be 
communicated through the listed channels above.
    We will provide hospices an opportunity to preview their quality 
measure data prior to publicly reporting information. These quality 
measure data reports or ``preview reports'' will be made available in 
the CASPER system prior to public reporting and will offer providers 
the opportunity to preview their quality measure data prior to public 
reporting on the CMS Hospice Compare Web site. We will provide hospices 
30 days to review the preview report beginning from the date on which 
they can access the report. Hospices will have an opportunity to 
request review of their data by CMS during the 30-day preview period if 
they believe that errors in data submitted to CMS may have resulted in 
incorrect measure scores and can submit proof along with a plan 
describing how the errors will be corrected. We will review these 
requests and if we confirm that the errors have affected the measures 
and agree to correct the measure, we will suppress the measure on the 
Hospice Compare Web site for one time only and display the corrected 
measure during the subsequent quarterly refresh of the Compare Web 
site. When the preview reports are ready for providers to access, 
anticipated summer of CY 2017 prior to the release of Hospice Compare, 
we will post the policies and procedures for providers to submit 
requests for reviewing of their data by CMS on the CMS HQRP Web site: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-

[[Page 20787]]

Instruments/Hospice-Quality-Reporting/Hospice-Quality-Public-
Reporting.html.
    CMS encourages hospices to use CASPER QM Reports (see section 
III.D.14 of this proposed rule) to review their HIS quality measures 
after they submit the HIS data to CMS. If hospices determine that 
erroneous data have been submitted, they should submit either of these 
two types of HIS records: Modify existing record or inactivate existing 
record to correct their data. HIS data corrected before the data are 
frozen for the creation of the preview reports will be reflected in the 
preview reports.
    We propose to begin public reporting of CAHPS[supreg] Hospice 
Survey measures in 2018. Specifically, we are proposing to publicly 
report data in winter CY 2018 on all eight CAHPS[supreg] Hospice Survey 
measures. Scores would be displayed based on eight rolling quarters of 
data and would initially use CAHPS[supreg] Hospice Survey data 
collected from caregivers of patients who died while receiving hospice 
care between April 1, 2015 and March 31, 2017. We are proposing that 
the display of these scores be updated quarterly, and that scores be 
displayed only for those hospices for which there are 30 or more 
completed questionnaires during the reporting period. Scores will not 
be displayed for hospices with fewer than 30 completed questionnaires 
during the reporting period.
    Like other CMS Compare Web sites, the Hospice Compare Web site 
will, in time, feature a quality rating system that gives each hospice 
a rating of between 1 and 5 stars. Hospices will have prepublication 
access to their own agency's quality data, which enables each agency to 
know how it is performing before public posting of data on the Hospice 
Compare Web site. Public comments regarding how the rating system would 
determine a hospice's star rating and the methods used for 
calculations, as well as a proposed timeline for implementation will be 
announced via the CMS HQRP Web page, listserv messages via the Post-
Acute Care QRP listserv, MLN Connects[supreg] National Provider Calls & 
Events, MLN Connects[supreg] Provider eNews and announcements on Open 
Door Forums and Special Open Door Forums. We will announce the timeline 
for development and implementation of the star rating system in future 
rulemaking.
    Lastly, as part of our ongoing efforts to make healthcare more 
transparent, affordable, and accountable for all hospice stakeholders, 
we have posted a hospice directory and quality data on a public data 
set located at https://data.medicare.gov. This data will serve as a 
helpful resource regarding information on Medicare-certified hospice 
agencies throughout the nation. In an effort to move toward public 
reporting of hospice data, we have initially posted demographic data of 
hospice agencies that have been registered with Medicare. This list 
includes high-level demographic data for each agency, including 
provider name, address, phone numbers, ownership type, CCN, profit 
status, and date of original CMS certification. The posting of this 
hospice data directory occurred on June 14, 2016 and will be refreshed 
quarterly. Information can be located at https://data.medicare.gov/data/hospice-directory. Additionally, we have posted two hospice data 
files containing national level aggregate quality data regarding seven 
HIS quality measures and CAHPS[supreg] Hospice Survey measures in 
December 2016. These data file are a one-time release with a goal to 
make quality data available prior to the release of the Hospice Compare 
in summer of CY 2017. Additional details regarding hospice datasets 
will be announced via the CMS HQRP Web page, listserv messages via the 
Post-Acute Care QRP listserv, MLN Connects[supreg] National Provider 
Calls & Events, MLN Connects[supreg] Provider eNews and announcements 
on Open Door Forums and Special Open Door Forums. In addition, we have 
provided the list of CASPER/ASPEN contacts, Regional Office and State 
coordinators in the event that a Medicare-certified agency is either 
not listed in the database or the characteristics/administrative data 
(name, address, phone number, services, or type of ownership) are 
incorrect or have changed. To continue to meet Medicare enrollment 
requirements, all Medicare providers are required to report changes to 
their information in their enrollment application as outlined in the 
Provider-Supplier Enrollment Fact Sheet Series located at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/MedEnroll_InstProv_FactSheet_ICN903783.pdf. Once 
the Hospice Compare Web site is released in the summer of CY 2017, 
https://data.medicare.gov will post the official datasets used on the 
Medicare.gov Compare Web sites provided by CM.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Unless noted otherwise, all salary information is from the Bureau 
of Labor Statistics (BLS) Web site at http://www.bls.gov/oes and 
includes a fringe benefits package worth 100 percent of the base 
salary. The mean hourly wage rates are based on May, 2015 BLS data for 
each discipline.
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
This data must be submitted in a form and manner, and at a time 
specified by the Secretary.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. Hospice Item Set

    In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in 
compliance with section 1814(i)(5)(C) of the Act, we finalized the 
specific collection of data items that support the following 7 NQF 
endorsed measures for hospice:
     NQF #1617 Patients Treated with an Opioid who are Given a 
Bowel Regimen,
     NQF #1634 Pain Screening,
     NQF #1637 Pain Assessment,
     NQF #1638 Dyspnea Treatment,
     NQF #1639 Dyspnea Screening,
     NQF #1641 Treatment Preferences,
     NQF #1647 Beliefs/Values Addressed (if desired by the 
patient).
    We finalized the following two additional measures in the FY 2017 
Hospice Wage Index final rule affecting FY 2019 payment determinations 
(81 FR 52163 through 52173):

 Hospice Visits when Death is Imminent
 Hospice and Palliative Care Composite Process Measure--
Comprehensive Assessment at Admission

    Data for the aforementioned 9 measures is collected via the HIS as

[[Page 20788]]

discussed in the FY 2017 Hospice Wage Index final rule (81 FR 52189) 
and covered under OMB control number 0938-1153. The HIS V2.00.0 was 
approved by the Office of Management and Budget on April 17, 2017 under 
control number 0938-1153. We are not proposing any new updates or 
additional collections of information in this proposed rule in regards 
to the Hospice Item Set or its constituent quality measures.

B. Summary of CAHPS[supreg] Hospice Survey Information Collection 
Requirements (OMB Control Number 0938-1257)

    National Implementation of the Hospice Experience of Care Survey 
(CAHPs Hospice Survey) data measures are covered under OMB control 
number 0938-1257 and is summarized here for convenience. We have 
implemented patient experience surveys in a number of settings 
including Medicare, Medicare Advantage, and Part D Prescription Drug 
Plans, hospitals, and home health agencies. Other CAHPS[supreg] surveys 
exist for hemodialysis facilities, nursing homes, and physician 
practices. The hospice survey differs from most other CMS patient 
experience surveys because its target population is bereaved family 
members or close friends of patients who died in hospice care. Family 
members and friends are the best source of information regarding the 
entire trajectory of hospice care. In addition, many hospice patients 
are very ill and unable to answer survey questions.
    Surveys are administered by CMS-approved survey vendors hired by 
hospice providers to conduct the survey on their behalf. The survey 
vendor may collect data in one of three modes: Mail-only, telephone-
only, or mixed mode (mail with telephone follow-up). The sample 
consists of bereaved family members or close friends of patients who 
died while receiving hospice care (1) at home, (2) in a nursing home, 
or (3) an inpatient setting (that is, freestanding inpatient unit or 
acute care hospital). The questionnaire is composed of 47 items.
    The estimated annualized burden hours and costs to respondents for 
the national implementation of the CAHPS[supreg] Hospice Survey are 
shown in Tables 18 and 19. Based on participation in national 
implementation in the CAHPS[supreg] Hospice Survey from Quarter 2 2015 
through Quarter 1 2016, we assume that 3,414 hospices will administer 
the survey to an average of 278.7 cases. Thus, we estimate that the 
CAHPS[supreg] Hospice Survey will be administered to a maximum of 
951,482 individuals each year for the duration of the collection period 
covered by this application for the purposes of national 
implementation. As not all sampled cases will complete the survey, this 
estimate reflects the maximum burden possible. The estimated number of 
responses is based on actual hospice participation in national 
implementation of the CAHPS[supreg] Hospice Survey.
    Table 18 shows the estimated annualized burden for the respondents' 
time to participate in the national implementation data collection. The 
survey contains 47 items and is estimated to require an average 
administration time of 10.4 minutes in English (at a pace of 4.5 items 
per minute) and 12.5 minutes in Spanish (assuming 20 percent more words 
in the Spanish translation), for an average response time of 10.47 
minutes or 0.174 hours (assuming that 1 percent of survey respondents 
complete the survey in Spanish). These burden and pace estimates are 
based on CMS' experience with the CAHPS[supreg] Hospice Survey and 
surveys of similar length that were fielded with Medicare 
beneficiaries. As indicated below, the annual total burden hours for 
survey participants are estimated to be 165,959.57 for the continued 
national implementation of the survey.

    Table 18--Estimated Annualized Burden Hours for Respondents: National Implementation of the CAHPS[supreg]
                                                 Hospice Survey
----------------------------------------------------------------------------------------------------------------
                                                                     Number of
                 Survey version                      Number of     responses per     Hours per     Total burden
                                                    respondents     respondent       response          hours
----------------------------------------------------------------------------------------------------------------
CAHPS[supreg] Hospice Survey....................         951,482               1           0.174      165,959.57
                                                 ---------------------------------------------------------------
    Total.......................................         951,482               1           0.174      165,959.57
----------------------------------------------------------------------------------------------------------------

    Table 19 shows the cost burden to respondents associated with their 
time to complete a survey as part of national implementation. The 
annual total cost burden is estimated to be $7,710,481.60. This 
estimate is higher than the $3,034,789.70 estimated in the prior OMB 
filing, due to the increased number of hospices participating (and 
correspondingly, the increased number of respondents), as well as an 
increase in the average hourly rate.

               Table 19--Estimated Annualized Cost Burden for Respondents: National Implementation
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                    Form name                        Number of     Total burden     hourly wage     Total cost
                                                    respondents        hours           rate*          burden
----------------------------------------------------------------------------------------------------------------
CAHPS[supreg] Hospice Survey....................         951,482      165,959.57        * $46.46   $7,710,481.60
----------------------------------------------------------------------------------------------------------------
    Total.......................................         951,482      165,959.57        * $46.46   $7,710,481.60
----------------------------------------------------------------------------------------------------------------
* Source: Data from the U.S. Bureau of Labor Statistics' May 2015 National Occupational Employment and Wage
  Estimates for all salary estimates (http://www.bls.gov/oes). This figure includes a 100% fringe benefit on an
  average wage of $23.23. Retrieved April 10, 2017.

    If you comment on these information collection, that is, reporting, 
recordkeeping or third-party disclosure requirements, please submit 
your comments electronically as specified in the ADDRESSES section of 
this proposed rule.
    Comments must be received by 5 p.m. June 26, 2017.

[[Page 20789]]

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VI. Request for Information on CMS Flexibilities and Efficiencies

    CMS is committed to transforming the health care delivery system--
and the Medicare program--by putting an additional focus on patient-
centered care and working with providers, physicians, and patients to 
improve outcomes. We seek to reduce burdens for hospitals, physicians, 
and patients, improve the quality of care, decrease costs, and ensure 
that patients and their providers and physicians are making the best 
health care choices possible. These are the reasons we are including 
this Request for Information in this proposed rule.
    As we work to maintain flexibility and efficiency throughout the 
Medicare program, we would like to start a national conversation about 
improvements that can be made to the health care delivery system that 
reduce unnecessary burdens for clinicians, other providers, and 
patients and their families. We aim to increase quality of care, lower 
costs improve program integrity, and make the health care system more 
effective, simple and accessible.
    We would like to take this opportunity to invite the public to 
submit their ideas for regulatory, subregulatory, policy, practice, and 
procedural changes to better accomplish these goals. Ideas could 
include payment system redesign, elimination or streamlining of 
reporting, monitoring and documentation requirements, aligning Medicare 
requirements and processes with those from Medicaid and other payers, 
operational flexibility, feedback mechanisms and data sharing that 
would enhance patient care, support of the physician-patient 
relationship in care delivery, and facilitation of individual 
preferences. Responses to this Request for Information could also 
include recommendations regarding when and how CMS issues regulations 
and policies and how CMS can simplify rules and policies for 
beneficiaries, clinicians, physicians, providers, and suppliers. Where 
practicable, data and specific examples would be helpful. If the 
proposals involve novel legal questions, analysis regarding CMS' 
authority is welcome for CMS' consideration. We are particularly 
interested in ideas for incentivizing organizations and the full range 
of relevant professionals and paraprofessionals to provide screening, 
assessment and evidence-based treatment for individuals with opioid use 
disorder and other substance use disorders, including reimbursement 
methodologies, care coordination, systems and services integration, use 
of paraprofessionals including community paramedics and other 
strategies. We are requesting commenters to provide clear and concise 
proposals that include data and specific examples that could be 
implemented within the law.
    We note that this is a Request for Information only. Respondents 
are encouraged to provide complete but concise responses. This Request 
for Information is issued solely for information and planning purposes; 
it does not constitute a Request for Proposal (RFP), applications, 
proposal abstracts, or quotations. This Request for Information does 
not commit the U.S. Government to contract for any supplies or services 
or make a grant award. Further, CMS is not seeking proposals through 
this Request for Information and will not accept unsolicited proposals. 
Responders are advised that the U.S. Government will not pay for any 
information or administrative costs incurred in response to this 
Request for Information; all costs associated with responding to this 
Request for Information will be solely at the interested party's 
expense. We note that not responding to this Request for Information 
does not preclude participation in any future procurement, if 
conducted. It is the responsibility of the potential responders to 
monitor this Request for Information announcement for additional 
information pertaining to this request. In addition, we note that CMS 
will not respond to questions about the policy issues raised in this 
Request for Information. CMS will not respond to comment submissions in 
response to this Request for Information in the FY 2018 Hospice Wage 
Index and Payment Rate Update and Hospice Quality Reporting 
Requirements final rule. Rather, CMS will actively consider all input 
as we develop future regulatory proposals or future subregulatory 
policy guidance. CMS may or may not choose to contact individual 
responders. Such communications would be for the sole purpose of 
clarifying statements in the responders' written responses. Contractor 
support personnel may be used to review responses to this Request for 
Information. Responses to this notice are not offers and cannot be 
accepted by the Government to form a binding contract or issue a grant. 
Information obtained as a result of this Request for Information may be 
used by the Government for program planning on a nonattribution basis. 
Respondents should not include any information that might be considered 
proprietary or confidential. This Request for Information should not be 
construed as a commitment or authorization to incur cost for which 
reimbursement would be required or sought. All submissions become U.S. 
Government property and will not be returned. CMS may publicly post the 
public comments received, or a summary of those public comments.

VII. Regulatory Impact Analyses

A. Statement of Need

    This proposed rule meets the requirements of our regulations at 
Sec.  418.306(c), which requires annual issuance, in the Federal 
Register, of the hospice wage index based on the most current available 
CMS hospital wage data, including any changes to the definitions of 
Core-Based Statistical Areas (CBSAs), or previously used Metropolitan 
Statistical Areas (MSAs). This proposed rule would also update payment 
rates for each of the categories of hospice care, described in Sec.  
418.302(b), for FY 2018 as required under section 
1814(i)(1)(C)(ii)(VII) of the Act. Section 411(d) of the Medicare 
Access and CHIP Reauthorization Act of 2015 (MACRA) amended section 
1814(i)(1)(C) of the Act such that for hospice payments for FY 2018, 
the market basket percentage increase shall be 1 percent. Finally, 
section 3004 of the Affordable Care Act amended the Act to authorize a 
quality reporting program for hospices and this rule discusses changes 
in the requirements for the hospice quality reporting program in 
accordance with section 1814(i)(5) of the Act.

B. Overall Impacts

    We estimate that the aggregate impact of the payment provisions in 
this proposed rule would result in an increase of $180 million in 
payments to hospices, resulting from the hospice payment update 
percentage of 1.0 percent. The impact analysis of this proposed rule 
represents the projected effects of the changes in hospice payments 
from FY 2017 to FY 2018. Using the most recent data available at the 
time of rulemaking, in this case FY

[[Page 20790]]

2016 hospice claims data, we apply the current FY 2017 wage index and 
labor-related share values to the level of care per diem payments and 
SIA payments for each day of hospice care to simulate FY 2017 payments. 
Then, using the same FY 2016 data, we apply the proposed FY 2018 wage 
index and labor-related share values to simulate FY 2018 payments. 
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.
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the 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), the Congressional Review Act (5 U.S.C. 804(2) and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). We estimate that this rulemaking is ``economically significant'' 
as measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we have prepared a RIA 
that, to the best of our ability presents the costs and benefits of the 
rulemaking.

C. Anticipated Effects

    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. The great majority of hospitals and most 
other health care providers and suppliers are small entities by meeting 
the Small Business Administration (SBA) definition of a small business 
(in the service sector, having revenues of less than $7.5 million to 
$38.5 million in any 1 year), or being nonprofit organizations. For 
purposes of the RFA, we consider all hospices as small entities as that 
term is used in the RFA. 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. 
The effect of the proposed FY 2018 hospice payment update percentage 
results in an overall increase in estimated hospice payments of 1.0 
percent, or $180 million. Therefore, the Secretary has determined that 
this proposed rule will not create a significant economic impact on a 
substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. This proposed rule only 
affects hospices. Therefore, the Secretary has determined that this 
proposed rule would not have a significant impact on the operations of 
a substantial number of small rural hospitals.
    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 2017, that 
threshold is approximately $148 million. This proposed rule is not 
anticipated to have an effect on state, local, or tribal governments, 
in the aggregate, or on the private sector of $148 million or more.
    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 these criteria 
of Executive Order 13132, and have determined that it will not impose 
substantial direct costs on state or local governments.
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on last year's proposed rule will be the number of reviewers 
of this proposed rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this rule. It is 
possible that not all commenters reviewed last year's rule in detail, 
and it is also possible that some reviewers chose not to comment on the 
proposed rule. For these reasons we thought that the number of past 
commenters would be a fair estimate of the number of reviewers of this 
rule. We welcome any comments on the approach in estimating the number 
of entities which will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $90.16 per hour, including overhead and fringe benefits 
(https://www.bls.gov/oes/2015/may/naics4_621100.htm). Assuming an 
average reading speed, we estimate that it would take approximately 1.3 
hours for the staff to review half of this proposed rule. For each 
hospice that reviews the rule, the estimated cost is $117.21 (1.3 hours 
x

[[Page 20791]]

$90.16). Therefore, we estimate that the total cost of reviewing this 
regulation is $7, 032.60 ($117.21 x 60 reviewers).

D. Detailed Economic Analysis

    The proposed FY 2018 hospice payment impacts appear in Table 20. We 
tabulate the resulting payments according to the classifications in 
Table 20 (for example, facility type, geographic region, facility 
ownership), and compare the difference between current and proposed 
payments to determine the overall impact.
    The first column shows the breakdown of all hospices by urban or 
rural status, census region, hospital-based or freestanding status, 
size, and type of ownership, and hospice base. The second column shows 
the number of hospices in each of the categories in the first column.
    The third column shows the effect of the annual update to the wage 
index. This represents the effect of using the proposed FY 2018 hospice 
wage index. The aggregate impact of this change is zero percent, due to 
the proposed hospice wage index standardization factor. However, there 
are distributional effects of the proposed FY 2018 hospice wage index.
    The fourth column shows the effect of the proposed hospice payment 
update percentage for FY 2018. The proposed FY 2018 hospice payment 
update percentage of 1 percent is mandated by section 1814(i)(1)(C) of 
the Act, as amended by section 411(d) of the MACRA.
    The fifth column shows the effect of all the proposed changes on FY 
2018 hospice payments. It is projected that aggregate payments will 
increase by 1.0 percent, assuming hospices do not change their service 
and billing practices in response.
    As illustrated in Table 20, the combined effects of all the 
proposals vary by specific types of providers and by location. For 
example, due to the changes proposed in this rule, the estimated 
impacts on FY 2018 payments range from a 0.9 percent decrease for 
hospices providing care in the rural outlying region to a 1.7 percent 
increase for hospices providing care in the urban Pacific region.

                               Table 20--Projected Impact to Hospices for FY 2018
----------------------------------------------------------------------------------------------------------------
                                                                                    Proposed FY
                                                     Number of     Updated  wage   2018 hospice    FY 2018 total
                                                     providers       data  (%)        payment       change (%)
                                                                                    update (%)
(1)                                                          (2)             (3)             (4)             (5)
----------------------------------------------------------------------------------------------------------------
All Hospices....................................           4,295             0.0             1.0             1.0
Urban Hospices..................................           3,323             0.0             1.0             1.0
Rural Hospices..................................             972             0.1             1.0             1.1
Urban Hospices--New England.....................             134            -0.7             1.0             0.3
Urban Hospices--Middle Atlantic.................             249             0.1             1.0             1.1
Urban Hospices--South Atlantic..................             429            -0.3             1.0             0.7
Urban Hospices--East North Central..............             405            -0.1             1.0             0.9
Urban Hospices--East South Central..............             159             0.0             1.0             1.0
Urban Hospices--West North Central..............             229            -0.2             1.0             0.8
Urban Hospices--West South Central..............             648             0.0             1.0             1.0
Urban Hospices--Mountain........................             315            -0.1             1.0             0.9
Urban Hospices--Pacific.........................             716             0.7             1.0             1.7
Urban Hospices--Outlying........................              39            -0.6             1.0             0.4
Rural Hospices--New England.....................              23             0.0             1.0             1.0
Rural Hospices--Middle Atlantic.................              40             0.6             1.0             1.6
Rural Hospices--South Atlantic..................             134             0.1             1.0             1.1
Rural Hospices--East North Central..............             140             0.2             1.0             1.2
Rural Hospices--East South Central..............             124            -0.1             1.0             0.9
Rural Hospices--West North Central..............             181             0.2             1.0             1.2
Rural Hospices--West South Central..............             180             0.1             1.0             1.1
Rural Hospices--Mountain........................             101             0.2             1.0             1.2
Rural Hospices--Pacific.........................              46             0.3             1.0             1.3
Rural Hospices--Outlying........................               3            -1.9             1.0            -0.9
0--3,499 RHC Days (Small).......................             960             0.2             1.0             1.2
3,500-19,999 RHC Days (Medium)..................           2,001             0.1             1.0             1.1
20,000+ RHC Days (Large)........................           1,334             0.0             1.0             1.0
Non-Profit Ownership............................           1,058             0.0             1.0             1.0
For Profit Ownership............................           2,682             0.1             1.0             1.1
Government Ownership............................             155            -0.3             1.0             0.7
Other Ownership.................................             400            -0.2             1.0             0.8
Freestanding Facility Type......................           3,323             0.0             1.0             1.0
HHA/Facility-Based Facility Type................             972             0.0             1.0             1.0
----------------------------------------------------------------------------------------------------------------
Source: FY 2016 hospice claims from the Chronic Condition Data Warehouse (CCW) Research Identifiable File (RIF)
  in January 2017.
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


[[Page 20792]]

E. Alternatives Considered

    Since the hospice payment update percentage is determined based on 
statutory requirements, we did not consider not updating hospice 
payment rates by the payment update percentage. Payment rates since FY 
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 years must be the market basket percentage for that FY. 
Section 3401(g) of the Affordable Care Act also mandates that, starting 
with FY 2013 (and in subsequent years), the hospice payment update 
percentage will be annually reduced by changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
In addition, section 3401(g) of the Affordable Care Act mandates that 
in FY 2013 through FY 2019, the hospice payment update percentage will 
be reduced by an additional 0.3 percentage point (although for FY 2014 
to FY 2019, the potential 0.3 percentage point reduction is subject to 
suspension under conditions specified in section 1814(i)(1)(C)(v) of 
the Act). For FY 2018, since the hospice payment update percentage is 
determined based on statutory requirements at section 1814(i)(1)(C) of 
the Act, as amended by section 411(d) of the MACRA, we cannot consider 
not updating the hospice payment rates by the hospice payment update 
percentage, nor can we consider updating the hospice payment rates by 
the hospice payment update percentage absent the change to section 
1814(i)(1)(C) as amended by MACRA.

F. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 21, we have 
prepared an accounting statement showing the classification of the 
expenditures associated with the provisions of this proposed rule. 
Table 21 provides our best estimate of the possible changes in Medicare 
payments under the hospice benefit as a result of the policies in this 
proposed rule. This estimate is based on the data for 4,295 hospices in 
our impact analysis file, which was constructed using FY 2016 claims 
available in January 2017. All expenditures are classified as transfers 
to hospices.

  Table 21--Accounting Statement: Classification of Estimated Transfers
                   and Costs, From FY 2017 to FY 2018
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $ 180 million.\*\
From Whom to Whom?.....................  Federal Government to Medicare
                                          Hospices.
------------------------------------------------------------------------
* The net increase of $180 million in transfer payments is a result of
  the 1.0 percent hospice payment update compared to payments in FY
  2017.

G. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, titled ``Reducing Regulation and Controlling 
Regulatory Costs,'' was issued on January 30, 2017 (82 FR 9339, 
February 3, 2017). Section 2(a) of Executive Order 13771 requires an 
agency, unless prohibited by law, to identify at least two existing 
regulations to be repealed when the agency publicly proposes for notice 
and comment, or otherwise promulgates, a new regulation. In furtherance 
of this requirement, section 2(c) of Executive Order 13771 requires 
that the new incremental costs associated with new regulations shall, 
to the extent permitted by law, be offset by the elimination of 
existing costs associated with at least two prior regulations. OMB's 
implementation guidance, issued on April 5, 2017, explains that 
``Federal spending regulatory actions that cause only income transfers 
between taxpayers and program beneficiaries (for example, regulations 
associated with . . . Medicare spending) are considered `transfer 
rules' and are not covered by EO 13771. . . . However . . . such 
regulatory actions may impose requirements apart from transfers . . . 
In those cases, the actions would need to be offset to the extent they 
impose more than de minimis costs. Examples of ancillary requirements 
that may require offsets include new reporting or recordkeeping 
requirements.'' It has been determined that this proposed rule is a 
transfer rule that does not impose more than de minimis costs as 
described above and thus is not a regulatory action for the purposes of 
EO 13771.

H. Conclusion

    We estimate that aggregate payments to hospices in FY 2018 would 
increase by $180 million, or 1.0 percent, compared to payments in FY 
2017. We estimate that in FY 2018, hospices in urban and rural areas 
would experience, on average, 1.0 percent and 1.1 percent increases, 
respectively, in estimated payments compared to FY 2017. Hospices 
providing services in the urban Pacific and rural Middle Atlantic 
regions would experience the largest estimated increases in payments of 
1.7 percent and 1.6 percent, respectively. Hospices serving patients in 
urban areas in the New England region would experience, on average, the 
lowest estimated increase of 0.3 percent in FY 2018 payments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

    Dated: April 12, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: April 17, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-08563 Filed 4-27-17; 4:15 pm]
 BILLING CODE 4120-01-P