[Federal Register Volume 82, Number 144 (Friday, July 28, 2017)]
[Proposed Rules]
[Pages 35270-35393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15825]



[[Page 35269]]

Vol. 82

Friday,

No. 144

July 28, 2017

Part II





Department of Health and Human Services





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 Centers for Medicare & Medicaid Services





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42 CFR Parts 409 and 484





 Medicare and Medicaid Programs; CY 2018 Home Health Prospective 
Payment System Rate Update and Proposed CY 2019 Case-Mix Adjustment 
Methodology Refinements; Home Health Value-Based Purchasing Model; and 
Home Health Quality Reporting Requirements; Proposed Rule

  Federal Register / Vol. 82 , No. 144 / Friday, July 28, 2017 / 
Proposed Rules  

[[Page 35270]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409 and 484

[CMS-1672-P]
RIN 0938-AT01


Medicare and Medicaid Programs; CY 2018 Home Health Prospective 
Payment System Rate Update and Proposed CY 2019 Case-Mix Adjustment 
Methodology Refinements; Home Health Value-Based Purchasing Model; and 
Home Health Quality Reporting Requirements

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule updates the home health prospective payment 
system (HH PPS) payment rates, including the national, standardized 60-
day episode payment rates, the national per-visit rates, and the non-
routine medical supply (NRS) conversion factor, effective for home 
health episodes of care ending on or after January 1, 2018. This rule 
also: updates the HH PPS case-mix weights using the most current, 
complete data available at the time of rulemaking; implements the 3rd-
year of a 3-year phase-in of a reduction to the national, standardized 
60-day episode payment to account for estimated case-mix growth 
unrelated to increases in patient acuity (that is, nominal case-mix 
growth) between CY 2012 and CY 2014; and discusses our efforts to 
monitor the potential impacts of the rebasing adjustments that were 
implemented in CY 2014 through CY 2017. This rule proposes case-mix 
methodology refinements, as well as a change in the unit of payment 
from 60-day episodes of care to 30-day periods of care, to be 
implemented for home health services beginning on or after January 1, 
2019; and finally, this rule proposes changes to the Home Health Value-
Based Purchasing (HHVBP) Model and to the Home Health Quality Reporting 
Program (HH QRP).

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on September 25, 
2017.

ADDRESSES: In commenting, please refer to file code CMS-1672-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1672-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    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-1672-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.

(Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A 
stamp-in clock is available for persons wishing to retain a proof of 
filing by stamping in and retaining an extra copy of the comments 
being filed.)

    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call (410) 786-7195 in advance to schedule your arrival with one 
of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: For general information about the HH 
PPS, please send your inquiry via email to: 
[email protected].
    For information about the HHVBP model, please send your inquiry via 
email to: [email protected].
    Joan Proctor, (410) 786-0949 for information about the home health 
quality reporting program.

SUPPLEMENTARY INFORMATION: 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. EST. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of the Major Provisions
    C. Summary of Costs and Benefits
II. Background
    A. Statutory Background
    B. Current System for Payment of Home Health Services
    C. Updates to the Home Health Prospective Payment System
    D. Report to Congress: Home Health Study on Access to Care for 
Vulnerable Patient Populations and Subsequent Research and Analyses
III. Provisions of the Proposed Rule: Payment Under the Home Health 
Prospective Payment System (HH PPS)
    A. Monitoring for Potential Impacts--Affordable Care Act 
Rebasing Adjustments
    B. Proposed CY 2018 HH PPS Case-Mix Weights
    C. Proposed CY 2018 Home Health Payment Rate Update
    D. Payments for High-Cost Outliers under the HH PPS
    E. Proposed Implementation of the Home Health Groupings Model 
(HHGM) for CY 2019
IV. Proposed Provisions of the Home Health Value-Based Purchasing 
(HHVBP) Model
    A. Background
    B. Quality Measures
    C. Quality Measures for Future Consideration

[[Page 35271]]

V. Proposed Updates to the Home Health Care Quality Reporting 
Program (HH QRP)
    A. Background and Statutory Authority
    B. General Considerations Used for the Selection of Quality 
Measures for the HH QRP
    C. Accounting for Social Risk Factors in the HH QRP
    D. Proposed Data Elements for Removal From OASIS
    E. Proposed Collection of Standardized Patient Assessment Data 
Under the HH QRP
    F. HH QRP Quality Measures Proposed Beginning With the CY 2020 
HH QRP
    G. HH QRP Quality Measures and Measure Concepts Under 
Consideration for Future Years
    H. Proposed Standardized Patient Assessment Data
    I. Proposals Relating to the Form, Manner, and Timing of Data 
Submission Under the HH QRP
    J. Other Proposals for the CY 2019 HH QRP and Subsequent Years
    K. Proposals and Policies Regarding Public Display of Quality 
Measure Data for the HH QRP
    L. Proposed Mechanism for Providing Confidential Feedback 
Reports to HHAs
    M. Home Health Care CAHPS[supreg] Survey (HHCAHPS)
VI. Request for Information on CMS Flexibilities and Efficiencies
VII. Collection of Information Requirements
    A. Statutory Requirement for Solicitation of Comments
    B. Collection of Information Requirements for the HH QRP
    C. Submission of PRA-Related Comments
VIII. Response to Public Comments
IX. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Detailed Economic Analysis
    D. Alternatives Considered
    E. Accounting Statement and Table
    F. Reducing Regulation and Controlling Regulatory Costs
    G. Conclusion
X. Federalism Analysis
Regulation Text

Acronyms

    In addition, because of the many terms to which we refer by 
abbreviation in this proposed rule, we are listing these abbreviations 
and their corresponding terms in alphabetical order below:

ACH LOS Acute Care Hospital Length of Stay
ADL Activities of Daily Living
AM-PAC Activity Measure for Post-Acute Care
APU Annual Payment Update
ASPE Assistant Secretary for Planning and Evaluation
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999, (Pub. L. 106-113)
BIMS Brief Interview for Mental Status
BLS Bureau of Labor Statistics
CAD Coronary Artery Disease
CAH Critical Access Hospital
CAM Confusion Assessment Method
CARE Continuity Assessment Record and Evaluation
CASPER Certification and Survey Provider Enhanced Reports
CBSA Core-Based Statistical Area
CCN CMS Certification Number
CHF Congestive Heart Failure
CMI Case-Mix Index
CMP Civil Money Penalty
CMS Centers for Medicare & Medicaid Services
CoPs Conditions of Participation
COPD Chronic Obstructive Pulmonary Disease
CVD Cardiovascular Disease
CY Calendar Year
DM Diabetes Mellitus
DRA Deficit Reduction Act of 2005, Public Law 109-171, enacted 
February 8, 2006
DTI Deep Tissue Injury
EOC End of Care
FDL Fixed Dollar Loss
FI Fiscal Intermediaries
FR Federal Register
FY Fiscal Year
HAVEN Home Assessment Validation and Entry System
HCC Hierarchical Condition Categories
HCIS Health Care Information System
HH Home Health
HHA Home Health Agency
HHCAHPS Home Health Care Consumer Assessment of Healthcare Providers 
and Systems Survey
HH PPS Home Health Prospective Payment System
HHGM Home Health Groupings Model
HHQRP Home Health Quality Reporting Program
HHRG Home Health Resource Group
HHVBP Home Health Value-Based Purchasing
HIPPS Health Insurance Prospective Payment System
HVBP Hospital Value-Based Purchasing
IADL Instrumental Activities of Daily Living
ICD-9-CM International Classification of Diseases, Ninth Revision, 
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision, 
Clinical Modification
IH Inpatient Hospitalization
IMPACT Act Improving Medicare Care Transformation Act of 2014 (Pub. 
L. 113-185)
IPR Interim Performance Report
IRF Inpatient Rehabilitation Facility
IRF-PAI IRF Patient Assessment Instrument
IV Intravenous
LCDS LTCH CARE Data Set
LEF Linear Exchange Function
LTCH Long-Term Care Hospital
LUPA Low-Utilization Payment Adjustment
MACRA Medicare Access and CHIP Reauthorization Act of 2015
MAP Measure Applications Partnership
MDS Minimum Data Set
MEPS Medical Expenditures Panel Survey
MFP Multifactor productivity
MMA Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003, Pub. L. 108-173, enacted December 8, 2003
MSA Metropolitan Statistical Area
MSS Medical Social Services
NQF National Quality Forum
NQS National Quality Strategy
NRS Non-Routine Supplies
OASIS Outcome and Assessment Information Set
OBRA Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-2-3, 
enacted December 22, 1987
OCESAA Omnibus Consolidated and Emergency Supplemental 
Appropriations Act, Pub. L. 105-277, enacted October 21, 1998
OES Occupational Employment Statistics
OIG Office of Inspector General
OLS Ordinary Least Squares
OT Occupational Therapy
OMB Office of Management and Budget
PAC Post-Acute Care
PAC-PRD Post-Acute Care Payment Reform Demonstration
PAMA Protecting Access to Medicare Act of 2014
PEP Partial Episode Payment Adjustment
PHQ-2 Patient Health Questionnaire-2
PPOC Primary Point of Contact
PPS Prospective Payment System
PRA Paperwork Reduction Act
PRRB Provider Reimbursement Review Board
PT Physical Therapy
PY Performance Year
QAP Quality Assurance Plan
QIES Quality Improvement Evaluation System
QRP Quality Reporting Program
RAP Request for Anticipated Payment
RF Renal Failure
RFA Regulatory Flexibility Act, Pub. L. 96--354
RHHIs Regional Home Health Intermediaries
RIA Regulatory Impact Analysis
ROC Resumption of Care
SAF Standard Analytic File
SLP Speech-Language Pathology
SN Skilled Nursing
SNF Skilled Nursing Facility
SOC Start of Care
SSI Surgical Site Infection
TEP Technical Expert Panel
TPS Total Performance Score
UMRA Unfunded Mandates Reform Act of 1995.
VAD Vascular Access Device
VBP Value-Based Purchasing

I. Executive Summary

A. Purpose

    This proposed rule would update the payment rates for home health 
agencies (HHAs) for calendar year (CY) 2018, as required under section 
1895(b) of the Social Security Act (the Act). This proposed rule would 
update the case-mix weights under section 1895(b)(4)(A)(i) and 
(b)(4)(B) of the Act for CY 2018 and implement a 0.97 percent reduction 
to the national, standardized 60-day episode payment amount to account 
for case-mix growth

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unrelated to increases in patient acuity (that is, nominal case-mix 
growth) between CY 2012 and CY 2014, under the authority of section 
1895(b)(3)(B)(iv) of the Act. For home health services beginning on or 
after January 1, 2019, this rule also proposes case-mix methodology 
refinements under the authority set out at sections 1895(b)(4)(A)(i) 
and (b)(4)(B) of the Act, and a change in the unit of payment from a 
60-day episode of care to a 30-day period of care under the authority 
set out at section 1895(b)(2) of the Act. Additionally, this rule 
proposes changes to: The Home Health Value Based Purchasing (HHVBP) 
model under the authority of section 1115A of the Act; and the Home 
Health Quality Reporting Program (HH QRP) requirements under the 
authority of section 1895(b)(3)(B)(v) of the Act.

B. Summary of the Major Provisions

    Section III.A of this rule discusses our efforts to monitor for 
potential impacts due to the rebasing adjustments implemented in CY 
2014 through CY 2017, as mandated by section 3131(a) of the Patient 
Protection and Affordable Care Act of 2010 (Pub. L. 111-148, enacted 
March 23, 2010) as amended by the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152, enacted March 30, 2010), 
collectively referred to as the ``Affordable Care Act''. In the CY 2015 
HH PPS final rule (79 FR 66072), we finalized our proposal to 
recalibrate the case-mix weights every year with the most current and 
complete data available at the time of rulemaking. In section III.B of 
this rule, we are recalibrating the HH PPS case-mix weights, using the 
most current cost and utilization data available, in a budget neutral 
manner. Also in section III.B of this rule, as finalized in the CY 2016 
HH PPS final rule (80 FR 68624), we are implementing a reduction to the 
national, standardized 60-day episode payment rate for CY 2018 of 0.97 
percent to account for estimated case-mix growth unrelated to increases 
in patient acuity (that is, nominal case-mix growth) between CY 2012 
and CY 2014.
    In section III.C of this proposed rule, we would update the payment 
rates under the HH PPS by 1 percent for CY 2018 in accordance with 
section 411(d) of the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA) (Pub. L. 114-10, enacted April 16, 2015) which amended 
section 1895(b)(3)(B) of the Act. Additionally, section III.C of this 
rule, would update the CY 2018 home health wage index using FY 2014 
hospital cost report data. In section III.D of this proposed rule, we 
note that the fixed-dollar loss ratio would remain 0.55 for CY 2018 to 
pay up to, but no more than, 2.5 percent of total payments as outlier 
payments, as required by section 1895(b)(5)(A) of the Act.
    In section III.E of this rule we are proposing to implement case-
mix methodology refinements and a change in the unit of payment from a 
60-day episode of care to a 30-day period of care, effective for home 
health services beginning on or after January 1, 2019. The proposed 
home health groupings model (HHGM) relies more heavily on clinical 
characteristics and other patient information to place patients into 
meaningful payment categories, while eliminating therapy service use 
thresholds that are currently used to case-mix adjust payments under 
the HH PPS. This includes proposed changes in the episode timing 
categories, the addition of an admission source category, the creation 
of six clinical groups used to categorize patients based on their 
primary reason for home health care, revised functional levels and 
corresponding OASIS items, the addition of a comorbidity adjustment, 
and a proposed change in the Low-Utilization Payment Adjustment (LUPA) 
threshold. The LUPA add-on policy, the partial [episode] payment 
adjustment policy, and the methodology used to calculate payments for 
high-cost outliers would remain unchanged except for occurring on a 30-
day basis rather than a 60-day basis.
    In section IV of this rule, we are proposing changes to the Home 
Health Value-Based Purchasing (HHVBP) Model implemented January 1, 
2016. We are proposing to amend the definition of ``applicable 
measure'' to specify that the HHA would have to submit a minimum of 40 
completed surveys for Home Health Care Consumer Assessment of 
Healthcare Providers and Systems (HHCAHPS) measures, for purposes of 
receiving a performance score for any of the HHCAHPS measures, and for 
performance year (PY) 3 and subsequent years, to remove the Outcome and 
Assessment Information Set (OASIS)-based measure, Drug Education on All 
Medications Provided to Patient/Caregiver during All Episodes of Care, 
from the set of applicable measures. We are also soliciting public 
comments on composite quality measures for future consideration.
    In section V of this rule, we propose updates to the Home Health 
Quality Reporting Program, including: The replacement of one quality 
measure, the adoption of two new quality measures, the reporting of 
standardized patient assessment data in five categories described under 
the IMPACT Act, data submission requirements, exception and extension 
requirements, and reconsideration and appeals procedures.

C. Summary of Costs and Benefits

                 Table 1--Summary of Costs and Transfers
------------------------------------------------------------------------
     Provision description            Costs              Transfers
------------------------------------------------------------------------
CY 2018 HH PPS Payment Rate     .................  The overall economic
 Update.                                            impact of the HH PPS
                                                    payment rate update
                                                    is an estimated -$80
                                                    million (-0.4
                                                    percent) in payments
                                                    to HHAs.
CY 2018 HHVBP Model...........  .................  The overall economic
                                                    impact of the HHVBP
                                                    Model provision for
                                                    CY 2018 through 2022
                                                    is an estimated $378
                                                    million in total
                                                    savings from a
                                                    reduction in
                                                    unnecessary
                                                    hospitalizations and
                                                    SNF usage as a
                                                    result of greater
                                                    quality improvements
                                                    in the HH industry
                                                    (none of which is
                                                    attributable to the
                                                    changes proposed in
                                                    this proposed rule).
                                                    As for payments to
                                                    HHAs, there are no
                                                    aggregate increases
                                                    or decreases
                                                    expected to be
                                                    applied to the HHAs
                                                    competing in the
                                                    model.
CY 2019 HH QRP................  The overall        .....................
                                 economic impact
                                 of the HH QRP
                                 changes is a
                                 savings to HHAs
                                 of an estimated
                                 $44.9 million,
                                 beginning
                                 January 1, 2019.

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CY 2019 HH PPS Case-Mix         .................  The overall impact of
 Adjustment Methodology                             the proposed HH PPS
 Refinements.                                       case-mix adjustment
                                                    methodology
                                                    refinements,
                                                    including a change
                                                    in the unit of
                                                    payment from 60-day
                                                    episodes to 30-day
                                                    periods of care, is
                                                    an estimated -$950
                                                    million (-4.3
                                                    percent) in payments
                                                    to HHAs in CY 2019
                                                    if the refinements
                                                    are implemented in a
                                                    non-budget neutral
                                                    manner for 30-day
                                                    periods of care
                                                    beginning on or
                                                    after January 1,
                                                    2019. The overall
                                                    impact is an
                                                    estimated -$480
                                                    million (-2.2
                                                    percent) in payments
                                                    to HHAs in CY 2019
                                                    if the refinements
                                                    are implemented in a
                                                    partially budget-
                                                    neutral manner.
------------------------------------------------------------------------

II. Background

A. Statutory Background

    The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33, enacted 
August 5, 1997), significantly changed the way Medicare pays for 
Medicare HH services. Section 4603 of the BBA mandated the development 
of the HH PPS. Until the implementation of the HH PPS on October 1, 
2000, HHAs received payment under a retrospective reimbursement system.
    Section 4603(a) of the BBA mandated the development of a HH PPS for 
all Medicare-covered HH services provided under a plan of care (POC) 
that were paid on a reasonable cost basis by adding section 1895 of the 
Act, entitled ``Prospective Payment For Home Health Services.'' Section 
1895(b)(1) of the Act requires the Secretary to establish a HH PPS for 
all costs of HH services paid under Medicare.
    Section 1895(b)(3)(A) of the Act requires the following: (1) The 
computation of a standard prospective payment amount include all costs 
for HH services covered and paid for on a reasonable cost basis and 
that such amounts be initially based on the most recent audited cost 
report data available to the Secretary; and (2) the standardized 
prospective payment amount be adjusted to account for the effects of 
case-mix and wage levels among HHAs.
    Section 1895(b)(3)(B) of the Act addresses the annual update to the 
standard prospective payment amounts by the HH applicable percentage 
increase. Section 1895(b)(4) of the Act governs the payment 
computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act 
require the standard prospective payment amount to be adjusted for 
case-mix and geographic differences in wage levels. Section 
1895(b)(4)(B) of the Act requires the establishment of an appropriate 
case-mix change adjustment factor for significant variation in costs 
among different units of services.
    Similarly, section 1895(b)(4)(C) of the Act requires the 
establishment of wage adjustment factors that reflect the relative 
level of wages, and wage-related costs applicable to HH services 
furnished in a geographic area compared to the applicable national 
average level. Under section 1895(b)(4)(C) of the Act, the wage-
adjustment factors used by the Secretary may be the factors used under 
section 1886(d)(3)(E) of the Act.
    Section 1895(b)(5) of the Act gives the Secretary the option to 
make additions or adjustments to the payment amount otherwise paid in 
the case of outliers due to unusual variations in the type or amount of 
medically necessary care. Section 3131(b)(2) of the Affordable Care Act 
revised section 1895(b)(5) of the Act so that total outlier payments in 
a given year would not exceed 2.5 percent of total payments projected 
or estimated. The provision also made permanent a 10 percent agency-
level outlier payment cap.
    In accordance with the statute, as amended by the BBA, we published 
a final rule in the July 3, 2000 Federal Register (65 FR 41128) to 
implement the HH PPS legislation. The July 2000 final rule established 
requirements for the new HH PPS for HH services as required by section 
4603 of the BBA, as subsequently amended by section 5101 of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act for Fiscal 
Year 1999 (OCESAA), (Pub. L. 105-277, enacted October 21, 1998); and by 
sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP 
Balanced Budget Refinement Act of 1999, (BBRA) (Pub. L. 106-113, 
enacted November 29, 1999). The requirements include the implementation 
of a HH PPS for HH services, consolidated billing requirements, and a 
number of other related changes. The HH PPS described in that rule 
replaced the retrospective reasonable cost-based system that was used 
by Medicare for the payment of HH services under Part A and Part B. For 
a complete and full description of the HH PPS as required by the BBA, 
see the July 2000 HH PPS final rule (65 FR 41128 through 41214).
    Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 
109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) 
to the Act, requiring HHAs to submit data for purposes of measuring 
health care quality, and links the quality data submission to the 
annual applicable percentage increase. This data submission requirement 
is applicable for CY 2007 and each subsequent year. If an HHA does not 
submit quality data, the HH market basket percentage increase is 
reduced by 2 percentage points. In the November 9, 2006 Federal 
Register (71 FR 65884, 65935), we published a final rule to implement 
the pay-for-reporting requirement of the DRA, which was codified at 
Sec.  484.225(h) and (i) in accordance with the statute. The pay-for-
reporting requirement was implemented on January 1, 2007.
    The Affordable Care Act made additional changes to the HH PPS. One 
of the changes in section 3131 of the Affordable Care Act is the 
amendment to section 421(a) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173, 
enacted on December 8, 2003) as amended by section 5201(b) of the DRA. 
Section 421(a) of the MMA, as amended by section 3131 of the Affordable 
Care Act, requires that the Secretary increase, by 3 percent, the 
payment amount otherwise made under section 1895 of the Act, for HH 
services furnished in a rural area (as defined in section 1886(d)(2)(D) 
of the Act) with respect to episodes and visits ending on or after 
April 1, 2010, and before January 1, 2016.
    Section 210 of the MACRA amended section 421(a) of the MMA to 
extend the rural add-on for 2 more years. Section 421(a) of the MMA, as 
amended by section 210 of the MACRA, requires that the Secretary 
increase, by 3 percent, the payment amount otherwise made under section 
1895 of the Act, for HH services

[[Page 35274]]

provided in a rural area (as defined in section 1886(d)(2)(D) of the 
Act) with respect to episodes and visits ending on or after April 1, 
2010, and before January 1, 2018. Section 411(d) of MACRA amended 
section 1895(b)(3)(B) of the Act such that for home health payments for 
CY 2018, the market basket percentage increase shall be 1 percent.

B. Current System for Payment of Home Health Services

    Generally, Medicare currently makes payment under the HH PPS on the 
basis of a national, standardized 60-day episode payment rate that is 
adjusted for the applicable case-mix and wage index. The national, 
standardized 60-day episode rate includes the six HH disciplines 
(skilled nursing, HH aide, physical therapy, speech-language pathology, 
occupational therapy, and medical social services). Payment for non-
routine supplies (NRS) is not part of the national, standardized 60-day 
episode rate, but is computed by multiplying the relative weight for a 
particular NRS severity level by the NRS conversion factor. Payment for 
durable medical equipment covered under the HH benefit is made outside 
the HH PPS payment system. To adjust for case-mix, the HH PPS uses a 
153-category case-mix classification system to assign patients to a 
home health resource group (HHRG). The clinical severity level, 
functional severity level, and service utilization are computed from 
responses to selected data elements in the OASIS assessment instrument 
and are used to place the patient in a particular HHRG. Each HHRG has 
an associated case-mix weight which is used in calculating the payment 
for an episode. Therapy service use is measured by the number of 
therapy visits provided during the episode and can be categorized into 
nine visit level categories (or thresholds): 0-5; 6; 7-9; 10; 11-13; 
14-15; 16-17; 18-19; and 20 or more visits.
    For episodes with four or fewer visits, Medicare pays national per-
visit rates based on the discipline(s) providing the services. An 
episode consisting of four or fewer visits within a 60-day period 
receives what is referred to as a low-utilization payment adjustment 
(LUPA). Medicare also adjusts the national standardized 60-day episode 
payment rate for certain intervening events that are subject to a 
partial episode payment adjustment (PEP adjustment). For certain cases 
that exceed a specific cost threshold, an outlier adjustment may also 
be available.

C. Updates to the Home Health Prospective Payment System

    As required by section 1895(b)(3)(B) of the Act, we have 
historically updated the HH PPS rates annually in the Federal Register. 
The August 29, 2007 final rule with comment period set forth an update 
to the 60-day national episode rates and the national per-visit rates 
under the HH PPS for CY 2008. The CY 2008 HH PPS final rule included an 
analysis performed on CY 2005 HH claims data, which indicated a 12.78 
percent increase in the observed case-mix since 2000. Case-mix 
represents the variations in conditions of the patient population 
served by the HHAs. Subsequently, a more detailed analysis was 
performed on the 2005 case-mix data to evaluate if any portion of the 
12.78 percent increase was associated with a change in the actual 
clinical condition of HH patients. We identified 8.03 percent of the 
total case-mix change as real, and therefore, decreased the 12.78 
percent of total case-mix change by 8.03 percent to get a final nominal 
case-mix increase measure of 11.75 percent (0.1278 * (1-0.0803) = 
0.1175).
    To account for the changes in case-mix that were not related to an 
underlying change in patient health status, we implemented a reduction, 
over 4 years, to the national, standardized 60-day episode payment 
rates. That reduction was to be 2.75 percent per year for 3 years 
beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011. 
In the CY 2011 HH PPS final rule (76 FR 68532), we updated our analyses 
of case-mix change and finalized a reduction of 3.79 percent, instead 
of 2.71 percent, for CY 2011 and deferred finalizing a payment 
reduction for CY 2012 until further study of the case-mix change data 
and methodology was completed.
    In the CY 2012 HH PPS final rule (76 FR 68526), we updated the 60-
day national episode rates and the national per-visit rates. In 
addition, as discussed in the CY 2012 HH PPS final rule (76 FR 68528), 
our analysis indicated that there was a 22.59 percent increase in 
overall case-mix from 2000 to 2009 and that only 15.76 percent of that 
overall observed case-mix percentage increase was due to real case-mix 
change. As a result of our analysis, we identified a 19.03 percent 
nominal increase in case-mix. At that time, to fully account for the 
19.03 percent nominal case-mix growth identified from 2000 to 2009, we 
finalized a 3.79 percent payment reduction in CY 2012 and a 1.32 
percent payment reduction for CY 2013.
    In the CY 2013 HH PPS final rule (77 FR 67078), we implemented a 
1.32 percent reduction to the payment rates for CY 2013 to account for 
nominal case-mix growth from 2000 through 2010. When taking into 
account the total measure of case-mix change (23.90 percent) and the 
15.97 percent of total case-mix change estimated as real from 2000 to 
2010, we obtained a final nominal case-mix change measure of 20.08 
percent from 2000 to 2010 (0.2390 * (1 - 0.1597) = 0.2008). To fully 
account for the remainder of the 20.08 percent increase in nominal 
case-mix beyond that which was accounted for in previous payment 
reductions, we estimated that the percentage reduction to the national, 
standardized 60-day episode rates for nominal case-mix change would be 
2.18 percent. Although we considered proposing a 2.18 percent reduction 
to account for the remaining increase in measured nominal case-mix, we 
finalized the 1.32 percent payment reduction to the national, 
standardized 60-day episode rates in the CY 2012 HH PPS final rule (76 
FR 68532).
    Section 3131(a) of the Affordable Care Act requires that, beginning 
in CY 2014, we apply an adjustment to the national, standardized 60-day 
episode rate and other amounts that reflect factors such as changes in 
the number of visits in an episode, the mix of services in an episode, 
the level of intensity of services in an episode, the average cost of 
providing care per episode, and other relevant factors. Additionally, 
we must phase in any adjustment over a 4-year period in equal 
increments, not to exceed 3.5 percent of the amount (or amounts) as of 
the date of enactment of the Affordable Care Act, and fully implement 
the rebasing adjustments by CY 2017. The statute specifies that the 
maximum rebasing adjustment is to be no more than 3.5 percent per year 
of the CY 2010 rates. Therefore, in the CY 2014 HH PPS final rule (78 
FR 72256) for each year, CY 2014 through CY 2017, we finalized a fixed-
dollar reduction to the national, standardized 60-day episode payment 
rate of $80.95 per year, increases to the national per-visit payment 
rates per year, and a decrease to the NRS conversion factor of 2.82 
percent per year. We also finalized three separate LUPA add-on factors 
for skilled nursing, physical therapy, and speech-language pathology 
and removed 170 diagnosis codes from assignment to diagnosis groups in 
the HH PPS Grouper. In the CY 2015 HH PPS final rule (79 FR 66032), we 
implemented the 2nd year of the 4 year phase-in of the rebasing 
adjustments to the HH PPS payment rates and made changes to the

[[Page 35275]]

HH PPS case-mix weights. In addition, we simplified the face-to-face 
encounter regulatory requirements and the therapy reassessment 
timeframes.
    In the CY 2016 HH PPS final rule (80 FR 68624), we implemented the 
3rd year of the 4-year phase-in of the rebasing adjustments to the 
national, standardized 60-day episode payment amount, the national per-
visit rates and the NRS conversion factor (as outlined above). In the 
CY 2016 HH PPS final rule, we also recalibrated the HH PPS case-mix 
weights, using the most current cost and utilization data available, in 
a budget neutral manner and finalized reductions to the national, 
standardized 60-day episode payment rate in CY 2016, CY 2017, and CY 
2018 of 0.97 percent in each year to account for estimated case-mix 
growth unrelated to increases in patient acuity (that is, nominal case-
mix growth) between CY 2012 and CY 2014. Finally, section 421(a) of the 
MMA, as amended by section 210 of the MACRA, extended the payment 
increase of 3 percent for HH services provided in rural areas (as 
defined in section 1886(d)(2)(D) of the Act) to episodes or visits 
ending before January 1, 2018.
    In the CY 2017 HH PPS final rule (81 FR 76702), we implemented the 
last year of the 4-year phase-in of the rebasing adjustments to the 
national, standardized 60-day episode payment amount, the national per-
visit rates and the NRS conversion factor (as outlined above). We also 
finalized changes to the methodology used to calculate outlier payments 
under the authority of section 1895(b)(5) of the Act. Lastly, in 
accordance with section 1834(s) of the Act, as added by section 504(a) 
of the Consolidated Appropriations Act, 2016 (Pub. L. 114-113, enacted 
December 18, 2015), we implemented changes in payment for furnishing 
Negative Pressure Wound Therapy (NPWT) using a disposable device for 
patients under a home health plan of care for which payment would 
otherwise be made under section 1895(b) of the Act.

D. Report to Congress: Home Health Study on Access to Care for 
Vulnerable Patient Populations and Subsequent Research and Analyses

    Section 3131(d) of the Affordable Care Act required CMS to conduct 
a study on home health agency costs involved with providing ongoing 
access to care to low-income Medicare beneficiaries or beneficiaries in 
medically underserved areas, and in treating beneficiaries with varying 
levels of severity of illness and submit a report to Congress. As 
discussed in the CY 2016 HH PPS proposed rule (80 FR 39840) and the CY 
2017 HH PPS proposed rule (81 FR 43744), the findings from the Report 
to Congress on the ``Medicare Home Health Study: An Investigation on 
Access to Care and Payment for Vulnerable Patient Populations'', found 
that payment accuracy could be improved under the current payment 
system, particularly for patients with certain clinical characteristics 
requiring more nursing care than therapy.\1\
---------------------------------------------------------------------------

    \1\ The Report to Congress can be found in its entirety at 
https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.
---------------------------------------------------------------------------

    The research for the Report to Congress, released in December 2014, 
consisted of extensive analysis of both survey and administrative data. 
The CMS-developed surveys were given to physicians who referred 
vulnerable patient populations to Medicare home health and to Medicare-
certified HHAs.\2\ The response rates were 72 percent and 59 percent 
for the HHA and physician surveys, respectively. The results of the 
survey revealed that over 80 percent of respondent HHAs and over 90 
percent of respondent physicians reported that access to home health 
care for Medicare fee-for-service beneficiaries in their local area was 
excellent or good. When survey respondents reported access issues, 
specifically their inability to place or admit Medicare fee-for-service 
patients into home health, the most common reason reported (64 percent 
of respondent HHAs surveyed) was that the patients did not qualify for 
the Medicare home health benefit. HHAs and physicians also cited family 
or caregiver issues as an important contributing factor in the 
inability to admit or place patients. Only 17.2 percent of HHAs and 
16.7 percent of physicians reported insufficient payment as an 
important contributing factor in the inability to admit or place 
patients. The results of the CMS-conducted surveys suggested that CMS' 
ability to improve access for certain vulnerable patient populations 
through payment policy may be limited. However, we are able to revise 
the case-mix system to minimize differences in payment that could 
potentially be serving as a barrier to receiving care. In this rule, we 
propose to better align payment with resource use so that it reduces 
HHAs' financial incentives to select certain patients over others.
---------------------------------------------------------------------------

    \2\ For the purposes of the surveys, ``vulnerable patient 
populations'' were defined as beneficiaries who were either eligible 
for the Part D low-income subsidy (LIS) 27 or residing in a health 
professional shortage area (HPSA).
---------------------------------------------------------------------------

    However, we also performed an analysis of Medicare administrative 
data (CY 2010 Medicare claims and cost report data) and calculated 
margins for episodes of care. This was done because margin differences 
associated with patient clinical and social characteristics can 
indicate whether financial incentives exist in the current HH PPS to 
provide home health care for certain types of patients over others. 
Lower margins, if systematically associated with care for vulnerable 
patient populations, may indicate financial disincentives for HHAs to 
admit these patients, potentially creating access to care issues. The 
findings from the data analysis found that certain patient 
characteristics appear to be strongly associated with margin levels, 
and thus may create financial incentives to select certain patients 
over others. Margins were estimated to be lower for patients who 
required parenteral nutrition, who had traumatic wounds or ulcers, or 
required substantial assistance in bathing. For example, in CY 2010, 
episodes for patients with parenteral nutrition were, on average, 
associated with a $178.53 lower margin than episodes for patients 
without parenteral nutrition. Given that these variables are already 
included in the HH PPS case-mix system, the results indicated that 
modifications to the way the current case-mix system accounts for 
resource use differences may be needed to mitigate any financial 
incentives to select certain patients over others. Margins were also 
lower for beneficiaries who were admitted after acute or post-acute 
stays or who had certain poorly-controlled clinical conditions, such as 
poorly-controlled pulmonary disorders, indicating that accounting for 
additional patient characteristic variables in the HH PPS case-mix 
system may also reduce financial incentives to select certain types of 
patients over others. More information on the results from the Home 
Health Study required by section 3131(d) of the Affordable Care Act can 
be found in the Report to Congress on the ``Medicare Home Health Study: 
An Investigation on Access to Care and Payment for Vulnerable Patient 
Populations'' available at https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html.
    Section 3131(d)(5) of the Affordable Care Act allowed for the 
Secretary to determine whether a Medicare demonstration project is 
appropriate to conduct based on the result of the Home Health Study. If 
the Secretary determined it was appropriate to conduct the 
demonstration project under this subsection, the Secretary was to 
conduct the project for a four year period beginning not later than 
January

[[Page 35276]]

1, 2015. We did not determine that it was appropriate to conduct a 
demonstration project based on the findings from the Home Health Study. 
Rather, the findings from the Home Health Study suggested that follow-
on work should be conducted to better align payments with costs under 
the authority of section 1895 of the Act.
    In addition to the findings from the Report to Congress on the 
``Medicare Home Health Study: An Investigation on Access to Care and 
Payment for Vulnerable Patient Populations'', concerns have also been 
raised about the use of therapy thresholds in the current payment 
system. Under the current payment system, HHAs receive higher payments 
for providing more therapy visits once certain thresholds are reached. 
As a result, the average number of therapy visits per 60-day episode of 
care have increased since the implementation of the HH PPS, while the 
number of skilled nursing and home health aide visits have decreased 
over the same time period as shown in Figure 3 in section III.A of this 
rule. A study examining an option of using predicted, rather than 
actual, therapy visits in the HH found that in 2013, 58 percent of home 
health episodes included some therapy services, and these episodes 
accounted for 72 percent of all Medicare home health payments.\3\ 
Figure 1 from that study demonstrates that the percentage of episodes, 
and the average episode payment by the number of therapy visits for 
episodes with at least one therapy visit in 2013 increased sharply in 
therapy provision just over payment thresholds at 6, 7, and 16. 
According to the study, the presence of sharp increases in the 
percentage of episodes just above payment thresholds suggests a 
response to financial incentives in the home health payment system. 
Similarly, between 2008 and 2013, MedPAC reported a 26 percent increase 
in the number of episodes with at least 6 therapy visits, compared with 
a 1 percent increase in the number of episodes with five or fewer 
therapy visits.\4\ CMS analysis demonstrates that the average share of 
therapy visits across all 60-day episodes of care increased from 9 
percent of all visits in 1997, prior to the implementation of the HH 
PPS (see 64 FR 58151), to 39 percent of all visits in 2015 (see Table 2 
in section III.A. of this proposed rule).
---------------------------------------------------------------------------

    \3\ Fout B, Plotzke M, Christian T. (2016). Using Predicted 
Therapy Visits in the Medicare Home Health Prospective Payment 
System. Home Health Care Management & Practice, 29(2), 81-90. http://journals.sagepub.com/doi/abs/10.1177/1084822316678384.
    \4\ Medicare Payment Advisory Commission (MedPAC). ``Home Health 
Care Services.'' Report to Congress: Medicare Payment Policy. 
Washington, DC, March 2015. P. 223. Accessed on March 28, 2017 at: 
http://www.medpac.gov/docs/default-source/reports/mar2015_entirereport_revised.pdf?sfvrsn=0.
[GRAPHIC] [TIFF OMITTED] TP28JY17.005

    Figure 1 suggests that HHAs may be responding to financial 
incentives in the home health payment system when making care plan 
decisions. Additionally, an investigation into the therapy practices of 
the four largest publically-traded home health companies, conducted by 
the Senate Committee on Finance in 2010, found that three out of the 
four companies investigated ``encouraged therapists to target the most 
profitable number of therapy visits, even when patient need alone may 
not have justified such patterns''.\5\ The Committee on Finance

[[Page 35277]]

investigation also highlighted the abrupt and dramatic responses the 
home health industry has taken to maximize reimbursement under the 
therapy threshold models (both the original 10-visit threshold model 
and under the revised thresholds implemented in the CY 2008 HH PPS 
final rule (72 FR 49762)). Under the HH PPS, the report noted that HHAs 
have broad discretion over the number of therapy visits to provide 
patients and therefore have control of the single-largest variable in 
determining reimbursement and overall margins. The report recommended 
that CMS closely examine a future payment approach that focuses on 
patient well-being and health characteristics, rather than the 
numerical utilization measures.
---------------------------------------------------------------------------

    \5\ Committee on Finance, United States Senate. Staff Report on 
Home Health and the Medicare Therapy Threshold. Washington, DC, 
2011. Accessed on March 28, 2017 at https://www.finance.senate.gov/imo/media/doc/Home_Health_Report_Final4.pdf.
---------------------------------------------------------------------------

    MedPAC also continues to recommend the removal of the therapy 
thresholds used for determining payment from the HH PPS, as it believes 
that such thresholds run counter to the goals of a prospective payment 
system, create financial incentives that detract from a focus on 
patient characteristics and care needs when agencies are setting plans 
of care for their patients, and incentivize unnecessary therapy 
utilization. For the average HHA, according to MedPAC, the increase in 
payment for therapy visits rises faster than costs resulting in 
financial incentives for HHAs to overprovide therapy services.\6\ HHAs 
that provide more therapy episodes tend to be more profitable and this 
higher profitability and rapid growth in the number of therapy episodes 
suggest that financial incentives are causing agencies to favor therapy 
services when possible.\7\ Eliminating therapy as a payment factor 
would base home health payment solely on patient characteristics, which 
is a more patient-focused approach to payment, as recommended by both 
MedPAC and previously by the Senate Committee on Finance.
---------------------------------------------------------------------------

    \6\ Medicare Payment Advisory Commission (MedPAC). ``Home Health 
Services.'' Report to Congress: Medicare Payment Policy. Washington, 
DC, March 2011. P. 182-183. Accessed on March 28, 2017 at http://www.medpac.gov/docs/default-source/reports/Mar11_Ch08.pdf?sfvrsn=0.
    \7\ Medicare Payment Advisory Commission (MedPAC). ``Home Health 
Care Services.'' Report to Congress: Medicare Payment Policy. 
Washington, DC, March 2017. P. 243-244. Accessed on March 28, 2017 
at http://www.medpac.gov/docs/default-source/reports/mar17_medpac_ch9.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    After considering the findings from the Report to Congress and 
recommendations from MedPAC and the Senate Committee on Finance, CMS, 
along with our contractor, conducted additional research on ways to 
improve the payment accuracy under the current payment system. 
Exploring all options and different models ultimately led us to further 
develop the Home Health Groupings Model (HHGM) proposal. The HHGM 
proposal uses 30-day periods, rather than 60-day episodes, and relies 
more heavily on clinical characteristics and other patient information 
(for example, principal diagnosis, functional level, comorbid 
conditions, admission source, and timing) to place patients into 
meaningful payment categories, rather than the current therapy driven 
system. We believe this patient-centered approach is consistent with 
how clinicians differentiate between home health patients and would 
improve payment accuracy and access for medically complex cases and not 
just cases receiving therapy. The HHGM proposal leverages many of the 
same aspects of the current system; however, the major differences 
between the current system and the HHGM proposal include a change from 
a 60-day to a 30-day billing cycle and the elimination of the therapy 
thresholds in the case-mix system.
    We shared the analyses and development of the HHGM with both 
internal and external stakeholders via technical expert panels, 
clinical workgroups, special open door forums, and in the CY 2016 HH 
PPS proposed rule (80 FR 39840) and the CY 2017 HH PPS proposed rule 
(81 FR 43744). Most recently, we posted a detailed technical report on 
the CMS Web site in December of 2016.\8\ After posting the technical 
report for the public to review, we also held additional technical 
expert panel and clinical workgroup webinars to garner feedback from 
the industry and conducted a National Provider call that occurred in 
January 2017 to solicit feedback from external stakeholders.\9\ The 
feedback we received during the National Provider call on the HHGM was 
positive. We discuss the HHGM proposal further below, in section III.E, 
and seek public comment on this proposal and the underlying analyses.
---------------------------------------------------------------------------

    \8\ Ab Associates. Medicare Home Health Prospective Payment 
System: Case-Mix Methodology Refinements. Overview of the Home 
Health Groupings Model. Cambridge, MA, November 18, 2016. Accessed 
on April 27, 2017 at: https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
    \9\ Centers for Medicare & Medicaid Services (CMS). ``Home 
Health Groupings Model Technical Report Call.'' Baltimore, MD, 
January 18, 2017. Accessed on April 27, 2017 at: https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2017-01-18-Home-Health.html?DLPage=2&DLEntries=10&DLSort=0&DLSortDir=descending.
---------------------------------------------------------------------------

III. Provisions of the Proposed Rule: Payment Under the Home Health 
Prospective Payment System (HH PPS)

A. Monitoring for Potential Impacts--Affordable Care Act Rebasing 
Adjustments

1. Analysis of FY 2015 HHA Cost Report Data
    As part of our efforts in monitoring the potential impacts of the 
rebasing adjustments finalized in the CY 2014 HH PPS final rule (78 FR 
72293), we continue to update our analysis of home health cost report 
and claims data. Previous years' cost report and claims data analyses 
and results can be found in the CY 2017 HH PPS proposed rule (81 FR 
43719 through 43720). For this proposed rule, we analyzed 2015 HHA cost 
report data and 2015 HHA claims data. To determine the 2015 average 
cost per visit per discipline, we applied the same trimming methodology 
outlined in the CY 2014 HH PPS proposed rule (78 FR 40284) and weighted 
the costs per visit from the 2015 cost reports by size, facility type, 
and urban/rural location so the costs per visit were nationally 
representative according to 2015 claims data. The 2015 average number 
of visits was taken from 2015 claims data. We estimated the cost of a 
60-day episode in CY 2015 to be $2,449.01 using 2015 cost report data 
as shown in Table 2. However, the national, standardized 60-day episode 
payment amount in CY 2015 was $2,961.38. For CY 2015, on average, 
payments were 21 percent higher than costs (($2,961.38--$2,449.01)/
$2,449.01).

                                    TABLE 2--2015 Estimated Cost per Episode
----------------------------------------------------------------------------------------------------------------
                                                            2015 Average       2015 Average       2015 60-day
                       Discipline                         costs per visit    number of visits    episode costs
----------------------------------------------------------------------------------------------------------------
Skilled Nursing........................................            $132.48               8.93          $1,183.05
Physical Therapy.......................................             156.32               5.39             842.56

[[Page 35278]]

 
Occupational Therapy...................................             154.64               1.41             218.04
Speech Pathology.......................................             170.96               0.29              49.58
Medical Social Services................................             220.07               0.14              30.81
Home Health Aides......................................              62.80               1.99             124.97
                                                        --------------------------------------------------------
    Total..............................................  .................              18.15           2,449.01
----------------------------------------------------------------------------------------------------------------
Source: Medicare cost reports pulled in February 2017 and Medicare claims data from 2014 and 2015 for episodes
  (excluding low-utilization payment adjusted episodes and partial-episode-payment adjusted episodes), linked to
  OASIS assessments for episodes ending in CY 2015.

2. Analysis of CY 2016 HHA Claims Data
    In the CY 2014 HH PPS final rule (78 FR 72283), some commenters 
expressed concern that the rebasing of the HH PPS payment rates would 
result in HHA closures and would therefore diminish access to home 
health services. In addition to examining more recent cost report data, 
for this proposed rule we examined home health claims data from the 
first 3 years of the 4-year phase-in of the rebasing adjustments (CY 
2014, CY 2015, and CY 2016), the first calendar year of the HH PPS (CY 
2001), and claims data for 2 years before implementation of the 
rebasing adjustments (CY 2012 and CY2013). Analysis of CY 2016 home 
health claims data indicates that the number of episodes and the number 
of home health users that received at least one episode of care 
remained virtually the same (change of less than 1 percent) from 2015 
to 2016, while the number of FFS beneficiaries increased 2 percent from 
2015 to 2016. Between 2013 and 2014 there appears to be a net decrease 
in the number of HHAs billing Medicare for home health services of 1.6 
percent, a continued decrease of 1.7 percent from 2014 to 2015, and a 
decrease of 2.5 percent from 2015 to 2016. The number of home health 
users, as a percentage of FFS beneficiaries, appears to have slightly 
decreased from 9.0 percent in 2012 to 8.7 percent in 2016, but remains 
higher than the 6.9 percent in 2001. In CY 2016, there were 2.9 HHAs 
per 10,000 FFS beneficiaries, which is still markedly higher than the 
1.9 HHAs per 10,000 FFS beneficiaries observed close to the 
implementation of the HH PPS in 2001 (see Table 3). Therefore, the 
rebasing adjustments made to the HH PPS payment rates in CYs 2014 
through 2016 do not appear to have resulted in significant HHA closures 
or otherwise diminished access to home health services.
---------------------------------------------------------------------------

    \10\ The data used for this table is not publicly available. 
Providers and researchers have access to similar data via the home 
health public use files at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/HHA.html and through the CMS program statistics Web site 
at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMSProgramStatistics/index.html.

                                        TABLE 3--Home Health Statistics, CY 2001 and CY 2012 Through CY 2016 \10\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2001            2012            2013            2014            2015            2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of episodes......................................       3,896,502       6,727,875       6,708,923       6,451,283       6,340,932       6,294,234
Beneficiaries receiving at least 1 episode (Home Health        2,412,318       3,446,122       3,484,579       3,381,635       3,365,512       3,350,174
 Users).................................................
Part A and/or B FFS beneficiaries.......................      34,899,167      38,224,640      38,505,609      38,506,534      38,506,534      38,555,150
Episodes per Part A and/or B FFS beneficiaries..........            0.11            0.18            0.17            0.17            0.17            0.16
Home health users as a percentage of Part A and/or B FFS            6.9%            9.0%            9.0%            8.8%            8.8%            8.7%
 beneficiaries..........................................
HHAs providing at least 1 episode.......................           6,511          11,746          11,889          11,693          11,381          11,102
HHAs per 10,000 Part A and/or B FFS beneficiaries.......             1.9             3.1             3.1             3.0             3.0             2.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on May 14, 2014 and August 19, 2014 for CY 2011, CY
  2012, and CY 2013 data; accessed on May 7, 2015 for CY 2001 and CY 2014 data; accessed on April 7, 2016 for CY 2015 data; and accessed on March 20,
  2017 for CY 2016 data and Medicare enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of
  beneficiaries in a given year with at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage
  coverage.
Note(s):These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and
  District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0''
  (``Non-payment/zero claims'') and ``2'' (``Interim--first claim'') are excluded. If a beneficiary is treated by providers from multiple states within
  a year the beneficiary is counted within each state's unique number of beneficiaries served.

    In addition to examining home health claims data from the first 
three years of the implementation of rebasing adjustments required by 
the Affordable Care Act, we examined trends in home health utilization 
for all years starting in CY 2001 and up through CY 2016. Figure 2, 
displays the average number of visits per 60-day episode of care and 
the average payment per visit. While the average payment per visit has 
steadily increased from approximately $116 in CY 2001 to $167 for CY 
2016, the average total number of visits per 60-day episode of care has 
declined, most notably between CY 2009 (21.7 visits per episode) and CY 
2010 (19.8 visits per episode), which was the first year that the 10 
percent agency-level cap on HHA outlier payments was implemented. The 
average of total visits per episode has steadily decreased from 21.7 in 
2009 to 17.9 in 2016.

[[Page 35279]]

[GRAPHIC] [TIFF OMITTED] TP28JY17.000

    Figure 3 displays the average number of visits by discipline type 
for a 60-day episode of care and shows that the number of therapy 
visits per 60-day episode of care has increased steadily. However, the 
number of skilled nursing visits has decreased from 10.7 in 2009 to 8.7 
in 2016. The number of home health aide visits has decreased from 5.6 
average visits in 2009 to 1.5 visits in 2016. The results of the home 
health study required by section 3131(d) of the Affordable Care Act 
suggest that the current home health payment system may discourage HHAs 
from serving patients with clinically complex and/or poorly controlled 
chronic conditions who do not qualify for therapy but require a large 
number of skilled nursing visits.\11\ The home health study results 
seem to be consistent with the recent trend in the decreased number of 
visits per episode of care driven by decreases in skilled nursing and 
home health aide services evident in Figures 2 and 3.
---------------------------------------------------------------------------

    \11\ The Report to Congress on the Home Health Study required by 
Section 3131(d) is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.

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[[Page 35280]]

[GRAPHIC] [TIFF OMITTED] TP28JY17.001

    As part of our monitoring efforts, we also examined the trends in 
episode timing and service use over time. The first and second episodes 
are considered ``early'' episodes, while third and later episodes are 
considered ``late'' episodes. Specifically, we examined the percentage 
of early episodes with 0 to 19 therapy visits, late episodes with 0 to 
19 therapy visits, and episodes with 20+ therapy visits from CY 2008 to 
CY 2016. In CY 2008, we implemented refinements to the HH PPS case-mix 
system. As part of those refinements, we added additional therapy 
thresholds and differentiated between early and late episodes for those 
episodes with less than 20+ therapy visits. When the case-mix system 
first differentiated payments between early and late episodes of care, 
late episodes of care tended to have higher case-mix weights compared 
to early episodes of care. Table 4 shows that while there was a 
substantial increase in the number of late episodes between 2008 and 
2009 (8 percentage points), since 2011 the number of late episodes as a 
percentage of total episodes has decreased over time. In 2015, the 
case-mix weights for the third and later episodes of care with 0 to 19 
therapy visits decreased as a result of the CY 2015 recalibration of 
the case-mix weights. The recalibration of the HH PPS case-mix weights, 
beginning in CY 2015, does not seem to have substantially impacted the 
percentage of early versus late episodes of care.
    The case-mix weights for episodes with 20+ therapy visits are not 
determined based on the timing of the episode of care. The percentage 
of episodes with 20+ therapy visits increased from 4.6 percent in CY 
2008 to 7.0 percent in CY 2016. The increase in the percentage of 
episodes with 20+ therapy visits is consistent with the overall 
observed increase in therapy visits provided during a 60-day episode of 
care (see Figure 3).

[[Page 35281]]



                                        TABLE 4--Home Health Episodes by Episode Timing, CY 2008 Through CY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of      % of early    Number of late     % of late
                                                          early episodes     episodes        episodes        episodes        Number of
                                                            (excluding      (excluding      (excluding      (excluding     episodes with   % of episodes
                  Year                     All episodes    episodes with   episodes with   episodes with   episodes with    20+ therapy      with 20+
                                                            20+ therapy     20+ therapy     20+ therapy     20+ therapy       visits      therapy visits
                                                              visits)         visits)         visits)         visits)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2008....................................       5,423,037       3,571,619            65.9       1,600,587            29.5         250,831             4.6
2009....................................       6,530,200       3,701,652            56.7       2,456,308            37.6         372,240             5.7
2010....................................       6,877,598       3,872,504            56.3       2,586,493            37.6         418,601             6.1
2011....................................       6,857,885       3,912,982            57.1       2,564,859            37.4         380,044             5.5
2012....................................       6,767,576       3,955,207            58.4       2,458,734            36.3         353,635             5.2
2013....................................       6,733,146       4,023,486            59.8       2,347,420            34.9         362,240             5.4
2014....................................       6,616,875       3,980,151            60.2       2,263,638            34.2         373,086             5.6
2015....................................       6,644,922       4,008,279            60.3       2,205,052            33.2         431,591             6.5
2016....................................       6,294,232       3,802,254            60.4       2,053,972            32.6         438,006             7.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on March 21, 2017.
Note(s): Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0'' (``Non-payment/zero
  claims'') and ``2'' (``Interim--first claim'') are excluded.

    We also examined trends in admission source for home health 
episodes over time. Specifically, we examined the admission source for 
the ``first or only'' episodes of care (first episodes in a sequence of 
adjacent episodes of care or the only episode of care) from CY 2008 
through CY 2016 (Figure 4). The percentage of first or only episodes 
with an acute admission source, defined as episodes with an inpatient 
hospital stay within the 14 days prior to a home health episode, has 
decreased from 38.6 percent in CY 2008 to 33.9 percent in CY 2016. The 
percentage of first or only episodes with a post-acute admission 
source, defined as episodes which had a stay at a skilled nursing 
facility (SNF), inpatient rehabilitation facility (IRF), or long term 
care hospital (LTCH) within 14 days prior to the home health episode, 
slightly increased from 16.5 percent in CY 2008 to 17.5 percent in CY 
2016. The percentage of first or only episodes with a community 
admission source, defined as episodes which did not have an acute or 
post-acute stay in the 14 days prior to the home health episode, 
increased from 37.4 percent in CY 2008 to 42.6 percent in CY 2016. Our 
findings on the trends in admission source are consistent with MedPAC's 
as outlined in their 2015 Report to the Congress.\12\ MedPAC examined 
admission source trends from 2002 up through 2013 and concluded that 
``there has been tremendous growth in the use of home health for 
patients residing in the community, episodes not preceded by a prior 
hospitalization. The high rates of volume growth for these types of 
episodes, which have more than doubled since 2001, suggest there is 
significant potential for overuse, particularly since Medicare does not 
currently require any cost sharing for home health care.''
---------------------------------------------------------------------------

    \12\ Medicare Payment Advisory Commission (MedPAC). ``Home 
Health Care Services.'' Report to the Congress: Medicare Payment 
Policy. Washington, DC, March 2015. P. 214. Accessed on 3/28/2017 at 
http://www.medpac.gov/docs/default-source/reports/chapter-9-home-health-care-services-march-2015-report-.pdf?sfvrsn=0.

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

[[Page 35282]]

[GRAPHIC] [TIFF OMITTED] TP28JY17.002

    We will continue to monitor for potential impacts due to the 
rebasing adjustments required by section 3131(a) of the Affordable Care 
Act and other policy changes in the future. Independent effects of any 
one policy may be difficult to discern in years where multiple policy 
changes occur in any given year.

B. Proposed CY 2018 HH PPS Case-Mix Weights

    In the CY 2015 HH PPS final rule (79 FR 66072), we finalized a 
policy to annually recalibrate the HH PPS case-mix weights--adjusting 
the weights relative to one another--using the most current, complete 
data available. To recalibrate the HH PPS case-mix weights for CY 2018, 
we will use the same methodology finalized in the CY 2008 HH PPS final 
rule (72 FR 49762), the CY 2012 HH PPS final rule (76 FR 68526), and 
the CY 2015 HH PPS final rule (79 FR 66032). Annual recalibration of 
the HH PPS case-mix weights ensures that the case-mix weights reflect, 
as accurately as possible, current home health resource use and changes 
in utilization patterns.
    To generate the proposed CY 2018 HH PPS case-mix weights, we used 
CY 2016 home health claims data (as of March 17, 2017) with linked 
OASIS data. These data are the most current and complete data available 
at this time. We will use CY 2016 home health claims data (as of June 
30, 2017 or later) with linked OASIS data to generate the CY 2018 HH 
PPS case-mix weights in the CY 2018 HH PPS final rule. The process we 
used to calculate the HH PPS case-mix weights are outlined below.
    Step 1: Re-estimate the four-equation model to determine the 
clinical and functional points for an episode using wage-weighted 
minutes of care as our dependent variable for resource use. The wage-
weighted minutes of care are determined using the CY 2015 Bureau of 
Labor Statistics national hourly wage plus fringe rates for the six 
home health disciplines and the minutes per visit from the claim. The 
points for each of the variables for each leg of the model, updated 
with CY 2016 home health claims data, are shown in Table 5. The points 
for the clinical variables are added together to determine an episode's 
clinical score. The points for the functional variables are added 
together to determine an episode's functional score.

                                Table 5--Case-Mix Adjustment Variables and Scores
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                       Episode number within              1 or 2          1 or 2              3+              3+
                        sequence of adjacent
                        episodes.
                       Therapy visits...........            0-13             14+            0-13             14+
                       EQUATION:................               1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                               CLINICAL DIMENSION
----------------------------------------------------------------------------------------------------------------
1....................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis = Blindness/
                        Low Vision.
2....................  Primary or Other           ..............               1  ..............  ..............
                        Diagnosis = Blood
                        disorders.
3....................  Primary or Other           ..............               4  ..............               4
                        Diagnosis = Cancer,
                        selected benign
                        neoplasms.
4....................  Primary Diagnosis =        ..............               3  ..............               1
                        Diabetes.
5....................  Other Diagnosis =                       1  ..............  ..............  ..............
                        Diabetes.
6....................  Primary or Other                        2              16               1              10
                        Diagnosis = Dysphagia
                        AND Primary or Other
                        Diagnosis = Neuro 3--
                        Stroke.

[[Page 35283]]

 
7....................  Primary or Other                        1               6  ..............               6
                        Diagnosis = Dysphagia
                        AND M1030 (Therapy at
                        home) = 3 (Enteral).
8....................  Primary or Other           ..............  ..............  ..............               2
                        Diagnosis =
                        Gastrointestinal
                        disorders.
9....................  Primary or Other           ..............               7  ..............  ..............
                        Diagnosis =
                        Gastrointestinal
                        disorders AND M1630
                        (ostomy)= 1 or 2.
10...................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis =
                        Gastrointestinal
                        disorders AND Primary or
                        Other Diagnosis = Neuro
                        1--Brain disorders and
                        paralysis, OR Neuro 2--
                        Peripheral neurological
                        disorders, OR Neuro 3--
                        Stroke, OR Neuro 4--
                        Multiple Sclerosis.
11...................  Primary or Other                        1               3  ..............               2
                        Diagnosis = Heart
                        Disease OR Hypertension.
12...................  Primary Diagnosis = Neuro               2               9               6               9
                        1--Brain disorders and
                        paralysis.
13...................  Primary or Other           ..............               4  ..............               4
                        Diagnosis = Neuro 1--
                        Brain disorders and
                        paralysis AND M1840
                        (Toilet transfer) = 2 or
                        more.
14...................  Primary or Other                        2               4               1               4
                        Diagnosis = Neuro 1--
                        Brain disorders and
                        paralysis OR Neuro 2--
                        Peripheral neurological
                        disorders AND M1810 or
                        M1820 (Dressing upper or
                        lower body)= 1, 2, or 3.
15...................  Primary or Other                        3               9               2               4
                        Diagnosis = Neuro 3--
                        Stroke.
16...................  Primary or Other           ..............               2  ..............  ..............
                        Diagnosis = Neuro 3--
                        Stroke AND M1810 or
                        M1820 (Dressing upper or
                        lower body)= 1, 2, or 3.
17...................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis = Neuro 3--
                        Stroke AND M1860
                        (Ambulation) = 4 or more.
18...................  Primary or Other                        3               7               5              10
                        Diagnosis = Neuro 4--
                        Multiple Sclerosis AND
                        AT LEAST ONE OF THE
                        FOLLOWING: M1830
                        (Bathing) = 2 or more OR
                        M1840 (Toilet transfer)
                        = 2 or more OR M1850
                        (Transferring) = 2 or
                        more OR M1860
                        (Ambulation) = 4 or more.
19...................  Primary or Other                        7               1               7  ..............
                        Diagnosis = Ortho 1--Leg
                        Disorders or Gait
                        Disorders AND M1324
                        (most problematic
                        pressure ulcer stage)=
                        1, 2, 3 or 4.
20...................  Primary or Other                        3  ..............               3               7
                        Diagnosis = Ortho 1--Leg
                        OR Ortho 2--Other
                        orthopedic disorders AND
                        M1030 (Therapy at home)
                        = 1 (IV/Infusion) or 2
                        (Parenteral).
21...................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis = Psych 1--
                        Affective and other
                        psychoses, depression.
22...................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis = Psych 2--
                        Degenerative and other
                        organic psychiatric
                        disorders.
23...................  Primary or Other           ..............               2  ..............               1
                        Diagnosis = Pulmonary
                        disorders.
24...................  Primary or Other           ..............  ..............  ..............  ..............
                        Diagnosis = Pulmonary
                        disorders AND M1860
                        (Ambulation) = 1 or more.
25...................  Primary Diagnosis = Skin                3              17               6              17
                        1-Traumatic wounds,
                        burns, and post-
                        operative complications.
26...................  Other Diagnosis = Skin 1--              6              13               8              13
                        Traumatic wounds, burns,
                        post-operative
                        complications.
27...................  Primary or Other                        2  ..............  ..............  ..............
                        Diagnosis = Skin 1-
                        Traumatic wounds, burns,
                        and post-operative
                        complications OR Skin 2--
                        Ulcers and other skin
                        conditions AND M1030
                        (Therapy at home) = 1
                        (IV/Infusion) or 2
                        (Parenteral).
28...................  Primary or Other                        2              16               8              17
                        Diagnosis = Skin 2--
                        Ulcers and other skin
                        conditions.
29...................  Primary or Other                        2              17  ..............              17
                        Diagnosis = Tracheostomy.
30...................  Primary or Other           ..............              17  ..............              12
                        Diagnosis = Urostomy/
                        Cystostomy.
31...................  M1030 (Therapy at home) =  ..............              15               5              15
                        1 (IV/Infusion) or 2
                        (Parenteral).
32...................  M1030 (Therapy at home) =  ..............              15  ..............               8
                        3 (Enteral).
33...................  M1200 (Vision) = 1 or      ..............  ..............  ..............  ..............
                        more.
34...................  M1242 (Pain)= 3 or 4.....               3  ..............               2  ..............
35...................  M1311 = Two or more                     4               6               4               6
                        pressure ulcers at stage
                        3 or 4.
36...................  M1324 (Most problematic                 4              19               7              16
                        pressure ulcer stage)= 1
                        or 2.
37...................  M1324 (Most problematic                 8              31              10              25
                        pressure ulcer stage)= 3
                        or 4.
38...................  M1334 (Stasis ulcer                     4              13               7              13
                        status)= 2.
39...................  M1334 (Stasis ulcer                     7              17               9              17
                        status)= 3.
40...................  M1342 (Surgical wound                   2               7               6              13
                        status)= 2.
41...................  M1342 (Surgical wound      ..............               6               5              10
                        status)= 3.
42...................  M1400 (Dyspnea) = 2, 3,                 1               1  ..............  ..............
                        or 4.
43...................  M1620 (Bowel               ..............               3  ..............               2
                        Incontinence) = 2 to 5.
44...................  M1630 (Ostomy)= 1 or 2...               4              11               2               8
45                     M2030 (Injectable Drug     ..............  ..............  ..............  ..............
                        Use) = 0, 1, 2, or 3.
----------------------------------------------------------------------------------------------------------------

[[Page 35284]]

 
                                              FUNCTIONAL DIMENSION
----------------------------------------------------------------------------------------------------------------
46...................  M1810 or M1820 (Dressing                1  ..............  ..............  ..............
                        upper or lower body) =
                        1, 2, or 3.
47...................  M1830 (Bathing) = 2 or                  6               5               5               2
                        more.
48...................  M1840 (Toilet              ..............               1  ..............  ..............
                        transferring) = 2 or
                        more.
49...................  M1850 (Transferring) = 2                3               1               2  ..............
                        or more.
50...................  M1860 (Ambulation) = 1, 2               7  ..............               4  ..............
                        or 3.
51...................  M1860 (Ambulation) = 4 or               8               9               6               7
                        more.
----------------------------------------------------------------------------------------------------------------
Source: CY 2016 Medicare claims data for episodes ending on or before December 31, 2016 (as of December 31,
  2016) for which we had a linked OASIS assessment. LUPA episodes, outlier episodes, and episodes with PEP
  adjustments were excluded.
Note(s): Points are additive; however, points may not be given for the same line item in the table more than
  once. Please see Medicare Home Health Diagnosis Coding guidance at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/coding_billing.html for definitions of primary and secondary diagnoses.

    In updating the four-equation model for CY 2018, using 2016 home 
health claims data (the last update to the four-equation model for CY 
2017 used CY 2015 home health claims data), there were few changes to 
the point values for the variables in the four-equation model. These 
relatively minor changes reflect the change in the relationship between 
the grouper variables and resource use between CY 2015 and CY 2016. The 
CY 2018 four-equation model resulted in 120 point-giving variables 
being used in the model (as compared to the 124 variables for the CY 
2017 recalibration). There were 8 variables that were added to the 
model and 12 variables that were dropped from the model due to the 
absence of additional resources associated with the variable. Of the 
variables that were in both the four-equation model for CY 2017 and the 
four-equation model for CY 2018, the points for 14 variables increased 
in the CY 2018 four-equation model and the points for 48 variables 
decreased in the CY 2018 4-equation model. There were 50 variables with 
the same point values.
    Step 2: Re-defining the clinical and functional thresholds so they 
are reflective of the new points associated with the CY 2018 four-
equation model. After estimating the points for each of the variables 
and summing the clinical and functional points for each episode, we 
look at the distribution of the clinical score and functional score, 
breaking the episodes into different steps. The categorizations for the 
steps are as follows:
     Step 1: First and second episodes, 0-13 therapy visits.
     Step 2.1: First and second episodes, 14-19 therapy visits.
     Step 2.2: Third episodes and beyond, 14-19 therapy visits.
     Step 3: Third episodes and beyond, 0-13 therapy visits.
     Step 4: Episodes with 20+ therapy visits.
    We then divide the distribution of the clinical score for episodes 
within a step such that a third of episodes are classified as low 
clinical score, a third of episodes are classified as medium clinical 
score, and a third of episodes are classified as high clinical score. 
The same approach is then done looking at the functional score. It was 
not always possible to evenly divide the episodes within each step into 
thirds due to many episodes being clustered around one particular 
score.\13\ Also, we looked at the average resource use associated with 
each clinical and functional score and used that as a guide for setting 
our thresholds. We grouped scores with similar average resource use 
within the same level (even if it meant that more or less than a third 
of episodes were placed within a level). The new thresholds, based off 
the CY 2018 four-equation model points are shown in Table 6.
---------------------------------------------------------------------------

    \13\ For Step 1, 45.4% of episodes were in the medium functional 
level (All with score 14).
    For Step 2.1, 87.3% of episodes were in the low functional level 
(Most with scores 5 to 7).
    For Step 2.2, 81.9% of episodes were in the low functional level 
(Most with score 1).
    For Step 3, 46.4% of episodes were in the medium functional 
level (Most with score 9).
    For Step 4, 48.6% of episodes were in the medium functional 
level (Most with score 5 or 6).

                                                                       Table 6--CY 2018 Clinical and Functional Thresholds
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          1st and 2nd episodes                                       3rd+ episodes                            All Episodes
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
                                                           0 to 13  therapy visits    14 to 19  therapy visits    0 to 13  therapy visits    14 to 19  therapy visits     20+ therapy  visits
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Grouping Step                                            1.........................  2.........................  3........................  4........................  5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Equations used to calculate points                       1.........................  2.........................  3........................  4........................  (2&4)
 (see Table B1)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dimension                              Severity Level    ..........................  ..........................  .........................  .........................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Clinical..........................  C1.................  0 to 1....................  0 to 1....................  0 to 1...................  0 to 1...................  0 to 3
                                    C2.................  2 to 3....................  2 to 7....................  2........................  2 to 9...................  4 to 16
                                    C3.................  4+........................  8+........................  3+.......................  10+......................  17+
Functional........................  F1.................  0 to 13...................  0 to 7....................  0 to 6...................  0 to 2...................  0 to 2
                                    F2.................  14........................  8 to 15...................  7 to 10..................  3 to 7...................  3 to 6
                                    F3.................  15+.......................  16+.......................  11+......................  8+.......................  7+
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 35285]]

    Step 3: Once the clinical and functional thresholds are determined 
and each episode is assigned a clinical and functional level, the 
payment regression is estimated with an episode's wage-weighted minutes 
of care as the dependent variable. Independent variables in the model 
are indicators for the step of the episode as well as the clinical and 
functional levels within each step of the episode. Like the four-
equation model, the payment regression model is also estimated with 
robust standard errors that are clustered at the beneficiary level. 
Table 7 shows the regression coefficients for the variables in the 
payment regression model updated with CY 2016 home health claims data. 
The R-squared value for the payment regression model is 0.5073 (an 
increase from 0.4919 for the CY 2017 recalibration).

                    Table 7--Payment Regression Model
------------------------------------------------------------------------
                                                              Payment
                                                            regression
                                                              from 4-
                                                          equation model
                                                            for CY2018
------------------------------------------------------------------------
Step 1, Clinical Score Medium...........................          $24.35
Step 1, Clinical Score High.............................           54.10
Step 1, Functional Score Medium.........................           71.10
Step 1, Functional Score High...........................          104.74
Step 2.1, Clinical Score Medium.........................           47.79
Step 2.1, Clinical Score High...........................          133.50
Step 2.1, Functional Score Medium.......................           30.46
Step 2.1, Functional Score High.........................           55.93
Step 2.2, Clinical Score Medium.........................           39.93
Step 2.2, Clinical Score High...........................          192.15
Step 2.2, Functional Score Medium.......................           17.99
Step 2.2, Functional Score High.........................           53.34
Step 3, Clinical Score Medium...........................           14.03
Step 3, Clinical Score High.............................           92.83
Step 3, Functional Score Medium.........................           56.27
Step 3, Functional Score High...........................           86.76
Step 4, Clinical Score Medium...........................           78.75
Step 4, Clinical Score High.............................          260.68
Step 4, Functional Score Medium.........................           25.95
Step 4, Functional Score High...........................           58.66
Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits.          497.79
Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits........          508.40
Step 3, 3rd+ Episodes, 0-13 Therapy Visits..............          -67.30
Step 4, All Episodes, 20+ Therapy Visits................          883.46
Intercept...............................................          382.25
------------------------------------------------------------------------
Source: CY 2016 Medicare claims data for episodes ending on or before
  December 31, 2016 (as of March 17, 2017) for which we had a linked
  OASIS assessment.

    Step 4: We use the coefficients from the payment regression model 
to predict each episode's wage-weighted minutes of care (resource use). 
We then divide these predicted values by the mean of the dependent 
variable (that is, the average wage-weighted minutes of care across all 
episodes used in the payment regression). This division constructs the 
weight for each episode, which is simply the ratio of the episode's 
predicted wage-weighted minutes of care divided by the average wage-
weighted minutes of care in the sample. Each episode is then aggregated 
into one of the 153 home health resource groups (HHRGs) and the ``raw'' 
weight for each HHRG was calculated as the average of the episode 
weights within the HHRG.
    Step 5: The raw weights associated with 0 to 5 therapy visits are 
then increased by 3.75 percent, the weights associated with 14-15 
therapy visits are decreased by 2.5 percent, and the weights associated 
with 20+ therapy visits are decreased by 5 percent. These adjustments 
to the case-mix weights were finalized in the CY 2012 HH PPS final rule 
(76 FR 68557) and were done to address MedPAC's concerns that the HH 
PPS overvalues therapy episodes and undervalues non-therapy episodes 
and to better align the case-mix weights with episode costs estimated 
from cost report data.\14\
---------------------------------------------------------------------------

    \14\ Medicare Payment Advisory Commission (MedPAC), Report to 
the Congress: Medicare Payment Policy. March 2011, P. 176.
---------------------------------------------------------------------------

    Step 6: After the adjustments in Step 5 are applied to the raw 
weights, the weights are further adjusted to create an increase in the 
payment weights for the therapy visit steps between the therapy 
thresholds. Weights with the same clinical severity level, functional 
severity level, and early/later episode status were grouped together. 
Then within those groups, the weights for each therapy step between 
thresholds are gradually increased. We do this by interpolating between 
the main thresholds on the model (from 0-5 to 14-15 therapy visits, and 
from 14-15 to 20+ therapy visits). We use a linear model to implement 
the interpolation so the payment weight increase for each step between 
the thresholds (such as the increase between 0-5 therapy visits and 6 
therapy visits and the increase between 6 therapy visits and 7-9 
therapy visits) are constant. This interpolation is identical to the 
process finalized in the CY 2012 HH PPS final rule (76 FR 68555).
    Step 7: The interpolated weights are then adjusted so that the 
average case-

[[Page 35286]]

mix for the weights is equal to 1.0000.\15\ This last step creates the 
proposed CY 2018 case-mix weights shown in Table 8.
---------------------------------------------------------------------------

    \15\ When computing the average, we compute a weighted average, 
assigning a value of one to each normal episode and a value equal to 
the episode length divided by 60 for PEPs.

                               Table 8--Proposed CY 2018 Case-Mix Payment Weights
----------------------------------------------------------------------------------------------------------------
                                                                 Clinical and functional  levels    Proposed CY
            Pay group                       Description          (1 = low; 2 = medium; 3 = high)    2018 weight
----------------------------------------------------------------------------------------------------------------
10111............................  1st and 2nd Episodes, 0 to 5  C1F1S1                                   0.5617
                                    Therapy Visits.
10112............................  1st and 2nd Episodes, 6       C1F1S2                                   0.6925
                                    Therapy Visits.
10113............................  1st and 2nd Episodes, 7 to 9  C1F1S3                                   0.8232
                                    Therapy Visits.
10114............................  1st and 2nd Episodes, 10      C1F1S4                                   0.9539
                                    Therapy Visits.
10115............................  1st and 2nd Episodes, 11 to   C1F1S5                                   1.0846
                                    13 Therapy Visits.
10121............................  1st and 2nd Episodes, 0 to 5  C1F2S1                                   0.6662
                                    Therapy Visits.
10122............................  1st and 2nd Episodes, 6       C1F2S2                                   0.7845
                                    Therapy Visits.
10123............................  1st and 2nd Episodes, 7 to 9  C1F2S3                                   0.9027
                                    Therapy Visits.
10124............................  1st and 2nd Episodes, 10      C1F2S4                                   1.0209
                                    Therapy Visits.
10125............................  1st and 2nd Episodes, 11 to   C1F2S5                                   1.1392
                                    13 Therapy Visits.
10131............................  1st and 2nd Episodes, 0 to 5  C1F3S1                                   0.7157
                                    Therapy Visits.
10132............................  1st and 2nd Episodes, 6       C1F3S2                                   0.8311
                                    Therapy Visits.
10133............................  1st and 2nd Episodes, 7 to 9  C1F3S3                                   0.9464
                                    Therapy Visits.
10134............................  1st and 2nd Episodes, 10      C1F3S4                                   1.0618
                                    Therapy Visits.
10135............................  1st and 2nd Episodes, 11 to   C1F3S5                                   1.1772
                                    13 Therapy Visits.
10211............................  1st and 2nd Episodes, 0 to 5  C2F1S1                                   0.5975
                                    Therapy Visits.
10212............................  1st and 2nd Episodes, 6       C2F1S2                                   0.7343
                                    Therapy Visits.
10213............................  1st and 2nd Episodes, 7 to 9  C2F1S3                                   0.8711
                                    Therapy Visits.
10214............................  1st and 2nd Episodes, 10      C2F1S4                                   1.0078
                                    Therapy Visits.
10215............................  1st and 2nd Episodes, 11 to   C2F1S5                                   1.1446
                                    13 Therapy Visits.
10221............................  1st and 2nd Episodes, 0 to 5  C2F2S1                                   0.7020
                                    Therapy Visits.
10222............................  1st and 2nd Episodes, 6       C2F2S2                                   0.8263
                                    Therapy Visits.
10223............................  1st and 2nd Episodes, 7 to 9  C2F2S3                                   0.9506
                                    Therapy Visits.
10224............................  1st and 2nd Episodes, 10      C2F2S4                                   1.0749
                                    Therapy Visits.
10225............................  1st and 2nd Episodes, 11 to   C2F2S5                                   1.1991
                                    13 Therapy Visits.
10231............................  1st and 2nd Episodes, 0 to 5  C2F3S1                                   0.7514
                                    Therapy Visits.
10232............................  1st and 2nd Episodes, 6       C2F3S2                                   0.8729
                                    Therapy Visits.
10233............................  1st and 2nd Episodes, 7 to 9  C2F3S3                                   0.9943
                                    Therapy Visits.
10234............................  1st and 2nd Episodes, 10      C2F3S4                                   1.1157
                                    Therapy Visits.
10235............................  1st and 2nd Episodes, 11 to   C2F3S5                                   1.2372
                                    13 Therapy Visits.
10311............................  1st and 2nd Episodes, 0 to 5  C3F1S1                                   0.6412
                                    Therapy Visits.
10312............................  1st and 2nd Episodes, 6       C3F1S2                                   0.7929
                                    Therapy Visits.
10313............................  1st and 2nd Episodes, 7 to 9  C3F1S3                                   0.9446
                                    Therapy Visits.
10314............................  1st and 2nd Episodes, 10      C3F1S4                                   1.0963
                                    Therapy Visits.
10315............................  1st and 2nd Episodes, 11 to   C3F1S5                                   1.2480
                                    13 Therapy Visits.
10321............................  1st and 2nd Episodes, 0 to 5  C3F2S1                                   0.7457
                                    Therapy Visits.
10322............................  1st and 2nd Episodes, 6       C3F2S2                                   0.8850
                                    Therapy Visits.
10323............................  1st and 2nd Episodes, 7 to 9  C3F2S3                                   1.0242
                                    Therapy Visits.
10324............................  1st and 2nd Episodes, 10      C3F2S4                                   1.1634
                                    Therapy Visits.
10325............................  1st and 2nd Episodes, 11 to   C3F2S5                                   1.3026
                                    13 Therapy Visits.
10331............................  1st and 2nd Episodes, 0 to 5  C3F3S1                                   0.7952
                                    Therapy Visits.
10332............................  1st and 2nd Episodes, 6       C3F3S2                                   0.9315
                                    Therapy Visits.
10333............................  1st and 2nd Episodes, 7 to 9  C3F3S3                                   1.0679
                                    Therapy Visits.
10334............................  1st and 2nd Episodes, 10      C3F3S4                                   1.2043
                                    Therapy Visits.
10335............................  1st and 2nd Episodes, 11 to   C3F3S5                                   1.3406
                                    13 Therapy Visits.
21111............................  1st and 2nd Episodes, 14 to   C1F1S1                                   1.2154
                                    15 Therapy Visits.
21112............................  1st and 2nd Episodes, 16 to   C1F1S2                                   1.3780
                                    17 Therapy Visits.
21113............................  1st and 2nd Episodes, 18 to   C1F1S3                                   1.5406
                                    19 Therapy Visits.
21121............................  1st and 2nd Episodes, 14 to   C1F2S1                                   1.2574
                                    15 Therapy Visits.
21122............................  1st and 2nd Episodes, 16 to   C1F2S2                                   1.4176
                                    17 Therapy Visits.
21123............................  1st and 2nd Episodes, 18 to   C1F2S3                                   1.5779
                                    19 Therapy Visits.
21131............................  1st and 2nd Episodes, 14 to   C1F3S1                                   1.2926
                                    15 Therapy Visits.
21132............................  1st and 2nd Episodes, 16 to   C1F3S2                                   1.4558
                                    17 Therapy Visits.
21133............................  1st and 2nd Episodes, 18 to   C1F3S3                                   1.6189
                                    19 Therapy Visits.
21211............................  1st and 2nd Episodes, 14 to   C2F1S1                                   1.2814
                                    15 Therapy Visits.
21212............................  1st and 2nd Episodes, 16 to   C2F1S2                                   1.4573
                                    17 Therapy Visits.
21213............................  1st and 2nd Episodes, 18 to   C2F1S3                                   1.6332
                                    19 Therapy Visits.
21221............................  1st and 2nd Episodes, 14 to   C2F2S1                                   1.3234
                                    15 Therapy Visits.
21222............................  1st and 2nd Episodes, 16 to   C2F2S2                                   1.4970
                                    17 Therapy Visits.
21223............................  1st and 2nd Episodes, 18 to   C2F2S3                                   1.6705
                                    19 Therapy Visits.
21231............................  1st and 2nd Episodes, 14 to   C2F3S1                                   1.3586
                                    15 Therapy Visits.
21232............................  1st and 2nd Episodes, 16 to   C2F3S2                                   1.5351
                                    17 Therapy Visits.

[[Page 35287]]

 
21233............................  1st and 2nd Episodes, 18 to   C2F3S3                                   1.7116
                                    19 Therapy Visits.
21311............................  1st and 2nd Episodes, 14 to   C3F1S1                                   1.3997
                                    15 Therapy Visits.
21312............................  1st and 2nd Episodes, 16 to   C3F1S2                                   1.6178
                                    17 Therapy Visits.
21313............................  1st and 2nd Episodes, 18 to   C3F1S3                                   1.8359
                                    19 Therapy Visits.
21321............................  1st and 2nd Episodes, 14 to   C3F2S1                                   1.4418
                                    15 Therapy Visits.
21322............................  1st and 2nd Episodes, 16 to   C3F2S2                                   1.6575
                                    17 Therapy Visits.
21323............................  1st and 2nd Episodes, 18 to   C3F2S3                                   1.8732
                                    19 Therapy Visits.
21331............................  1st and 2nd Episodes, 14 to   C3F3S1                                   1.4770
                                    15 Therapy Visits.
21332............................  1st and 2nd Episodes, 16 to   C3F3S2                                   1.6956
                                    17 Therapy Visits.
21333............................  1st and 2nd Episodes, 18 to   C3F3S3                                   1.9142
                                    19 Therapy Visits.
22111............................  3rd+ Episodes, 14 to 15       C1F1S1                                   1.2300
                                    Therapy Visits.
22112............................  3rd+ Episodes, 16 to 17       C1F1S2                                   1.3877
                                    Therapy Visits.
22113............................  3rd+ Episodes, 18 to 19       C1F1S3                                   1.5455
                                    Therapy Visits.
22121............................  3rd+ Episodes, 14 to 15       C1F2S1                                   1.2549
                                    Therapy Visits.
22122............................  3rd+ Episodes, 16 to 17       C1F2S2                                   1.4159
                                    Therapy Visits.
22123............................  3rd+ Episodes, 18 to 19       C1F2S3                                   1.5770
                                    Therapy Visits.
22131............................  3rd+ Episodes, 14 to 15       C1F3S1                                   1.3037
                                    Therapy Visits.
22132............................  3rd+ Episodes, 16 to 17       C1F3S2                                   1.4632
                                    Therapy Visits.
22133............................  3rd+ Episodes, 18 to 19       C1F3S3                                   1.6226
                                    Therapy Visits.
22211............................  3rd+ Episodes, 14 to 15       C2F1S1                                   1.2852
                                    Therapy Visits.
22212............................  3rd+ Episodes, 16 to 17       C2F1S2                                   1.4598
                                    Therapy Visits.
22213............................  3rd+ Episodes, 18 to 19       C2F1S3                                   1.6345
                                    Therapy Visits.
22221............................  3rd+ Episodes, 14 to 15       C2F2S1                                   1.3100
                                    Therapy Visits.
22222............................  3rd+ Episodes, 16 to 17       C2F2S2                                   1.4880
                                    Therapy Visits.
22223............................  3rd+ Episodes, 18 to 19       C2F2S3                                   1.6660
                                    Therapy Visits.
22231............................  3rd+ Episodes, 14 to 15       C2F3S1                                   1.3588
                                    Therapy Visits.
22232............................  3rd+ Episodes, 16 to 17       C2F3S2                                   1.5352
                                    Therapy Visits.
22233............................  3rd+ Episodes, 18 to 19       C2F3S3                                   1.7117
                                    Therapy Visits.
22311............................  3rd+ Episodes, 14 to 15       C3F1S1                                   1.4954
                                    Therapy Visits.
22312............................  3rd+ Episodes, 16 to 17       C3F1S2                                   1.6816
                                    Therapy Visits.
22313............................  3rd+ Episodes, 18 to 19       C3F1S3                                   1.8678
                                    Therapy Visits.
22321............................  3rd+ Episodes, 14 to 15       C3F2S1                                   1.5202
                                    Therapy Visits.
22322............................  3rd+ Episodes, 16 to 17       C3F2S2                                   1.7098
                                    Therapy Visits.
22323............................  3rd+ Episodes, 18 to 19       C3F2S3                                   1.8993
                                    Therapy Visits.
22331............................  3rd+ Episodes, 14 to 15       C3F3S1                                   1.5690
                                    Therapy Visits.
22332............................  3rd+ Episodes, 16 to 17       C3F3S2                                   1.7570
                                    Therapy Visits.
22333............................  3rd+ Episodes, 18 to 19       C3F3S3                                   1.9449
                                    Therapy Visits.
30111............................  3rd+ Episodes, 0 to 5         C1F1S1                                   0.4628
                                    Therapy Visits.
30112............................  3rd+ Episodes, 6 Therapy      C1F1S2                                   0.6163
                                    Visits.
30113............................  3rd+ Episodes, 7 to 9         C1F1S3                                   0.7697
                                    Therapy Visits.
30114............................  3rd+ Episodes, 10 Therapy     C1F1S4                                   0.9232
                                    Visits.
30115............................  3rd+ Episodes, 11 to 13       C1F1S5                                   1.0766
                                    Therapy Visits.
30121............................  3rd+ Episodes, 0 to 5         C1F2S1                                   0.5455
                                    Therapy Visits.
30122............................  3rd+ Episodes, 6 Therapy      C1F2S2                                   0.6874
                                    Visits.
30123............................  3rd+ Episodes, 7 to 9         C1F2S3                                   0.8293
                                    Therapy Visits.
30124............................  3rd+ Episodes, 10 Therapy     C1F2S4                                   0.9711
                                    Visits.
30125............................  3rd+ Episodes, 11 to 13       C1F2S5                                   1.1130
                                    Therapy Visits.
30131............................  3rd+ Episodes, 0 to 5         C1F3S1                                   0.5903
                                    Therapy Visits.
30132............................  3rd+ Episodes, 6 Therapy      C1F3S2                                   0.7330
                                    Visits.
30133............................  3rd+ Episodes, 7 to 9         C1F3S3                                   0.8757
                                    Therapy Visits.
30134............................  3rd+ Episodes, 10 Therapy     C1F3S4                                   1.0183
                                    Visits.
30135............................  3rd+ Episodes, 11 to 13       C1F3S5                                   1.1610
                                    Therapy Visits.
30211............................  3rd+ Episodes, 0 to 5         C2F1S1                                   0.4835
                                    Therapy Visits.
30212............................  3rd+ Episodes, 6 Therapy      C2F1S2                                   0.6438
                                    Visits.
30213............................  3rd+ Episodes, 7 to 9         C2F1S3                                   0.8041
                                    Therapy Visits.
30214............................  3rd+ Episodes, 10 Therapy     C2F1S4                                   0.9645
                                    Visits.
30215............................  3rd+ Episodes, 11 to 13       C2F1S5                                   1.1248
                                    Therapy Visits.
30221............................  3rd+ Episodes, 0 to 5         C2F2S1                                   0.5662
                                    Therapy Visits.
30222............................  3rd+ Episodes, 6 Therapy      C2F2S2                                   0.7149
                                    Visits.
30223............................  3rd+ Episodes, 7 to 9         C2F2S3                                   0.8637
                                    Therapy Visits.
30224............................  3rd+ Episodes, 10 Therapy     C2F2S4                                   1.0125
                                    Visits.
30225............................  3rd+ Episodes, 11 to 13       C2F2S5                                   1.1612
                                    Therapy Visits.
30231............................  3rd+ Episodes, 0 to 5         C2F3S1                                   0.6110
                                    Therapy Visits.
30232............................  3rd+ Episodes, 6 Therapy      C2F3S2                                   0.7605
                                    Visits.
30233............................  3rd+ Episodes, 7 to 9         C2F3S3                                   0.9101
                                    Therapy Visits.
30234............................  3rd+ Episodes, 10 Therapy     C2F3S4                                   1.0597
                                    Visits.
30235............................  3rd+ Episodes, 11 to 13       C2F3S5                                   1.2093
                                    Therapy Visits.
30311............................  3rd+ Episodes, 0 to 5         C3F1S1                                   0.5993
                                    Therapy Visits.

[[Page 35288]]

 
30312............................  3rd+ Episodes, 6 Therapy      C3F1S2                                   0.7785
                                    Visits.
30313............................  3rd+ Episodes, 7 to 9         C3F1S3                                   0.9577
                                    Therapy Visits.
30314............................  3rd+ Episodes, 10 Therapy     C3F1S4                                   1.1369
                                    Visits.
30315............................  3rd+ Episodes, 11 to 13       C3F1S5                                   1.3162
                                    Therapy Visits.
30321............................  3rd+ Episodes, 0 to 5         C3F2S1                                   0.6820
                                    Therapy Visits.
30322............................  3rd+ Episodes, 6 Therapy      C3F2S2                                   0.8496
                                    Visits.
30323............................  3rd+ Episodes, 7 to 9         C3F2S3                                   1.0173
                                    Therapy Visits.
30324............................  3rd+ Episodes, 10 Therapy     C3F2S4                                   1.1849
                                    Visits.
30325............................  3rd+ Episodes, 11 to 13       C3F2S5                                   1.3526
                                    Therapy Visits.
30331............................  3rd+ Episodes, 0 to 5         C3F3S1                                   0.7268
                                    Therapy Visits.
30332............................  3rd+ Episodes, 6 Therapy      C3F3S2                                   0.8952
                                    Visits.
30333............................  3rd+ Episodes, 7 to 9         C3F3S3                                   1.0637
                                    Therapy Visits.
30334............................  3rd+ Episodes, 10 Therapy     C3F3S4                                   1.2321
                                    Visits.
30335............................  3rd+ Episodes, 11 to 13       C3F3S5                                   1.4006
                                    Therapy Visits.
40111............................  All Episodes, 20+ Therapy     C1F1S1                                   1.7032
                                    Visits.
40121............................  All Episodes, 20+ Therapy     C1F2S1                                   1.7381
                                    Visits.
40131............................  All Episodes, 20+ Therapy     C1F3S1                                   1.7821
                                    Visits.
40211............................  All Episodes, 20+ Therapy     C2F1S1                                   1.8091
                                    Visits.
40221............................  All Episodes, 20+ Therapy     C2F2S1                                   1.8440
                                    Visits.
40231............................  All Episodes, 20+ Therapy     C2F3S1                                   1.8881
                                    Visits.
40311............................  All Episodes, 20+ Therapy     C3F1S1                                   2.0539
                                    Visits.
40321............................  All Episodes, 20+ Therapy     C3F2S1                                   2.0889
                                    Visits.
40331............................  All Episodes, 20+ Therapy     C3F3S1                                   2.1329
                                    Visits.
----------------------------------------------------------------------------------------------------------------

    To ensure the changes to the HH PPS case-mix weights are 
implemented in a budget neutral manner, we then apply a case-mix budget 
neutrality factor to the proposed CY 2018 national, standardized 60-day 
episode payment rate (see section III.C.3. of this proposed rule). The 
case-mix budget neutrality factor is calculated as the ratio of total 
payments when the CY 2018 HH PPS case-mix weights (developed using CY 
2016 home health claims data) are applied to CY 2016 utilization 
(claims) data to total payments when CY 2017 HH PPS case-mix weights 
(developed using CY 2015 home health claims data) are applied to CY 
2016 utilization data. This produces a case-mix budget neutrality 
factor for CY 2018 of 1.0159.

C. Proposed CY 2018 Home Health Payment Rate Update

1. Proposed CY 2018 Home Health Market Basket Update
    Section 1895(b)(3)(B) of the Act requires that the standard 
prospective payment amounts for CY 2018 be increased by a factor equal 
to the applicable HH market basket update for those HHAs that submit 
quality data as required by the Secretary. The home health market 
basket was rebased and revised in CY 2013. A detailed description of 
how we derive the HHA market basket is available in the CY 2013 HH PPS 
final rule (77 FR 67080 through 67090).
    Section 1895(b)(3)(B)(vi) of the Act, requires that, in CY 2015 
(and in subsequent calendar years, except CY 2018 (under section 411(c) 
of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 
(Pub. L. 114-10, enacted April 16, 2015)), the market basket percentage 
under the HHA prospective payment system as described in section 
1895(b)(3)(B) of the Act be annually adjusted by changes in economy-
wide productivity. Section 1886(b)(3)(B)(xi)(II) of the Act defines the 
productivity adjustment to be equal to the 10-year moving average of 
change in annual economy-wide private nonfarm business multifactor 
productivity (MFP) (as projected by the Secretary for the 10-year 
period ending with the applicable fiscal year, calendar year, cost 
reporting period, or other annual period) (the ``MFP adjustment''). The 
Bureau of Labor Statistics (BLS) is the agency that publishes the 
official measure of private nonfarm business MFP. Please see http://www.bls.gov/mfp, to obtain the BLS historical published MFP data.
    Prior to the enactment of the MACRA, which amended section 
1895(b)(3)(B) of the Act, the proposed home health update percentage 
for CY 2018 would have been based on the estimated home health market 
basket update of 2.7 percent (based on IHS Global Insight Inc.'s first-
quarter 2017 forecast with historical data through fourth-quarter 
2016). Due to the requirements specified at section 1895(b)(3)(B)(vi) 
of the Act prior to the enactment of MACRA, the estimated CY 2018 home 
health market basket update of 2.7 percent would have been reduced by a 
MFP adjustment as mandated by the Affordable Care Act (currently 
estimated to be 0.5 percentage point for CY 2018). In effect, the 
proposed home health payment update percentage for CY 2018 would have 
been 2.2 percent. However, section 411(c) of the MACRA amended section 
1895(b)(3)(B) of the Act, such that for home health payments for CY 
2018, the market basket percentage increase is required to be 1 
percent.
    Section 1895(b)(3)(B) of the Act requires that the home health 
update be decreased by 2 percentage points for those HHAs that do not 
submit quality data as required by the Secretary. For HHAs that do not 
submit the required quality data for CY 2018, the home health payment 
update would be -1 percent (1 percent minus 2 percentage points).
2. Proposed CY 2018 Home Health Wage Index
    Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the 
Secretary to provide appropriate adjustments to the proportion of the 
payment amount under the HH PPS that account for area wage differences, 
using adjustment

[[Page 35289]]

factors that reflect the relative level of wages and wage-related costs 
applicable to the furnishing of HH services. Since the inception of the 
HH PPS, we have used inpatient hospital wage data in developing a wage 
index to be applied to HH payments. We propose to continue this 
practice for CY 2018, as we continue to believe that, in the absence of 
HH-specific wage data, using inpatient hospital wage data is 
appropriate and reasonable for the HH PPS. Specifically, we propose to 
continue to use the pre-floor, pre-reclassified hospital wage index as 
the wage adjustment to the labor portion of the HH PPS rates. For CY 
2018, the updated wage data are for hospital cost reporting periods 
beginning on or after October 1, 2013, and before October 1, 2014 (FY 
2014 cost report data). We would apply the appropriate wage index value 
to the labor portion of the HH PPS rates based on the site of service 
for the beneficiary (defined by section 1861(m) of the Act as the 
beneficiary's place of residence).
    To address those geographic areas in which there are no inpatient 
hospitals, and thus, no hospital wage data on which to base the 
calculation of the CY 2018 HH PPS wage index, we propose to continue to 
use the same methodology discussed in the CY 2007 HH PPS final rule (71 
FR 65884) to address those geographic areas in which there are no 
inpatient hospitals. For rural areas that do not have inpatient 
hospitals, we would use the average wage index from all contiguous Core 
Based Statistical Areas (CBSAs) as a reasonable proxy. 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 urban areas without inpatient hospitals, we would use 
the average wage index of all urban areas within the state as a 
reasonable proxy for the wage index for that CBSA. For CY 2018, the 
only urban area without inpatient hospital wage data is Hinesville, GA 
(CBSA 25980).
    On February 28, 2013, OMB issued Bulletin No. 13-01, announcing 
revisions to the delineations of MSAs, Micropolitan Statistical Areas, 
and CBSAs, and guidance on uses of the delineation of these areas. In 
the CY 2015 HH PPS final rule (79 FR 66085 through 66087), we adopted 
the OMB's new area delineations using a 1-year transition. The most 
recent bulletin (No. 15-01) concerning the revised delineations was 
published by the OMB on July 15, 2015.
    The proposed CY 2018 wage index is available on the CMS Web site at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices.html.
3. Proposed CY 2018 Annual Payment Update
a. Background
    The Medicare HH PPS has been in effect since October 1, 2000. As 
set forth in the July 3, 2000 final rule (65 FR 41128), the base unit 
of payment under the Medicare HH PPS is a national, standardized 60-day 
episode payment rate. As set forth in Sec.  484.220, we adjust the 
national, standardized 60-day episode payment rate by a case-mix 
relative weight and a wage index value based on the site of service for 
the beneficiary.
    To provide appropriate adjustments to the proportion of the payment 
amount under the HH PPS to account for area wage differences, we apply 
the appropriate wage index value to the labor portion of the HH PPS 
rates. The labor-related share of the case-mix adjusted 60-day episode 
rate would continue to be 78.535 percent and the non-labor-related 
share would continue to be 21.465 percent as set out in the CY 2013 HH 
PPS final rule (77 FR 67068). The CY 2018 HH PPS rates would use the 
same case-mix methodology as set forth in the CY 2008 HH PPS final rule 
with comment period (72 FR 49762) and would be adjusted as described in 
section III.B of this rule. The following are the steps we take to 
compute the case-mix and wage-adjusted 60-day episode rate:
    (1) Multiply the national 60-day episode rate by the patient's 
applicable case-mix weight.
    (2) Divide the case-mix adjusted amount into a labor (78.535 
percent) and a non-labor portion (21.465 percent).
    (3) Multiply the labor portion by the applicable wage index based 
on the site of service of the beneficiary.
    (4) Add the wage-adjusted portion to the non-labor portion, 
yielding the case-mix and wage adjusted 60-day episode rate, subject to 
any additional applicable adjustments.
    In accordance with section 1895(b)(3)(B) of the Act, this document 
proposes the annual update of the HH PPS rates. Section 484.225 sets 
forth the specific annual percentage update methodology. In accordance 
with Sec.  484.225(i), for a HHA that does not submit HH quality data, 
as specified by the Secretary, the unadjusted national prospective 60-
day episode rate is equal to the rate for the previous calendar year 
increased by the applicable HH market basket index amount minus 2 
percentage points. Any reduction of the percentage change would apply 
only to the calendar year involved and would not be considered in 
computing the prospective payment amount for a subsequent calendar 
year.
    Medicare pays the national, standardized 60-day case-mix and wage-
adjusted episode payment on a split percentage payment approach. The 
split percentage payment approach includes an initial percentage 
payment and a final percentage payment as set forth in Sec.  
484.205(b)(1) and (b)(2). We may base the initial percentage payment on 
the submission of a request for anticipated payment (RAP) and the final 
percentage payment on the submission of the claim for the episode, as 
discussed in Sec.  409.43. The claim for the episode that the HHA 
submits for the final percentage payment determines the total payment 
amount for the episode and whether we make an applicable adjustment to 
the 60-day case-mix and wage-adjusted episode payment. The end date of 
the 60-day episode as reported on the claim determines which calendar 
year rates Medicare would use to pay the claim.
    We may also adjust the 60-day case-mix and wage-adjusted episode 
payment based on the information submitted on the claim to reflect the 
following:
     A low-utilization payment adjustment (LUPA) is provided on 
a per-visit basis as set forth in Sec. Sec.  484.205(c) and 484.230.
     A partial episode payment (PEP) adjustment as set forth in 
Sec. Sec.  484.205(d) and 484.235.
     An outlier payment as set forth in Sec. Sec.  484.205(e) 
and 484.240.
b. Proposed CY 2018 National, Standardized 60-Day Episode Payment Rate
    Section 1895(3)(A)(i) of the Act requires that the 60-day episode 
base rate and other applicable amounts be standardized in a manner that 
eliminates the effects of variations in relative case-mix and area wage 
adjustments among different home health agencies in a budget neutral 
manner. To determine the CY 2018 national, standardized 60-day episode 
payment rate, we would apply a wage

[[Page 35290]]

index budget neutrality factor; a case-mix budget neutrality factor 
described in section III.B. of this proposed rule; a reduction of 0.97 
percent to account for nominal case-mix growth from 2012 to 2014, as 
finalized in the CY 2016 HH PPS final rule (80 FR 68646); and the home 
health payment update percentage discussed in section III.C.1 of this 
proposed rule.
    To calculate the wage index budget neutrality factor, we simulated 
total payments for non-LUPA episodes using the proposed CY 2018 wage 
index and compared it to our simulation of total payments for non-LUPA 
episodes using the CY 2017 wage index. By dividing the total payments 
for non-LUPA episodes using the proposed CY 2018 wage index by the 
total payments for non-LUPA episodes using the CY 2017 wage index, we 
obtain a wage index budget neutrality factor of 1.0001. We would apply 
the wage index budget neutrality factor of 1.0001 to the calculation of 
the proposed CY 2018 national, standardized 60-day episode rate.
    As discussed in section III.B. of this proposed rule, to ensure the 
changes to the case-mix weights are implemented in a budget neutral 
manner, we would apply a case-mix weight budget neutrality factor to 
the CY 2018 national, standardized 60-day episode payment rate. The 
case-mix weight budget neutrality factor is calculated as the ratio of 
total payments when CY 2018 case-mix weights are applied to CY 2016 
utilization (claims) data to total payments when CY 2017 case-mix 
weights are applied to CY 2016 utilization data. The case-mix budget 
neutrality factor for CY 2018 would be 1.0159 as described in section 
III.B of this proposed rule.
    Next, we would apply a reduction of 0.97 percent to the national, 
standardized 60-day payment rate for CY 2018 to account for nominal 
case-mix growth between CY 2012 and CY 2014. Lastly, we would update 
the proposed payment rates by the proposed CY 2018 home health payment 
update percentage of 1 percent as mandated by section 
1895(b)(3)(B)(iii) of the Act. The proposed CY 2018 national, 
standardized 60-day episode payment rate is calculated in Table 9.

                                  Table 9--Proposed CY 2018 60-day National, Standardized 60-day Episode Payment Amount
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Proposed CY
                                                                        Wage index        Case-mix      Nominal case-     Proposed CY     2018 national,
       CY 2017 national, standardized 60-day episode payment              budget       weights budget     mix growth    2018 HH payment  standardized 60-
                                                                        neutrality       neutrality     adjustment (1-       update        day  episode
                                                                          factor           factor          0.0097)                           payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
$2,989.97..........................................................        x 1.0001         x 1.0159         x 0.9903           x 1.01        $3,038.43
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The proposed CY 2018 national, standardized 60-day episode payment 
rate for an HHA that does not submit the required quality data is 
updated by the proposed CY 2018 home health payment update of 1 percent 
minus 2 percentage points and is shown in Table 10.

              Table 10--Proposed CY 2018 National, Standardized 60-day Episode Payment Amount for HHAs That DO NOT Submit the Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Proposed CY      Proposed CY
                                                                        Wage index        Case-mix      Nominal case-   2018 HH payment   2018 national,
       CY 2017 national, standardized 60-day episode payment              budget       weights budget     mix growth     update minus 2  standardized 60-
                                                                        neutrality       neutrality     adjustment (1-     percentage      day episode
                                                                          factor           factor          0.0097)           points          payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
$2,989.97..........................................................        x 1.0001         x 1.0159         x 0.9903           x 0.99        $2,978.26
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Proposed CY 2018 National Per-Visit Rates
    The national per-visit rates are used to pay LUPAs (episodes with 
four or fewer visits) and are also used to compute imputed costs in 
outlier calculations. The per-visit rates are paid by type of visit or 
HH discipline. The six HH disciplines are as follows:
     Home health aide (HH aide);
     Medical Social Services (MSS);
     Occupational therapy (OT);
     Physical therapy (PT);
     Skilled nursing (SN); and
     Speech-language pathology (SLP).
    To calculate the proposed CY 2018 national per-visit rates, we 
start with the CY 2017 national per-visit rates. We then apply a wage 
index budget neutrality factor to ensure budget neutrality for LUPA 
per-visit payments. We calculate the wage index budget neutrality 
factor by simulating total payments for LUPA episodes using the 
proposed CY 2018 wage index and comparing it to simulated total 
payments for LUPA episodes using the CY 2017 wage index. By dividing 
the total payments for LUPA episodes using the proposed CY 2018 wage 
index by the total payments for LUPA episodes using the CY 2017 wage 
index, we obtain a wage index budget neutrality factor of 1.0005. We 
would apply the wage index budget neutrality factor of 1.0005 in order 
to calculate the CY 2018 national per-visit rates.
    The LUPA per-visit rates are not calculated using case-mix weights. 
Therefore, there is no case-mix weights budget neutrality factor needed 
to ensure budget neutrality for LUPA payments. Lastly, the per-visit 
rates for each discipline are updated by the proposed CY 2018 home 
health payment update percentage of 1 percent. The national per-visit 
rates are adjusted by the wage index based on the site of service of 
the beneficiary. The per-visit payments for LUPAs are separate from the 
LUPA add-on payment amount, which is paid for episodes that occur as 
the only episode or initial episode in a sequence of adjacent episodes. 
The proposed CY 2018 national per-visit rates are shown in Tables 11 
and 12.

[[Page 35291]]



 Table 11--Proposed CY 2018 National Per-Visit Payment Amounts for HHAs That DO Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                    Wage index
                                                   CY 2017 per-       budget        Proposed CY     Proposed CY
               HH discipline type                  visit payment    neutrality        2018 HH     2018 per-visit
                                                                      factor      payment update      payment
----------------------------------------------------------------------------------------------------------------
Home Health Aide................................          $64.23        x 1.0005          x 1.01          $64.90
Medical Social Services.........................          227.36        x 1.0005          x 1.01          229.75
Occupational Therapy............................          156.11        x 1.0005          x 1.01          157.75
Physical Therapy................................          155.05        x 1.0005          x 1.01          156.68
Skilled Nursing.................................          141.84        x 1.0005          x 1.01          143.33
Speech- Language Pathology......................          168.52        x 1.0005          x 1.01          170.29
----------------------------------------------------------------------------------------------------------------

    The proposed CY 2018 per-visit payment rates for HHAs that do not 
submit the required quality data are updated by the proposed CY 2018 HH 
payment update percentage of 1 percent minus 2 percentage points and 
are shown in Table 12.

 Table 12--Proposed CY 2018 National Per-Visit Payment Amounts for HHAs That DO NOT Submit the Required Quality
                                                      Data
----------------------------------------------------------------------------------------------------------------
                                                                                    Proposed CY
                                                                    Wage index        2018 HH
                                                   CY 2017  per-      budget      payment update    Proposed CY
               HH discipline type                  visit  rates     neutrality        minus 2     2018 per-visit
                                                                      factor        percentage         rates
                                                                                      points
----------------------------------------------------------------------------------------------------------------
Home Health Aide................................          $64.23        x 1.0005          x 0.99          $63.62
Medical Social Services.........................          227.36        x 1.0005          x 0.99          225.20
Occupational Therapy............................          156.11        x 1.0005          x 0.99          154.63
Physical Therapy................................          155.05        x 1.0005          x 0.99          153.58
Skilled Nursing.................................          141.84        x 1.0005          x 0.99          140.49
Speech- Language Pathology......................          168.52        x 1.0005          x 0.99          166.92
----------------------------------------------------------------------------------------------------------------

d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors
    LUPA episodes that occur as the only episode or as an initial 
episode in a sequence of adjacent episodes are adjusted by applying an 
additional amount to the LUPA payment before adjusting for area wage 
differences. In the CY 2014 HH PPS final rule, we changed the 
methodology for calculating the LUPA add-on amount by finalizing the 
use of three LUPA add-on factors: 1.8451 for SN; 1.6700 for PT; and 
1.6266 for SLP (78 FR 72306). We multiply the per-visit payment amount 
for the first SN, PT, or SLP visit in LUPA episodes that occur as the 
only episode or an initial episode in a sequence of adjacent episodes 
by the appropriate factor to determine the LUPA add-on payment amount. 
For example, in the case of HHAs that do submit the required quality 
data, for LUPA episodes that occur as the only episode or an initial 
episode in a sequence of adjacent episodes, if the first skilled visit 
is SN, the payment for that visit would be $264.46 (1.8451 multiplied 
by $143.33), subject to area wage adjustment.
e. Proposed CY 2018 Non-Routine Medical Supply (NRS) Payment Rates
    Payments for NRS are computed by multiplying the relative weight 
for a particular severity level by the NRS conversion factor. To 
determine the proposed CY 2018 NRS conversion factor, we update the CY 
2017 NRS conversion factor ($52.50) by the proposed CY 2018 home health 
payment update percentage of 1 percent. We do not apply a 
standardization factor as the NRS payment amount calculated from the 
conversion factor is not wage or case-mix adjusted when the final claim 
payment amount is computed. The proposed NRS conversion factor for CY 
2018 is shown in Table 13.

Table 13--Proposed CY 2018 NRS Conversion Factor for HHAs That DO Submit
                        the Required Quality Data
------------------------------------------------------------------------
                                                           Proposed CY
                                          Proposed CY        2018 NRS
    CY 2017 NRS  conversion  factor         2018 HH         conversion
                                        payment  update       factor
------------------------------------------------------------------------
$52.50................................          x 1.01           $53.03
------------------------------------------------------------------------

    Using the CY 2018 NRS conversion factor, the payment amounts for 
the six severity levels are shown in Table 14.

        Table 14--Proposed CY 2018 NRS Payment Amounts for HHAs That DO Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                                    Proposed CY
                                                                                     Relative        2017 NRS
               Severity level                          Points  (scoring)              weight          payment
                                                                                                      amounts
----------------------------------------------------------------------------------------------------------------
1...........................................  0.................................          0.2698         $ 14.31
2...........................................  1 to 14...........................          0.9742           51.66
3...........................................  15 to 27..........................          2.6712          141.65
4...........................................  28 to 48..........................          3.9686          210.45

[[Page 35292]]

 
5...........................................  49 to 98..........................          6.1198          324.53
6...........................................  99+...............................         10.5254          558.16
----------------------------------------------------------------------------------------------------------------

    For HHAs that do not submit the required quality data, we update 
the CY 2017 NRS conversion factor ($52.50) by the proposed CY 2018 home 
health payment update percentage of 1 percent minus 2 percentage 
points. The proposed CY 2018 NRS conversion factor for HHAs that do not 
submit quality data is shown in Table 15.

  Table 15--Proposed CY 2018 NRS Conversion Factor for HHAs That DO NOT
                    Submit the Required Quality Data
------------------------------------------------------------------------
                                          Proposed CY
                                        2018 HH payment
                                             update        Proposed CY
    CY 2017 NRS  conversion  factor        percentage        2018 NRS
                                            minus 2         conversion
                                           percentage         factor
                                             points
------------------------------------------------------------------------
$52.50................................          x 0.99           $51.98
------------------------------------------------------------------------

    The payment amounts for the various severity levels based on the 
updated conversion factor for HHAs that do not submit quality data are 
calculated in Table 16.

      Table 16--Proposed CY 2018 NRS Payment Amounts for HHAs That DO NOT Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                                    Proposed CY
                                                                                     Relative        2018 NRS
               Severity level                          Points  (scoring)              weight          payment
                                                                                                      amounts
----------------------------------------------------------------------------------------------------------------
1...........................................  0.................................          0.2698         $ 14.02
2...........................................  1 to 14...........................          0.9742           50.64
3...........................................  15 to 27..........................          2.6712          138.85
4...........................................  28 to 48..........................          3.9686          206.29
5...........................................  49 to 98..........................          6.1198          318.11
6...........................................  99+...............................         10.5254          547.11
----------------------------------------------------------------------------------------------------------------

f. Rural Add-On
    Section 421(a) of the MMA required, for HH services furnished in a 
rural areas (as defined in section 1886(d)(2)(D) of the Act), for 
episodes or visits ending on or after April 1, 2004, and before April 
1, 2005, that the Secretary increase the payment amount that otherwise 
would have been made under section 1895 of the Act for the services by 
5 percent.
    Section 5201 of the DRA amended section 421(a) of the MMA. The 
amended section 421(a) of the MMA required, for HH services furnished 
in a rural area (as defined in section 1886(d)(2)(D) of the Act), on or 
after January 1, 2006, and before January 1, 2007, that the Secretary 
increase the payment amount otherwise made under section 1895 of the 
Act for those services by 5 percent.
    Section 3131(c) of the Affordable Care Act amended section 421(a) 
of the MMA to provide an increase of 3 percent of the payment amount 
otherwise made under section 1895 of the Act for HH services furnished 
in a rural area (as defined in section 1886(d)(2)(D) of the Act), for 
episodes and visits ending on or after April 1, 2010, and before 
January 1, 2016.
    Section 210 of the MACRA amended section 421(a) of the MMA to 
extend the rural add-on by providing an increase of 3 percent of the 
payment amount otherwise made under section 1895 of the Act for HH 
services provided in a rural area (as defined in section 1886(d)(2)(D) 
of the Act), for episodes and visits ending before January 1, 2018. 
Therefore, for episodes and visits that end on or after January 1, 
2018, a rural add-on payment will not apply.

D. Payments for High-Cost Outliers Under the HH PPS

1. Background
    Section 1895(b)(5) of the Act allows for the provision of an 
addition or adjustment to the home health payment amount in the case of 
outliers because of unusual variations in the type or amount of 
medically necessary care. Prior to the enactment of the Affordable Care 
Act, section 1895(b)(5) of the Act stipulated that projected total 
outlier payments could not exceed 5 percent of total projected or 
estimated HH payments in a given year. In the July 3, 2000 Medicare 
Program; Prospective Payment System for Home Health Agencies final rule 
(65 FR 41188 through 41190), we described the method for determining 
outlier payments. Under this system, outlier payments are made for 
episodes whose estimated costs exceed a threshold amount for each Home 
Health Resource Group (HHRG). The episode's estimated cost was 
established as the sum of the national wage-adjusted per-visit payment 
amounts delivered during the episode. The outlier threshold for each 
case-mix group or Partial Episode Payment (PEP) adjustment is defined 
as the 60-day episode payment or PEP adjustment for that group plus a 
fixed-dollar loss (FDL) amount. The outlier payment is defined to be a 
proportion of the wage-adjusted estimated cost

[[Page 35293]]

beyond the wage-adjusted threshold. The threshold amount is the sum of 
the wage and case-mix adjusted PPS episode amount and wage-adjusted FDL 
amount. The proportion of additional costs over the outlier threshold 
amount paid as outlier payments is referred to as the loss-sharing 
ratio.
    In the CY 2010 HH PPS proposed rule (74 FR 40948, 40957), we stated 
that outlier payments increased as a percentage of total payments from 
4.1 percent in CY 2005, to 5.0 percent in CY 2006, to 6.4 percent in CY 
2007 and that this excessive growth in outlier payments was primarily 
the result of unusually high outlier payments in a few areas of the 
country. In that discussion, we noted that despite program integrity 
efforts associated with excessive outlier payments in targeted areas of 
the country, we discovered that outlier expenditures still exceeded the 
5 percent target in CY 2007 and, in the absence of corrective measures, 
would continue do to so. Consequently, we assessed the appropriateness 
of taking action to curb outlier abuse. As described in the CY 2010 HH 
PPS final rule (74 FR 58080 through 58087), to mitigate possible 
billing vulnerabilities associated with excessive outlier payments and 
adhere to our statutory limit on outlier payments, we finalized an 
outlier policy that included a 10 percent agency-level cap on outlier 
payments. This cap was implemented in concert with a reduced FDL ratio 
of 0.67. These policies resulted in a projected target outlier pool of 
approximately 2.5 percent. (The previous outlier pool was 5 percent of 
total home health expenditures). For CY 2010, we first returned the 5 
percent held for the previous target outlier pool to the national, 
standardized 60-day episode rates, the national per-visit rates, the 
LUPA add-on payment amount, and the NRS conversion factor. Then, we 
reduced the CY 2010 rates by 2.5 percent to account for the new outlier 
pool of 2.5 percent. This outlier policy was adopted for CY 2010 only.
    As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through 
70399), section 3131(b)(1) of the Affordable Care Act amended section 
1895(b)(3)(C) of the Act, and required the Secretary to reduce the HH 
PPS payment rates such that aggregate HH PPS payments were reduced by 5 
percent. In addition, section 3131(b)(2) of the Affordable Care Act 
amended section 1895(b)(5) of the Act by redesignating the existing 
language as section 1895(b)(5)(A) of the Act, and revising the language 
to state that the total amount of the additional payments or payment 
adjustments for outlier episodes may not exceed 2.5 percent of the 
estimated total HH PPS payments for that year. Section 3131(b)(2)(C) of 
the Affordable Care Act also added section 1895(b)(5)(B) of the Act 
which capped outlier payments as a percent of total payments for each 
HHA at 10 percent.
    As such, beginning in CY 2011, our HH PPS outlier policy is that we 
reduce payment rates by 5 percent and target up to 2.5 percent of total 
estimated HH PPS payments to be paid as outliers. To do so, we first 
returned the 2.5 percent held for the target CY 2010 outlier pool to 
the national, standardized 60-day episode rates, the national per visit 
rates, the LUPA add-on payment amount, and the NRS conversion factor 
for CY 2010. We then reduced the rates by 5 percent as required by 
section 1895(b)(3)(C) of the Act, as amended by section 3131(b)(1) of 
the Affordable Care Act. For CY 2011 and subsequent calendar years we 
target up to 2.5 percent of estimated total payments to be paid as 
outlier payments, and apply a 10 percent agency-level outlier cap.
    In the CY 2017 HH PPS proposed and final rules (81 FR 43737 through 
43742 and 81 FR 76702), we described our concerns regarding patterns 
observed in home health outlier episodes. Specifically, we noted that 
the methodology for calculating home health outlier payments may have 
created a financial incentive for providers to increase the number of 
visits during an episode of care to surpass the outlier threshold and 
simultaneously created a disincentive for providers to treat medically 
complex beneficiaries who require fewer but longer visits. Given these 
concerns, in the CY 2017 HH PPS final rule (81 FR 76702), we finalized 
changes to the methodology used to calculate outlier payments, using a 
cost-per-unit approach rather than a cost-per-visit approach. This 
change in methodology allows for more accurate payment for outlier 
episodes, accounting for both the number of visits during an episode of 
care and also the length of the visits provided. Using this approach, 
we now convert the national per-visit rates into per 15-minute unit 
rates. These per 15-minute unit rates are used to calculate the 
estimated cost of an episode to determine whether the claim will 
receive an outlier payment and the amount of payment for an episode of 
care. In conjunction with our finalized policy to change to a cost-per-
unit approach to estimate episode costs and determine whether an 
outlier episode should receive outlier payments, in the CY 2017 HH PPS 
final rule we also finalized the implementation of a cap on the amount 
of time per day that would be counted toward the estimation of an 
episode's costs for outlier calculation purposes (81 FR 76725). 
Specifically, we limit the amount of time per day (summed across the 
six disciplines of care) to 8 hours (32 units) per day when estimating 
the cost of an episode for outlier calculation purposes.
2. Fixed Dollar Loss (FDL) Ratio
    For a given level of outlier payments, there is a trade-off between 
the values selected for the FDL ratio and the loss-sharing ratio. A 
high FDL ratio reduces the number of episodes that can receive outlier 
payments, but makes it possible to select a higher loss-sharing ratio, 
and therefore, increase outlier payments for qualifying outlier 
episodes. Alternatively, a lower FDL ratio means that more episodes can 
qualify for outlier payments, but outlier payments per episode must 
then be lower.
    The FDL ratio and the loss-sharing ratio must be selected so that 
the estimated total outlier payments do not exceed the 2.5 percent 
aggregate level (as required by section 1895(b)(5)(A) of the Act). 
Historically, we have used a value of 0.80 for the loss-sharing ratio 
which, we believe, preserves incentives for agencies to attempt to 
provide care efficiently for outlier cases. With a loss-sharing ratio 
of 0.80, Medicare pays 80 percent of the additional estimated costs 
above the outlier threshold amount.
    Simulations based on CY 2015 claims data (as of June 30, 2016) 
completed for the CY 2017 HH PPS final rule showed that outlier 
payments were estimated to represent approximately 2.84 percent of 
total HH PPS payments in CY 2017, and as such, we raised the FDL ratio 
from 0.45 to 0.55. We stated that raising the FDL ratio to 0.55, while 
maintaining a loss-sharing ratio of 0.80, struck an effective balance 
of compensating for high-cost episodes while still meeting the 
statutory requirement to target up to, but no more than, 2.5 percent of 
total payments as outlier payments (81 FR 76726). The national, 
standardized 60-day episode payment amount is multiplied by the FDL 
ratio. That amount is wage-adjusted to derive the wage-adjusted FDL 
amount, which is added to the case-mix and wage-adjusted 60-day episode 
payment amount to determine the outlier threshold amount that costs 
have to exceed before Medicare would pay 80 percent of the additional 
estimated costs.
    For this proposed rule, using preliminary CY 2016 claims data (as 
of March 17, 2017) and the proposed CY 2018 payment rates presented in 
section III.C of this proposed rule, we estimate that outlier payments 
would constitute

[[Page 35294]]

approximately 2.47 percent of total HH PPS payments in CY 2018 under 
the current outlier methodology. Given the statutory requirement to 
target up to, but no more than, 2.5 percent of total payments as 
outlier payments, we are not proposing a change to the FDL ratio for CY 
2018 as we believe that maintaining an FDL ratio of 0.55 with a loss-
sharing ratio of 0.80 is still appropriate given the percentage of 
outlier payments projected for CY 2018. Likewise, we are not proposing 
a change to the loss-sharing ratio (0.80) for the HH PPS to remain 
consistent with payment for high-cost outliers in other Medicare 
payment systems (for example, IRF PPS, IPPS, etc.). While we are not 
proposing to change the FDL ratio of 0.55 for CY 2018, we note that in 
the final rule, we will update our estimate of outlier payments as a 
percent of total HH PPS payments using the most current and complete 
year of HH PPS data (CY 2016 claims data as of June 30, 2017 or later). 
This may result in changes to the FDL ratio in the final rule.

E. Proposed Implementation of the Home Health Groupings Model (HHGM) 
for CY 2019

1. Overview, Data, and File Construction
    Under the home health prospective payment system (HH PPS), Medicare 
pays for home health services provided during a 60-day episode of care. 
Episodes are case-mix adjusted based on the timing of the episode 
within a sequence of episodes, the patient's clinical status and 
functional status as determined using information from the Outcome and 
Assessment Information Set (OASIS), and the amount of therapy service 
provided during the episode. Therapy service use is measured by the 
number of therapy visits provided during the episode and can be 
categorized into nine visit level categories (or thresholds): 0-5; 6; 
7-9; 10; 11-13; 14-15; 16-17; 18-19; and 20 or more visits. The 
combinations of episode timing, clinical and functional levels, and 
therapy service use categories result in 153 home health resource 
groups (HHRGs) into which home health episodes are categorized. Each 
HHRG is assigned a relative weight reflecting the average resource use 
of patients in that group compared with average resource use across all 
Medicare home health patients; this weight is then used to case mix 
adjust the episode's payment (with an additional adjustment for 
geographic variation in wages). Additional payment adjustments are made 
for very resource intensive (outlier) episodes, episodes with very few 
visits, transfers to other HHAs or to hospitals with a return to home 
health during the episode, and the expected use of non-routine medical 
supplies (NRS).
    As discussed in section II.D of this proposed rule, the Report to 
Congress, required by section 3131(d) of the Affordable Care Act, found 
that payment accuracy could be improved under the current payment 
system, particularly for patients with certain clinical 
characteristics.\16\ Findings from the report suggest that the current 
home health payment system may discourage HHAs from serving patients 
with clinically complex and/or poorly controlled chronic conditions who 
do not need therapy services, but require skilled nursing care. In 
addition, MedPAC believes that the Medicare home health benefit is ill-
defined and the current reliance on therapy service thresholds for 
determining payment is counter to the goals of a prospective payment 
system. Under the current payment system, HHAs receive higher payments 
for providing more therapy visits, which may incentivize unnecessary 
utilization. MedPAC reitereated their recommendation in the March 2017 
Report to Congress that CMS eliminate the use of the number of therapy 
vists as a payment factor in the home health PPS beginning in 2019.\17\
---------------------------------------------------------------------------

    \16\ Report to Congress. Medicare Home Health Study: An 
Investigation on Access to Care and Payment for Vulnerable Patient 
Populations. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.
    \17\ Medicare Payment Advisory Commission (MedPAC). ``Home 
Health Care Services.'' Report to Congress: Medicare Payment Policy. 
Washington, DC, March 2015. P. 233. Accessed on March 28, 2017 at 
http://www.medpac.gov/docs/default-source/reports/mar2015_entirereport_revised.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    To better align payment with patient care needs and better ensure 
that clinically complex and ill beneficiaries have adequate access to 
home health care, we are proposing for CY 2019 case-mix methodology 
refinements through the implementation of the Home Health Groupings 
Model (HHGM). We propose to implement the HHGM for home health periods 
of care beginning on or after January 1, 2019. The implementation of 
the HHGM will require provider education and training, updating and 
revising relevant manuals, and changing claims processing systems. 
Implementation starting in CY 2019 would provide an opportunity for 
CMS, its contractors, and the agencies themselves to prepare. This 
patient-centered model groups periods of care in a manner consistent 
with how clinicians differentiate between patients and the primary 
reason for needing home health care. The HHGM uses 30-day periods 
rather than the 60-day episode used in the current payment system, 
eliminates the use of the number of therapy visits provided to 
determine payment, and relies more heavily on clinical characteristics 
and other patient information (for example, diagnosis, functional 
level, comorbid conditions, admission source) to place patients into 
clinically meaningful payment categories. In total, there are 144 
different payment groups in the HHGM.
    Costs during an episode/period of care are estimated based on the 
concept of resource use, which measures the costs associated with 
visits performed during a home health episode/period. For the current 
HH PPS case-mix weights, we use Wage Weighted Minutes of Care (WWMC), 
which uses data from the Bureau of Labor Statistics (BLS) reflecting 
the Home Health Care Service Industry. For the HHGM, we propose 
shifting to a Cost-Per-Minute plus Non-Routine Supplies (CPM + NRS) 
approach, which uses information from the Medicare Cost Report. The CPM 
+ NRS approach incorporates a wider variety of costs (such as 
transportation) compared to the BLS estimates and the costs are 
available for individual HHA providers while the BLS costs are 
aggregated for the Home Health Care Service industry. The proposed 
methodology used to calculate the cost of an episode/period of care is 
discussed in detail in section III.E.2. of this proposed rule.
    We propose using the 30-day periods rather than the 60-day episodes 
in the current payment system. Episodes have more visits, on average, 
during the first 30 days compared to the last 30 days.\18\ Costs are 
much higher earlier in the episode and lesser later on, therefore we 
believe that dividing a single 60-day episode into two 30-day periods 
more accurately apportions payments. Overall, we found that the average 
length of an episode of care was 47 days, but roughly a quarter of all 
60 days episodes lasted 30 days or less. The proposed change from 60-
day billing to 30-day billing under the HHGM is discussed in detail in 
section III.E.3. of this proposed rule.
---------------------------------------------------------------------------

    \18\ Abt Associates. ``Overview of the Home Health Groupings 
Model.'' Medicare Home Health Prospective Payment System: Case-Mix 
Methodology Refinements. Cambridge, MA, November 18, 2016. Available 
at https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.

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

[[Page 35295]]

    Similar to the current payment system, 30-day periods under the 
HHGM would be classified as ``early'' or ``late'' depending on when 
they occur within a sequence of 30-day periods. Under the current HH 
PPS, the first two 60-day episodes of a sequence of adjacent 60-day 
episodes are considered early, while the third 60-day episode of that 
sequence and any subsequent episodes are considered late. Under the 
HHGM, the first 30-day period is classified as early. All subsequent 
30-day periods in the sequence (second or later) are classified as 
late. We propose to adopt this episode timing classification for 30-day 
periods with the implementation of the HHGM. Similar to the current 
payment system, we propose that a 30-day period could not be considered 
early unless there was a gap of more than 60 days between the end of 
one period and the start of another. The comprehensive assessment would 
still be completed within 5 days of the start of care date and 
completed no less frequently than during the last 5 days of every 60 
days beginning with the start of care date, as currently required by 
Sec.  484.55, Condition of participation: Comprehensive assessment of 
patients. The proposed episode timing classification is discussed in 
detail in section III.E.4. of this proposed rule.
    Under the HHGM, each period would be classified into one of two 
admission source categories--community or institutional--depending on 
what healthcare setting was utilized in the 14 days prior to home 
health. The 30-day period would be categorized as institutional if an 
acute or post-acute care stay occurred in the prior 14 days to the 
start of the 30-day period of care. The 30-day period would be 
categorized as community if there was no acute or post-acute care stay 
in the 14 days prior to the start of the 30-day period of care. We 
propose to adopt this categorization by admission source with the 
implementation of the HHGM. The proposed admission classification 
source is discussed in detail in section III.E.5. of this proposed 
rule.
    The HHGM would group 30-day periods into categories based on a 
variety of patient characteristics. Within the HHGM, one of the steps 
in case-mix adjusting the 30-day payment amount would include grouping 
periods into one of six clinical groups based on the principal 
diagnosis listed on the home health claim. We propose grouping periods 
into one of six clinical groups based on the principal diagnosis with 
the implementation of the HHGM. The principal diagnosis reported would 
provide information to describe the primary reason for which patients 
are receiving home health services under the Medicare home health 
benefit. The proposed six clinical groups, which are discussed in 
detail in section III.E.6. of this proposed rule, are as follows:
     Musculoskeletal Rehabilitation.
     Neuro/Stroke Rehabilitation.
     Wounds--Post-Op Wound Aftercare and Skin/Non-Surgical 
Wound Care.
     Complex Nursing Interventions.
     Behavioral Health Care.
     Medication Management, Teaching and Assessment (MMTA).
    Under the HHGM, each 30-day period would be placed into one of 
three functional levels. The level would indicate if, on average, given 
its responses on certain functional OASIS items, a 30-day period is 
predicted to have higher costs or lower costs. We propose classifying 
30-day periods according to functional level. For each of the six 
clinical groups, we propose that periods would be further classified 
into one of three functional levels with roughly 33 percent of periods 
in each level. The creation of this functional level is very similar to 
how the functional level is created in the current payment system. The 
proposed functional levels and corresponding OASIS items are discussed 
in detail in section III.E.7. of this proposed rule.
    Exploratory analyses determined that comorbidities--that is, 
secondary diagnoses--provide additional information that can further 
explain resource use differences across 30-day periods of care even 
after controlling for the primary diagnosis. Comorbidities are tied to 
poorer health outcomes, more complex medical need and management, and 
higher costs. The HHGM would include a comorbidity adjustment category 
based on the presence of secondary diagnoses. We propose that 30-day 
periods would receive a comorbidity adjustment if any diagnosis codes 
listed on the home health claim are included on a list of comorbidities 
that occurred in at least 0.1 percent of 30-day periods and associated 
with increased average resource use. The proposed comorbidity 
adjustment is discussed in detail in section III.E.8. of this proposed 
rule.
    Currently, if an HHA provides four visits or less in an episode, 
they will be paid a standardized per visit payment instead of an 
episode payment for a 60-day episode of care. These payment adjustments 
are called Low-Utilization Payment Adjustments (LUPAs). While the HHGM 
would still include LUPAs, the approach to calculating the LUPA 
thresholds would need to change in the HHGM because of the switch to 
30-day periods from 60-day episodes. Whereas there is a single LUPA 
threshold of 4 visits for all episodes under the current payment 
system, we propose the LUPA threshold would vary for a 30-day period 
under the HHGM depending on the HHGM payment group to which it was 
assigned. To create LUPA thresholds, 30-day periods (including those 
that were LUPAs in the current payment system) were grouped into the 
144 different HHGM payment groups. For each payment group, we propose 
to use the 10th percentile value of visits to create a payment group 
specific LUPA threshold with a minimum threshold of at least 2 for each 
group. The proposed LUPA thresholds are discussed in more detail in 
section III.E.9. of this proposed rule.
    Figure 5 represents how each 30-day period of care would be placed 
into one of 144 home health resource groups (HHRGs) under the proposed 
HHGM.

[[Page 35296]]

[GRAPHIC] [TIFF OMITTED] TP28JY17.003

    While the proposed HHGM would reflect a change in the case-mix 
adjustment methodology, the conditions for payment would remain the 
same for Medicare home health services, meaning all requirements would 
still

[[Page 35297]]

need to be met in accordance with Sec.  424.22. This includes physician 
certification that: (1) The individual is in need or needed 
intermittent skilled nursing care, or physical therapy or speech-
language pathology services, and is confined to the home; (2) a plan of 
care has been established and will be periodically reviewed by a 
physician who is a doctor of medicine, osteopathy, or podiatric 
medicine; (3) the individual was under the care of a physician who is a 
doctor of medicine, osteopathy, or podiatric medicine; and, (4) a face-
to-face patient encounter, which is related to the primary reason the 
patient requires home health services, occurred no more than 90 days 
prior to the home health start of care date or within 30 days of the 
start of the home health care and was performed by a physician or 
allowed non-physician practitioner. Likewise, under the HHGM, the 
Medicare beneficiary would retain all rights that currently exist under 
the current HH PPS, including those related to beneficiary liability 
for services or any reduction or termination of services. These would 
include the issuance of the Advanced Beneficiary Notice (ABN) and the 
Home Health Change of Care Notice (HHCCN), when appropriate. Medicare 
home health agencies are required to issue an ABN when a HHA believes 
Medicare will not pay for some or all of the patient's Medicare home 
health care. In these circumstances, if the beneficiary chooses to 
receive the items/services in question and Medicare does not cover the 
home health care, HHAs may use the ABN to shift liability for the non-
covered home health care to the beneficiary. The HHCCN is a written 
notice that the HHA provides a beneficiary when his/her home health 
plan of care is changing because the home health agency makes a 
business decision to reduce or stop providing the patient some or all 
of the home health services or supplies OR the beneficiary's physician 
changed orders which may reduce or stop certain Medicare covered home 
health services or supplies.
    To create the HHGM proposed model and related analyses, a data file 
based on home health episodes of care as reported in Medicare home 
health claims was utilized. The claims data provide episode-level data 
(for example, episode From and Through Dates, total number of visits, 
HHRG, diagnoses), as well as visit-level data (visit date, visit length 
in 15-minute units, discipline of the staff, etc.). The claims also 
provide data on whether NRS was provided during the episode and total 
charges for NRS.
    The core file for most of the analyses for this proposed rule 
includes 100 percent of home health episode claims with Through Dates 
in Calendar Year (CY) 2016, processed by March 17, 2017, accessed via 
the Chronic Conditions Data Warehouse (CCW). Original or adjustment 
claims processed after March 17, 2017, would not be reflected in the 
core file. The claims-based file was supplemented with additional 
variables that were obtained from the CCW, such as information 
regarding other Part A and Part B utilization.
    The data were cleaned by processing any remaining adjustments and 
by excluding duplicates and claims that were Requests for Anticipated 
Payment (RAP). In addition, visit-level variables needed for the 
analysis were extracted from the revenue center trailers (that is, the 
line items that describe the visits) and downloaded as a separate 
visit-level file, with selected episode-level variables merged onto the 
records for visits during those episodes. To account for potential data 
entry errors, the visit-level variables for visit length were top-
censored at eight hours.\19\
---------------------------------------------------------------------------

    \19\ Less than 0.1 percent of all visits were recorded as having 
greater than 8 hours of service.
---------------------------------------------------------------------------

    A set of data cleaning exclusions were applied to the episode-level 
file, which resulted in the exclusion of the following:
     Episodes with no covered visits.
     Episodes with any missing units or visit data.
     Episodes with zero payments.
     Episodes with no charges.
     Non-LUPA episodes missing an HHRG.
    The analysis file also includes data on patient characteristics 
obtained from the OASIS assessments conducted by HHA staff at the start 
of each episode. The assessment data are electronically submitted by 
home health agencies (HHAs) to a central CMS repository. In 
constructing the core data file, 100 percent of the OASIS assessments 
submitted October 2015, through December 2016 from the CMS repository 
were uploaded by CMS to the CCW. A CCW-derived linking key (Bene_ID) 
was used to match the OASIS data with CY 2016 episodes of care. 
Episodes that could not be linked with an OASIS assessment were 
excluded from the analysis file, as they included insufficient patient-
level data to create the HHGM.
    To construct measures of resource use, a variety of data sources 
were used (see section III.E.2 of this proposed rule for the proposed 
methodology used to calculate the cost of care under the HHGM). First, 
BLS data on average wages and fringe benefits were used to produce one 
version of the wage-weighted cost per minute for each home health 
discipline. The wage data are for North American Industry 
Classification System (NAICS) 621600--Home Health Care Services. The 
wage data are broken down by the following occupations:

  Table 17--BLS Standard Occupation Classification (SOC) Codes for Home
                            Health Providers
------------------------------------------------------------------------
    Standard Occupation Code (SOC) No.            Occupation title
------------------------------------------------------------------------
29-1141...................................  Registered Nurses.
29-2061...................................  Licensed Practical and
                                             Licensed Vocational Nurses.
29-1123...................................  Physical Therapists.
31-2021...................................  Physical Therapist
                                             Assistants.
31-2022...................................  Physical Therapist Aides.
29-1122...................................  Occupational Therapists.
31-2011...................................  Occupational Therapist
                                             Assistants.
31-2012...................................  Occupational Therapist
                                             Aides.
29-1127...................................  Speech-Language
                                             Pathologists.
21-1022...................................  Medical and Public Health
                                             Social Workers.
21-1023...................................  Mental Health and Substance
                                             Abuse Social Workers.
31-1011...................................  Home Health Aides.
------------------------------------------------------------------------

    For visits where the service provided--as indicated by the 
Healthcare Common Procedure Coding System (HCPCS) code--can be provided 
by only a single standard occupation classification code; for example, 
establishment or review of a plan of care by a registered nurse (RN; 
HCPCS = G0162), the wage (and fringe) rate for that standard occupation 
classification is used to calculate the cost of the minutes for the 
visit. For visits where the service provided can potentially be 
provided by different standard occupation classification, such as 
observation and assessment by an RN or a Licensed Practical Nurse (LPN; 
HCPCS = G0163), a blended rate is applied, with the rate for each 
standard occupation classification code weighted by the total home 
health employment for that standard occupation classification code. The 
employment data are available from the same BLS table as the wage data.
    Home Health Agency Medicare Cost Report (MCR) data were also used 
to construct a measure of resource use after trimming out HHAs whose 
costs were outliers. These data are used to provide a representation of 
the average costs of visits provided by HHAs in the six Medicare home 
health disciplines: Skilled nursing; physical therapy; occupational 
therapy; speech-language pathology; medical social services; and home 
health aide services. Cost report

[[Page 35298]]

data are publicly available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/.
    The 2016 analytic file included 6,293,442 episodes. Of these, 
469,346 (7.5 percent) were excluded because they could not be linked to 
OASIS assessments or because of the reasons listed above. This yielded 
an analysis file including 5,824,096 episodes. Those episodes are 60-
day episodes under the current payment system, but for the HHGM those 
60-day episodes were converted into two 30-day periods. This yielded a 
final HHGM analytic file that included 10,231,507, 30-day periods. 
Certain 30-day periods were excluded for the following reasons:
     Periods missing a diagnosis code or where the diagnosis 
code did not link to a clinical group to case-mix adjust the period's 
payment (after exclusions, n = 10,177,949).
     Inability to merge to certain OASIS items to create the 
episode's functional level that is used for risk adjustment. For all 
the periods in the analytic file, there was a look-back through CY 2015 
for a Start of Care or Resumption of Care assessment that preceded the 
period being analyzed and was in the same sequence of periods. If such 
an assessment was found, it was used to impute responses for OASIS 
items that were not included in the follow-up assessment. Periods which 
did not link to a Start of Care or Resumption of Care assessment were 
dropped (after exclusions, n = 9,477,856).
     No nursing visits or therapy visits (after exclusions, n = 
9,290,340).
     LUPAs were excluded from the analysis. Periods that are 
identified as LUPAs in the current payment system are excluded in the 
creation of the functional score. Following the creation of the score 
(and the corresponding levels), case-mix group specific LUPA thresholds 
were created and episodes/periods were excluded that were below the new 
LUPA threshold when computing the case-mix weights.\20\ Therefore, the 
final analytic sample included 8,642,107 30-day periods that were used 
for the analyses in the HHGM.
---------------------------------------------------------------------------

    \20\ The case-mix group specific LUPA thresholds were determined 
using episodes that were considered LUPAs under the current payment 
system.
---------------------------------------------------------------------------

    As noted in section II.D of this proposed rule, the analyses and 
the ultimate development of Home Health Groupings Model (HHGM) have 
been shared with both internal and external stakeholders via technical 
expert panels, clinical workgroups, special open door forums, and in 
the CY 2017 HH PPS final rule (81 FR 76702). Technical expert panel and 
clinical workgroup webinars on the technical report were held in 
December 2016 and a detailed technical report was posted on the CMS 
home health agency Web page in December, providing opportunity for 
stakeholder feedback.\21\ We also held a National Provider call in 
January 2017, to further solicit feedback from the public.\22\
---------------------------------------------------------------------------

    \21\ Abt Associates. ``Overview of the Home Health Groupings 
Model.'' Medicare Home Health Prospective Payment System: Case-Mix 
Methodology Refinements. Cambridge, MA, November 18, 2016. Available 
at https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
    \22\ Centers for Medicare & Medicaid Services (CMS). 
``Certifying Patients for the Medicare Home Health Benefit.'' MLN 
ConnectsTM National Provider Call. Baltimore, MD, 
December 16, 2016. Slides, examples, audio recording and transcript 
available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2017-01-18-Home-Health.html?DLPage=2&DLEntries=10&DLSort=0&DLSortDir=descending.
---------------------------------------------------------------------------

2. Methodology Used To Calculate the Cost of Care
    To construct the case-mix weights for the HHGM proposal, the costs 
of providing care needed to be determined. A Wage-Weighted Minutes of 
Care (WWMC) approach is used in the current payment system based on 
data from the BLS. However, we are proposing to adopt a Cost-per-Minute 
plus Non-Routine Supplies (CPM + NRS) approach, which uses information 
from Medicare Cost Reports (MCR). We used the following data sources 
and methodology for calculating these measures of resource use:
     BLS Wage Estimates: For the WWMC method of calculating 
home health resource use, wage and fringe data was obtained from the 
BLS by industry code from the NAICS and occupation code from the 
Standard Operation Classification. These data provide nationwide 
average wage rates and the average value of fringe benefits per hour of 
work for specific occupations.
     Home Health Medicare Cost Report Data: All Medicare-
certified HHAs must report their own costs through publicly-available 
home health cost reports maintained by the Healthcare Cost Report 
Information System (HCRIS). Freestanding HHAs report HHA-specific cost 
reports while HHAs that are hospital-based report on the HHA component 
of the hospital cost reports. These cost reports enable estimation of 
the cost per visit by provider and the estimated NRS cost to charge 
ratios. To obtain a more robust estimate of cost, a trimming process 
was applied to remove cost reports with missing or questionable data 
and extreme values.\23\
---------------------------------------------------------------------------

    \23\ The trimming methodology is described in the report 
``Analyses in Support of Rebasing & Updating Medicare Home Health 
Payment Rates'' (Morefield, Christian, and Goldberg 2013). See 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Analyses-in-Support-of-Rebasing-and-Updating-the-Medicare-Home-Health-Payment-Rates-Technical-Report.pdf.
---------------------------------------------------------------------------

     Home Health Claims Data: Medicare home health claims data 
are used in both the WWMC and CPM+NRS methods to obtain minutes of care 
by discipline of care.
     Wage-Weighted Minutes of Care (WWMC) Approach: Used in the 
current payment system, this approach determines resource use for each 
episode by multiplying utilization (in terms of the number of minutes 
of direct patient care provided by each discipline) by the 
corresponding opportunity cost of that care (represented by wage and 
fringe benefit rates from the BLS).\24\ Table 18 shows the occupational 
titles and corresponding mean hourly wage rates from the BLS. The 
employer cost per hour worked shown in the fifth column is calculated 
by adding together the mean hourly wage rates and the fringe benefit 
rates from the BLS (generally around 37 percent of wages). For home 
health disciplines that include multiple occupations (such as skilled 
nursing), the opportunity cost is generated by weighting the employer 
cost by the proportions of the labor mix.\25\ Otherwise, the 
opportunity cost is the same as the employer cost per hour.
---------------------------------------------------------------------------

    \24\ Opportunity costs represent the foregone resources from 
providing each minute of care versus using the resources for another 
purpose (the next best alternative). Generally, opportunity costs 
represent more than the monetary costs, but in these analyses, they 
are proxied using hourly wage rates.
    \25\ Labor mix represents the percentage of employees with a 
particular occupational title (as obtained from the BLS) within a 
home health discipline.

[[Page 35299]]



                                                 Table 18--Occupational Employment and Wages Provided by the Federal Bureau of Labor Statistics
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Estimated
                                                    National       Mean hourly     Estimate of    employer cost   Labor                                                             Opportunity
                Occupation title                   employment         wage        benefits as a     per hour       mix                    Home health discipline                       cost
                                                     counts                        % of wages        worked
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Registered Nurses..............................         173,590          $32.94           43.76          $47.36    0.68  Skilled Nursing........................................          $42.21
Licensed Practical and Licensed Vocational               82,860           21.86           43.76           31.43    0.32
 Nurses.
Physical Therapists............................          25,700           46.42           39.91           64.95    0.76  Physical Therapy.......................................           59.18
Physical Therapist Assistants..................           7,460           30.81           35.75           41.83    0.22
Physical Therapist Aides.......................             500           15.85           35.75           21.52    0.01
Occupational Therapists........................          10,780           44.17           39.91           61.80    0.82  Occupational Therapy...................................           58.46
Occupational Therapist Assistants..............           2,220           32.03           35.75           43.48    0.17
Occupational Therapist Aides...................             110           25.20           35.75           34.21    0.01
Speech-Language Pathologists...................           5,340           46.83           39.91           65.52  ......  Speech Therapy.........................................           65.52
Medical and Public Health Social Workers.......          17,270           28.16           39.91           39.40    0.97  Medical Social Service.................................           39.35
Mental Health and Substance Abuse Social                    450           26.87           39.91           37.59    0.03
 Workers.
Home Health Aides..............................         385,440           10.93           35.75           14.84  ......  Home Health Aide.......................................           14.84
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: May 2015 National Industry-Specific Occupational Employment and Wage Estimates NAICS 621600--Home Health Care Services.

    For each home health period of care, the number of minutes of care 
provided (obtained from the home health claims) is weighted by the 
corresponding opportunity cost for each discipline providing the 
minutes. The resulting wage-weighted minutes of care are summed for the 
30-day period to obtain total costs. Table 19 shows these costs overall 
for 30-day periods in CY 2016 (n = 8,642,107). On average, total period 
costs were $374.52. The distribution ranged from a 5th percentile value 
of $73.87 to a 95th percentile value of $912.10.

                                                               Table 19--Distribution of Average Resource Use Using WWMC Approach
                                                                                        [30 day periods]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     5th          10th          25th          50th          75th          90th          95th
                            Statistics                                  Mean            N        Percentile    Percentile    Percentile    Percentile    Percentile    Percentile    Percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average Resource Use (WWMC).......................................      $374.52     8,642,107        $73.87        $94.97       $158.29       $303.19      $517.063       $749.22       $912.10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    In the current HH PPS, all episodes without a LUPA payment receive 
payment for NRS, regardless of whether or not the HHA provided NRS 
during that episode. NRS payment amounts are determined through a 
payment model separately from the one used to construct the episode's 
case-mix weight. The current payment system determines NRS payment 
using the presence of clinical factors associated with NRS provision 
from the OASIS. Two-thirds of episodes do not include provision of NRS, 
yet those episodes still receive an NRS payment.
    We are proposing to calculate resource use under the HHGM using a 
Cost-per-Minute plus Non-Routine Supplies (CPM + NRS) approach. It 
determines resource use using information from Medicare cost reports. 
Under the proposed HHGM, we would group episodes into their case-mix

[[Page 35300]]

groups taking into account admission source, timing, clinical group, 
functional level, and comorbidity adjustment. From there, the average 
resource use for each case-mix group dictates the group's case-mix 
weight. Resource use is the estimated cost of visits recorded on the 
home health claim plus the cost of NRS recorded on the claims. The cost 
of NRS is generated by taking NRS charges on claims and converting them 
to costs using a NRS cost to charge ratio that is specific to each HHA. 
When NRS is factored into the average resource use, NRS costs are 
reflected in the average resource use that drives the case-mix weights. 
CMS would return $53.03 to the base rate (that is, the NRS conversion 
factor). If there is a high amount of NRS cost for all episodes in a 
particular group (holding all else equal), the resource use will be 
higher relative to the average and the case-mix weight will 
correspondingly be higher. Similar to the current system, NRS would 
still be paid prospectively under the HHGM, but the HHGM eliminates the 
separate case-mix adjustment model for NRS. Incorporating the NRS cost 
into the measure of overall resource use (that is, the dependent 
variable of the payment model) requires adjusting the NRS charges 
submitted on claims based on the NRS cost-to-charge ratio from cost 
report data.
    The following steps would be used to generate the measure of 
resource use under this CPM + NRS approach:
    (1) From the cost reports, obtain total costs for each of the six 
home health disciplines for each HHA.
    (2) From the cost reports, obtain the number of visits by each of 
the six home health disciplines for each HHA.
    (3) Calculate discipline-specific cost per visit values by dividing 
total costs [1] by number of visits [2] for each discipline for each 
HHA. For HHAs that did not have a cost report available (or a cost 
report that was trimmed from the sample), imputed values were used as 
follows:
     A state-level mean was used if the HHA was not hospital-
based. The state-level mean was computed using all non-hospital based 
HHAs in each state.
     An urban nationwide mean was used for all hospital-based 
HHAs located in a Core-based Statistical Area (CBSA). The urban nation-
wide mean was computed using all hospital-based HHAs located in any 
CBSA.
     A rural nationwide mean was used for all hospital-based 
HHAs not in a CBSA. The rural nation-wide mean was computed using all 
hospital-based HHAs not in a CBSA.
    (4) From the home health claims data, obtain the average number of 
minutes of care provided by each discipline across all episodes for a 
HHA.
    (5) From the home health claims data, obtain the average number of 
visits provided by each discipline across all episodes for each HHA.
    (6) Calculate a ratio of average visits to average minutes by 
discipline by dividing average visits provided [5] by average minutes 
of care [4] by discipline for each HHA.
    (7) Calculate costs per minute by multiplying the HHA's cost per 
visit [3] by the ratio of average visits to average minutes [6] by 
discipline for each HHA.
    (8) Obtain 30-day period costs by multiplying costs per minute [7] 
by the total number of minutes of care provided during a 30-day period 
by discipline. Then, sum these costs across the disciplines for each 
period.
    This approach accounts for variation in the length of a visit by 
discipline. NRS costs are added to the resource use calculated in [8] 
in the following way:
    (9) From the cost reports, determine the NRS cost-to-charge ratio 
for each HHA. The NRS ratio is trimmed if the value falls in the top or 
bottom 1 percent of the distribution across all HHAs from the trimmed 
sample. Imputation for missing or trimmed values is done in the same 
manner as it was done for cost per visit (see [3] above).
    (10) From the home health claims data, obtain NRS charges for each 
period.
    (11) Obtain NRS costs for each period by multiplying charges from 
the home health claims data [10] by the cost-to-charge ratio from the 
cost reports [9] for each HHA.
    Resource use is then obtained by:
    (12) Summing costs from [8] with NRS costs from [11] for each 30-
day period.
    Table 20 shows these costs overall for 30-day periods in CY 2015 (n 
= 8,642,107). On average, total 30-day period costs are $1,585.48. The 
distribution ranges from a 5th percentile value of $300.03 to a 95th 
percentile value of $3,908.93.

                                         Table 20--Distribution of Average Resource Use Using CPM + NRS Approach
                                                                    [30 day periods]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   5th          10th         25th         50th         75th         90th         95th
             Statistics                  Mean          N        Percentile   Percentile   Percentile   Percentile   Percentile   Percentile   Percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Resource Use (CPM + NRS)...    $1,585.48    8,642,107      $300.03      $396.82      $671.96     $1262.65    $2,119.49    $3,135.38    $3,908.93
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The distributions and magnitude of the estimates of costs for the 
two methods are very different. The differences arise because the CPM + 
NRS method incorporates HHA-specific costs that represent the total 
costs incurred during a 30-day period (including overhead costs), while 
the WWMC method provides an estimate of only the labor costs (wage + 
fringe) related to direct patient care from patient visits that are 
incurred during a 30-day period. Those costs are not HHA-specific and 
do not account for any non-labor costs (such as transportation costs) 
or the non-direct patient care labor costs (such as, administration and 
general labor costs). Because the costs estimated using the two 
approaches are measuring different items, they cannot be directly 
compared. However, if the true cost of a 30-day period is correlated 
with the labor that is provided during visits, the two approaches 
should be highly correlated. The correlation coefficient between the 
two approaches to calculating resource use is equal to 0.8016 (n = 
8,642,107). Therefore, the relationship in relative costs is similar 
between the two methods.
    Using cost report data to develop case-mix weights more evenly 
weights skilled nursing services and therapy services than the BLS 
data. Table 21 shows the ratios between the estimated costs per hour 
for each of the home health disciplines compared with skilled nursing 
resulting from the CPM +NRS versus WWMC methods. Under the CPM+NRS 
methodology, the ratio for physical therapy costs per hour to skilled 
nursing is 1.14 compared with 1.40 using the WWMC method.

[[Page 35301]]



                                                Table 21--Relative Values in Costs per Hour by Discipline
                                                                [Skilled nursing is base]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Skilled        Physical      Occupational       Speech          Medical      Home  health
                 Estimated cost per hour                      nursing         therapy         therapy         therapy     social service       aide
--------------------------------------------------------------------------------------------------------------------------------------------------------
CPM+NRS.................................................            1.00            1.14            1.16            1.24            1.36            0.41
WWMC....................................................            1.00            1.40            1.39            1.50            0.95            0.36
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We believe that using cost report data to calculate the cost of 
home health care better aligns the case-mix weights with the total 
relative cost for treating various patients. In addition, using cost 
report data allows us to incorporate NRS into the case-mix system, 
rather than maintaining a separate payment system. Therefore, we are 
proposing to calculate the cost of a 30-day period of home health care 
under the HHGM using the cost per minute plus non-routine supplies 
(CPM+NRS) approach outlined above. We invite comments on the proposed 
methodology for calculating the cost of a 30-day period of care under 
the HHGM.
3. Change From 60-Day Billing to 30-Day Billing Under the HHGM
a. 30-Day Unit of Payment
    Currently, HHAs are paid for each 60-day episode of home health 
care provided. We are proposing 30-day periods of payment for the HHGM. 
Through examination of the resources used within a 60-day episode of 
care, we identified differences in resources used between the first 30-
day period within a 60-day episode and the second 30-day period within 
a 60-day episode. Episodes have more visits, on average, during the 
first 30 days compared to the last 30 days (see Tables 22 and 23). 
Costs are much higher earlier in the episode and lesser later on, 
therefore, dividing a single 60-day episode into two 30-day periods 
more accurately apportions payments. This difference in resource use 
between the first and second 30-day period within a 60-day episode is 
one of the main reasons we are proposing 30-day periods of payment for 
the HHGM. Another reason for proposing to change the unit of payment 
from 60-days to 30-days is the removal of the therapy visit thresholds 
from the case-mix adjustment methodology under the HHGM (the current 
system accounts for therapy visit variation through the use of these 
thresholds). Without thresholds being used to account for resource use 
variation, a shorter period of care is needed to reduce the variation 
and improve the accuracy of the case-mix weights generated under the 
HHGM. The HHGM's goodness of fit statistics (for example, R-squared) 
improve due to reduced resource use variation when a shorter, more 
constrained time period is examined. Therefore, the case-mix weights 
and proposed move to a 30-day period under the HHGM better approximate 
relative resource use. Furthermore, by switching to a 30-day period, 
the billing cycle for Medicare home health services would be the same 
as for other Medicare health care settings, such as hospices and SNFs, 
which currently bill on a monthly basis.
    Using two segments of the current 60-day episodes, 30-day periods 
were constructed as follows for the development of the HHGM:
     A 30-day period comprising days 1-30 of a current 60-day 
episode where ``day 1'' is the current 60-day episode's From Date.
     A second period comprising days 31 and above of a current 
60-day episode. This period would be 30-days in length if the current 
episode was 60-days (from the From Date of the episode to the Through 
Date of the episode) and some lesser length if the current episode were 
fewer than 60-days.
    A typical 60-day episode was broken down into two portions: A first 
30-day period; and a second 30-day period consisting of the remaining 
days. For example, if the current episode was 58 days, then the first 
period was 30-days, and the second period was comprised of the 
remaining 28 days. Resource utilization was calculated for each 30-day 
period based on the discipline visits that occur within each respective 
30-day time span. The OASIS information that is applied to the two 30-
day periods (for example, OASIS information) is established by the same 
OASIS that is linked to the current 60-day episode.
    Table 22 shows the average number of visits by discipline and 
resource use estimates during 15-day periods in a 60-day episode, and 
shows that visit patterns differ over the course of a 60-day episode. 
Across all labor categories there is a decline in visits as the episode 
proceeds; in total there are 6.8 visits on average in days 1-15 and 2.6 
visits on average in days 46-60 which is a 61.8 percent decline from 
the first 15 days of care in a 60-day episode to the last 15 days of 
care in a 60-day episode.
    Table 23 shows the average number of visits and resource use 
estimates by discipline during 15-day periods in a 60-day episode, but 
for only those episodes that are first in a sequence of episodes and 
last a full 60-days. A sequence of episodes contains episodes where no 
more than 60-days elapse from the end of one episode to the start of 
the next. Therefore, first episodes are those where the beneficiary has 
not had home health in the 60-days prior to the start of the first 
episode. Even among this subset of episodes, there is a decline in 
average visits by quarter as the episode proceeds.
    These results show that there is variation in average resource use 
across 60-day episodes. By moving to two 30-day periods within a 60-day 
episode (or a single 30-day period if the 60-day episode contains 30 or 
fewer days), the HH PPS case mix weights better align with the resource 
use patterns across the current 60-day episode. Though the analyses are 
based on two 30-day periods in a 60-day episode, we are not proposing a 
change in the requirements for completing the comprehensive assessment. 
Under the HHGM, the comprehensive assessment would still be required, 
as outlined in Sec.  484.55 roughly every 60-days as is required under 
the current HH PPS. While we examined resource use in 15-day periods in 
a 60-day episode of care, as outlined in Tables 22 and 23, in order to 
strike an appropriate balance between increasing payment accuracy and 
being cognizant of increasing burden for the home health industry, we 
are not proposing to adjust payments every 15 days. We expect that 
billing on a 30-day basis should not be completely unfamiliar to HHAs 
as HHAs billed as such prior to the implementation of the HH PPS.

[[Page 35302]]



                          Table 22--Average Visits per 15 Days During a 60-Day Episode
----------------------------------------------------------------------------------------------------------------
                                                     Days 1-15      Days 16-30      Days 31-45      Days 46-60
----------------------------------------------------------------------------------------------------------------
Average Daily Resource Use......................         $261.97         $162.44         $107.49          $88.67
Average Skilled Nursing Visits..................             3.3             2.1             1.6             1.4
Average PT Visits...............................             2.2             1.7             1.0             0.6
Average OT Visits...............................             0.6             0.5             0.3             0.2
Average SLP Visits..............................             0.1             0.1             0.1             0.0
Average Aide Visits.............................             0.5             0.5             0.4             0.3
Average MSS Visits..............................             0.1             0.0             0.0             0.0
                                                 ---------------------------------------------------------------
    Average Total Visits........................             6.8             4.9             3.3             2.6
----------------------------------------------------------------------------------------------------------------


                          Table 23--Average Visits per 15 Days During a 60-Day Episode
                    [Only First Episodes in a Sequence of Episodes That Last a Full 60-Days]
----------------------------------------------------------------------------------------------------------------
                                                     Days 1-15      Days 16-30      Days 31-45      Days 46-60
----------------------------------------------------------------------------------------------------------------
Average Daily Resource Use......................         $326.78         $217.75         $174.82         $167.69
Average Skilled Nursing Visits..................             3.9             2.5             2.2             2.3
Average PT Visits...............................             2.6             2.4             1.7             1.4
Average OT Visits...............................             0.8             0.8             0.5             0.4
Average SLP Visits..............................             0.1             0.2             0.1             0.1
Average Aide Visits.............................             0.5             0.5             0.5             0.4
Average MSS Visits..............................             0.1             0.1             0.0             0.0
                                                 ---------------------------------------------------------------
    Average Total Visits........................             8.1             6.4             5.1             4.6
----------------------------------------------------------------------------------------------------------------

    Overall, approximately 25 percent of episodes are 30 days or less 
in length, and therefore, would produce no second 30-day period under 
the HHGM. These episodes (with 30 days or fewer) would convert to only 
one 30-day period each; any 60-day episode that is 31 days or more 
would produce two 30-day periods: A first period comprising 30 days in 
length and then a second period with the remaining days in the 60-day 
episode.
    Overall, after conversion from the 5,110,629 60-day episodes, there 
were 8,642,107 30-day periods:
     There were 1,197,740 30-day periods that could potentially 
be one-to-one conversions from 60-day episodes that were 30-days or 
fewer in length.
     Additionally, there were 3,912,889 60-day episodes that 
were between 31 and 60-days in length in which two 30-day periods could 
be produced. That is, those 60-day episodes could produce up to 
7,825,778 30-day periods.
     However, from the above episodes (which were used to 
create the 30-day periods), there were 381,411 periods that had no 
visits included or were considered a LUPA under the HHGM and therefore 
were excluded. This is shown in Table 24.
[GRAPHIC] [TIFF OMITTED] TP28JY17.004


[[Page 35303]]


    Tables 25 and 26 show the frequency of episode length in days and 
estimates of resource use among the original, 60-day episodes and the 
corresponding distribution of episode length and resource use estimates 
among the simulated 30-day periods. Again, these results show 
differences by the length of care. By shortening the unit of time that 
CMS pays for within the HH PPS (from 60-day episodes to 30-day 
periods), payment would more accurately relate to the variation in 
costs seen across episodes and periods of care.

                       Table 25--Frequency of Length of 60-Day Episodes and Average Resource Use for Episodes of a Certain Length
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
        Length of episode in days            Number of      Percent of        Average      deviation of    Percentile of      Median       Percentile of
                                             episodes        episodes      resource use    resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................             189             0.0         $390.10         $200.87         $348.85         $249.99         $495.03
2.......................................           1,204             0.0          542.52          348.55          453.72          318.34          673.97
3.......................................           3,796             0.1          673.54          418.19          596.78          403.37          846.78
4.......................................           6,051             0.1          751.09          474.35          667.26          447.37          940.19
5.......................................           9,385             0.2          829.89          521.12          730.17          506.40        1,021.84
6.......................................          11,793             0.2          873.31          505.81          785.61          542.35        1,083.79
7.......................................          16,587             0.3          941.17          560.28          838.68          588.23        1,152.63
8.......................................          19,887             0.4          972.38          556.43          875.29          613.68        1,200.88
9.......................................          21,026             0.4        1,024.75          592.64          920.13          641.04        1,272.40
10......................................          25,724             0.5        1,078.33          623.90          965.80          671.36        1,345.45
11......................................          29,757             0.6        1,130.59          645.67        1,021.82          708.30        1,418.14
12......................................          34,725             0.7        1,210.00          661.38        1,094.30          769.13        1,515.79
13......................................          40,923             0.8        1,264.30          704.44        1,138.39          791.18        1,585.99
14......................................          49,796             1.0        1,328.34          737.07        1,194.49          829.00        1,667.27
15......................................          55,035             1.1        1,348.52          744.31        1,210.83          840.75        1,697.71
16......................................          47,921             0.9        1,386.45          780.24        1,245.80          850.81        1,754.75
17......................................          48,442             0.9        1,417.42          818.41        1,265.56          865.41        1,796.48
18......................................          48,802             1.0        1,467.76          851.49        1,311.49          883.41        1,864.69
19......................................          48,998             1.0        1,538.06          887.62        1,377.47          926.88        1,955.85
20......................................          53,699             1.1        1,583.97          897.61        1,427.87          954.98        2,014.18
21......................................          59,071             1.2        1,649.78          939.64        1,482.19          995.89        2,097.03
22......................................          66,055             1.3        1,678.50          958.48        1,501.48        1,012.61        2,129.05
23......................................          58,291             1.1        1,743.90          995.17        1,565.59        1,047.09        2,225.60
24......................................          59,211             1.2        1,797.28        1,026.42        1,605.71        1,085.07        2,292.14
25......................................          58,481             1.1        1,847.21        1,059.00        1,656.07        1,103.81        2,363.45
26......................................          58,245             1.1        1,919.71        1,098.44        1,734.72        1,145.08        2,456.08
27......................................          63,077             1.2        1,976.10        1,115.08        1,799.37        1,188.51        2,534.66
28......................................          67,228             1.3        2,038.34        1,156.00        1,845.61        1,229.39        2,608.78
29......................................          73,202             1.4        2,056.06        1,176.25        1,850.93        1,227.68        2,630.45
30......................................          61,139             1.2        2,131.43        1,219.42        1,925.44        1,266.69        2,748.63
31......................................          54,481             1.1        2,054.35        1,239.89        1,844.53        1,175.90        2,664.68
32......................................          48,964             1.0        2,106.57        1,320.10        1,876.72        1,183.96        2,745.18
33......................................          45,330             0.9        2,162.62        1,347.74        1,940.78        1,206.50        2,828.61
34......................................          47,568             0.9        2,249.85        1,433.54        2,011.03        1,250.25        2,928.78
35......................................          50,567             1.0        2,323.60        1,436.69        2,094.77        1,331.92        3,004.86
36......................................          54,810             1.1        2,355.59        1,436.60        2,133.82        1,372.34        3,017.30
37......................................          44,844             0.9        2,429.51        1,534.67        2,185.85        1,389.64        3,114.63
38......................................          43,262             0.8        2,474.67        1,561.76        2,208.94        1,423.02        3,166.09
39......................................          40,322             0.8        2,521.79        1,611.74        2,258.31        1,429.43        3,244.51
40......................................          39,193             0.8        2,611.98        1,669.37        2,348.75        1,487.83        3,344.28
41......................................          42,316             0.8        2,676.84        1,652.00        2,433.86        1,570.54        3,392.77
42......................................          43,428             0.8        2,717.91        1,713.02        2,433.05        1,570.70        3,486.36
43......................................          44,866             0.9        2,723.30        1,692.49        2,429.86        1,594.39        3,475.35
44......................................          36,714             0.7        2,784.62        1,751.30        2,489.70        1,608.51        3,560.94
45......................................          34,973             0.7        2,825.00        1,800.40        2,498.55        1,617.88        3,621.28
46......................................          32,604             0.6        2,843.98        1,881.88        2,516.21        1,592.33        3,649.60
47......................................          31,457             0.6        2,901.93        1,914.85        2,568.74        1,637.72        3,722.24
48......................................          33,588             0.7        2,967.28        1,890.38        2,637.52        1,692.59        3,802.17
49......................................          35,758             0.7        2,985.66        1,881.80        2,661.29        1,728.52        3,810.65
50......................................          38,505             0.8        3,006.91        1,948.18        2,656.75        1,714.03        3,846.70
51......................................          34,081             0.7        3,069.10        1,987.99        2,711.23        1,754.01        3,911.27
52......................................          35,200             0.7        3,044.64        1,968.48        2,699.22        1,730.90        3,902.26
53......................................          37,353             0.7        3,041.44        2,031.19        2,656.68        1,663.20        3,911.30
54......................................          42,039             0.8        3,050.40        1,995.63        2,691.98        1,681.25        3,935.63
55......................................          57,053             1.1        3,031.82        1,993.77        2,686.03        1,655.26        3,929.67
56......................................         133,103             2.6        2,739.54        1,902.85        2,402.36        1,337.71        3,653.27
57......................................         134,831             2.6        2,910.43        1,957.02        2,568.83        1,506.89        3,835.12
58......................................         124,027             2.4        2,979.59        2,032.32        2,616.53        1,506.76        3,934.52
59......................................         131,881             2.6        3,056.59        2,106.81        2,671.40        1,531.18        4,042.43
60......................................       2,339,771            45.8        3,167.25        2,582.35        2,584.60        1,381.40        4,146.38
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................       5,110,629           100.0        2,668.61        2,167.89        2,126.24        1,223.35        3,471.50
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 35304]]


                       Table 26A--Frequency of Length of 30-Day Periods and Average Resource Use for Episodes of a Certain Length
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
        Length of period in days             Number of      Percent of        Average      deviation of    Percentile of      Median       Percentile of
                                              periods         periods      resource use    resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................           3,524             0.0         $324.24         $263.35         $280.90         $211.49         $370.04
2.......................................           8,369             0.1          388.82          369.29          315.71          239.78          433.16
3.......................................          15,906             0.2          457.10          366.59          362.89          264.75          533.87
4.......................................          23,219             0.3          505.38          421.31          389.49          278.90          600.01
5.......................................          32,751             0.4          548.40          454.32          422.29          293.29          661.01
6.......................................          41,608             0.5          574.07          450.58          448.54          304.63          704.08
7.......................................          43,863             0.5          659.05          534.21          512.49          332.18          825.53
8.......................................          51,527             0.6          701.40          524.40          566.85          362.61          892.13
9.......................................          52,384             0.6          750.57          575.81          606.90          383.81          957.98
10......................................          57,437             0.7          821.25          612.49          679.85          416.34        1,056.92
11......................................          64,917             0.8          871.27          626.24          738.18          452.60        1,118.16
12......................................          71,310             0.8          937.62          667.37          791.38          482.71        1,220.16
13......................................          79,309             0.9          990.00          697.39          832.05          514.47        1,288.99
14......................................          81,603             0.9        1,097.23          740.41          943.52          584.53        1,432.03
15......................................          86,340             1.0        1,154.17          754.00          999.52          634.63        1,495.77
16......................................          77,411             0.9        1,180.96          793.23        1,017.08          634.79        1,538.93
17......................................          77,257             0.9        1,217.06          828.31        1,044.18          656.03        1,579.78
18......................................          79,981             0.9        1,251.95          846.54        1,070.55          665.44        1,632.13
19......................................          82,356             1.0        1,296.30          881.05        1,109.47          687.23        1,690.54
20......................................          89,669             1.0        1,336.50          899.78        1,144.26          709.84        1,748.36
21......................................          91,247             1.1        1,426.72          942.61        1,230.61          773.65        1,859.45
22......................................          99,530             1.2        1,472.50          956.21        1,274.66          809.29        1,910.76
23......................................          94,124             1.1        1,494.61          993.71        1,285.28          793.44        1,959.20
24......................................          99,779             1.2        1,513.58        1,018.60        1,302.00          791.75        1,989.40
25......................................         113,978             1.3        1,486.39        1,035.65        1,260.53          749.62        1,964.15
26......................................         188,106             2.2        1,282.22        1,006.44        1,027.40          550.41        1,727.53
27......................................         195,398             2.3        1,372.37        1,038.05        1,126.05          617.79        1,844.29
28......................................         189,012             2.2        1,465.50        1,086.75        1,219.26          668.85        1,967.27
29......................................         202,819             2.3        1,541.39        1,118.11        1,295.04          727.83        2,060.18
30......................................       6,247,373            72.3        1,719.92        1,375.02        1,396.74          728.43        2,305.59
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................       8,642,107           100.0        1,585.48        1,289.23        1,262.65          671.96        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The 60-day episode unit of payment was originally implemented on 
October 1, 2000, because most episodes in the HHA per-episode PPS 
demonstration, which was used to inform the development of the HH PPS, 
ended in 60 days or less, the OASIS data would be captured on a 60-day 
cycle, and Medicare plan of care/certification requirements continue to 
be bimonthly (64 FR 58143). In the FY 2001 HH PPS proposed rule, we 
noted that about 60 percent of episodes paid under the HH PPS were 
completed within one 60-day episode and 73 percent within two 60-day 
episodes. In the FY 2001 HH PPS final rule, we noted that we would 
continue to monitor the appropriateness of the 60-day unit of payment, 
and would consider modifying our approach to the episode definition in 
subsequent years of PPS, if warranted (65 FR 41136).
    In CY 2016, 73 percent of episodes were completed within one 60-day 
episode and 86 percent within two 60-day episodes. We currently observe 
wide variation in the length of care in the current HH PPS. Overall, 
the average length of home health care was approximately 46 days, but 
roughly a quarter of all 60-day episodes lasted 30 days or less. For 
example, those episodes that had a hospital stay in the seven days 
prior to the start of the episode where the Diagnosis Related Group 
(DRG) was either 469 or 470 (major joint replacement or reattachment of 
lower extremity) had an average length equal to 23.7 days. As noted 
above, there is a decline in visits as the episode proceeds with a 61.8 
percent decline from the first 15 days of care in a 60-day episode to 
the last 15 days of care in a 60-day episode.
    The wide variation in resource use and trends toward shorter 
episodes of care, the difference in resources between the first and 
second 30-day period within a 60-day episode, and the removal of the 
therapy visit thresholds from the case-mix adjustment methodology 
(which currently account for variation in resource use, but create 
adverse incentives as outlined in section II.D of this proposed rule) 
result in less accurate case-mix weights. When a shorter, more 
constrained time period is used for payment, the HHGM's goodness of fit 
statistics (for example, R-squared) improve due to reduced resource use 
variation. Accordingly, the case-mix weights under the HHGM better 
approximate relative resource use. Therefore, we are proposing to 
change the unit of payment under section 1895(b)(2) of the Act from a 
60-day episode of care to 30-day periods of care. Section 1895(b)(2) of 
the Act requires the Secretary to consider potential changes in the mix 
of services provided within that unit and their cost. Our analysis 
shows evidence of a change in the mix of services under a 60-day 
episode of care, as outlined above and in section II.D of this proposed 
rule. Therefore, to better account for changes in the mix of services 
over time; to ensure that the unit of payment reflects an appropriate 
number, type, and duration of visits provided within a unit of payment; 
and to provide continued access to quality services, we are proposing 
to change the unit of payment from a 60-day episode of care to a 30-day 
period of care and to implement case-mix adjustment methodology 
refinements, outlined in sections III.E.1 through III.E.12 of this 
proposed rule.

[[Page 35305]]

b. National, Standardized 30-Day Payment Amount
    We note that we propose to implement the HHGM for 30-day periods of 
care beginning on or after January 1, 2019.\26\ As a result, we would 
calculate a proposed national, standardized 30-day payment amount in 
the CY 2019 HH PPS proposed rule. In calculating a national, 
standardized 30-day payment amount for CY 2019, we propose to start 
with the CY 2019 national, standardized 60-day episode payment amount 
reflecting the HHA market basket update as specified in section 
1895(b)(3)(B) of the Act, add back in the CY 2019 non-routine medical 
supply (NRS) conversion factor amount reflecting the HHA market basket 
update as specified in section 1895(b)(3)(B) of the Act, and then 
divide the sum by two.
---------------------------------------------------------------------------

    \26\ 60-day episodes of care that begin on or before December 
31, 2018 and end on or after January 1, 2019, will be paid using the 
current case-mix adjustment methodology (153-group system) and a CY 
2019 national, standardized 60-day episode payment amount and/or CY 
2019 national per-visit amounts.
---------------------------------------------------------------------------

    If we had proposed to implement the HHGM in CY 2018, we would have 
calculated a proposed 30-day payment amount for CY 2018 by starting 
with the CY 2018 proposed national, standardized 60-day episode payment 
amount of $3,038.43, adding back in the CY 2018 proposed NRS conversion 
factor amount of $53.03, and dividing the sum by two to produce a 30-
day payment amount of $1,545.73. However, we reiterate that we propose 
to implement the HHGM for 30-day periods of care beginning on or after 
January 1, 2019; so we propose to calculate a national, standardized 
30-day payment amount for CY 2019 using the CY 2019 60-day episode 
payment amount, adding back in the CY 2019 NRS conversion factor and 
dividing the sum by two to produce a 30-day payment amount. Finally, we 
note that the calculation proposed above would only be used to 
calculate a national, standardized 30-day payment amount for CY 2019. 
To calculate a national, standardized 30-day payment amount for CY 2020 
and subsequent years, we would update the national, standardized 30-day 
payment amount from the immediate preceding year by the home health 
payment update percentage required by the statute, as described in 
section III.C.1 of this rule.
    In determining the 30-day payment amount, we evaluated whether 
starting with the national, standardized 60-day episode payment amount, 
adding back in the NRS conversion factor amount and dividing the sum by 
two was an appropriate estimate of the cost of a 30-day period of care. 
Section 1895(b)(3) of the Act provides a methodology for determining an 
initial payment amount for the PPS and for calculating annual 
increases. As noted in this proposed rule, the Act at section 
1895(b)(2) gives the Secretary the discretion to determine the ``unit 
of payment'' (also referred to in the statute as a ``unit of service'') 
on which a standard prospective payment amount would be based. Since we 
are proposing to change the unit of payment, we believe it is necessary 
to calculate a 30-day payment amount that would accurately reflect what 
a 30-day payment would be had we chosen to use a 30-day rather than a 
60-day unit of payment when we first implemented the PPS.
    To do this, we calculated an estimated 30-day payment amount by 
taking the average number of visits per discipline per 30-day period of 
care in CY 2016 multiplied by the FY 2001 per-visit amounts (including 
average NRS costs per visit) initially established under the HH PPS 
based on the most recent audited cost report data available to the 
Secretary in accordance with section 1895(b)(3)(A)(I) of the Act, as 
adjusted for inflation and productivity. The FY 2001 per-visit amounts 
were adjusted for inflation by the actual HHA market basket updates 
(reflecting historical data from FY 2002 to CY 2016), the regulatory 
HHA market basket updates for CY 2017 (which is based on the CY 2017 
forecasted data at the time of CY 2017 rulemaking (81 FR 76714)) and CY 
2018 (which is based on the CY 2018 forecasted data in this CY 2018 
proposed rule), and for productivity (using Economy-wide Multifactor 
Productivity as specified in section 1895(b)(3)(B)(vi) to the Act and 
described in section 1886(b)(3)(B)(xi)(II) of the Act) beginning in 
2015, as reflected in Table 26B.

                               Table 26B--HHA Market Basket Updates and Productivity Adjustments, FY 2002 Through CY 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     FY/CY
                                                                   FY 02    FY 03     04*     CY 05    CY 06    CY 07    CY 08    CY 09    CY 10
-------------------------------------------------------------------------------------------------------------------------------------------------
Market Basket Update (Historical Data FY02 to CY16, forecast          3.4      3.2      4.0      3.1      3.1      3.5      3.2      1.7      1.7
 CY17 and CY18).................................................
                                                                  .......  .......  .......  .......  .......  .......  .......  .......  .......
                                                                    CY 11    CY 12    CY 13    CY 14    CY 15    CY 16    CY 17     CY18  .......
Market Basket Update (Historical FY02 to CY16, forecast CY 17         2.0      1.7      1.6      1.6      1.6      2.0      2.8      2.7  .......
 and CY 18).....................................................
Multi-Factor Productivity Adjustment (historical CY15,            .......  .......  .......  .......      0.4      0.6      0.3      0.5  .......
 preliminary historical CY16, forecast CY17 and CY18)...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in Table 28, using the FY 2001 per-visit amounts initially 
established under the HH PPS results in an estimated 30-day payment 
amount of $1,494.64. This value is less than, but similar to half the 
sum of the proposed CY 2018 national, standardized 60-day episode 
payment amount and proposed CY 2018 NRS conversion factor amount 
($1,545.73).
    We also calculated an estimated 30-day payment amount by taking the 
average number of visits per discipline per 30-day period of care in CY 
2016 multiplied by the FY 2015 costs-per-visit, per discipline, based 
on the most recent cost report data available at the time of CY 2018 HH 
PPS rulemaking (as outlined in Table 2 in section III.A of this 
proposed rule) and further adjusted to include average NRS costs per 
visit, for outliers in accordance with section 1895(b)(3)(C) of the 
Act, and for inflation and productivity. As shown in Table 29, using 
2015 costs-per-visit, per discipline, based on the most recent cost 
report data available at the time of CY 2018 HH PPS rulemaking, results 
in an estimated 30-day payment amount of $1,485.11. This value is also 
less than, but similar to half the sum of the proposed CY 2018 
national, standardized 60-day episode payment amount and proposed CY 
2018 NRS conversion factor amount ($1,545.73).

[[Page 35306]]



 Table 27--Average Visits Per Discipline for 30-Day Periods of Care, CY
                                  2016
------------------------------------------------------------------------
                                                              CY 2016
                                                          Average number
                       Discipline                          of visits in
                                                           30-day period
------------------------------------------------------------------------
Skilled Nursing.........................................             5.0
Physical Therapy........................................             3.3
Occupational Therapy....................................             0.9
Speech-Language Pathology...............................             0.2
Medical Social Services.................................             0.1
Home Health Aides.......................................             1.0
                                                         ---------------
    Total...............................................            10.5
------------------------------------------------------------------------
Source: CY 2016 claims data (as of March 17, 2017), excluding 30-day
  periods of care with no visits and those classified as LUPAs as
  outlined in section III.E.9 of this proposed rule.


  Table 28--Estimated 30-Day Payment Amount in CY 2018 (Using FY 2001 HH PPS Per-Visit Amounts, Per Discipline,
                         Adjusted for Inflation and for Productivity Beginning in 2015)
----------------------------------------------------------------------------------------------------------------
                                                                   FY 2001 per-
                                                   FY 2001 per-    visit amounts      CY 2016
                   Discipline                      visit amounts      trended     average number  CY 2018 30-day
                                                        \1\         forward to     of visits in    period costs
                                                                       2018        30-day period
----------------------------------------------------------------------------------------------------------------
Skilled Nursing.................................          $95.34         $143.03             5.0         $715.15
Physical Therapy................................          104.27          156.43             3.3          516.22
Occupational Therapy............................          104.97          157.48             0.9          141.73
Speech-Language Pathology.......................          113.32          170.01             0.2           34.00
Medical Social Services.........................          152.95          229.47             0.1           22.95
Home Health Aides...............................           43.05           64.59             1.0           64.59
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............            10.5        1,494.64
----------------------------------------------------------------------------------------------------------------
\1\ The FY 2001 per-visit amounts can be found in 65 FR 41187 through 41188 (Table 6).
Note(s): When the HH PPS was established on October 1, 2000, the original per-visit payment amounts for each
  discipline included a one-time adjustment of $0.21 to reflect the costs associated with OASIS assessment
  schedule refinements (65 FR 41187). In addition, the resulting per-visit rates were then divided by 1.05 to
  account for the estimated percentage of outlier payments, a calculation further refined in the CY 2008 HH PPS
  final rule (72 FR 49868) by multiplying by 1.05 and 0.95. The FY 2001 per-visit amounts in the text reflect
  removing the $0.21 from the FY 2001 per-visit amounts and include the effects of the CY 2008 outlier
  calculation refinement.


Table 29--Estimated 30-Day Payment Amount in CY 2018 (Using FY 2015 Average Costs-Per-Visit, Per Discipline, Adjusted for Inflation and for Productivity
                                                                   Beginning in 2015)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              FY 2015
                                                              FY 2015         FY 2015     average costs-                      CY 2016
                                              FY 2015       average NRS     average NRS   per-visit plus      Outlier     average number  CY 2018 30-day
               Discipline                 average costs-    costs-per-      costs-per-      NRS trended     adjustment     of visits in    period costs
                                             per-visit       visit \1\    visit plus NRS    forward to        factor       30-day period
                                                                                               2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Skilled Nursing.........................         $132.48          +$3.36         $135.84         $144.29          x 0.95             5.0         $685.38
Physical Therapy........................          156.32            3.36          159.68          169.61          x 0.95             3.3          531.73
Occupational Therapy....................          154.64            3.36          158.00          167.83          x 0.95             0.9          143.50
Speech-Language Pathology...............          170.96            3.36          174.32          185.17          x 0.95             0.2           35.18
Medical Social Services.................          220.07            3.36          223.43          237.33          x 0.95             0.1           22.55
Home Health Aides.......................           62.80            3.36           66.16           70.28          x 0.95             1.0           66.77
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................  ..............  ..............  ..............  ..............  ..............            10.5        1,485.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Of the 8,032 FY 2015 HHA cost reports used for the analysis presented in Table 2 in section III.A of this proposed rule, NRS costs totaled
  $301,207,702. For those same 8,032 HHAs, visits (all visits, all episode types) where the claim through date fell on or between the FY start end date
  of the agency's cost report totaled 89,726,272. $301,207,702 divided by 89,726,272 = $3.36 per visit.

    We believe our proposal to start with the national, standardized 
60-day episode payment amount, add back in NRS conversion factor 
amount, and then divide the sum by two is a reasonable estimate of the 
cost of a 30-day period of care. We propose to implement the change in 
the unit of payment from 60-day episodes of care to 30-day periods of 
care in a non-budget neutral manner. We note that in its March 2017 
Report to Congress, MedPAC highlighted that home health payments have 
consistently and substantially exceeded costs because agencies are able 
to reduce the number of visits provided and cost growth is generally 
lower than the annual payment updates for home health care.\27\ MedPAC 
recommended a 5 percent reduction in the base rate for 2018 and a 2-
year rebasing beginning in 2019.\28\ We invite comments on the proposed 
calculations for determining the 30-day payment amount, including our 
rationale for proposing to

[[Page 35307]]

implement the HHGM in a non-budget neutral manner.
---------------------------------------------------------------------------

    \27\ Medicare Payment Advisory Commission (MedPAC). ``Home 
Health Care Services.'' Report to Congress: Medicare Payment Policy. 
Washington, DC, March 2017. P. 232. Accessed on July 16, 2017 at: 
http://www.medpac.gov/docs/default-source/reports/mar17_medpac_ch9.pdf?sfvrsn=0.
    \28\ Ibid.
---------------------------------------------------------------------------

    We are further proposing to implement the HHGM in a fully non-
budget neutral manner beginning in CY 2019 or alternatively to use a 
phased approach to implementation. We acknowledge that implementing the 
HHGM in a partially budget-neutral manner could lessen the economic 
impact for HHAs in transitioning to the HHGM. Therefore, we considered 
potential alternative implementation approaches for the HHGM, 
including, but not limited to, a partially budget-neutral approach with 
a phase-out period. Specifically, for the phased approach, we propose 
to apply a HHGM partial budget neutrality adjustment factor in CY 2019 
that would reduce the estimated impact of the HHGM from an estimated -
4.3 percent to -2.2 percent in the initial year of implementation with 
the removal of the HHGM partial budget neutrality adjustment factor in 
CY 2020. We invite comments on whether to implement the HHGM in a fully 
non-budget neutral manner beginning in CY 2019; whether to 
alternatively implement the HHGM in CY 2019 with a HHGM partial budget 
neutrality adjustment factor applied and then subsequently removed in 
CY 2020; or whether a HHGM partial budget neutrality adjustment factor 
should be applied and then phased-out over a longer period of time.
c. Split Percentage Payment Approach for 30-Day Periods of Care
    In the current HH PPS there is a split percentage payment approach 
to the 60-day episode. The first bill, a Request for Anticipated 
Payment (RAP), is submitted at the beginning of the episode. The 
second, final bill is submitted at the end of the 60-day episode of 
care. An initial percentage payment of 60 percent of the anticipated 
final claim payment amount is paid at the beginning of the episode and 
a final percent payment of 40 percent is paid at the end of the 
episode. For all subsequent episodes for beneficiaries who receive 
continuous home health care, the episodes are paid at a 50/50 
percentage payment split. A new initial and final bill must be 
submitted for each 60-day episode period. HHAs are encouraged to submit 
the RAP as soon as possible after care begins to assure being 
established as the primary HHA for the beneficiary and so that the 
claims processing system is alerted that a beneficiary is under a HH 
episode of care to enforce the consolidating billing edits required by 
law.
    We are not proposing a change to the split percentage payment 
approach in conjunction with proposing to change the unit of payment 
from a 60-day episode to a 30-day period of care. Under the proposed 
HHGM, we propose that the initial payment for initial 30-day periods 
would be paid at 60 percent of the case-mix and wage-adjusted 30-day 
payment rate. The residual final payment for initial 30-day periods 
would be paid at 40 percent of the case-mix and wage-adjusted 30-day 
payment rate. We propose the initial payment for subsequent 30-day 
periods would be paid at 50 percent of the case-mix and wage-adjusted 
30-day payment rate. The residual final payment for subsequent 30-day 
periods would be paid at 50 percent of the case-mix and wage-adjusted 
30-day payment rate.
    However, we note the length of time HHAs currently take to submit 
the RAP indicates that the RAP payment might not be necessary for the 
majority of HHAs to maintain an adequate cash flow (see Table 30). 
Approximately 5 percent of RAPs (95th percentile) are not submitted 
until the end of an episode of care and the median length of days for 
RAP submission is 12 days from the start of the episode. In addition, 
eliminating RAP payments would address existing program integrity 
vulnerabilities. For example, $1.8 billion in RAP payments (July 1, 
2015 through July 31, 2016) were auto-cancelled, and of that amount, a 
final claim was never submitted for $321 million worth of RAP 
payments.\29\
---------------------------------------------------------------------------

    \29\ A RAP is auto-cancelled and recouped on the next 
disbursement if the final claim is not received within 4 months of 
the start of care or within 2 months of when the RAP was paid 
(whichever is greater).

     Table 30--Number of Days From the Start of Care to Initial RAP
                               Submission
------------------------------------------------------------------------
                                                          Number of days
                                                          from the start
                       Percentile                           of care to
                                                            initial RAP
                                                            submission
------------------------------------------------------------------------
1.......................................................               1
10......................................................               5
25......................................................               8
50......................................................              12
75......................................................              21
90......................................................              36
95......................................................              57
99......................................................             169
------------------------------------------------------------------------
Source: Analysis of CWF data from July 1, 2015 through July 31, 2016 and
  HIGLAS payments and recoupments.

    We are soliciting comments as to whether the split payment approach 
would still be needed for HHAs to maintain adequate cash flow if the 
unit of payment changes from 60-day episodes to 30-day periods of care 
under our proposal. In addition, we are soliciting comments on ways to 
phase-out the split percentage payment approach in the future if the 
proposed HHGM is finalized with the split percentage payment approach 
being initially maintained. Specifically, we are soliciting comments on 
reducing the percentage of the upfront payment over a period of time. 
We believe that payment based on 30-day periods would reduce, if not 
eliminate, the need for these partial, up-front payments that occur in 
the current payment system. Home health agencies would bill on a 
monthly basis, similar to hospices and SNFs, and thus receive final 
payment sooner.
    If in the future the split percentage approach was eliminated, we 
are also soliciting comments on the need for HHAs to submit a notice of 
admission within 5 days of the start of care to assure being 
established as the primary HHA for the beneficiary and so that the 
claims processing system is alerted that a beneficiary is under a HH 
period of care to enforce the consolidating billing edits required by 
law.
    We invite comments on the proposed change in the unit of payment 
from a 60-day episode of care to a 30-day period of care under the 
HHGM; the calculation of the national, standardized 30-day payment 
amount, initially maintaining the split percentage payment approach and 
applying such policy to 30-day periods of care; and the associated 
regulations text changes outlined in section III.E.13. of this proposed 
rule. We are also soliciting comments on ways the split percentage 
payment approach could be phased-out and whether to implement a notice 
of admission process if the split percentage payment approach is 
eliminated in the future.
4. Episode Timing Categories
    To advance the goals of better aligning payment with patient needs, 
as well as addressing payment incentives and vulnerabilities within the 
current system, we investigated the impact of episode timing on home 
health resource use. In the current payment system, 60-day episodes are 
classified as ``early'' if they are the first or second in a sequence 
of episodes and ``late'' if they are the third or later in the 
sequence. Episodes are defined as being in the same sequence if there 
are no more than 60 days between the end of one episode and the start 
of the next. In the development of the proposed HHGM, we sought to 
evaluate whether payments to providers appropriately reflect the 
varying resource needs of

[[Page 35308]]

home health beneficiaries during various portions of the home health 
stay, accounting for contrasting patient characteristics.
    We endeavored to evaluate whether beneficiaries in their first 30-
day period of care have different needs and patterns of resource use 
than those in later 30-day periods, thus possibly resulting in the 
potential need for differentiated payment amounts. We reviewed related 
research, held technical and clinical expert panels, and performed our 
own investigative analyses. In particular, we were interested in 
whether home health patients utilize more resources at the beginning of 
home health than in later periods of the home health stay, and, if so, 
does the current payment structure sufficiently account for this 
elevated need. In a review of research related to episode timing, 
studies show that more frequent skilled visits in the first few weeks 
of a home health stay can prove beneficial for certain diagnoses by 
reducing the likelihood of readmission to an institutional setting and 
easing the transition from hospital to home, which can be challenging 
for patients.
    The Visiting Nurse Associations of America defines ``frontloading'' 
as the practice of providing an increase in intensity of visits during 
the first two to three weeks of the home health care episode for 
patients that have been determined to be at high risk for 
hospitalization.\30\ A 2014 literature review titled ``Frontloading and 
Intensity of Skilled Home Health Visits: A State of the Science'' found 
that Medicare patients benefited from an intensified level of care 
through a ``frontloading'' approach, which reduced the need for re-
hospitalization among skilled home health patients, and especially for 
those with heart failure.\31\ For the purposes of this particular 
study, frontloading was defined as providing 60 percent of planned 
visits within the first 2 weeks of the home health episode of care. 
Furthermore, frontloading was also found by the Briggs[supreg] National 
Quality Improvement/Hospitalization Reduction Study,\32\ to be one of 
15 best practices routinely employed by 64 percent of the HHAs who were 
most successful at reducing hospitalizations. Similarly, in an article 
titled ``The Effect of Frontloading Visits on Patient Outcomes,'' \33\ 
the authors assessed the impact of frontloading on patients with 
insulin-dependent diabetes and with heart failure. In their research, 
the authors found that frontloading was effective for patients with 
heart failure, decreasing re-hospitalization by more than half (39.4 
percent vs. 16 percent), with fewer visits overall (15.5 vs. 9.5) and 
equal clinical outcomes and patient satisfaction. These improvements in 
overall outcomes were presumably due to the timing of the services, 
where more visits were provided in the beginning portion of the 
episode, even when fewer visits were provided overall. However, we note 
that there was no significant impact for those patients with diabetes. 
No specific effect for patients with mental health or behavioral health 
conditions was noted. Given the potential positive outcomes of the 
practice of frontloading, specifically for those beneficiaries with 
heart disease, we expect that HHAs would provide more frequent skilled 
services in the beginning portion of a home health stay to educate 
patients in medication management, coordinate the instruction of both 
the patient and family, and support patients in navigating their 
clinical situation, especially in cases of heart disease. The first and 
fourth reported top primary reasons for home health care in CY 2016 
were hypertension and heart failure, respectively, and we therefore 
believe an opportunity exists for HHAs to improve the outcomes for 
these high-volume home health beneficiaries by providing more resources 
in the early period of a home health stay.
---------------------------------------------------------------------------

    \30\ Care-Initiation-Frontloading. (n.d.). Retrieved March 20, 
2017, from http://vnaablueprint.org/Care-Initiation-Frontloading.html.
    \31\ O'Connor, M., Bowles, K.H., Feldman, P. H., Pierre, M. S., 
Jarr[iacute]n, O., Shah, S., & Murtaugh, C. M. (2014). Frontloading 
and Intensity of Skilled Home Health Visits: A State of the Science. 
Retrieved March 02, 2017, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4532304/.
    \32\ Briggs National Quality Improvement/Hospitalization * * * 
(n.d.). Retrieved March 2, 2017, from http://www.briggscorp.com/ACHstrategies/BriggsStudy.pdf.
    \33\ Rogers, J., Perlic, M., & Madigan, E. A. (2007). The Effect 
of Frontloading Visits on Patient Outcomes. Home Healthcare Nurse: 
The Journal for the Home Care and Hospice Professional, 25(2), 103-
109. doi:10.1097/00004045-200702000-00011; https://www.ncbi.nlm.nih.gov/pubmed/17285038.
---------------------------------------------------------------------------

    For many patients admitted to home health, the transition from 
hospital or other institutional settings back to the home environment 
can be very challenging and lead to adverse effects for the 
beneficiary, such as medication errors, harmful drug events, and 
additional complications. The provision of intensified home health 
services early in a home health stay can potentially help to mitigate 
any negative events that could result from this time of transition from 
the institutional setting to the home. As such, we would expect that 
beneficiaries would require more resources, particularly from skilled 
disciplines providing teaching and medication management, during the 
first 30 days of a home health admission.
    As described in section III.E.3 of this proposed rule, analysis of 
home health data demonstrates that HHAs provide more services in the 
first 30-day period of home health than in later periods of care. The 
differences in the resource utilization during home health episodes are 
presented in Table 22, which shows the average resource use of home 
health episodes divided into 15-day segments. The first two 15-day 
periods in a home health episode have significantly higher average 
resource use at $261.97 and $162.44, respectively, as compared with the 
third and fourth 15-day segments in a 60-day period, at $107.49 and 
$88.67, respectively. Additionally, the average number of visits by the 
six disciplines is also significantly higher in the first two 15-day 
segments, at 6.8 and 4.9 visits per segment, respectively as compared 
to the third and fourth 15-day segments of a 60-day episode, at 3.3 and 
2.6, respectively.
    Further analysis of home health data demonstrates that under the 
current payment system, when analyzed by 30-day periods, HHAs provide 
more resources in the first 30-day period of home health (``early'') 
than in later periods of care. The differences in the average resource 
use during early and late home health episodes when divided into 30-day 
periods are presented in Table 28, and shows the first 30-day periods 
in a home health sequence have significantly higher average resource 
use at $2,102.29 as compared with subsequent 30-day periods. 
Specifically, the later 30-day periods showed an average resource use 
of $1,348.18, a difference of more than $700 or a 36 percent decrease. 
Table 31 also shows a significant difference between the early and late 
episode median values of resource use. The median for the first 30-day 
period is $1,848.12, while the median for subsequent 30-day periods is 
$987.54, a difference of more than $850 or an approximately 47 percent 
decrease.

[[Page 35309]]



                                                Table 31--Average Resource Use by Timing (30 Day Periods)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
                                              Average        Number of      Percent of     deviation of    percentile of      Median       percentile of
                 Timing                    resource use      episodes      episodes (%)    resource use    resource use    resource use    resource use
                                                ($)                                             ($)             ($)             ($)             ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Early Episodes..........................        2,102.29       2,719,495           31.47        1,265.68        1,213.51        1,848.12        2,681.90
Late Episodes...........................        1,348.18       5,922,612           68.53        1,229.14          537.85          987.54        1,760.20
    Total...............................        1,585.48       8,642,107          100.00        1,289.23          671.96        1,262.65        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------

    There is significant difference in the resource utilization between 
early and late 30-day periods as demonstrated in Table 31. Moreover, 
the predictive power of the HHGM in terms of estimating resource 
utilization improved when separating episodes into 30-day periods 
rather than 60-day periods (that is, the first and second 30-day 
periods). We believe that an HHGM that accounts for the demonstrated 
increase in resource utilization in the first 30-day period better 
captures the variations in resource utilization and further promotes 
the goal of payment accuracy within the HH PPS. We are proposing to 
classify the 30-day periods under the proposed HHGM as ``early'' or 
``late'' depending on when they occur within a sequence of 30-day 
periods. For the purposes of defining ``early'' and ``late'' periods 
for the proposed HHGM, we are proposing that only the first 30-day 
period in a sequence of periods be defined as ``early'' and all other 
subsequent 30-day periods would be considered ``late''. Additionally, 
we are proposing that the definition of a ``home health sequence'' (as 
currently described in Sec.  484.230) will remain unchanged relative to 
the current system, that is, 30-day periods are considered to be in the 
same sequence as long as no more than 60 days pass between the end of 
one period and the start of the next, which is consistent with the 
definition of a ``home health spell of illness'' described at section 
1861(tt)(2) of the Act. We note that because section 1861(tt)(2) of the 
Act is a definition related to eligibility for home health services as 
described at section 1812(a)(3) of the Act, it does not affect or 
restrict our ability to propose a 30-day prospective payment period.
    To identify the first 30-day period within a sequence, the Medicare 
claims processing system would verify that the claim ``From date'' and 
``Admission date'' match. If this condition were to be met, our systems 
would send the ``early'' indicator to the HH Grouper for the 30-day 
period of care. When the claim is received by CMS's Common Working 
File, the system would look back 60 days to ensure there is not a 
prior, related episode. If not, the claim would continue to be paid as 
``early.'' If another related episode were to be identified, that is an 
earlier 30-day period in the sequence, the claim would be returned to 
the shared systems for subsequent regrouping and re-pricing. Those 
periods that are not the first 30-day period in a sequence of adjacent 
periods, separated by no more than a 60 day gap, would be categorized 
as ``late'' periods and placed in corresponding HHGM categories.
    We invite public comments on the timing categories in the proposed 
HHGM and the associated regulations text changes outlined in section 
III.E.13 of this proposed rule.
5. Admission Source Category
    In accordance with the statute, as amended by the BBA, we published 
a final rule in the July 3, 2000 Federal Register (65 FR 41128) 
implementing the HH PPS. In that final rule, we discussed and finalized 
the use of a methodology that included variables identifying pre-
admission location (that is, whether certain inpatient and other stays 
occurred in the 14-day period immediately preceding the home health 
episode) as part of our case-mix adjustment methodology. We stated that 
not only were pre-admission inpatient stays a traditional indication of 
need in clinical practice, but also that such variables were useful 
correlates of resource cost in our evaluation of the home health case-
mix data (65 FR 41146). This pre-admission information was submitted by 
HHAs via OASIS assessments.
    In the CY 2008 HH PPS final rule, we removed elements from the 
case-mix adjustment methodology that were based upon the source of 
admission (72 FR 49766). In the CY 2008 HH PPS proposed and final 
rules, we assessed variables for policy and payment appropriateness and 
ultimately decided to remove the variable that had been used to 
identify the patient's pre-admission location from the case-mix 
adjustment methodology (72 FR 25361 and 72 FR 49766, respectively). 
This decision was based, in part, upon concerns that some agencies were 
encountering challenges in obtaining concrete information regarding the 
patient's preadmission location while performing the initial home 
health assessment and thus the OASIS item used to indicate the 
preadmission location of the patient was not always reliable. Moreover, 
the pre-admission information did not perform well in terms of the 
four-equation model used for payment estimation and also had a small 
impact in terms of payment accuracy within the model. In the CY 2008 HH 
PPS final rule, we further noted that the item's results across the 
four equation model created difficulties in terms of interpretation and 
the explanatory power (for example, its contribution to the R-squared 
value) was minimal (72 FR 49766).
    For the purposes of constructing the HHGM, which would not use a 4-
equation model or otherwise adjust payments based on therapy visit 
thresholds; we reexamined the impact of beneficiary admission source, 
either from the community or from an institutional setting, on home 
health resource use. In our review of related scholarly research, we 
found that beneficiaries admitted directly or recently from an 
institutional setting (acute or post-acute care (PAC)) tend to have 
different care needs and higher resource use than those admitted from 
the community, thus indicating the need for differentiated payment 
amounts. For instance, a literature review of 25 research studies 
published between 2002 and 2011, titled ``Hospitalization Among 
Medicare-Reimbursed Skilled Home Health Recipients,'' found that 
Medicare beneficiaries discharged from PAC and acute facilities differ 
significantly in resource need when compared to community-admitted 
beneficiaries.\34\ Patients discharged from acute and PAC settings tend 
to be sicker upon admission and are being discharged rapidly back to 
the community. Additionally, they are more likely to be

[[Page 35310]]

re-hospitalized after discharge due to the acute nature of their 
illness. One study discussed in this literature review determined that 
patients being discharged from an inpatient hospitalization typically 
present with multiple comorbidities, suggesting that initially-
hospitalized patients subsequently transferred to home care were more 
likely to have four or more secondary diagnoses, as well as a pressure 
or stasis ulcer, urinary incontinence, a urinary catheter, depression, 
or dyspnea.\35\ They generally had more than five medications than 
their non-hospitalized counterparts and required assistance with 
medication management.\36\ As such, patients referred to home health 
after an institutional stay tend to be more infirm, requiring 
significant resources upon admission to home health. Additionally, the 
same literature review also highlighted a study titled ``Unplanned 
hospital readmissions: A home care perspective'' that demonstrated that 
patients referred from acute and PAC settings are at a high risk of 
hospitalization within 14 to 21 days of admission to home health.\37\ 
Given that the first few weeks after an institutional stay represent a 
critical window in terms of providing beneficiaries with appropriately 
intensive supports and services, as well as preventing re-
hospitalization, we would expect that providing care for those 
beneficiaries admitted from institutional settings would require more 
resource use compared to patients admitted to home health from the 
community. Comprehensive and deliberate interventions in this timeframe 
could also potentially reduce re-hospitalization rates.
---------------------------------------------------------------------------

    \34\ O'Connor, M. (2012, February). Hospitalization Among 
Medicare-Reimbursed Skilled Home Health Recipients. Retrieved March 
02, 2017, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4690459.
    \35\ Rosati, R. J., Huang, L., Navaie-Waliser, M., & Feldman, P. 
H. (2003). Risk Factors for Repeated Hospitalizations Among Home 
Healthcare Recipients. Journal For Healthcare Quality, 25(2), 4-11. 
doi:10.1111/j.1945-1474.2003.tb01038.x.
    \36\ Rosati, R. J., Huang, L., Navaie-Waliser, M., & Feldman, P. 
H. (2003). Risk Factors for Repeated Hospitalizations Among Home 
Healthcare Recipients. Journal For Healthcare Quality, 25(2), 4-11. 
doi:10.1111/j.1945-1474.2003.tb01038.x.
    \37\ Anderson, M. A., Helms, L. B., Hanson, K. S., & Devilder, 
N. W. (1999). Unplanned Hospital Readmissions: A Home Care 
Perspective. Nursing Research, 48(6), 299-307. doi:10.1097/00006199-
199911000-00005.
---------------------------------------------------------------------------

    Research studies also demonstrate that patients admitted to home 
health from institutional settings are more vulnerable to adverse 
effects and injury because of the functional decline that occurs as a 
result of their institutional stay, indicating that this patient 
population requires more concentrated resources and supports to account 
for and mitigate this functional decline. In the article titled ``The 
Incidence and Severity of Adverse Events Affecting Patients after 
Discharge from the Hospital,'' \38\ Alan J. Forster, MD noted that 
beneficiaries are susceptible to harm post-hospitalization: ``Patients 
may be especially vulnerable to injuries during this [post-discharge] 
period because they may still have functional impairments and because 
discontinuities may occur at the interface of acute and ambulatory 
care.'' The author also notes that the current health care environment 
encourages potentially expedited discharges from hospital stays, ``in 
which patients are leaving the hospital `quicker and sicker.' '' 
Patients may be leaving the hospital environment in a tenuous and 
fragile state, leaving them vulnerable to further harm once returned to 
the home environment. Additionally, the change from constant monitoring 
in the inpatient facility to less frequent monitoring in the home 
environment can potentially cause gaps in care and consequently 
increased risk for adverse events for the newly-admitted home health 
beneficiary. The article notes that many of the negative impacts of the 
transition can be reduced by an appropriate increase in care for the 
beneficiary in the home setting, notably with more frequent assessment 
of their condition and ongoing monitoring. Therefore, we believe that 
an opportunity may exist for the HHGM to account for this increased 
need and accordingly provide a differentiated payment to facilitate the 
provision of more frequent assessments and monitoring for beneficiaries 
admitted to home health from acute and PAC settings, which could in 
turn help prevent re-hospitalizations and adverse events. We expect 
that HHAs would provide more resource-intensive services after 
discharge from an institutional setting to educate patients in new 
medication management, facilitate discharge education for the patient 
and family, and provide support in the recovery from the illness that 
caused the originating hospitalization or institutional stay.
---------------------------------------------------------------------------

    \38\ Forster, A.J. (2003). The Incidence and Severity of Adverse 
Events Affecting Patients after Discharge from the Hospital. Annals 
of Internal Medicine, 138(3), 161. doi:10.7326/0003-4819-138-3-
200302040-00007.
---------------------------------------------------------------------------

    In the guidebook ``Patient Safety and Quality: An Evidence-based 
Handbook for Nurses,'' authors Ruth M. Kleinpell, Kathy Fletcher, of 
and Bonnie M. Jennings note in chapter 11 that deconditioning, a status 
characterized by a ``decrease in muscle mass and the other physiologic 
changes related to bed rest, contributes to overall weakness,'' has 
become commonplace in the post-institutional beneficiary 
population.\39\ This physiological weakening of the institutionalized 
beneficiary can then, in turn, lead to significant functional decline, 
resulting in reduction in ability to perform Activities of Daily Living 
(ADLs), and ultimately in increased home health resource utilization. 
The article notes that hospitalization of the elderly is usually marked 
by decreased levels of mobility and increased levels of bed rest, with 
deterioration from their baseline levels as soon as day two of the 
hospitalization. Hence, a hospitalization itself leads to declines in 
mobility, which consequently yields reduced functionality in patients 
relative to their status before their inpatient stay. This decline in 
functional ability likewise merits appropriate skilled services to 
support the patient's increased needs after a hospital stay.
---------------------------------------------------------------------------

    \39\ Hughes, R. (2008). Patient safety and quality: An evidence-
based handbook for nurses. Rockville, MD: Agency for Healthcare 
Research and Quality, U.S. Dept. of Health and Human Services. 
https://archive.ahrq.gov/professionals/clinicians-providers/resources/nursing/resources/nurseshdbk/nurseshdbk.pdf, 259-274.
---------------------------------------------------------------------------

    In the article ``Determinants of health after hospital discharge: 
Rationale and design of the Vanderbilt Inpatient Cohort Study (VICS),'' 
the authors describe the period after a hospitalization as a 
``vulnerable time'' for patients.\40\ This vulnerability is due to a 
number of factors, including the need to manage new health care issues, 
major modifications to medication interventions, and the coordination 
of follow-up appointments, all while a beneficiary strives to 
recuperate after a hospital stay for an acute medical event. Of 
particular concern are the risks for adverse drug events, for errors in 
a beneficiary's medication regimen, and for the need to readmit to the 
hospital due to deterioration of the patient's condition. Given the 
risks during this intense, challenging, and potentially costly period 
after discharge, we would expect that beneficiaries would require more 
visits from skilled disciplines, particularly for the purpose of 
teaching and medication management. This increased utilization of 
resources would, in turn, warrant a differentiated, potentially higher 
payment for such services, and the proposed HHGM payment system 
refinement could account for this difference with varying

[[Page 35311]]

payment amounts based upon admission source. We note that we do not 
expect the source of the patient's admission would lead to an HHA 
furnishing home health services that would replace any orders made by 
the referring physician regarding the type or frequency of services the 
patient might need during the home health stay. The admission source 
variable in the proposed HHGM is meant to serve as a meaningful 
indicator of resource utilization, which determines Medicare payment. 
The HHA, in consultation with the physician and ordered by the 
physician, will continue to articulate, in the plan of care, what 
services are required to meet the needs of the patient, as well as the 
frequency of such services.
---------------------------------------------------------------------------

    \40\ Meyers, A.G., Salanitro, A., Wallston, K.A., Cawthon, C., 
Vasilevskis, E.E., Goggins, K. M., . . . Kripalani, S. (2014). 
Determinants of health after hospital discharge: Rationale and 
design of the Vanderbilt Inpatient Cohort Study (VICS). BMC Health 
Services Research, 14(1). doi:10.1186/1472-6963-14-10.
---------------------------------------------------------------------------

    With regard to beneficiaries admitted to home health from the 
community, research related to home health admission source 
demonstrates that community-admitted beneficiaries tend to receive care 
from the less-costly disciplines. In its 2016 Report to Congress, 
MedPAC noted that, in their analysis of CY 2013 HH claims, 
beneficiaries admitted from the community tend to receive more visits 
from home health aides than their non-community counterparts, stating 
that ``aide services were the majority of services provided in 14 
percent of the episodes for community-admitted users compared with 5 
percent for PAC users.'' \41\ However, these same community entrants 
averaged 2.6, 60-day episodes, while the institutional admits averaged 
only 1.4, 60-day episodes, demonstrating longer lengths of stay for the 
community-admitted beneficiaries than those entering from institutional 
settings. These findings suggest that beneficiaries admitted to home 
health from the community typically require less resources but for 
longer periods of time when compared to the beneficiaries admitted from 
an institutional stay. Additionally, a 2001 Department of Health and 
Human Services Office of Inspector General study found Medicare home 
health referrals coming from the community (in this case defined as a 
referral for a beneficiary who had not been admitted to an overnight 
stay in a hospital or skilled nursing facility for 15 days prior to 
beginning a home health care episode) were more likely to have chronic 
conditions than those referred from hospitals, and therefore, were more 
likely to require ongoing but less resource-intensive care.\42\
---------------------------------------------------------------------------

    \41\ Medicare Payment Advisory Commission (MedPAC). ``Home 
Health Care Services.'' Report to Congress: Medicare Payment Policy. 
Washington, DC, March 2016. P. XX. Accessed on March 28, 2017 at 
http://www.medpac.gov/docs/default-source/reports/chapter-8-home-health-care-services-march-2016-report-.pdf?sfvrsn=0.
    \42\ https://oig.hhs.gov/oei/reports/oei-02-01-00070.pdf; 
``Medicare Home Health Care Community Beneficiaries 2001''; HHSM-
500-2010-00072C 12.
---------------------------------------------------------------------------

    In addition to our review of related research, we also evaluated 
home health utilization and patient assessment data as described in 
section III.E.1 of this proposed rule, and our findings demonstrate 
that those beneficiaries admitted from PAC, as well as acute care 
settings demonstrate higher resource utilization than their community-
admitted counterparts.
    The differences in care needs during home health based on admission 
source are illustrated in the resource utilization figures presented in 
Table 32, which shows the distribution of admission sources as well as 
average resource use for 30-day periods by admission source. 
Institutional admissions have significantly higher average resource use 
at $2,165.06 compared with community admissions at $1,393.10, a 
difference of $771.96. Median values of resource use also show a 
significant difference between sources of admission, with institutional 
resource use at $1,899.41 while community resource use is at $1,060.51, 
a difference of nearly $840. The pattern of higher resource use for 
institutional admissions as compared to community admissions continues 
for the 25th and 75th percentiles, with a difference of approximately 
$700 and $900, respectively.

                                 Table 32--Average Resource Use by Admission Source (14 Day Look-Back) Admission Source
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
                                              Average      Number of 30-  Percent of 30-   deviation of    percentile of      Median       percentile of
                                           resource use     day periods     day periods    resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Institutional...........................       $2,165.06      $2,153,712           24.92       $1,350.43       $1,224.83       $1,899.41       $2,772.04
Community...............................        1,393.10       6,488,395           75.08        1,208.29          571.97        1,060.51        1,838.39
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................        1,585.48       8,642,107          100.00        1,289.23          671.96        1,262.65        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2016 Medicare Home Health Claims Data (as of March 17, 2017).

    For all of these reasons, we are proposing to establish two 
admission source categories for grouping 30-day periods of care under 
the HHGM--institutional and community--as determined by the healthcare 
setting utilized in the 14 days prior to home health admission. We are 
proposing the institutional category would include 30-day periods of 
care for patients admitted from either acute care or PAC settings. 
Thirty-day periods for beneficiaries with any inpatient acute care 
hospitalizations, skilled nursing facility stays, inpatient 
rehabilitation facility stays, or long term care hospital stays within 
the 14 days prior to a home health admission would be designated as 
institutional admissions. Similarly, we are proposing that the 
institutional admission source category would also include patients 
that had an acute care hospital stay during a previous 30-day period of 
care and within 14 days prior to the subsequent, contiguous 30-day 
period of care and for which the patient was not discharged from home 
health and readmitted (that is, the admission date and from date for 
the subsequent 30-day period of care do not match) as we acknowledge 
that HHAs have discretion as to whether they discharge the patient due 
to a hospitalization and then readmit the patient after hospital 
discharge. However, we would not categorize post-acute care stays that 
occur during a previous 30-day period and within 14 days of a 
subsequent, contiguous 30-day period of care (that is, the admission 
date and from date for the subsequent 30-day period of care do not 
match) as institutional as we would expect the HHA to discharge the 
patient if the patient requires post-acute care in a different setting 
(for example, a SNF or IRF) and then readmit the patient, if necessary, 
after discharge from such setting. If the patient is discharged and 
then readmitted to home health, the admission date and from date on the 
30-day claim will match and the claims

[[Page 35312]]

processing system will look for an acute or a post-acute care stay 
within 14 days of the home health admission date. This admission source 
designation process would be applicable to institutional stays paid by 
Medicare or any other payer. All other 30-day periods would be 
designated as community admissions.
    We initially investigated maintaining two separate institutional 
categories, one for PAC and another for acute care settings, to 
identify any meaningful differences in resource use. However, we 
observed similar resource use in those cases where the patient was 
admitted from both PAC and acute care settings. Furthermore, in our 
analysis of the data from CY 2013, we found that the volume of home 
health cases with an admission from PAC settings across all 30-day 
periods of care was a low value at 736,112 cases (approximately 8 
percent) out of a total of 8,539,996 cases as compared with cases 
admitted from acute settings at 1,376,567 cases (approximately 16 
percent). The number of cases admitted from acute settings was 
approximately double the number of cases admitted from PAC settings. 
Moreover, in the creation of case-mix groups that differentiated 
between community, acute, and PAC admission sources, there were some 
case-mix groups with a very low number of 30-day periods of care, which 
in turn can result in substantial variability in the average resource 
use from year- to- year. We were concerned that this variability could 
introduce unnecessary instability in the case-mix weights under the 
proposed HHGM. As such, we are proposing to group 30-day periods of 
care for patients admitted from acute care and PAC settings together as 
``institutional'' admissions.
    We also considered the employment of a ``look-back'' period for 
determining the admission source that was longer than 14 days and thus 
examined data for a longer 30-day ``look-back'' period to assess the 
resource utilization for patients admitted to home health from 
institutional and community settings; however, our findings indicated 
that there is only a slight difference in resource use, as well as 
volume of beneficiaries utilizing PAC or acute services before home 
health between the two timeframes. Table 33 shows the distribution of 
30-day periods and average resource utilization with admission source 
categories now defined by service use for beneficiaries in the 30 days 
prior instead of 14 days prior. In general, results are similar to 
those for the 14-day look-back period when compared to the 30-day 
``look-back'' window. Average resource use under a 14-day ``look-back'' 
period for institutional entrants is at $2,165.06 while the 30-day 
entrants show an average resource use of $2,140.40. The same similarity 
holds true for community entrants, who show an average resource use of 
$1,393.10 for the 14-day ``look-back'' period versus $1,382.38 under 
the 30-day window. We note that the 30-day ``look-back'' period only 
produces a slightly higher proportion of institutional periods of care, 
at 2,315,557 periods as compared with the 14-day period value of 
2,153,712, a difference of approximately 10 percent.

                                                   Table 33--Average Resource Use by Admission Source
                                                                   [30 Day look-back]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
            Admission source                  Average      Number of 30-  Percent of 30-   deviation of    Percentile of      Median       Percentile of
                                           resource use     day periods     day periods    resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Institutional...........................       $2,140.40       2,315,557          26.79%       $1,354.34       $1,197.39       $1,873.71       $2,748.79
Community...............................        1,382.38       6,326,550           73.21        1,202.14          567.05        1,049.66        1,823.04
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................        1,585.48       8,642,107          100.00        1,289.23          671.96        1,262.65        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY2016 Medicare Home Health Claims Data (as of March 17, 2017).

    We believe that a 14-day ``look-back'' period is more likely to be 
directly related to the patients' need for home health care than a 30-
day ``look-back'' period. This would also be more intuitive for HHAs, 
as the OASIS item M1000 specifically assesses whether a beneficiary was 
discharged from an institutional setting within the past 14 days. Thus, 
we ultimately are proposing to use the 14-day ``look-back'' period as 
we believe it will better categorize those beneficiaries with a 
relatively short transition between institutional care and home health 
care. Given that beneficiary admission source has previously been 
utilized for the purposes of Medicare home health payment, HHAs will be 
familiar with this concept. Moreover, the proposed 14-day ``look-back'' 
period simplifies the structure of the proposed model and limits burden 
on claims systems and related processing. Additionally, a ``look-back'' 
period of 14 days is consistent with section 1861(tt)(1) of the Act, 
which defines the term ``post-institutional home health services''.
    To differentiate between an institutional and community admission 
source, we would establish an evaluation process whereby the Medicare 
claims processing system would check for the presence of an acute/post-
acute Medicare claim occurring within 14 days of the home health 
admission on an ongoing basis. In the past, HHAs stated that they had 
encountered challenges in terms of identifying the source of admission 
for home health beneficiaries, and we believe that an automated systems 
approach where Medicare systems evaluate for the presence of an 
institutional claim within the 14-day ``look-back'' window will serve 
to overcome this earlier challenge. Under this approach, the Medicare 
systems would only evaluate for whether an acute/post-acute Medicare 
claim occurring within 14 days of the home health admission was 
processed by Medicare, not whether it was paid.
    Moreover, we propose that newly-created occurrence codes would also 
be established that would allow HHAs to manually indicate on Medicare 
home health claims an institutional admission source prior to an acute/
post-acute Medicare claim, if any, being processed by Medicare systems. 
We note that the use of these occurrence codes would not be limited to 
home health beneficiaries for whom the acute/post-acute claims were 
paid by Medicare. HHAs would also use the occurrence codes for 
beneficiaries with acute/post-acute care stays paid by other payers, 
such as the Veterans Administration. Although a home health claim with 
a non-Medicare institutional admission source can be categorized by the 
HHA as an institutional admission and paid accordingly, we may conduct 
medical review as discussed below. We expect

[[Page 35313]]

home health agencies would utilize discharge summaries from 
institutional providers to inform the usage of these occurrence codes. 
We note that these discharge documents should already be part of the 
beneficiary's home health medical record used to support the 
certification of patient eligibility as outlined in Sec.  424.22(c).
    If an occurrence code is submitted on the home health claim, the 
home health claim would be categorized as an institutional admission. 
However, if a home health claim is submitted without an institutional 
admission occurrence code, thereby categorizing it with a community 
admission source, and later an acute/post-acute Medicare claim for an 
institutional stay occurring within 14 days of the home health 
admission is submitted within the timely filing deadline and processed 
by the Medicare systems, the home health claim would be automatically 
adjusted and re-categorized as an institutional admission and 
appropriate payment modifications would be made. Our systems would 
adjust community-admitted home health claims on a claim-by-claim, flow 
basis if an acute/post-acute Medicare claim for an institutional stay 
occurring within 14 days of the home health admission is received. 
Given that our systems can only evaluate for the presence of a Medicare 
acute/post-acute claim, if there was a non-Medicare institutional stay 
occurring within 14 days of the home health admission but the HHA was 
not aware of such a stay, upon learning of the institutional stay, the 
HHA would be able to resubmit a home health claim that included an 
occurrence code, subject to the timely filing deadline, and payment 
adjustments would be made accordingly.
    Conversely, if an occurrence code is submitted on the home health 
claim along with dates of the institutional stay, and an acute/post-
acute Medicare claim for an institutional stay occurring within 14 days 
of the home health admission is not subsequently submitted within the 
timely filing deadline and processed by the Medicare systems, or an 
acute/post-acute Medicare claim for an institutional stay occurring 
within 14 days of the home health admission was submitted but later 
denied for payment, we may conduct post-payment medical review of the 
home health claim to determine whether the admission was in fact 
preceded by an institutional stay occurring within 14 days of the home 
health admission. If upon medical review a determination is made that 
the admission was not from an institutional setting, we would take 
appropriate administrative action, including correcting any improper 
payments and potentially referring the provider to another CMS review 
contractor for further review or investigation. In summary, we believe 
that allowing HHAs to submit a claim with an institutional admission 
occurrence code for a beneficiary with either a Medicare or non-
Medicare institutional admission source would enable HHAs to receive 
appropriate payment for the home health services, while also allowing 
us the opportunity and flexibility to verify the source of the 
admission and correct any improper payments as deemed appropriate.
    For the purposes of a RAP, we would only adjust the final home 
health claim submitted for source of admission. For example, if a RAP 
for a community admission was submitted and paid, and then an acute/
post-acute Medicare claim was submitted for that patient before the 
final home health claim was submitted, we would not adjust the RAP and 
would only adjust the final home health claim so that it reflected an 
institutional admission. Additionally, HHAs would only indicate 
admission source occurrence codes on the final claim and not on any 
RAPs submitted.
    We invite public comments on the admission source component of the 
proposed HHGM payment system.
6. Proposed Clinical Groupings
a. Background
    As discussed in section II.D of this proposed rule, the Home Health 
Study Report to Congress found that the current payment system may 
encourage HHAs to select certain types of patients over others, as some 
clinical sub-groups within the current case mix system are associated 
with lower margins.\43\ These sub-groups include patients with a higher 
severity of illness, including those receiving a greater level of 
skilled nursing care; for example, patients with wounds, with ostomies, 
or who are receiving total parenteral nutrition or mechanical 
ventilation. Additionally, the Medicare Payment Advisory Commission 
(MedPAC) has expressed concerns that the HH PPS disincentivizes care 
for patients needing skilled nursing visits, thereby limiting access of 
care to the most clinically vulnerable patient populations.\44\
---------------------------------------------------------------------------

    \43\ Report to Congress. Medicare Home Health Study: An 
Investigation on Access to Care and Payment for Vulnerable Patient 
Populations. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.
    \44\ Report to the Congress: Medicare Payment Policy. (2015) 
Home health care services: Assessing payment adequacy and updating 
payments. Ch.9 http://www.medpac.gov/docs/default-source/reports/chapter-9-home-health-care-services-march-2015-report-.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    Although the clinical domain of the current case-mix system 
accounts for whether or not the patient has one or more certain 
clinical conditions, there could be improvements in clarity regarding 
patient needs to clearly explain resource use and cost. Given that 
payment should be predicated on resource use, providing additional 
clinical groups in the case-mix system and adjusting payment based on 
identified clinical characteristics and associated services, along with 
other patient variables, should better align payment with resource use. 
As such, under the HHGM, we propose grouping 30-day periods of care 
into six clinical groups designed to capture the most common types of 
care that HHAs provide. The proposed groups mirror how clinicians 
differentiate between patients as to what types of care they are 
receiving. To inform the development of the clinical groups, Abt 
Associates and CMS conducted an extensive review of diagnosis codes to 
identify the primary reasons for home health services under the 
Medicare home health benefit. The workgroup developed six clinical 
groups reflecting the reported principal diagnosis, clinical relevance, 
and coding guidelines and conventions, see Table 34.

    Table 34--Clinical Groups Used in the Home Health Groupings Model
------------------------------------------------------------------------
                                       The primary reason for the home
          Clinical groups              health encounter is to provide:
------------------------------------------------------------------------
Musculoskeletal Rehabilitation....  Therapy (physical, occupational or
                                     speech) for a musculoskeletal
                                     condition.
Neuro/Stroke Rehabilitation.......  Therapy (physical, occupational or
                                     speech) for a neurological
                                     condition or stroke.

[[Page 35314]]

 
Wounds--Post-Op Wound Aftercare     Assessment, treatment & evaluation
 and Skin/Non-Surgical Wound Care.   of a surgical wound(s); assessment,
                                     treatment & evaluation of non-
                                     surgical wounds, ulcers, burns, and
                                     other lesions.
Behavioral Health Care............  Assessment, treatment & evaluation
                                     of psychiatric conditions.
Complex Nursing Interventions.....  Assessment, treatment & evaluation
                                     of complex medical & surgical
                                     conditions including IV, TPN,
                                     enteral nutrition, ventilator, and
                                     ostomies.
Medication Management, Teaching     Assessment, evaluation, teaching,
 and Assessment (MMTA).              and medication management for a
                                     variety of medical and surgical
                                     conditions not classified in one of
                                     the above listed groups.
------------------------------------------------------------------------

    The 30-day periods of care were assigned to one of the six clinical 
groups based on the reported principal diagnosis. However, roughly 19 
percent of 30-day periods could not be assigned to a clinical group 
based on principal diagnosis alone. Reasons for the inability to group 
30-day periods based on primary diagnoses included codes that were too 
vague, meaning the code did not provide adequate information to support 
the need for home health services (for example, T14.90 Injury, 
unspecified); codes that would not be Medicare covered services in 
other settings (for example, dental codes); codes that would be 
unlikely to require skilled home health services (for example, R68.89 
Other general symptoms and signs); codes that indicate death as the 
outcome (for example, G93.82, Brain death); manifestation codes, where 
coding guidelines require an etiology code to be reported as a 
principal diagnosis (for example, I39 Endocarditis and heart valve 
disorders in diseases classified elsewhere); or code first, meaning the 
diagnosis is subject to sequencing conventions under ICD-10-CM, where 
the underlying condition must be sequenced first (for example, dementia 
in Parkinson's disease, in which Parkinson's disease must be sequenced 
first). In these instances, 30-day periods were considered 
``questionable encounters'' and secondary diagnosis codes were examined 
to group the 30-day period of care. An ICD-10-CM list with all of the 
codes that would assign 30-day periods into the six clinical groupings 
can be found on CMS's HHA Center Web page at https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html. More 
information on the analysis and development of the groupings can be 
found in the HHGM technical report, also available on the HHA Center 
Web page. Table 35 shows the distribution of episodes and associated 
resource use across the six clinical groups.

                                           Table 35--Frequency and Associated Resource Use of Clinical Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard       25th                      75th
                                                                 Average                               deviation    Percentile     Median     Percentile
                        Clinical group                           resource        N         Percent    of resource  of resource    resource   of resource
                                                                   use                                    use          use          use          use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Musculoskeletal Rehabilitation...............................    $1,713.10    1,430,813        16.56    $1,149.61    $1,495.09      $878.95    $2,276.98
Neuro/Stroke Rehabilitation..................................     1,811.74      772,579         8.94     1,319.45     1,511.06       851.12     2,434.60
Wound........................................................     2,055.47      906,782        10.49     1,666.59     1,609.16       955.17     2,623.31
Behavioral Health............................................     1,252.08      289,513         3.35     1,019.25       954.32       505.15     1,704.72
Complex Nursing Interventions................................     1,703.24      336,249         3.89     1,573.15     1,240.74       675.88     2,206.54
MMTA.........................................................     1,437.37    4,906,171        56.77     1,200.35     1,105.63       589.92     1,936.81
                                                              ------------------------------------------------------------------------------------------
    Total....................................................     1,585.48    8,642,107       100.00     1,289.23     1,262.65       671.96     2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 35 illustrates the differences in average resource use 
between 30-day periods with similar care needs. Under the HHGM, we 
propose that each 30-day period would be assigned to a clinical group 
according to the primary reason the patient was receiving home health, 
which would be derived from the principal diagnosis code reported on 
the home health claims. If a 30-day period of care could not be grouped 
based on the home health reported principal diagnosis due to the 
reasons listed above, we propose that the claim for that 30-day period 
would remain a questionable encounter and be returned to the provider 
for more accurate or definitive coding. Upon publication of this 
proposed rule, we will post a complete list of ICD-10 codes and their 
assigned clinical groupings on the CMS HHA Center Web page (https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html) to 
allow ample time for HHAs to understand those codes which would be 
considered a ``questionable encounter.'' We believe this will help to 
minimize any returned claims for more definitive coding. Each code 
should be reported to the level of certainty and specificity known for 
the home health admission. Under our proposal, secondary diagnosis 
codes would not be used to assign the clinical group, as the intent of 
the HHGM is to increase clarity by classifying the 30-day period based 
on the primary reason for home health services. Although the principal 
diagnosis code is the basis for the home health period, secondary 
diagnosis codes would then be used to case-mix adjust the period 
further through additional elements of the model, such as the 
comorbidity adjustment. Using principal diagnoses as the core of the 
model would create a clinically intuitive payment system that more 
clearly identifies the types of patients that are treated in home 
health. Diagnosis codes would also provide clarity and transparency 
since they are clearly described and reported on claims and other care 
tools. Additionally, they would support medical necessity for services 
furnished, and provide information for establishing the home health 
plan of care. Ultimately, developing clinically similar groups based on 
the reported principal

[[Page 35315]]

diagnosis as part of the larger structure of the model would allow for 
more meaningful analysis of home health resource use, ensure that 
patients are receiving care commiserate with their level of need, and 
more accurately align payment with cost.
b. Musculoskeletal and Neuro/Stroke Rehabilitation
    Rehabilitation is an integral part of recovery following an 
illness, injury, or surgical procedure, whether due to a neurological 
or a musculoskeletal condition. Given that different care goals and 
expected outcomes of neuro-rehabilitation and musculoskeletal 
rehabilitation affect resource use, the clinical groups in the HHGM 
would differentiate between the two. Patient characteristics between 
the two groups determine whether resources are directed towards 
preventing the loss of function or slowing the rate of loss of 
function; improvement or restoration of function; compensation for lost 
function; and maintenance of current function.\45\ Musculoskeletal 
rehabilitation focuses on individuals with impairments or disabilities 
due to disease, disorders, or trauma to the muscles or bones, whereas 
neurological rehabilitation is designed for individuals with disease, 
trauma, or disorders of the nervous system.\46\ Rehabilitation 
following a stroke, for instance, is primarily initiated early and 
intensively with the most recovery of function occurring within the 
first 3 months; \47\ however, reacquiring the skills to perform ADLs 
may be an on-going process depending on the extent and area of injury. 
However, if improvement or recovery are not expected or achieved, the 
focus of therapy may shift to maintenance to prevent further decline. 
Therefore, the VA Clinical Practice Guidelines for Management of Stroke 
Rehabilitation ``strongly recommend that rehabilitation therapy should 
start as early as possible, once medical stability is reached'' and 
``recommend that the patient receive as much therapy as needed and 
tolerated to adapt, recover, and/or reestablish the premorbid or 
optimal level of functional independence.'' \48\ Neuro-rehabilitation 
resource use can encompass evaluation and treatment of impairments in 
cognitive and spatial functioning, swallowing, communication, and 
psychological or emotional deficit; whereas musculoskeletal 
rehabilitation generally focuses on evaluation and treatment of the 
impaired muscle, bone, or joint. Musculoskeletal rehabilitation is more 
targeted toward proprioception, strength, imbalances, orthopedic 
surgeries, and abnormal functional movement patterns, and generally 
streamlines resources following a surgery or injury. Because of these 
clinical differences and associated resource use differences based on 
variables in length and intensity of rehabilitation, the HHGM would 
adjust payment between musculoskeletal and neuro/stroke rehabilitation 
accordingly.
---------------------------------------------------------------------------

    \45\ World Health Organization. (2011). Rehabilitation. World 
Report on Disability. Chapter 4. Retrieved from http://www.who.int/disabilities/world_report/2011/chapter4.pdf.
    \46\ Johns Hopkins Online Health Library. Neurological 
Rehabilitation. Retrieved from http://www.hopkinsmedicine.org/healthlibrary/conditions/adult/physical_medicine_and_rehabilitation/neurological_rehabilitation_85,P01163/.
    \47\ Stinear,C., Ackerley,S., Byblow, W. (2013) Rehabilitation 
is Initiated Early After Stroke, but Most Motor Rehabilitation 
Trials Are Not. Stroke. 2013; 44:2039-2045. https://doi.org/10.1161/STROKEAHA.113.000968.
    \48\ http://www.healthquality.va.gov/guidelines/Rehab/stroke/Mgmt_of_Stroke_Rehab_03151.pdf.
---------------------------------------------------------------------------

c. Wounds
    Wound care is provided in a variety of settings, including in the 
home. Advances in wound care treatments have increasingly allowed for a 
wide range of wound therapies to be provided in the home.\49\ According 
to the article ``Wound Care Outcomes and Associated Cost Among Patients 
Treated in US Outpatient Wound Centers: Data From the US Wound 
Registry,'' a ``rough population prevalence rate for chronic non-
healing wounds in the United States is 2 percent of the general 
population,'' with an estimated cost of caring for these wounds 
exceeding $50 billion a year.\50\ Non-healing, chronic wounds are often 
found in home health patients considering ``prolonged and non-healing 
connective tissue injuries are often associated with common diseases, 
such as metabolic disorders, obesity, hypertension, arteriosclerosis, 
neuropathy, and diabetes mellitus,'' \51\ which are among the top home 
health diagnoses.
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    \49\ Rhee, S., Valle, M., Wilson, L., Lazarus, G., Zenilman, J., 
Robinson, K. (2015). Negative pressure wound therapy technologies 
for chronic wound care in the home setting: A systematic review. 
Wound Repair and Regeneration. 23, 506-517.
    \50\ http://www.woundsresearch.com/article/wound-care-outcomes-and-associated-cost-among-patients-treated-us-outpatient-wound-centers-d.
    \51\ Ackermann, P., Hart, D. Influence of Comorbidities: 
Neuropathy, Vasculopathy, and Diabetes on Healing Response Quality. 
(2013) Adv Wound Care (New Rochelle), 2(8): 410-421. doi: 10.1089/
wound.2012.0437.
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    Surgical wound care is essential at preventing post-operative 
complications such as surgical site infections (SSIs) and dehiscence. 
Research has shown that post-discharge SSIs occur in 3 to 5 percent of 
all surgical patients, and up to 33 percent of patients undergoing 
abdominal surgery, and that ``more than half of patients who develop 
post-discharge SSIs are readmitted to the hospital, making SSIs the 
overall costliest healthcare-associated infection.'' \52\ Home care 
management of burns requires a variety of resources as ``burn patients 
are unique, representing the most severe model of trauma.'' \53\ The 
management of burn injury involves a multidisciplinary approach which 
may include nurses, occupational and physical therapists, dieticians, 
and psychosocial experts. Pressure ulcers are associated with an 
increased risk of morbidity and mortality and have a variety of 
intrinsic and external factors affecting their incidence and treatment. 
The incidence of pressure ulcers in home health is projected to rise 
due to the aging population, increasingly fragmented care, and nursing 
shortage.\54\ Ultimately, wound care depends on a multitude of 
characteristics driving resource utilization. By highlighting them as a 
clinical group, the HHGM would recognize the variety of resources and 
skills that necessitate careful treatment and healing of different 
types of wounds, and more accurately ascribe resource use to payment.
---------------------------------------------------------------------------

    \52\ Sanger, P., Hartzler, A., Han,S., et al. (2014) Patient 
Perspectives on Post-Discharge Surgical Site Infections: Towards a 
Patient-Centered Mobile Health Solution. PLoS One. 2014; 9(12): 
e114016.Published online 2014 Dec 1. doi: 10.1371/
journal.pone.0114016.
    \53\ Al-Mousawi, A. MD, Mecott-Rivera, G. MD, Jeschke, M. MD, 
Ph.D., et al. (2009). Burn Teams and Burn Centers: The Importance of 
a Comprehensive Team Approach to Burn Care: Clin Plast Surg. 2009 
Oct; 36(4): 547-554: doi: 10.1016/j.cps.2009.05.015.
    \54\ Lyder, C., Ayello, Elizabeth. (2008). Pressure Ulcers: A 
Patient Safety Issue. Patient Safety and Quality: An Evidence-based 
Handbook for Nurses. Chapter 12.
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d. Behavioral Health Care
    The World Health Organization (WHO) defines health as ``a state of 
complete physical, mental and social well-being and not merely the 
absence of disease or infirmity.'' \55\ As such, behavioral and mental 
home health is an important clinical group of the HHGM. If all 
eligibility and coverage criteria are met according to Sec.  409.42, 
then a patient may receive skilled nursing services for the assessment, 
treatment, and evaluation of psychiatric conditions. The Home Health 
Benefit Policy Manual states that ``the evaluation, psychotherapy, and 
teaching needed by a patient suffering from a diagnosed psychiatric 
disorder that requires active treatment by a

[[Page 35316]]

psychiatrically trained nurse, and the costs of the psychiatric nurse's 
services may be covered as a skilled nursing service.'' \56\ However, 
the psychiatric care must be furnished by an agency that does not 
primarily provide care and treatment of mental diseases. Older adults 
may be more susceptible to psychiatric and behavioral health issues due 
to limited mobility, bereavement, loss of ability to live 
independently, or drop in socioeconomic status due to retirement.\57\ 
Although psychiatric and behavioral conditions have different signs, 
symptoms, and treatment options than physical illness, mental health 
can have major consequences on physical health. Behavioral health 
research suggests that ``a model of care including solely hospital 
based provision (usually inpatient and outpatient care) will be 
insufficient to provide access for people facing barriers to care.'' 
\58\ Additionally, the length of stay among Medicare beneficiaries who 
have been hospitalized for mental illness has declined over the last 
decade, with patients being discharged to home health rather than 
extending a hospitalization.\59\ For these reasons, behavioral home 
health remains a crucial aspect of keeping beneficiaries out of the 
hospital. Distinguishing it as a clinical group delineates the 
resources associated with the unique care needs of these patients and 
would more accurately assign payment based on patient characteristics.
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    \55\ Constitution of WHO: principles: http://www.who.int/about/mission/en/.
    \56\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c07.pdf.
    \57\ World Health Organization: Mental Health and Older Adults. 
Retrieved from http://www.who.int/mediacentre/factsheets/fs381/en/.
    \58\ Thornicroft, G., Deb, T., Henderson, C. (2016) Community 
mental health care worldwide: current status and further 
developments. World Psychiatry, 15(3): 276-286.Published online 2016 
Sep 22. doi: 10.1002/wps.20349.
    \59\ Banta, J., Belk, I., Newton, K., Sherzai, A. (2010) 
Inpatient Charges and Mental Illness: Findings from the Inpatient 
Sample 1999-2007. Clinicoecon Outcomes Res2010; 2: 149-158.
    Published online 2010 Oct 11. doi: 10.2147/CEOR.S7560.
---------------------------------------------------------------------------

e. Complex Nursing Interventions
    Understandably, the growing trend toward providing more healthcare 
services in the community shifts an increasing number of complex 
nursing interventions to home health. Providing complex nursing 
interventions in the home reflects a patient population with ``more 
complex health care needs who require more intensive medical services 
coordinated across multiple providers, as well as a wide range of 
social supports to maintain health and functioning.'' \60\ Because of 
the range and intensity of services needed, these patients tend to 
generate high resource utilization and associated costs due to the need 
for a higher level of knowledge and expertise.\61\ Additionally, 
readmission rates can be high in this vulnerable population as patients 
adjust to their home with therapies generally administered in the 
hospital or post-acute environment.\62\
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    \60\ Rich, E., Lipson, D., Libersky, J., Parchman, M. (2012). 
Coordinating Care for Adults With Complex Care Needs in the Patient-
Centered Medical Home: Challenges and Solutions WHITE PAPER, 
prepared by Mathematica Policy Research AHRQ Publication No. 12-0010 
January 2012: https://www.mathematica-mpr.com/our-publications-and-findings/publications/coordinating-care-for-adults-with-complex-care-needs-in-the-patientcentered-medical-home-challenges-and-solutions.
    \61\ Huisman-de Waal G., van Achterberg, T., Jansen, J., Wanten, 
G., Schoonhoven, L. (2011) High-tech home care: overview of 
professional care in patients on home parenteral nutrition and 
implications for nursing care: J Clin Nurs. 2011 Aug;20(15-16):2125-
34. doi: 10.1111/j.1365-2702.2010.03682.x. Epub 2011 May 25.
    \62\ Vallab, H., Konrad, D., DeChicco, R., et al (2016). Thirty-
Day Readmission Rate Is High for Hospitalized Patients Discharged 
With Home Parenteral Nutrition or Intravenous Fluids, JPEN J 
Parenter Enteral Nutr. 2016 Aug 18. doi: 0148607116664785.
---------------------------------------------------------------------------

    For instance, the introduction of home mechanical ventilation is a 
technological advancement that not only keeps healthcare costs down but 
also allows patients, whose condition would otherwise necessitate an 
institutional environment, a maximum quality of life. For example, the 
results from one study found that long-term mechanical ventilation on 
average costs $14,500 less per patient, per month when administered at 
home rather than in an acute or post-acute facility.\63\ However, it 
does not come without challenges. Caregiver competency, evolving 
technology, changes in patient medical status, and safety of home 
environment can lead to higher home health resource utilization. 
Likewise, management of ostomies and vascular access devices (VADs) are 
associated with higher resource use in the home. The impact on patients 
living with VADs and ostomies is significant, with research identifying 
physical, psychological, and social effects.\64\ Ostomy and VAD 
specific challenges or complications may occur initially and persist 
and change daily as patients learn to troubleshoot and manage life with 
an ostomy or VAD. Care often requires resources aimed at education and 
support in addition to physical care. This can be made more challenging 
by the social and psychological effects that many new patients 
experience. Under the HHGM, ICD-10-CM codes on the home health claim 
that identify complex nursing interventions as the principal reason for 
home health would generate higher payment to account for these inherent 
challenges requiring additional resource utilization.
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    \63\ King, A. Long-Term Home Mechanical Ventilation in the 
United States. (2012). Respiratory Care June 2012, 57 (6) 921-932; 
doi: https://doi.org/10.4187/respcare.01741.
    \64\ Grant, M. RN, DNS, FAAN, McCorkle, R. Ph.D., FAAN, 
Hornbrook, M. Ph.D., et al. (2013). Development of a Chronic Care 
Ostomy Self-Management Program. J Cancer Educ. 2013 Mar; 28(1): 70-
78. doi: 10.1007/s13187-012-0433-1.
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f. Medication Management, Teaching, and Assessment (MMTA)
    Based on our analysis, the majority of 30-day periods of care in 
the HHGM would likely be classified under the MMTA clinical group. 
These 30-day periods would be characterized by codes that identify 
direct services related to the management and evaluation of the care 
plan, observation and assessment of the patient's condition, and 
training and/or education of a patient or family member that are not 
classified into one of the other clinical groups. The numerous and 
diverse conditions found in home health, and their associated 
medications and interventions, influence the principal diagnosis that 
would classify a 30-day period as under the MMTA clinical group.
    Research on home health patient characteristics, home health 
nursing interventions, and outcomes of care show that there are four 
broad categories of interventions most frequently provided in the home:
    (1) Health teaching, guidance and counseling;
    (2) Treatments and procedures;
    (3) Case management; and,
    (4) Surveillance \65\
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    \65\ Martin, K., Scheet, N., Stegman, M.R. (1993). Home Health 
Clients: Characteristics, Outcomes of Care, and Nursing 
Interventions. American Journal of Public Health. 83(12), 1730-1734.
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    Of these interventions, surveillance is the most frequently 
occurring intervention, closely followed by health teaching, guidance 
and counseling.\66\ Specific patient problems most frequently 
identified in the home health setting are related to medication 
regimens, especially with polypharmacy, and health-related 
behaviors.\67\ The majority of home health care patients routinely take 
more than five prescription drugs, and many likely deviate from their 
prescribed medication regimen.\68\ This increases

[[Page 35317]]

the potential for medication errors or adverse effects in home health, 
highlighting the substantial need for education and medication 
management regardless of whether the patient needs wound care, 
rehabilitation, or complex nursing interventions.
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    \66\ Ibid.
    \67\ Ibid.
    \68\ Ellenbecker, C., Samia, L., Cushman, M., Alster, K. (2008). 
Patient Safety and Quality in Home Health Care. Patient Safety and 
Quality: An Evidence-based Handbook for Nurses. Chapter 13.
---------------------------------------------------------------------------

    Additionally, patients with comorbidities tend to be high users of 
home health,\69\ making education and assessment of disease diagnosis, 
medication interactions, lifestyle changes, and avoidance of adverse 
events a considerable portion of home health care. In an elderly 
patient population, the number of chronic conditions increases with 
age. Medications used to treat or prevent blood clots (anticoagulants), 
diabetes (insulin), and pain (opioid analgesics) are some of the most 
commonly implicated drugs in emergency room visits and emergent 
hospitalizations for adverse drug events in older adults.\70\ These 
adverse events can potentially be reduced by improving dosing and 
monitoring of these drugs in high risk populations and settings like 
older adults in home health programs.\71\ Anticoagulants are 
challenging to manage in home health settings and have been identified 
as targets for improvements in monitoring and care coordination by HHS. 
Also, as the number of medications being taken increases, so does the 
risk of adverse drug reactions, and the risk of drug reaction related 
emergency room visits and hospital admissions, especially in patients 
who are in poor health.\72\ Elderly patients are especially at risk for 
adverse drug reactions as the organs that metabolize drugs have reduced 
functional ability which can lead to increased toxicity.\73\ Similarly, 
roughly 31 percent of younger Medicare beneficiaries with disabilities 
report having five or more chronic conditions.\74\ Polypharmacy can 
lead to reduced compliance with medication regimens, thus putting the 
patient at risk for adverse events resulting from poorly managed 
conditions. In the home healthcare setting, management of polypharmacy 
is a primary focus of nursing interventions.\75\ These interventions 
include assessment of the patient's chronic conditions and medications 
used to treat those conditions; assessment of the patient's 
understanding of and compliance with his or her medication regimen; and 
teaching and reinforcing treatment and medication regimens. The 
medication review by the home health nurse can help reduce duplicate 
medications, medications that are contraindicated for older adults, and 
provide ways to ensure patients are being appropriately monitored and 
understand why they are taking the medications as well as how to take 
them correctly.\76\
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    \69\ Center for Healthcare and Transformation. (2010). Health 
Care Cost drivers: Chronic Disease, Comorbidity and Health Risk 
Factors in the U.S. and Michigan. Center for Healthcare and 
Transformation.
    \70\ Budnitz DS, Lovegrove MC, Shehab N, Richards CL. Emergency 
hospitalizations for adverse drug events among older Americans. N 
Engl J Med 2011;365:2002-2012.
    \71\ U.S. Department of Health and Human Services, Office of 
Disease Prevention and Health Promotion. (2014). National Action 
Plan for Adverse Drug Event Prevention. Washington, DC.
    \72\ Alpert, P., Gatlin, T. (2015). Polypharmacy in Older 
Adults. Homehealth Care Now. 33(10), 524-529.
    \73\ Ibid.
    \74\ Cubanski, J., Neuman, T., Damico, A. (2010, August) 
Medicare's Role for People Under Age 65 with Disabilities. Retrieved 
from http://kff.org/medicare/issue-brief/medicares-role-for-people-under-age-65-with-disabilities/.
    \75\ Ibid.
    \76\ Ibid.
---------------------------------------------------------------------------

    Other studies show that primary functions of home health care 
skilled nursing interventions include providing disease-specific and 
general health information; helping patients to practice and refine 
disease management skills; assessing efficacy of treatment; and, 
advocating for any needed changes to established treatment and drug 
regimens.\77\ The interventions encompassed under the MMTA clinical 
group are shown extensively in research literature to be the most 
prevalent services provided by home health clinicians. Analysis of home 
health episodes for the HHGM suggests that the MMTA services would be 
the most frequent home health service being provided to Medicare home 
health beneficiaries.
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    \77\ Liebel, D., Powers, B.A., Friedman, B., Watson, N. (2011). 
Barriers and Facilitators to Optimize Function and Prevent 
Disability Worsening: A Content Analysis of a Nurse Home 
Intervention. Journal of Advanced Nursing. 68(1), 80-93.
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    We believe that the proposed clinical groupings add a needed level 
of clarity in identifying and meeting the needs of home health 
patients; particularly the patient populations addressed in the Home 
Health Study Report to Congress as outlined in section II.D. of this 
proposed rule. Recognizing that all 30-day periods of home health care 
cannot be defined by the principal diagnosis alone, the clinical 
groupings would only be one step in the case-mix adjustment under the 
HHGM. We invite comments on the proposed clinical groups, which are 
designed to capture the most common types of care that HHAs provide.
7. Functional Levels and Corresponding OASIS Items
    Research has shown a relationship exists between functional status, 
rates of hospital readmission, and the overall costs of health care 
services.\78\ Functional status is defined in a number of ways, but 
generally, functional status reflects an individual's ability to carry 
out activities of daily living (ADLs) and to participate in various 
life situations and in society.\79\ The assessment of functional status 
is often called ``the sixth vital sign'', which reflects its clinical 
relevance in the plan of care. CMS requires the collection of data on 
functional status in home health through a standardized assessment 
instrument: The Outcome and Assessment Information Set (OASIS).\80\ 
Under the current HH PPS, functional status is assessed through the 
following OASIS items:
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    \78\ Burke, R. MD, MS, Whitfield, E. Ph.D., Hittle, D. Ph.D., 
Min, S. Ph.D., Levy, C. MD, Ph.D., Prochazka, A. MD, MS, Coleman, E. 
MD, MPH, Schwartz, R. MD, Ginde, A. (2016). ``Hospital Readmission 
From Post-Acute Care Facilities: Risk Factors, Timing, and 
Outcomes''. The Journal of Post-Acute Care and Long Term Care 
Medicine. (17), 249-255.
    \79\ Clauser, S. Ph.D., and Arlene S. Bierman, M.D., M.S. 
(2003). ``Significance of Functional Status Data for Payment and 
Quality''. Health Care Financing Review. 24(3), 1-12.
    \80\ Bierman, A. (2001). ``Functional Status: The Sixth Vital 
Sign''. Journal of Internal Medicine. 16(11), 785-786.
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     M1810: Dressing Upper Body.
     M1820: Dressing Lower Body.
     M1830: Bathing.
     M1840: Toileting.
     M1850: Transferring.
     M1860: Ambulation/Locomotion.
    For each of these OASIS items, the clinician or therapist 
conducting the assessment selects a numbered checkbox that best 
describes the patient's functional status in terms of ability to 
perform certain tasks. These numbered checkboxes typically range from 
zero, meaning independent with the task or no functional deficits, to 
higher numbers, meaning decreasing independence and/or increasing 
deficits. Responses to these OASIS items result in ``points'' to 
calculate an overall functional score which conveys the functional 
status of the patient. This means that patients with a higher 
functional score (that is, reduced functional status) have, on average, 
higher resource use compared to patients with a lower functional score 
(that is, higher functional status). As such, the functional status of 
the patient is a useful case-mix adjuster. Including functional status 
in the case-mix adjustment methodology allows for higher payment for 
those patients with

[[Page 35318]]

higher service needs. As functional status is commonly used for risk 
adjustment in various payment systems, including in the current HH PPS, 
the proposed HHGM would also adjust payments to account for differences 
in resource use associated with functional status.
    During the development of the HHGM, each OASIS-C item was evaluated 
using clinical review and analytical methods. Because the current case-
mix adjustment methodology already utilizes OASIS items associated with 
functional status to adjust the home health payment, utilizing these 
OASIS items for inclusion in the HHGM was a primary focus. All OASIS 
items, including items not used in the current case-mix adjustment 
methodology, were evaluated for potential inclusion in the HHGM. OASIS 
items were eliminated for inclusion based on statistical factors (for 
example, the relationship of the item with resource use), clinical 
factors (for example, clinical appropriateness of using the item for 
payment purposes) and incentive factors (for example, potential for 
unintended consequences such as overutilization solely for increased 
reimbursement).
    We presented our analysis of the OASIS items to a clinical 
workgroup that included physicians, nurses, and therapists with 
substantial home health clinical expertise, to obtain input regarding 
which OASIS items to include in the HHGM. Based on the clinical 
workgroup feedback and additional analyses by the research team, the 
following decisions were made regarding the narrowed list of OASIS 
items being considered for a functional status payment adjustment under 
the HHGM: \81\
---------------------------------------------------------------------------

    \81\ Version OASIS C items were used for this initial analysis.
---------------------------------------------------------------------------

     M066, M0110: Age, Episode timing--Both age and episode 
timing were determined to be appropriate for the HHGM, but both items 
can be accurately obtained directly from the home health claims data, 
rather than the OASIS. As such, responses on these OASIS items would 
not be used for this functional status adjustment under the HHGM.
     M1018, M1030: Selected prior conditions and types of 
therapies a patient receives--These OASIS items would not be used for 
functional status adjustment in the HHGM because the clinical groups, 
specifically Complex Nursing Interventions, (described in section 
III.E.6. of this proposed rule) account for most of the conditions 
described in these OASIS items (for example, IV therapy, TPN) so using 
these OASIS items would be duplicative.
     M1200: Vision--The clinical workgroup believed this OASIS 
item to be clinically significant. However, while this item is used in 
the current HH PPS, there are no longer ``points'' associated with this 
item for the clinical domain because there is no additional resource 
use related to this item beyond the average across all periods of care. 
Additionally, analysis of this vision impairment OASIS item showed 
decreased resource use in the HHGM and; therefore, was determined to 
have a counterintuitive relationship. As a result, this OASIS item 
would not be used for functional status adjustment in the HHGM. 
Analysis of this item is found in the ``Overview of the Home Health 
Groupings Model'' technical report found on the HHA Center Web 
page.\82\
---------------------------------------------------------------------------

    \82\ ``Overview of the Home Health Groupings Model'' technical 
report, Appendix Exhibit A7-1 on the HHA Center Web page (https://
www.cms.gov/center/provider-type/home-health-agency-hha-
center.html).
---------------------------------------------------------------------------

     M1220, M1230: Understanding of verbal content, speech and 
oral--These items were determined to be subjective in nature and may 
not provide information that is an accurate reflection of the patient's 
cognitive status. As with other OASIS items in this analysis, these 
items showed that there was decreased resource costs associated with 
worsening status. As a result, these OASIS items would not be used for 
functional status adjustment in the HHGM.
     M1242: Pain--While this item is used in the current HH 
PPS, this is shown to have only a minimal relationship with resource 
use in the current payment model. Although the clinical workgroup 
believed this item to be clinically significant, CMS clinicians agreed 
this one item alone may not be robust enough to fully capture the pain 
presentation of the patient and its impact on resource utilization. 
Therefore, this OASIS item would not be used for functional status 
adjustment in the HHGM.
     M1302, M1308, M1320, M1322, M1324, M1332, M1334, and 
M1340: Ulcers and wounds--These OASIS items would not be used for 
functional status adjustment in the HHGM because the Wound clinical 
group (described in section III.E.6.of this proposed rule) already 
adjusts the period payment for these conditions and using these OASIS 
items would be duplicative.
     M1400: Shortness of breath--Although the clinical 
workgroup believed this item to be clinically significant, this OASIS 
item would not be used for functional status adjustment in the HHGM 
because the analysis showed decreased resource costs with worsening 
dyspnea which appears to be clinically counterintuitive.\83\
---------------------------------------------------------------------------

    \83\ Ibid.
---------------------------------------------------------------------------

     M1700--M1750: Cognitive items--These items were initially 
determined to be clinically appropriate for inclusion in the HHGM but 
were later removed due to analysis that showed a counterintuitive 
relationship, meaning costs decreased as cognitive status worsened. 
This negative relationship with resource use was consistent with most 
of the OASIS cognitive items. This analysis is discussed more in depth 
in this section below and the full analysis of all of the cognitive 
items is found in the technical report.
     M1800--M1890: Functional items--These OASIS items include 
both ADLs and Instrumental Activities of Daily Living (IADLs). ADLs are 
routine activities that people tend to do every day without needing 
assistance. There are six basic ADLs: Eating, bathing, dressing, 
toileting, transferring (walking) and continence. IADLs are activities 
related to independent living and include preparing meals, managing 
money, shopping for groceries or personal items, performing light or 
heavy housework, doing laundry, and using a telephone. While most of 
these items were determined to be clinically appropriate for inclusion 
in the HHGM, M1870-M1890 (IADLs) would not be used for functional 
status adjustment in the HHGM due to responses having a negative 
relationship with resource use (for example, worsening status in 
performing IADLs was associated with decreased resource use).
     M2030: Management of injectable medications--This OASIS 
item would not be used for functional status adjustment in the HHGM 
because most of the responses associated with this item reflected less 
resource use when the patient increasingly had issues with preparing 
and taking injectable medications. We believe that clinically 
counterintuitive relationships resulting from responses to OASIS items, 
where the expectation would be to see increased resource costs 
associated with decreased function or ability, should not be included 
in the case mix adjustment.
    In addition to the OASIS items listed above, the clinical workgroup 
also discussed M2100 (types and sources of assistance-specifically non-
HHA caregiver assistance). Workgroup members agreed that the 
availability of non-agency caregiver assistance can be an important 
determinant of home health care needs. Caregiver availability

[[Page 35319]]

and assistance was a focus in the Report to Congress ``Medicare Home 
Health Study: An Investigation on Access to Care and Payment for 
Vulnerable Patient Populations''. Vulnerable patient populations 
examined in this study included those patients with minimal or no 
caregiver support. Results from this study revealed that HHAs and 
physicians stated that family or caregiver issues are an important 
contributing factor in the inability to admit or place patients in home 
health.\84\ However, the survey results suggest that much of the 
variation in access to Medicare home health services is associated with 
social and personal conditions, and therefore, CMS' ability to improve 
access for certain vulnerable patient populations through payment 
policy alone may be limited.\85\ OASIS-C item M2100 identifies the 
ability and willingness of the caregiver(s) (other than home health 
agency staff) to provide categories of assistance needed by the 
patient, including ADL/IADL assistance, medication administration, and 
management of equipment. This particular OASIS item is multi-faceted, 
meaning this items requires one of six responses for seven different 
types of caregiver assistance. Because the responses to this item 
generally are not based on direct observation by the clinician 
conducting the assessment, this presents a limitation for use in a case 
mix adjustment as the accuracy of the responses cannot be easily 
validated. Patients or caregivers may overestimate or underestimate 
their ability or willingness to assist in the patient's care. Analysis 
of the resource use associated with this item showed ambiguous results 
where the same response (``assistance needed, but no caregiver(s) 
available'') would be associated with increased resource costs for 
certain types of assistance but decreased resource costs for other 
types of assistance. We believe this is clinically counterintuitive as 
it would be expected that if a need for caregiver assistance exists but 
there are no available caregivers, then the result would be an 
increased need for resources for all of the types of caregiver 
assistance listed on this OASIS item. Analysis of OASIS-C item M2110, 
frequency of ADL/IADL assistance, which identifies the frequency of 
assistance provided by non-agency caregiver(s), also showed a 
counterintuitive and contradicting relationship with M2100. Therefore, 
these OASIS items would not be included as part of the functional 
status payment adjustment under the HHGM.
---------------------------------------------------------------------------

    \84\ Report to Congress Medicare Home Health Study: An 
Investigation on Access to Care and Payment for Vulnerable Patient 
Populations. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.
    \85\ Ibid.
---------------------------------------------------------------------------

    During the analysis of functional case mix adjustment under the 
HHGM, a review of the literature revealed growing evidence suggesting 
that cognitive dysfunction is an important risk factor in the 
development of functional disability and loss of independence.\86\ The 
research team analyzed the responses to the OASIS items associated with 
cognitive status, but found there was decreased resource use associated 
with worsening cognitive status. We decided to further evaluate OASIS 
cognitive items (M1700-1750) in addition to functional items (M1800-
1860), as well as other possible OASIS items that may contribute to 
overall function status. The following OASIS items were determined to 
be indicators of cognitive and functional status that potentially could 
be used as case mix adjusters:
---------------------------------------------------------------------------

    \86\ Njegovan, V., Man-Song-Hing, M., Mitchell, S., Molnar, 
F.(2001). ``The Hierarchy of Functional Loss Associated with 
Cognitive Decline in Older Persons''. Journal of Gerontology. 
56A(10), M638-643.
---------------------------------------------------------------------------

     M066: Age.
     M1032: Risk of Hospitalization.
     M1220: Understanding of Verbal Content.
     M1230: Speech and Oral (Verbal) Expression of Language.
     M1700: Cognitive functioning.
     M1710: Confusion indicator.
     M1720: Anxiety indicator.
     M1740: Cognitive, behavioral, and psychiatric symptoms.
     M1745: Frequency of disruptive behavior symptoms.
     M1750: Receipt of psychiatric nursing services.
     M1800: Grooming.
     M1810: Current ability to dress upper body safely.
     M1820: Current ability to dress lower body safely.
     M1830: Bathing.
     M1840: Toilet transferring.
     M1845: Toilet hygiene.
     M1850: Transferring.
     M1860: Ambulation/locomotion.
    One difficulty in using certain OASIS items (for example, M1700) to 
examine relationships with resource use is that they are only 
questioned on the Start of Care and Resumption of Care assessments, and 
not on follow-up assessments. Therefore, for this analysis, as outlined 
in the technical report, we looked back for the most recent period in 
the same sequence of periods that was linked to a Start of Care or 
Resumption of Care assessment, and carried forward the information from 
that assessment to the subsequent periods of care linked to follow-up 
(recertification) assessments. Analysis of these items, including 
looking at interactions between certain items, continued to show 
decreased resource use associated with worsening severity. The research 
team believed that clinically counterintuitive relationships to 
resource use may have the unintended consequence of discouraging HHAs 
to provide the appropriate amount of care to the patients who are 
clinically complex and need home health services the most.
    For several of the OASIS items listed above, particularly the 
functional items, worsening status is associated with higher resource 
use, indicating that these items may be useful as adjustors to 
construct case-mix weights for the HHGM. However, several responses 
within other individual OASIS items had very similar average resource 
use. Due to the lack of variation in resource use across certain 
responses and because certain responses were infrequently chosen, some 
responses were combined into larger response categories to better 
capture the relationship between worsening status and resource use. 
Responses on these OASIS items were combined using the following 
methodology:
     Responses that corresponded to a small number of periods 
were combined with responses that corresponded to a larger number of 
periods and;
     Responses that had similar average resource use were 
combined together.
    The resulting combinations of responses for these OASIS items are 
found at Exhibit 7-2 in the HHGM technical report.\87\
---------------------------------------------------------------------------

    \87\ https://www.cms.gov/center/provider-type/home-health-agency-hha-center.html?redirect=/center/hha.asp; https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
---------------------------------------------------------------------------

    After making these combinations, the newly combined OASIS items and 
resource use were analyzed again to determine if those OASIS items 
could be used to help case-mix adjust periods within the HHGM. Results 
showed that decreasing functional status, increasing age, and 
increasing risk of hospitalization tended to be associated with higher 
resource use, while worsening cognitive status tended to be associated 
with lower resource use. The relationship between worsening cognitive 
status but lower resource use is counterintuitive to existing research 
regarding cognitive status and health

[[Page 35320]]

care costs.\88\ To further explore the relationship between the 
functional and cognitive OASIS items and resource use, additional 
analyses were conducted where the coefficients (that is, resource 
costs) associated with the functional and cognitive items were 
converted into a table of points to calculate the functional score for 
home health periods of care. However, even after controlling for each 
OASIS variable (as well as other components of the HHGM), the general 
trends between the cognitive and functional items from the other 
analyses remained the same. That is, worsening cognitive status was 
generally associated with less resource use; worsening functional 
status was generally associated with increased resource use; increased 
risk of hospitalization was associated with increased resource use; and 
age was not associated with either increased or decreased resource use. 
The summary statistics of these analyses are found at Exhibit 7-3 of 
the technical report, ``Overview of the Home Health Groupings 
Model''.\89\ Therefore, we decided not to include those OASIS items 
with these types of inverse relationships to resource costs as part of 
the adjustment to the HHGM period payment. However, given the research 
support and clinical input from home health clinicians, we will 
continue to analyze the inclusion of cognitive items into the HHGM case 
mix adjustment. The analyses of the complete list of all OASIS items 
analyzed can be found in the Appendix Exhibits A7-1 and A7-2 of the 
technical report mentioned above.
---------------------------------------------------------------------------

    \88\ P.P. Pandharipande, T.D. Girard, J.C. Jackson, A. Morandi, 
J.L. Thompson, B.T. Pun, N.E. Brummel, C.G. Hughes, E.E. 
Vasilevskis, A.K. Shintani, K.G. Moons, S.K. Geevarghese, A. 
Canonico, R.O. Hopkins, G.R. Bernard, R.S. Dittus, and E.W. Ely. 
(2013). ``Long-Term Cognitive Impairment after Critical Illness''. 
The New England Journal of Medicine. 369(14), 1306-14.
    \89\ Abt Associates. ``Overview of the Home Health Groupings 
Model.'' Medicare Home Health Prospective Payment System: Case-Mix 
Methodology Refinements. Cambridge, MA, November 18, 2016. Accessed 
on April 27, 2017 at https://www.cms.gov/center/provider-type/home-health-agency-hha-center.html?redirect=/center/hha.asp; https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
---------------------------------------------------------------------------

    On the basis of input from the clinical workgroup and these 
analytic results, all cognitive items, functional items with a negative 
relationship with resource use, and age were removed and the model was 
re-estimated. Each OASIS item included in the final model has a 
positive relationship with resource use, meaning as functional status 
declines (as measured by a higher response category), periods have more 
resource use on average. Additionally, periods with a higher risk of 
hospitalization (meaning four or more items checked on M1033) are 
associated with higher resource use compared with periods with a lower 
risk of hospitalization. This indicates that these items could be used 
to help risk adjust a period's payment and help determine case-mix 
weights for the HHGM. As such, we are proposing that the following 
OASIS items be included as part of the functional payment adjustment 
under the proposed HHGM:
     M1800: Grooming.
     M1810: Current Ability to Dress Upper Body.
     M1820: Current Ability to Dress Lower Body.
     M1830: Bathing.
     M1840: Toilet Transferring.
     M1850: Transferring.
     M1860: Ambulation/Locomotion.
     M1032 (M1033 in OASIS-C1): Risk of Hospitalization.\90\
---------------------------------------------------------------------------

    \90\ In Version OASIS C-1, two responses were excluded: 
``currently reports exhaustion'' and ``other risks not listed in 1-
8''.
---------------------------------------------------------------------------

    While the original analyses of these OASIS functional items were 
conducted using CY 2013 data from the OASIS-C version (as presented in 
the technical report), the updated analyses for CY 2016 reported in 
Tables 36, 37, and 38 are based on data obtained from OASIS C-1. While 
the OASIS item number for ``Risk of Hospitalization'' changed from 
M1032 (in OASIS C) to M1033 (in OASIS C-1), the remaining OASIS items 
(and item numbers) used for this functional adjustment analysis are the 
same. As discussed earlier in this section, to facilitate the 
interpretation of this analysis of the functional items used to 
construct the case mix weights, the results of this analysis were 
converted into a table of points that can be used to calculate the 
functional score for a home health period. Table 36 shows the points 
for 2013 and 2016 for those items associated with increased resource 
use using a reduced set of OASIS C-1 items:

Table 36--OASIS Points Table for Those Items Associated With Increased Resource Use Using a Reduced Set of OASIS
                                           Items, CY 2013 and CY 2016
----------------------------------------------------------------------------------------------------------------
                                                                                    Percent of      Percent of
                                                                                    periods in      periods in
            Variable                 Response     Points  (2013)  Points  (2016)    2013  with      2016  with
                                     category                                     this  response  this  response
                                                                                   category  (%)   category  (%)
----------------------------------------------------------------------------------------------------------------
M1800: Grooming.................               1               3               4            41.5            51.9
M1810: Current Ability to Dress                1               4               6            46.6            55.6
 Upper Body.....................
M1820: Current Ability to Dress                1               7               6            52.1            57.5
 Lower Body.....................
                                               2              10              12            16.4            19.6
M1830: Bathing..................               1               6               4            24.4            20.3
                                               2              17              14            46.1            51.6
                                               3              25              22            19.1            21.9
M1840: Toilet Transferring......               1               4               5            20.3            28.2
M1850: Transferring.............               1               7               4            61.6            47.7
                                               2              13               9            29.2            48.0
M1860: Ambulation/Locomotion....               1              13              12            37.7            29.0
                                               2              17              15            33.0            47.8
                                               3              27              27            12.7            14.2
M1032 (M1033 for OASIS C-1):           4 or more              12              11            12.6            16.3
 Risk of Hospitalization........   items checked
----------------------------------------------------------------------------------------------------------------


[[Page 35321]]

    Similar to the current case-mix adjustment methodology, the points 
generated in Table 36 were then used to create a functional score for 
each home health period of care in the HHGM. That is, a home health 
period of care receives points based on each of the responses 
associated with the OASIS items listed above. The sum of all of these 
points results in a functional score which is used in the HHGM to group 
home health periods into a functional level. As part of the HHGM case-
mix adjustment, we are proposing to assign points for each of the 
responses to the proposed OASIS functional items and to sum up the 
points to create a functional score for the period of care. Whereas the 
results presented in the technical report showed that the number of 
functional levels varied by clinical group, continued analysis 
ultimately established three functional levels for each of the clinical 
groups--low, medium and high, with approximately one third of home 
health periods from each of the clinical groups within each level. This 
means home health periods in the low level have responses for the above 
OASIS items that are associated with the lowest resource use on 
average. Home health periods in the high level have responses on the 
above OASIS items that are associated with the highest resource use on 
average. We are proposing to use the three functional levels of low, 
medium, and high, based on the CY 2016 data for each of the clinical 
groups. Table 37 shows the functional thresholds for each functional 
level by clinical group for CYs 2013 and 2016.

                Table 37--Thresholds for Functional Levels by Clinical Group, CY 2013 and CY 2016
----------------------------------------------------------------------------------------------------------------
                                                                                   Points  (2013   Points  (2016
                 Clinical group                               Level                    data)           data)
----------------------------------------------------------------------------------------------------------------
MMTA...........................................  Low............................            0-36            0-36
                                                 Medium.........................           37-55           37-54
                                                 High...........................             56+             55+
Behavioral Health..............................  Low............................            0-30            0-38
                                                 Medium.........................           31-55           39-57
                                                 High...........................             56+             58+
Complex Nursing Interventions..................  Low............................            0-33            0-36
                                                 Medium.........................           34-60           37-59
                                                 High...........................             61+             60+
Musculoskeletal Rehabilitation.................  Low............................            0-37            0-39
                                                 Medium.........................           38-55           40-55
                                                 High...........................             56+             56+
Neuro Rehabilitation...........................  Low............................            0-48            0-49
                                                 Medium.........................           49-67           50-66
                                                 High...........................             68+             67+
Wound..........................................  Low............................            0-41            0-42
                                                 Medium.........................           42-65           43-65
                                                 High...........................             66+             66+
----------------------------------------------------------------------------------------------------------------

    Table 38 shows the average resource use by clinical group and 
functional level for CY 2016:

                                     TABLE 38--Average Resource Use by Clinical Group and Functional Level, CY 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
                                           Mean resource   Frequency  of    Percent of     deviation  of   Percentile of      Median       Percentile of
                                                use           periods         periods      resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
MMTA--Low...............................       $1,216.76       1,683,279           19.48       $1,091.11         $880.56         $507.63       $1,589.76
MMTA--Medium............................        1,466.19       1,594,451           18.45        1,182.78        1,163.49          617.07        1,979.71
MMTA--High..............................        1,637.21       1,628,441           18.84        1,284.34        1,334.00          695.10        2,216.12
Behavioral Health--Low..................          963.97         100,572            1.16          847.72          679.14          407.74        1,255.47
Behavioral Health--Medium...............        1,308.10          94,030            1.09        1,018.11        1,040.79          543.96        1,780.03
Behavioral Health--High.................        1,501.87          94,911            1.10        1,107.73        1,237.97          662.86        2,047.39
Complex--Low............................        1,425.30         120,528            1.39        1,356.53        1,019.77          582.12        1,795.04
Complex--Medium.........................        1,797.33         106,056            1.23        1,593.76        1,354.89          739.39        2,340.46
Complex--High...........................        1,917.72         109,665            1.27        1,723.31        1,430.70          756.59        2,536.16
MS Rehab--Low...........................        1,519.02         478,059            5.53        1,048.29        1,298.20          753.88        2,025.52
MS Rehab--Medium........................        1,730.99         480,676            5.56        1,121.66        1,534.42          921.87        2,296.70
MS Rehab--High..........................        1,891.42         472,078            5.46        1,241.57        1,671.24        1,004.59        2,501.81
Neuro--Low..............................        1,594.59         283,573            3.28        1,169.30        1,327.08          739.60        2,137.34
Neuro--Medium...........................        1,847.36         233,398            2.70        1,271.54        1,581.08          914.70        2,487.14
Neuro--High.............................        2,020.14         255,608            2.96        1,473.75        1,682.68          947.61        2,715.74
Wound--Low..............................        1,860.42         305,556            3.54        1,550.96        1,436.36          861.98        2,345.97
Wound--Medium...........................        2,052.45         303,435            3.51        1,603.05        1,646.76          980.27        2,634.01
Wound--High.............................        2,258.66         297,791            3.45        1,814.01        1,771.12        1,043.72        2,897.54
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................        1,585.48       8,642,107          100.00        1,289.23        1,262.65          671.96        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 35322]]

    Like the annual recalibration of the case-mix weights under the 
current HH PPS, we expect that annual recalibrations would also be made 
to the HHGM case-mix weights. If the HHGM is finalized, we will 
continue to analyze all of the components of the case-mix adjustment, 
including adjustment for functional status, and would make refinements 
as necessary to ensure that payment for home health periods are in 
alignment with costs. We invite comments on the proposed OASIS items 
and the associated points and thresholds used to group patients into 
three functional levels under the HHGM, as outlined above.
8. Comorbidity Adjustment
    The HHGM groups home health periods based on the primary reason for 
home health care (principal diagnosis), functional level, admission 
source, and timing. To further account for differences in resource use 
based on patient characteristics in the development of the HHGM, we 
analyzed the presence of comorbidities as another factor that could 
impact resource utilization and costs. We conducted a comprehensive 
literature review examining published, peer-reviewed research regarding 
the relationship between comorbidity and resource use.\91\ This review 
also included findings on those conditions that impact health care 
resource utilization. Based on this review and findings, we propose a 
comorbidity adjustment to account for higher costs associated with 
comorbidities.
---------------------------------------------------------------------------

    \91\ Appendix Exhibit A9-1, ``Overview of the Home Health 
Groupings Model'', 2016. 12-23-12-26. https://www.cms.gov/center/
provider-type/home-health-agency-hha-center.html.
---------------------------------------------------------------------------

    A comorbidity is most often defined as two or more coexisting 
medical conditions or disease processes that are in addition to an 
initial diagnosis.\92\ Typically, a comorbidity is a condition(s) in 
which there is no direct correlation in the treatment of the principal 
diagnosis, but the presence of that condition(s) may impact the home 
health plan of care in terms of resource utilization and costs. With 
aging, the presence of comorbidity increases markedly because the 
frequency of individual conditions arises with age. While the elderly 
are far more likely to have multiple comorbidities, comorbidities also 
are prevalent in Medicare beneficiaries under the age of 65 who have 
intellectual and physical disabilities.\93\ Research has repeatedly 
shown that comorbidity is associated with high health care utilization 
and expenditures.\94\ Additionally, comorbidity is tied to worse health 
outcomes and the need for more complex treatment and disease 
management, which in turn results in higher health care costs.\95\ 
Patients with comorbidities tend to be high users of home health visits 
and overall Medicare spending increases with the number of chronic 
conditions.\96\
---------------------------------------------------------------------------

    \92\ Mosby's Medical Dictionary, 9th edition. (copyright)2009, 
Elsevier.
    \93\ Cooper, S., McLean, G., Guthrie, B., McConnachie, A., 
Mercer, S., Sullivan, F., Morrison, J. (2015). ``Multiple physical 
and mental health comorbidity in adults with intellectual 
disabilities''. BMC Family Practice. 16(110), 1-11. doi 10.1186/
s12875-015-0329-3.
    \94\ Fried, L., Ferrucci, L., Darer, J., Williamson, J., 
Anderson, G. (2004). ``Untangling the Concepts of Disability, 
Frailty, and Comorbidity: Implications for Improved Targeting and 
Care''. Journal of Gerontology. 59(3), 255-263.
    \95\ Starfield, B., Lemke, K., Bernhardt, T., Foldes, S., 
Forrest, C., Weiner, J. (2003). ``Comorbidity: Implications for the 
Importance of Primary Care in Case Management''. Annals of Family 
Medicine. 1(1), 8-14.
    \96\ http://www.cdc.gov/chronicdisease/about/multiple-chronic.html.
---------------------------------------------------------------------------

    In the home health setting, information regarding the patient's 
health conditions for which home health services are provided are 
assessed and documented by skilled clinicians on the OASIS. These 
conditions would include secondary diagnoses in addition to the 
principal diagnosis supporting the need for home health services. As 
such, exploratory analyses for the HHGM determined that secondary 
diagnoses (that is, comorbidities) provide additional information that 
can predict resource use even after controlling for the period's 
clinical group. We examined multiple approaches for a comorbidity 
adjustment in the HHGM and the analyses on these approaches is found in 
the ``Overview of the Home Health Groupings Model'' technical report 
found on the HHA Center Web page. Based on the results of these 
analyses, we moved towards the development of a home health specific 
comorbidity list for the HHGM comorbidity adjustment.
    For the analysis of a comorbidity adjustment in the HHGM, some 
diagnosis exclusions were made. Under the HHGM, certain reported 
principal diagnosis codes, including some ICD-10-CM ``R-codes'' (R00-
R99) which identify symptoms and abnormal clinical findings, would be 
considered a ``questionable encounter'', meaning these codes may be too 
vague to group the home health period, subject to sequencing or other 
ICD-10-CM coding conventions, not a Medicare-covered diagnosis, or a 
condition unlikely to require home health services. For these 
``questionable encounters'', more information was needed to assign the 
period to a clinical group. This meant, for analysis purposes only, we 
looked at the secondary diagnoses to assign the home health period to 
one of the six clinical groups. As such, those periods with a principal 
diagnosis that was determined to be a ``questionable encounter'' code 
were excluded from our comorbidity adjustment analysis. However, if the 
HHGM is finalized, we are proposing that claims submitted with 
principal reported diagnosis codes that are considered ``questionable 
encounters'' would be returned to the provider for more definitive 
coding. Once the claim is resubmitted without a principal diagnosis 
that is considered a ``questionable encounter'', the home health period 
would be grouped into one of the six clinical groups. The secondary 
diagnoses on those resubmitted claims would then be eligible for the 
comorbidity adjustment.
    Another exclusion from this comorbidity analysis included those 
secondary diagnoses that had the same three character ICD-10-CM code as 
the diagnosis used to assign a case to a particular clinical group 
(that is, musculoskeletal rehab, neuro/stroke rehab, wounds, behavioral 
health, complex nursing interventions, and MMTA). An additional 
exclusion was added that applied to diagnoses that identify an 
unspecified site or side (meaning the code is defined by laterality or 
site specificity). There are ICD-10-CM codes that are specific to site, 
laterality, and proximal versus distal parts of the body. For example, 
L89.004, Pressure ulcer of unspecified elbow, stage 4, can be coded to 
identify whether the pressure ulcer is on the left or right elbow. ICD-
10 CM coding guidelines state to report diagnoses to the greatest level 
of specificity. The home health clinician should be able to identify 
the specific side or body part involved through either direct 
assessment or of a query of the certifying physician.
    Finally, an exclusion was added for some secondary diagnoses that 
would not be considered a comorbidity if reported with certain Z codes. 
For example, if Z96.651, presence of right artificial knee joint, is 
reported as secondary, it would not be considered a comorbidity if 
Z47.1, aftercare following joint replacement surgery, was reported as 
the principal diagnosis. The secondary diagnosis in this scenario is 
not a comorbidity because this secondary diagnosis explains the reason 
for the aftercare. We are utilizing this approach to minimize the 
unintended consequence of providers reporting comorbidities that are 
duplicative of the

[[Page 35323]]

principal diagnosis, or are a further description of the principal 
diagnosis, which could potentially overestimate the actual resources 
needed for a home health period and could result in inaccurate payment.
    Using the research from the comprehensive literature review, we 
identified common chronic comorbid conditions frequently cited as 
drivers of increased health care resource utilization, including 
coronary artery disease, congestive heart failure, diabetes, COPD, 
asthma, chronic wounds, and depression.\97\ In addition to chronic 
comorbid conditions, other acute comorbid conditions have been shown to 
affect overall resource utilization as well. These conditions include 
pneumonia, Clostridium difficile (c-diff), and Methicillin-resistant 
Staphylococcus aureus (MRSA).\98\ After compiling a list of both acute 
and chronic comorbid diagnoses that could affect home health resource 
utilization, we conducted initial analyses looking at controlling for 
the presence of the individual diagnoses. However, these analyses 
showed some counterintuitive relationships with resource use, meaning 
the presence of certain comorbidities showed that there would be less 
resource use than if the comorbidity was not present.
---------------------------------------------------------------------------

    \97\ Center for Healthcare Research and Transformation. (2010) 
``Healthcare Cost Drivers: Chronic Disease, Comorbidity, and Health 
Risk Factors in the U.S. and Michigan.'' http://www.chrt.org/publication/health-care-cost-drivers-chronic-disease-comorbidity-health-risk-factors-u-s-michigan/.
    \98\ Drikoningen, J., Rohde, G., (2010). ``Pneumococcal 
Infection in Adults: Burden of Disease''. Clinical Microbiology and 
Infection. 45-51. Kyne, L., Hamel, M.B., Polavaram, R., Kelly, C. 
(2002). ``Health Care Costs and Mortality Associated with Nosocomial 
Diarrhea due to Clostridium difficile''. Clinical Infectious 
Diseases. 346-353.
---------------------------------------------------------------------------

    Because the core of the HHGM is a clinical one, CMS clinicians 
utilized the principles of patient assessment by body systems and their 
associated diseases, conditions, and injuries as a way to examine 
potential clinically relevant relationships. Next, we combined those 
individual diagnoses into larger categories utilizing the body systems 
as a clinically intuitive way to consider what diagnoses potentially 
could impact the home health plan of care and resource utilization. 
When combining the individual diagnoses into larger comorbidity 
categories, the counterintuitive relationships decreased. These broad 
body system categories include conditions, diseases, and injuries that 
affect each of the individual body systems (for example, heart 
disease). Neoplasms and infectious diseases were given their own 
discrete categories because of their potential to affect more than one 
body system. The broad categories used to group comorbidities within 
the HHGM were further refined by grouping similar diagnoses within the 
broad categories into subcategories. The subcategories allowed for 
additional refinement of diagnoses to include as part of the home 
health specific list. Subcategories were distinguished primarily (but 
not exclusively) by the first three characters of the ICD-10-CM 
diagnosis code to represent related conditions within the same body 
system. For example, subcategory Heart 10 includes diagnoses associated 
with various cardiac arrhythmias. The home health specific comorbidity 
list includes 13 broad body system based categories and 116 total 
subcategories using ICD-10-CM diagnosis codes. The broad categories 
used to group comorbidities within the HHGM include the following:
     Heart Disease (11 subcategories).
     Respiratory Disease (9 subcategories).
     Circulatory Disease and Blood Disorders (12 
subcategories).
     Cerebral Vascular Disease (4 subcategories).
     Gastrointestinal Disease (9 subcategories).
     Neurological Disease and Associated Conditions (11 
subcategories).
     Endocrine Disease (6 subcategories).
     Neoplasm (24 subcategories).
     Genitourinary and Renal Disease (5 subcategories).
     Skin Disease (5 subcategories).
     Musculoskeletal Disease or Injury (5 subcategories).
     Behavioral Health (11 subcategories).
     Infectious Disease (4 subcategories).
    The secondary diagnoses listed on the OASIS that are attributed to 
any one of the listed subcategories were used to identify whether a 
period fell into one or more comorbidity categories and subcategories.
    For the purpose of evaluating these identified comorbidities for 
inclusion in the HHGM, we assigned the CY 2016 home health periods that 
reported a secondary diagnosis included on this home health specific 
list to a comorbidity subcategory and subsequently dropped any 
subcategories that were in less than 0.1 percent of periods. This was 
done because low volume leads to instability in our estimates of how 
resource use is related to the comorbidity. A regression model was used 
to determine the relationship between the remaining subcategories and 
resource use. After this analysis, we dropped comorbidity subcategories 
that were not statistically significant with regards to their 
relationship to resource use (a coefficient with a p-value greater than 
0.05). After these exclusions, we kept the subcategories associated 
with increased resource use that was at least as high as the median 
resource use, as they indicated a direct relationship between the 
comorbidity subcategories and resource utilization. These remaining 
subcategories would receive a comorbidity adjustment. As such, there 
are 15 subcategories that meet the current criteria for the comorbidity 
adjustment in the HHGM. This is a decreased number of subcategories 
that were presented in the technical report where 29 subcategories met 
the criteria to qualify for the comorbidity adjustment. The comorbidity 
analysis presented in the technical report was based on CY 2013 data 
and used ICD-9-CM diagnosis codes. There are several potential reasons 
for this decrease including that the analysis exclusions for the 2016 
analysis were slightly different than were used in the technical 
report. Another potential reason for the decrease in subcategories may 
be due to diagnosis exclusions based on changes from ICD-9-CM to ICD-
10-CM with regards to specificity. Some of this decrease could be 
related to the changes in case-mix weights from 2013 to 2016 where 
secondary conditions that received clinical points in 2013 may not have 
had any associated points in 2016 and hence, there would be no 
incentive to report those conditions. The analysis on the CY 2013 and 
CY 2016 data, including all of the diagnoses and their assigned 
subcategories is posted on the HHA Center Web page.\99\ The 15 
subcategories included in the comorbidity adjustment in the HHGM are as 
follows:
---------------------------------------------------------------------------

    \99\ https://www.cms.gov/center/provider-type/home-health-
agency-hha-center.html.
---------------------------------------------------------------------------

     Heart Disease 1: Includes hypertensive heart disease.
     Cerebral Vascular Disease 4: Includes sequelae of 
cerebrovascular disease.
     Circulatory Disease and Blood Disorders 9: Includes venous 
embolisms and thrombosis.
     Circulatory Disease and Blood Disorders 10: Includes 
varicose veins of lower extremities with ulcers and inflammation, and 
esophageal varices.
     Circulatory Disease and Blood Disorders 11: Includes 
lymphedema.
     Endocrine Disease 2: Includes diabetes with complications 
due to an underlying condition.
     Neoplasm 18: Includes secondary malignant neoplasms.

[[Page 35324]]

     Neurological Disease and Associated Conditions 5: Includes 
secondary parkinsonism.
     Neurological Disease and Associated Conditions 7: Includes 
encephalitis, myelitis, encephalomyelitis, and hemiplegia, paraplegia, 
and quadriplegia.
     Neurological Disease and Associated Conditions 10: 
Includes diabetes with neurological complications.
     Respiratory Disease 7: Includes pneumonia, pneumonitis, 
and pulmonary edema.
     Skin Disease 1: Includes cutaneous abscesses, and 
cellulitis.
     Skin Disease 2: Includes stage one pressure ulcers.
     Skin Disease 3: Includes atherosclerosis with gangrene.
     Skin Disease 4: Includes unstageable and stages two 
through four pressure ulcers.
    We propose that if a period had at least one secondary diagnosis 
reported on the home health claim that fell into one of the 15 
subcategories, that period would receive a comorbidity adjustment to 
account for higher costs associated with the comorbidity. The 
comorbidity adjustment amount would be the same across all of the 
subcategories. A period would receive only one comorbidity adjustment 
regardless of the number of secondary diagnoses reported on the home 
health claim that fell into one of the 15 subcategories. Table 39 shows 
information on resource use for periods with and without the 
comorbidity adjustment.

                                   TABLE 39--Frequency of Comorbidity Groups and Distribution of Average Resource Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
            Comorbidity group              Mean resource   Frequency of     Percent of     deviation of    Percentile of      Median       Percentile of
                                                use           periods         periods      resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Comorbidity Adjustment...............       $1,534.17       7,365,806           85.23       $1,228.43       $1,227.35         $653.57       $2,061.88
Comorbidity Adjustment..................        1,881.60       1,276,301           14.77        1,562.89        1,484.39          803.15        2,475.20
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................        1,585.48       8,642,107          100.00        1,289.23        1,262.65          671.96        2,119.49
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The HHGM payment adjustment for comorbidities is predicated on the 
presence of one of the identified diagnoses within the subcategories 
associated with increased resource use at or above the median. If there 
is no reported diagnosis that meets the comorbidity adjustment 
criteria, the period would not qualify for the payment adjustment. We 
consider this comorbidity adjustment component of the proposed HHGM to 
be fluid, where OASIS-reported secondary diagnoses may be removed from, 
or added to the home health specific comorbidity list dependent upon 
the relationship between the comorbidity and resource costs. If the 
HHGM is finalized and implemented, we anticipate there may be 
behavioral shifts in secondary diagnosis reporting and the proposed 
comorbidity list and its associated subcategories may change to capture 
resource utilization associated with these or other conditions. We 
invite comments on the proposed comorbidity diagnoses, including 
additions or subtractions to the proposed home health specific list, 
and this comorbidity adjustment approach under the HHGM.
9. Change in the Low-Utilization Payment Adjustment (LUPA) Threshold
    An episode with four or fewer visits is paid the national per visit 
amount by discipline, adjusted by the appropriate wage index based on 
the site of service of the beneficiary, instead of the full episode 
amount. Such payment adjustments are called Low Utilization Payment 
Adjustments (LUPAs). While the proposed HHGM system would still include 
LUPA payments, we are proposing that the approach to calculating the 
LUPA thresholds would change in the HHGM because of the proposed change 
in the unit of payment to 30-day periods from 60-day episodes. Whereas 
LUPAS are paid for all episodes consisting of four or fewer visits 
under the current payment system, in order to receive full episode 
amount under the HHGM (rather than receive a LUPA where the episode 
would be paid the national per visit amount by discipline) we propose 
to vary the LUPA threshold for a 30-day period under the HHGM depending 
on the HHGM payment group to which it is assigned. The 30-day periods 
have substantially more instances of four or fewer visits than 60-day 
episodes. To create LUPA thresholds, 30-day periods (including those 
that were LUPAs in the current payment system) were grouped into the 
144 different HHGM payment groups. For each payment group, we propose 
to set the LUPA threshold at the 10th percentile value of visits or 2 
visits, whichever is higher. In the current payment system 
approximately 8 percent of episodes are LUPAs. Under the HHGM, we 
propose the 10th percentile value of visits or 2 visits, whichever is 
higher, to target approximately the same percentage of LUPAs 
(approximately 7 percent of 30-day periods would be LUPAs (assuming no 
behavior change)).
    For example, for 30-day periods of care in the payment group 
corresponding to ``MMTA- Functional Level Medium--Early Timing--
Institutional Admission--No Comorbidity Adjustment'', the threshold is 
four visits. If 30-day periods assigned to that particular payment 
group had three or fewer visits they would be paid using the national 
per-visit rates in section III.C.3 of this proposed rule instead of the 
case-mix adjusted 30-day payment amount. We propose that the LUPA 
thresholds for each HHGM payment group would be re-evaluated every year 
based on the most current, complete utilization data available. The 
LUPA thresholds, based on the most current utilization data available 
(CY 2016 data as of March 17, 2017), for each corresponding HIPPS code, 
are listed in Table 40. We would propose updated LUPA thresholds using 
the most current, complete utilization data available at the time of 
rulemaking.

[[Page 35325]]



    Table 40--Proposed LUPA Thresholds for the Proposed HHGM Payment Groups Based on CY 2016 Utilization Data
----------------------------------------------------------------------------------------------------------------
                                                                                                     Threshold
                                                                                                       (10th
          HIPPS             Clinical group and   Timing and admission   Comorbidity  adjustment    percentile or
                             functional level           source                                     2--whichever
                                                                                                    is higher)
----------------------------------------------------------------------------------------------------------------
1AAN.....................  MMTA--Low...........  Early--Community....  No.......................               4
1AAY.....................  MMTA--Low...........  Early--Community....  Yes......................               4
1ABN.....................  MMTA--Medium........  Early--Community....  No.......................               4
1ABY.....................  MMTA--Medium........  Early--Community....  Yes......................               4
1ACN.....................  MMTA--High..........  Early--Community....  No.......................               4
1ACY.....................  MMTA--High..........  Early--Community....  Yes......................               4
1BAN.....................  Neuro--Low..........  Early--Community....  No.......................               4
1BAY.....................  Neuro--Low..........  Early--Community....  Yes......................               5
1BBN.....................  Neuro--Medium.......  Early--Community....  No.......................               5
1BBY.....................  Neuro--Medium.......  Early--Community....  Yes......................               5
1BCN.....................  Neuro--High.........  Early--Community....  No.......................               5
1BCY.....................  Neuro--High.........  Early--Community....  Yes......................               5
1CAN.....................  Wound--Low..........  Early--Community....  No.......................               5
1CAY.....................  Wound--Low..........  Early--Community....  Yes......................               4
1CBN.....................  Wound--Medium.......  Early--Community....  No.......................               5
1CBY.....................  Wound--Medium.......  Early--Community....  Yes......................               5
1CCN.....................  Wound--High.........  Early--Community....  No.......................               5
1CCY.....................  Wound--High.........  Early--Community....  Yes......................               5
1DAN.....................  Complex--Low........  Early--Community....  No.......................               3
1DAY.....................  Complex--Low........  Early--Community....  Yes......................               3
1DBN.....................  Complex--Medium.....  Early--Community....  No.......................               3
1DBY.....................  Complex--Medium.....  Early--Community....  Yes......................               3
1DCN.....................  Complex--High.......  Early--Community....  No.......................               3
1DCY.....................  Complex--High.......  Early--Community....  Yes......................               3
1EAN.....................  MS Rehab--Low.......  Early--Community....  No.......................               5
1EAY.....................  MS Rehab--Low.......  Early--Community....  Yes......................               5
1EBN.....................  MS Rehab--Medium....  Early--Community....  No.......................               5
1EBY.....................  MS Rehab--Medium....  Early--Community....  Yes......................               5
1ECN.....................  MS Rehab--High......  Early--Community....  No.......................               5
1ECY.....................  MS Rehab--High......  Early--Community....  Yes......................               5
1FAN.....................  Behavioral Health--   Early--Community....  No.......................               3
                            Low.
1FAY.....................  Behavioral Health--   Early--Community....  Yes......................               3
                            Low.
1FBN.....................  Behavioral Health--   Early--Community....  No.......................               4
                            Medium.
1FBY.....................  Behavioral Health--   Early--Community....  Yes......................               4
                            Medium.
1FCN.....................  Behavioral Health--   Early--Community....  No.......................               4
                            High.
1FCY.....................  Behavioral Health--   Early--Community....  Yes......................               4
                            High.
2AAN.....................  MMTA--Low...........  Early--Institutional  No.......................               3
2AAY.....................  MMTA--Low...........  Early--Institutional  Yes......................               4
2ABN.....................  MMTA--Medium........  Early--Institutional  No.......................               4
2ABY.....................  MMTA--Medium........  Early--Institutional  Yes......................               5
2ACN.....................  MMTA--High..........  Early--Institutional  No.......................               4
2ACY.....................  MMTA--High..........  Early--Institutional  Yes......................               4
2BAN.....................  Neuro--Low..........  Early--Institutional  No.......................               5
2BAY.....................  Neuro--Low..........  Early--Institutional  Yes......................               5
2BBN.....................  Neuro--Medium.......  Early--Institutional  No.......................               6
2BBY.....................  Neuro--Medium.......  Early--Institutional  Yes......................               6
2BCN.....................  Neuro--High.........  Early--Institutional  No.......................               5
2BCY.....................  Neuro--High.........  Early--Institutional  Yes......................               5
2CAN.....................  Wound--Low..........  Early--Institutional  No.......................               4
2CAY.....................  Wound--Low..........  Early--Institutional  Yes......................               4
2CBN.....................  Wound--Medium.......  Early--Institutional  No.......................               5
2CBY.....................  Wound--Medium.......  Early--Institutional  Yes......................               5
2CCN.....................  Wound--High.........  Early--Institutional  No.......................               4
2CCY.....................  Wound--High.........  Early--Institutional  Yes......................               5
2DAN.....................  Complex--Low........  Early--Institutional  No.......................               3
2DAY.....................  Complex--Low........  Early--Institutional  Yes......................               4
2DBN.....................  Complex--Medium.....  Early--Institutional  No.......................               4
2DBY.....................  Complex--Medium.....  Early--Institutional  Yes......................               4
2DCN.....................  Complex--High.......  Early--Institutional  No.......................               4
2DCY.....................  Complex--High.......  Early--Institutional  Yes......................               4
2EAN.....................  MS Rehab--Low.......  Early--Institutional  No.......................               5
2EAY.....................  MS Rehab--Low.......  Early--Institutional  Yes......................               5
2EBN.....................  MS Rehab--Medium....  Early--Institutional  No.......................               6
2EBY.....................  MS Rehab--Medium....  Early--Institutional  Yes......................               6
2ECN.....................  MS Rehab--High......  Early--Institutional  No.......................               6
2ECY.....................  MS Rehab--High......  Early--Institutional  Yes......................               7
2FAN.....................  Behavioral Health--   Early--Institutional  No.......................               3
                            Low.

[[Page 35326]]

 
2FAY.....................  Behavioral Health--   Early--Institutional  Yes......................               3
                            Low.
2FBN.....................  Behavioral Health--   Early--Institutional  No.......................               4
                            Medium.
2FBY.....................  Behavioral Health--   Early--Institutional  Yes......................               5
                            Medium.
2FCN.....................  Behavioral Health--   Early--Institutional  No.......................               4
                            High.
2FCY.....................  Behavioral Health--   Early--Institutional  Yes......................               4
                            High.
3AAN.....................  MMTA--Low...........  Late--Community.....  No.......................               2
3AAY.....................  MMTA--Low...........  Late--Community.....  Yes......................               2
3ABN.....................  MMTA--Medium........  Late--Community.....  No.......................               2
3ABY.....................  MMTA--Medium........  Late--Community.....  Yes......................               2
3ACN.....................  MMTA--High..........  Late--Community.....  No.......................               2
3ACY.....................  MMTA--High..........  Late--Community.....  Yes......................               2
3BAN.....................  Neuro--Low..........  Late--Community.....  No.......................               2
3BAY.....................  Neuro--Low..........  Late--Community.....  Yes......................               2
3BBN.....................  Neuro--Medium.......  Late--Community.....  No.......................               2
3BBY.....................  Neuro--Medium.......  Late--Community.....  Yes......................               3
3BCN.....................  Neuro--High.........  Late--Community.....  No.......................               2
3BCY.....................  Neuro--High.........  Late--Community.....  Yes......................               3
3CAN.....................  Wound--Low..........  Late--Community.....  No.......................               3
3CAY.....................  Wound--Low..........  Late--Community.....  Yes......................               3
3CBN.....................  Wound--Medium.......  Late--Community.....  No.......................               3
3CBY.....................  Wound--Medium.......  Late--Community.....  Yes......................               3
3CCN.....................  Wound--High.........  Late--Community.....  No.......................               3
3CCY.....................  Wound--High.........  Late--Community.....  Yes......................               3
3DAN.....................  Complex--Low........  Late--Community.....  No.......................               2
3DAY.....................  Complex--Low........  Late--Community.....  Yes......................               2
3DBN.....................  Complex--Medium.....  Late--Community.....  No.......................               2
3DBY.....................  Complex--Medium.....  Late--Community.....  Yes......................               2
3DCN.....................  Complex--High.......  Late--Community.....  No.......................               2
3DCY.....................  Complex--High.......  Late--Community.....  Yes......................               2
3EAN.....................  MS Rehab--Low.......  Late--Community.....  No.......................               2
3EAY.....................  MS Rehab--Low.......  Late--Community.....  Yes......................               2
3EBN.....................  MS Rehab--Medium....  Late--Community.....  No.......................               2
3EBY.....................  MS Rehab--Medium....  Late--Community.....  Yes......................               2
3ECN.....................  MS Rehab--High......  Late--Community.....  No.......................               2
3ECY.....................  MS Rehab--High......  Late--Community.....  Yes......................               3
3FAN.....................  Behavioral Health--   Late--Community.....  No.......................               2
                            Low.
3FAY.....................  Behavioral Health--   Late--Community.....  Yes......................               2
                            Low.
3FBN.....................  Behavioral Health--   Late--Community.....  No.......................               2
                            Medium.
3FBY.....................  Behavioral Health--   Late--Community.....  Yes......................               2
                            Medium.
3FCN.....................  Behavioral Health--   Late--Community.....  No.......................               2
                            High.
3FCY.....................  Behavioral Health--   Late--Community.....  Yes......................               3
                            High.
4AAN.....................  MMTA--Low...........  Late--Institutional.  No.......................               3
4AAY.....................  MMTA--Low...........  Late--Institutional.  Yes......................               3
4ABN.....................  MMTA--Medium........  Late--Institutional.  No.......................               3
4ABY.....................  MMTA--Medium........  Late--Institutional.  Yes......................               3
4ACN.....................  MMTA--High..........  Late--Institutional.  No.......................               3
4ACY.....................  MMTA--High..........  Late--Institutional.  Yes......................               3
4BAN.....................  Neuro--Low..........  Late--Institutional.  No.......................               4
4BAY.....................  Neuro--Low..........  Late--Institutional.  Yes......................               4
4BBN.....................  Neuro--Medium.......  Late--Institutional.  No.......................               4
4BBY.....................  Neuro--Medium.......  Late--Institutional.  Yes......................               4
4BCN.....................  Neuro--High.........  Late--Institutional.  No.......................               4
4BCY.....................  Neuro--High.........  Late--Institutional.  Yes......................               4
4CAN.....................  Wound--Low..........  Late--Institutional.  No.......................               3
4CAY.....................  Wound--Low..........  Late--Institutional.  Yes......................               3
4CBN.....................  Wound--Medium.......  Late--Institutional.  No.......................               4
4CBY.....................  Wound--Medium.......  Late--Institutional.  Yes......................               4
4CCN.....................  Wound--High.........  Late--Institutional.  No.......................               4
4CCY.....................  Wound--High.........  Late--Institutional.  Yes......................               4
4DAN.....................  Complex--Low........  Late--Institutional.  No.......................               2
4DAY.....................  Complex--Low........  Late--Institutional.  Yes......................               3
4DBN.....................  Complex--Medium.....  Late--Institutional.  No.......................               3
4DBY.....................  Complex--Medium.....  Late--Institutional.  Yes......................               3
4DCN.....................  Complex--High.......  Late--Institutional.  No.......................               3
4DCY.....................  Complex--High.......  Late--Institutional.  Yes......................               3
4EAN.....................  MS Rehab--Low.......  Late--Institutional.  No.......................               4
4EAY.....................  MS Rehab--Low.......  Late--Institutional.  Yes......................               4

[[Page 35327]]

 
4EBN.....................  MS Rehab--Medium....  Late--Institutional.  No.......................               4
4EBY.....................  MS Rehab--Medium....  Late--Institutional.  Yes......................               4
4ECN.....................  MS Rehab--High......  Late--Institutional.  No.......................               4
4ECY.....................  MS Rehab--High......  Late--Institutional.  Yes......................               5
4FAN.....................  Behavioral Health--   Late--Institutional.  No.......................               2
                            Low.
4FAY.....................  Behavioral Health--   Late--Institutional.  Yes......................               3
                            Low.
4FBN.....................  Behavioral Health--   Late--Institutional.  No.......................               3
                            Medium.
4FBY.....................  Behavioral Health--   Late--Institutional.  Yes......................               3
                            Medium.
4FCN.....................  Behavioral Health--   Late--Institutional.  No.......................               3
                            High.
4FCY.....................  Behavioral Health--   Late--Institutional.  Yes......................               3
                            High.
----------------------------------------------------------------------------------------------------------------

    We invite public comments on the LUPA threshold methodology 
proposed for the HHGM and the associated regulations text changes in 
section VIII. of this proposed rule.
10. HH PPS Case-Mix Weights Under the HHGM
    Section 1895(b)(4)(B) of the Act requires the Secretary to 
establish appropriate case mix adjustment factors for home health 
services in a manner that explains a significant amount of the 
variation in cost among different units of services. We are proposing 
the HHGM case-mix adjustment methodology, which sorts 30-day periods of 
care into different payment groups based on five categories (admission 
source, timing, clinical group, functional level, and comorbidity 
group), for 30-day periods of care that begin on or after January 1, 
2019. In combination, this would yield a total of 144 HHGM payment 
groups, which we would still refer to as Home Health Resource Groups 
(HHRGs) under the HHGM. To generate HHGM case-mix weights, we utilized 
a data file based on home health episodes of care, as reported in 
Medicare home health claims, as well as OASIS assessment data. The 
claims data provide episode-level data, as well as visit-level data. 
The claims also provide data on whether NRS was provided during the 
episode and the total charges for NRS. We determined the case-mix 
weight for each of the different HHGM payment groups by regressing 
resource use on a series of indicator variables for each of the five 
categories listed above using a fixed effects model. The regression 
measures resource use with the proposed Cost per Minute (CPS) + NRS 
approach outlined in section III.E.2 of this proposed rule.
    To normalize the results from the fixed effects regression model, 
we divided the predicted resource use for each 30-day period by the 
overall average resource use for all 30-day periods used to estimate 
the model to calculate the case mix weight of all 30-day periods within 
a particular payment group, where each payment group is defined as the 
unique combination of the subgroups within the five HHGM categories 
(admission source, timing of the episode, clinical grouping, functional 
level, and comorbidity adjustment). The case-mix weight is then used to 
adjust the 30-day payment rate to determine each 30-day period payment. 
Table 41 shows the coefficients of the payment regression used to 
generate the weights, and the coefficients divided by average resource 
use. Information can be found in section III.E.6 of this proposed rule 
for the clinical groups, section III.E.7 of this proposed rule for the 
functional levels, section III.E.5 of this proposed rule for admission 
source, section III.E.4 of this proposed rule for episode timing, and 
section III.E.8 of this proposed rule for the comorbidity adjustment.

 Table 41--Coefficient of Payment Regression and Coefficient Divided by
               Average Resource Use for HHGM Payment Group
------------------------------------------------------------------------
                                                            Coefficient
                                                            divided by
                                            Coefficient       average
                                                           resource use
------------------------------------------------------------------------
       Clinical Group and Functional Level (MMTA--Low is excluded)
------------------------------------------------------------------------
MMTA--Medium............................         $238.93           0.151
MMTA--High..............................          434.36           0.274
Behavioral Health--Low..................         -116.43          -0.073
Behavioral Health--Medium...............          177.47           0.112
Behavioral Health--High.................          350.98           0.221
Complex--Low............................           99.82           0.063
Complex--Medium.........................          472.79           0.298
Complex--High...........................          638.62           0.403
MS Rehab--Low...........................          154.72           0.098
MS Rehab--Medium........................          353.44           0.223
MS Rehab--High..........................          597.31           0.377
Neuro--Low..............................          356.33           0.225
Neuro--Medium...........................          636.52           0.401
Neuro--High.............................          804.50           0.507
Wound--Low..............................          582.68           0.368

[[Page 35328]]

 
Wound--Medium...........................          812.76           0.513
Wound--High.............................        1,048.55           0.661
------------------------------------------------------------------------
         Referral Source With Timing (Community Early excluded)
------------------------------------------------------------------------
Community Late..........................         -618.74          -0.390
Institutional Early.....................          271.07           0.171
Institutional Late......................           83.61           0.053
------------------------------------------------------------------------
  Comorbidity Adjustment (No Comorbidity Adjustment Group is excluded)
------------------------------------------------------------------------
Comorbidity Adjustment Group............          244.01           0.154
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Constant................................        1,533.33           0.967
N.......................................       8,642,107  ..............
Adjusted R2.............................          0.2704  ..............
Average Resource Use....................        1,585.48  ..............
------------------------------------------------------------------------
Source: CY 2016 Medicare claims data for episodes ending on or before
  December 31, 2016 (as of March 17, 2017) for which we had a linked
  OASIS assessment. LUPA episodes, outlier episodes, and episodes with
  PEP adjustments were excluded.

    Table 42 presents the case-mix weight for each HHRG in the 
regression model (from Table 46's coefficients). LUPA episodes, outlier 
episodes, and episodes with PEP adjustments were excluded. These are 
the case-mix weights for the HHGM based on the most current, complete 
data available (CY 2016 data as of March 17, 2017). We would propose 
updated case-mix weights using the latest CY 2017 data in the CY 2019 
HH PPS proposed rule. LUPA information can be found in section III.E.9 
of this proposed rule. Weights are determined by first calculating the 
predicted resource use for episodes with a particular combination of 
admission source, episode timing, clinical grouping, functional level, 
and comorbidity adjustment. This combination specific calculation is 
then divided by the average resource use of all the episodes that were 
used to estimate, which is $1,585.48. The resulting ratio represents 
the case-mix weight for that particular combination of a HHRG payment 
group. The adjusted R-squared value for this model is 0.2704. The 
adjusted R-squared value provides a measure of how well observed 
outcomes are replicated by the model, based on the proportion of total 
variation of outcomes explained by the model. In this instance, the 
fixed effects regression model used to generate the case-mix weight 
under the HHGM predicts about 27 percent of the variation in resource 
use in a given 30-day period of home health care.
    As noted above, there are 144 different HHRG payment groups under 
the HHGM. There are 9 HHRG payment groups that represent roughly 50.5 
percent of the total episodes. There are 33 HHRG payment groups that 
represent roughly 1.0 percent of total episodes. The HHRG payment group 
with the smallest weight has a weight of 0.5034 (community, late, 
behavioral health, low functional level, with no comorbidity 
adjustment). The HHRG payment group with the largest weight has a 
weight of 1.9533 (institutional admission, early, wound, high 
functional level, with comorbidity adjustment).

                   Table 42--Case-Mix Weights for Each HHRG Payment Group, Based on 2016 Data
----------------------------------------------------------------------------------------------------------------
                                                                                                   Weight based
          HIPPS             Clinical group and   Timing and admission   Comorbidity  adjustment     on CY 2016
                             functional level           source                                         data
----------------------------------------------------------------------------------------------------------------
1AAN.....................  MMTA--Low...........  Early--Community....  No.......................          0.9671
1AAY.....................  MMTA--Low...........  Early--Community....  Yes......................          1.1210
1ABN.....................  MMTA--Medium........  Early--Community....  No.......................          1.1178
1ABY.....................  MMTA--Medium........  Early--Community....  Yes......................          1.2717
1ACN.....................  MMTA--High..........  Early--Community....  No.......................          1.2411
1ACY.....................  MMTA--High..........  Early--Community....  Yes......................          1.3950
1BAN.....................  Neuro--Low..........  Early--Community....  No.......................          1.1919
1BAY.....................  Neuro--Low..........  Early--Community....  Yes......................          1.3458
1BBN.....................  Neuro--Medium.......  Early--Community....  No.......................          1.3686
1BBY.....................  Neuro--Medium.......  Early--Community....  Yes......................          1.5225
1BCN.....................  Neuro--High.........  Early--Community....  No.......................          1.4745
1BCY.....................  Neuro--High.........  Early--Community....  Yes......................          1.6284
1CAN.....................  Wound--Low..........  Early--Community....  No.......................          1.3346
1CAY.....................  Wound--Low..........  Early--Community....  Yes......................          1.4885
1CBN.....................  Wound--Medium.......  Early--Community....  No.......................          1.4797
1CBY.....................  Wound--Medium.......  Early--Community....  Yes......................          1.6336
1CCN.....................  Wound--High.........  Early--Community....  No.......................          1.6284

[[Page 35329]]

 
1CCY.....................  Wound--High.........  Early--Community....  Yes......................          1.7823
1DAN.....................  Complex--Low........  Early--Community....  No.......................          1.0301
1DAY.....................  Complex--Low........  Early--Community....  Yes......................          1.1840
1DBN.....................  Complex--Medium.....  Early--Community....  No.......................          1.2653
1DBY.....................  Complex--Medium.....  Early--Community....  Yes......................          1.4192
1DCN.....................  Complex--High.......  Early--Community....  No.......................          1.3699
1DCY.....................  Complex--High.......  Early--Community....  Yes......................          1.5238
1EAN.....................  MS Rehab--Low.......  Early--Community....  No.......................          1.0647
1EAY.....................  MS Rehab--Low.......  Early--Community....  Yes......................          1.2186
1EBN.....................  MS Rehab--Medium....  Early--Community....  No.......................          1.1900
1EBY.....................  MS Rehab--Medium....  Early--Community....  Yes......................          1.3439
1ECN.....................  MS Rehab--High......  Early--Community....  No.......................          1.3438
1ECY.....................  MS Rehab--High......  Early--Community....  Yes......................          1.4977
1FAN.....................  Behavioral Health--   Early--Community....  No.......................          0.8937
                            Low.
1FAY.....................  Behavioral Health--   Early--Community....  Yes......................          1.0476
                            Low.
1FBN.....................  Behavioral Health--   Early--Community....  No.......................          1.0790
                            Medium.
1FBY.....................  Behavioral Health--   Early--Community....  Yes......................          1.2329
                            Medium.
1FCN.....................  Behavioral Health--   Early--Community....  No.......................          1.1885
                            High.
1FCY.....................  Behavioral Health--   Early--Community....  Yes......................          1.3424
                            High.
2AAN.....................  MMTA--Low...........  Early--Institutional  No.......................          1.1381
2AAY.....................  MMTA--Low...........  Early--Institutional  Yes......................          1.2920
2ABN.....................  MMTA--Medium........  Early--Institutional  No.......................          1.2888
2ABY.....................  MMTA--Medium........  Early--Institutional  Yes......................          1.4427
2ACN.....................  MMTA--High..........  Early--Institutional  No.......................          1.4120
2ACY.....................  MMTA--High..........  Early--Institutional  Yes......................          1.5659
2BAN.....................  Neuro--Low..........  Early--Institutional  No.......................          1.3628
2BAY.....................  Neuro--Low..........  Early--Institutional  Yes......................          1.5167
2BBN.....................  Neuro--Medium.......  Early--Institutional  No.......................          1.5395
2BBY.....................  Neuro--Medium.......  Early--Institutional  Yes......................          1.6934
2BCN.....................  Neuro--High.........  Early--Institutional  No.......................          1.6455
2BCY.....................  Neuro--High.........  Early--Institutional  Yes......................          1.7994
2CAN.....................  Wound--Low..........  Early--Institutional  No.......................          1.5056
2CAY.....................  Wound--Low..........  Early--Institutional  Yes......................          1.6595
2CBN.....................  Wound--Medium.......  Early--Institutional  No.......................          1.6507
2CBY.....................  Wound--Medium.......  Early--Institutional  Yes......................          1.8046
2CCN.....................  Wound--High.........  Early--Institutional  No.......................          1.7994
2CCY.....................  Wound--High.........  Early--Institutional  Yes......................          1.9533
2DAN.....................  Complex--Low........  Early--Institutional  No.......................          1.2010
2DAY.....................  Complex--Low........  Early--Institutional  Yes......................          1.3549
2DBN.....................  Complex--Medium.....  Early--Institutional  No.......................          1.4363
2DBY.....................  Complex--Medium.....  Early--Institutional  Yes......................          1.5902
2DCN.....................  Complex--High.......  Early--Institutional  No.......................          1.5409
2DCY.....................  Complex--High.......  Early--Institutional  Yes......................          1.6948
2EAN.....................  MS Rehab--Low.......  Early--Institutional  No.......................          1.2357
2EAY.....................  MS Rehab--Low.......  Early--Institutional  Yes......................          1.3896
2EBN.....................  MS Rehab--Medium....  Early--Institutional  No.......................          1.3610
2EBY.....................  MS Rehab--Medium....  Early--Institutional  Yes......................          1.5149
2ECN.....................  MS Rehab--High......  Early--Institutional  No.......................          1.5148
2ECY.....................  MS Rehab--High......  Early--Institutional  Yes......................          1.6687
2FAN.....................  Behavioral Health--   Early--Institutional  No.......................          1.0646
                            Low.
2FAY.....................  Behavioral Health--   Early--Institutional  Yes......................          1.2185
                            Low.
2FBN.....................  Behavioral Health--   Early--Institutional  No.......................          1.2500
                            Medium.
2FBY.....................  Behavioral Health--   Early--Institutional  Yes......................          1.4039
                            Medium.
2FCN.....................  Behavioral Health--   Early--Institutional  No.......................          1.3594
                            High.
2FCY.....................  Behavioral Health--   Early--Institutional  Yes......................          1.5133
                            High.
3AAN.....................  MMTA--Low...........  Late--Community.....  No.......................          0.5769
3AAY.....................  MMTA--Low...........  Late--Community.....  Yes......................          0.7308
3ABN.....................  MMTA--Medium........  Late--Community.....  No.......................          0.7276
3ABY.....................  MMTA--Medium........  Late--Community.....  Yes......................          0.8815
3ACN.....................  MMTA--High..........  Late--Community.....  No.......................          0.8508
3ACY.....................  MMTA--High..........  Late--Community.....  Yes......................          1.0047
3BAN.....................  Neuro--Low..........  Late--Community.....  No.......................          0.8016
3BAY.....................  Neuro--Low..........  Late--Community.....  Yes......................          0.9555
3BBN.....................  Neuro--Medium.......  Late--Community.....  No.......................          0.9783
3BBY.....................  Neuro--Medium.......  Late--Community.....  Yes......................          1.1322
3BCN.....................  Neuro--High.........  Late--Community.....  No.......................          1.0843
3BCY.....................  Neuro--High.........  Late--Community.....  Yes......................          1.2382
3CAN.....................  Wound--Low..........  Late--Community.....  No.......................          0.9444
3CAY.....................  Wound--Low..........  Late--Community.....  Yes......................          1.0983
3CBN.....................  Wound--Medium.......  Late--Community.....  No.......................          1.0895

[[Page 35330]]

 
3CBY.....................  Wound--Medium.......  Late--Community.....  Yes......................          1.2434
3CCN.....................  Wound--High.........  Late--Community.....  No.......................          1.2382
3CCY.....................  Wound--High.........  Late--Community.....  Yes......................          1.3921
3DAN.....................  Complex--Low........  Late--Community.....  No.......................          0.6398
3DAY.....................  Complex--Low........  Late--Community.....  Yes......................          0.7937
3DBN.....................  Complex--Medium.....  Late--Community.....  No.......................          0.8751
3DBY.....................  Complex--Medium.....  Late--Community.....  Yes......................          1.0290
3DCN.....................  Complex--High.......  Late--Community.....  No.......................          0.9796
3DCY.....................  Complex--High.......  Late--Community.....  Yes......................          1.1335
3EAN.....................  MS Rehab--Low.......  Late--Community.....  No.......................          0.6744
3EAY.....................  MS Rehab--Low.......  Late--Community.....  Yes......................          0.8283
3EBN.....................  MS Rehab--Medium....  Late--Community.....  No.......................          0.7998
3EBY.....................  MS Rehab--Medium....  Late--Community.....  Yes......................          0.9537
3ECN.....................  MS Rehab--High......  Late--Community.....  No.......................          0.9536
3ECY.....................  MS Rehab--High......  Late--Community.....  Yes......................          1.1075
3FAN.....................  Behavioral Health--   Late--Community.....  No.......................          0.5034
                            Low.
3FAY.....................  Behavioral Health--   Late--Community.....  Yes......................          0.6573
                            Low.
3FBN.....................  Behavioral Health--   Late--Community.....  No.......................          0.6888
                            Medium.
3FBY.....................  Behavioral Health--   Late--Community.....  Yes......................          0.8427
                            Medium.
3FCN.....................  Behavioral Health--   Late--Community.....  No.......................          0.7982
                            High.
3FCY.....................  Behavioral Health--   Late--Community.....  Yes......................          0.9521
                            High.
4AAN.....................  MMTA--Low...........  Late--Institutional.  No.......................          1.0198
4AAY.....................  MMTA--Low...........  Late--Institutional.  Yes......................          1.1737
4ABN.....................  MMTA--Medium........  Late--Institutional.  No.......................          1.1705
4ABY.....................  MMTA--Medium........  Late--Institutional.  Yes......................          1.3244
4ACN.....................  MMTA--High..........  Late--Institutional.  No.......................          1.2938
4ACY.....................  MMTA--High..........  Late--Institutional.  Yes......................          1.4477
4BAN.....................  Neuro--Low..........  Late--Institutional.  No.......................          1.2446
4BAY.....................  Neuro--Low..........  Late--Institutional.  Yes......................          1.3985
4BBN.....................  Neuro--Medium.......  Late--Institutional.  No.......................          1.4213
4BBY.....................  Neuro--Medium.......  Late--Institutional.  Yes......................          1.5752
4BCN.....................  Neuro--High.........  Late--Institutional.  No.......................          1.5273
4BCY.....................  Neuro--High.........  Late--Institutional.  Yes......................          1.6812
4CAN.....................  Wound--Low..........  Late--Institutional.  No.......................          1.3874
4CAY.....................  Wound--Low..........  Late--Institutional.  Yes......................          1.5413
4CBN.....................  Wound--Medium.......  Late--Institutional.  No.......................          1.5325
4CBY.....................  Wound--Medium.......  Late--Institutional.  Yes......................          1.6864
4CCN.....................  Wound--High.........  Late--Institutional.  No.......................          1.6812
4CCY.....................  Wound--High.........  Late--Institutional.  Yes......................          1.8351
4DAN.....................  Complex--Low........  Late--Institutional.  No.......................          1.0828
4DAY.....................  Complex--Low........  Late--Institutional.  Yes......................          1.2367
4DBN.....................  Complex--Medium.....  Late--Institutional.  No.......................          1.3180
4DBY.....................  Complex--Medium.....  Late--Institutional.  Yes......................          1.4719
4DCN.....................  Complex--High.......  Late--Institutional.  No.......................          1.4226
4DCY.....................  Complex--High.......  Late--Institutional.  Yes......................          1.5765
4EAN.....................  MS Rehab--Low.......  Late--Institutional.  No.......................          1.1174
4EAY.....................  MS Rehab--Low.......  Late--Institutional.  Yes......................          1.2713
4EBN.....................  MS Rehab--Medium....  Late--Institutional.  No.......................          1.2428
4EBY.....................  MS Rehab--Medium....  Late--Institutional.  Yes......................          1.3967
4ECN.....................  MS Rehab--High......  Late--Institutional.  No.......................          1.3966
4ECY.....................  MS Rehab--High......  Late--Institutional.  Yes......................          1.5505
4FAN.....................  Behavioral Health--   Late--Institutional.  No.......................          0.9464
                            Low.
4FAY.....................  Behavioral Health--   Late--Institutional.  Yes......................          1.1003
                            Low.
4FBN.....................  Behavioral Health--   Late--Institutional.  No.......................          1.1318
                            Medium.
4FBY.....................  Behavioral Health--   Late--Institutional.  Yes......................          1.2857
                            Medium.
4FCN.....................  Behavioral Health--   Late--Institutional.  No.......................          1.2412
                            High.
4FCY.....................  Behavioral Health--   Late--Institutional.  Yes......................          1.3951
                            High.
----------------------------------------------------------------------------------------------------------------
Source: CY 2016 Medicare claims data for episodes ending on or before December 31, 2016 for which we had a
  linked OASIS assessment. LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded.

    We invite comments on the proposed case-mix weight methodology 
under the HHGM.
11. Low-Utilization Payment Adjustment (LUPA) Add-On Payments and 
Partial Payment Adjustments Under the HHGM
    LUPA episodes that occur as the only episode or as an initial 
episode in a sequence of adjacent episodes are adjusted by applying an 
additional amount to the LUPA payment before adjusting for area wage 
differences. Under the HHGM, we propose the LUPA add-on factors will 
remain the same as the current payment system, described in section 
III.C.3. of this

[[Page 35331]]

proposed rule. We propose to multiply the per-visit payment amount for 
the first SN, PT, or SLP visit in LUPA episodes that occur as the only 
episode or an initial episode in a sequence of adjacent episodes by the 
appropriate factor (1.8451 for SN, 1.6700 for PT, and 1.6266 for SLP) 
to determine the LUPA add-on payment amount. For example, for LUPA 
episodes that occur as the only episode or an initial episode in a 
sequence of adjacent episodes in CY 2019, if the first skilled visit is 
SN, the payment for that visit would be the CY 2019 per-visit rate for 
SN, multiplied by 1.8451, subject to area wage adjustment.
    The current partial episode payment (PEP) adjustment is a 
proportion of the episode payment and is based on the span of days 
including the start-of-care date or first billable service date through 
and including the last billable service date under the original plan of 
care before the intervening event in a home health beneficiary's care 
defined as:
     A beneficiary elected transfer, or
     A discharge and return to home health that would warrant, 
for purposes of payment, a new OASIS assessment, physician 
certification of eligibility, and a new plan of care.
    For 30-day periods of care, we propose the process for partial 
payment adjustments would remain the same as the existing policies 
pertaining to partial episode payments. When a new 30-day period begins 
due to the intervening event of the beneficiary elected transfer or 
there was a discharge and return to home health during the 30-day 
period, we propose the original 30-day period would be proportionally 
adjusted to reflect the length of time the beneficiary remained under 
the agency's care prior to the intervening event. The proportional 
payment is the partial payment adjustment. The partial payment 
adjustment is calculated by using the span of days (first billable 
service date through and including the last billable service date) 
under the original plan of care as a proportion of 30. The proportion 
is multiplied by the original case-mix and wage index to produce the 
30-day payment.
12. Payments for High-Cost Outliers Under the HHGM
    As described in section III.D. of this proposed rule, section 
1895(b)(5) of the Act allows for the provision of an addition or 
adjustment to the home health payment amount in the case of outliers 
because of unusual variations in the type or amount of medically 
necessary care. The history of and current methodology for payment of 
high-cost outliers under the HH PPS is described in detail in section 
III.D. of this proposed rule. We are proposing to maintain the current 
methodology for payment of high-cost outliers upon implementation of 
the HHGM in CY 2019 and we would calculate payment for high-cost 
outliers on 30-day periods of care.
    Simulating payments using preliminary CY 2016 claims data and the 
CY 2018 payment rates, we estimate that outlier payments under the 
proposed HHGM with 30-day periods of care would comprise approximately 
4.50 percent of total HH PPS payments in CY 2018. Given the statutory 
requirement to target up to, but no more than, 2.5 percent of total 
payments as outlier payments, we currently estimate that the FDL ratio 
under the HHGM would need to change from 0.55 to 0.93. However, given 
the proposed implementation of the HHGM for 30-day periods of care 
beginning on or after January 1, 2019, we will update our estimate of 
outlier payments as a percent of total HH PPS payments using the most 
current and complete utilization data available at the time of CY 2019 
rate-setting. We would propose a change in the FDL ratio for CY 2019, 
if needed.
    We invite public comments on maintaining the current outlier 
payment methodology outlined in section III.D. of this proposed rule 
for the proposed HHGM and the associated changes in the regulations 
text as described in section III.E.13 of this proposed rule.
13. Conforming Regulations Text Revisions for the Implementation of the 
HHGM in CY 2019
    We are proposing to make a number of revisions to the regulations 
to implement the HHGM for periods beginning on or after January 1, 
2019, as outlined in sections III.E.1. through III.E.12. of this 
proposed rule. We propose to make conforming changes in Sec.  409.43 
and part 484 subpart E to revise the unit of service from a 60-day 
episode to a 30-day period. In addition, we are proposing to 
restructure Sec.  484.205. These revisions would be effective on 
January 1, 2019. We are not proposing any revisions to the regulations 
for CY 2018. These revisions and others are discussed below. 
Specifically, we propose to:
     Revise Sec.  409.43, which outlines plan of care 
requirements. We propose to revise several paragraphs to phase out the 
unit of service from a 60-day episode for episodes beginning on or 
before December 31, 2018, and to implement a 30-day period as the new 
unit of service for periods beginning on or after January 1, 2019 under 
the HHGM.
     Revise the definitions of rural area and urban area in 
Sec.  484.202 to remove ``with respect to home health episodes ending 
on or after January 1, 2006'' from each definition, as this verbiage is 
no longer necessary.
     Restructure Sec.  484.205 to provide more logical 
organization. Specifically, we propose to add paragraphs to paragraph 
(b) to define the unit of payment. We propose to move language which 
addresses the requirement for OASIS submission from Sec.  484.210 and 
insert it into Sec.  484.205 as new paragraph (c). We also propose to 
add paragraph (f) to discuss split percentage payments under the 
current model and the proposed HHGM. In addition, we propose to revise 
Sec.  484.205 to remove references to ``60-day episode'' and to refer 
more generally to the ``national, standardized prospective payment''. 
While we are proposing to revise Sec.  484.205 to account for the 
change in the unit of payment under the HH PPS for CY 2019, we are not 
proposing to change the requirements or policies relating to durable 
medical equipment or furnishing negative pressure wound therapy using a 
disposable device.
     Remove Sec.  484.210 which discusses data used for the 
calculation of the national prospective 60-day episode payment as we 
believe that this information is incorporated in other sections of part 
484 subpart E, such as Sec.  484.205(c), Sec.  484.215(a) and (b), 
Sec.  484.220 and Sec.  484.215.
     Revise the section heading of Sec.  484.215 from ``Initial 
establishment of the calculation of the national 60-day episode 
payment'' to ``Initial establishment of the calculation of the 
national, standardized prospective 60-day episode payment and 30-day 
payment rates.'' Also, we propose to add paragraph (f) to this section 
to describe how the national, standardized prospective 60-day episode 
payment rate is converted into a national, standardized prospective 30-
day period payment and when it applies.
     Revise the section heading of Sec.  484.220 from 
``Calculation of the adjusted national prospective 60-day episode 
payment rate for case-mix and area wage levels'' to ``Calculation of 
the case-mix and wage area adjusted prospective payment rates.'' We 
propose to remove the reference to ``national 60-day episode payment 
rate'' and replace it with ``national, standardized prospective 
payment''.
     Revise the section heading in Sec.  484.225 from ``Annual 
update of the unadjusted national prospective 60-day episode payment 
rate'' to ``Annual update of the unadjusted national, standardized 
prospective 60-day

[[Page 35332]]

episode and 30-day payment rates''. Also, we propose to revise Sec.  
484.225 to remove references to ``60-day episode'' and to refer more 
generally to the ``national, standardized prospective payment''. In 
addition, we propose to add paragraph (d) to describe the annual update 
for CY 2019.
     Revise the section heading of Sec.  484.230 from 
``Methodology used for the calculation of low-utilization payment 
adjustment'' to ``Low utilization payment adjustment''. Also, we 
propose to designate the current text to paragraph (a) and insert 
language such that proposed paragraph (a) applies to episodes beginning 
on or before December 31, 2018, using the current payment system. We 
propose to add paragraph (b) to describe how low utilization payment 
adjustments are determined for periods beginning on or after January 1, 
2019, using the proposed HHGM.
     Revise the section heading of Sec.  484.235 from 
``Methodology used for the calculation of partial episode payment 
adjustments'' to ``Partial payment adjustments''. We propose to remove 
paragraphs (a), (b), and (c). We propose to remove paragraphs (1), (2), 
and (3) which describe partial payment adjustments from paragraph (d) 
in Sec.  484.205 and incorporate them into Sec.  484.235. We propose to 
add paragraph (a) to describe partial payment adjustments under the 
current system, that is, for episodes beginning on or before December 
31, 2018, and paragraph (b) to describe partial payment adjustments 
under the proposed HHGM, that is, for periods beginning on or after 
January 1, 2019.
     Revise the section heading for Sec.  484.240 from 
``Methodology used for the calculation of the outlier payment'' to 
``Outlier payments.'' In addition, we propose to remove language at 
paragraph (b) and append it to paragraph (a). We propose to add 
language to proposed revised paragraph (a) such that paragraph (a) will 
apply to payments under the current system, that is, for episodes 
beginning on or before December 31, 2018. We propose to revise 
paragraph (b) to describe payments under the proposed HHGM, that is, 
for periods beginning on or after January 1, 2019. In paragraph (c), we 
propose to replace the ``estimated'' cost with ``imputed'' cost. 
Lastly, we propose to revise paragraph (d) to reflect the per-15 minute 
unit approach to imputing the cost for each claim.
    We are soliciting comments on the proposed HHGM as outlined in 
sections III.E.1. through III.E.12. and the associated regulations text 
changes described above and in the regulations text of this proposed 
rule.

IV. Proposed Provisions of the Home Health Value-Based Purchasing 
(HHVBP) Model

A. Background

    As authorized by section 1115A of the Act and finalized in the CY 
2016 HH PPS final rule (80 FR 68624), we began testing the HHVBP Model 
on January 1, 2016. The HHVBP Model has an overall purpose of improving 
the quality and delivery of home health care services to Medicare 
beneficiaries. The specific goals of the Model are to: (1) Provide 
incentives for better quality care with greater efficiency; (2) study 
new potential quality and efficiency measures for appropriateness in 
the home health setting; and (3) enhance the current public reporting 
process.
    Using the randomized selection methodology finalized in the CY 2016 
HH PPS final rule, nine states were selected for inclusion in the HHVBP 
Model, representing each geographic area across the nation. All 
Medicare-certified HHAs providing services in Arizona, Florida, Iowa, 
Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and 
Washington (competing HHAs) are required to compete in the Model. 
Requiring all Medicare-certified HHAs providing services in the 
selected states to participate in the Model ensures that: (1) there is 
no selection bias; (2) participating HHAs are representative of HHAs 
nationally; and, (3) there is sufficient participation to generate 
meaningful results.
    As finalized in the CY 2016 HH PPS final rule, the HHVBP Model will 
utilize the waiver authority under section 1115A(d)(1) of the Act to 
adjust Medicare payment rates under section 1895(b) of the Act 
beginning in CY 2018 based on performance on applicable measures. 
Payment adjustments will be increased incrementally over the course of 
the HHVBP Model in the following manner: (1) A maximum payment 
adjustment of 3 percent (upward or downward) in CY 2018; (2) a maximum 
payment adjustment of 5 percent (upward or downward) in CY 2019; (3) a 
maximum payment adjustment of 6 percent (upward or downward) in CY 
2020; (4) a maximum payment adjustment of 7 percent (upward or 
downward) in CY 2021; and (5) a maximum payment adjustment of 8 percent 
(upward or downward) in CY 2022. Payment adjustments will be based on 
each HHA's Total Performance Score (TPS) in a given performance year 
(PY) on (1) a set of measures already reported via OASIS and HHCAHPS 
for all patients serviced by the HHA and select claims data elements, 
and (2) three New Measures where points are achieved for reporting 
data.
    As finalized in the CY 2017 HH PPS final rule (81 FR 76741 through 
76752), in addition to providing an update on the progress towards 
developing public reporting of performance under the HHVBP Model, we 
finalized the following changes related to the HHVBP Model:
     Calculating benchmarks and achievement thresholds at the 
state level rather than the level of the size-cohort and revising the 
definition for benchmark to state that benchmark refers to the mean of 
the top decile of Medicare-certified HHA performance on the specified 
quality measure during the baseline period, calculated for each state;
     Requiring a minimum of eight HHAs in a size-cohort;
     Increasing the timeframe for submitting New Measure data 
from seven calendar days to 15 calendar days following the end of each 
reporting period to account for weekends and holidays;
     Removing four measures (Care Management: Types and Sources 
of Assistance, Prior Functioning Activities of Daily Living (ADL)/
Instrumental ADL (IADL), Influenza Vaccine Data Collection Period, and 
Reason Pneumococcal Vaccine Not Received) from the set of applicable 
measures;
     Adjusting the reporting period and submission date for the 
Influenza Vaccination Coverage for Home Health Personnel measure from a 
quarterly submission to an annual submission; and
     Allowing for an appeals process that includes the 
recalculation process finalized in the CY 2016 HH PPS final rule (80 FR 
68688 through 68689), as modified, and adds a reconsideration process.

B. Quality Measures

1. Proposed Adjustment to the Minimum Number of Completed Home Health 
Care Consumer Assessment of Healthcare Providers and System (HHCAHPS) 
Surveys
    The HHCAHPS survey presents home health patients with a set of 
standardized questions about their home health care providers and about 
the quality of their home health care. The survey is designed to 
measure the experiences of people receiving home health care from 
Medicare-certified home health care agencies and meet the following 
three broad goals to: (1)

[[Page 35333]]

Produce comparable data on the patient's perspective that allows 
objective and meaningful comparisons between home health agencies on 
domains that are important to consumers; (2) create incentives through 
public reporting of survey results for agencies to improve their 
quality of care; and (3) enhance public accountability in health care 
by increasing the transparency of the quality of care provided in 
return for public investment through public reporting.
    As finalized in the CY 2016 HH PPS final rule (80 FR 68685 through 
68686), if a HHA does not have a minimum of 20 episodes of care during 
a performance year to generate a performance score on at least five 
measures, that HHA would not be included in the Linear Exchange 
Function (LEF) and would not have a payment adjustment percentage 
calculated. The LEF is used to translate an HHA's Total Performance 
Score (TPS) into a percentage of the value-based payment adjustment 
earned by each HHA under the HHVBP Model. For the HHCAHPS measures, a 
minimum of 20 HHCAHPS completed surveys would be necessary in order for 
scores to be generated for the HHCAHPS quality measures that can be 
included in the calculation of the TPS.
    We believe, however, that using a minimum of 40 completed HHCAHPS 
surveys, rather than a minimum of 20 completed HHCAHPS surveys, would 
better align the Model with HHCAHPS policy for the Patient Survey Star 
Ratings on Home Health Compare.\100\ The decision to use a minimum of 
40 completed surveys for these star ratings was a result of balancing 
two competing goals. One goal was to provide star ratings that were 
meaningful and minimized random variations. This goal was best served 
by calculating star ratings for large numbers of cases by having a 
larger minimum of completed HHCAHPS surveys (for example, 50 or 100 
completed HHCAHPS surveys). At the same time, we also wanted to be able 
to provide star ratings for as many HHAs as possible. This goal was 
best served by using a lower minimum of completed HHCAHPS surveys (for 
example, 20 completed HHCAHPS surveys). We chose to balance these 
opposing and necessary goals by using 40 completed HHCAHPS surveys for 
the Patient Survey Star Ratings. Because we believe that aligning the 
Patient Survey Star Ratings system and the HHVBP model provides 
uniformity, consistency, and standard transformability for different 
healthcare platforms, we therefore propose using a minimum of 40 
instead of 20 completed HHCAHPS surveys under the HHVBP.
---------------------------------------------------------------------------

    \100\ Patient Survey Star Ratings https://www.medicare.gov/HomeHealthCompare/Data/Patient-Survey-Star-Ratings.html.
---------------------------------------------------------------------------

    We note that we received a comment in response to the CY 2016 HH 
PPS proposed rule in support of using a higher minimum threshold for 
HHCAHPS completed surveys for the Patient Survey Star Ratings if the 
data are going to be used in HHVBP or any other quality assessment 
program (80 FR 68709). We also note that we received public comment in 
response to the CY 2017 HH PPS proposed rule in support of using a 
higher minimum threshold for HHCAHPS completed surveys in the HHVBP 
Model, including a recommendation to use a minimum of 100 HHCAHPS 
rather than a sample size of 20 surveys (81 FR 76747). We believe that 
proposing a minimum of 40 completed HHCAHPS surveys for the Model would 
be more appropriate than the higher minimums previously recommended by 
some commenters because it represents a balance between providing 
meaningful data and having sufficient numbers of HHAs with performance 
scores for at least 5 measures in the cohorts. Moreover, as we noted, 
it aligns with the Patient Survey Star Ratings on Home Health Compare.
    To understand the possible impact of our proposal to use a minimum 
of 40 HHCAHPS completed surveys, we note that HHAs may refer to the 
Interim Performance Reports (IPRs) issued in October 2016, January 2017 
and April 2017, which analyzed 40 or more completed HHCAHPS surveys 
across both small and large cohorts in determining each HHA's HHCAHPS 
quality measure scores. As a point of comparison to the minimum of 40 
HHCAHPS completed surveys, we note that these IPRs will be reissued 
using 20 or more completed HHCAHPS surveys and include quality measure 
scores, for these same time periods, calculated with HHAs that qualify 
for the LEF by having sufficient data for at least five measures. HHAs 
will have the opportunity to submit a request for recalculation of the 
revised interim performance scores.
    HHAs have an opportunity to evaluate these IPRs in light of our 
proposal to change to a minimum of 40 HHCAHPS completed surveys, as 
well as seek clarification on the difference in their reports. The 
participating HHAs will receive concurrent IPRs in July 2017 and 
concurrent Annual Total Performance Score and Payment Adjustment 
Reports, which we plan to make available in the last week of August 
2017. The concurrent reports will show one report with HHCAHPS quality 
measure scores calculated based on a minimum of 40 completed surveys 
and one report with HHCAHPS quality measure scores calculated based on 
a minimum of 20 completed surveys. Because this proposed rule will not 
be finalized before the timeline for submission of recalculation and 
reconsideration requests, HHAs will have the opportunity to submit 
recalculation requests for the interim performance scores based on both 
a minimum of 40 and 20 completed surveys, and recalculation and 
reconsideration requests, as applicable, for the annual total 
performance scores included in these reports for these thresholds in 
accordance with the appeals process set forth at Sec.  484.335, which 
was finalized in the CY 2017 HH PPS final rule.
    We analyzed the effects on participating HHAs of using the proposed 
40 or more completed HHCAHPS surveys as compared to using 20 or more 
completed HHCAHPS surveys by examining OASIS measures submitted from 
January 1, 2015 through December 31, 2016, claims measures submitted 
from September 1, 2015 through September 30, 2016, and 12 months ending 
June 30, 2016 for HHCAHPS-based measures. We also found that 
achievement thresholds, which are calculated as the median of all HHAs' 
performance on the specified quality measures during the 2015 baseline 
year for each state, would not change by more than 1.1 
percent, with the largest changes occurring in the statewide 
achievement thresholds for the HHCAHPS Willingness to Recommend the 
Agency measure in Arizona (+1.1 percent) and Nebraska (-1.1 percent). 
Benchmarks (the mean of the top decile of Medicare-certified HHA 
performance on the specified quality measures during the 2015 baseline 
year, calculated for each state) had greater potential for change, 
ranging down to -3.2 percent. For instance, we found that when 
calculated using a minimum of 40 surveys rather than a minimum of 20 
surveys, there was a -2.0 percent reduction in the benchmark for the 
HHCAHPS Willingness to Recommend the Agency measure for Arizona and a -
1.7 percent reduction in the benchmark for Nebraska. We also found that 
when calculated using a minimum of 40 surveys rather than a minimum of 
20 surveys, there was a -1.7 percent reduction in the benchmark for the 
HHCAHPS Communications between

[[Page 35334]]

Providers and Patients measure for Arizona, a -1.7 percent reduction in 
the benchmark for Florida, and a -3.2 percent reduction in the 
benchmark for Nebraska.
    Overall, the proposed change in the HHCAHPS minimum of 40 completed 
surveys is estimated to result in a limited percent change in the 
average statewide TPS for larger-volume HHAs, ranging from -0.4 through 
+2.2 percent. Because the underlying data does not cover the full 2016 
calendar year, the data limitation may impact the final total 
performance scores and corresponding payment adjustment percentages. We 
provide estimates of the expected payment adjustment distribution based 
on the proposed minimum of 40 completed HHCAHPS surveys in the impact 
analysis of this proposed rule.
    We are inviting public comments on our proposal to use 40 or more 
completed HHCAHPS surveys as the minimum to generate a quality measure 
score on the HHCAHPS measures, as is currently used in Home Health 
Compare and the Patient Survey Star Ratings. Therefore, we propose to 
revise the definition of ``applicable measure'' at Sec.  484.305 to 
reflect this proposal, from a measure for which the competing HHA has 
provided 20 home health episodes of care per year to a measure for 
which a competing HHA has provided a minimum of 20 home health episodes 
of care per year for the OASIS-based measures, 20 home health episodes 
of care per year for the claims-based measures, or 40 completed surveys 
for the HHCAHPS measures. This proposal, if finalized, would apply to 
the calculation of the benchmark and achievement thresholds and the 
calculation of performance scores for all Model years, beginning with 
Performance Year (PY) One.
2. Proposal To Remove One OASIS-Based Measure Beginning With 
Performance Year 3
    In the CY 2016 HH PPS final rule, we finalized a set of quality 
measures in Figure 4a: Final PY1 Measures and Figure 4b: Final PY1 New 
Measures (80 FR 68671 through 68673) for the HHVBP Model to be used in 
the first performance year (PY1), referred to as the starter set.
    The measures were selected for the Model using the following 
guiding principles: (1) Use a broad measure set that captures the 
complexity of the services HHAs provide; (2) Incorporate the 
flexibility for future inclusion of the Improving Medicare Post-Acute 
Care Transformation Act of 2014 (IMPACT) measures that cut across post-
acute care settings; (3) Develop `second generation' (of the HHVBP 
Model) measures of patient outcomes, health and functional status, 
shared decision making, and patient activation; (4) Include a balance 
of process, outcome and patient experience measures; (5) Advance the 
ability to measure cost and value; (6) Add measures for appropriateness 
or overuse; and (7) Promote infrastructure investments. This set of 
quality measures encompasses the multiple National Quality Strategy 
(NQS) domains \101\ (80 FR 68668). The NQS domains include six priority 
areas identified in the CY 2016 HH PPS final rule (80 FR 68668) as the 
CMS Framework for Quality Measurement Mapping. These areas are: (1) 
Clinical quality of care; (2) Care coordination; (3) Population & 
community health; (4) Person- and Caregiver-centered experience and 
outcomes; (5) Safety; and (6) Efficiency and cost reduction. Figures 4a 
and 4b of the CY 2016 HH PPS final rule identified 15 outcome measures 
(five from the HHCAHPS, eight from Outcome and Assessment Information 
Set (OASIS), and two from the Chronic Care Warehouse (claims)), and 
nine process measures (six from OASIS, and three New Measures, which 
were not previously reported in the home health setting).
---------------------------------------------------------------------------

    \101\ 2015 Annual Report to Congress, http://www.ahrq.gov/workingforquality/reports/annual-reports/nqs2015annlrpt.htm.
---------------------------------------------------------------------------

    In the CY 2017 HH PPS final rule, we removed the following four 
measures from the measure set for PY 1 and subsequent performance 
years: (1) Care Management: Types and Sources of Assistance; (2) Prior 
Functioning ADL/IADL; (3) Influenza Vaccine Data Collection Period: 
Does this episode of care include any dates on or between October 1 and 
March 31?; and (4) Reason Pneumococcal Vaccine Not Received, for the 
reasons discussed in that final rule (81 FR 76743 through 76747).
    For Performance Year 3 (PY 3), we are proposing to remove one 
OASIS-based measure, Drug Education on All Medications Provided to 
Patient/Caregiver during All Episodes of Care, from the set of 
applicable measures. As part of our ongoing monitoring efforts, we 
found that based on the standard metrics of measure performance, many 
providers have achieved full performance on the Drug Education measure. 
For example, for the January 2017 IPRs (which covered the 12-month 
period of October 1, 2015 through September 30, 2016), the average 
value for this measure across all participating HHAs was 95.69 percent 
from October 2015 through September 2016. When looking at just 
September 2016, the mean value on this measure across all participating 
HHAs had increased to 97.8 percent. Also, there are few HHAs with poor 
performance on the measure. Based on the January 2017 IPRs, across all 
participating HHAs, the 10th percentile was 89 percent and the 5th 
percentile was 81.8 percent, but only 1.8 percent of HHAs had a value 
below 70 percent on the measure. We believe that removing this measure 
would be consistent with our policy, as noted in the CY 2017 HH PPS 
final rule (81 FR 76746), that when a measure has achieved full 
performance, we may propose the removal of the measure in future 
rulemaking. In addition, our contractor's Technical Expert Panel (TEP), 
which consists of 11 panelists with expertise in home health care and 
quality measures, expressed concern that the Drug Education measure 
does not capture whether the education provided by the HHA was 
meaningful.
    The revised set of applicable measures, if our proposal to remove 
the OASIS-based measure, Drug Education on All Medications Provided to 
Patient/Caregiver during All Episodes of Care, is finalized, is 
presented in Table 43. This measure set would be applicable to PY3 and 
each subsequent performance year until such time that another set of 
applicable measures, or changes to this measure set, are proposed and 
finalized in future rulemaking.
---------------------------------------------------------------------------

    \102\ For more detailed information on the proposed measures 
utilizing OASIS refer to the OASIS-C1/ICD-9, Changed Items & Data 
Collection Resources dated September 3, 2014 available at 
www.oasisanswers.com/LiteratureRetrieve.aspx?ID=215074.
    For NQF endorsed measures see The NQF Quality Positioning System 
available at http://www.qualityforum.org/QPS. For non-NQF measures 
using OASIS see links for data tables related to OASIS measures at 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html. For 
information on HHCAHPS measures see https://homehealthcahps.org/SurveyandProtocols/SurveyMaterials.aspx.

[[Page 35335]]



                                             Table 43--Measure Set for the HHVBP Model \102\ Beginning PY 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
          NQS domains             Measure title       Measure type        Identifier        Data source           Numerator             Denominator
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clinical Quality of Care......  Improvement in     Outcome..........  NQF0167..........  OASIS (M1860)....  Number of home health  Number of home health
                                 Ambulation[dash]                                                            episodes of care       episodes of care
                                 Locomotion.                                                                 where the value        ending with a
                                                                                                             recorded on the        discharge during the
                                                                                                             discharge assessment   reporting period,
                                                                                                             indicates less         other than those
                                                                                                             impairment in          covered by generic
                                                                                                             ambulation/            or measure-specific
                                                                                                             locomotion at          exclusions.
                                                                                                             discharge than at
                                                                                                             the start (or
                                                                                                             resumption) of care.
Clinical Quality of Care......  Improvement in     Outcome..........  NQF0175..........  OASIS (M1850)....  Number of home health  Number of home health
                                 Bed Transferring.                                                           episodes of care       episodes of care
                                                                                                             where the value        ending with a
                                                                                                             recorded on the        discharge during the
                                                                                                             discharge assessment   reporting period,
                                                                                                             indicates less         other than those
                                                                                                             impairment in bed      covered by generic
                                                                                                             transferring at        or measure-specific
                                                                                                             discharge than at      exclusions.
                                                                                                             the start (or
                                                                                                             resumption) of care.
Clinical Quality of Care......  Improvement in     Outcome..........  NQF0174..........  OASIS (M1830)....  Number of home health  Number of home health
                                 Bathing.                                                                    episodes of care       episodes of care
                                                                                                             where the value        ending with a
                                                                                                             recorded on the        discharge during the
                                                                                                             discharge assessment   reporting period,
                                                                                                             indicates less         other than those
                                                                                                             impairment in          covered by generic
                                                                                                             bathing at discharge   or measure-specific
                                                                                                             than at the start      exclusions.
                                                                                                             (or resumption) of
                                                                                                             care.
Clinical Quality of Care......  Improvement in     Outcome..........  NA...............  OASIS (M1400)....  Number of home health  Number of home health
                                 Dyspnea.                                                                    episodes of care       episodes of care
                                                                                                             where the discharge    ending with a
                                                                                                             assessment indicates   discharge during the
                                                                                                             less dyspnea at        reporting period,
                                                                                                             discharge than at      other than those
                                                                                                             start (or              covered by generic
                                                                                                             resumption) of care.   or measure-specific
                                                                                                                                    exclusions.
Communication & Care            Discharged to      Outcome..........  NA...............  OASIS (M2420)....  Number of home health  Number of home health
 Coordination.                   Community.                                                                  episodes where the     episodes of care
                                                                                                             assessment completed   ending with
                                                                                                             at the discharge       discharge or
                                                                                                             indicates the          transfer to
                                                                                                             patient remained in    inpatient facility
                                                                                                             the community after    during the reporting
                                                                                                             discharge.             period, other than
                                                                                                                                    those covered by
                                                                                                                                    generic or measure-
                                                                                                                                    specific exclusions.
Efficiency & Cost Reduction...  Acute Care         Outcome..........  NQF0171..........  CCW (Claims).....  Number of home health  Number of home health
                                 Hospitalization:                                                            stays for patients     stays that begin
                                 Unplanned                                                                   who have a Medicare    during the 12-month
                                 Hospitalization                                                             claim for an           observation period.
                                 during first 60                                                             unplanned admission   A home health stay is
                                 days of Home                                                                to an acute care       a sequence of home
                                 Health.                                                                     hospital in the 60     health payment
                                                                                                             days following the     episodes separated
                                                                                                             start of the home      from other home
                                                                                                             health stay.           health payment
                                                                                                                                    episodes by at least
                                                                                                                                    60 days.
Efficiency & Cost Reduction...  Emergency          Outcome..........  NQF0173..........  CCW (Claims).....  Number of home health  Number of home health
                                 Department Use                                                              stays for patients     stays that begin
                                 without                                                                     who have a Medicare    during the 12-month
                                 Hospitalization.                                                            claim for outpatient   observation period.
                                                                                                             emergency department  A home health stay is
                                                                                                             use and no claims      a sequence of home
                                                                                                             for acute care         health payment
                                                                                                             hospitalization in     episodes separated
                                                                                                             the 60 days            from other home
                                                                                                             following the start    health payment
                                                                                                             of the home health     episodes by at least
                                                                                                             stay.                  60 days.
Patient Safety................  Improvement in     Outcome..........  NQF0177..........  OASIS (M1242)....  Number of home health  Number of home health
                                 Pain Interfering                                                            episodes of care       episodes of care
                                 with Activity.                                                              where the value        ending with a
                                                                                                             recorded on the        discharge during the
                                                                                                             discharge assessment   reporting period,
                                                                                                             indicates less         other than those
                                                                                                             frequent pain at       covered by generic
                                                                                                             discharge than at      or measure-specific
                                                                                                             the start (or          exclusions.
                                                                                                             resumption) of care.
Patient Safety................  Improvement in     Outcome..........  NQF0176..........  OASIS (M2020)....  Number of home health  Number of home health
                                 Management of                                                               episodes of care       episodes of care
                                 Oral Medications.                                                           where the value        ending with a
                                                                                                             recorded on the        discharge during the
                                                                                                             discharge assessment   reporting period,
                                                                                                             indicates less         other than those
                                                                                                             impairment in taking   covered by generic
                                                                                                             oral medications       or measure-specific
                                                                                                             correctly at           exclusions.
                                                                                                             discharge than at
                                                                                                             start (or
                                                                                                             resumption) of care.
Population/Community Health...  Influenza          Process..........  NQF0522..........  OASIS (M1046)....  Number of home health  Number of home health
                                 Immunization                                                                episodes during        episodes of care
                                 Received for                                                                which patients (a)     ending with
                                 Current Flu                                                                 received vaccination   discharge, or
                                 Season.                                                                     from the HHA or (b)    transfer to
                                                                                                             had received           inpatient facility
                                                                                                             vaccination from HHA   during the reporting
                                                                                                             during earlier         period, other than
                                                                                                             episode of care, or    those covered by
                                                                                                             (c) was determined     generic or measure-
                                                                                                             to have received       specific exclusions.
                                                                                                             vaccination from
                                                                                                             another provider.
Population/Community Health...  Pneumococcal       Process..........  NQF0525..........  OASIS (M1051)....  Number of home health  Number of home health
                                 Polysaccharide                                                              episodes during        episodes of care
                                 Vaccine Ever                                                                which patients were    ending with
                                 Received.                                                                   determined to have     discharge or
                                                                                                             ever received          transfer to
                                                                                                             Pneumococcal           inpatient facility
                                                                                                             Polysaccharide         during the reporting
                                                                                                             Vaccine (PPV).         period, other than
                                                                                                                                    those covered by
                                                                                                                                    generic or measure-
                                                                                                                                    specific exclusions.
Patient & Caregiver-Centered    Care of Patients.  Outcome..........  .................  CAHPS............  NA...................  NA.
 Experience.
Patient & Caregiver-Centered    Communications     Outcome..........  .................  CAHPS............  NA...................  NA.
 Experience.                     between
                                 Providers and
                                 Patients.

[[Page 35336]]

 
Patient & Caregiver-Centered    Specific Care      Outcome..........  .................  CAHPS............  NA...................  NA.
 Experience.                     Issues.
Patient & Caregiver-Centered    Overall rating of  Outcome..........  .................  CAHPS............  NA...................  NA.
 Experience.                     home health care.
Patient & Caregiver-Centered    Willingness to     Outcome..........  .................  CAHPS............  NA...................  NA.
 Experience.                     recommend the
                                 agency.
Population/Community Health...  Influenza          Process..........  NQF0431 (Used in   Reported by HHAs   Healthcare personnel   Number of healthcare
                                 Vaccination                           other care         through Web        in the denominator     personnel who are
                                 Coverage for                          settings, not      Portal.            population who         working in the
                                 Home Health Care                      Home Health).                         during the time from   healthcare facility
                                 Personnel.                                                                  October 1 (or when     for at least 1
                                                                                                             the vaccine became     working day between
                                                                                                             available) through     October 1 and March
                                                                                                             March 31 of the        31 of the following
                                                                                                             following year: (a)    year, regardless of
                                                                                                             Received an            clinical
                                                                                                             influenza              responsibility or
                                                                                                             vaccination            patient contact.
                                                                                                             administered at the
                                                                                                             healthcare facility,
                                                                                                             or reported in
                                                                                                             writing or provided
                                                                                                             documentation that
                                                                                                             influenza
                                                                                                             vaccination was
                                                                                                             received elsewhere:
                                                                                                             or (b) were
                                                                                                             determined to have a
                                                                                                             medical
                                                                                                             contraindication/
                                                                                                             condition of severe
                                                                                                             allergic reaction to
                                                                                                             eggs or to other
                                                                                                             components of the
                                                                                                             vaccine or history
                                                                                                             of Guillain-Barre
                                                                                                             Syndrome within 6
                                                                                                             weeks after a
                                                                                                             previous influenza
                                                                                                             vaccination; or (c)
                                                                                                             declined influenza
                                                                                                             vaccination; or (d)
                                                                                                             persons with unknown
                                                                                                             vaccination status
                                                                                                             or who do not
                                                                                                             otherwise meet any
                                                                                                             of the definitions
                                                                                                             of the above-
                                                                                                             mentioned numerator
                                                                                                             categories.
Population/Community Health...  Herpes zoster      Process..........  NA...............  Reported by HHAs   Total number of        Total number of
                                 (Shingles)                                               through Web        Medicare               Medicare
                                 vaccination: Has                                         Portal.            beneficiaries aged     beneficiaries aged
                                 the patient ever                                                            60 years and over      60 years and over
                                 received the                                                                who report having      receiving services
                                 shingles                                                                    ever received zoster   from the HHA.
                                 vaccination?                                                                vaccine (shingles
                                                                                                             vaccine).
Communication & Care            Advance Care Plan  Process..........  NQF0326..........  Reported by HHAs   Patients who have an   All patients aged 65
 Coordination.                                                                            through Web        advance care plan or   years and older.
                                                                                          Portal.            surrogate decision
                                                                                                             maker documented in
                                                                                                             the medical record
                                                                                                             or documentation in
                                                                                                             the medical record
                                                                                                             that an advanced
                                                                                                             care plan was
                                                                                                             discussed but the
                                                                                                             patient did not wish
                                                                                                             or was not able to
                                                                                                             name a surrogate
                                                                                                             decision maker or
                                                                                                             provide an advance
                                                                                                             care plan.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We invite public comment on the proposal to remove one OASIS-based 
measure, Drug Education on All Medications Provided to Patient/
Caregiver during All Episodes of Care, from the set of applicable 
measures for PY3 and subsequent performance years and Table 43.

C. Quality Measures for Future Consideration

    The CY 2016 HH PPS final rule discusses the HHVBP Model design, the 
guiding principles to select measures, and the six priority areas of 
the National Quality Strategy (NQS) we considered for the Model (80 FR 
68656 through 68678). Under the HHVBP Model, any measures we determine 
to be good indicators of quality will be considered for use in the 
HHVBP Model in future years, and may be added or removed through the 
rulemaking process. To further our commitment to objectively assess 
HHVBP quality measures, we are utilizing an implementation contractor 
that invited a group of measure experts to provide advice on the 
adjustment of the current measure set for consideration. The contractor 
convened a technical expert panel (TEP) consisting of 11 panelists with 
expertise in home health care and quality measures that met on 
September 7, 2016, in Baltimore, Maryland and via conference call on 
December 2, 2016. The TEP discussed developing a composite total change 
in ADL/IADL measure; a composite functional decline measure; a measure 
to capture when an HHA correctly identifies the patient's need for 
mental and behavioral health supervision; and a measure to identify if 
a caregiver is able to provide the patient's mental or behavioral 
health supervision, to align with Sec.  409.45(b)(3)(iii) and the 
Medicare Benefit Policy Manual (Pub. 100-02), Chapter 7, Section 20.2. 
We discuss each of these potential measures in further detail in this 
section of the proposed rule. While any new measures would be proposed 
for use in future rulemaking, we are inviting comment on these 
potential measures now to inform measure development and selection.
    As noted in the CY 2017 HH PPS final rule (81 FR 76747), we 
received several comments expressing concern that the measures under 
the Model do not reflect the patient population served under the 
Medicare Home Health benefit as the outcome measures focus on a 
patient's clinical improvement and do not address patients with chronic 
illnesses; deteriorating neurological, pulmonary, cardiac, and other 
conditions; and some with terminal illness. These commenters opined 
that the value of

[[Page 35337]]

including stabilization measures in the HHVBP Model is readily apparent 
as it aligns the Model with the Medicare Home Health benefit. 
Commenters also expressed concerns that improvement is not always the 
goal for each patient and that stabilization is a reasonable clinical 
goal for some patients. Commenters suggested the addition of 
stabilization or maintenance measures be considered for the HHVBP 
Model. Many commenters objected to the use of improvement measures in 
the HHVBP Model. We did not receive any specific measures for future 
consideration. In the subsections that follow, we are identifying 
measures that we are considering for possible inclusion under the Model 
in future rulemaking and are seeking input from the public on the 
measures mentioned, as well as any input about the development or 
construction of the measures and their features or methodologies.
1. Total Change in ADL/IADL Performance by HHA Patients
    The measure set finalized in the CY 2016 HH PPS final rule included 
Change in Daily Activity Function as Measured by the Activity Measure 
for Post-Acute Care (AM-PAC) (NQF #0430). However, the measure was 
removed in the CY 2017 HH PPS final rule and never used in the HHVBP 
Model because the measure required use of a proprietary data collection 
instrument in the home health environment. We are considering replacing 
Change in Daily Activity Function as Measured by AM-PAC (NQF #0430) 
with a composite total ADL/IADL change performance measure. During the 
September 2016 TEP meeting, an alternative to the Change in Daily 
Activity Function measure was presented. The TEP requested that a 
composite Total ADL/IADL Change measure be investigated empirically. 
This measure was discussed as part of the follow-up conference call, 
and the TEP supported continued development of the measure in the HHVBP 
Model as a way of including a measure that captures all three potential 
outcomes for home health patients: Stabilization; decline; and 
improvement. They provided input on the technical specifications of the 
potential composite measure, including the feasibility of implementing 
the measure and the overall measure reliability and validity. We have 
reviewed this suggested alternative and believe this measure would 
provide actionable and transparent information that would support HHA 
efforts to improve care and prevent functional decline for all patients 
across a broad range of patient functional outcomes. The measure would 
also improve accountability during an episode of care when the patient 
is directly under the HHA's care.
    The name of this potential composite measure could be Total Change 
in ADL/IADL Performance by HHA Patients. The measure would report the 
average, normalized, total improved functioning across the 11 ADL/IADL 
items on the current OASIS-C2 instrument. The measure is calculated by 
comparing scores from the start-of-care/resumption of care to scores at 
discharge. For each item the patient's discharge assessed performance 
score is subtracted from the patient's start of care/resumption of care 
assessed performance score, and then divided by the maximum improvement 
value based on the number of response options for that item. These 
values are summed into a total normalized change score that can range 
from -11 (that is, for an episode where there is maximum decline on all 
11 items used in the measure) to +11 (that is, for an episode where 
there is the maximum improvement on all 11 items). An HHA's score on 
the measure is based on its average across all eligible episodes. 
Patients who are independent on all 11 ADL/IADL items at Start of Care 
(SOC)/Resumption of Care (ROC) would also be included in the measure. 
The HHA's observed score on the measure is the average of the 
normalized total scores for all eligible episodes for its patients 
during the reporting period.
    The following 11 ADLs/IADL-related items from OASIS-C2 items were 
included in developing a composite measure:
    ADL OASIS-C2 items related to Self-Care:
     M1800 (Grooming).
     M1810 (Upper body dressing).
     M1820 (Lower body dressing).
     M1845 (Toileting hygiene).
     M1870 (Eating).
    ADL OASIS-C2 items related to Mobility:
     M1840 (Toilet transferring).
     M1840 (Bed transferring).
     M1860 (Ambulation).
    Other IADLs OASIS items:
     M1880 (Light meal preparation).
     M1890 (Telephone use).
     M2020 (Oral medication management).
    Based on the measures identified above, we would risk-adjust using 
OASIS-C2 items to account for case-mix variation and other factors that 
affect functional decline but are beyond the influence of the HHA. The 
risk-adjustment model uses an ordinary least squares (OLS) 
103 104 regression framework because the outcome measure 
(normalized change in ADL/IADL performance) is a continuous variable.
---------------------------------------------------------------------------

    \103\ Fox, John (1997). Applied Regression Analysis, Linear 
Models, and Related Methods/Edition 1, 1997, SAGE.
    \104\ Green, William H. (2017). Econometric analysis (8th ed.). 
New Jersey: Pearson. ISBN 978-0134461366.
---------------------------------------------------------------------------

    The prediction model for this outcome measure was derived using the 
predicted values from the 11 individual outcomes that are currently 
used to risk adjust these 11 individual quality measures. Of the 11 
values tested, the 8 identified in this proposed rule were found to be 
statistically related to the Total Change in ADL/IADL Performance by 
HHA Patients measure at p <0.0001 level and would be used in the 
prediction model that we are considering proposing to use to risk 
adjust the HHA's observed value with respect to this potential future 
measure. The prediction model for this outcome measure uses predicted 
values from the following individual outcomes (Note: The primary source 
OASIS item is listed in parenthesis after the name of the quality 
measure):
     Improvement in Upper Body Dressing (M1810).
     Improvement in Management of Oral Medications (M2020).
     Improvement in Bed Transferring (M1850).
     Improvement in Ambulation/Locomotion (M1860).
     Improvement in Grooming (M1800).
     Improvement in Toileting Hygiene (M1845).
     Discharged to the Community (M2420).
     Improvement in Toileting Transfer (M1840).
    Two predictive models, one based on predicted values from CY2014 
and one from CY2015, were computed. The correlations at the episode 
level between observed and predicted values for the target outcome 
measure Total Change in ADL/IADL Performance by HHA Patients are shown 
in Table 44.

[[Page 35338]]



Table 44--Correlations at the Episode Level Between Observed and Predicted Values for the Target Outcome Measure
                              Total Change in ADL/IADL Performance by HHA Patients
----------------------------------------------------------------------------------------------------------------
                                                                                                  r\2\ (Coeff.
                          Data group                              Correlation    Significance    Determination)
                                                                                    (p < )             (%)
----------------------------------------------------------------------------------------------------------------
CY2014, National..............................................          0.5022          0.0001             25.22
CY2014, HHVBP states..........................................          0.5094          0.0001             25.95
CY2015, National..............................................          0.5011          0.0001             25.11
CY2015, HHVBP states..........................................          0.5076          0.0001             25.76
----------------------------------------------------------------------------------------------------------------

    The results in Table 44 suggest that either model would account for 
25 percent or more of the variability in the outcome measure. These 
models could be considered very strong predictive models for the target 
outcome measure. Although the analysis supports developing a composite 
measure, the analysis assumes that the OASIS-C2 items identified to be 
used in the composite measure do not change; however, we recognize that 
OASIS-C2 items could be removed or added in any given year. We expect 
to conduct an additional analysis, in advance of any future proposal, 
to assess whether changes to OASIS-C2 items that are removed or added 
could significantly impact a HHA's ability to address several measures 
to improve its overall score in the composite measure. We are 
soliciting public comments on whether or not to include a composite 
total ADL/IADL change performance measure in the set of applicable 
measures, the name of any such measure, the risk adjustment method, and 
whether we should conduct an analysis of the impact of removal/addition 
of OASIS-C2 items.
2. Composite Functional Decline Measure
    The second measure we are considering for possible inclusion under 
the Model in future rulemaking is a Composite Functional Decline 
Measure that could be the percentage of episodes where there was 
decline on one or more of the eight ADL items used in the measure. As 
noted in this proposed rule, we received comments on the CY 2017 HH PPS 
proposed rule suggesting that we consider the addition of stabilization 
or maintenance measures. To address this suggestion, we are considering 
a composite functional decline measure because the existing functional 
stabilization measures, taken individually, are topped out, with HHA 
level means of 95 percent or higher. This type of composite functional 
decline measure is similar to the composite ADL decline measure that is 
used in the Skilled Nursing Facility (SNF) Quality Reporting program 
(QRP).\105\ The SNF QRP measure is constructed from four ADL items: Bed 
mobility; transfer; eating; and toileting.
---------------------------------------------------------------------------

    \105\ ``Long-stay Nursing Home Care: Percent of Residents Whose 
Need for help with Activities of Daily Living has Increased.'' 
https://www.qualitymeasures.ahrq.gov/summaries/summary/50060.
---------------------------------------------------------------------------

    An HHVBP composite functional decline measure could provide 
actionable and transparent information that could support HHA efforts 
to improve care and prevent functional decline for all patients, 
including those for whom improvement in functional status is not a 
realistic care goal. This concept was discussed during the TEP meeting 
on September 7, 2016, with a follow-up conference call held on December 
2, 2016. The TEP supported the inclusion of measures of stabilization 
and decline in the HHVBP Model, as well as further development of the 
composite functional decline measure. They provided input on the 
technical specifications of the potential composite measure, including 
the feasibility of implementing the measure and the overall measure 
reliability and validity.
    When calculating the composite functional decline measure, we could 
use the following 8 existing OASIS-C2 items identified below:
     Ambulation/Locomotion (M1860).
     Bed Transferring (M1840).
     Toilet Transferring (M1840).
     Bathing (M1830).
     Toilet Hygiene (M1845).
     Lower Body Dressing (M1820).
     Upper Body Dressing (M1810).
     Grooming (M1800).
    The measure could be defined as 1 if there is decline reported in 
one or more of these items between the Start of Care and the Discharge 
assessments and zero if no decline is reported on any of these items. 
As with other OASIS-based measures, a performance score for the measure 
would only be calculated for HHAs that have 20 or more episodes of care 
during a performance year.
    The measure could be risk-adjusted using OASIS-C2 items to account 
for case-mix variation and other factors that affect functional decline 
but are beyond the influence of the HHA. The risk-adjustment model uses 
a logistic regression framework. The model includes a large number of 
patient clinical conditions and other characteristics measured at start 
of care. A logistic regression model is estimated to predict whether 
the patient will have length of stay of greater than 60 days. The 
predicted probability of length of stay of greater than 60 days is 
used, along with other patient characteristics, to construct a logistic 
regression model to predict the probability of decline in any of eight 
ADLs. This model is used to estimate the predicted percent of ADL 
decline at the HHA level. To calculate case-mix adjusted values, the 
observed value of the measure is adjusted by the difference between the 
HHA predicted percent and the national predicted percent. The risk-
adjustment model reduces the adjusted difference between HHAs that 
serve a disproportionate number of longer-stay patients and those that 
serve patients with more typical lengths of stay of one episode.
    Across all participating HHAs in the HHVBP Model, for HHAs that had 
less than 20 percent of episodes lasting more than 60 days, the average 
on the functional decline measure was 8.08 percent. This increased to 
11.08 percent for HHAs with 20 percent to 40 percent of episodes 
lasting more than 60 days, 14.23 percent for HHAs with 40 percent to 60 
percent of episodes lasting more than 60 days, and 20.59 percent for 
HHAs with more than 60 percent of episodes lasting more than 60 days. 
This finding suggests that, in addition to focusing on prevention of 
functional decline, we should also attempt to better predict a 
patient's functional trajectory and potentially stratify the population 
to exclude those on a likely downward trajectory. However, in spite of 
this finding, the inclusion of a measure that rewards providers for 
avoiding functional decline has the advantage of diversifying the set 
of measures for the HHVBP model. We are soliciting public comments on 
whether or not to include

[[Page 35339]]

a composite functional decline measure in the set of applicable 
measures, the name of any such measure, the risk adjustment method, and 
whether we should conduct an analysis of the impact of removal/addition 
of OASIS-C2 items.
3. Behavioral Health Measures
    Although we did not receive comments or suggestions through the 
rulemaking process for the HHVBP Model regarding behavioral or mental 
health measures, we recognize that the Model does not include such 
measures. The OASIS-C2 collects several items related to behavioral and 
mental health (M1700 Cognitive Functioning; M1710 Confusion Frequency; 
M1720 Anxiety; M1730 Depression Screening; M1740 Cognitive, Behavioral, 
and Psychiatric Symptoms; M1745 Frequency of Disruptive Behavior 
Symptoms; and M1750 Psychiatric Nursing Services). These items are used 
to compute both Improvement and Process measures as well as Potentially 
Avoidable Events. The inclusion of behavioral health measures is 
important for care transformation and improvement activities as many 
persons served by the Home Health program may have behavioral health 
needs.
    The TEP made several suggestions during the December 2016 
conference call as to whether the focus of a behavioral or mental 
health measure could be identifying whether a patient needed mental or 
behavioral health assistance compared to the supervision of the patient 
or advocacy assistance. The TEP supports the supervision type measure 
due to its opportunity for potential improvement. In further analyses, 
we identified two underlying components to outcomes for providing 
assistance. We developed a method, described below, to identify 
patients who have or do not have needs for mental or behavioral health 
supervision. We are considering further refining this method by 
identifying the involvement of the caregiver in addressing the 
patient's mental or behavioral health supervision needs as an important 
outcome measure, and we seek comment on whether this is an appropriate 
factor or feature that we should consider in developing such a measure 
in future rulemaking.
a. HHA Correctly Identifies Patient's Need for Mental or Behavioral 
Health Supervision
    We are considering adding a HHA Correctly Identifies Patient's Need 
for Mental or Behavioral Health Supervision measure to the HHVBP Model 
in the future to capture a patient's need for mental or behavioral 
health supervision based on an identifier. This identifier is based on 
information from existing Neuro/Emotional/Behavioral Status OASIS 
items, along with other indicators of mental/behavioral health problems 
to identify a patient in need of supervisory assistance. The outcome 
measure assesses whether the HHA correctly identifies whether or not 
the patient needs mental or behavioral health supervision based on the 
OASIS SOC/ROC assessment item M2102f, Types and Sources of Assistance: 
Supervision and Safety.
    A composite Mental/Behavioral Health measure could be a dichotomous 
measure that reports the percentage of episodes of care where the HHA 
correctly identifies: (a) Patients who need mental or behavioral health 
supervision; and (b) patients who don't need mental or behavioral 
health supervision. The numerator could be a combination of two values: 
(1) The number of episodes of care where the HHA correctly identifies 
patients who need mental or behavioral health supervision; plus (2) the 
number of episodes of care where the HHA correctly identifies patients 
who don't need mental or behavioral health supervision. The denominator 
is all episodes of care.
    The composite measure requires that a patient's need for mental or 
behavioral health supervision be identified. The following algorithm 
was designed to identify if a patient was in need of mental or 
behavioral health supervision. If the patient met any of the following 
conditions, the patient was identified by the algorithm as in need of 
mental or behavioral health supervision:
     Was discharged from a psychiatric hospital prior to 
entering home health care (M1000 = 6);
     Is diagnosed as having chronic mental behavioral problems 
(M1021 and M1023);
     Is diagnosed with a mental illness (M1021 and M1023);
     Is cognitively impaired (M1700 > = 2);
     Is confused (M1710 > = 2);
     Is identified as having a memory deficit (M1740 = 1);
     Is identified as having impaired decision-making (M1740 = 
2);
     Is identified as being verbally disruptive (M1740 = 3);
     Is identified as being physically aggressive (M1740 = 4);
     Is identified as exhibiting disruptive, infantile, or 
inappropriate behaviors (M1740 = 5);
     Is identified as being delusional (M1740 = 6); or
     Has a frequency of disruptive symptoms (M1745 >= 2.
    The measure also requires that the HHA identify if the patient is 
in need of mental or behavioral health supervision. This requirement is 
based on the SOC/ROC code for M2102f, Types and Sources of Assistance: 
Supervision and Safety. If the HHA codes a value of 0, then the HHA has 
identified this patient as not needing mental or behavioral health 
supervision. If the HHA codes another value for M2102f, Types and 
Sources of Assistance: Supervision and Safety, then the HHA has 
identified this patient as needing mental or behavioral health 
supervision. The outcome measure is defined as the agreement between 
the algorithm's identification of a patient's need for mental or 
behavioral health supervision and the HHA's coding of this need. That 
is, if--
     The algorithm identifies the patient as not in need of 
mental or behavioral health supervision and the HHA identifies the 
patient as not in need of mental or behavioral health supervision, or
     The algorithm identifies the patient as in need of mental 
or behavioral health supervision and the HHA identifies the patient as 
in need of mental or behavioral health supervision, then
     The outcome is coded as 1, successful.
    As with other OASIS-based measures, a performance score for the 
measure would only be calculated for HHAs that have 20 or more episodes 
of care during a performance year.
    The measure is risk-adjusted using OASIS-C2 items to account for 
case-mix variation and other factors that affect functional decline but 
are beyond the influence of the HHA. The risk-adjustment model uses a 
logistic regression framework. The model includes a large number of 
patient clinical conditions and other characteristics measured at the 
start of care. To calculate case-mix adjusted values, the observed 
value of the measure is adjusted by the difference between the HHA 
predicted percent and the national predicted percent.
    The prediction model for this outcome measure uses 39 risk factors 
\106\ with each risk factor statistically significant at <0.0001. The 
correlation for the model between observed and predicted values as 
estimated by

[[Page 35340]]

Somers' D \107\ is 0.427, that yields an estimated coefficient of 
determination (r2) value based on the Tau-a \108\ of 0.201. This 
suggests that the variability in the model accounts for (predicts) 
approximately 20 percent of the variability in the outcome measure. The 
best statistic for evaluating the power of a prediction model that is 
derived using logistic regression is the c-statistic.\109\ This 
statistic identifies the overall accuracy of prediction by comparing 
observed and predicted value pairs to the proportion of the time that 
both predict the outcome in the same direction with 0.500 being a coin-
flip. The discussed prediction model has a c-statistic equal to 0.713, 
which is considered to be strong. Using data from CY 2015, the episode-
level mean for the HHA Correctly Identifies Patient's Need for Mental 
or Behavioral Health Supervision measure is 61.98 percent, nationally, 
and 62.98 percent for the HHVBP states.
---------------------------------------------------------------------------

    \106\ ``Home Health Quality Initiative: Quality Measures'' 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    \107\ Somers' D is a statistic that is based on the concept of 
concordant vs. discordant pairs for two related values. In this 
case, if both the observed and predicted values are higher than the 
average or if both values are less than the average, then the pair 
of numbers is considered concordant. However, if one value is higher 
than average and the other is lower than average--or vice versa, 
then the pair of values is considered discordant. The Somer's D is 
(# of concordant pairs - # of discordant pairs)/total # of pairs. 
The higher the ratio, the stronger the concordance between the two 
set of values.
    \108\ The Kendall Tau-a assumes that if there is a correlation 
between two variables, then sorting the variables based on one of 
the values will result in ordering the second variable. It uses the 
same concept of concordant pairs in Somers' D but a different 
formula: t = [(4P)/[(n) (n-1)]-1 where p = # of concordant pairs and 
n = # of pairs. This correlation method reduces the effect of 
outlier values as the values are essentially ranked.
    \109\ The C-statistic (sometimes called the ``concordance'' 
statistic or C-index) is a measure of goodness of fit for binary 
outcomes in a logistic regression model. In clinical studies, the C-
statistic gives the probability a randomly selected patient who 
experienced an event (for example, a disease or condition) had a 
higher risk score than a patient who had not experienced the event. 
It is equal to the area under the Receiver Operating Characteristic 
(ROC) curve and ranges from 0.5 to 1.
     A value below 0.5 indicates a very poor model.
     A value of 0.5 means that the model is no better than 
predicting an outcome than random chance.
     Values over 0.7 indicate a good model.
     Values over 0.8 indicate a strong model.
---------------------------------------------------------------------------

b. Caregiver Can/Does Provide for Patient's Mental or Behavioral Health 
Supervision Need
    We are considering including under the Model in future rulemaking a 
Caregiver Can/Does Provide for Patient's Mental or Behavioral Health 
Supervision Need measure that would encourage HHAs to ensure that 
patients who need mental or behavioral health supervision are receiving 
such care from the patient's caregivers, and would be a realistic care 
goal.
    When considering how to develop a measure to determine whether or 
not the caregiver can/does provide the patient's mental or behavioral 
health supervision, we would create an identifier of a patient's need 
for mental or behavioral health supervision. This identifier is based 
on the same algorithm described in the previous section from existing 
Neuro/Emotional/Behavioral Status OASIS items along with other 
indicators of mental/behavioral health problems to identify a patient 
in need of supervisory assistance. The outcome measure is whether the 
HHA correctly identifies this patient as having the need for mental or 
behavioral health supervision based on the OASIS SOC/ROC assessment 
item M2102f, Types and Sources of Assistance: Supervision and Safety.
    The measure could be a dichotomous measure that reports the 
percentage of episodes where patients with identified mental or 
behavioral health supervision needs have their needs met or could have 
their needs met by the patient's caregiver with additional training (if 
needed) and support by the HHA. The numerator is the intersection of: 
(1) The number of episodes of care where the patient needs mental or 
behavioral health supervision; and (2) the number of episodes of care 
where these patients have their needs met or could have their needs met 
by the patient's caregiver with additional training (if needed) and 
support by the HHA. By intersection, we mean that, for the numerator to 
equal one, a patient has to need mental or behavioral health 
supervision and has to have these needs met by his or her caregiver, or 
could have their needs met by the caregiver with additional training 
and/or support by the HHA. The denominator is all episodes of care. The 
algorithm discussed above for HHA Correctly Identifies Patient's Need 
for Mental or Behavioral Health Supervision could also be used to first 
identify if a patient was in need of mental or behavioral health 
supervision.
    To identify whether caregivers are able to provide supervisory care 
or, with training, could be able to provide supervisory care for these 
patients, we could use the SOC/ROC code for M2102f, Types and Sources 
of Assistance: Supervision and Safety. If the HHA codes a value of 1 
(Non-agency caregiver(s) currently provide assistance) or 2 (Non-agency 
caregiver(s) need training/supportive services to provide assistance), 
then the measure identifies that a caregiver does or could provide 
supervision to a patient who has been identified as needing mental or 
behavioral health supervision.
    The outcome measure is defined as the agreement between the 
algorithm's identification of a patient's need for mental or behavioral 
health supervision and the availability of supervision from the 
patient's caregiver(s). That is, if--
     The algorithm identifies the patient as in need of mental 
or behavioral health supervision and there is documentation that the 
patient's caregiver(s) do or could provide this supervision; then
     The outcome is coded as 1, successful.
    As with other OASIS-based measures, a performance score for the 
measure would only be calculated for HHAs that have 20 or more episodes 
during a performance year. We would use the same methodology to risk-
adjust by using OASIS-C2 items and the prediction model described 
above. The prediction model for this outcome measure uses 55 risk 
factors with each risk factor significant at p < 0.0001. The 
correlation for the model between observed and predicted values as 
estimated by Somers' D is 0.672, that yields an estimated coefficient 
of determination (r\2\) value based on the Tau-a of 0.205. This 
suggests that the variability in the model accounts for (predicts) 
approximately 20 percent of the variability in the outcome measure. The 
best statistic for evaluating the power of a prediction model that is 
derived using logistic regression is the c-statistic. This statistic 
identifies the overall accuracy of prediction by comparing observed and 
predicted value pairs to the proportion of the time that both predict 
the outcome in the same direction with 0.500 being a coin-flip. The 
prediction model has a c-statistic equal to 0.836, which is considered 
to be extremely strong.
    We are considering whether the HHA Correctly Identifies Patient's 
Need for Mental or Behavioral Health Supervision measure or the 
Caregiver Can/Does Provide for Patient's Mental or Behavioral Health 
Supervision Need measure would be most meaningful to include in the 
Model. We are also considering the interactions between the Home Health 
Grouping Model (HHGM) proposal on quality measures discussed in section 
III of this proposed rule and the HHVBP Model for the quality measures 
discussed in section IV.B of this proposed rule. We are soliciting 
public comments on the methodologies, analyses used to test the quality 
measure, and issues described in this section for future measure 
considerations. We will continue to share analyses as they become 
available with participating HHAs during future webinars.

[[Page 35341]]

V. Proposed Updates to the Home Health Care Quality Reporting Program 
(HH QRP)

A. Background and Statutory Authority

    Section 1895(b)(3)(B)(v)(II) of the Act requires that for 2007 and 
subsequent years, each HHA submit to the Secretary in a form and 
manner, and at a time, specified by the Secretary, such data that the 
Secretary determines are appropriate for the measurement of health care 
quality. To the extent that an HHA does not submit data in accordance 
with this clause, the Secretary is directed to reduce the home health 
market basket percentage increase applicable to the HHA for such year 
by 2 percentage points. As provided at section 1895(b)(3)(B)(vi) of the 
Act, depending on the market basket percentage increase applicable for 
a particular year, the reduction of that increase by 2 percentage 
points for failure to comply with the requirements of the HH QRP, and 
further reduction of the increase by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act, may result in 
the home health market basket percentage increase being less than 0.0 
percent for a year, and may result in payment rates under the Home 
Health PPS for a year being less than payment rates for the preceding 
year.
    We use the terminology ``CY [year] HH QRP'' to refer to the 
calendar year for which the HH QRP requirements applicable to that 
calendar year must be met in order for an HHA to avoid a 2 percentage 
point reduction to its market basket percentage increase under section 
1895(b)(3)(B)(v)(I) of the Act when calculating the payment rates 
applicable to it for that calendar year.
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(Pub. L. 113-185, enacted on October 6, 2014) (IMPACT Act) amended 
Title XVIII of the Act, in part, by adding new section 1899B of the 
Act, entitled ``Standardized Post-Acute Care Assessment Data for 
Quality, Payment, and Discharge Planning,'' and by enacting new data 
reporting requirements for certain post-acute care (PAC) providers, 
including Home Health Agencies (HHAs). Specifically, new sections 
1899B(a)(1)(A)(ii) and (iii) of the Act require HHAs, Inpatient 
Rehabilitation Facilities (IRFs), Long Term Care Hospitals (LTCHs) and 
Skilled Nursing Facilities (SNFs), under each of their respective 
quality reporting program (which, for HHAs, is found at section 
1895(b)(3)(B)(v) of the Act), to report data on quality measures 
specified under section 1899B(c)(1) of the Act for at least five 
domains, and data on resource use and other measures specified under 
section 1899B(d)(1) of the Act for at least three domains. Section 
1899B(a)(1)(A)(i) of the Act further requires each of these PAC 
providers to report under their respective quality reporting program 
standardized patient assessment data in accordance with subsection (b) 
for at least the quality measures specified under subsection (c)(1) and 
that is for five specific categories: Functional status; cognitive 
function and mental status; special services, treatments, and 
interventions; medical conditions and co-morbidities; and impairments. 
All of the data that must be reported in accordance with section 
1899B(a)(1)(A) of the Act must be standardized and interoperable, so as 
to allow for the exchange of the information among PAC providers and 
other providers, as well as for the use of such data to enable access 
to longitudinal information and to facilitate coordinated care. We 
refer readers to the CY 2016 HH PPS final rule (80 FR 68690 through 
68692) for additional information on the IMPACT Act and its 
applicability to HHAs.

B. General Considerations Used for the Selection of Quality Measures 
for the HH QRP

    We refer readers to the CY 2016 HH PPS final rule (80 FR 68695 
through 68698) for a detailed discussion of the considerations we apply 
in measure selection for the HH QRP, such as alignment with the CMS 
Quality Strategy,\110\ which incorporates the three broad aims of the 
National Quality Strategy.\111\ As part of our consideration for 
measures for use in the HH QRP, we review and evaluate measures that 
have been implemented in other programs and take into account measures 
that have been endorsed by NQF for provider settings other than the HH 
setting. We have previously adopted measures with the term 
``Application of'' in the names of those measures. We have received 
questions pertaining to the term ``application'' and want to clarify 
that when we refer to a measure as an ``Application of'' the measure, 
we mean that the measure would be used in a setting other than the 
setting for which it was endorsed by the NQF. For example, in the FY 
2016 SNF PPS Rule (80 FR 46440 through 46444 we adopted an Application 
of Percent of Residents with Experiencing Falls with Major Injury (Long 
Stay) (NQF #0674), which is endorsed for the Nursing Home setting but 
not the SNF setting. For such measures, we intend to seek NQF 
endorsement for the HH setting, and if the NQF endorses one or more of 
them, we will update the title of the measure to remove the reference 
to ``Application of.''
---------------------------------------------------------------------------

    \110\ http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html.
    \111\ http://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
---------------------------------------------------------------------------

C. Accounting for Social Risk Factors in the HH QRP

    We consider related factors that may affect measures in the HH QRP. 
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 \112\) 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.\113\ 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

[[Page 35342]]

methods for measuring and accounting for social risk factors, including 
stratified public reporting.\114\
---------------------------------------------------------------------------

    \112\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \113\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \114\ National Academies of Sciences, Engineering, and Medicine. 
2017. Accounting for social risk factors in Medicare payment. 
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------

    As discussed in the CY 2017 HH PPS final rule, 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. Measures from the HH QRP, Rehospitalization During the 
First 30 Days of Home Health (NQF #2380), and Emergency Department Use 
without Hospital Readmission During the First 30 Days of Home Health 
(NQF #2505) are being addressed in this trial. 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 HH QRP, 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 seeking public comment on which social risk 
factors might be most appropriate for reporting stratified measure 
scores and 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 HH QRP. 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 CMS programs. Of note, implementing any of the above 
methods would be taken into consideration in the context of how this 
and other CMS 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 beneficiaries have access to and receive excellent care, and that 
the quality of care furnished by providers and suppliers is assessed 
fairly in CMS programs.

D. Proposed Data Elements for Removal From OASIS

    We are proposing to remove 247 data elements from 35 OASIS items 
collected at specific time points during a home health episode. These 
data elements are not used in the calculation of quality measures 
already adopted in the HH QRP, nor are they being used for previously 
established purposes unrelated to the HH QRP, including payment, 
survey, the HH VBP Model or care planning. A list of the proposed 35 
OASIS items and data elements are listed in Table 45 and also at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/OASIS-Data-Sets.html.

                                      Table 45--Proposed Data Elements To Be Removed From OASIS on January 1, 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Specific time point
                                                         -----------------------------------------------------------------------------------------------
                       OASIS item                                                                         Transfer to an
                                                           Start of care   Resumption of     Follow-up       inpatient     Death at home  Discharge from
                                                                               care                          facility                         agency
--------------------------------------------------------------------------------------------------------------------------------------------------------
M0903...................................................  ..............  ..............  ..............               1               1               1
M1011...................................................               6               6               6  ..............  ..............  ..............
M1017...................................................               6               6  ..............  ..............  ..............  ..............
M1018...................................................               6               6  ..............  ..............  ..............  ..............
M1025...................................................              12              12              12  ..............  ..............  ..............
M1034...................................................               1               1  ..............  ..............  ..............  ..............
M1036...................................................               4               4  ..............  ..............  ..............  ..............
M1200...................................................               1               1               1  ..............  ..............  ..............
M1210...................................................               1               1  ..............  ..............  ..............  ..............
M1220...................................................               1               1  ..............  ..............  ..............  ..............
M1230...................................................               1               1  ..............  ..............  ..............               1
M1240...................................................               1               1  ..............  ..............  ..............  ..............
M1300...................................................               1               1  ..............  ..............  ..............  ..............
M1302...................................................               1               1  ..............  ..............  ..............  ..............
M1320...................................................               1               1  ..............  ..............  ..............               1
M1322...................................................  ..............  ..............  ..............  ..............  ..............               1
M1332...................................................  ..............  ..............  ..............  ..............  ..............               1
M1350...................................................               1               1  ..............  ..............  ..............  ..............
M1410...................................................               3               3  ..............  ..............  ..............  ..............
M1501...................................................  ..............  ..............  ..............               1  ..............               1

[[Page 35343]]

 
M1511...................................................  ..............  ..............  ..............               5  ..............               5
M1610...................................................  ..............  ..............  ..............  ..............  ..............               1
M1615...................................................               1               1  ..............  ..............  ..............               1
M1730...................................................               3               3  ..............  ..............  ..............  ..............
M1750...................................................               1               1  ..............  ..............  ..............  ..............
M1880...................................................               1               1  ..............  ..............  ..............               1
M1890...................................................               1               1  ..............  ..............  ..............               1
M1900...................................................               4               4  ..............  ..............  ..............  ..............
M2030...................................................               1               1               1  ..............  ..............               1
M2040...................................................               2               2  ..............  ..............  ..............  ..............
M2102 *.................................................               6               6  ..............  ..............  ..............          \**\ 3
M2110...................................................               1               1  ..............  ..............  ..............  ..............
M2250...................................................               7               7  ..............  ..............  ..............  ..............
M2310...................................................  ..............  ..............  ..............        \***\ 15  ..............        \***\ 15
M2430...................................................  ..............  ..............  ..............              20  ..............  ..............
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................              75              75              20              42               1              34
--------------------------------------------------------------------------------------------------------------------------------------------------------
* M2102 row f to remain collected at Start of Care, Resumption of Care and Discharge from Agency as part of the HH VBP program.
** M2102 rows a,c,d to remain collected at Discharge from Agency for survey purposes.
*** M2310 responses 1,10,OTH,UK to remain collected at Transfer to an Inpatient Facility and Discharge from Agency for survey purposes.

    We are inviting public comment on this proposal.

E. Proposed Collection of Standardized Patient Assessment Data Under 
the HH QRP

1. Proposed Definition of Standardized Patient Assessment Data
    Section 1895(b)(3)(B)(v)(IV)(bb) of the Act requires that beginning 
with the CY 2019 HH QRP, HHAs report standardized patient assessment 
data required under section 1899B(b)(1) of the Act. For purposes of 
meeting this requirement, section 1895(b)(3)(B)(v)(IV)(cc) of the Act 
requires that a HHA submit the standardized patient assessment data 
required under section 1899B(b)(1) of the Act in the form and manner, 
and at the time, as specified by the Secretary.
    Section 1899B(b)(1)(B) of the Act describes standardized patient 
assessment data as data required for at least the quality measures 
described in sections 1899B(c)(1) of the Act and regarding the 
following categories:
     Functional status, such as mobility and self-care at 
admission to a PAC provider and before discharge from a PAC provider;
     Cognitive function, such as ability to express and 
understand ideas, and mental status, such as depression and dementia;
     Special services, treatments and interventions such as the 
need for ventilator use, dialysis, chemotherapy, central line 
placement, and total parenteral nutrition;
     Medical conditions and comorbidities such as diabetes, 
congestive heart failure and pressure ulcers;
     Impairments, such as incontinence and an impaired ability 
to hear, see or swallow; and
     Other categories deemed necessary and appropriate by the 
Secretary.
    As required under section 1899B(b)(1)(A) of the Act, the 
standardized patient assessment data must be reported at least for the 
beginning of the home health episode (for example, HH start of care/
resumption of care) and end of episode (discharge), but the Secretary 
may require the data to be reported more frequently.
    In this proposed rule, we are proposing to define the standardized 
patient assessment data that HHAs must report under the HH QRP, as well 
as the requirements for the reporting of these data. The collection of 
standardized patient assessment data is critical to our efforts to 
drive improvement in healthcare quality across the four post-acute care 
(PAC) settings to which the IMPACT Act applies. We intend to use these 
data for a number of purposes, including facilitating their exchange 
and longitudinal use among healthcare providers to enable high quality 
care and outcomes through care coordination, as well as for quality 
measure calculation, and identifying comorbidities that might increase 
the medical complexity of a particular admission.
    HHAs are currently required to report patient assessment data 
through the Outcome and Assessment Information Set (OASIS) by 
responding to an identical set of assessment questions using an 
identical set of response options (we refer to a solitary question/
response option as a data element and we refer to a group of questions/
responses as data elements), both of which incorporate an identical set 
of definitions and standards. The primary purpose of the identical 
questions and response options is to ensure that we collect a set of 
standardized data elements across HHAs, which we can then use for a 
number purposes, including HH payment and measure calculation for the 
HH QRP.
    LTCHs, IRFs, and SNFs are also required to report patient 
assessment data through their applicable PAC assessment instruments, 
and they do so by responding to identical assessment questions 
developed for their respective settings using an identical set of 
response options (which incorporate an identical set of definitions and 
standards). Like the OASIS, the questions and response options for each 
of these other PAC assessment instruments are standardized across the 
PAC provider type to which the PAC assessment instrument applies. 
However, the assessment questions and response options in the four PAC 
assessment instruments are not currently standardized with each other. 
As a result, questions and response options that appear on the OASIS

[[Page 35344]]

cannot be readily compared with questions and response options that 
appear, for example, on the Inpatient Rehabilitation Facility-Patient 
Assessment Instrument (IRF-PAI) the PAC assessment instrument used by 
IRFs. This is true even when the questions and response options are 
similar. This lack of standardization across the four PAC provider 
types has limited our ability to compare one PAC provider type with 
another for purposes such as care coordination and quality improvement.
    To achieve a level of standardization across HHAs, LTCHs, IRFs, and 
SNFs that enables us to make comparisons between them, we are proposing 
to define ``standardized patient assessment data'' as patient or 
resident assessment questions and response options that are identical 
in all four PAC assessment instruments, and to which identical 
standards and definitions apply. Standardizing the questions and 
response options across the four PAC assessment instruments is an 
essential step in making that data interoperable, allowing it to be 
shared electronically, or otherwise, between PAC provider types. It 
will enable the data to be comparable for various purposes, including 
the development of cross-setting quality measures and to inform payment 
models that take into account patient characteristics rather than 
setting, as described in the IMPACT Act.
    We are inviting public comment on this proposed definition.
2. General Considerations Used for the Selection of Proposed 
Standardized Patient Assessment Data
    As part of our effort to identify appropriate standardized patient 
assessment data for purposes of collecting under the HH QRP, we sought 
input from the general public, stakeholder community, and subject 
matter experts on items that would enable person-centered, high quality 
health care, as well as access to longitudinal information to 
facilitate coordinated care and improved beneficiary outcomes.
    To identify optimal data elements for standardization, our data 
element contractor organized teams of researchers for each category, 
with each team working with a group of advisors made up of clinicians 
and academic researchers with expertise in PAC. Information-gathering 
activities were used to identify data elements, as well as key themes 
related to the categories described in section 1899B(b)(1)(B) of the 
Act. In January and February 2016, our data element contractor also 
conducted provider focus groups for each of the four PAC provider 
types, and a focus group for consumers that included current or former 
PAC patients and residents, caregivers, ombudsmen, and patient advocacy 
group representatives. The Development and Maintenance of Post-Acute 
Care Cross-Setting Standardized Patient Assessment Data Focus Group 
Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Our data element contractor also assembled a 16-member TEP that met 
on April 7 and 8, 2016, and January 5 and 6, 2017, in Baltimore, 
Maryland, to provide expert input on data elements that are currently 
in each PAC assessment instrument, as well as data elements that could 
be standardized. The Development and Maintenance of Post-Acute Care 
Cross-Setting Standardized Patient Assessment Data TEP Summary Reports 
are available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    As part of the environmental scan, data elements currently in the 
four existing PAC assessment instruments were examined to see if any 
could be considered for proposal as standardized patient assessment 
data. Specifically, this evaluation included consideration of data 
elements in OASIS-C2 (effective January 2017); IRF-PAI, v1.4 (effective 
October 2016); LCDS, v3.00 (effective April 2016); and MDS 3.0, v1.14 
(effective October 2016). Data elements in the standardized assessment 
instrument that we tested in the Post-Acute Care Payment Reform 
Demonstration (PAC PRD)--the Continuity Assessment Record and public 
reporting Evaluation (CARE)--were also considered. A literature search 
was also conducted to determine whether additional data elements to 
propose as standardized patient assessment data could be identified.
    Additionally, we held four Special Open Door Forums (SODFs) on 
October 27, 2015; May 12, 2016; September 15, 2016; and December 8, 
2016, to present data elements we were considering and to solicit 
input. At each SODF, some stakeholders provided immediate input, and 
all were invited to submit additional comments via the CMS IMPACT 
Mailbox: [email protected].
    We also convened a meeting with federal agency subject matter 
experts (SMEs) on May 13, 2016. In addition, a public comment period 
was open from August 12 to September 12, 2016 to solicit comments on 
detailed candidate data element descriptions, data collection methods, 
and coding methods. The IMPACT Act Public Comment Summary Report 
containing the public comments (summarized and verbatim) and our 
responses is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We specifically sought to identify standardized patient assessment 
data that we could feasibly incorporate into the LTCH, IRF, SNF, and 
HHA assessment instruments and that have the following attributes: (1) 
Being supported by current science; (2) testing well in terms of their 
reliability and validity, consistent with findings from the Post-Acute 
Care Payment Reform Demonstration (PAC PRD); (3) the potential to be 
shared (for example, through interoperable means) among PAC and other 
provider types to facilitate efficient care coordination and improved 
beneficiary outcomes; (4) the potential to inform the development of 
quality, resource use and other measures, as well as future payment 
methodologies that could more directly take into account individual 
beneficiary health characteristics; and (5) the ability to be used by 
practitioners to inform their clinical decision and care planning 
activities. We also applied the same considerations that we apply with 
quality measures, including the CMS Quality Strategy which is framed 
using the three broad aims of the National Quality Strategy.
3. Policy for Retaining HH QRP Measures and Proposal To Apply That 
Policy to Standardized Patient Assessment Data
    In the CY 2017 HH PPS final rule (81 FR 76702), we adopted a policy 
that would allow for any quality measure adopted for use in the HH QRP 
to remain in effect until the measure is removed, suspended, or 
replaced. For further information on how measures are considered for 
removal, suspension or replacement, we refer readers to the CY 2017 HH 
PPS final rule (81 FR 76702). We propose to apply this same policy to 
the standardized patient assessment data that we adopt for the HH QRP.
    We are inviting public comment on our proposal.

[[Page 35345]]

4. Policy for Adopting Changes to HH QRP Measures and Proposal To Apply 
That Policy to Standardized Patient Assessment Data
    In the CY 2017 HH PPS final rule (81 FR 76702), we adopted a 
subregulatory process to incorporate updates to HH quality measure 
specifications that do not substantively change the nature of the 
measure. Substantive changes will be proposed and finalized through 
rulemaking. For further information on what constitutes a substantive 
versus a nonsubstantive change and the subregulatory process for 
nonsubstantive changes, we refer readers to the CY 2017 HH PPS final 
rule (81 FR 76702). We propose to apply this policy to the standardized 
patient assessment data that we adopt for HH QRP.
    We are inviting public comment on our proposal.
5. Quality Measures Previously Finalized for the HH QRP
    The HH QRP currently has 23 measures, as outlined in Table 47.

           Table 47--Measures Currently Adopted for the HH QRP
------------------------------------------------------------------------
          Short name                   Measure name & data source
------------------------------------------------------------------------
                               OASIS-based
------------------------------------------------------------------------
Pressure Ulcers..............  Percent of Patients or Residents with
                                Pressure Ulcers that are New or Worsened
                                (NQF #0678).* \+\
DRR..........................  Drug Regimen Review Conducted with Follow-
                                Up for Identified Issues-Post Acute Care
                                (PAC) Home Health Quality Reporting
                                Program.\+\
Ambulation...................  Improvement in Ambulation/Locomotion (NQF
                                #0167).
Bathing......................  Improvement in Bathing (NQF #0174).
Dyspnea......................  Improvement in Dyspnea.
Oral Medications.............  Improvement in Management of Oral
                                Medication (NQF #0176).
Pain.........................  Improvement in Pain Interfering with
                                Activity (NQF #0177).
Surgical Wounds..............  Improvement in Status of Surgical Wounds
                                (NQF #0178).
Bed Transferring.............  Improvement in Bed Transferring (NQF
                                #0175).
Timely Care..................  Timely Initiation Of Care (NQF #0526).
Depression Assessment........  Depression Assessment Conducted.
Influenza....................  Influenza Immunization Received for
                                Current Flu Season (NQF #0522).
PPV..........................  Pneumococcal Polysaccharide Vaccine Ever
                                Received (NQF #0525).
Falls Risk...................  Multifactor Fall Risk Assessment
                                Conducted For All Patients Who Can
                                Ambulate (NQF #0537).
Diabetic Foot Care...........  Diabetic Foot Care and Patient/Caregiver
                                Education Implemented during All
                                Episodes of Care (NQF #0519).
Drug Education...............  Drug Education on All Medications
                                Provided to Patient/Caregiver during All
                                Episodes of Care.
------------------------------------------------------------------------
                              Claims-based
------------------------------------------------------------------------
MSPB.........................  Total Estimated Medicare Spending Per
                                Beneficiary (MSPB)--Post Acute Care
                                (PAC) Home Health (HH) Quality Reporting
                                Program (QRP).\+\
DTC..........................  Discharge to Community-Post Acute Care
                                (PAC) Home Health (HH) Quality Reporting
                                Program (QRP).\+\
PPR..........................  Potentially Preventable 30-Day Post-
                                Discharge Readmission Measure for Home
                                Health Quality Reporting Program.\+\
ACH..........................  Acute Care Hospitalization During the
                                First 60 Days of Home Health (NQF
                                #0171).
ED Use.......................  Emergency Department Use without
                                Hospitalization During the First 60 Days
                                of Home Health (NQF #0173).
Rehospitalization............  Rehospitalization During the First 30
                                Days of Home Health (NQF #2380).
ED Use without Readmission...  Emergency Department Use without Hospital
                                Readmission During the First 30 Days of
                                Home Health (NQF #2505).
------------------------------------------------------------------------
                              HHCAHPs-based
------------------------------------------------------------------------
Professional Care............  How often the home health team gave care
                                in a professional way.
Communication................  How well did the home health team
                                communicate with patients.
Team Discussion..............  Did the home health team discuss
                                medicines, pain, and home safety with
                                patients.
Overall Rating...............  How do patients rate the overall care
                                from the home health agency.
Willing to Recommend.........  Would patients recommend the home health
                                agency to friends and family.
------------------------------------------------------------------------
* Not currently NQF-endorsed for the HH Setting.
\+\ The data collection period will begin with CY 2017 Q1&2 reporting
  for CY 2018 APU determination, followed by the previously established
  HH QRP use of 12 months (July 1, 2017-June 30, 2018) of CY 2017
  reporting for CY 2019 APU determination. Subsequent years will be
  based on the HH July 1-June 30 timeframe for APU purposes. For claims
  data, the performance period will use rolling CY claims for subsequent
  reporting purposes.

F. HH QRP Quality Measures Proposed Beginning With the CY 2020 HH QRP

    Beginning with the CY 2020 HH QRP, in addition to the quality 
measures we are retaining under our policy described in section V.B. of 
the preamble of this proposed rule, we are proposing to replace the 
current pressure ulcer measure entitled Percent of Residents or 
Patients with Pressure Ulcers That Are New or Worsened (Short Stay) 
(NQF #0678) with a modified version of the measure and to adopt one 
measure on patient falls and one measure on assessment of patient 
functional status. We are also proposing to characterize the data 
elements described below, as standardized patient assessment data under 
section 1899B(b)(1)(B) of the Act that must be reported by HHAs under 
the HH QRP through the OASIS, under section 1895(b)(3)(B)(v) of the 
Act. The proposed measures are as follows:
     Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury.
     Application of Percent of Residents Experiencing One or 
More Falls with Major Injury (NQF #0674).
     Application of Percent of Long-Term Care Hospital Patients 
with an Admission and Discharge Functional

[[Page 35346]]

Assessment and a Care Plan That Addresses Function (NQF #2631).
    The measures are described in more detail below.
1. Proposal To Replace the Current Pressure Ulcer Quality Measure, 
Entitled Percent of Residents or Patients With Pressure Ulcers That Are 
New or Worsened (Short Stay) (NQF #0678), With a Modified Pressure 
Ulcer Measure, Entitled Changes in Skin Integrity Post-Acute Care: 
Pressure Ulcer/Injury
a. Measure Background
    In this rule, we are proposing to remove the current pressure ulcer 
measure, Percent of Residents or Patients with Pressure Ulcers That Are 
New or Worsened (Short Stay) (NQF #0678), from the HH QRP measure set 
and to replace it with a modified version of that measure, Changes in 
Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, beginning with 
the CY 2020 HH QRP. The change in the measure name is to reduce 
confusion about the new modified measure. The modified version differs 
from the current version of the measure because it includes new or 
worsened unstageable pressure ulcers, including deep tissue injuries 
(DTIs), in the measure numerator. The proposed modified version of the 
measure also contains updated specifications intended to eliminate 
redundancies in the assessment items needed for its calculation and to 
reduce the potential for underestimating the frequency of pressure 
ulcers. The modified version of the measure would satisfy the IMPACT 
Act domain of ``Skin integrity and changes in skin integrity.''
b. Measure Importance
    As described in the CY 2016 HH PPS final rule (80 FR 68697), 
pressure ulcers are high-cost adverse events and are an important 
measure of quality. For information on the history and rationale for 
the relevance, importance, and applicability of having a pressure ulcer 
measure in the HH QRP, we refer readers to the CY 2016 HH PPS final 
rule (80 FR 68623).
    We are proposing to adopt a modified version of the current 
pressure ulcer measure because unstageable pressure ulcers, including 
DTIs, are similar to Stage 2, Stage 3, and Stage 4 pressure ulcers in 
that they represent poor outcomes, are a serious medical condition that 
can result in death and disability, are debilitating and painful and 
are often an avoidable outcome of medical 
care.115 116 117 118 119 120 Studies show that most pressure 
ulcers can be avoided and can also be healed in acute, post-acute, and 
long term care settings with appropriate medical care.\121\ 
Furthermore, some studies indicate that DTIs, if managed using 
appropriate care, can be resolved without deteriorating into a worsened 
pressure ulcer.122 123
---------------------------------------------------------------------------

    \115\ Casey, G. (2013). ``Pressure ulcers reflect quality of 
nursing care.'' Nurs N Z 19(10): 20-24.
    \116\ Gorzoni, M.L. and S.L. Pires (2011). ``Deaths in nursing 
homes.'' Rev Assoc Med Bras 57(3): 327-331.
    \117\ Thomas, J.M., et al. (2013). ``Systematic review: health-
related characteristics of elderly hospitalized adults and nursing 
home residents associated with short-term mortality.'' J Am Geriatr 
Soc 61(6): 902-911.
    \118\ White-Chu, E.F., et al. (2011). ``Pressure ulcers in long-
term care.'' Clin Geriatr Med 27(2): 241-258.
    \119\ Bates-Jensen BM. Quality indicators for prevention and 
management of pressure ulcers in vulnerable elders. Ann Int Med. 
2001;135 (8 Part 2), 744-51.
    \120\ Bennet, G, Dealy, C, Posnett, J (2004). The cost of 
pressure ulcers in the UK, Age and Aging, 33(3):230-235.
    \121\ Black, Joyce M., et al. ``Pressure ulcers: avoidable or 
unavoidable? Results of the national pressure ulcer advisory panel 
consensus conference.'' Ostomy-Wound Management 57.2 (2011): 24.
    \122\ Sullivan, R. (2013). A Two-year Retrospective Review of 
Suspected Deep Tissue Injury Evolution in Adult Acute Care Patients. 
Ostomy Wound Management 59(9) http://www.o-wm.com/article/two-year-retrospective-review-suspected-deep-tissue-injury-evolution-adult-acute-care-patien.
    \123\ Posthauer, ME, Zulkowski, K. (2005). Special to OWM: The 
NPUAP Dual Mission Conference: Reaching Consensus on Staging and 
Deep Tissue Injury. Ostomy Wound Management 51(4) http://www.o-wm.com/content/the-npuap-dual-mission-conference-reaching-consensus-staging-and-deep-tissue-injury.
---------------------------------------------------------------------------

    While there are few studies that provide information regarding the 
incidence of unstageable pressure ulcers in PAC settings, an analysis 
conducted by our measure development contractor indicated that adding 
unstageable pressure ulcers to the quality measure numerator would 
result in a higher percentage of patients with new or worsened pressure 
ulcers in HHA settings and increase the variability of measure scores. 
A higher percentage indicates lower quality. This increased variability 
serves to improve the measure by improving the ability of the measure 
to distinguish between high and low quality home health agencies.
    Given the low prevalence of pressure ulcers in the home health 
setting, the addition of unstageable ulcers to this measure should 
enhance variability. Analysis of 2015 OASIS data found that in 
approximately 1.2 percent, or more than 70,000 episodes, the patient 
had an unstageable ulcer upon admission. Patients in more than 13,000 
episodes were discharged with an unstageable ulcer. In addition, 
unstageable ulcers due to slough/eschar worsened between admission and 
discharge in approximately 5,000 episodes of care. In conclusion, the 
inclusion of unstageable pressure ulcers, including DTIs, in the 
numerator of this measure is expected to increase measure scores and 
variability in measure scores, thereby improving the ability to 
discriminate among poor- and high-performing HHAs.
    Testing shows similar results in other PAC settings. For example, 
in SNFs, using data from Quarter 4 2015 through Quarter 3 2016, the 
mean score on the currently implemented pressure ulcer measure is 1.75 
percent, compared with 2.58 percent in the proposed measure. In the 
proposed measure, the SNF mean score is 2.58 percent; the 25th and 75th 
percentiles are 0.65 percent and 3.70 percent, respectively; and 20.32 
percent of facilities have perfect scores. In LTCHs, using data from 
Quarter 1 through Quarter 4 2015, the mean score on the currently 
implemented pressure ulcer measure is 1.95 percent, compared with 3.73 
percent in the proposed measure. In the proposed measure, the LTCH mean 
score is 3.73 percent; the 25th and 75th percentiles are 1.53 percent 
and 4.89 percent, respectively; and 5.46 percent of facilities have 
perfect scores. In IRFs, using data from Quarter 4 2016, the mean score 
on the currently implemented pressure ulcer measure is 0.64 percent, 
compared with 1.46 percent in the proposed measure. In the proposed 
measure, the IRF mean score is 1.46 percent and the 25th and 75th 
percentiles are 0 percent and 2.27 percent, respectively. The inclusion 
of unstageable pressure ulcers, including DTIs, in the numerator of 
this measure is expected to increase measure scores and variability in 
measure scores, thereby improving the ability to distinguish between 
poor and high performing HHAs.
    This increased variability of scores across quarters and deciles 
may improve the ability of the measure to distinguish between high and 
low performing providers across PAC settings.
c. Stakeholder Feedback
    Our measure development contractor sought input from subject matter 
experts, including Technical Expert Panels (TEPs), over the course of 
several years on various skin integrity topics and specifically those 
associated with the inclusion of unstageable pressure ulcers including 
DTIs. Most recently, on July 18, 2016, a TEP convened by our measure 
development contractor provided input on the technical specifications 
of this proposed quality measure, including the feasibility of 
implementing the proposed measure's

[[Page 35347]]

updates across PAC settings. The TEP supported the use of the proposed 
measure across PAC settings, including the use of different data 
elements for measure calculation. The TEP supported the updates to the 
measure across PAC settings, including the inclusion in the numerator 
of unstageable pressure ulcers due to slough and/or eschar that are new 
or worsened, new unstageable pressure ulcers due to a non-removable 
dressing or device, and new DTIs. The TEP recommended supplying 
additional guidance to providers regarding each type of unstageable 
pressure ulcer. This support was in agreement with earlier TEP 
meetings, held on June 13, and November 15, 2013, which had recommended 
that CMS update the specifications for the pressure ulcer measure to 
include unstageable pressure ulcers in the numerator.124 125 
Exploratory data analysis conducted by our measure development 
contractor suggests that the addition of unstageable pressure ulcers, 
including DTIs, will increase the observed incidence of new or worsened 
pressure ulcers at the facility level and may improve the ability of 
the proposed quality measure to discriminate between poor- and high-
performing agencies.
---------------------------------------------------------------------------

    \124\ Schwartz, M., Nguyen, K.H., Swinson Evans, T.M., Ignaczak, 
M.K., Thaker, S., and Bernard, S.L.: Development of a Cross-Setting 
Quality Measure for Pressure Ulcers: OY2 Information Gathering, 
Final Report. Centers for Medicare & Medicaid Services, November 
2013. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Quality-Measure-for-Pressure-Ulcers-Information-Gathering-Final-Report.pdf.
    \125\ Schwartz, M., Ignaczak, M.K., Swinson Evans, T.M., Thaker, 
S., and Smith, L.: The Development of a Cross-Setting Pressure Ulcer 
Quality Measure: Summary Report on November 15, 2013, Technical 
Expert Panel Follow-Up Webinar. Centers for Medicare & Medicaid 
Services, January 2014. Available: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Development-of-a-Cross-Setting-Pressure-Ulcer-Quality-Measure-Summary-Report-on-November-15-2013-Technical-Expert-Pa.pdf.
---------------------------------------------------------------------------

    We solicited stakeholder feedback on this proposed measure by means 
of a public comment period held from October 17, through November 17, 
2016. In general, we received considerable support for the proposed 
measure. A few commenters supported all of the changes to the current 
pressure ulcer measure that resulted in the proposed measure, with one 
commenter noting the significance of the work to align the pressure 
ulcer quality measure specifications across the PAC settings. Many 
commenters supported the inclusion of unstageable pressure ulcers due 
to slough/eschar, due to non-removable dressing/device, and DTIs in the 
proposed quality measure. Other commenters did not support the 
inclusion of DTIs in the proposed quality measure because they stated 
that there is no universally accepted definition for this type of skin 
injury.
    Some commenters provided feedback on the data elements used to 
calculate the proposed quality measure. We believe that these data 
elements will promote facilitation of cross-setting quality comparison 
as mandated by the IMPACT Act, alignment between quality measures and 
payment, reduction in redundancies in assessment items, and prevention 
of inappropriate underestimation of pressure ulcers. The currently 
implemented pressure ulcer measure is calculated using retrospective 
data elements that assess the number of new or worsened pressure ulcers 
at each stage, while the proposed measure is calculated using data 
elements that assess the current number of unhealed pressure ulcers at 
each stage, and the number of these that were present upon admission, 
which are subtracted from the current number at that stage. Some 
commenters did not support the data elements that would be used to 
calculate the proposed measure, and requested further testing of these 
data elements. Other commenters supported the use of these data 
elements stating that these data elements simplified the measure 
calculation process.
    The public comment summary report for the proposed measure is 
available on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    The NQF-convened Measures Application Partnership (MAP) Post-Acute 
Care/Long-Term Care (PAC/LTC) Workgroup met on December 14 and 15, 
2016, and provided input to us about this proposed measure. The MAP 
provided a recommendation of ``support for rulemaking'' for use of the 
proposed measure in the HH QRP. The MAP Coordinating Committee met on 
January 24 and 25, 2017, and provided a recommendation of ``conditional 
support for rulemaking'' for use of the proposed measure in the HH QRP. 
The MAP's conditions of support include that, as a part of measure 
implementation, we provide guidance on the correct collection and 
calculation of the measure result, as well as guidance on public 
reporting Web sites explaining the impact of the specification changes 
on the measure result. The MAP's conditions also specify that CMS 
continue analyzing the proposed measure to investigate unexpected 
results reported in public comment. We intend to fulfill these 
conditions by offering additional training opportunities and 
educational materials in advance of public reporting, and by continuing 
to monitor and analyze the proposed measure. We provide private 
provider feedback reports as well as a Quarterly Quality Measure report 
that allow HHAs to track their measure outcomes for QI purposes. Aside 
from those reports, we conduct internal monitoring and evaluation of 
our measures to ensure that the measures are performing as they were 
intended to perform during the development of the measure. More 
information about the MAP's recommendations for this measure is 
available at http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=84452.
    We reviewed the NQF's consensus endorsed measures and were unable 
to identify any home health measures that address changes in skin 
integrity related to pressure ulcers. Therefore, based on the evidence 
previously discussed, we are proposing to adopt the quality measure 
entitled, Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/
Injury, for the HH QRP beginning with the CY 2020 HH QRP. We plan to 
submit the proposed measure to the NQF for endorsement consideration as 
soon as feasible.
d. Data Collection
    The data for this quality measure would be collected using the 
OASIS data set, which is currently submitted by HHAs through the 
Quality Improvement and Evaluation System (QIES) Assessment Submission 
and Processing (ASAP) System. The required items applicable to this 
measure are already reported by HHAs for patients and episodes of care 
meeting statutorily-defined criteria. While the inclusion of 
unstageable wounds in the proposed measure results in a measure 
calculation methodology that is different from the methodology used to 
calculate the current pressure ulcer measure, the data elements needed 
to calculate the proposed measure are already included on the OASIS 
data set. In addition, our proposal to eliminate duplicative data 
elements that were used in calculation of the current pressure ulcer 
measure will result in an overall reduced reporting burden for HHAs for 
the proposed measure. For more information on OASIS data set submission 
using the QIES ASAP System, we refer readers to https://www.qtso.com/.

[[Page 35348]]

    For technical information about this proposed measure, including 
information about the measure calculation and the standardized patient 
assessment data elements used to calculate this measure, we refer 
readers to the document titled, Proposed Measure Specifications and 
Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    We are proposing that HHAs would begin reporting the proposed 
pressure ulcer measure, Changes in Skin Integrity Post-Acute Care: 
Pressure Ulcer/Injury, which will replace the current pressure ulcer 
measure, with data collection beginning with respect to admissions and 
discharges occurring on or after January 1, 2019.
    We are inviting public comment on our proposal to remove the 
current pressure ulcer measure, Percent of Residents or Patients with 
Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), and 
replace it with a modified version of that measure, entitled, Changes 
in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, beginning 
with the CY 2020 HH QRP.
2. Proposal To Address the IMPACT Act Domain of Functional Status, 
Cognitive Function, and Changes in Function and Cognitive Function: 
Application of Percent of Long-Term Care Hospital Patients With an 
Admission and Discharge Functional Assessment and a Care Plan That 
Addresses Function (NQF #2631)
a. Measure Background
    Sections 1899B(d)(1)(B) of the Act requires that no later than the 
specified application date (which under section 1899B(a)(1)(E)(ii) is 
January 1, 2019 for HHAs, and October 1, 2016 for SNFs, IRFs and 
LTCHs), the Secretary specify a quality measure to address the domain 
of ``Functional status, cognitive function, and changes in function and 
cognitive function.'' We propose to adopt the measure, Application of 
Percent of Long-Term Care Hospital Patients with an Admission and 
Discharge Functional Assessment and a Care Plan That Addresses Function 
(NQF #2631) for the HH QRP, beginning with the CY 2020 program year. 
This is a process measure that reports the percentage of patients with 
an admission and discharge functional assessment and treatment goal 
that addresses function. The treatment goal provides evidence that a 
care plan with a goal has been established for the HH patient.
    The National Committee on Vital and Health Statistics' Subcommittee 
on Health,\126\ noted that ``information on functional status is 
becoming increasingly essential for fostering healthy people and a 
healthy population. Achieving optimal health and well-being for 
Americans requires an understanding across the life span of the effects 
of people's health conditions on their ability to do basic activities 
and participate in life situations in other words, their functional 
status.'' This is supported by research showing that patient and 
resident functioning is associated with important outcomes such as 
discharge destination and length of stay in inpatient settings,\127\ as 
well as the risk of nursing home placement and hospitalization of older 
adults living in the community.\128\ For example, many patients who 
utilize HH services may be at risk for a decline in function due to 
limited mobility and ambulation.\129\ Thus, impairment in function 
activities such as self-care and mobility is highly prevalent in HH 
patients. For example, in 98 percent of the over six million HH 
episodes in 2015, the patient had at least one limitation or was not 
completely independent in self-care activities such as grooming, upper 
and lower body dressing, bathing, toilet hygiene, and/or feeding/
eating.\130\
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    \126\ Subcommittee on Health National Committee on Vital and 
Health Statistics, ``Classifying and Reporting Functional Status'' 
(2001).
    \127\ Reistetter TA, Graham JE, Granger CV, Deutsch A, 
Ottenbacher KJ. Utility of Functional Status for Classifying 
Community Versus Institutional Discharges after Inpatient 
Rehabilitation for Stroke. Archives of Physical Medicine and 
Rehabilitation, 2010; 91:345-350.
    \128\ Miller EA, Weissert WG. Predicting Elderly People's Risk 
for Nursing Home Placement, Hospitalization, Functional Impairment, 
and Mortality: A Synthesis. Medical Care Research and Review, 57; 3: 
259-297.
    \129\ Kortebein, P., Ferrando, A., Lombebeida, J., Wolfe, R., & 
Evans, W.J. (2007). Effect of 10 days of bed rest on skeletal muscle 
in health adults. JAMA; 297(16):1772-4.
    \130\ Kortebein, P., Ferrando, A., Lombebeida, J., Wolfe, R., & 
Evans, W.J. (2007). Effect of 10 days of bed rest on skeletal muscle 
in health adults. JAMA; 297(16):1772-4.
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    The primary goal of home health care is to provide restorative care 
when improvement is expected, maintain function and health status if 
improvement is not expected, slow the rate of functional decline to 
avoid institutionalization in an acute or post-acute setting, and/or 
facilitate transition to end-of-life care as 
appropriate.131 132 Home health care can positively impact 
functional outcomes. In stroke patients, home-based rehabilitation 
programs administered by home health clinicians significantly improved 
ADL function and gait performance.\133\ Home health services, delivered 
by a registered nurse, positively impacted patient Quality of Life 
(QOL) and clinical outcomes, including significant improvement in 
dressing lower body, bathing, meal preparation, shopping, and 
housekeeping. For some home health patients, achieving independence 
within the living environment and improved community mobility might be 
the goal of care. For others, the goal of care might be to slow the 
rate of functional decline to avoid institutionalization.\134\
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    \131\ Riggs, J. S. & Madigan, E. A. (2012). Describing variation 
in home health care episodes for patients with heart failure. Home 
Health Care Management and Practice, 24(3): 146-152.
    \132\ Ellenbecker, C.H., Samia, L., Cushman, M.J., & Alster, K 
(2008). Patient safety and quality: an evidence-based handbook for 
nurses. Rockville (MD): agency for healthcare research and quality 
(US); 2008 Apr. Chapter 13.
    \133\ Asiri, F. Y., Marchetti, G. F., Ellis, J. L., Otis, L., 
Sparto, P. J., Watzlaf, V., & Whitney, S. L. (2014). Predictors of 
functional and gait outcomes for persons poststroke undergoing home-
based rehabilitation. Journal of Stroke and Cerebrovascular 
Diseases: The Official Journal of National Stroke Association, 
23(7), 1856-1864. https://doi.org/10.1016/j.jstrokecerebrovasdis.2014.02.025.
    \134\ Ellenbecker, C.H., Samia, L., Cushman, M.J., & Alster, K 
(2008). Patient safety and quality: an evidence-based handbook for 
nurses. Rockville (MD): agency for healthcare research and quality 
(US); 2008 Apr. Chapter 13.
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    Patients' functional status is associated with important patient 
outcomes, so measuring and monitoring the patients' extent of engaging 
in self-care and mobility is valuable. Functional decline among the 
elderly;\135\ and chronic illness comorbidities, such as chronic pain 
among the older adult population 136 137 are associated with 
decreases in self-sufficiency and patient activation (defined as the 
patient's knowledge and confidence in self-managing their health). 
Impaired mobility, frailty, and low physical activity are associated 
with institutionalization,\138\ higher risk of

[[Page 35349]]

falls and falls-related hip fracture and death,139 140 
greater risk of undernutrition,\141\ higher rates of inpatient 
admission from the emergency department,\142\ and higher prevalence of 
hypertension and diabetes.\143\
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    \135\ Gleason, K. T., Tanner, E. K., Boyd, C. M., Saczynski, J. 
S., & Szanton, S. L. (2016). Factors associated with patient 
activation in an older adult population with functional 
difficulties. Patient Education and Counseling, 99(8), 1421-1426. 
https://doi.org/10.1016/j.pec.2016.03.011.
    \136\ Roberts AR, Betts Adams K, Beckette & Warner C. (2016). 
Effects of chronic illness on daily life and barriers to self-care 
for older women: a mixed-methods exploration. J Women Aging, Jul 
25:1-11.
    \137\ Wu, J.-R., Lennie, T. A., & Moser, D. K. (2016). A 
prospective, observational study to explore health disparities in 
patients with heart failure-ethnicity and financial status. European 
Journal of Cardiovascular Nursing: Journal of the Working Group on 
Cardiovascular Nursing of the European Society of Cardiology. 
https://doi.org/10.1177/1474515116641296.
    \138\ Hajek, A., Brettschneider, C., Lange, C., Posselt, T., 
Wiese, B., Steinmann, S., Weyerer, S., Werle, J., Pentzek, M., 
Fuchs, A., Stein, J., Luck, T., Bickel, H., M[ouml]sch, E., Wagner, 
M., Jessen, F., Maier, W., Scherer, M., Riedel-Heller, S.G., 
K[ouml]nig, H.H., & AgeCoDe Study Group. (2015). Longitudinal 
Predictors of Institutionalization in Old Age. PLoS One, 
10(12):e0144203.
    \139\ Akahane, M., Maeyashiki, A., Yoshihara, S., Tanaka, Y., & 
Imamura, T. (2016). Relationship between difficulties in daily 
activities and falling: loco-check as a self-assessment of fall 
risk. Interactive Journal of Medical Research, 5(2), e20. https://doi.org/10.2196/ijmr.5590.
    \140\ Zaslavsky, O., Zelber-Sagi, S., Gray, S. L., LaCroix, A. 
Z., Brunner, R. L., Wallace, R. B., . . . Woods, N. F. (2016). 
Comparison of Frailty Phenotypes for Prediction of Mortality, 
Incident Falls, and Hip Fracture in Older Women. Journal of the 
American Geriatrics Society, 64(9), 1858--1862. https://doi.org/10.1111/jgs.14233.
    \141\ van der Pols-Vijlbrief, R., Wijnhoven, H. A. H., Bosmans, 
J. E., Twisk, J. W. R., & Visser, M. (2016). Targeting the 
underlying causes of undernutrition. Cost-effectiveness of a 
multifactorial personalized intervention in community-dwelling older 
adults: A randomized controlled trial. Clinical Nutrition 
(Edinburgh, Scotland). https://doi.org/10.1016/j.clnu.2016.09.030.
    \142\ Hominick, K., McLeod, V., & Rockwood, K. (2016). 
Characteristics of older adults admitted to hospital versus those 
discharged home, in emergency department patients referred to 
internal medicine. Canadian Geriatrics Journal: CGJ, 19(1), 9-14. 
https://doi.org/10.5770/cgj.19.195.
    \143\ Halaweh, H., Willen, C., Grimby-Ekman, A., & Svantesson, 
U. (2015). Physical activity and health-related quality of life 
among community dwelling elderly. J Clin Med Res, 7(11), 845-52.
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    In addition, the assessment of functional ability and provision of 
treatment plans directed toward improving or maintaining functional 
ability could impact health care costs. Providing comprehensive home 
health care, which includes improving or maintaining functional ability 
for frail elderly adults, can reduce the likelihood of hospital 
readmissions or emergency department visits, leading to reduced health 
care service expenditures.144 145 146 Reducing preventable 
rehospitalizations, which made up approximately 17 percent of 
Medicare's $102.6 billion in 2004 hospital payments, creates the 
potential for large health care cost savings.147 148
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    \144\ Hirth, V., Baskins, J., & Dever-Bumba, M. (2009). Program 
of all-inclusive care (PACE): Past, present, and future. Journal of 
the American Medical Directors Association, 10, 155-160.
    \145\ Mukamel, D. B., Fortinsky, R. H., White, A., Harrington, 
C., White, L. M., & Ngo-Metzger, Q. (2014). The policy implications 
of the cost structure of home health agencies. Medicare & Medicaid 
Research Review, 4(1). https://doi.org/10.5600/mmrr2014-004-01-a03.
    \146\ Meunier, M. J., Brant, J. M., Audet, S., Dickerson, D., 
Gransbery, K., & Ciemins, E. L. (2016). Life after PACE (Program of 
All-Inclusive Care for the Elderly): A retrospective/prospective, 
qualitative analysis of the impact of closing a nurse practitioner 
centered PACE site. Journal of the American Association of Nurse 
Practitioners. https://doi.org/10.1002/2327-6924.12379.
    \147\ Jencks, S.F., Williams, M.V., and Coleman, E.A. (2009). 
Rehospitalizations among patients in the Medicare fee-for-service 
program. New England Journal of Medicine; 360(14):1418-28.
    \148\ Tao, H., Ellenbecker, C. H., Chen, J., Zhan, L., & Dalton, 
J. (2012). The influence of social environmental factors on 
rehospitalization among patients receiving home health care 
services. ANS. Advances in Nursing Science, 35(4), 346-358. https://doi.org/10.1097/ANS.0b013e318271d2ad.
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    Further, improving and maintaining functional ability in 
individuals with high needs, defined as those with three or more 
chronic conditions, may also account for an increase in healthcare 
savings. Adults with three or more chronic conditions have nearly four 
times the average annual per-person spending for health care services 
and prescription medications than the average for all U.S. adults, and 
high needs adults with limitations in their ability to perform ADLs, 
have even higher average annual health care expenditures.\149\ High 
needs individuals with functional limitations spend, on average, 
$21,021 on annual health care services, whereas the average annual 
health care expenditures for all U.S. adults are approximately 
$4,845.\45\
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    \149\ Hayes, S.L., Salzberg, C.A., McCarthy, D., Radley, DC, 
Abrams, M.K., Shah, T., and Anderson, G.F. (2016). High-Need, High-
Cost Patients: Who are they and how do they use health care--A 
population-based comparison of demographics, health care use, and 
expenditures. The Commonwealth Fund.
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b. Measure Importance
    The majority of individuals who receive PAC services, including 
care provided by HHAs, SNFs, IRFs, and LTCHs, have functional 
limitations, and many of these individuals are at risk for further 
decline in function due to limited mobility and ambulation.\150\ The 
patient populations treated by HHAs, SNFs, IRFs, and LTCHs vary in 
terms of their functional abilities. For example, for home health 
patients, achieving independence within the home environment and 
promoting community mobility may be the goal of care. For other home 
health patients, the goal of care may be to slow the rate of functional 
decline in order to allow the person to remain at home and avoid 
institutionalization.\151\ The clinical practice guideline Assessment 
of Physical Function \152\ recommends that clinicians document 
functional status at baseline and over time to validate capacity, 
decline, or progress. Therefore, assessment of functional status at 
admission and discharge, as well as establishing a functional goal for 
discharge as part of the care plan is an important aspect of patient or 
resident care across PAC settings.
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    \150\ Kortebein P, Ferrando A, Lombebeida J, Wolfe R, Evans WJ. 
Effect of 10 days of bed rest on skeletal muscle in health adults. 
JAMA; 297(16):1772-4.
    \151\ Ellenbecker CH, Samia L, Cushman MJ, Alster K. Patient 
safety and quality in home health care. Patient Safety and Quality: 
An Evidence-Based Handbook for Nurses. Vol 1.
    \152\ Kresevic DM. Assessment of physical function. In: Boltz M, 
Capezuti E, Fulmer T, Zwicker D, editor(s). Evidence-based geriatric 
nursing protocols for best practice. 4th ed. New York (NY): Springer 
Publishing Company; 2012. p. 89-103.
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    Currently, functional assessment data are collected by all four PAC 
providers, yet data collection has employed different assessment 
instruments, scales, and item definitions. The data cover similar 
topics, but are not standardized across PAC settings. The different 
sets of functional assessment items coupled with different rating 
scales makes communication about patient and resident functioning 
challenging when patients and residents transition from one type of 
setting to another. Collection of standardized functional assessment 
data across HHAs, SNFs, IRFs, and LTCHs using common data items would 
establish a common language for patient and resident functioning, which 
may facilitate communication and care coordination as patients and 
residents transition from one type of provider to another. The 
collection of standardized functional status data may also help improve 
patient functioning during an episode of care by ensuring that basic 
daily activities are assessed for all PAC residents at the start and 
end of care, and that at least one functional goal is established.
    The functional assessment items included in the proposed functional 
status quality measure were originally developed and tested as part of 
the Post-Acute Care Payment Reform Demonstration version of the 
Continuity Assessment Record and Evaluation (CARE) Item Set, which was 
designed to standardize the assessment of a person's status, including 
functional status, across acute and post-acute settings (HHAs, SNFs, 
IRFs, and LTCHs). The functional status items on the CARE Item Set are 
daily activities that clinicians typically assess at the time of 
admission and/or discharge to determine patient or resident needs, 
evaluate patient or resident progress, and prepare patients, residents, 
and their families for a transition to home or to another setting. The 
development of the CARE Item Set and a description and rationale for 
each item is described in a report entitled ``The Development and 
Testing of the Continuity Assessment Record and Evaluation (CARE) Item 
Set: Final Report on the Development of the CARE Item Set:

[[Page 35350]]

Volume 1 of 3.'' \153\ Reliability and validity testing were conducted 
as part of CMS's Post-Acute Care Payment Reform Demonstration (PAC-
PRD), and we concluded that the functional status items have acceptable 
reliability and validity. Testing for the functional assessment items 
concluded that the items were able to evaluate all patients on basic 
self-care and mobility activities, regardless of functional level or 
PAC setting. A description of the testing methodology and results are 
available in several reports, including the report entitled ``The 
Development and Testing of the Continuity Assessment Record And 
Evaluation (CARE) Item Set: Final Report On Reliability Testing: Volume 
2 of 3'' \154\ and the report entitled ``The Development and Testing of 
The Continuity Assessment Record And Evaluation (CARE) Item Set: Final 
Report on Care Item Set and Current Assessment Comparisons: Volume 3 of 
3.'' \155\ These reports are available on our Post-Acute Care Quality 
Initiatives Web page at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
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    \153\ Barbara Gage et al., ``The Development and Testing of the 
Continuity Assessment Record and Evaluation (CARE) Item Set: Final 
Report on the Development of the CARE Item Set'' (RTI International, 
2012).
    \154\ Ibid.
    \155\ Ibid.
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    Additional testing of these functional assessment items was 
conducted in a small field test occurring in 2016-2017, capturing data 
from 12 HHAs. Preliminary data results yielded moderate to substantial 
reliability for the self-care and mobility data items. More information 
about testing design and results can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/OASIS-Data-Sets.html. The functional status 
quality measure we are proposing to adopt beginning with the CY 2020 HH 
QRP is a process quality measure that is an application of the NQF-
endorsed quality measure, the Percent of Long-Term Care Hospital 
Patients with an Admission and Discharge Functional Assessment and a 
Care Plan that Addresses Function (NQF #2631). This quality measure 
reports the percent of patients with both an admission and a discharge 
functional assessment and a functional treatment goal.
    This process measure requires the collection of admission and 
discharge functional status data by clinicians using standardized 
patient assessment data elements, which assess specific functional 
activities, such as self-care and mobility activities. The self-care 
and mobility function activities are coded using a 6-level rating scale 
that indicates the resident's level of independence with the activity 
at both admission and discharge. A higher score indicates more 
independence. These functional assessment data elements will be 
collected at Start or Resumption of Care (SOC/ROC) and discharge.
    For this quality measure, there must be documentation at the time 
of admission (SOC) that at least one activity performance (function) 
goal is recorded for at least one of the standardized self-care or 
mobility function items using the 6-level rating scale. This indicates 
that an activity goal(s) has been established. Following this initial 
assessment, the clinical best practice would be to ensure that the 
patient's care plan reflected and included a plan to achieve such 
activity goal(s). At the time of discharge, goal setting and 
establishment of a care plan to achieve the goal, is reassessed using 
the same 6-level rating scale, allowing for the ability to evaluate 
success in achieving the patient's activity performance goals.
    To the extent that a patient has an unplanned discharge, for 
example, transfer to an acute care facility, the collection of 
discharge functional status data may not be feasible. Therefore, for 
patients with unplanned discharges, admission functional status data 
and at least one treatment goal must be reported, but discharge 
functional status data are not required to be reported.
c. Stakeholder Feedback
    Our measures contractor convened a TEP on October 17, and October 
18, 2016. The TEP was composed of a diverse group of stakeholders with 
HH, PAC, and functional assessment expertise. The panel provided input 
on the technical specifications of this proposed measure, including the 
feasibility of implementing the measure, as well as the overall measure 
of reliability and validity. The TEP additionally provided feedback on 
the clinical assessment items used to calculate the measure. The TEP 
reviewed the measure ``Percent of Long-Term Care Patients with an 
Admission and Discharge Functional Assessment and a Care Plan That 
Addresses Function (NQF 2631)'' for potential application to the home 
health setting. Overall they were supportive of a functional process 
measure, noting it could have the positive effect of focusing clinician 
attention on functional status and goals. A summary of the TEP 
proceedings is available on the PAC Quality Initiatives Downloads and 
Videos Web page at https://www.cms.gov/medicare/quality-initiatives-
patient-assessment-instruments/post-acute-care-quality-initiatives/
impact-act-of-2014/impact-act-downloads-and-videos.html.
    We also solicited stakeholder feedback on the development of this 
measure through a public comment period held from November 4, 2016 
through December 5, 2016. Several stakeholders and organizations 
supported this measure for implementation and for measure 
standardization. Some commenters also provided feedback on the 
standardized patient assessment data elements used to calculate the 
proposed quality measure. Commenters offered suggestions, including 
providing education regarding the difference in measure scales for the 
standardized items relative to current OASIS functional items, and 
guidance on the type of clinical staff input needed to appropriately 
complete new functional assessment items. Commenters also addressed the 
feasibility of collecting data for the individual standardized self-
care and mobility items in the home health setting. Finally, commenters 
noted the importance of appropriate goal setting when functional 
improvement for a patient may not be feasible. The public comment 
summary report for the proposed measure is available on the CMS Web 
site at https://www.cms.gov/medicare/quality-initiatives-patient-
assessment-instruments/post-acute-care-quality-initiatives/impact-act-
of-2014/impact-act-downloads-and-videos.html.
    The NQF-convened MAP met on December 14 and 15, 2016, and provided 
input on the use of this proposed measure in the HH QRP. The MAP 
recommended ``conditional support for rulemaking'' for this measure. 
MAP members noted the measure would drive care coordination and improve 
transitions by encouraging the use of standardized functional 
assessment items across PAC settings, but recommended submission to the 
NQF for endorsement to include the home health setting. More 
information about the MAP's recommendations for this measure is 
available at http://www.qualityforum.org/Publications/2017/02/MAP_2017_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx.
    We reviewed the NQF's consensus endorsed measures and were unable 
to identify any home health measures that address functional 
assessment, and treatment goals that address function.

[[Page 35351]]

There are five functional measures in home health that assess 
functional activities: (1) Improvement in Ambulation/Locomotion (NQF 
#0167); (2) Improvement in Bathing (NQF #0174); (3) Improvement in Bed 
Transfer (NQF #0175); (4) Improvement in Management of Oral Medications 
(NQF # 0176); and (5) Improvement in Pain Interfering with Activity 
(NQF #0177). Our review determined that these setting-specific measures 
are not appropriate to meet the specified IMPACT Act domain as they do 
not include standardized items or are not included for various other 
PAC populations. Specifically:
     The items used to collect data for the current home health 
measures are less specific, leading to broader measure results, whereas 
the standardized patient assessment data items used for the proposed 
measure assess core activities such as rolling in bed, walking a 
specified distance, or wheelchair capability.
     The item coding responses are more detailed when compared 
to the non-standardized OASIS item responses, allowing for more 
granular data for the measure.
     The proposed functional measure will capture a patient's 
discharge goal at admission into home health; this detail is not 
captured in the existing endorsed HH function measures.
    Therefore, based on the evidence discussed above, we are proposing 
to adopt the quality measure entitled, Application of Percent of Long-
Term Care Hospital Patients with an Admission and Discharge Functional 
Assessment and a Care Plan That Addresses Function (NQF #2631), for the 
HH QRP beginning with the CY 2020 HH QRP. We plan to submit the 
proposed measure to the NQF for endorsement consideration as soon as is 
feasible.
    For technical information about this proposed measure, including 
information about the measure calculation and the standardized patient 
assessment data elements used to calculate this measure, we refer 
readers to the document titled, Proposed Measure Specifications and 
Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
d. Data Collection
    For purposes of assessment data collection, we propose to add new 
functional status items to the OASIS, to be collected at SOC/ROC and 
discharge. These items would assess specific self-care and mobility 
activities, and would be based on functional items included in the PAC-
PRD version of the CARE Item Set. More information pertaining to item 
testing is available on our Post-Acute Care Quality Initiatives Web 
page at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/CARE-Item-Set-and-B-CARE.html.
    To allow HHAs to fulfill the requirements of the Home Health Agency 
Conditions of Participation (HHA CoPs) (82 FR 4504), we are proposing 
to add a subset of the functional assessment items to the OASIS, with 
collection of these items at Follow-Up (FU). The collection of these 
assessment items at FU by HHAs will allow them to fulfill the 
requirements outlined in the HHA CoPs that suggest that the collection 
of a patient's current health, including functional status, be 
collected on the comprehensive assessment.
    These new functional status items are standardized across PAC 
settings and support the proposed standardized measure. They are 
organized into two functional domains: Self-Care and Mobility. Each 
domain includes dimensions of these functional constructs that are 
relevant for home health patients. The proposed function items that we 
would add to the OASIS for purposes of the calculation of this proposed 
quality measure do not duplicate existing items currently collected in 
that assessment instrument for other purposes. The current OASIS 
function items evaluate current ability, whereas the proposed 
functional items would evaluate an individual's usual performance at 
the time of admission and at the time of discharge for goal setting 
purposes. Additionally, there are several key differences between the 
existing and new proposed function items that may result in variation 
in the patient assessment results including: (1) The data collection 
and associated data collection instructions; (2) the rating scales used 
to score a resident's level of independence; and (3) the item 
definitions. A description of these differences is provided with the 
measure specifications available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Because of the differences between the current function assessment 
items (OASIS C-2) and the proposed function assessment items that we 
would collect for purposes of calculating the proposed measure, we 
would require that HHAs submit data on both sets of items. Data 
collection for the new proposed function items do not substitute for 
the data collection under the current OASIS ADL and IADL items. 
Although providers will collect on the proposed function assessment 
items as well as the current assessment items, for reasons previously 
described, we believe these items are not duplicative. However, we 
request comment on opportunities to streamline reporting to avoid 
duplication and minimize burden.
    We are proposing that data for the proposed quality measure would 
be collected through the OASIS, which HHAs currently submit through the 
QIES ASAP system. We refer readers to section V.F.2 of this proposed 
rule for more information on the proposed data collection and 
submission timeline for this proposed quality measure. If this measure 
is finalized, we intend to provide initial confidential feedback to 
home health agencies, prior to the public reporting of this measure.
    We invite public comment on our proposal to adopt the measure, 
Application of Percent of Long-Term Care Hospital Patients with an 
Admission and Discharge Functional Assessment and a Care Plan That 
Addresses Function (NQF #2631).
3. Proposal To Address the IMPACT Act Domain of ``Incidence of Major 
Falls'' Measure: Percent of Residents Experiencing One or More Falls 
With Major Injury
a. Measure Background
    Sections 1899B(c)(1)(D) of the Act requires that no later than the 
specified application date (which under section 1899B(a)(1)(E)(i)(IV) 
is January 1, 2019 for HHAs, and October 1, 2016 for SNFs, IRFs and 
LTCHs), the Secretary specify a measure to address the domain of 
incidence of major falls, including falls with major injury. We propose 
to adopt the measure, Application of Percent of Residents Experiencing 
One or More Falls with Major Injury (NQF #0674), for which we would 
begin to collect data on January 1, 2019 for the CY 2020 HH QRP to meet 
this requirement. This proposed outcome measure reports the percentage 
of residents who have experienced falls with major injury during 
episodes ending in a 3-month period.
b. Measure Importance
    Falls affect an estimated 6 to 12 million older adults each year 
and are the leading cause of both fatal injury

[[Page 35352]]

and nonfatal hospital admissions.\156\ \157\ Within the home health 
population, the risk of falling is significant as approximately one 
third of individuals over the age of 65 experienced at least one fall 
annually.\158\ Major fall-related injuries among older community-
dwelling adults are a growing health concern within the United 
States159 160 because they can have high medical and cost 
implications for the Medicare community.\161\ In 2013, the direct 
medical cost for falls in older adults was $34 billion \162\ and is 
projected to increase to over $101 billion by 2030 due to the aging 
population.\163\
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    \156\ Bohl, A. A., Phelan, E. A., Fishman, P. A., & Harris, J. 
R. (2012). How are the costs of care for medical falls distributed? 
The costs of medical falls by component of cost, timing, and injury 
severity. The Gerontologist, 52(5): 664-675.
    \157\ National Council on Aging (2015). Falls Prevention Fact 
Sheet. Retrieved from https://www.ncoa.org/wp-content/uploads/Fact-Sheet_Falls-Prevention.pdf.
    \158\ Avin G., K., Hanke A., T., Kirk-Sanche, N., McDonough M., 
C., Shubert E., T., Hardage, J., & Hartley, G. (2015). Management of 
Falls in Community-Dwelling Older Adults: Clinical Guidance 
Statement From the Academy of Geriatric Physical Therapy of the 
American Physical Therapy Association. Physical Therapy, 95(6), 815-
834. doi:10.2522/ptj.20140415.
    \159\ Hester, A. L. & Wei, F. (2013). Falls in the community: 
state of the science. Clinical Interventions in Aging, 8:675-679.
    \160\ Orces, C. H. & Alamgir, H. (2014). Trends in fall-related 
injuries among older adults treated in emergency departments in the 
USA. Injury Prevention, 20: 421-423.
    \161\ Liu, S. W., Obermeyer, Z., Chang, Y., & Shankar, K. N. 
(2015). Frequency of ED revisits and death among older adults after 
a fall. American Journal of Emergency Medicine, 33(8), 1012-1018. 
doi:10.1016/j.ajem.2015.04.023.
    \162\ Centers for Disease Control and Prevention (2015b). 
Important facts about falls. http://www.cdc.gov/homeandrecreationalsafety/falls/adultfalls.html. Accessed April 19, 
2016.
    \163\ Houry, D., Florence, C. Bladwin, G., Stevens, J., & 
McClure, R. (2015). The CDC Injury Center's response to the growing 
public health problem of falls among older adults. American Journal 
of Lifestyle Medicine, 10(1), 74-77.
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    Evidence from various studies indicates that implementing effective 
fall prevention interventions and minimizing the impact of falls that 
do occur reduces overall costs, emergency department visits, hospital 
readmissions, and overall Medicare resource 
utilization.164 165 166 167 In the 2006 Home Assessments and 
Modification study, a home visit by an occupational therapist or home 
care worker to identify and mitigate potential home hazards and risky 
behavior, resulted in a 46 percent reduction in fall rates for those 
receiving the intervention compared to controls.\168\ Overall, patients 
participating in interventions experienced improved quality of life due 
to reduced morbidity, improved functional ability and mobility, reduced 
number of falls and injurious falls, and a decrease in the fear of 
falling. 169 170 Falls also represent a significant cost 
burden to Medicare. Each year, 2.8 million older people are treated in 
Emergency Departments for fall related injuries and over 800,000 
require hospitalization.\171\ Adjusted to 2015 dollars, nationally, 
direct medical costs for non-fatal fall related injuries in older 
adults were over $31.3 billion.\172\ Additional health care costs (in 
2010 dollars) can range from $3,500 for a fall without serious injury 
to $27,000 for a fall with a serious injury.\173\ Between 1988 and 
2005, fractures accounted for 84 percent of hospitalizations for fall-
related injuries among older adults.\174\ Researchers evaluated the 
cost of fall-related hospitalizations among older adults using the 2011 
Texas Hospital Inpatient Discharge Data and determined that the average 
cost for fall-related hip fractures was $61,715 for individuals 50 and 
older living in metropolitan areas and $55,366 for those living 
nonmetropolitan areas.\175\
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    \164\ Bamgbade, S., & Dearmon, V. (2016). Fall prevention for 
older adults receiving home healthcare. Home Healthcare Now, 34(2), 
68-75.
    \165\ Carande-Kulis, V., Stevens, J. A., Florence, C. S., 
Beattie, B. L., & Arias, I. (2015). A cost-benefit analysis of three 
older adult fall prevention interventions. Journal of Safety 
Research, 52, 65-70. doi:10.1016/j.jsr.2014.12.007.
    \166\ Cohen, A. M., Miller, J., Shi, X., Sandhu, J., & Lipsitz, 
A. (2015). Prevention program lowered the risk of falls and 
decreased claims for long-term care services among elder 
participants. Health Affairs, 34(6), 971-977.
    \167\ Howland, J., Shankar, K. N., Peterson, E. W., & Taylor, A. 
A. (2015). Savings in acute care costs if all older adults treated 
for fall-related injuries completed matter of balance. Injury 
Epidemiology, 2(25), 1-7.
    \168\ Pighills AC, Torgerson DJ, Sheldon TA, Drummond AE, Bland 
JM. Environmental assessment and modification to prevent falls in 
older people. Journal of the American Geriatrics Society. 
2011;59(1):26-33.
    \169\ Chase, C. A., Mann, K., Wasek, S., & Arbesman, M. (2012). 
Systematic review of the effect of home modification and fall 
prevention programs on falls and the performance of community-
dwelling older adults. American Journal of Occupational Therapy, 
66(3), 284-291.
    \170\ Patil, R., Uusi-Rasi, K., Tokola, K., Karinkanta, S., 
Kannus, P., & Sievanen, H. (2015). Effects of a Multimodal Exercise 
Program on Physical Function, Falls, and Injuries in Older Women: A 
2-Year Community-Based, Randomized Controlled Trial. Journal of the 
American Geriatrics Society, 63(7), 1306-1313.
    \171\ Centers for Disease Control and Prevention, National 
Center for Injury Prevention and Control. Web-based Injury 
Statistics Query and Reporting System (WISQARS) [online]. Accessed 
August 5, 2016.
    \172\ Burns ER, Stevens JA, Lee R. The direct costs of fatal and 
non-fatal falls among older adults--United States. J Safety Res 
2016;58:99-103.
    \173\ Wu S, Keeler EB, Rubenstein LZ, Maglione MA, Shekelle PG. 
A cost-effectiveness analysis of a proposed national falls 
prevention program. Clin Geriatr Med. 2010;26(4): 751-66.
    \174\ Orces, C. H. & Alamgir, H. (2014). Trends in fall-related 
injuries among older adults treated in emergency departments in the 
USA. Injury Prevention, 20: 421-423.
    \175\ Towne, S. D., Ory, M. G., & Smith, M. L. (2014). Cost of 
fall-related hospitalizations among older adults: environmental 
comparisons from the 2011 Texas hospital inpatient discharge data. 
Population Health Management, 17(6), 351-356.
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    To meet the IMPACT Act provision requiring the development of a 
standardized quality measure for the domain of Incidence of Major Falls 
(sections 1899B(c)(1)(D) of the Act), we developed the proposed 
standardized measure, The Percent of Residents Experiencing One or More 
Falls with Major Injury (Long Stay) (NQF #0674). This quality measure 
is NQF-endorsed and has been successfully implemented in the Nursing 
Home Quality Initiative for nursing facility long-stay residents since 
2011, demonstrating the measure is feasible, appropriate for assessing 
PAC quality of care, and could be used as a platform for standardized 
quality measure development. This quality measure is standardized 
across PAC settings and contains items that are collected uniformly in 
each setting's assessment instruments (that is, MDS, IRF-PAI, and 
LCDS). Further, an application of the quality measure was adopted for 
use in the LTCH QRP in the FY 2014 IPPS/LTCH PPS final rule (78 FR 
50874 through 50877), revised in the FY 2015 IPPS/LTCH PPS final rule 
(79 FR 50290), and adopted to fulfill IMPACT Act requirements in the FY 
2016 IPPS/LTCH PPS final rule (80 FR 49736 through 49739). Data 
collection began in April 1, 2016 for LTCHs, and October 1, 2016 for 
SNFs and IRFs.
    More information on the NQF-endorsed quality measure, the Percent 
of Residents Experiencing One or More Falls with Major Injury (Long 
Stay) (NQF #0674) is available at http://www.qualityforum.org/QPS/0674.
c. Stakeholder Feedback
    A TEP convened by our measure development contractor provided input 
on the technical specifications of an application of the quality 
measure, the Percent of Residents Experiencing One or More Falls with 
Major Injury (Long Stay) (NQF #0674), including the feasibility of 
implementing the measure across PAC settings. The TEP was supportive of 
the implementation of this measure across PAC settings and was also 
supportive of our efforts to standardize this measure for cross-setting 
development. More information about this TEP can be found at https://
www.cms.gov/medicare/quality-initiatives-patient-assessment-
instruments/post-acute-care-quality-initiatives/impact-act-of-2014/
impact-act-downloads-and-videos.html.

[[Page 35353]]

    In addition, we solicited public comment on this measure from 
September 19, 2016 through October 14, 2016. Overall, commenters were 
generally supportive of the measure, but raised concerns about the 
attribution given that home health clinicians are not present in the 
home at all times and recommended risk-adjusting the measure. The 
summary of this public comment period can be found at https://
www.cms.gov/medicare/quality-initiatives-patient-assessment-
instruments/post-acute-care-quality-initiatives/impact-act-of-2014/
impact-act-downloads-and-videos.html.
    Finally, we presented this measure to the NQF-convened MAP on 
December 14, 2016. The MAP conditionally supported the use of an 
application of the quality measure, the Percent of Residents 
Experiencing One or More Falls with Major Injury (Long Stay) (NQF 
#0674) in the HH QRP as a cross-setting quality measure. The MAP 
highlighted the clinical significance of falls with major injury, while 
noting potential difficulties in collecting falls data and more limited 
actionability in the HH setting. The MAP suggested that CMS explore 
stratification of measure rates by referral origin when public 
reporting. More information about the MAP's recommendations for this 
measure is available at http://www.qualityforum.org/Publications/2017/02/MAP_2017_Considerations_for_Implementing_Measures_in_Federal_Programs_-_PAC-LTC.aspx. We are inviting public comment on the stratification of 
the proposed measure, specifically on the measure rates for public 
reporting. The quality measure, the Percent of Residents Experiencing 
One or More Falls with Major Injury (Long Stay) (NQF #0674) is not 
currently endorsed for the HH setting. We reviewed the NQF's consensus 
endorsed measures and were unable to identify any NQF-endorsed cross-
setting quality measures for that setting that are focused on falls 
with major injury. We found one falls-related measure in home health 
titled, Multifactor Fall Risk Assessment Conducted for All Patients Who 
Can Ambulate (NQF #0537).
    We are also aware of one NQF-endorsed measure, Falls with Injury 
(NQF #0202), which is a measure designed for adult acute inpatient and 
rehabilitation patients capturing ``all documented patient falls with 
an injury level of minor or greater on eligible unit types in a 
calendar quarter, reported as injury falls per 100 days.'' \176\ After 
careful review, we have determined that these measures are not 
appropriate to meet the IMPACT Act domain of incidence of major falls. 
Specifically:
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    \176\ American Nurses Association (2014, April 9). Falls with 
injury. Retrieved from http://www.qualityforum.org/QPS/0202.
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     NQF #0202 includes minor injuries in the numerator 
definition. Including all falls in an outcome measure could result in 
providers limiting activity for individuals at higher risk for falls.
     NQF #0537 is a process-based measure of HHAs' efforts to 
assess the risk for any fall, but not actual falls.
     Neither measure is standardized across PAC settings.
    We are unaware of any other cross-setting quality measures for 
falls with major injury that have been endorsed or adopted by another 
consensus organization for the HH setting. Therefore, based on the 
evidence discussed above, we are proposing to adopt the quality measure 
entitled, An Application of the Measure Percent of Residents 
Experiencing One or More Falls with Major Injury (Long Stay) (NQF 
#0674), for the HH QRP beginning with the CY 2020 HH QRP. We plan to 
submit the proposed measure to the NQF for endorsement consideration as 
soon as it is feasible.
d. Data Collection
    For purposes of assessment data collection, we propose to add two 
new falls-related items to the OASIS. The proposed falls with major 
injury item used to calculate the proposed quality measure does not 
duplicate existing items currently collected in the OASIS. We propose 
to add two standardized items to the OASIS for collection at End of 
Care (EOC), which comprises the Discharge from Agency, Death at Home, 
and Transfer to an Inpatient Facility time points: J1800 and J1900. The 
first item (J1800) is a gateway item that asks whether the patient has 
experienced any falls since admission/resumption of care (prior 
assessment). If the answer to J1800 is yes, the next item (J1900) asks 
for the number of falls with: (a) No injury, (b) injury (except major), 
and (c) major injury. The measure is calculated using data reported for 
J1900C (number of falls with major injury). This measure would be 
calculated at the time of discharge (see Section V.F.3 of this proposed 
rule). For technical information about this proposed measure, including 
information pertaining to measure calculation and the standardized 
patient assessment data element used to calculate this measure, we 
refer readers to the document titled, Proposed Measure Specifications 
and Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    We are proposing that data for the proposed quality measure would 
be collected through the OASIS, which HHAs currently submit through the 
QIES ASAP system. We refer readers to section V.I.4 of this proposed 
rule for more information on the proposed data collection and 
submission timeline for this proposed quality measure.
    We are inviting public comments on our proposal to adopt an 
application of the quality measure, the Percent of Residents 
Experiencing One or More Falls with Major Injury (Long Stay) (NQF 
#0674) for the CY 2020 HH QRP.

G. HH QRP Quality Measures and Measure Concepts Under Consideration for 
Future Years

    We are inviting public comment on the importance, relevance, 
appropriateness, and applicability of each of the quality measures 
listed in Table 48 for use in future years in the HH QRP.

 Table 48--HH QRP Quality Measures Under Consideration for Future Years
------------------------------------------------------------------------
                                 Functional status, cognitive function,
      IMPACT Act domain          and changes in function and cognitive
                                                function
------------------------------------------------------------------------
Measures.....................  A. Application of NQF #2633--Change in
                                Self-Care Score for Medical
                                Rehabilitation Patients.
                               B. Application of NQF #2634--Change in
                                Mobility Score for Medical
                                Rehabilitation Patients.
                               C. Application of NQF #2635--Discharge
                                Self-Care Score for Medical
                                Rehabilitation Patients.
                               D. Application of NQF #2636--Discharge
                                Mobility Score for Medical
                                Rehabilitation Patients.
------------------------------------------------------------------------


[[Page 35354]]

    We are considering four measures that would assess a change in 
functional outcomes such as self-care and mobility across a HH episode. 
These measures would be standardized to measures finalized in other PAC 
quality reporting programs, such as the IRF QRP. We invite feedback on 
the importance, relevance, appropriateness, and applicability of these 
measure constructs.
    Based on input from stakeholders, we have identified additional 
concept areas for potential future measure development for the HH QRP. 
These include claims-based within stay potentially preventable 
hospitalization measures. The potentially preventable within-stay 
hospitalization measures would look at the percentage of HH episodes in 
which patients were admitted to an acute care hospital or seen in an 
emergency department for a potentially preventable condition during an 
HH episode. We invite feedback on the importance, relevance, 
appropriateness, and applicability of these measure constructs.
    In alignment with the requirements of the IMPACT Act to develop 
quality measures and standardize data for comparative purposes, we 
believe that evaluating outcomes across the post-acute settings using 
standardized data is an important priority. Therefore, in addition to 
proposing a process-based measure for the domain of ``Functional 
status, cognitive function, and changes in function and cognitive 
function'', included in this year's proposed rule, we also intend to 
develop outcomes-based quality measures, including functional status 
and other quality outcome measures to further satisfy this domain.
1. IMPACT Act Implementation Update
    As a result of the input and suggestions provided by technical 
experts at the TEPs held by our measure developer, and through public 
comment, we are engaging in additional development work for two 
measures that would satisfy 1899B(c)(1)(E) of the Act, including 
performing additional testing. We intend to specify these measures 
under section 1899B(c)(1)(E) of the Act no later than January 1, 2019 
and we intend to propose to adopt them for the CY 2021 HH QRP, with 
data collection beginning on or about January 1, 2020.

H. Proposed Standardized Patient Assessment Data

1. Proposed Standardized Patient Assessment Data Reporting for the CY 
2019 HH QRP
    Section 1895(b)(3)(B)(v)(IV)(bb) of the Act requires that for 
calendar years beginning on or after January 1, 2019, HHAs submit to 
the Secretary standardized patient assessment data required under 
section 1899B(b)(1) of the Act.
    As we describe in more detail above, we are proposing that the 
current pressure ulcer measure, Application of Percent of Residents or 
Patients with Pressure Ulcers That Are New or Worsened (Short Stay) 
(NQF #0678), be replaced with the proposed pressure ulcer measure, 
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, 
beginning with the CY 2020 HH QRP. The current pressure ulcer measure 
will remain in the HH QRP until that time. Accordingly, for the 
requirement that HHAs report standardized patient assessment data for 
the CY 2019 HH QRP, we are proposing that the data elements used to 
calculate that measure meet the definition of standardized patient 
assessment data for medical conditions and co-morbidities under section 
1899B(b)(1)(B)(iv) of the Act, and that the successful reporting of 
that data under section 1895(b)(3)(b)(v)(IV)(aa) of the Act for the 
beginning of the HH episode (for example, HH start of care/resumption 
of care), as well as the end of the HH episode (discharges) occurring 
during the first two quarters of CY 2018 would also satisfy the 
requirement to report standardized patient assessment data beginning 
with the CY 2019 HH QRP.
    The collection of assessment data pertaining to skin integrity, 
specifically pressure related wounds, is important for multiple 
reasons. Clinical decision making, care planning, and quality 
improvement all depend on reliable assessment data collection. Pressure 
related wounds represent poor outcomes, are a serious medical condition 
that can result in death and disability, are debilitating and painful, 
and are often avoidable. 177 178 179 180 181 182 Pressure 
related wounds are considered healthcare acquired conditions.
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    \177\ Casey, G. (2013). ``Pressure ulcers reflect quality of 
nursing care.'' Nurs N Z 19(10): 20-24.
    \178\ Gorzoni, M.L. and S.L. Pires (2011). ``Deaths in nursing 
homes.'' Rev Assoc Med Bras 57(3): 327-331.
    \179\ Thomas, J.M., et al. (2013). ``Systematic review: health-
related characteristics of elderly hospitalized adults and nursing 
home residents associated with short-term mortality.'' J Am Geriatr 
Soc 61(6): 902-911.
    \180\ White-Chu, E.F., et al. (2011). ``Pressure ulcers in long-
term care.'' Clin Geriatr Med 27(2): 241-258.
    \181\ Bates-Jensen BM. Quality indicators for prevention and 
management of pressure ulcers in vulnerable elders. Ann Int Med. 
2001;135 (8 Part 2), 744-51.
    \182\ Bennet, G, Dealy, C Posnett, J (2004). The cost of 
pressure ulcers in the UK, Age and Aging, 33(3):230-235.
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    As we note above, the data elements needed to calculate the current 
pressure ulcer measure are already included on the OASIS data set and 
reported by HHAs, and exhibit validity and reliability for use across 
PAC providers. Item reliability for these data elements was also tested 
for the nursing home setting during implementation of MDS 3.0. Testing 
results are from the RAND Development and Validation of MDS 3.0 
project.\183\ The RAND pilot test of the MDS 3.0 data elements showed 
good reliability and are applicable to the OASIS because the data 
elements tested are the same as those used in the OASIS Data Set. 
Across the pressure ulcer data elements, the average gold-standard 
nurse to gold-standard nurse kappa statistic was 0.905. The average 
gold-standard nurse to facility-nurse kappa statistic was 0.937. Data 
elements used to risk adjust this quality measure were also tested 
under this same pilot test, and the gold-standard to gold-standard 
kappa statistic, or percent agreement (where kappa statistic not 
available), ranged from 0.91 to 0.99 for these data elements. These 
kappa scores indicate ``almost perfect'' agreement using the Landis and 
Koch standard for strength of agreement.\184\
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    \183\ Saliba, D., & Buchanan, J. (2008, April). Development and 
validation of a revised nursing home assessment tool: MDS 3.0. 
Contract No. 500-00-0027/Task Order #2. Santa Monica, CA: Rand 
Corporation. Retrieved from http://www.cms.hhs.gov/NursingHomeQualityInits/Downloads/MDS30FinalReport.pdf.
    \184\ Landis, R., & Koch, G. (1977, March). The measurement of 
observer agreement for categorical data. Biometrics 33(1), 159-174.
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    The data elements used to calculate the current pressure ulcer 
measure received public comment on several occasions, including when 
that measure was proposed in the CY 2016 HH PPS (80 FR 68623). Further, 
they were discussed in the past by TEPs held by our measure development 
contractor on June 13 and November 15, 2013, and recently by a TEP on 
July 18, 2016. TEP members supported the measure and its cross-setting 
use in PAC. The report, Technical Expert Panel Summary Report: 
Refinement of the Percent of Patients or Residents with Pressure Ulcers 
that are New or Worsened (Short-Stay) (NQF #0678) Quality Measure for 
Skilled Nursing Facilities (SNFs), Inpatient Rehabilitation Facilities 
(HHAs), Long-Term Care Hospitals

[[Page 35355]]

(LTCHs), and Home Health Agencies (HHAs), is available at and https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We are inviting public comment on this proposal.
2. Proposed Standardized Patient Assessment Data Reporting Beginning 
With the CY 2020 HH QRP
    We describe below our proposals for the reporting of standardized 
patient assessment data by HHAs beginning with the CY 2020 HH QRP. 
LTCHs, IRFs, and SNFs are also required to report standardized patient 
assessment data through their applicable PAC assessment instruments, 
and they do so by responding to identical assessment questions 
developed for their respective settings using an identical set of 
response options (which incorporate an identical set of definitions and 
standards). HHAs would be required to report these data at admission 
(SOC/ROC) and discharge beginning on January 1, 2019, with the 
exception of three data elements (Brief Interview of Mental Status 
(BIMS), Hearing, and Vision) that will be required at SOC/ROC only, as 
described below. The BIMS, Hearing and Vision data elements would be 
assessed at SOC/ROC only due to the relatively stable nature of the 
types of cognitive function, hearing impairment, and vision impairment, 
making it unlikely that these assessments would change between the 
start and end of the HHA episode of care. Assessment of the BIMS, 
Hearing, and Vision data elements at EOC would introduce additional 
burden without improving the quality or usefulness of the data, and is 
deemed unnecessary. Following the initial reporting year (which would 
be based on 6 months of data) for the CY 2020 HH QRP, subsequent years 
for the HH QRP would be based on a full calendar year of such data 
reporting.
    In selecting the data elements described below, we carefully 
weighed the balance of burden in assessment-based data collection and 
aimed to minimize additional burden through the utilization of existing 
data in the assessment instruments. We also note that the patient and 
resident assessment instruments are considered part of the medical 
record and sought the inclusion of data elements relevant to patient 
care.
    We also took into consideration the following factors for each data 
element: overall clinical relevance; ability to support clinical 
decisions, care planning, and interoperable exchange to facilitate care 
coordination during transitions in care; and the ability to capture 
medical complexity and risk factors that can inform both payment and 
quality. In addition, the data elements had to have strong scientific 
reliability and validity; be meaningful enough to inform longitudinal 
analysis by providers; had to have received general consensus agreement 
for its usability; and had to have the ability to collect such data 
once but support multiple uses. Further, to inform the final set of 
data elements for proposal, we took into account technical and clinical 
subject matter expert review, public comment, and consensus input in 
which such principles were applied.
3. Proposed Standardized Patient Assessment Data by Category
a. Functional Status Data
    We are proposing that the data elements that would be reported by 
HHAs to calculate the measure, Application of Percent of Long-Term Care 
Hospital Patients with an Admission and Discharge Functional Assessment 
and a Care Plan That Addresses Function (NQF #2631), as described in 
section V.F.2 would also meet the definition of standardized patient 
assessment data for functional status under section 1899B(b)(1)(B)(i) 
of the Act, and that the successful reporting of that data under 
section 1895(b)(3)(B)(v)(IV)(aa) of the Act would also satisfy the 
requirement to report standardized patient assessment data under 
section 1895(b)(3)(B)(v)(IV)(bb) of the Act. Details on the data used 
to calculate this measure is discussed in section V.F.2.
    To further satisfy the requirements under section 1899B(b)(1)(B)(i) 
of the Act and specifically our efforts to achieve standardized patient 
assessment data pertaining to functional status, such as mobility and 
self-care at admission to a PAC provider and before discharge from a 
PAC provider, we are also proposing to adopt the functional status data 
elements that specifically address mobility and self-care as provided 
in the Act. These data elements are also used to calculate the function 
outcome measures implemented and/or proposed for implementation in 
three other post-acute quality reporting programs to which the IMPACT 
Act applies (Application of NQF #2633--Change in Self-Care Score for 
Medical Rehabilitation Patients; Application of NQF #2634--Change in 
Mobility Score for Medical Rehabilitation Patients; Application of NQF 
#2635--Discharge Self-Care Score for Medical Rehabilitation Patients; 
and Application of NQF #2636--Discharge Mobility Score for Medical 
Rehabilitation Patients). To achieve standardization, we have 
implemented such data elements, or sub-sets of the items, into the 
other post-acute care patient/resident assessment instruments and we 
are proposing that they also meet the definition of standardized 
patient assessment data for functional status under section 
1899B(b)(1)(B)(i) of the Act, and that the successful reporting of such 
data under section 1895(b)(3)(B)(v)(IV)(aa) of the Act would also 
satisfy the requirement to report standardized patient assessment data 
under section 1895(b)(3)(B)(v)(IV)(bb) of the Act. These data elements 
currently are collected in the Section GG: Functional Abilities and 
Goals located in current versions of the MDS and the IRF-PAI assessment 
instruments.
    As previously described, these patient assessment data that assess 
for functional status are from the CARE Item Set. They were 
specifically developed for cross-setting application and are the result 
of consensus building and public input. Further, we received public 
comment and input. Their reliability and validity testing were 
conducted as part of CMS' Post-Acute Care Payment Reform Demonstration, 
and we concluded that the functional status items have acceptable 
reliability and validity. We refer the reader to section V.F.2 for a 
full description of the CARE Item Set and description of the testing 
methodology and results that are available in several reports. For more 
information about this quality measure and the data elements used to 
calculate it, we refer readers to the FY 2016 IPPS/LTCH PPS final rule 
(80 FR 49739 through 49747), the FY 2016 IRF PPS final rule (80 FR 
47100 through 47111), and the FY 2016 SNF PPS final rule (80 FR 46444 
through 46453).
    Therefore, we are proposing to adopt the functional status data 
elements that as for the CY 2020 HH QRP, HHAs would be required to 
report these data at SOC/ROC or discharge starting on January 1, 2019. 
This aligns with the required reporting timeframe for the CY 2020 HH 
QRP. Following the initial two quarters of reporting for the CY 2020 HH 
QRP, subsequent years for the HH QRP would be based on 12 months of 
data reporting beginning with July 1, 2019, through June 30, 2020 for 
the CY 2021 HH QRP.
    We seek comment on this proposal.

[[Page 35356]]

b. Cognitive Function and Mental Status Data
    Cognitive function and mental status in PAC patient and resident 
populations can be affected by a number of underlying conditions, 
including dementia, stroke, traumatic brain injury, side effects of 
medication, metabolic and/or endocrine imbalances, delirium, and 
depression.\185\ The assessment of cognitive function and mental status 
by PAC providers is important because of the high percentage of 
patients and residents with these conditions,\186\ and to improve 
quality of care. Symptoms of dementia may improve with pharmacotherapy, 
occupational therapy, or physical activity,187 188 189 and 
promising treatments for severe traumatic brain injury are currently 
being tested.\190\ For older patients and residents diagnosed with 
depression, treatment options to reduce symptoms and improve quality of 
life include antidepressant medication and 
psychotherapy,191 192 193 194 and targeted services, such as 
therapeutic recreation, exercise, and restorative nursing, to increase 
opportunities for psychosocial interaction.\195\
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    \185\ National Institute on Aging. (2014). Assessing Cognitive 
Impairment in Older Patients. A Quick Guide for Primary Care 
Physicians. Retrieved from https://www.nia.nih.gov/alzheimers/publication/assessing-cognitive-impairment-older-patients.
    \186\ Gage B., Morley M., Smith L., et al. (2012). Post-Acute 
Care Payment Reform Demonstration (Final report, Volume 4 of 4). 
Research Triangle Park, NC: RTI International.
    \187\ Casey D.A., Antimisiaris D., O'Brien J. (2010). Drugs for 
Alzheimer's Disease: Are They Effective? Pharmacology & 
Therapeutics, 35, 208-11.
    \188\ Graff M.J., Vernooij-Dassen M.J., Thijssen M., Dekker J., 
Hoefnagels W.H., Rikkert M.G.O. (2006). Community Based Occupational 
Therapy for Patients with Dementia and their Care Givers: Randomised 
Controlled Trial. BMJ, 333(7580): 1196.
    \189\ Bherer L., Erickson K.I., Liu-Ambrose T. (2013). A Review 
of the Effects of Physical Activity and Exercise on Cognitive and 
Brain Functions in Older Adults. Journal of Aging Research, 657508.
    \190\ Giacino J.T., Whyte J., Bagiella E., et al. (2012). 
Placebo-controlled trial of amantadine for severe traumatic brain 
injury. New England Journal of Medicine, 366(9), 819-826.
    \191\ Alexopoulos G.S., Katz I.R., Reynolds C.F. 3rd, Carpenter 
D., Docherty J.P., Ross R.W. (2001). Pharmacotherapy of depression 
in older patients: a summary of the expert consensus guidelines. 
Journal of Psychiatric Practice, 7(6), 361-376.
    \192\ Arean P.A., Cook B.L. (2002). Psychotherapy and combined 
psychotherapy/pharmacotherapy for late life depression. Biological 
Psychiatry, 52(3), 293-303.
    \193\ Hollon S.D., Jarrett R.B., Nierenberg A.A., Thase M.E., 
Trivedi M., Rush A.J. (2005). Psychotherapy and medication in the 
treatment of adult and geriatric depression: which monotherapy or 
combined treatment? Journal of Clinical Psychiatry, 66(4), 455-468.
    \194\ Wagenaar D., Colenda C.C., Kreft M., Sawade J., Gardiner 
J., Poverejan E. (2003). Treating depression in nursing homes: 
practice guidelines in the real world. J Am Osteopath Assoc. 
103(10), 465-469.
    \195\ Crespy S.D., Van Haitsma K., Kleban M., Hann C.J. Reducing 
Depressive Symptoms in Nursing Home Residents: Evaluation of the 
Pennsylvania Depression Collaborative Quality Improvement Program. J 
Healthc Qual. 2016. Vol. 38, No. 6, pp. e76-e88.
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    Accurate assessment of cognitive function and mental status of 
patients and residents in PAC would be expected to have a positive 
impact on the National Quality Strategy's domains of patient and family 
engagement, patient safety, care coordination, clinical process/
effectiveness, and efficient use of health care resources. For example, 
standardized assessment of cognitive function and mental status of 
patients and residents in PAC will support establishing a baseline for 
identifying changes in cognitive function and mental status (for 
example, delirium), anticipating the patient or resident's ability to 
understand and participate in treatments during a PAC stay, ensuring 
patient and resident safety (for example, risk of falls), and 
identifying appropriate support needs at the time of discharge or 
transfer. Standardized assessment data elements will enable or support 
clinical decision-making, early clinical intervention, as well as 
person-centered, high quality care through: Facilitating better care 
continuity and coordination; better data exchange and interoperability 
between settings; and longitudinal outcome analysis. Hence, reliable 
data elements assessing cognitive impairment and mental status are 
needed to initiate a care plan that can best manage a patient or 
resident's prognosis and reduce the possibility of adverse events.
i. Brief Interview for Mental Status (BIMS)
    We are proposing that the data elements that comprise the Brief 
Interview for Mental Status meet the definition of standardized patient 
assessment data for cognitive function and mental status under section 
1899B(b)(1)(B)(ii) of the Act. The proposed data elements consist of 
seven BIMS questions that result in a cognitive function score. For 
more information on the BIMS, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    The BIMS is a performance-based cognitive assessment that assesses 
repetition, recall with and without prompting, and temporal 
orientation. It was developed to be a brief screener to assess 
cognition, with a focus on learning and memory. Dementia and cognitive 
impairment are associated with long-term functional dependence and, 
consequently, poor quality of life, increased health care costs, and 
mortality.\196\ This makes assessment of mental status and early 
detection of cognitive decline or impairment critical in the PAC 
setting. The intensity of routine nursing care is higher for patients 
and residents with cognitive impairment than for those without, and 
dementia is a significant variable in predicting readmission after 
discharge to the community from PAC providers.\197\
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    \196\ Ag[uuml]ero-Torres, H., Fratiglioni, L., Guo, Z., 
Viitanen, M., von Strauss, E., & Winblad, B. (1998). ``Dementia is 
the major cause of functional dependence in the elderly: 3-year 
follow-up data from a population-based study.'' Am J of Public 
Health 88(10): 1452-1456.
    \197\ RTI International. Proposed Measure Specifications for 
Measures Proposed in the FY 2017 LTCH QRP NPRM. Research Triangle 
Park, NC. 2016.
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    The BIMS data elements are currently in use in two of the PAC 
assessments: The MDS 3.0 in SNFs and the IRF-PAI in IRFs. The BIMS was 
tested in the PAC PRD where it was found to have substantial to almost 
perfect agreement for inter-rater reliability (kappa range of 0.71 to 
0.91) when tested in all four PAC settings.\198\ Clinical and subject 
matter expert advisors working with our data element contractor agreed 
that the BIMS is feasible for use by PAC providers. Additionally, 
discussions during a TEP convened on April 6 and 7, 2016, demonstrated 
support for the BIMS. The Development and Maintenance of Post-Acute 
Care Cross-Setting Standardized Patient Assessment Data Technical 
Expert Panel Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
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    \198\ Gage B., Morley M., Smith L., et al. (2012). Post-Acute 
Care Payment Reform Demonstration (Final report, Volume 2 of 4). 
Research Triangle Park, NC: RTI International.
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    To solicit additional feedback on the BIMS, we requested public 
comment from August 12 to September 12, 2016. Many commenters expressed 
support for use of the BIMS, noting that it is reliable, feasible to 
use across settings, and will provide useful information about patients 
and residents. These comments noted that the data collected through the 
BIMS will provide a clearer picture of patient or resident complexity, 
help with the care planning

[[Page 35357]]

process, and be useful during care transitions and when coordinating 
across providers. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing to adopt the BIMS for use in the HH 
QRP. We are proposing to add the data elements that comprise the BIMS 
to the OASIS, and that HHAs would be required to report these data at 
SOC/ROC between January 1, 2019 and June 30, 2019. Following the 
initial two quarters of reporting for the CY 2020 HH QRP, subsequent 
years for the HH QRP would be based on 12 months of such data reporting 
beginning with July 1, 2019 through June 30, 2020 for the CY 2021 HH 
QRP. The BIMS data elements would be assessed at SOC/ROC only due to 
the relatively stable nature of the types of cognitive function 
assessed by the BIMS, making it unlikely that a patient's score on this 
assessment would change between the start and end of care. Assessment 
at discharge would introduce additional burden without improving the 
quality or usefulness of the data, and we believe it is unnecessary.
    We are inviting public comment on these proposals.
ii. Confusion Assessment Method (CAM)
    We are proposing that the data elements that comprise the Confusion 
Assessment Method (CAM) meet the definition of standardized patient 
assessment data for cognitive function and mental status under section 
1899B(b)(1)(B)(ii) of the Act. The CAM is a six-question instrument 
that screens for overall cognitive impairment, as well as distinguishes 
delirium or reversible confusion from other types of cognitive 
impairment. For more information on the CAM, we refer readers to the 
document titled, Proposed Measure Specifications and Standardized Data 
Elements for CY 2018 HH QRP Notice of Proposed Rulemakings, available 
at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    The CAM was developed to identify the signs and symptoms of 
delirium. It results in a score that suggests whether the patient or 
resident should be assigned a diagnosis of delirium. Because patients 
and residents with multiple comorbidities receive services from PAC 
providers, it is important to assess delirium, as it is associated with 
a high mortality rate and prolonged duration of stay in hospitalized 
older adults with dementia.\199\ Assessing for signs and symptoms of 
delirium is clinically relevant for care planning by PAC providers.
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    \199\ Fick, D.M., Steis, M.R., Waller, J.L., & Inouye, S.K. 
(2013). ``Delirium superimposed on dementia is associated with 
prolonged length of stay and poor outcomes in hospitalized older 
adults.'' J of Hospital Med 8(9): 500-505.
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    The CAM is currently in use in two of the PAC assessments: The MDS 
3.0 in SNFs and the LCDS in LTCHs. The CAM was tested in the PAC PRD 
where it was found to have substantial agreement for inter-rater 
reliability for the ``Inattention and Disorganized Thinking'' questions 
(kappa range of 0.70 to 0.73); and moderate agreement for the ``Altered 
Level of Consciousness'' question (kappa of 0.58).\200\
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    \200\ Gage B., Morley M., Smith L., et al. (2012). Post-Acute 
Care Payment Reform Demonstration (Final report, Volume 2 of 4). 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the CAM is feasible for use by PAC 
providers, that it assesses key aspects of cognition, and that this 
information about patient or resident cognition would be clinically 
useful both within and across PAC provider types. The CAM was also 
supported by a TEP that discussed and rated candidate data elements 
during a meeting on April 6 and 7, 2016. The Development and 
Maintenance of Post-Acute Care Cross-Setting Standardized Patient 
Assessment Data Technical Expert Panel Summary Report is available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html. We requested public comment on 
the CAM from August 12 to September 12, 2016. Many commenters expressed 
support for use of the CAM, noting that it would provide important 
information for care planning and care coordination, and therefore, 
contribute to quality improvement. The commenters noted it is 
particularly helpful in distinguishing delirium and reversible 
confusion from other types of cognitive impairment. A full report of 
the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing to add the CAM data elements to the 
OASIS, and that HHAs would be required to report these data for the CY 
2020 HH QRP at SOC/ROC and discharge between January 1, 2019 and June 
30, 2019. Following the initial two quarters of reporting for the CY 
2020 HH QRP, subsequent years for the HH QRP would be based on 12 
months of such data reporting beginning with July 1, 2019 through June 
30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
iii. Behavioral Signs and Symptoms
    We are proposing that the Behavioral Signs and Symptoms data 
elements meet the definition of standardized patient assessment data 
for cognitive function and mental status under section 
1899B(b)(1)(B)(ii) of the Act. The proposed data elements consist of 
three Behavioral Signs and Symptoms questions and result in three 
scores that categorize patients as having or not having certain types 
of behavioral signs and symptoms. For more information on the 
Behavioral Signs and Symptoms data elements, we refer readers to the 
document titled, Proposed Measure Specifications and Standardized Data 
Elements for CY 2018 HH QRP Notice of Proposed Rulemaking, available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    The questions included in the Behavioral Signs and Symptoms group 
assess whether the patient or resident has exhibited any behavioral 
symptoms that may indicate cognitive impairment or other mental health 
issues during the assessment period, including physical, verbal, and 
other disruptive or dangerous behavioral symptoms, but excluding 
patient wandering. Such behaviors can indicate unrecognized needs and 
care preferences and are associated most commonly with dementia and 
other cognitive impairment, and less commonly with adverse drug events, 
mood disorders, and other conditions.\201\ Assessing behavioral 
disturbances can lead to early intervention, patient- and resident-
centered care planning, clinical decision support, and improved staff 
and patient or resident safety. Assessment and documentation of these 
behaviors can help inform care planning and patient transitions, and 
provide important information about resource use.
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    \201\ Desai A, Grossbert G. Recognition and management of 
behavioral disturbances in dementia. The Primary Care Companion to 
the Journal of Clinical Psychiatry. 2001; 3(3):93-109.
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    Data elements that capture behavioral symptoms are currently 
included in two

[[Page 35358]]

of the PAC assessments: The MDS 3.0 in SNFs and the OASIS-C2 in HHAs. 
In the MDS, each question includes four response options ranging from 
``behavior not exhibited'' (0) to behavior ``occurred daily'' (3). The 
OASIS-C2 includes some similar data elements which record the frequency 
of disruptive behaviors on a 6-point scale ranging from ``never'' (0) 
to ``at least daily'' (5). Data elements that mirror those used in the 
MDS and serve the same assessment purpose were tested in post-acute 
providers in the PAC PRD and found to be clinically relevant, 
meaningful for care planning, and feasible for use in each of the four 
PAC settings.\202\
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    \202\ Gage B., Morley M., Smith L., et al. (2012). Post-Acute 
Care Payment Reform Demonstration (Final report, Volume 2 of 4). 
Research Triangle Park, NC: RTI International.
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    The proposed data elements were supported by comments from the 
Standardized Patient Assessment Data TEP held by our data element 
contractor. The TEP identified patient and resident behaviors as an 
important consideration for resource intensity and care planning, and 
affirmed the importance of the standardized assessment of patient 
behaviors through data elements such as those in use in the MDS. The 
Development and Maintenance of Post-Acute Care Cross-Setting 
Standardized Patient Assessment Data Technical Expert Panel Summary 
Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Because the PAC PRD version of the Behavioral Signs and Symptoms 
data elements were previously tested across PAC providers, we solicited 
additional feedback on this version of the data elements by including 
these data elements in a call for public comment that was open from 
August 12 to September 12, 2016. Consistent with the TEP discussion on 
the importance of patient and resident behaviors, many commenters 
expressed support for use of the Behavioral Signs and Symptoms data 
elements, noting that they would provide useful information about 
patient and resident behavior at both admission and discharge, and 
contribute to care planning regarding the most appropriate treatment 
and resource use for the patient or resident. Public comment also 
supported the use of a highly similar MDS version of the data elements 
to provide continuity with existing assessment processes in SNFs. A 
full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing the MDS version of the Behavioral Signs 
and Symptoms data elements because they focus more closely on 
behavioral symptoms than the OASIS data elements, and include more 
detailed response categories than those used in the PAC PRD version, 
capturing more information about the frequency of behaviors. We are 
proposing that HHAs would be required to report these data for the CY 
2020 HH QRP at SOC/ROC and discharge between January 1, 2019 and June 
30, 2019. Following the initial two quarters of reporting for the CY 
2020 HH QRP, subsequent years for the HH QRP would be based on 12 
months of such data reporting beginning with July 1, 2019 through June 
30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
iv. Patient Health Questionnaire-2 (PHQ-2)
    We are proposing that the PHQ-2 data elements meet the definition 
of standardized patient assessment data for cognitive function and 
mental status under section 1899B(b)(1)(B)(ii) of the Act. The proposed 
data elements consist of the PHQ-2 two-item questionnaire that assesses 
the cardinal criteria for depression: depressed mood and anhedonia 
(inability to feel pleasure). For more information on the PHQ-2, we 
refer readers to the document titled, Proposed Measure Specifications 
and Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Depression is a common mental health condition that is often missed 
and under-recognized. Assessing depression helps PAC providers better 
understand the needs of their patients and residents by: Prompting 
further evaluation (that is, to establish a diagnosis of depression); 
elucidating the patient's or resident's ability to participate in 
therapies for conditions other than depression during their stay; and 
identifying appropriate ongoing treatment and support needs at the time 
of discharge. A PHQ-2 score beyond a predetermined threshold signals 
the need for additional clinical assessment to determine a depression 
diagnosis.
    The proposed data elements that comprise the PHQ-2 are currently 
used in the OASIS-C2 for HHAs and the MDS 3.0 for SNFs (as part of the 
PHQ-9). The PHQ-2 data elements were tested in the PAC PRD, where they 
were found to have almost perfect agreement for inter-rater reliability 
(kappa range of 0.84 to 0.91) when tested by all four PAC 
providers.\203\
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    \203\ Gage B., Smith L., Ross J. et al. (2012). The Development 
and Testing of the Continuity Assessment Record and Evaluation 
(CARE) Item Set (Final Report on Reliability Testing, Volume 2 of 
3). Research Triangle Park, NC: RTI International.
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    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the PHQ-2 is feasible for use in PAC, 
that it assesses key aspects of mental status, and that this 
information about patient or resident mood would be clinically useful 
both within and across PAC settings. We note that both the PHQ-9 and 
the PHQ-2 were supported by TEP members who discussed and rated 
candidate data elements during a meeting on April 6 and 7, 2016. They 
particularly noted that the brevity of the PHQ-2 made it feasible with 
low burden for both assessors and PAC patients or residents. The 
Development and Maintenance of Post-Acute Care Cross-Setting 
Standardized Patient Assessment Data Technical Expert Panel Summary 
Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    To solicit additional feedback on the PHQ-2, we requested public 
comment from August 12 to September 12, 2016. Many commenters provided 
feedback on using the PHQ-2 for the assessment of mood. Overall, 
commenters believed that collecting these data elements across PAC 
settings was appropriate, given the role that depression plays in well-
being. Several commenters expressed support for an approach that would 
use PHQ-2 as a gateway to the longer PHQ-9 and would maintain the 
reduced burden on most patients and residents, as well as test 
administrators, which is a benefit of the PHQ-2, while ensuring that 
the PHQ-9, which exhibits higher specificity,\204\ would be 
administered for patients and residents who showed signs and symptoms 
of depression on the PHQ-2. Specific

[[Page 35359]]

comments are described in a full report available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
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    \204\ Arroll B, Goodyear-Smith F, Crengle S, Gunn J, Kerse N, 
Fishman T, et al. Validation of PHQ-2 and PHQ-9 to screen for major 
depression in the primary care population. Annals of family 
medicine. 2010;8(4):348-53. doi: 10.1370/afm.1139 pmid:20644190; 
PubMed Central PMCID: PMC2906530.
---------------------------------------------------------------------------

    Therefore, we are proposing to adopt the PHQ-2 data elements for 
use in the HH QRP as standardized patient assessment data. As noted 
above in this section, the PHQ-2 is already included on the OASIS. HHAs 
would be required to report these data for the CY 2020 HH QRP at SOC/
ROC and discharge between January 1, 2019 and June 30, 2019. Following 
the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019 through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
c. Special Services, Treatments, and Interventions Data
    Special services, treatments, and interventions performed in PAC 
can have a major effect on an individual's health status, self-image, 
and quality of life. The assessment of these special services, 
treatments, and interventions in PAC is important to ensure the 
continuing appropriateness of care for the patients and residents 
receiving them, and to support care transitions from one PAC setting to 
another, an acute care hospital, or discharge. Accurate assessment of 
special services, treatments, and interventions of patients and 
residents served by PAC providers are expected to have a positive 
impact on the National Quality Strategy's domains of patient and family 
engagement, patient safety, care coordination, clinical process/
effectiveness, and efficient use of healthcare resources.
    For example, standardized assessment of special services, 
treatments, and interventions used in PAC can promote patient and 
resident safety through appropriate care planning (for example, 
mitigating risks such as infection or pulmonary embolism associated 
with central intravenous access), and identifying life-sustaining 
treatments that must be continued, such as mechanical ventilation, 
dialysis, suctioning, and chemotherapy, at the time of discharge or 
transfer. Standardized assessment of these data elements will enable or 
support: Clinical decision-making and early clinical intervention; 
person-centered, high quality care through, for example, facilitating 
better care continuity and coordination; better data exchange and 
interoperability between settings; and longitudinal outcome analysis. 
Hence, reliable data elements assessing special services, treatments, 
and interventions are needed to initiate a care plan that can improve, 
maintain, or best manage a patient or resident's condition and reduce 
the possibility of adverse events.
    We are proposing 15 special services, treatments, and interventions 
as presented below in this section grouped by cancer treatments, 
respiratory treatments, other treatments, and nutritional approaches. A 
TEP convened by our data element contractor provided input on the 15 
data elements for Special Services, Treatments, and Interventions. This 
TEP, held on January 5 and 6, 2017, opined that these data elements are 
appropriate for standardization because they would provide useful 
clinical information to inform care planning and care coordination. The 
TEP affirmed that assessment of these services and interventions is 
standard clinical practice, and that the collection of these data by 
means of a list and checkbox format would conform with common workflow 
for PAC providers. A full report of the TEP discussion is available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
i. Cancer Treatment: Chemotherapy (IV, Oral, Other)
    We are proposing that the Chemotherapy (IV, Oral, Other) data 
elements meet the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data elements consist of 
the principal Chemotherapy data element and three sub-elements: IV 
Chemotherapy, Oral Chemotherapy, and Other. For more information on the 
Chemotherapy (IV, Oral, Other) data elements, we refer readers to the 
document titled, https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Chemotherapy is a type of cancer treatment that uses drugs to 
destroy cancer cells. It is typically used when a patient has a 
malignancy (cancer), which is a serious, often life-threatening or 
life-limiting condition. Both intravenous (IV) and oral chemotherapy 
can have serious side effects, including nausea/vomiting, extreme 
fatigue, risk of infection due to a suppressed immune system, anemia, 
and an increased risk of bleeding due to low platelet counts. Oral 
chemotherapy can have as many side effects as IV chemotherapy, but can 
also be significantly more convenient and less resource-intensive to 
administer. Because of the toxicity of these agents, special care must 
be exercised in handling and transporting chemotherapy drugs. IV 
chemotherapy may be given by peripheral IV, but is more commonly given 
via an indwelling central line, which raises the risk of bloodstream 
infections. Given the significant burden of malignancy, the resource 
intensity of administering chemotherapy, and the side effects and 
potential complications of these highly-toxic medications, assessing 
the receipt of chemotherapy is important in the PAC setting for care 
planning and determining resource use.
    The need for chemotherapy predicts resource intensity, both because 
of the complexity of administering these potent, toxic drug 
combinations under specific protocols, and because of what the need for 
chemotherapy signals about the patient's underlying medical condition. 
Furthermore, the resource intensity of IV chemotherapy is higher than 
for oral chemotherapy, as the protocols for administration and the care 
of the central line (if present) require significant resources.
    The Chemotherapy (IV, Oral, Other) data elements consist of a 
principal data element and three sub-elements: IV chemotherapy, which 
is generally resource-intensive; oral chemotherapy, which is less 
invasive and generally less intensive with regard to administration 
protocols; and a third category provided to enable the capture of other 
less common chemotherapeutic approaches. This third category is 
potentially associated with higher risks and is more resource intensive 
due to delivery by other routes (for example, intraventricular or 
intrathecal).
    The principal Chemotherapy data element is currently in use in the 
MDS 3.0. One proposed sub-element, IV Chemotherapy, was tested in the 
PAC PRD and found feasible for use in each of the four PAC settings. We 
solicited public comment on IV Chemotherapy from August 12 to September 
12, 2016. Several commenters provided support for the data element and 
suggested it be included as standardized patient assessment data. 
Commenters stated that assessing the use of chemotherapy services is 
relevant to share across the care continuum to facilitate care 
coordination and care transitions and noted the validity of the data 
element.

[[Page 35360]]

Commenters also noted the importance of capturing all types of 
chemotherapy, regardless of route, and stated that collecting data only 
on patients and residents who received chemotherapy by IV would limit 
the usefulness of this standardized data element. A full report of the 
comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Chemotherapy (IV, Oral, Other) 
data elements with a principal data element and three sub-elements meet 
the definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the 
Chemotherapy (IV, Oral, Other) data elements to the OASIS, and that 
HHAs would be required to report these data for the CY 2020 HH QRP at 
SOC/ROC and discharge between January 1, 2019 and June 30, 2019. 
Following the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019, through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
ii. Cancer Treatment: Radiation
    We are proposing that the Radiation data element meets the 
definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Radiation data element. For more information on the 
Radiation data element, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Radiation is a type of cancer treatment that uses high-energy 
radioactivity to stop cancer by damaging cancer cell DNA, but it can 
also damage normal cells. Radiation is an important therapy for 
particular types of cancer, and the resource utilization is high, with 
frequent radiation sessions required, often daily for a period of 
several weeks. Assessing whether a patient or resident is receiving 
radiation therapy is important to determine resource utilization, as 
PAC patients and residents will need to be transported to and from 
radiation treatments, and monitored and treated for side effects after 
receiving this intervention. Therefore, assessing the receipt of 
radiation therapy, which would compete with other care processes given 
the time burden, would be important for care planning and care 
coordination by PAC providers.
    The Radiation data element is currently in use in the MDS 3.0. This 
data element was not tested in the PAC PRD. However, public comment and 
other expert input on the Radiation data element supported its 
importance and clinical usefulness for patients in PAC settings, due to 
the side effects and consequences of radiation treatment on patients 
that need to be considered in care planning and care transitions. To 
solicit additional feedback on the Radiation data element we are 
proposing, we requested public comment from August 12 to September 12, 
2016. Several commenters provided support for the data element, noting 
the relevance of this data element in facilitating care coordination 
and supporting care transitions, the feasibility of the item, and the 
potential for quality improvement. A full report of the comments is 
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    The proposed data element was presented to and supported by the TEP 
held by our data element contractor on January 5 and 6, 2017, which 
opined that Radiation provided important corollary information about 
cancer treatment in addition to Chemotherapy (IV, Oral, Other), and 
that, because capturing this information is a customary part of 
clinical practice, the proposed data element would be feasible, 
reliable, and easily incorporated into existing workflow.
    Therefore, we are proposing that the Radiation data element meets 
the definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the Radiation 
data element to the OASIS, and that HHAs would be required to report 
these data for the CY 2020 HH QRP at SOC/ROC and discharge between 
January 1, 2019 and June 30, 2019. Following the initial two quarters 
of reporting for the CY 2020 HH QRP, subsequent years for the HH QRP 
would be based on 12 months of such data reporting beginning with July 
1, 2019 through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
iii. Respiratory Treatment: Oxygen Therapy (Continuous, Intermittent)
    We are proposing that the Oxygen Therapy (Continuous, Intermittent) 
data elements meet the definition of standardized patient assessment 
data for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data elements consist of 
the principal Oxygen data element and two sub-elements, ``Continuous'' 
(whether the oxygen was delivered continuously, typically defined as 
>=14 hours per day), or ``Intermittent.'' For more information on the 
Oxygen Therapy (Continuous, Intermittent) data elements, we refer 
readers to the document titled, Proposed Measure Specifications and 
Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Oxygen therapy provides a patient or resident with extra oxygen 
when medical conditions such as chronic obstructive pulmonary disease, 
pneumonia, or severe asthma prevent the patient or resident from 
getting enough oxygen from room air. Oxygen administration is a 
resource-intensive intervention, as it requires specialized equipment 
such as the source of oxygen, delivery systems (for example, oxygen 
concentrator, liquid oxygen containers, and high-pressure systems), the 
patient interface (for example, nasal cannula or mask), and other 
accessories (for example, regulators, filters, tubing). These data 
elements capture patient or resident use of two types of oxygen therapy 
(continuous and intermittent) which are reflective of intensity of care 
needs, including the level of monitoring and direct patient care 
required. Assessing the receipt of this service is important for care 
planning and resource use for PAC providers.
    The proposed data elements were developed based on similar data 
elements that assess oxygen therapy, currently in use in the MDS 3.0 
(``Oxygen Therapy'') and OASIS-C2 (``Oxygen (intermittent or 
continuous)''), and a data element tested in the PAC PRD that focused 
on intensive oxygen therapy (``High O2 Concentration Delivery System 
with FiO2 > 40%'').
    As a result of input from expert advisors, we solicited public 
comment on the single data element, Oxygen

[[Page 35361]]

(inclusive of intermittent and continuous oxygen use), from August 12 
to September 12, 2016. Several commenters supported the importance of 
the Oxygen data element, noting feasibility of this item in PAC, and 
the relevance in facilitating care coordination and supporting care 
transitions, but suggesting that the extent of oxygen use be 
documented. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    As a result of public comment and input from expert advisors about 
the importance and clinical usefulness of documenting the extent of 
oxygen use, we expanded the single data element to include two sub-
elements, intermittent and continuous.
    Therefore, we are proposing that the Oxygen Therapy (Continuous, 
Intermittent) data elements with a principal data element and two sub-
elements meet the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to expand the existing 
Oxygen (intermittent or continuous)- data element in the OASIS to 
include sub-elements for Continuous and Intermittent, and that HHAs 
would be required to report these data for the CY 2020 HH QRP at SOC/
ROC and discharge between January 1, 2019 and June 30, 2019. Following 
the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019 through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
iv. Respiratory Treatment: Suctioning (Scheduled, As needed)
    We are proposing that the Suctioning (Scheduled, As needed) data 
elements meet the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data elements consist of 
the principal Suctioning data element, and two sub-elements, 
``Scheduled'' and ``As needed.'' These sub-elements capture two types 
of suctioning. ``Scheduled'' indicates suctioning based on a specific 
frequency, such as every hour. ``As needed'' means suctioning only when 
indicated. For more information on the Suctioning (Scheduled, As 
needed) data elements, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Suctioning is an intervention used to clear secretions from the 
airway when a person cannot clear those secretions on his or her own. 
It is done by aspirating secretions through a catheter connected to a 
suction source. Types of suctioning include oropharyngeal and 
nasopharyngeal suctioning, nasotracheal suctioning, and suctioning 
through an artificial airway such as a tracheostomy tube. Oropharyngeal 
and nasopharyngeal suctioning are a key part of many patients' care 
plans, both to prevent the accumulation of secretions that can lead to 
aspiration pneumonia (a common condition in patients with inadequate 
gag reflexes), and to relieve obstructions from mucus plugging during 
an acute or chronic respiratory infection, which can often lead to 
desaturation and increased respiratory effort. Suctioning can be done 
on a scheduled basis if the patient is judged to clinically benefit 
from regular interventions; or can be done as needed, such as when 
secretions become so copious that gurgling or choking is noted, or a 
sudden desaturation occurs from a mucus plug. As suctioning is 
generally performed by a care provider rather than independently, this 
intervention can be quite resource-intensive if it occurs every hour, 
for example, rather than once a shift. It also signifies an underlying 
medical condition that prevents the patient from clearing his/her 
secretions effectively (such as after a stroke, or during an acute 
respiratory infection). Generally, suctioning is necessary to ensure 
that the airway is clear of secretions which, if left, can inhibit 
successful oxygenation of the individual and/or lead to infection. The 
intent of suctioning is to maintain a patent airway, the loss of which 
can lead to death, or complications associated with hypoxia.
    The proposed data elements are based on an item currently in use in 
the MDS 3.0 (``Suctioning'' without the two sub-elements), and data 
elements tested in the PAC PRD that focused on the frequency of 
suctioning required for patients with tracheostomies (``Trach Tube with 
Suctioning: Specify most intensive frequency of suctioning during stay 
[Every __ hours]'').
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the proposed Suctioning (Scheduled, As 
needed) data elements are feasible for use in PAC, and that they 
indicate important treatment that would be clinically useful to capture 
both within and across PAC providers. We solicited public comment on 
the suctioning data element currently included in the MDS 3.0 from 
August 12 to September 12, 2016. Several commenters wrote in support of 
this data element, noting feasibility of this item in PAC, and the 
relevance of this data element to facilitating care coordination and 
supporting care transitions. We also received comments suggesting that 
we examine the frequency of suctioning to better understand the use of 
staff time, the impact on a patient or resident's capacity to speak and 
swallow, and intensity of care required. Based on these comments, we 
decided to add two sub-elements (scheduled and as needed) to the 
suctioning element. The proposed data elements, Suctioning (Scheduled, 
As needed) includes both the principal suctioning data element that is 
included on the MDS 3.0 and two sub-elements, ``scheduled'' and ``as 
needed.'' A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would provide useful clinical information to inform care planning 
and care coordination. The TEP affirmed that assessment of these 
services and interventions is standard clinical practice. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Suctioning (Scheduled, As 
needed) data elements with a principal data element and two sub-
elements meet the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the Suctioning 
(Scheduled, As needed) data elements to the OASIS, and that HHAs would 
be

[[Page 35362]]

required to report these data for the CY 2020 HH QRP at SOC/ROC and 
discharge between January 1, 2019, and June 30, 2019. Following the 
initial two quarters of reporting for the CY 2020 HH QRP, subsequent 
years for the HH QRP would be based on 12 months of such data reporting 
beginning with July 1, 2019, through June 30, 2020 for the CY 2021 HH 
QRP.
    We are inviting public comment on these proposals.
v. Respiratory Treatment: Tracheostomy Care
    We are proposing that the Tracheostomy Care data element meets the 
definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Tracheostomy Care data element. For more information on the 
Tracheostomy Care data element, we refer readers to the document 
titled, Proposed Measure Specifications and Standardized Data Elements 
for CY 2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    A tracheostomy provides an airway to help a patient or resident 
breathe when the usual route for breathing is obstructed or impaired. 
Generally, in all of these cases, suctioning is necessary to ensure 
that the tracheostomy tube is clear of secretions which can inhibit 
successful oxygenation of the individual, or accumulate and cause 
infection. Often, individuals with tracheostomies are also receiving 
supplemental oxygenation. The presence of a tracheostomy, whether 
permanent or temporary, warrants careful monitoring and immediate 
intervention if the tracheostomy tube becomes occluded or dislodged. 
While in rare cases the presence of a tracheostomy is not associated 
with increased care demands (and in some of those instances, the care 
of the ostomy is performed by the patient), in general the presence of 
such a device is associated with increased patient risk and resource 
use. Tracheostomy care should include close monitoring to prevent 
occlusion or decannulation, skin infection or necrosis, and other 
complications to ensure adequate air flow and oxygenation. In addition 
to suctioning, skin care, dressing changes, and replacement or cleaning 
of the tracheostomy cannula (tube), is also a critical part of the 
tracheostomy care plan. Regular cleaning and suctioning is important in 
preventing infections such as pneumonia, preventing skin breakdown, and 
preventing any occlusions leading to inadequate oxygenation.
    The proposed data element is currently in use in the MDS 3.0 
(``Tracheostomy care''). Data elements (``Trach Tube with Suctioning'') 
that were tested in the PAC PRD included an equivalent principal data 
element on the presence of a tracheostomy. This data element was found 
feasible for use in each of the four PAC settings as the data 
collection aligned with usual work flow.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the Tracheostomy Care data element is 
feasible for use in PAC and that it assesses an important treatment 
that would be clinically useful both within and across PAC provider 
types.
    We solicited public comment on this data element from August 12 to 
September 12, 2016. Several commenters wrote in support of this data 
element, noting the feasibility of this item in PAC, and the relevance 
of this data element to facilitating care coordination and supporting 
care transitions. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would provide useful clinical information to inform care planning 
and care coordination. The TEP affirmed that assessment of these 
services and interventions is standard clinical practice. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Tracheostomy Care data element 
meets the definition of standardized patient assessment data for 
special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the 
Tracheostomy Care data element to the OASIS, and that HHAs would be 
required to report these data for the CY 2020 HH QRP at SOC/ROC and 
discharge between January 1, 2019 and June 30, 2019. Following the 
initial two quarters of reporting for the CY 2020 HH QRP, subsequent 
years for the HH QRP would be based on 12 months of such data reporting 
beginning with July 1, 2019, through June 30, 2020 for the CY 2021 HH 
QRP.
    We are inviting public comment on these proposals.
vi. Respiratory Treatment: Non-Invasive Mechanical Ventilator (BiPAP, 
CPAP)
    We are proposing that the Non-invasive Mechanical Ventilator 
(Bilevel Positive Airway Pressure [BiPAP], Continuous Positive Airway 
Pressure [CPAP]) data elements meet the definition of standardized 
patient assessment data for special services, treatments, and 
interventions under section 1899B(b)(1)(B)(iii) of the Act. The 
proposed data elements consist of the principal Non-invasive Mechanical 
Ventilator data element and two sub-elements, BiPAP and CPAP. For more 
information on the Non-invasive Mechanical Ventilator (BiPAP, CPAP) 
data elements, we refer readers to the document titled, Proposed 
Measure Specifications and Standardized Data Elements for CY 2018 HH 
QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    BiPAP and CPAP are respiratory support devices that prevent the 
airways from closing by delivering slightly pressurized air via 
electronic cycling throughout the breathing cycle (Bilevel Positive 
Airway Pressure, referred to as BiPAP) or through a mask continuously 
(Continuous PAP, referred to as CPAP). Assessment of non-invasive 
mechanical ventilation is important in care planning, as both CPAP and 
BiPAP are resource-intensive (although less so than invasive mechanical 
ventilation) and signify a more complex or underlying medical 
condition. Particularly when used in the context of acute illness or 
progressive respiratory decline, additional staff (for example, 
respiratory therapists) are required to monitor and adjust the CPAP and 
BiPAP settings. Additionally the patient or resident may require more 
nursing assessment, education, and interventions, such as pulse 
oximetry or venipuncture for blood gas evaluation.
    Data elements that assess BiPAP and CPAP are currently included on 
the OASIS-C2 for HHAs (``Continuous/Bi-level positive airway 
pressure''), LCDS for the LTCH setting (``Non-invasive Ventilator 
(BIPAP, CPAP)''), and the MDS 3.0 for the SNF setting (``BiPAP/

[[Page 35363]]

CPAP''). A data element that focused on CPAP was tested across the four 
PAC providers in the PAC PRD study and found to be feasible for 
standardization. All of these data elements assess BiPAP or CPAP with a 
single check box, not separately.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the standardized assessment of Non-
invasive Mechanical Ventilator (BiPAP, CPAP) data elements would be 
feasible for use in PAC, and assess an important treatment that would 
be clinically useful both within and across PAC provider types.
    To solicit additional feedback on the form of the Non-invasive 
Mechanical Ventilator (BiPAP, CPAP) data elements best suited for 
standardization, we requested public comment on a single data element, 
BiPAP/CPAP, equivalent (but for labeling) to what is currently in use 
on the MDS, OASIS, and LCDS, from August 12 to September 12, 2016. 
Several commenters wrote in support of this data element, noting the 
feasibility of these items in PAC, and the relevance of these data 
elements for facilitating care coordination and supporting care 
transitions. In addition, there was support in the public comment 
responses for separating out BiPAP and CPAP as distinct sub-elements, 
as they are therapies used for different types of patients and 
residents. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would provide useful clinical information to inform care planning 
and care coordination. The TEP affirmed that assessment of these 
services and interventions is standard clinical practice. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Non-invasive Mechanical 
Ventilator (BiPAP, CPAP) data elements with a principal data element 
and two sub-elements meet the definition of standardized patient 
assessment data for special services, treatments, and interventions 
under section 1899B(b)(1)(B)(iii) of the Act. We are proposing that the 
existing ``Continuous/Bi-level positive airway pressure'' data element 
in the OASIS be expanded and relabeled as the Non-invasive Mechanical 
Ventilator (BiPAP, CPAP) data elements, and that HHAs would be required 
to report these data for the CY 2020 HH QRP at SOC/ROC and discharge 
between January 1, 2019 and June 30, 2019. Following the initial two 
quarters of reporting for the CY 2020 HH QRP, subsequent years for the 
HH QRP would be based on 12 months of such data reporting beginning 
with July 1, 2019, through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
vii. Respiratory Treatment: Invasive Mechanical Ventilator
    We are proposing that the Invasive Mechanical Ventilator data 
element meets the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of a 
single Invasive Mechanical Ventilator data element. For more 
information on the Invasive Mechanical Ventilator data element, we 
refer readers to the document titled, Proposed Measure Specifications 
and Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Invasive mechanical ventilation includes ventilators and 
respirators that ventilate the patient through a tube that extends via 
the oral airway into the pulmonary region (intubation), or through a 
surgical opening directly into the trachea (tracheostomy). Thus, 
assessment of invasive mechanical ventilation is important in care 
planning and risk mitigation. Ventilation in this manner is a resource-
intensive therapy associated with life-threatening conditions without 
which the patient or resident would not survive. However, ventilator 
use has inherent risks requiring close monitoring. Failure to 
adequately care for the patient or resident who is ventilator dependent 
can lead to iatrogenic events such as death, pneumonia and sepsis. 
Mechanical ventilation further signifies the complexity of the 
patient's underlying medical or surgical condition. Of note, invasive 
mechanical ventilation is associated with high daily and aggregate 
costs.\205\
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    \205\ Wunsch, H., Linde-Zwirble, W.T., Angus, D. C., Hartman, 
M.E., Milbrandt, E.B., & Kahn, J.M. (2010). ``The epidemiology of 
mechanical ventilation use in the United States.'' Critical Care Med 
38(10): 1947-1953.
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    Data elements that capture invasive mechanical ventilation, but 
vary in their level of specificity, are currently in use in the MDS 3.0 
(``Ventilator or respirator''), LCDS (``Invasive Mechanical Ventilator: 
weaning'' and ``Invasive Mechanical Ventilator: non-weaning''), and 
related data elements that assess invasive ventilator use and weaning 
status were tested in the PAC PRD (``Ventilator--Weaning'' and 
``Ventilator--Non-Weaning'') and found feasible for use in each of the 
four PAC settings.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that assessing Invasive Mechanical Ventilator 
use is feasible in PAC, and would be clinically useful both within and 
across PAC providers.
    To solicit additional feedback on the form of a data element on 
this topic that would be appropriate for standardization, data elements 
that assess invasive ventilator use and weaning status that were tested 
in the PAC PRD (``Ventilator--Weaning'' and ``Ventilator--Non-
Weaning'') were included in a call for public comment that was open 
from August 12 to September 12, 2016 because they were being considered 
for standardization. Several commenters wrote in support of these data 
elements, highlighting the importance of this information in supporting 
care coordination and care transitions. Some commenters expressed 
concern about the appropriateness for standardization, given the 
prevalence of ventilator weaning across PAC providers; the timing of 
administration; how weaning is defined; and how weaning status in 
particular relates to quality of care. These comments guided the 
decision to propose a single data element focused on current use of 
invasive mechanical ventilation only, and does not attempt to capture 
weaning status. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would

[[Page 35364]]

provide useful clinical information to inform care planning and care 
coordination. The TEP affirmed that assessment of these services and 
interventions is standard clinical practice. A full report of the TEP 
discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Invasive Mechanical Ventilator 
data element that assesses the use of an invasive mechanical 
ventilator, but does not assess weaning status, meets the definition of 
standardized patient assessment data for special services, treatments, 
and interventions under section 1899B(b)(1)(B)(iii) of the Act. We are 
proposing to add the Invasive Mechanical Ventilator data element to the 
OASIS, and that HHAs would be required to report these data for the CY 
2020 HH QRP at SOC/ROC and discharge between January 1, 2019 and June 
30, 2019. Following the initial two quarters of reporting for the CY 
2020 HH QRP, subsequent years for the HH QRP would be based on 12 
months of such data reporting beginning with July 1, 2019 through June 
30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
viii. Other Treatment: Intravenous (IV) Medications (Antibiotics, 
Anticoagulation, Other)
    We are proposing that the IV Medications (Antibiotics, 
Anticoagulation, Other) data elements meet the definition of 
standardized patient assessment data for special services, treatments, 
and interventions under section 1899B(b)(1)(B)(iii) of the Act. The 
proposed data elements consist of the principal IV Medications data 
element and three sub-elements, Antibiotics, Anticoagulation, and 
Other. For more information on the IV Medications (Antibiotics, 
Anticoagulation, Other) data elements, we refer readers to the document 
titled, Proposed Measure Specifications and Standardized Data Elements 
for CY 2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    IV medications are solutions of a specific medication (for example, 
antibiotics, anticoagulants) administered directly into the venous 
circulation via a port or intravenous tubing. IV medications are 
administered via intravenous push (bolus), single, intermittent, or 
continuous infusion through a catheter placed into the vein (for 
example, through central, midline, or peripheral ports). Further, IV 
medications are more resource intensive to administer than oral 
medications, and signify a higher patient complexity (and often higher 
severity of illness).
    The clinical indications for each of the sub-elements of the IV 
Medication data element (Antibiotics, Anticoagulants, and Other) are 
very different. IV antibiotics are used for severe infections when: (1) 
The bioavailability of the oral form of the medication would be 
inadequate to kill the pathogen; (2) an oral form of the medication 
does not exist; or (3) the patient is unable to take the medication by 
mouth. IV anticoagulants refer to anti-clotting medications (that is, 
``blood thinners''), often used for the prevention and treatment of 
deep vein thrombosis and other thromboembolic complications. IV 
anticoagulants are commonly used in patients with limited mobility 
(either chronically or acutely, in the post-operative setting), who are 
at risk of deep vein thrombosis, or patients with certain cardiac 
arrhythmias such as atrial fibrillation. The indications, risks, and 
benefits of each of these classes of IV medications are distinct, 
making it important to assess and monitor each separately in PAC. 
Knowing whether or not patients are receiving IV medication and the 
type of medication provided by each PAC provider will improve quality 
of care.
    The principal IV Medication data element is currently in use on the 
MDS 3.0 and there is a related data element in OASIS-C2 that collects 
information on Intravenous and Infusion Therapies. One sub-element of 
the proposed data elements, IV Anti-coagulants, and two other data 
elements related to IV therapy (IV Vasoactive Medications and IV 
Chemotherapy), were tested in the PAC PRD and found feasible for use in 
that the data collection aligned with usual work flow in each of the 
four PAC settings, demonstrating the feasibility of collecting IV 
medication information, including type of IV medication, through 
similar data elements in these settings.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that standardized collection of information 
on medications, including IV medications, would be feasible in PAC, and 
assess an important treatment that would be clinically useful both 
within and across PAC provider types.
    We solicited public comment on a related data element, Vasoactive 
Medications, from August 12 to September 12, 2016. While commenters 
supported this data element with one noting the importance of this data 
element in supporting care transitions, others criticized the need for 
collecting specifically on Vasoactive Medications, giving feedback that 
the data element was too narrowly focused. Additionally, comments 
received indicated that the clinical significance of vasoactive 
medications administration alone was not high enough in PAC to merit 
mandated assessment, noting that related and more useful information 
could be captured in an item that assessed all IV medication use.
    Overall, public comment indicated the importance of including the 
additional check box data elements to distinguish particular classes of 
medications. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would provide useful clinical information to inform care planning 
and care coordination. The TEP affirmed that assessment of these 
services and interventions is standard clinical practice. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the IV Medications (Antibiotics, 
Anticoagulation, Other) data elements with a principal data element and 
three sub-elements meet the definition of standardized patient 
assessment data for special services, treatments, and interventions 
under section 1899B(b)(1)(B)(iii) of the Act. We are proposing to add 
the IV Medications (Antibiotics, Anticoagulation, Other) data elements 
to the OASIS, and that HHAs would be required to report these data for 
the CY 2020 HH QRP at SOC/ROC and discharge between January 1, 2019 and 
June 30, 2019. Following the initial two quarters of reporting for the 
CY 2020 HH QRP, subsequent years for the HH QRP would be based on 12

[[Page 35365]]

months of such data reporting beginning with July 1, 2019 through June 
30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
ix. Other Treatment: Transfusions
    We are proposing that the Transfusions data element meets the 
definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Transfusions data element. For more information on the 
Transfusions data element, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Transfusion refers to introducing blood, blood products, or other 
fluid into the circulatory system of a person. Blood transfusions are 
based on specific protocols, with multiple safety checks and monitoring 
required before, during, and after the infusion to prevent errors and 
adverse events. Coordination with the provider's blood bank is 
necessary, as well as documentation by clinical staff to ensure 
compliance with regulatory requirements. In addition, the need for 
transfusions signifies underlying patient complexity that is likely to 
require care coordination and patient monitoring, and impacts planning 
for transitions of care, as transfusions are not performed by all PAC 
providers.
    The proposed data element was selected from three existing 
assessment items on transfusions and related services, currently in use 
in the MDS 3.0 (``Transfusions'') and OASIS-C2 (``Intravenous or 
Infusion Therapy''), and a data element tested in the PAC PRD (``Blood 
Transfusions''), that was found feasible for use in each of the four 
PAC settings. We chose to propose the MDS version because of its 
greater level of specificity over the OASIS-C2 data element. This 
selection was informed by expert advisors and reviewed and supported in 
the proposed form by the Standardized Patient Assessment Data TEP held 
by our data element contractor on January 5 and 6, 2017. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Transfusions data element that 
is currently in use in the MDS meets the definition of standardized 
patient assessment data for special services, treatments, and 
interventions under section 1899B(b)(1)(B)(iii) of the Act. We are 
proposing to add the Transfusions data element to the OASIS, and that 
HHAs would be required to report these data for the CY 2020 HH QRP at 
SOC/ROC and discharge between January 1, 2019 and June 30, 2019. 
Following the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019 through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
x. Other Treatment: Dialysis (Hemodialysis, Peritoneal Dialysis)
    We are proposing that the Dialysis (Hemodialysis, Peritoneal 
dialysis) data elements meet the definition of standardized patient 
assessment data for special services, treatments, and interventions 
under section 1899B(b)(1)(B)(iii) of the Act. The proposed data 
elements consist of the principal Dialysis data element and two sub-
elements, Hemodialysis and Peritoneal dialysis. For more information on 
the Dialysis (Hemodialysis, Peritoneal dialysis) data elements, we 
refer readers to the document titled, Proposed Measure Specifications 
and Standardized Data Elements for CY 2018 HH QRP Notice of Proposed 
Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Dialysis is a treatment primarily used to provide replacement for 
lost kidney function. Both forms of dialysis (hemodialysis and 
peritoneal dialysis) are resource intensive, not only during the actual 
dialysis process but before, during, and after treatment. Patients and 
residents who need and undergo dialysis procedures are at high risk for 
physiologic and hemodynamic instability from fluid shifts and 
electrolyte disturbances, as well as infections that can lead to 
sepsis. Further, patients or residents receiving hemodialysis are often 
transported to a different facility, or at a minimum, to a different 
location in the same facility. Close monitoring for fluid shifts, blood 
pressure abnormalities, and other adverse effects is required prior to, 
during and following each dialysis session. Nursing staff typically 
perform peritoneal dialysis at the bedside, and as with hemodialysis, 
close monitoring is required.
    The principal Dialysis data element is currently included on the 
MDS 3.0 and the LCDS v3.0 and assesses the overall use of dialysis. The 
sub-elements for Hemodialysis and Peritoneal dialysis were tested 
across the four PAC providers in the PAC PRD study, and found to be 
feasible for standardization. Clinical and subject matter expert 
advisors working with our data element contractor opined that the 
standardized assessment of dialysis is feasible in PAC, and that it 
assesses an important treatment that would be clinically useful both 
within and across PAC providers. As the result of expert and public 
feedback, described below, we decided to propose data elements that 
include both the principal Dialysis data element and the two sub-
elements (hemodialysis and peritoneal dialysis).
    The Hemodialysis data element, which was tested in the PAC PRD, was 
included in a call for public comment that was open from August 12 to 
September 12, 2016. Commenters supported the assessment of hemodialysis 
and recommended that the data element be expanded to include peritoneal 
dialysis. Several commenters supported the Hemodialysis data element, 
noting the relevance of this information for sharing across the care 
continuum to facilitate care coordination and care transitions, the 
potential for this data element to be used to improve quality, and the 
feasibility for use in PAC. In addition, we received comment that the 
item would be useful in improving patient and resident transitions of 
care. Several commenters also stated that peritoneal dialysis should be 
included in a standardized data element on dialysis and recommended 
collecting information on peritoneal dialysis in addition to 
hemodialysis. The rationale for including peritoneal dialysis from 
commenters included the fact that patients and residents receiving 
peritoneal dialysis will have different needs at post-acute discharge 
compared to those receiving hemodialysis or not having any dialysis. 
Based on these comments, the Hemodialysis data element was expanded to 
include a principal Dialysis data element and two sub-elements, 
hemodialysis and peritoneal dialysis; these are the same two data 
elements that were tested in the PAC PRD. This expanded version, 
Dialysis (Hemodialysis, Peritoneal dialysis), are the data elements 
being proposed. A full report of the comments

[[Page 35366]]

is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We note that the Dialysis (Hemodialysis, Peritoneal dialysis) data 
elements were also supported by the TEP that discussed candidate data 
elements for Special Services, Treatments, and Interventions during a 
meeting on January 5 and 6, 2017. A full report of the TEP discussion 
is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Dialysis (Hemodialysis, 
Peritoneal dialysis) data elements with a principal data element and 
two sub-elements meet the definition of standardized patient assessment 
data for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the Dialysis 
(Hemodialysis, Peritoneal dialysis) data elements to the OASIS, and 
that HHAs would be required to report these data for the CY 2020 HH QRP 
at SOC/ROC and discharge between January 1, 2019 and June 30, 2019. 
Following the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019 through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
xi. Other Treatment: Intravenous (IV) Access (Peripheral IV, Midline, 
Central Line, Other)
    We are proposing that the IV Access (Peripheral IV, Midline, 
Central line, Other) data elements meet the definition of standardized 
patient assessment data for special services, treatments, and 
interventions under section 1899B(b)(1)(B)(iii) of the Act. The 
proposed data elements consist of the principal IV Access data element 
and four sub-elements, Peripheral IV, Midline, Central line, and Other. 
For more information on the IV Access (Peripheral IV, Midline, Central 
line, Other) data elements, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Patients or residents with central lines, including those 
peripherally inserted or who have subcutaneous central line ``port'' 
access, always require vigilant nursing care to ensure patency of the 
lines and prevent any potentially life-threatening events such as 
infection, air embolism, or bleeding from an open lumen. Clinically 
complex patients and residents are likely to be receiving medications 
or nutrition intravenously. The sub-elements included in the IV Access 
data elements distinguish between peripheral access and different types 
of central access. The rationale for distinguishing between a 
peripheral IV and central IV access is that central lines confer higher 
risks associated with life-threatening events such as pulmonary 
embolism, infection, and bleeding.
    The proposed IV Access (Peripheral IV, Midline, Central line, 
Other) data elements are not currently included on any of the mandated 
PAC assessment instruments. However, related data elements (for 
example, IV Medication in MDS 3.0 for SNF, Intravenous or infusion 
therapy in OASIS-C2 for HHAs) currently assess types of IV infusions or 
service. Several related data elements that describe types of IV 
infusions and services (for example, Central Line Management, IV 
Vasoactive Medications) were tested across the four PAC providers in 
the PAC PRD study, and found to be feasible for standardization.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that assessing type of IV access would be 
feasible for use in PAC and that it assesses an important treatment 
that would be clinically useful both within and across PAC provider 
types.
    We requested public comment on one of the PAC PRD data elements, 
Central Line Management, from August 12 to September 12, 2016. A 
central line is one type of IV access. Commenters supported the 
assessment of central line management and recommended that the data 
element be broadened to also include other types of IV access. Several 
commenters supported the data element, noting feasibility and 
importance for facilitating care coordination and care transitions. 
However, a few commenters recommended that the definition of this data 
element be broadened to include peripherally inserted central catheters 
(``PICC lines'') and midline IVs. Based on public comment feedback and 
in consultation with clinical and subject matter experts, we expanded 
the Central Line Management data element to include more types of IV 
access (Peripheral IV, Midline, Central line, Other). This expanded 
version, IV Access (Peripheral IV, Midline, Central line, Other), are 
the data elements being proposed. A full report of the comments is 
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We note that the IV Access (Peripheral IV, Midline, Central line, 
Other) data elements were supported by the TEP that discussed candidate 
data elements for Special Services, Treatments, and Interventions 
during a meeting on January 5 and 6, 2017. A full report of the TEP 
discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the IV access (Peripheral IV, 
Midline, Central line, Other) data elements with a principal data 
element and four sub-elements meet the definition of standardized 
patient assessment data for special services, treatments, and 
interventions under section 1899B(b)(1)(B)(iii) of the Act. We are 
proposing to add the IV Access (Peripheral IV, Midline, Central line, 
Other) data elements to the OASIS and that HHAs would be required to 
report these data for the CY 2020 HH QRP at SOC/ROC and discharge 
between January 1, 2019 and June 30, 2019. Following the initial two 
quarters of reporting for the CY 2020 HH QRP, subsequent years for the 
HH QRP would be based on 12 months of such data reporting beginning 
with July 1, 2019 through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
xii. Nutritional Approach: Parenteral/IV Feeding
    We are proposing that the Parenteral/IV Feeding data element meets 
the definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Parenteral/IV Feeding data element. For more information on 
the Parenteral/IV Feeding data element, we refer readers to the 
document titled, Proposed Measure Specifications and Standardized Data 
Elements for CY 2018 HH QRP Notice of Proposed

[[Page 35367]]

Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Parenteral/IV Feeding refers to a patient or resident being fed 
intravenously using an infusion pump, bypassing the usual process of 
eating and digestion. The need for IV/parenteral feeding indicates a 
clinical complexity that prevents the patient or resident from meeting 
his/her nutritional needs enterally, and is more resource intensive 
than other forms of nutrition, as it often requires monitoring of blood 
chemistries, and maintenance of a central line. Therefore, assessing a 
patient or resident's need for parenteral feeding is important for care 
planning and resource use. In addition to the risks associated with 
central and peripheral intravenous access, total parenteral nutrition 
is associated with significant risks such as embolism, sepsis, and 
glucose abnormalities.
    The Parenteral/IV Feeding data element is currently in use in the 
MDS 3.0, and equivalent or related data elements are in use in the 
LCDS, IRF-PAI, and the OASIS-C2. An equivalent data element was tested 
in the PAC PRD (``Total Parenteral Nutrition'') and found feasible for 
use in each of the four PAC settings, demonstrating the feasibility of 
collecting information about this nutritional service in these 
settings.
    Total Parenteral Nutrition (an item with the same meaning as the 
proposed data element, but with the label used in the PAC PRD) was 
included in a call for public comment that was open from August 12 to 
September 12, 2016. Several commenters supported this data element, 
noting its relevance to facilitating care coordination and supporting 
care transitions. After the public comment period, the Total Parenteral 
Nutrition data element was re-named Parenteral/IV Feeding, to be 
consistent with how this data element is referred to in the MDS. A full 
report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    A TEP convened by the data element contractor provided input on the 
proposed data elements. This TEP, held on January 5 and 6, 2017, opined 
that these data elements are appropriate for standardization because 
they would provide useful clinical information to inform care planning 
and care coordination. The TEP affirmed that assessment of these 
services and interventions is standard clinical practice. A full report 
of the TEP discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Parenteral/IV Feeding data 
element meets the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to rename the existing 
``Parenteral nutrition (TPN or lipids)'' data element in the OASIS to 
the Parenteral/IV Feeding data element, and that HHAs would be required 
to report these data for the CY 2020 HH QRP at SOC/ROC and discharge 
between January 1, 2019, and June 30, 2019. Following the initial two 
quarters of reporting for the CY 2020 HH QRP, subsequent years for the 
HH QRP would be based on 12 months of such data reporting beginning 
with July 1, 2019, through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
xiv. Nutritional Approach: Feeding Tube
    We are proposing that the Feeding Tube data element meets the 
definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Feeding Tube data element. For more information on the 
Feeding Tube data element, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    The majority of patients admitted to acute care hospitals 
experience deterioration of their nutritional status during their 
hospital stay, making assessment of nutritional status and method of 
feeding, if unable to eat orally, very important in PAC. A feeding tube 
can be inserted through the nose or the skin on the abdomen to deliver 
liquid nutrition into the stomach or small intestine. Feeding tubes are 
resource intensive and are therefore important to assess for care 
planning and resource use. Patients with severe malnutrition are at 
higher risk for a variety of complications.\206\ In PAC settings, there 
are a variety of reasons that patients and residents may not be able to 
eat orally (including clinical or cognitive status).
---------------------------------------------------------------------------

    \206\ Dempsey, D.T., Mullen, J.L., & Buzby, G.P. (1988). ``The 
link between nutritional status and clinical outcome: can 
nutritional intervention modify it?'' Am J of Clinical Nutrition 
47(2): 352-356.
---------------------------------------------------------------------------

    The Feeding Tube data element is currently included in the MDS 3.0 
for SNFs, and in the OASIS-C2 for HHAs, where it is labeled Enteral 
Nutrition. A related data element is collected in the IRF-PAI for IRFs 
(Tube/Parenteral Feeding). The testing of similar nutrition-focused 
data elements in the PAC PRD, and the current assessment of feeding 
tubes and related nutritional services and devices, demonstrates the 
feasibility of collecting information about this nutritional service in 
these settings.
    Clinical and subject matter expert advisors working with our data 
element contractor opined that the Feeding Tube data element is 
feasible for use in PAC, and supported its importance and clinical 
usefulness for patients in PAC settings, due to the increased level of 
nursing care and patient monitoring required for patients who received 
enteral nutrition with this device.
    We solicited additional feedback on an Enteral Nutrition data 
element (an item with the same meaning as the proposed data element, 
but with the label used in the OASIS) in a call for public comment that 
was open from August 12 to September 12, 2016. Several commenters 
supported the data element, noting the importance of assessing enteral 
nutrition status for facilitating care coordination and care 
transitions. After the public comment period, the Enteral Nutrition 
data element used in public comment was re-named Feeding Tube, 
indicating the presence of an assistive device. A full report of the 
comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We note that the Feeding Tube data element was also supported by 
the TEP that discussed candidate data elements for Special Services, 
Treatments, and Interventions during a meeting on January 5 and 6, 
2017. A full report of the TEP discussion is available at https://
www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/

[[Page 35368]]

IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Feeding Tube data element 
meets the definition of standardized patient assessment data for 
special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to rename the existing 
``Enteral nutrition (nasogastric, gastrostomy, jejunostomy, or any 
other artificial entry into the alimentary canal)'' data element in the 
OASIS to the Feeding Tube data element and that HHAs would be required 
to report these data for the CY 2020 HH QRP at SOC/ROC and discharge 
between January 1, 2019, and June 30, 2019. Following the initial two 
quarters of reporting for the CY 2020 HH QRP, subsequent years for the 
HH QRP would be based on 12 months of such data reporting beginning 
with July 1, 2019 through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
xv. Nutritional Approach: Mechanically Altered Diet
    We are proposing that the Mechanically Altered Diet data element 
meets the definition of standardized patient assessment data for 
special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Mechanically Altered Diet data element. For more information 
on the Mechanically Altered Diet data element, we refer readers to the 
document titled, Proposed Measure Specifications and Standardized Data 
Elements for CY 2018 HH QRP Notice of Proposed Rulemaking, available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    The Mechanically Altered Diet data element refers to food that has 
been altered to make it easier for the patient or resident to chew and 
swallow, and this type of diet is used for patients and residents who 
have difficulty performing these functions. Patients with severe 
malnutrition are at higher risk for a variety of complications.\207\ In 
PAC settings, there are a variety of reasons that patients and 
residents may have impairments related to oral feedings, including 
clinical or cognitive status. The provision of a mechanically altered 
diet may be resource intensive, and can signal difficulties associated 
with swallowing/eating safety, including dysphagia. In other cases, it 
signifies the type of altered food source, such as ground or puree, 
which will enable the safe and thorough ingestion of nutritional 
substances and ensure safe and adequate delivery of nourishment to the 
patient. Often, patients on mechanically altered diets also require 
additional nursing supports such as individual feeding, or direct 
observation, to ensure the safe consumption of the food product. 
Assessing whether a patient or resident requires a mechanically altered 
diet is therefore important for care planning and resource 
identification.
---------------------------------------------------------------------------

    \207\ Dempsey, D.T., Mullen, J.L., & Buzby, G.P. (1988). ``The 
link between nutritional status and clinical outcome: can 
nutritional intervention modify it?'' Am J of Clinical Nutrition 
47(2): 352-356.
---------------------------------------------------------------------------

    The proposed data element for a mechanically altered diet is 
currently included on the MDS 3.0 for SNFs. A related data element for 
modified food consistency/supervision is currently included on the IRF-
PAI for IRFs. A related data element is included in the OASIS-C2 for 
HHAs that collects information about independent eating that requires 
``a liquid, pureed or ground meat diet.'' The testing of similar 
nutrition-focused data elements in the PAC PRD, and the current 
assessment of various nutritional services across the four PAC 
settings, demonstrates the feasibility of collecting information about 
this nutritional service in these settings.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that the proposed Mechanically Altered Diet 
data element is feasible for use in PAC, and it assesses an important 
treatment that would be clinically useful both within and across PAC 
settings. Expert input on the Mechanically Altered Diet data element 
highlighted its importance and clinical usefulness for patients in PAC 
settings, due to the increased monitoring and resource use required for 
patients on special diets. We note that the Mechanically Altered Diet 
data element was also supported by the TEP that discussed candidate 
data elements for Special Services, Treatments, and Interventions 
during a meeting on January 5 and 6, 2017. A full report of the TEP 
discussion is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing that the Mechanically Altered Diet data 
element meets the definition of standardized patient assessment data 
for special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the 
Mechanically Altered Diet data element to the OASIS, and that HHAs 
would be required to report these data for the CY 2020 HH QRP at SOC/
ROC and discharge between January 1, 2019 and June 30, 2019. Following 
the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019, through June 30, 2020 for 
the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
xvi. Nutritional Approach: Therapeutic Diet
    We are proposing that the Therapeutic Diet data element meets the 
definition of standardized patient assessment data for special 
services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. The proposed data element consists of 
the single Therapeutic Diet data element. For more information on the 
Therapeutic Diet data element, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Therapeutic Diet refers to meals planned to increase, decrease, or 
eliminate specific foods or nutrients in a patient or resident's diet, 
such as a low-salt diet, for the purpose of treating a medical 
condition. The use of therapeutic diets among patients in PAC provides 
insight on the clinical complexity of these patients and their multiple 
comorbidities. Therapeutic diets are less resource intensive from the 
bedside nursing perspective, but can signify one or more underlying 
clinical conditions that preclude the patient from eating a regular 
diet. They also often require more education and lifestyle modification 
training. The communication among PAC providers about whether a patient 
is receiving a particular therapeutic diet is critical to ensure safe 
transitions of care.
    The Therapeutic Diet data element is currently in use in the MDS 
3.0. The testing of similar nutrition-focused data elements in the PAC 
PRD, and the current assessment of various nutritional services across 
the four PAC settings, demonstrates the feasibility of collecting 
information about this nutritional service in these settings.
    Clinical and subject matter expert advisors working with our data 
element contractor supported the importance

[[Page 35369]]

and clinical usefulness of the proposed Therapeutic Diet data element 
for patients in PAC settings, due to the increased monitoring and 
resource use required for patients on special diets, and agreed that it 
is feasible for use in PAC and that it assesses an important treatment 
that would be clinically useful both within and across PAC settings. We 
note that the Therapeutic Diet data element was also supported by the 
TEP that discussed candidate data elements for Special Services, 
Treatments, and Interventions during a meeting on January 5 and 6, 
2017.
    Therefore, we are proposing that the Therapeutic Diet data element 
meets the definition of standardized patient assessment data for 
special services, treatments, and interventions under section 
1899B(b)(1)(B)(iii) of the Act. We are proposing to add the Therapeutic 
Diet data element to the OASIS, and that HHAs would be required to 
report these data for the CY 2020 HH QRP at SOC/ROC and discharge 
between January 1, 2019 and June 30, 2019. Following the initial two 
quarters of reporting for the CY 2020 HH QRP, subsequent years for the 
HH QRP would be based on 12 months of such data reporting beginning 
with July 1, 2019, through June 30, 2020 for the CY 2021 HH QRP.
    We are inviting public comment on these proposals.
d. Medical Condition and Comorbidity Data
    We are proposing that the data elements needed to calculate the 
current measure, Percent of Residents or Patients with Pressure Ulcers 
That Are New or Worsened (Short Stay) (NQF #0678), and that the 
proposed measure, Changes in Skin Integrity Post-Acute Care: Pressure 
Ulcer/Injury, meet the definition of standardized patient assessment 
data with respect to medical conditions and co-morbidities under 
section 1899B(b)(1)(B)(iv) of the Act, and that the successful 
reporting of that data under section 1895(b)(3)(B)(v)(IV)(aa) of the 
Act would also satisfy the requirement to report standardized patient 
assessment data under section 1895(b)(3)(B)(v)(IV)(bb) of the Act.
    ``Medical conditions and co-morbidities'' and the conditions 
addressed in the standardized data elements used in the calculation and 
risk adjustment of these measures, that is, the presence of pressure 
ulcers, diabetes, incontinence, peripheral vascular disease or 
peripheral arterial disease, mobility, as well as low body mass index 
(BMI), are all health-related conditions that indicate medical 
complexity that can be indicative of underlying disease severity and 
other comorbidities.
    Specifically, the data elements used in the measure are important 
for care planning and provide information pertaining to medical 
complexity. Pressure ulcers are serious wounds representing poor 
outcomes, and can result in sepsis and death. Assessing skin condition, 
care planning for pressure ulcer prevention and healing, and informing 
providers about their presence in patient transitions of care is 
imperative a customary and best practice. Venous and arterial disease 
and diabetes are associated with insufficient low blood flow, which may 
increase the risk of tissue damage. These diseases commonly are 
indicators of factors that may place individuals at risk for pressure 
ulcer development and are therefore important for care planning. Low 
BMI, which may be an indicator of underlying disease severity, may be 
associated with loss of fat and muscle, resulting in potential risk for 
pressure ulcers due to shearing. Bowel incontinence, and the possible 
maceration to the skin associated, can lead to higher risk for pressure 
ulcers. In addition, the bacteria associated with bowel incontinence 
can complicate current wounds and cause local infection. Mobility is an 
indicator of impairment or reduction in mobility and movement which is 
a major risk factor for the development of pressure ulcers. Taken 
separately and together, these data elements are important for care 
planning, transitions in services and identifying medical complexities.
e. Impairment Data
    Hearing and vision impairments are conditions that, if unaddressed, 
affect activities of daily living, communication, physical functioning, 
rehabilitation outcomes, and overall quality of life. Sensory 
limitations can lead to confusion in new settings, increase isolation, 
contribute to mood disorders, and impede accurate assessment of other 
medical conditions. Failure to appropriately assess, accommodate, and 
treat these conditions increases the likelihood that patients will 
require more intensive and prolonged treatment. Onset of these 
conditions can be gradual, so individualized assessment with accurate 
screening tools and regular follow-up evaluations are essential to 
determining which patients need hearing- or vision-specific medical 
attention or assistive devices, and accommodations, including auxiliary 
aids and/or services, and to ensure that person-directed care plans are 
developed to accommodate a patient's needs. Accurate diagnosis and 
management of hearing or vision impairment would likely improve 
rehabilitation outcomes and care transitions, including transition from 
institutional-based care to the community. Accurate assessment of 
hearing and vision impairment would be expected to lead to appropriate 
treatment, accommodations, including the provision of auxiliary aids 
and services during the stay, and ensure that patients continue to have 
their vision and hearing needs met when they leave the facility.
    Accurate individualized assessment, treatment, and accommodation of 
hearing and vision impairments of patients and residents in PAC would 
be expected to have a positive impact on the National Quality 
Strategy's domains of patient and family engagement, patient safety, 
care coordination, clinical process/effectiveness, and efficient use of 
healthcare resources. For example, standardized assessment of hearing 
and vision impairments used in PAC will support ensuring patient safety 
(for example, risk of falls) identifying accommodations needed during 
the stay, and appropriate support needs at the time of discharge or 
transfer. Standardized assessment of these data elements will enable or 
support clinical decision-making and early clinical intervention; 
person-centered, high quality care (for example, facilitating better 
care continuity and coordination); better data exchange and 
interoperability between settings; and longitudinal outcome analysis. 
Hence, reliable data elements assessing hearing and vision impairments 
are needed to initiate a management program that can optimize a patient 
or resident's prognosis and reduce the possibility of adverse events.
i. Hearing
    We are proposing that the Hearing data element meets the definition 
of standardized patient assessment data for impairments under section 
1899B(b)(1)(B)(v) of the Act. The proposed data element consists of the 
single Hearing data element. This data element assesses level of 
hearing impairment, and consists of one question. For more information 
on the Hearing data element, we refer readers to the document titled, 
Proposed Measure Specifications and Standardized Data Elements for CY 
2018 HH QRP Notice of Proposed Rulemaking, available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.

[[Page 35370]]

    Accurate assessment of hearing impairment is important in the PAC 
setting for care planning and resource use. Hearing impairment has been 
associated with lower quality of life, including poorer physical, 
mental, and social functioning, and emotional health.208 209 
Treatment and accommodation of hearing impairment led to improved 
health outcomes, including but not limited to increased quality of 
life.\210\ For example, hearing loss in elderly individuals has been 
associated with depression and cognitive 
impairment,211 212 213 higher rates of incident cognitive 
impairment and cognitive decline,\214\ and less time in occupational 
therapy.\215\ Accurate assessment of hearing impairment is important in 
the PAC setting for care planning and defining resource use.
---------------------------------------------------------------------------

    \208\ Dalton DS, Cruickshanks KJ, Klein BE, Klein R, Wiley TL, 
Nondahl DM. The impact of hearing loss on quality of life in older 
adults. Gerontologist. 2003;43(5):661-668.
    \209\ Hawkins K, Bottone FG, Jr., Ozminkowski RJ, et al. The 
prevalence of hearing impairment and its burden on the quality of 
life among adults with Medicare Supplement Insurance. Qual Life Res. 
2012;21(7):1135-1147.
    \210\ Horn KL, McMahon NB, McMahon DC, Lewis JS, Barker M, 
Gherini S. Functional use of the Nucleus 22-channel cochlear implant 
in the elderly. The Laryngoscope. 1991;101(3):284-288.
    \211\ Sprinzl GM, Riechelmann H. Current trends in treating 
hearing loss in elderly people: a review of the technology and 
treatment options--a mini-review. Gerontology. 2010;56(3):351-358.
    \212\ Lin FR, Thorpe R, Gordon-Salant S, Ferrucci L. Hearing 
Loss Prevalence and Risk Factors Among Older Adults in the United 
States. The Journals of Gerontology Series A: Biological Sciences 
and Medical Sciences. 2011;66A(5):582-590.
    \213\ Hawkins K, Bottone FG, Jr., Ozminkowski RJ, et al. The 
prevalence of hearing impairment and its burden on the quality of 
life among adults with Medicare Supplement Insurance. Qual Life Res. 
2012;21(7):1135-1147.
    \214\ Lin FR, Metter EJ, O'Brien RJ, Resnick SM, Zonderman AB, 
Ferrucci L. Hearing Loss and Incident Dementia. Arch Neurol. 
2011;68(2):214-220.
    \215\ Cimarolli VR, Jung S. Intensity of Occupational Therapy 
Utilization in Nursing Home Residents: The Role of Sensory 
Impairments. J Am Med Dir Assoc. 2016;17(10):939-942.
---------------------------------------------------------------------------

    The proposed data element was selected from two forms of the 
Hearing data element based on expert and stakeholder feedback. We 
considered the two forms of the Hearing data element, one of which is 
currently in use in the MDS 3.0 (Hearing) and another data element with 
different wording and fewer response option categories that is 
currently in use in the OASIS-C2 (Ability to Hear). Ability to Hear was 
also tested in the PAC PRD and found to have substantial agreement for 
inter-rater reliability across PAC settings (kappa of 0.78).\216\
---------------------------------------------------------------------------

    \216\ Gage B., Smith L., Ross J. et al. (2012). The Development 
and Testing of the Continuity Assessment Record and Evaluation 
(CARE) Item Set (Final Report on Reliability Testing, Volume 2 of 
3). Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Several data elements that assess hearing impairment were presented 
to the Standardized Patient Assessment Data TEP held by our data 
element contractor. The TEP did not reach consensus on the ideal number 
of response categories or phrasing of response options, which are the 
primary differences between the current MDS (Hearing) and OASIS 
(Ability to Hear) items. The Development and Maintenance of Post-Acute 
Care Cross-Setting Standardized Patient Assessment Data Technical 
Expert Panel Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    The PAC PRD form of the data element (Ability to Hear) was included 
in a call for public comment that was open from August 12 to September 
12, 2016. This data element includes three response choices, in 
contrast to the Hearing data element (in use in the MDS 3.0 and being 
proposed for standardization), which includes four response choices. 
Several commenters supported the use of the Ability to Hear data 
element, although some commenters raised concerns that the three-level 
response choice was not compatible with the current, four-level 
response used in the MDS, and favored the use of the MDS version of the 
Hearing data element. In addition, we received comments stating that 
standardized assessment related to hearing impairment has the ability 
to improve quality of care if information on hearing is included in 
medical records of patients and residents, which would improve care 
coordination and facilitate the development of patient- and resident-
centered treatment plans. Based on comments that the three-level 
response choice (Ability to Hear) was not congruent with the current, 
four-level response used in the MDS (Hearing), and support for the use 
of the MDS version of the Hearing data element received in the public 
comment, we are proposing the Hearing data element from the MDS. A full 
report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Therefore, we are proposing the Hearing data element currently in 
use in the MDS. We are proposing to add the Hearing data element to the 
OASIS, and that HHAs would be required to report these data for the CY 
2020 HH QRP at SOC/ROC between January 1, 2019 and June 30, 2019. 
Following the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019, through June 30, 2020 for 
the CY 2021 HH QRP. The Hearing data element would be assessed at SOC/
ROC only due to the relatively stable nature of hearing impairment, 
making it unlikely that this assessment would change between the start 
and end of care. Assessment at discharge would introduce additional 
burden without improving the quality or usefulness of the data, and we 
believe it is unnecessary.
    We are inviting public comment on these proposals.
ii. Vision
    We are proposing that the Vision data element meets the definition 
of standardized patient assessment data for impairments under section 
1899B(b)(1)(B)(v) of the Act. The proposed data element consists of the 
single Vision (Ability To See in Adequate Light) data element that 
consists of one question with five response categories. For more 
information on the Vision data element, we refer readers to the 
document titled, Proposed Measure Specifications and Standardized Data 
Elements for CY 2018 HH QRP Notice of Proposed Rulemaking, available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    Evaluation of an individual's ability to see is important for 
assessing for risks such as falls and provides opportunities for 
improvement through treatment and the provision of accommodations, 
including auxiliary aids and services, which can safeguard patients and 
improve their overall quality of life. Further, vision impairment is 
often a treatable risk factor associated with adverse events and poor 
quality of life. For example, individuals with visual impairment are 
more likely to experience falls and hip fracture, have less mobility, 
and report depressive symptoms.217 218 219 220 221 222 223
---------------------------------------------------------------------------

    \217\ Colon-Emeric CS, Biggs DP, Schenck AP, Lyles KW. Risk 
factors for hip fracture in skilled nursing facilities: who should 
be evaluated? Osteoporos Int. 2003;14(6):484-489.
    \218\ Freeman EE, Munoz B, Rubin G, West SK. Visual field loss 
increases the risk of falls in older adults: the Salisbury eye 
evaluation. Invest Ophthalmol Vis Sci. 2007;48(10):4445-4450.
    \219\ Keepnews D, Capitman JA, Rosati RJ. Measuring patient-
level clinical outcomes of home health care. J Nurs Scholarsh. 
2004;36(1):79-85.
    \220\ Nguyen HT, Black SA, Ray LA, Espino DV, Markides KS. 
Predictors of decline in MMSE scores among older Mexican Americans. 
J Gerontol A Biol Sci Med Sci. 2002;57(3):M181-185.
    \221\ Prager AJ, Liebmann JM, Cioffi GA, Blumberg DM. Self-
reported Function, Health Resource Use, and Total Health Care Costs 
Among Medicare Beneficiaries With Glaucoma. JAMA ophthalmology. 
2016;134(4):357-365.
    \222\ Rovner BW, Ganguli M. Depression and disability associated 
with impaired vision: the MoVies Project. J Am Geriatr Soc. 
1998;46(5):617-619.
    \223\ Tinetti ME, Ginter SF. The nursing home life-space 
diameter. A measure of extent and frequency of mobility among 
nursing home residents. J Am Geriatr Soc. 1990;38(12):1311-1315.

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[[Page 35371]]

    Individualized initial screening can lead to life-improving 
interventions such as accommodations, including the provision of 
auxiliary aids and services, during the stay and/or treatments that can 
improve vision and prevent or slow further vision loss. For patients 
with some types of visual impairment, use of glasses and contact lenses 
can be effective in restoring vision.\224\ Other conditions, including 
glaucoma\225\ and age-related macular degeneration,226 227 
have responded well to treatment. Accurate assessment of vision 
impairment is important in the PAC setting for care planning and 
defining resource use.
---------------------------------------------------------------------------

    \224\ Rein DB, Wittenborn JS, Zhang X, et al. The Cost-
effectiveness of Welcome to Medicare Visual Acuity Screening and a 
Possible Alternative Welcome to Medicare Eye Evaluation Among 
Persons Without Diagnosed Diabetes Mellitus. Archives of 
ophthalmology. 2012;130(5):607-614.
    \225\ Leske M, Heijl A, Hussein M, et al. Factors for glaucoma 
progression and the effect of treatment: The early manifest glaucoma 
trial. Archives of Ophthalmology. 2003;121(1):48-56.
    \226\ Age-Related Eye Disease Study Research G. A randomized, 
placebo-controlled, clinical trial of high-dose supplementation with 
vitamins c and e, beta carotene, and zinc for age-related macular 
degeneration and vision loss: AREDS report no. 8. Archives of 
Ophthalmology. 2001;119(10):1417-1436.
    \227\ Takeda AL, Colquitt J, Clegg AJ, Jones J. Pegaptanib and 
ranibizumab for neovascular age[hyphen]related macular degeneration: 
a systematic review. The British Journal of Ophthalmology. 
2007;91(9):1177-1182.
---------------------------------------------------------------------------

    The Vision data element that we are proposing for standardization 
was tested as part of the development of the MDS 3.0 and is currently 
in use in that assessment. Similar data elements, but with different 
wording and fewer response option categories, are in use in the OASIS-
C2 and were tested in post-acute providers in the PAC PRD and found to 
be clinically relevant, meaningful for care planning, reliable (kappa 
of 0.74),\228\ and feasible for use in each of the four PAC settings.
---------------------------------------------------------------------------

    \228\ Gage B., Smith L., Ross J. et al. (2012). The Development 
and Testing of the Continuity Assessment Record and Evaluation 
(CARE) Item Set (Final Report on Reliability Testing, Volume 2 of 
3). Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Several data elements that assess vision were presented to the TEP 
held by our data element contractor. The TEP did not reach consensus on 
the ideal number of response categories or phrasing of response 
options, which are the primary differences between the current MDS and 
OASIS items; some members preferring more granular response options 
(for example, mild impairment and moderate impairment) while others 
were comfortable with collapsed response options (that is, mild/
moderate impairment). The Development and Maintenance of Post-Acute 
Care Cross-Setting Standardized Patient Assessment Data Technical 
Expert Panel Summary Report is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    We solicited public comment from August 12 to September 12, 2016, 
on the Ability to See in Adequate Light data element (version tested in 
the PAC PRD with three response categories). The data element in public 
comment differed from the proposed data element, but the comments 
supported the assessment of vision in PAC settings and the useful 
information a vision data element would provide. The commenters stated 
that the Ability to See item would provide important information that 
would facilitate care coordination and care planning, and consequently 
improve the quality of care. Other commenters suggested it would be 
helpful as an indicator of resource use and noted that the item would 
provide useful information about the abilities of patients and 
residents to care for themselves. Additional commenters noted that the 
item could feasibly be implemented across PAC providers and that its 
kappa scores from the PAC PRD support its validity. Some commenters 
noted a preference for MDS version of the Vision data element over the 
form put forward in public comment, citing the widespread use of this 
data element. A full report of the comments is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.
    Clinical and subject matter expert advisors working with our data 
element contractor agreed that assessing vision impairment of patients 
and residents with a standardized data element is feasible in PAC, that 
it can reliably and accurately identify adults with objective impaired 
vision, and that this information about impaired vision would be 
clinically useful to identify needed accommodations and/or treatment 
both within and across PAC settings.
    Therefore, we are proposing the Vision data element from the MDS. 
We are proposing to add the Vision data element to the OASIS, and that 
HHAs would be required to report these data for the CY 2020 HH QRP at 
the start of care between January 1, 2019 and June 30, 2019. Following 
the initial two quarters of reporting for the CY 2020 HH QRP, 
subsequent years for the HH QRP would be based on 12 months of such 
data reporting beginning with July 1, 2019 through June 30, 2020 for 
the CY 2021 HH QRP. The Vision data element would be assessed at start 
of care only due to the relatively stable nature of vision impairment, 
making it unlikely that this assessment would change between the start 
and end of care. Assessment at the end of care would introduce 
additional burden without improving the quality or usefulness of the 
data, and we believe it is unnecessary.
    We are inviting public comment on these proposals.

I. Proposals Relating to the Form, Manner, and Timing of Data 
Submission Under the HH QRP

1. Proposed Start Date for Reporting Standardized Patient Assessment 
Data by New HHAs
    In the CY 2016 HH PPS final rule (80 FR 68624), we adopted timing 
for new HHAs to begin reporting standardized quality data under the HH 
QRP. We are proposing in this proposed rule that new HHAs will be 
required to begin reporting standardized patient assessment data on the 
same schedule. We are inviting public comment on this proposal.
2. Proposed Mechanism for Reporting Standardized Patient Assessment 
Data Beginning With the CY 2019 HH QRP
    Under our current policy, HHAs report data by completing applicable 
sections of the OASIS, and submitting the OASIS to CMS through the 
QIES, ASAP system. For more information on HH QRP reporting through the 
QIES ASAP system, refer to https://www.qtso.com/index.php. In addition 
to the data currently submitted on quality measures as previously 
finalized and described in Table 49 of this proposed

[[Page 35372]]

rule, we are proposing that HHAs would be required to begin submitting 
the proposed standardized patient assessment data for HHA Medicare and 
Medicaid quality episodes that begin or end on or after January 1, 2019 
using the OASIS, as described here.
    Further, the proposed standardized patient assessment data elements 
described above would be added to the OASIS, so the new reporting 
requirements regarding those elements would result in no changes to the 
mechanism by which HHAs report data under the HH QRP. All standardized 
patient assessment data elements would be collected at SOC/ROC using 
the OASIS item set, and all except the Brief Interview for Mental 
Status (BIMS), Hearing, and Vision data elements are or would be 
collected at discharge using the OASIS item set. Details on the 
modifications and assessment collection for the OASIS for the proposed 
standardized data are available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html.
    We are inviting public comments on these proposals.
3. Proposed Schedule for Reporting Standardized Patient Assessment Data 
Beginning With the CY 2019 HH QRP
    Starting with the CY 2019 HH QRP, we are proposing to apply our 
current schedule for the reporting of measure data to the reporting of 
standardized patient assessment data. Under that policy, except for the 
first program year for which a measure is adopted, HHAs must report 
data on measures for HHA Medicare and Medicaid quality episodes that 
occur during the 12-month period (between July 1 and June 30) that 
applies to the program year. For the first program year for which a 
measure is adopted, HHAs are only required to report data on HHA 
Medicare and Medicaid quality episodes that begin on or after January 1 
and end up to and including June 30 of the calendar year that applies 
to that program year. For example, for the CY 2019 HH QRP, data on 
measures adopted for earlier program years must be reported for all HHA 
Medicare and Medicaid quality episodes that begin on or after July 1, 
2017 and end on or before June 30, 2018. However, data on new measures 
adopted for the first time for the CY 2019 HH QRP program year must 
only be reported for HHA Medicare and Medicaid quality episodes that 
begin or end during the first two quarters of CY 2018. Tables 49 and 50 
illustrate this policy.

  Table 49--Summary Illustration of Initial Reporting for Newly Adopted
 Measures and Standardized Patient Assessment Data Reporting Using CY Q1
                      and Q2 Data for the HH QRP *:
------------------------------------------------------------------------
                                             Proposed data submission
  Proposed data collection/submission      deadlines beginning with CY
           reporting period *                     2019 HH QRP *
------------------------------------------------------------------------
January 1, 2018-June 30, 2018..........  July 31, 2018.
------------------------------------------------------------------------
\*\We note that submission of the OASIS must also adhere to the HH PPS
  deadlines.
[supcaret] The term ``CY 2019 HH QRP'' means the calendar year for which
  the HH QRP requirements applicable to that calendar year must be met
  in order for a HHA to avoid a two percentage point reduction to its
  market basket percentage when calculating the payment rates applicable
  to it for that calendar year.


   Table 50--Summary Illustration of OASIS 12 Month Data Reporting for
 Measures and Standardized Patient Assessment Data Reporting for the HH
                                  QRP *
------------------------------------------------------------------------
                                             Proposed data submission
  Proposed data collection/submission      deadlines beginning with CY
           reporting period *                 2020 HH QRP * [caret]
------------------------------------------------------------------------
July 1, 2018--June 30, 2019............  July 31, 2019.
------------------------------------------------------------------------
\*\ We note that submission of the OASIS must also adhere to the HH PPS
  deadlines.
[supcaret] The term ``CY 2020 HH QRP'' means the calendar year for which
  the HH QRP requirements applicable to that calendar year must be met
  in order for a HHA to avoid a two percentage point reduction to its
  market basket percentage when calculating the payment rates applicable
  to it for that calendar year.

    We are inviting comment on our proposal to extend our current 
policy governing the schedule for reporting the quality measure data to 
the reporting of standardized patient assessment data for the HH QRP 
beginning with the CY 2019 HH QRP.
4. Proposed Schedule for Reporting the Proposed Quality Measures 
Beginning With the CY 2020 HH QRP
    As discussed in section V.I. of this proposed rule, we are 
proposing to adopt three quality measures beginning with the CY 2020 HH 
QRP: Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury; 
Application of The Percent of Residents Experiencing One or More Falls 
with Major Injury (NQF # 0674); and Application of Percent of Long-Term 
Care Hospital Patients with an Admission and Discharge Functional 
Assessment and a Care Plan That Addresses Function (NQF #2631). We are 
proposing that HHAs would report data on these measures using OASIS 
reporting that is submitted through the QIES ASAP system. More 
information on OASIS reporting using the QIES ASAP system is located at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/OASIS/DataSpecifications.html.
    For the CY 2020 HH QRP, HHAs would be required to report these data 
for HHA Medicare and Medicaid quality episodes that begin or end during 
the period from January 1, 2019 to June 30, 2019. Beginning with the CY 
2021 HH QRP, HHAs would be required to submit data for the entire 12-
month period from July 1 to June 30. Further, for the purposes of 
measure calculation, our policy was established in the CY 2017 HH PPS 
final rule (81 FR 76702) that data are utilized using calendar year 
timeframes with review and correction periods.
    We are inviting public comment on this proposal.
5. Input Sought for Data Reporting Related to Assessment Based Measures
    Through various means of public input, including through previous 
rules, public comment on measures, and the MAP, we have received input 
suggesting that we expand the population for quality measurement to 
include all patients regardless of payer. Approximately 75 percent of 
home health expenditures in 2014 were made

[[Page 35373]]

by either Medicare or Medicaid and currently both Medicare and Medicaid 
collect and report data for OASIS. We believe that expanding the 
patient population for which OASIS collects data will allow us to 
ensure data that is representative of quality provided to all patients 
in the HHA setting and therefore allow us to better determine whether 
HH Medicare beneficiaries receive the same quality of care that other 
patients receive. We also appreciate that collecting quality data on 
all patients regardless of payer source may create additional burden. 
However, we also received input that the effort to separate out 
Medicare and Medicaid beneficiaries, who are currently reported through 
OASIS, from other patients creates clinical and work flow implications 
with an associated burden too, and we further appreciate that it is 
common practice for HHAs to collect OASIS data on all patients, 
regardless of payer source. Thus, we are seeking input on whether we 
should require quality data reporting on all HH patients, regardless of 
payer, where feasible--noting that because Medicare Part A claims data 
are submitted only with respect to Medicare beneficiaries, claims-based 
measures rates would continue to be calculated only for Medicare 
beneficiaries.
    We are inviting public comments on this topic.

J. Other Proposals for the CY 2019 HH QRP and Subsequent Years

1. Proposal To Apply the HH QRP Data Completion Thresholds to the 
Submission of Standardized Patient Assessment Data Beginning With the 
CY 2019 HH QRP
    In the CY 2016 HH PPS final rule (80 FR 68703 through 68705), we 
defined the pay-for-reporting performance system model that could 
accurately measure the level of an HHA's submission of OASIS data based 
on the principle that each HHA is expected to submit a minimum set of 
two matching assessments for each patient admitted to their agency. 
These matching assessments together create what is considered a quality 
episode of care, consisting ideally of a Start of Care (SOC) or 
Resumption of Care (ROC) assessment and a matching End of Care (EOC) 
assessment. EOC assessments comprise the Discharge from Agency, Death 
at Home and Transfer to an Inpatient Facility time points. For further 
information on successful submission of OASIS assessments, types of 
assessments submitted by an HHA that fit the definition of a quality 
assessment, defining the ``Quality Assessments Only'' (QAO) formula, 
and implementing a pay-for-reporting performance requirement over a 3-
year period, please see the CY 2016 HH PPS final rule (80 FR 68704 to 
68705).
    Additionally, we finalized the pay-for-reporting threshold 
requirements in the CY 2016 HH PPS rule. We finalized a policy through 
which HHAs must score at least 70 percent on the QAO metric of pay-for-
reporting performance requirement for CY 2017 (reporting period July 1, 
2015 to June 30, 2016), 80 percent for CY 2018 (reporting period July 
1, 2016 to June 30, 2017) and 90 percent for CY 2019 (reporting period 
July 1, 2017 to June 30, 2018). An HHA that does not meet this 
requirement for a calendar year will be subject to a two percentage 
point reduction to the market basket percentage increase that would 
otherwise apply for that calendar year. We are now proposing to apply 
the threshold requirements established in the CY 2016 HH PPS rule to 
the submission of standardized patient assessment data beginning with 
the CY 2019 HH QRP.
    We are inviting public comment on our proposal to extend our 
current HH QRP data completion requirements to the submission of 
standardized patient assessment data.
2. Proposal for the HH QRP Submission Exception and Extension 
Requirements
    Our experience with other QRPs has shown that there are times when 
providers are unable to submit quality data due to extraordinary 
circumstances beyond their control (for example, natural, or man-made 
disasters). Other extenuating circumstances are reviewed on a case-by-
case basis. We propose to define a ``disaster'' as any natural or man-
made catastrophe which causes damages of sufficient severity and 
magnitude to partially or completely destroy or delay access to medical 
records and associated documentation. Natural disasters could include 
events such as hurricanes, tornadoes, earthquakes, volcanic eruptions, 
fires, mudslides, snowstorms, and tsunamis. Man-made disasters could 
include such events as terrorist attacks, bombings, floods caused by 
man-made actions, civil disorders, and explosions. A disaster may be 
widespread and impact multiple structures or be isolated and impact a 
single site only.
    In certain instances of either natural or man-made disasters, an 
HHA may have the ability to conduct a full patient assessment, and 
record and save the associated data either during or before the 
occurrence of the extraordinary event. In this case, the extraordinary 
event has not caused the agency's data files to be destroyed, but it 
could hinder the HHA's ability to meet the QRP's data submission 
deadlines. In this scenario, the HHA would potentially have the ability 
to report the data at a later date, after the emergency has passed. In 
such cases, a temporary extension of the deadlines for reporting might 
be appropriate.
    In other circumstances of natural or man-made disaster, an HHA may 
not have had the ability to conduct a full patient assessment, or to 
record and save the associated data before the occurrence of the 
extraordinary event. In such a scenario, the agency may not have 
complete data to submit to CMS. We believe that it may be appropriate, 
in these situations, to grant a full exception to the reporting 
requirements for a specific period of time.
    We do not wish to penalize HHAs in these circumstances or to unduly 
increase their burden during these times. Therefore, we propose a 
process for HHAs to request and for us to grant exceptions and 
extensions for the reporting requirements of the HH QRP for one or more 
quarters, beginning with the CY 2019 HH QRP, when there are certain 
extraordinary circumstances beyond the control of the HHA. When an 
exception or extension is granted, we would not reduce the HHA's PPS 
payment for failure to comply with the requirements of the HH QRP.
    We propose that if an HHA seeks to request an exception or 
extension for the HH QRP, the HHA should request an exception or 
extension within 90 days of the date that the extraordinary 
circumstances occurred. The HHA may request an exception or extension 
for one or more quarters by submitting a written request to CMS that 
contains the information noted below, via email to the HHA Exception 
and Extension mailbox at [email protected]. Requests 
sent to CMS through any other channel would not be considered as valid 
requests for an exception or extension from the HH QRP's reporting 
requirements for any payment determination.
    The subject of the email must read ``HH QRP Exception or Extension 
Request'' and the email must contain the following information:
     HHA CCN;
     HHA name;
     CEO or CEO-designated personnel contact information 
including name, telephone number, email address, and mailing address 
(the address must be a physical address, not a post office box);
     HHA's reason for requesting an exception or extension;
     Evidence of the impact of extraordinary circumstances, 
including

[[Page 35374]]

but not limited to photographs, newspaper and other media articles; and
     A date when the HHA believes it will be able to again 
submit HH QRP data and a justification for the proposed date.
    We propose that exception and extension requests be signed by the 
HHA's CEO or CEO-designated personnel, and that if the CEO designates 
an individual to sign the request, the CEO-designated individual has 
the appropriate authority to submit such a request on behalf of the 
HHA. Following receipt of the email, we would: (1) Provide a written 
acknowledgement, using the contact information provided in the email, 
to the CEO or CEO-designated contact notifying them that the request 
has been received; and (2) provide a formal response to the CEO or any 
CEO-designated HHA personnel, using the contact information provided in 
the email, indicating our decision.
    This proposal does not preclude us from granting exceptions or 
extensions to HHAs that have not requested them when we determine that 
an extraordinary circumstance, such as an act of nature, affects an 
entire region or locale. If we make the determination to grant an 
exception or extension to all HHAs in a region or locale, we propose to 
communicate this decision through routine communication channels to 
HHAs and vendors, including, but not limited to, issuing memos, emails, 
and notices on our HH QRP Web site once it is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HomeHealthQualityReporting-Reconsideration-and-Exception-and-Extension.html.
    We also propose that we may grant an exception or extension to HHAs 
if we determine that a systemic problem with one of our data collection 
systems directly affected the ability of the HHA to submit data. 
Because we do not anticipate that these types of systemic errors will 
happen often, we do not anticipate granting an exception or extension 
on this basis frequently.
    If an HHA is granted an exception, we would not require that the 
HHA submit any measure data for the period of time specified in the 
exception request decision. If we grant an extension to the original 
submission deadline, the HHA would still remain responsible for 
submitting quality data collected during the timeframe in question, 
although we would specify a revised deadline by which the HHA must 
submit this quality data.
    We also propose that any exception or extension requests submitted 
for purposes of the HH QRP would apply to that program only, and not to 
any other program we administer for HHAs such as survey and 
certification. OASIS requirements, including electronic submission, 
during Declared Public Health Emergencies can be found at FAQs I-5, I-
6, I-7, I-8 at http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/downloads/AllHazardsFAQs.pdf.
    We intend to provide additional information pertaining to 
exceptions and extensions for the HH QRP, including any additional 
guidance, on the HH QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HomeHealthQualityReporting-Reconsideration-and-Exception-and-Extension.html.
    We propose to add the HH QRP Submission Exception and Extension 
Requirements at Sec.  484.250(d). We welcome comment on these 
proposals.
3. Proposed HH QRP Submission Reconsideration and Appeals Procedures
    The HH QRP reconsiderations and appeals process was finalized in 
the CY 2013 HH PPS final rule (77 FR 67096) and has been used for prior 
all periods cited in the previous rules, and utilized in the CY 2012 to 
CY 2017 APU determinations. At the conclusion of the required quality 
data reporting and submission period, we review the data received from 
each HHA during that reporting period to determine if the HHA met the 
HH QRP reporting requirements. HHAs that are found to be noncompliant 
with the HH QRP reporting requirements for the applicable calendar year 
will receive a 2 percentage point reduction to its market basket 
percentage update for that calendar year.
    Similar to our other quality reporting programs, such as the SNF 
QRP, the LTCH QRP, and the IRF QRP, we include an opportunity for the 
providers to request a reconsideration of our initial noncompliance 
determination. To be consistent with other established quality 
reporting programs and to provide an opportunity for HHAs to seek 
reconsideration of our initial noncompliance decision, we are proposing 
a process that enables an HHA to request reconsideration of our initial 
non-compliance decision in the event that it believes that it was 
incorrectly identified as being non-compliant with the HH QRP reporting 
requirements for a particular calendar year. These proposals clarify 
the HH QRP reconsiderations and appeals process that we have finalized 
in previous rules.
    For the CY 2019 HH QRP, and subsequent years, we are proposing that 
a HHA would receive a notification of noncompliance if we determine 
that the HHA did not submit data in accordance with the HH QRP 
reporting requirements for the applicable CY. The purpose of this 
notification is to put the HHA on notice that the HHA: (1) Has been 
identified as being non-compliant with the HH QRP's reporting 
requirements for the applicable calendar year; (2) will be scheduled to 
receive a reduction in the amount of two percentage points to its 
market basket percentage update for the applicable calendar year; (3) 
may file a request for reconsideration if it believes that the finding 
of noncompliance is erroneous, has submitted a request for an extension 
or exception that has not yet been decided, or has been granted an 
extension or exception; and (4) must follow a defined process on how to 
file a request for reconsideration, which will be described in the 
notification. We would only consider requests for reconsideration after 
an HHA has been found to be noncompliant.
    Notifications of noncompliance and any subsequent notifications 
from CMS would be sent via a traceable delivery method, such as 
certified U.S. mail or registered U.S. mail, or through other 
practicable notification processes, such as a report from CMS to the 
provider as a Certification and Survey Provider Enhanced Reports 
(CASPER) report, that will provide information pertaining to their 
compliance with the reporting requirements for the given reporting 
cycle or from the Medicare Administrative Contractors assigned to 
process the provider's claims. To obtain the compliance reports, 
providers should access the CASPER Reporting Application. HHA providers 
access the CASPER Reporting application via their CMS OASIS System 
Welcome page by selecting the CASPER Reporting link. The ``CASPER 
Reports'' link will connect an HHA to the QIES National System Login 
page for CASPER Reporting.
    We propose to disseminate communications regarding the availability 
of compliance reports through routine channels to HHAs and vendors, 
including, but not limited to issuing memos, emails, Medicare Learning 
Network (MLN) announcements, and notices on our HH QRP Web site once it 
is available at https://www.cms.gov/Medicare/Quality-Initiatives-
Patient-Assessment-Instruments/HomeHealthQualityInits/

[[Page 35375]]

HomeHealthQualityReporting-Reconsideration-and-Exception-and-
Extension.html.
    An HHA would have 30 days from the date of the letter of 
noncompliance to submit to us a request for reconsideration. This 
proposed time frame allows us to balance our desire to ensure that HHA 
s have the opportunity to request reconsideration with our need to 
complete the process and provide HHAs with our reconsideration decision 
in a timely manner. We are proposing that an HHA may withdraw its 
request at any time and may file an updated request within the proposed 
30-day deadline. We are also proposing that, in very limited 
circumstances, we may grant a request by an HHA to extend the proposed 
deadline for reconsideration requests. It would be the responsibility 
of an HHA to request an extension and demonstrate that extenuating 
circumstances existed that prevented the filing of the reconsideration 
request by the proposed deadline.
    We also are proposing that as part of the HHA's request for 
reconsideration, the HHA would be required to submit all supporting 
documentation and evidence demonstrating full compliance with all HH 
QRP reporting requirements for the applicable calendar year, that the 
HHA has requested an extension or exception for which a decision has 
not yet been made, that the HHA has been granted an extension or 
exception, or has experienced an extenuating circumstance as defined in 
section V.I.2 of this rule but failed to file a timely request of 
exception. We propose that we would not review any reconsideration 
request that fails to provide the necessary documentation and evidence 
along with the request.
    The documentation and evidence may include copies of any 
communications that demonstrate the HHA's compliance with the HH QRP, 
as well as any other records that support the HHA's rationale for 
seeking reconsideration, but should not include any protected health 
information (PHI). We intend to provide a sample list of acceptable 
supporting documentation and evidence, as well as instructions for HHAs 
on how to retrieve copies of the data submitted to CMS for the 
appropriate program year in the future on our HH QRP Web site at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HomeHealthQualityReporting-Reconsideration-and-Exception-and-Extension.html.
    We are proposing that an HHA wishing to request a reconsideration 
of our initial noncompliance determination would be required to do so 
by submitting an email to the following email address: 
[email protected]. Any request for reconsideration 
submitted to us by an HHA would be required to follow the guidelines 
outlined on our HH QRP Web site once it is available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HomeHealthQualityReporting-Reconsideration-and-Exception-and-Extension.html.
    All emails must contain a subject line that reads ``HH QRP 
Reconsideration Request.'' Electronic email submission is the only form 
of reconsideration request submission that will be accepted by us. Any 
reconsideration requests communicated through another channel 
including, but not limited to, U.S. Postal Service or phone, will not 
be considered as a valid reconsideration request.
    We are proposing that a reconsideration request include the 
following information:
     HHA CMS Certification Number (CCN);
     HHA Business Name;
     HHA Business Address;
     The CEO contact information including name, email address, 
telephone number and physical mailing address; or The CEO-designated 
representative contact information including name, title, email 
address, telephone number and physical mailing address; and
     CMS identified reason(s) for noncompliance from the non-
compliance notification; and
     The reason(s) for requesting reconsideration.
    The request for reconsideration must be accompanied by supporting 
documentation demonstrating compliance. Following receipt of a request 
for reconsideration, we would provide an email acknowledgment, using 
the contact information provided in the reconsideration request, to the 
CEO or CEO-designated representative that the request has been 
received. Once we have reached a decision regarding the reconsideration 
request, an email would be sent to the HHA CEO or CEO designated 
representative, using the contact information provided in the 
reconsideration request, notifying the HHA of our decision.
    We also propose that the notifications of our decision regarding 
reconsideration requests may be made available through a traceable 
delivery method, such as certified U.S. mail or registered U.S. mail or 
through the use of CASPER reports. If the HHA is dissatisfied with the 
decision rendered at the reconsideration level, the HHA may appeal the 
decision to the PRRB under 42 CFR 405.1835. We believe this proposed 
process is more efficient and less costly for CMS and for HHAs because 
it decreases the number of PRRB appeals by resolving issues earlier in 
the process. Additional information about the reconsideration process 
including details for submitting a reconsideration request will be 
posted in the future to our HH QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HomeHealthQualityReporting-Reconsideration-and-Exception-and-Extension.html.
    We propose to add the HH QRP Submission Reconsideration and Appeals 
Procedures at Sec.  484.250(e) and (f). We welcome comment on these 
proposals.

K. Proposals and Policies Regarding Public Display of Quality Measure 
Data for the HH QRP

    Our home health regulations, at Sec.  484.250(a), require HHAs to 
submit OASIS assessments and Home Health Care Consumer Assessment of 
Healthcare Providers and Systems Survey[supreg] (HHCAHPS) data to meet 
the quality reporting requirements of section 1895(b)(3)(B)(v) of the 
Act. Section 1899B(g) of the Act requires that data and information of 
provider performance on quality measures and resource use and other 
measures be made publicly available beginning not later than two years 
after the applicable specified ``application date''. In addition, 
sections 1895(b)(3)(B)(v)(III) requires the Secretary to establish 
procedures for making data submitted under section 1895(b)(3)(B)(v)(II) 
available to the public, and section 1899B(g)(1) of the Act requires 
the Secretary to do the same with respect to HHA performance on 
measures specified under sections 1899B(c)(1) and (d)(1) of the Act. 
Section 1895(b)(3)(B)(v)(III) of the Act requires that the public 
reporting procedures for data submitted under subclause (II) ensure 
that a HHA has the opportunity to review the data that is to be made 
public with respect to it prior to such data being made public. Under 
section 1899B(g)(2) of the Act, the public reporting procedures for 
performance on measures under sections 1899B(c)(1) and (d)(1) of the 
Act must ensure, including through a process consistent with the 
process applied under section 1886(b)(3)(B)(viii)(VII) of the Act, 
(which refers to public display and review requirements in the Hospital 
Inpatient Quality Reporting (Hospital IQR) Program), that a HHA has the

[[Page 35376]]

opportunity to review and submit corrections to its data and 
information that are to be made public for the agency prior to such 
data being made public. We recognize that public reporting of quality 
data is a vital component of a robust quality reporting program and are 
fully committed to ensuring that the data made available to the public 
are meaningful. Further, we agree that measures for comparing 
performance across home health agencies should be constructed from data 
collected in a standardized and uniform manner.
    In the CY 2017 HH PPS final rule (81 FR 76785 through 76786), we 
finalized procedures that allow individual HHAs to review and correct 
their data and information on IMPACT Act measures that are to be made 
public before those measure data are made public. Information on how to 
review and correct data on IMPACT Act measures that are to be made 
public before those measure data are made public can be found on the HH 
QRP Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Reporting-Requirements.html. We are not proposing any changes 
to these policies.
    In this CY 2018 HH PPS proposed rule, pending the availability of 
data, we are proposing to publicly report data beginning in CY 2019 for 
the following two assessment-based measures: (1) Percent of Patients or 
Residents with Pressure Ulcers that are New or Worsened (NQF #0678); 
and (2) Drug Regimen Review Conducted with Follow-Up for Identified 
Issues-PAC HH QRP. Data collection for these two assessment-based 
measures began on OASIS on January 1, 2017. We propose to publicly 
report data beginning in CY 2019 for these assessment-based measures 
based on four rolling quarters of data, beginning with data collected 
for discharges in 2017.
    In addition, we are proposing to publicly report data beginning in 
CY 2019 for the following 3 claims-based measures: (1) Medicare 
Spending Per Beneficiary-PAC HH QRP; (2) Discharge to Community-PAC HH 
QRP; and (3) Potentially Preventable 30-Day Post-Discharge Readmission 
Measure for HH QRP. As adopted in the CY 2017 HH PPS final rule (81 FR 
43773), for the MSPB-PAC HH QRP measure, we will use one year of claims 
data beginning with CY 2016 claims data to inform confidential feedback 
reports for HHAs, and CY 2017 claims data for public reporting for the 
HH QRP. For the Discharge to Community--PAC HH QRP measure we will use 
2 years of claims data, beginning with CYs 2015 and 2016 claims data to 
inform confidential feedback and CYs 2016 and 2017 claims data for 
public reporting. For the Potentially Preventable 30-Day Post-Discharge 
Readmission Measure for HH QRP, we will use 3 years of claims data, 
beginning with CY 2014, 2015 and 2016 claims data to inform 
confidential feedback reports for HHAs, and CY 2015, 2016 and 2017 
claims data for public reporting.
    Finally, we are proposing to assign HHAs with fewer than 20 
eligible cases during a performance period to a separate category: 
``The number of patient episodes for this measure is too small to 
report,'' \229\ to ensure the statistical reliability of the measures. 
If a HHA had fewer than 20 eligible cases, the HHA's performance would 
not be publicly reported for the measure for that performance period.
---------------------------------------------------------------------------

    \229\ This language is currently available as Footnote #4 on 
Home Health Compare (https://www.medicare.gov/HomeHealthCompare/Data/Footnotes.html).

  Table 51--Summary of Proposed New HH QRP Measures for CY 2019 Public
                                 Display
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Proposed Measures:
    Percent of Residents or Patients with Pressure Ulcers that Are New
     or Worsened (Short Stay) (NQF #0678).
    Drug Regimen Review Conducted with Follow-Up for Identified Issues-
     PAC HH QRP.
    Potentially Preventable 30-Day Post-Discharge Readmission Measure
     for HH QRP.
    Discharge to Community--(PAC) HH QRP.
    Medicare Spending Per Beneficiary (PAC) HH QRP.
------------------------------------------------------------------------

    We are inviting public comment on these proposals for the public 
display of quality data, as described in this proposed rule.

L. Proposed Mechanism for Providing Confidential Feedback Reports to 
HHAs

    Section 1899B(f) of the Act requires the Secretary to provide 
confidential feedback reports to post-acute care (PAC) providers on 
their performance on the measures specified under subsections (c)(1) 
and (d)(1) of section 1899B of the Act, beginning one year after the 
specified application date that applies to such measures and PAC 
providers. In the CY 2017 HH PPS final rule (81 FR 76702), we finalized 
processes to allow HH providers the opportunity to review their data 
and information using confidential feedback reports that will enable 
HHAs to review their performance on the measures required under the HH 
QRP. Information on how to obtain these and other reports available to 
the HH QRP can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Reporting-Requirements.html. We are not proposing any 
changes to this policy.

M. Home Health Care CAHPS[supreg] Survey (HHCAHPS)

    In the CY 2017 HH PPS final rule (81 FR 76787), we stated that the 
home health quality measures reporting requirements for Medicare-
certified agencies includes the Home Health Care CAHPS[supreg] 
(HHCAHPS) Survey for the Home Health Quality Reporting Program and 
along with OASIS measures, HHCAHPS participation is required for the 
Annual Payment Update (APU). In the CY 2017 HH PPS final rule, we 
finalized the reporting requirements and the data submission dates for 
the CY 2017-CY 2020 APU periods. We proposed to continue the HHCAHPS 
requirements in future years for the continuous monthly data collection 
and quarterly data submission of HHCAHPS data.
1. Background and Description of HHCAHPS
    The HHCAHPS survey is part of a family of CAHPS[supreg] surveys 
that asks patients to report on and rate their experiences with health 
care. For more details about the HH CAHPS Survey please see 81 FR 76787 
through 76788.
    We stated in previous rules that Medicare-certified HHAs are 
required to contract with an approved HHCAHPS survey vendor. This 
requirement continues, and Medicare-certified agencies are required to 
provide a monthly list of their HHCAHPS-eligible patients to their 
respective HHCAHPS

[[Page 35377]]

survey vendors. Home health agencies are not allowed to influence their 
patients about how the HHCAHPS survey.
    As previously required, new HHCAHPS survey vendors are required to 
attend Introduction training, and current HHCAHPS vendors are required 
to attend Update training conducted by CMS and the HHCAHPS Survey 
Coordination Team. New HHCAHPS vendors need to pass a post-training 
certification test. We have approximately 30 approved HHCAHPS survey 
vendors. The list of approved HHCAHPS survey vendors is available at 
https://homehealthcahps.org.
2. HHCAHPS Oversight Activities
    We stated in prior final rules that all approved HHCAHPS survey 
vendors are required to participate in HHCAHPS oversight activities to 
ensure compliance with HHCAHPS protocols, guidelines, and survey 
requirements. The purpose of the oversight activities is to ensure that 
approved HHCAHPS survey vendors follow the HHCAHPS Protocols and 
Guidelines Manual.
    In the CY 2013 HH PPS final rule (77 FR 67094, 67164), we codified 
the current guideline that all approved HHCAHPS survey vendors fully 
comply with all HHCAHPS oversight activities. We included this survey 
requirement at Sec.  484.250(c)(3).
    For the sake of continuity with this proposed rule, we are 
reiterating the HHCAHPS requirements for CY 2019, because participation 
occurs in the period of the publication of the proposed and final rules 
for CY 2018. We are additionally presenting the HHCAHPS requirements 
for CY 2020 for the sake of continuity. We are proposing the HHCAHPS 
requirements for the CY 2021 Annual Payment Update.
3. HHCAHPS Requirements for the CY 2019 HH QRP
    In the CY 2017 HH PPS final rule, we finalized the requirements for 
the CY 2019 HH QRP. For the CY 2019 HH QRP, we require continuous 
monthly HHCAHPS data collection and reporting for four quarters. The 
data collection period for the CY 2018 HH QRP includes the second 
quarter 2017 through the first quarter 2018 (the months of April 2017 
through March 2018). HHAs will be required to submit their HHCAHPS data 
files to the HHCAHPS Data Center for the second quarter 2017 by 11:59 
p.m., eastern daylight time (e.d.t.) on October 19, 2017; for the third 
quarter 2017 by 11:59 p.m., eastern standard time (e.s.t.) on January 
18, 2018; for the fourth quarter 2017 by 11:59 p.m., e.d.t. on April 
19, 2018; and for the first quarter 2018 by 11:59 p.m., e.d.t. on July 
19, 2018. These deadlines are firm; no exceptions will be permitted.
    For more details on the CY 2019 HH QRP, we refer readers to 81 FR 
76789.
4. HHCAHPS Requirements for the CY 2020 HH QRP
    In the CY 2017 HH PPS final rule, we finalized the requirements for 
the CY 2020 HH QRP. For the CY 2020 HH QRP, we require continued 
monthly HHCAHPS data collection and reporting for four quarters. The 
data collection period for the CY 2020 HH QRP includes the second 
quarter 2018 through the first quarter 2019 (the months of April 2018 
through March 2019). HHAs will be required to submit their HHCAHPS data 
files to the HHCAHPS Data Center for the second quarter 2018 by 11:59 
p.m., e.d.t. on October 18, 2018; for the third quarter 2018 by 11:59 
p.m., e.s.t. on January 17, 2019; for the fourth quarter 2018 by 11:59 
p.m., e.d.t. on April 18, 2019; and for the first quarter 2019 by 11:59 
p.m., e.d.t. on July 18, 2019. These deadlines are firm; no exceptions 
will be permitted.
    For more details about the CY 2020 HH QRP, we refer readers to 81 
FR 76789.
5. HHCAHPS Requirements for the CY 2021 HH QRP
    For the CY 2021 HH QRP, we propose to require the continued monthly 
HHCAHPS data collection and reporting for four quarters. The data 
collection period for the CY 2021 HH QRP includes the second quarter 
2019 through the first quarter 2020 (the months of April 2019 through 
March 2020). HHAs will be required to submit their HHCAHPS data files 
to the HHCAHPS Data Center for the second quarter 2019 by 11:59 p.m., 
e.d.t. on October 17, 2019; for the third quarter 2019 by 11:59 p.m., 
e.s.t. on January 16, 2020; for the fourth quarter 2019 by 11:59 p.m., 
e.d.t. on April 16, 2020; and for the first quarter 2020 by 11:59 p.m., 
e.d.t. on July 16, 2020. These deadlines are firm; no exceptions will 
be permitted.
    For the CY 2021 HH QRP, we propose to require that all HHAs with 
fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the 
period of April 1, 2018 through March 31, 2019 are exempt from the 
HHCAHPS data collection and submission requirements for the CY 2021 HH 
QRP, upon completion of the CY 2021 HHCAHPS Participation Exemption 
Request form, and upon CMS verification of the HHA patient counts. 
Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique 
patients in the period of April 1, 2018 through March 31, 2019 are 
proposed to be required to submit their patient counts on the CY 2021 
HHCAHPS Participation Exemption Request form posted on https://homehealthcahps.org from April 1, 2019 to 11:59 p.m., e.d.t. to March 
31, 2020. This deadline is firm, as are all of the quarterly data 
submission deadlines for the HHAs that participate in HHCAHPS.
    We propose to automatically exempt HHAs receiving Medicare 
certification on or after the start of the period in which HHAs do 
their patient count for a particular year's HHCAHPS data submission 
from the HHCAHPS reporting requirement for the year. We propose that 
HHAs receiving Medicare-certification on or after April 1, 2019 would 
be exempt from the HHCAHPS reporting requirement for the CY 2021 HH 
QRP. As we have finalized in previous years, we propose that these 
newly-certified HHAs do not need to complete the HHCAHPS Participation 
Exemption Request Form for the CY 2021 HH QRP.
6. HHCAHPS Reconsiderations and Appeals Process
    As finalized in previous rules, we propose that HHAs should monitor 
their respective HHCAHPS survey vendors to ensure that vendors submit 
their HHCAHPS data on time, by accessing their HHCAHPS Data Submission 
Reports on https://homehealthcahps.org. This helps HHAs ensure that 
their data are submitted in the proper format for data processing to 
the HHCAHPS Data Center.
    We propose to continue HHCAHPS oversight activities as finalized in 
the previous rules. In the CY 2013 HH PPS final rule (77 FR 67068, 
67164), we codified the current guideline that all approved HHCAHPS 
survey vendors must fully comply with all HHCAHPS oversight activities. 
We included this survey requirement at Sec.  484.250(c)(3).
    For further information on the HH QRP reconsiderations and appeals 
process, please see Section V.J.3. of this proposed rule.
7. Summary
    We are not proposing any changes to the participation requirements, 
or to the requirements pertaining to the implementation of the Home 
Health CAHPS[supreg] Survey (HHCAHPS). We only updated the information 
to reflect the dates for future HH QRP years. We again strongly 
encourage HHAs to keep up-to-date about the HHCAHPS by regularly 
viewing the official Web site for the

[[Page 35378]]

HHCAHPS at https://homehealthcahps.org. HHAs can also send an email to 
the HHCAHPS Survey Coordination Team at [email protected] or to CMS at 
[email protected], or telephone toll-free (1-866-354-0985) 
for more information about the HHCAHPS Survey.

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 HH PPS 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 publically post the public comments 
received, or a summary of those public comments.

VII. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995 (PRA), 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 OMB for review and approval. We note that we will submit a revised 
information collection request (OMB control number 0938-1279) to OMB 
for review. This will also extend the information collection request 
which expires December 30, 2019. To fairly evaluate whether an 
information collection should be approved by OMB, section 3506(c)(2)(A) 
of the PRA 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.
    This proposed rule makes reference to associated information 
collections that are not discussed in the regulation text contained in 
this document.

B. Collection of Information Requirements for the HH QRP

    We believe that the burden associated with the HH QRP is the time 
and effort associated with data collection and reporting. As of April 
1, 2017, there are approximately 12,149 HHAs currently reporting 
quality data to CMS. For the purposes of calculating the costs 
associated with the collection of information requirements, we obtained 
mean hourly wages for these staff from the U.S. Bureau of Labor 
Statistics' May 2016 National Occupational

[[Page 35379]]

Employment and Wage Estimates (http://www.bls.gov/oes/current/oes_nat.htm). To account for overhead and fringe benefits (100 
percent), we have doubled the hourly wage. These amounts are detailed 
in Table 52.

     Table 52--U.S. Bureau of Labor Statistics' May 2016 National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe         Adjusted
                Occupation title                    Occupation      Mean hourly       benefit       hourly wage
                                                       code         wage ($/hr)   (100%)  ($/hr)      ($/hr)
----------------------------------------------------------------------------------------------------------------
Registered Nurse (RN)...........................         29-1141          $34.70          $34.70          $69.40
Physical therapists HHAs........................         29-1123           46.42           46.42           92.84
Speech-Language Pathologists (SLP)..............         29-1127           37.60           37.60           75.20
Occupational Therapists (OT)....................         29-1122           40.25           40.25           80.50
----------------------------------------------------------------------------------------------------------------

    The OASIS changes proposed in section V.D of this proposed rule 
will result in the removal of 75 data elements from the OASIS at the 
time point of Start of Care (SOC), 75 data elements at the time point 
of Resumption of Care (ROC), 20 data elements at the time point of 
Follow-up (FU), 42 data elements at the time point of Transfer to an 
Inpatient Facility (TOC), 1 data element at the time point of Death at 
Home (Death), and 34 data elements at the time point of Discharge from 
Agency (Discharge). These data items will not be used in the 
calculation of quality measures adopted in the HH QRP nor are they used 
for previously established purposes that are non-related to our HH QRP. 
More detail on these OASIS data elements proposed for removal can be 
found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/OASIS-Data-Sets.html.
    Section V.F.1 of this rule proposes to adopt a new pressure ulcer 
measure to replace the current pressure ulcer measure that has been 
specified under section 1899B(c)(1)(B) of the Act beginning with the CY 
2020 HH QRP. The proposed replacement measure is entitled, ``Changes in 
Skin Integrity Post-Acute Care: Pressure Ulcer/Injury.'' The new 
measure will be calculated using data elements that are currently 
collected and reported using the OASIS-C2 (version effective January 1, 
2017). Adoption of the Changes in Skin Integrity Post-Acute Care: 
Pressure Ulcer/Injury measure would result in the removal of item 
M1313, related to pressure ulcer assessment that we believe is 
duplicative and no longer necessary. Specifically, with adoption of 
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury 
measure, we would remove 6 data elements at Discharge.
    In sections V.F.2 of this proposed rule, we are proposing a new 
quality measure to meet requirements of the IMPACT Act under section 
1899B(c)(1)(A) of the Act beginning with the CY 2020 HH QRP titled 
``Application of Percent of Long-Term Care Hospital Patients with an 
Admission and Discharge Functional Assessment and a Care Plan That 
Addresses Function (NQF #2631).'' Specifically, we are proposing to add 
13 standardized patient assessment data elements at SOC, 13 data 
elements at ROC, 15 standardized patient assessment data elements at 
FU, and 13 standardized patient assessment data elements at Discharge.
    In sections V.F.3 of this proposed rule, we are proposing a new 
quality measure to meet requirements of the IMPACT Act under section 
1899B(c)(1)(D) of the Act beginning with the CY 2020 HH QRP titled 
``Application of Percent of Residents Experiencing One or More Falls 
with Major Injury (NQF# 0674).'' The new measure will be calculated 
using new standardized data elements added to the OASIS. Specifically, 
we are proposing to add 4 data elements at TOC, 4 data elements at 
Death, and 4 data elements at Discharge.
    In sections V.H.2 and V.H.3 of this proposed rule, we are proposing 
requirements related to the reporting of standardized patient 
assessment data beginning with the CY 2019 HH QRP. We are proposing to 
define the term ``standardized patient assessment data'' as patient 
assessment questions and response options that are identical in all 
four PAC assessment instruments, and to which identical standards and 
definitions apply. The standardized patient assessment data is intended 
to be shared electronically among PAC providers and will otherwise 
enable the data to be comparable for various purposes, including the 
development of cross-setting quality measures and to inform payment 
models that take into account patient characteristics rather than 
setting. Specifically, we are proposing to add 53 standardized patient 
assessment data elements at SOC, 53 standardized patient assessment 
data elements at ROC, and 36 standardized patient assessment data 
elements at Discharge.
    The OASIS instrument is used for both the HH QRP and the HH PPS. As 
outlined in section III.E of this proposed rule, to calculate the case-
mix adjusted payment amount (specifically the functional level 
assignment), we are proposing to add collection of two current OASIS-C2 
items (10 data elements) at the FU time point:

 M1033: Risk for Hospitalization (9 data elements)
 M1800: Grooming (1 data element).

    As outlined in section III.E of this proposed rule, OASIS 
integumentary status items would not be needed in case-mix adjusting 
the period payment; therefore, we are proposing to remove collection of 
eight current OASIS-C2 items (19 data elements) at the FU time point:

 M1311: Current Number of Unhealed Pressure Ulcers at Each 
Stage (12 data elements)
 M1322: Current Number of Stage 1 Pressure Ulcers (1 data 
element)
 M1324: Stage of Most Problematic Unhealed Pressure Ulcer that 
is Stageable (1 data element)
 M1330: Does this patient have a Stasis Ulcer? (1 data element)
 M1332: Current Number of Stasis Ulcer(s) that are Observable 
(1 data element)
 M1334: Status of Most Problematic Stasis Ulcer that is 
Observable (1 data element)
 M1340: Does this patient have a Surgical Wound? (1 data 
element)
 M1342: Status of Most Problematic Surgical Wound that is 
Observable (1 data element).

    Therefore, we are proposing the net removal associated with the 
HHGM of 9 data elements at FU.
    In summary, there is a net reduction of 9 data elements at SOC, 9 
data elements at ROC,14 data elements at FU

[[Page 35380]]

and 38 data elements at TOC. There is a net increase of 3 data elements 
at Death and 13 data elements at Discharge.
    Under section 1899B(m) of the Act, the Paperwork Reduction Act does 
not apply to section 1899B, or to the sections of the OASIS that 
require modification to achieve the standardization of patient 
assessment data. We are, however, setting out the burden as a courtesy 
to advise interested parties of the proposed actions' time and costs 
and for reference in the regulatory impact analysis (RIA) section IX. 
The requirement and burden will be submitted to OMB for review and 
approval when the modifications to the OASIS have achieved 
standardization and are no longer exempt from the requirements under 
section 1899B(m) of the Act.
    We assume that each data element requires 0.3 minutes of clinician 
time to complete. Therefore, there is a reduction in clinician burden 
per OASIS assessment of 2.7 minutes at SOC, 2.7 minutes at ROC, 4.2 
minutes at FU and 11.4 minutes at TOC. There is an increase in 
clinician burden per assessment of 0.9 minutes at Death and 3.9 minutes 
at Discharge.
    The OASIS is completed by RNs or PTs, or very occasionally by 
occupational therapists (OT) or speech language pathologists (SLP/ST). 
Data from 2016 show that the SOC/ROC OASIS is completed by RNs 
(approximately 87 percent of the time), PTs (approximately 12.7 percent 
of the time), and other therapists, including OTs and SLP/STs 
(approximately 0.3 percent of the time). Based on this analysis we 
estimated a weighted clinician average hourly wage of $72.40, inclusive 
of fringe benefits, using the hourly wage data in Table 52. Individual 
providers determine the staffing resources necessary.
    Table 53 shows the total number of assessments submitted in CY 2016 
and estimated burden at each time point.

 Table 53--CY 2016 OASIS Submissions and Estimated Burden, by Time Point
------------------------------------------------------------------------
                                         CY 2016
            Time point                 assessments      Estimated burden
                                        completed             ($)
------------------------------------------------------------------------
Start of Care.....................          6,261,934    -$20,401,380.97
Resumption of Care................          1,049,247      -3,418,446.73
Follow-up.........................          3,797,410     -19,245,273.88
Transfer to an inpatient facility.          1,892,099     -26,027,713.84
Death at Home.....................             41,128          44,665.01
Discharge from agency.............          5,120,124      24,095,303.54
                                   -------------------------------------
    Total.........................         18,161,942     -44,952,846.87
------------------------------------------------------------------------
* Estimated Burden ($) at each Time-Point = (# CY 2016 Assessments
  Completed) x (clinician burden [min]/60) x ($72.40 [weighted clinician
  average hourly wage]).

    Based on the data in Table 53, for the 12,149 active Medicare-
certified HHAs in April 2017, we estimate the total average decrease in 
cost associated with proposed changes to the HH QRP at $3,700,74 per 
HHA annually, or $44,952,846.87 for all HHAs annually. This decrease in 
burden will be accounted for in the information collection under OMB 
control number 0938-1279.

C. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. The requirements are not effective until they have been 
approved by OMB.
    We invite public comments on these information collection 
requirements. If you wish to comment, please identify the rule (CMS-
1672-P) and, where applicable, the ICR's CFR citation, CMS ID number, 
and OMB control number.
    To obtain copies of a supporting statement and any related forms 
for the proposed collection(s) summarized in this notice, you may make 
your request using one of following:
    1. Access CMS' Web site address at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html.
    2. Email your request, including your address, phone number, OMB 
number, and CMS document identifier, to [email protected].
    3. Call the Reports Clearance Office at (410) 786-1326.
    See this rule's DATES and ADDRESSES sections for the comment due 
date and for additional instructions.

VIII. Response to Public 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.

IX. Regulatory Impact Analysis

A. Statement of Need

    Section 1895(b)(1) of the Act requires the Secretary to establish a 
HH PPS for all costs of HH services paid under Medicare. In addition, 
section 1895(b) of the Act requires: (1) The computation of a standard 
prospective payment amount include all costs for HH services covered 
and paid for on a reasonable cost basis and that such amounts be 
initially based on the most recent audited cost report data available 
to the Secretary; (2) the prospective payment amount under the HH PPS 
to be an appropriate unit of service based on the number, type, and 
duration of visits provided within that unit; and (3) the standardized 
prospective payment amount be adjusted to account for the effects of 
case-mix and wage levels among HHAs. Section 1895(b)(3)(B) of the Act 
addresses the annual update to the standard prospective payment amounts 
by the HH applicable percentage increase. Section 1895(b)(4) of the Act 
governs the payment computation. Sections 1895(b)(4)(A)(i) and 
(b)(4)(A)(ii) of the Act require the standard prospective payment 
amount to be adjusted for case-mix and geographic differences in wage 
levels. Section 1895(b)(4)(B) of the Act requires the establishment of 
appropriate case-mix adjustment factors for significant variation in 
costs among different units of services. Lastly, section 1895(b)(4)(C) 
of the Act requires the establishment of wage adjustment factors that 
reflect the relative level of wages, and wage-related costs applicable 
to HH services

[[Page 35381]]

furnished in a geographic area compared to the applicable national 
average level.
    Section 1895(b)(3)(B)(iv) of the Act provides the Secretary with 
the authority to implement adjustments to the standard prospective 
payment amount (or amounts) for subsequent years to eliminate the 
effect of changes in aggregate payments during a previous year or years 
that was the result of changes in the coding or classification of 
different units of services that do not reflect real changes in case-
mix. Section 1895(b)(5) of the Act provides the Secretary with the 
option to make changes to the payment amount otherwise paid in the case 
of outliers because of unusual variations in the type or amount of 
medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires 
HHAs to submit data for purposes of measuring health care quality, and 
links the quality data submission to the annual applicable percentage 
increase.
    The HHVBP Model will apply a payment adjustment based on an HHA's 
performance on quality measures to test the effects on quality and 
costs of care.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (UMRA, March 22, 1995; Pub. L. 
104-4), 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). The net transfer impact related to the changes in payments under 
the HH PPS for CY 2018 is estimated to be -$80 million (-0.4 percent). 
The net transfer impact in CY 2019 related to the change in the unit of 
payment under the proposed HHGM is estimated to be -$950 million (-4.3 
percent) if the HHGM is implemented in a fully non-budget neutral 
manner in CY 2019. The net transfer impact in CY 2019 related to the 
change in the unit of payment under the proposed HHGM is estimated to 
be -$480 million (-2.2 percent) if the HHGM is implemented in a 
partially budget-neutral manner in CY 2019 with the removal of the HHGM 
partial budget neutrality adjustment factor in CY 2020. The savings 
impacts related to the HHVBP model as a whole are estimated at a total 
projected 5-year gross savings of $378 million assuming a savings 
estimate of a 6 percent annual reduction in hospitalizations and a 1.0 
percent annual reduction in SNF admissions; the portion attributable to 
this proposed rule is negligible. In the CY 2018 HH PPS proposed rule, 
we have identified a reduction in our regulatory reporting burden of 
$44,952,846.87. 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 Regulatory Impact Analysis that, to the best of our ability, 
presents the costs and benefits of the rulemaking.
    In addition, section 1102(b) of the Act requires us to prepare a 
RIA 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 603 of 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 is applicable exclusively to HHAs. 
Therefore, the Secretary has determined this rule would not have a 
significant economic impact on the operations 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.
    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 that 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 $105.16 per hour, including overhead and fringe benefits 
(https://www.bls.gov/oes/2016/may/naics4_621100.htm). Assuming an 
average reading speed, we estimate that it would take approximately 3.8 
hours for the staff to review half of this proposed rule. For each HHA 
that reviews the rule, the estimated cost is $399.61 (3.8 hours x 
$105.16). Therefore, we estimate that the total cost of reviewing this 
regulation is $33,966.85 ($399.61 x 85 reviewers).

[[Page 35382]]

1. HH PPS for CY 2018
    The update set forth in this rule applies to Medicare payments 
under HH PPS in CY 2018. Accordingly, the following analysis describes 
the impact in CY 2018 only. We estimate that the net impact of the 
policies in this rule is approximately $80 million in decreased 
payments to HHAs in CY 2018. We applied a wage index budget neutrality 
factor and a case-mix weights budget neutrality factor to the rates as 
discussed in section III.C.3 of this proposed rule. Therefore, the 
estimated impact of the 2018 wage index and the recalibration of the 
case-mix weights for 2018 is zero. The -$80 million impact reflects the 
distributional effects of a 0.5 percent reduction in payments due to 
the sunset of the rural add-on provision ($100 million decrease), a 1 
percent home health payment update percentage ($190 million increase), 
and a -0.97 percent adjustment to the national, standardized 60-day 
episode payment rate to account for nominal case-mix growth for an 
impact of -0.9 percent ($170 million decrease). The $80 million in 
decreased payments is reflected in the last column of the first row in 
Table 54 as a 0.4 percent decrease in expenditures when comparing CY 
2017 payments to estimated CY 2018 payments.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most hospitals and most other providers and 
suppliers are small entities, either by nonprofit status or by having 
revenues of less than $7.5 million to $38.5 million in any one year. 
For the purposes of the RFA, we estimate that almost all HHAs are small 
entities as that term is used in the RFA. Individuals and states are 
not included in the definition of a small entity. The economic impact 
assessment is based on estimated Medicare payments (revenues) and HHS's 
practice in interpreting the RFA is to consider effects economically 
``significant'' only if greater than 5 percent of providers reach a 
threshold of 3 to 5 percent or more of total revenue or total costs. 
The majority of HHAs' visits are Medicare-paid visits and therefore the 
majority of HHAs' revenue consists of Medicare payments. Based on our 
analysis, we conclude that the policies proposed in this rule would 
result in an estimated total impact of 3 to 5 percent or more on 
Medicare revenue for greater than 5 percent of HHAs. Therefore, the 
Secretary has determined that this HH PPS proposed rule would have a 
significant economic impact on a substantial number of small entities. 
Further detail is presented in Table 54, by HHA type and location.
    With regards to options for regulatory relief, the sunset of rural 
add-on payments for CY 2018 is statutory and we do not have the 
authority to authorize rural add-on payments past December 31, 2017. We 
believe it is appropriate to reduce the national, standardized 60-day 
episode payment amount by 0.97 percent in CY 2018 to account for the 
estimated increase in nominal case-mix in order to move towards more 
accurate payment for the delivery of home health services where 
payments better align with the costs of providing such services.
2. HH PPS for CY 2019 (Proposed HHGM)
    The net transfer impacts in CY 2019 related to the proposed change 
in the unit of payment under the HHGM are estimated to be -$950 million 
(-4.3 percent) if implemented in a fully non-budget neutral manner in 
CY 2019. The net transfer impact in CY 2019 related to the change in 
the unit of payment under the proposed HHGM is estimated to be -$480 
million (-2.2 percent) if the HHGM is implemented in a partially 
budget-neutral manner in CY 2019 with the removal of the HHGM partial 
budget neutrality adjustment factor in CY 2020. Based on our analysis, 
we conclude that the implementation of the HHGM in CY 2019 would result 
in an estimated total impact of 3 to 5 percent or more on Medicare 
revenue for greater than 5 percent of HHAs, and therefore, would have a 
significant economic impact on a substantial number of small entities. 
Further detail is presented in Table 55, by HHA type and location.
    With regards to options for regulatory relief, changing the unit of 
payment from a 60-day episode to a 30-day period is not subject to the 
budget neutrality requirements under section 1895 of the Act and would 
result in an estimated 4.3 percent decrease (-$950 million) in total HH 
PPS payments in CY 2019. As outlined in section III.E.3, we are 
proposing to implement the change in the unit of payment from 60-day 
episodes of care to 30-day periods care in a non-budget neutral manner 
as doing so would better align home health payments with the costs of 
providing care. However, as noted in section III.E.3, we are 
considering potential alternative implementation approaches for the 
HHGM, including, but not limited to, a partially budget-neutral 
approach with a phase-out period. Specifically, we are considering 
applying a HHGM partial budget neutrality adjustment factor that would 
reduce the estimated impact of the HHGM from an estimated -4.3 percent 
to -2.2 percent in CY 2019, to be eliminated as soon as CY 2020. We 
invite comments on whether to implement the HHGM in a fully non-budget 
neutral manner beginning in CY 2019, as proposed; whether to implement 
the HHGM in CY 2019 with a HHGM partial budget neutrality adjustment 
factor applied and then subsequently removed in CY 2020; or whether a 
HHGM partial budget neutrality adjustment factor should be applied and 
then phased-out over a longer period of time.
    HHAs that provide a larger percentage of overall visits as therapy 
visits compared to skilled nursing visits may experience larger 
decreases in payments under the HHGM. We do not believe it would be 
appropriate to offer regulatory relief, or otherwise mitigate the 
impact of the proposed HHGM, for HHAs that provide a preponderance of 
their visits as therapy visits compared to nursing visits. The HHGM 
would still provide adequate reimbursement for therapy services and was 
developed, in part, to eliminate the current therapy thresholds that 
encourage the provision of the most profitable number of therapy 
visits, even when patient need may not justify such services. We 
anticipate that HHAs currently providing excess therapy visits solely 
to maximize reimbursement, as outlined in section II.D of this proposed 
rule, will no longer do so under the HHGM. We note that therapy 
continues to be a valued home health service, as two of the six 
clinical groups (neuro/stroke rehabilitation and musculoskeletal 
rehabilitation) under the HHGM reflect instances where therapy would be 
the primary focus of home health care.
3. HHVBP Model
    Under the HHVBP Model, the first payment adjustment will apply in 
CY 2018 based on PY1 (2016) data and the final payment adjustment will 
apply in CY 2022 based on PY5 (2020) data. In the CY 2016 HH PPS final 
rule, we estimated that the overall impact of HHVBP Model from CY 2018 
through CY 2022 was a reduction of approximately $380 million (80 FR 
68716). In the CY 2017 HH PPS final rule, we estimated that the overall 
impact of the HHVBP Model from CY 2018 through CY 2022 was a reduction 
of approximately $378 million (81 FR 76795). We do not believe the 
proposed

[[Page 35383]]

changes in this rule would affect the prior estimates.

C. Detailed Economic Analysis

    This rule proposes updates for CY 2018 to the HH PPS rates 
contained in the CY 2017 HH PPS final rule (81 FR 76702 through 76797). 
The impact analysis of this proposed rule presents the estimated 
expenditure effects of policy changes proposed in this rule. We use the 
latest data and best analysis available, but we do not make adjustments 
for future changes in such variables as number of visits or case-mix.
    This analysis incorporates the latest estimates of growth in 
service use and payments under the Medicare HH benefit, based primarily 
on Medicare claims data from 2016. We note that certain events may 
combine to limit the scope or accuracy of our impact analysis, because 
such an analysis is future-oriented and, thus, susceptible to errors 
resulting from other changes in the impact time period assessed. Some 
examples of such possible events are newly-legislated general Medicare 
program funding changes made by the Congress, or changes specifically 
related to HHAs. In addition, changes to the Medicare program may 
continue to be made as a result of the Affordable Care Act, or new 
statutory provisions. Although these changes may not be specific to the 
HH PPS, 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 HHAs.
1. HH PPS for CY 2018
    Table 54 represents how HHA revenues are likely to be affected by 
the policy changes proposed in this rule for CY 2018. For this 
analysis, we used an analytic file with linked CY 2016 OASIS 
assessments and HH claims data for dates of service that ended on or 
before December 31, 2016. The first column of Table 54 classifies HHAs 
according to a number of characteristics including provider type, 
geographic region, and urban and rural locations. The second column 
shows the number of facilities in the impact analysis. The third column 
shows the payment effects of the CY 2018 wage index. The fourth column 
shows the payment effects of the CY 2018 case-mix weights. The fifth 
column shows the effects the 0.97 percent reduction to the national, 
standardized 60-day episode payment amount to account for nominal case-
mix growth. The sixth column shows the payment effects from the sunset 
of the rural add-on payment provision in statute. The seventh column 
shows the effects of the CY 2018 home health payment update percentage.
    The last column shows the combined effects of all the policies 
proposed in this rule. Overall, it is projected that aggregate payments 
in CY 2018 would decrease by 0.4 percent. As illustrated in Table 54, 
the combined effects of all of the changes vary by specific types of 
providers and by location. We note that some individual HHAs within the 
same group may experience different impacts on payments than others due 
to the distributional impact of the CY 2018 wage index, the extent to 
which HHAs had episodes in case-mix groups where the case-mix weight 
decreased for CY 2018 relative to CY 2017, the percentage of total HH 
PPS payments that were subject to the low-utilization payment 
adjustment (LUPA) or paid as outlier payments, and the degree of 
Medicare utilization. In addition, we clarify that there are negative 
estimated impacts attributed to the sunset of the rural add-on 
provision for HHAs located in urban areas as well as rural areas. This 
is due to the fact that HHAs located in urban areas provide services to 
patients located in rural areas and payments are based on the location 
of the beneficiary.

                                    Table 54--Estimated HHA Impacts by Facility Type and Area of the Country, CY 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         60-day
                                                                                                        episode
                                                                              CY 2018      CY 2018        rate      Sunset of    HH payment
                                                                Number of    wage index    case-mix     nominal     rural add-     update     Total (%)
                                                                 agencies     \1\ (%)    weights \2\    case-mix      on (%)     percentage
                                                                                             (%)       reduction                  \4\ (%)
                                                                                                        \3\ (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Agencies.................................................       10,930          0.0          0.0         -0.9         -0.5          1.0         -0.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Facility Type and Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................        1,089          0.0          0.1         -0.8         -0.4          1.0         -0.1
Free-Standing/Other Proprietary..............................        8,588          0.0          0.0         -0.9         -0.4          1.0         -0.3
Free-Standing/Other Government...............................          322         -0.2          0.2         -0.9         -1.4          1.0         -1.3
Facility-Based Vol/NP........................................          646          0.0          0.3         -0.8         -0.7          1.0         -0.2
Facility-Based Proprietary...................................           92         -0.2          0.2         -0.9         -1.3          1.0         -1.2
Facility-Based Government....................................          193         -0.2          0.2         -0.9         -1.4          1.0         -1.3
                                                              ------------------------------------------------------------------------------------------
    Subtotal: Freestanding...................................        9,999          0.0          0.0         -0.9         -0.4          1.0         -0.3
    Subtotal: Facility-based.................................          931         -0.1          0.3         -0.8         -0.8          1.0         -0.4
    Subtotal: Vol/NP.........................................        1,735          0.0          0.2         -0.8         -0.5          1.0         -0.1
    Subtotal: Proprietary....................................        8,680          0.0          0.0         -0.9         -0.5          1.0         -0.4
    Subtotal: Government.....................................          515         -0.2          0.2         -0.9         -1.4          1.0         -1.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Type and Control: Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................          267          0.2          0.2         -0.9         -2.5          1.0         -2.0
Free-Standing/Other Proprietary..............................          814         -0.2         -0.1         -0.9         -2.3          1.0         -2.5
Free-Standing/Other Government...............................          229         -0.4          0.1         -0.9         -2.6          1.0         -2.8
Facility-Based Vol/NP........................................          291         -0.4          0.2         -0.9         -2.7          1.0         -2.8
Facility-Based Proprietary...................................           47         -0.1          0.2         -0.9         -2.7          1.0         -2.5
Facility-Based Government....................................          142         -0.2          0.2         -0.9         -2.6          1.0         -2.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Type and Control: Urban
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................          822         -1.0          0.1         -0.8         -0.1          1.0         -0.8

[[Page 35384]]

 
Free-Standing/Other Proprietary..............................        7,774          0.0          0.0         -0.9         -0.2          1.0         -0.1
Free-Standing/Other Government...............................           93          0.0          0.2         -0.9         -0.1          1.0          0.2
Facility-Based Vol/NP........................................          355          0.1          0.3         -0.8         -0.1          1.0          0.5
Facility-Based Proprietary...................................           45         -0.3          0.2         -0.9         -0.2          1.0         -0.2
Facility-Based Government....................................           51         -0.2          0.3         -0.9         -0.3          1.0         -0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Location: Urban or Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rural........................................................        1,790         -0.1          0.0         -0.9         -2.4          1.0         -2.4
Urban........................................................        9,140          0.0          0.0         -0.9         -0.2          1.0         -0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Location: Region of the Country (Census Region)
--------------------------------------------------------------------------------------------------------------------------------------------------------
New England..................................................          346          0.1          0.1         -0.8         -0.3          1.0          0.1
Mid Atlantic.................................................          488          0.0          0.0         -0.8         -0.2          1.0          0.0
East North Central...........................................        2,216          0.0          0.2         -0.9         -0.4          1.0         -0.1
West North Central...........................................          706          0.3          0.2         -0.9         -0.8          1.0         -0.2
South Atlantic...............................................        1,721         -0.1         -0.1         -0.9         -0.3          1.0         -0.4
East South Central...........................................          423         -0.2         -0.2         -0.9         -1.3          1.0         -1.6
West South Central...........................................        2,972          0.2         -0.2         -0.9         -0.7          1.0         -0.6
Mountain.....................................................          668         -0.3          0.1         -0.9         -0.4          1.0         -0.5
Pacific......................................................        1,343          0.1          0.5         -0.9         -0.1          1.0          0.6
Other........................................................           47          0.2         -1.0         -0.8         -0.6          1.0         -1.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Facility Size (Number of 1st Episodes)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<100 episodes................................................        3,109          0.1          0.2         -0.9         -0.4          1.0          0.0
100 to 249...................................................        2,478          0.1          0.2         -0.9         -0.5          1.0         -0.1
250 to 499...................................................        2,203          0.1          0.2         -0.9         -0.5          1.0         -0.1
500 to 999...................................................        1,646          0.0          0.1         -0.9         -0.5          1.0         -0.3
1,000 or More................................................        1,494          0.0         -0.1         -0.9         -0.5          1.0         -0.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2016 Medicare claims data for episodes ending on or before December 31, 2016 for which we had a linked OASIS assessment.
\1\ The impact of the CY 2018 home health wage index is offset by the wage index budget neutrality factor described in section III.C.3 of this proposed
  rule.
\2\ The impact of the CY 2018 home health case-mix weights reflects the recalibration of the case-mix weights offset by the case-mix weights budget
  neutrality factor described in section III.B of this proposed rule.
\3\ The 0.97 percent reduction to the national, standardized 60-day episode payment amount in CY 2018 is estimated to have a 0.9 percent impact on
  overall HH PPS expenditures.
\4\ The CY 2018 home health payment update percentage reflects the home health payment update of 1 percent as described in section III.C.1 of this
  proposed rule.
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; Other = Guam, Puerto Rico, Virgin
  Islands.

2. HH PPS for CY 2019 (Proposed HHGM)
    Table 55 represents how HHA revenues are likely to be affected by 
the policy changes proposed in this rule for CY 2019. For this 
analysis, we used an analytic file with linked CY 2016 OASIS 
assessments and CY 2016 HH claims data (as of March 17, 2017) for dates 
of service that ended on or before December 31, 2016. The first column 
of Table 55 classifies HHAs according to a number of characteristics 
including provider type, geographic region, and urban and rural 
locations. The second column shows the number of facilities in the 
impact analysis. The third and fourth columns shows the impact of the 
proposed HHGM as outlined in section III.E of this proposed rule. 
Overall, before application of the home health payment update 
percentage for CY 2019, it is projected that aggregate payments in CY 
2019 would decrease by $950 million (-4.3 percent) if implemented in a 
fully non-budget neutral manner and by -$480 million (-2.2 percent) if 
the HHGM is implemented in a partially budget-neutral manner in CY 2019 
with the removal of the HHGM partial budget neutrality adjustment 
factor in CY 2020. As illustrated in Table 55, the effect of the 
proposed HHGM varies by specific types of providers and by location. We 
note that some individual HHAs within the same group may experience 
different impacts on payments than others. This is due to 
distributional differences among HHAs with regards to the percentage of 
total HH PPS payments that were subject to the low-utilization payment 
adjustment (LUPA) or paid as outlier payments, the degree of Medicare 
utilization, and the ratio of overall visits that were provided as 
therapy versus skilled nursing.

[[Page 35385]]



                Table 55--Estimated HHA Impacts by Facility Type and Area of the Country, CY 2019
----------------------------------------------------------------------------------------------------------------
                                                                                                  Implementation
                                                                                  Implementation    of the HHGM
                                                                     Number of      of the HHGM     (partially
                                                                     agencies       (not budget       budget
                                                                                   neutral)  (%)   neutral)  (%)
----------------------------------------------------------------------------------------------------------------
All Agencies....................................................          10,860            -4.3            -2.2
----------------------------------------------------------------------------------------------------------------
                                            Facility Type and Control
----------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP......................................           1,085            -1.3             0.9
Free-Standing/Other Proprietary.................................           8,525            -5.7            -3.6
Free-Standing/Other Government..................................             319            -2.9            -0.7
Facility-Based Vol/NP...........................................             646            -0.2             2.0
Facility-Based Proprietary......................................              92             0.4             2.6
Facility-Based Government.......................................             193             1.3             3.6
                                                                 -----------------------------------------------
    Subtotal: Freestanding......................................           9,929            -4.7            -2.6
    Subtotal: Facility-based....................................             931             0.0             2.2
    Subtotal: Vol/NP............................................           1,731            -1.0             1.2
    Subtotal: Proprietary.......................................           8,617            -5.7            -3.6
    Subtotal: Government........................................             512            -0.7             1.5
----------------------------------------------------------------------------------------------------------------
                                        Facility Type and Control: Rural
----------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP......................................             267             0.2             2.5
Free-Standing/Other Proprietary.................................             808            -0.6             1.7
Free-Standing/Other Government..................................             226            -1.7             0.6
Facility-Based Vol/NP...........................................             291             0.3             2.5
Facility-Based Proprietary......................................              47             5.0             7.3
Facility-Based Government.......................................             142             1.8             4.1
----------------------------------------------------------------------------------------------------------------
                                        Facility Type and Control: Urban
----------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP......................................             818            -1.5             0.7
Free-Standing/Other Proprietary.................................           7,717            -6.3            -4.3
Free-Standing/Other Government..................................              93            -4.2            -2.0
Facility-Based Vol/NP...........................................             355            -0.3             1.9
Facility-Based Proprietary......................................              45            -3.1            -1.0
Facility-Based Government.......................................              51             0.9             3.1
----------------------------------------------------------------------------------------------------------------
                                        Facility Location: Urban or Rural
----------------------------------------------------------------------------------------------------------------
Rural...........................................................           1,781            -0.2             2.1
Urban...........................................................           9,079            -4.9            -2.8
----------------------------------------------------------------------------------------------------------------
                            Facility Location: Region of the Country (Census Region)
----------------------------------------------------------------------------------------------------------------
New England.....................................................             339            -2.3            -0.2
Mid Atlantic....................................................             485            -0.6             1.5
East North Central..............................................           2,199            -5.2            -3.1
West North Central..............................................             705            -7.9            -5.9
South Atlantic..................................................           1,713           -10.2            -8.2
East South Central..............................................             423            -3.2            -1.0
West South Central..............................................           2,947            -0.3             1.9
Mountain........................................................             662            -9.7            -7.8
Pacific.........................................................           1,340             0.1             2.3
Other...........................................................              47             6.0             8.4
----------------------------------------------------------------------------------------------------------------
                                     Facility Size (Number of 1st Episodes)
----------------------------------------------------------------------------------------------------------------
< 100 episodes..................................................           3,040            -2.9            -0.8
100 to 249......................................................           2,478            -3.8            -1.7
250 to 499......................................................           2,203            -3.9            -1.8
500 to 999......................................................           1,645            -4.6            -2.5
1,000 or More...................................................           1,494            -4.4            -2.3
----------------------------------------------------------------------------------------------------------------
                                          Nursing/Therapy Visits Ratio
----------------------------------------------------------------------------------------------------------------
1st Quartile (Lowest 25 Nursing)................................           2,715           -14.4           -12.6
2nd Quartile....................................................           2,715            -4.6            -2.5
3rd Quartile....................................................           2,715             2.6             4.9

[[Page 35386]]

 
4th Quartile (Top 25 Nursing)...................................           2,715            12.9            15.5
----------------------------------------------------------------------------------------------------------------
Source: CY 2016 Medicare claims data (as of March 17, 2017) for episodes ending on or before December 31, 2016
  for which we had a linked OASIS assessment.
Notes: This analysis includes assumptions on behavioral responses as a result of the new case-mix adjustment
  methodology and omits 360,683 individuals not grouped under the HHGM (either due to a missing OASIS, because
  they could be assigned to a clinical grouping, or had missing therapy/nursing visits). After converting 60-day
  episodes to 30-day periods for the HHGM, a further 28 periods were excluded with missing wage index
  information, 17 periods with missing NRS weights, and 2,376 periods with a missing urban/rural indicator.
  These excluded episodes results overall in 70 fewer HHAs being represented than in Table 54.
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; Other = Guam, Puerto Rico, Virgin Islands.

3. HHVBP Model
    Table 57 displays our analysis of the distribution of possible 
payment adjustments at the 3-percent, 5-percent, 6-percent, 7-percent, 
and 8-percent rates that are being used in the Model using the 2015 and 
2016 OASIS-based measures, claims-based hospitalization and Emergency 
Department (ED) measures, and HHCAHPS data. Full 2016 data are not yet 
available for claims-based and HHCAHPS-based measures. For these 
measures, we used the available data--12 months of episodes ending 
September 30, 2016 for claims-based measures and 12 months ending June 
30, 2016 for HHCAHPS-based measures. The estimated impacts account for 
the minimum 40 HHCAHPS completed surveys proposal and the proposal to 
remove the OASIS-based measure, Drug Education on All Medications 
Provided to Patient/Caregiver during all Episodes of Care beginning in 
PY 3. We simulated the impacts based on nine (9) OASIS quality 
measures, two (2) claims-based measures in QIES, and the three (3) New 
Measures (using the October 2016 and January 2017 submission data), 
using the QIES Roll Up File data in the same manner as they will be in 
the Model. HHAs were classified as being in the smaller or larger 
volume cohort using the 2015 Quality Episode File, which is created 
using OASIS assessments. The basis of the payment adjustment was 
derived from complete 2015 claims data. We note that this impact 
analysis is based on the aggregate value of all nine (9) states.
    Table 58 displays our analysis of the distribution of possible 
payment adjustments based on the same 2015-2016 data used to calculate 
Table 57, providing information on the estimated impact of the 
proposals in this rule. We note that this impact analysis is based on 
the aggregate value across all nine (9) Model states. Note that all 
Medicare-certified HHAs that provide services in Massachusetts, 
Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, 
and Tennessee are required to compete in this Model. This analysis 
reflects that under our proposal, only HHAs that have data for at least 
five measures that meet the requirements of proposed Sec.  484.305 
would be included in the LEF and would have a payment adjustment 
calculated. Value-based incentive payment adjustments for the estimated 
1,600 plus HHAs in the selected states that will compete in the HHVBP 
Model are stratified by size as described in section IV.B. of the CY 
2017 HH PPS final rule. As finalized in section IV.B. of the CY 2017 
final rule, there must be a minimum of eight (8) HHAs in any cohort.
    Those HHAs that are in states that do not have at least eight 
smaller-volume HHAs will not have a separate smaller-volume cohort and 
thus there will only be one cohort that will include all the HHAs in 
that state. As indicated in Table 58, Maryland, North Carolina, 
Tennessee and Washington will only have one cohort while Arizona, 
Florida, Iowa, Massachusetts, and Nebraska will have both a smaller-
volume cohort and a larger-volume cohort. For example, Iowa has 32 HHAs 
eligible to be exempt from being required to have their beneficiaries 
complete HHCAHPS surveys because they provided HHA services to less 
than 60 beneficiaries. Therefore, those 32 HHAs would be competing in 
Iowa's smaller-volume cohort for the 2016 performance year under the 
Model.
    Using 2015-2016 data and the maximum payment adjustment for 
performance year 1 of 3-percent (as applied in CY 2018), based on the 
nine (9) OASIS quality measures, two (2) claims-based measures in QIES, 
the five (5) HHCAHPS measures, and the three (3) New Measures, the 
smaller-volume HHAs in Iowa would have a mean payment adjustment of 0.0 
percent (Table 58). Only 10-percent of HHAs in the smaller-volume 
cohort would be subject to downward payment adjustments of more than 
minus 1.4 percent (-1.4 percent). The next columns provide the 
distribution of scores by percentile; we see that the cohort payment 
adjustment distribution for HHAs in Iowa in the smaller-volume cohort 
ranges from -1.4 percent at the 10th percentile to +1.3 percent at the 
90th percentile, while the cohort payment adjustment distribution 
median is -0.2 percent.
    Table 59 provides the payment adjustment distribution based on 
agency size, proportion of dually-eligible beneficiaries, average case 
mix (using the average case-mix for non-LUPA episodes), the proportion 
of the HHA's beneficiaries that reside in rural areas and HHA 
organizational status. HHAs with a higher proportion of dually-eligible 
beneficiaries and HHAs whose beneficiaries have higher acuity tend to 
have better performance.
    The payment adjustment percentages were calculated at the state and 
size cohort level. Hence, the values of each separate analysis in the 
tables are representative of the baseline year of 2015 and the 
performance year of 2016 (though full 2016 data are not yet available 
for claims- and HHCAHPS-based measures). There were 1,674 HHAs in the 
nine selected states out of

[[Page 35387]]

1,894 HHAs that had a sufficient number of measures to receive a 
payment adjustment in the Model. It is expected that a certain number 
of HHAs will not have a payment adjustment because they may be 
servicing too small of a population to report on an adequate number of 
measures to calculate a TPS.
    Additional analysis (see Table 60) was conducted to illustrate the 
effect of our proposal to require 40 or more completed HHCAHPS surveys 
versus 20 or more completed HHCAHPS surveys. The percentage difference 
in the average TPS across all larger-volume HHAs for each state ranged 
from -0.4 percent through 2.2 percent and the majority of states were 
close to zero. We include information on average statewide TPS (by size 
cohort) because this is what is used to determine payment adjustment 
amounts in HHVBP. The relative ranking of one HHA's TPS to the average 
TPS will directly affect the HHA's payment adjustment amount. The 
reporting of TPS also shows that this change has no impact on the TPS 
for the smaller volume cohort, for which the HHCAHPS measures are not 
used (regardless of the minimum sample size).

          Table 57--Adjustment Distribution by Percentile Level of Quality Total Performance Score at Different Model Payment Adjustment Rates
                                                                      [Percentage]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Range                                        Median
                Payment adjustment distribution                   (%)      10%      20%      30%      40%      (%)      60%      70%      80%      90%
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% Payment Adjustment For Performance Year 1 of the Model.....      3.0     -1.5     -1.0     -0.7     -0.4     -0.1      0.2      0.6      0.9      1.5
5% Payment Adjustment For Performance Year 2 of the Model.....      5.0     -2.5     -1.6     -1.1     -0.7     -0.1      0.4      0.9      1.5      2.6
6% Payment Adjustment For Performance Year 3 of the Model.....      6.0     -2.9     -2.0     -1.3     -0.8     -0.2      0.4      1.1      1.8      3.1
7% Payment Adjustment For Performance Year 4 of the Model.....      7.0     -3.4     -2.3     -1.5     -0.9     -0.2      0.5      1.3      2.1      3.6
8% Payment Adjustment For Performance Year 5 of the Model.....      8.0     -3.9     -2.6     -1.8     -1.1     -0.2      0.6      1.5      2.4      4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                          Table 58--HHA Cohort Payment Adjustment Distributions by State/Cohort
                                                        [Based on a 3-percent payment adjustment]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Average
                    Cohort                        # of    payment  adj.    10%      20%      30%      40%      50%      60%      70%      80%      90%
                                                  HHAs          %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  HHA Cohort in States with no small cohorts (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
MD............................................       51             0.0     -1.0     -0.8     -0.6     -0.4      0.1      0.3      0.5      0.6      1.1
NC............................................      167            -0.1     -1.3     -0.9     -0.6     -0.3     -0.1      0.1      0.4      0.7      0.9
TN............................................      124            -0.2     -1.4     -0.9     -0.7     -0.5     -0.1      0.1      0.5      0.7      1.0
WA............................................       57            -0.2     -1.1     -0.9     -0.6     -0.3      0.0      0.2      0.3      0.4      0.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Smaller-volume HHA Cohort in states with small cohort (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
AZ............................................        8            -0.4     -2.4     -1.7     -1.3     -1.1     -1.0     -0.9      0.4      1.4      2.1
FL............................................      103             0.2     -1.7     -1.3     -0.8     -0.5     -0.2      0.6      1.1      1.6      2.9
IA............................................       32             0.0     -1.4     -1.0     -0.7     -0.5     -0.2      0.2      0.6      1.1      1.3
MA............................................       23            -0.7     -2.6     -2.0     -1.7     -1.5     -1.3     -0.9      0.1      1.2      1.2
NE............................................       16             0.4     -1.8     -1.3     -1.2     -0.7      0.5      1.0      1.8      2.4      3.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Large-volume HHA Cohort in states with small cohorts (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
AZ............................................      105            -0.1     -1.5     -1.0     -0.7     -0.5     -0.3      0.2      0.6      0.7      1.2
FL............................................      723             0.1     -1.4     -0.9     -0.6     -0.3      0.0      0.3      0.7      1.1      1.8
IA............................................       94            -0.1     -1.5     -1.1     -0.7     -0.4     -0.2      0.1      0.5      0.9      1.4
MA............................................      111            -0.2     -1.6     -1.2     -0.8     -0.5     -0.3      0.1      0.3      0.7      1.1
NE............................................       44             0.1     -1.3     -0.9     -0.5     -0.1      0.2      0.3      0.7      0.9      1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                              Table 59--Payment Adjustment Distributions by Characteristics
                                                  [Based on a 3-percent payment adjustment] \230\ \231\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Average
                    Cohort                        # of    payment  adj.    10%      20%      30%      40%      50%      60%      70%      80%      90%
                                                  HHAs          %
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small HHA (<60 patients in CY 2015)...........      189             0.1     -1.8     -1.4     -1.0     -0.6     -0.2      0.5      1.1      1.3      2.6
Large HHA (>=60 patients in CY 2015)..........    1,469             0.0     -1.4     -1.0     -0.6     -0.4     -0.1      0.2      0.5      0.8      1.5
Low % Dually--Eligible........................      414             0.1     -1.1     -0.8     -0.5     -0.2      0.1      0.4      0.6      0.9      1.4
Medium % Dually--Eligible.....................      830            -0.1     -1.4     -1.0     -0.7     -0.4     -0.2      0.1      0.4      0.7      1.2
High % Dually--Eligible.......................      414             0.1     -1.7     -1.3     -0.8     -0.5      0.0      0.4      0.9      1.5      2.3
Low Acuity....................................      415            -0.3     -1.8     -1.4     -1.0     -0.7     -0.5     -0.1      0.2      0.6      1.2
Mid Acuity....................................      828             0.0     -1.3     -0.9     -0.6     -0.4     -0.1      0.2      0.5      0.8      1.4
High Acuity...................................      414             0.4     -1.1     -0.6     -0.3      0.0      0.3      0.6      0.9      1.3      2.2
All non-rural beneficiaries...................      989             0.1     -1.5     -1.0     -0.7     -0.4      0.0      0.3      0.7      1.1      1.9
Up to 35% rural beneficiaries.................      389            -0.1     -1.5     -1.0     -0.6     -0.4     -0.1      0.1      0.4      0.7      1.1
Over 35% rural beneficiaries..................      280            -0.1     -1.4     -1.0     -0.7     -0.5     -0.2      0.0      0.4      0.8      1.3
Non-Profit HHAs...............................      304             0.1     -1.2     -0.8     -0.6     -0.3      0.0      0.3      0.6      0.9      1.4
For-Profit HHAs...............................    1,238             0.0     -1.5     -1.0     -0.7     -0.4     -0.1      0.2      0.6      0.9      1.6
Government HHAs...............................      116            -0.1     -1.3     -1.0     -0.7     -0.5     -0.3      0.0      0.3      0.6      1.2
Freestanding..................................    1,494             0.0     -1.5     -1.0     -0.7     -0.4     -0.1      0.2      0.6      0.9      1.6
Facility-based................................      164             0.0     -1.2     -0.9     -0.5     -0.3      0.0      0.3      0.5      0.8      1.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 35388]]


      Table 60--Impact of Changing Minimum Required Sample Size for HHCAHPS Performance Measures on Average TPS and Payment Adjustment Range \232\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average TPS                       Minimum payment         Maximum payment
                                                        -------------------------------------------------      adjustment              adjustment
                                                                                                         -----------------------------------------------
                    State                     HHA count      20                                    %          20         40
                                                          Minimum   40  Minimum   Difference  Difference   Minimum    Minimum    20 Minimum   40 Minimum
                                                                                                             (%)        (%)         (%)          (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Larger-Volume HHAS
--------------------------------------------------------------------------------------------------------------------------------------------------------
AZ..........................................        105     38.393       39.254         0.86         2.2       -2.6       -2.6          3.0          3.0
FL..........................................        723     36.794       37.451        0.657         1.8       -2.6       -2.6          3.0          3.0
IA..........................................         94     41.079       41.049        -0.03        -0.1       -2.4       -2.4          2.0          3.0
MA..........................................        111     40.074       39.927       -0.147        -0.4       -2.8       -2.8          2.6          2.6
MD..........................................         50     47.287       47.517         0.23         0.5       -1.2       -1.2          2.0          2.4
NC..........................................        164     43.738       44.175        0.437         1.0       -2.0       -2.0          2.2          2.2
NE..........................................         44     39.714       40.581        0.867         2.1       -1.8       -1.8          2.9          2.7
TN..........................................        121     45.699       45.749         0.05         0.1       -2.8       -2.6          1.8          1.8
WA..........................................         57     49.888       49.685       -0.203        -0.4       -1.4       -1.8          1.2          1.2
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................      1,469  .........  ...........  ...........  ..........  .........  .........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Smaller-Volume HHAS
--------------------------------------------------------------------------------------------------------------------------------------------------------
AZ..........................................          8     31.474       31.474            0         0.0       -2.4       -2.4          2.1          2.1
FL..........................................        103     37.349       37.349            0         0.0       -2.6       -2.6          3.0          3.0
IA..........................................         32     37.741       37.741            0         0.0       -1.9       -1.9          2.0          2.0
MA..........................................         23     26.904       26.904            0         0.0       -2.7       -2.7          3.0          3.0
MD..........................................          1     55.841       55.841            0         0.0        0.6        0.6          0.6          0.6
NC..........................................          3       67.1         67.1            0         0.0       -0.2       -0.2          3.0          3.0
NE..........................................         16     37.076       37.076            0         0.0       -2.8       -2.8          3.0          3.0
TN..........................................          3     48.549       48.549            0         0.0       -1.4       -1.4          2.3          2.3
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................        189  .........  ...........  ...........  ..........  .........  .........  ...........  ...........
                                             -----------------------------------------------------------------------------------------------------------
    Total...................................      1,658  .........  ...........  ...........  ..........  .........  .........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. HH QRP
    Failure to submit data required under section 1895(b)(3)(B)(v) of 
the Act will result in the reduction of the annual update to the 
standard federal rate for discharges occurring during such fiscal year 
by 2 percentage points for any HHA that does not comply with the 
requirements established by the Secretary. At the time that this 
analysis was prepared, 513, or approximately 4.3 percent, of the 12,149 
active Medicare-certified HHAs, did not receive the full annual 
percentage increase for the CY 2017 annual payment update 
determination. Information is not available to determine the precise 
number of HHAs that will not meet the requirements to receive the full 
annual percentage increase for the CY 2018 payment determination.
---------------------------------------------------------------------------

    \230\ Rural beneficiaries identified based on the CBSA code 
reported on the claim.
    \231\ Acuity is based on the average case-mx weight for non-LUPA 
episodes. Low acuity is defined as the bottom 25% (among HHVBP model 
participants); mid-acuity is the middle 50% and high acuity is the 
highest 25%. Note that one HHA was missing acuity information.
    \232\ OASIS measures run from January 1, 2015 to December 31, 
2016; Claims from September 1, 2015 to September 30, 2016. Payment 
based on 2015 and 2016 Medicare claims data (2016 is used as the 
payment year--in actuality CY 2018 claims payments would determine 
actual payment adjustment amounts).
---------------------------------------------------------------------------

    As noted in section VII.B. of this proposed rule, the net effect of 
our proposals is an estimated decrease in cost associated with proposed 
changes to the HH QRP on average of $3,700.74 per HHA annually, or 
$44,952,846.87 for all HHAs annually.

D. Alternatives Considered

1. HH PPS for CY 2018
    We did not consider extending the rural add-on payment as this 
provision was statutory. Section 421(a) of the MMA extended the rural 
add-on by providing an increase of 3 percent of the payment amount 
otherwise made under section 1895 of the Act for HH services provided 
in a rural area, for episodes and visits ending before January 1, 2018. 
Therefore, for episodes and visits that end on or after January 1, 
2018, a rural add-on payment will not apply.
    In the alternatives considered section for the CY 2016 HH PPS 
proposed rule (80 FR 39839), we considered reducing the 60-day episode 
rate in CY 2016 only to account for nominal case-mix growth between CY 
2012 and CY 2014. However, we instead proposed to reduce the 60-day 
episode rate over a 2-year period (CY 2016 and CY 2017) to lessen the 
impact on HHAs in a given year. In the CY 2016 HH PPS final rule (80 FR 
68624), we finalized a reduction of 0.97 percent to the 60-day episode 
rate in each of the next 3 calendar years (CY 2016 through CY 2018. 
Therefore, the alternatives with regards to the 0.97 percent reduction 
in the national, standardized 60-day episode payment amount for CY 2018 
were already considered in the CY 2016 HH PPS proposed and final rules 
and we did not consider alternatives for implementing this reduction 
for CY 2018.
    We are not able to consider alternative values for the home health 
payment update percentage. The home health payment update percentage is 
based on the home health market basket update and section 1895(b)(3)(B) 
of the Act, as amended by section 411(d) of the MACRA, mandates that 
for home health payments for CY 2018, the market basket percentage 
increase shall be 1 percent.
2. HH PPS for CY 2019 (Proposed HHGM)
    We considered proposing to implement the HHGM for CY 2018.

[[Page 35389]]

However, implementation of the HHGM will require provider education and 
training, updating and revising relevant manuals, and changing 
assessment and claims processing systems. Implementation starting in 
2019 would provide an opportunity for CMS and providers to prepare.
    For CY 2019, in addition to considering whether to implement the 
HHGM in a fully non-budget neutral manner for CY 2019 or implementing 
the HHGM with a HHGM partial budget neutrality adjustment factor that 
would have reduced the estimated impact of the HHGM by 50 percent in CY 
2019 and the elimination of such factor in CY 2020, we also considered 
implementing the HHGM as fully budget neutral in CY 2019 or as 
partially budget-neutral with longer phase-out period (for example 
starting with a HHGM partial budget neutrality adjustment factor that 
would have reduced the estimated impact of the HHGM by 75 percent in CY 
2019, a HHGM partial budget neutrality adjustment factor that would 
have reduced the estimated impact of the HHGM by 50 percent in CY 2020, 
a HHGM partial budget neutrality adjustment factor that would have 
reduced the estimated impact of the HHGM by 25 percent in CY 2021, and 
the elimination of such factor in CY 2022). However, we propose to 
implement the change in the unit of payment under the HHGM in a non-
budget neutral manner as doing so better aligns home health payments 
with the costs of providing care. In addition, we do not believe a 
longer phase-out period is necessary if we were to implement the HHGM 
in a non-budget neutral manner with a HHGM partial budget neutrality 
adjustment factor applied in CY 2019 to be removed in CY 2020, as this 
2-year timeframe would be sufficient to lessen the economic impact in 
the first year of implementation.
    We also considered maintaining 60-day episodes of care as the unit 
of payment. As stated in the FY 2001 HH PPS final rule, ``We believe 
the 60-day episode definition is the most appropriate approach to 
define the unit of payment under HHA PPS. Public support for the 60-day 
episode as the unit of payment under PPS centered on the general 
consensus that HHAs and physicians predict home care needs over a 60-
day timeframe due to current plan of care requirements and required 
updates to the comprehensive assessments that basically follow a 60-day 
timeframe. As discussed in detail in the proposed rule, research 
indicated that the 60-day episode captures the majority of stays 
experienced in the Phase II per-episode HHA PPS demonstration (65 FR 
41136).'' However, we further noted that we ``will continue to monitor 
the appropriateness of the 60-day unit of payment and may consider 
modifying our approach to the episode definition in subsequent years of 
PPS, if warranted.'' During subsequent years, we have identified 
variation in average resource use between the first 30-day period 
within a 60-day episode and the second 30-day period within a 60-day 
episode. This difference in resources between the first and second 30-
day periods within a 60-day episode led to the development of 30-day 
periods for the HHGM. In addition, the accuracy of the HHGM improves 
when a shorter, more constrained time period is examined. This in turn 
would improve the accuracy of the case-mix weights that are generated 
using 30-day periods instead of 60-day episodes. We note that the 
frequency of the required updates to the plan of care and the 
comprehensive assessment would remain unchanged under the proposed 
HHGM.
    We considered whether to continue using the wage-weighted minutes 
of care (WWMC) approach to estimate resource use under the HHGM, as 
described in section III.E.2 of this proposed rule. Although the 
relationship in relative costs between the WWMC approach and the 
proposed cost-per-minute plus non-routine supplies (CPM+NRS) approach 
is very similar (correlation coefficient equal to 0.8016), the WWMC 
approach does not as evenly weight skilled nursing costs relative to 
therapy costs as evidenced in the cost report data and would require us 
to maintain a separate case-mix adjustment mechanism for NRS. If we 
were to maintain the current WWMC approach, skilled nursing and therapy 
costs would not be as evenly weighted and a certain level of complexity 
in calculating payments under the HH PPS would persist as we would need 
to continue with the current method of case-mix adjusting NRS payments 
separate from service costs (i.e., skilled nursing, physical therapy, 
occupational therapy, speech-language pathology, home health aide, and 
medical social services) under the HH PPS.
    Finally, we considered not proposing the HH PPS case-mix 
methodology refinements for CY 2019. However, in maintaining the 
current case-mix methodology, the current payment system, with its 
various therapy thresholds, would continue to provide financial 
incentives that detract from a focus on patient characteristics and 
care needs when agencies are setting plans of care for their patients, 
and would continue to incentivize unnecessary therapy utilization. The 
proposed HHGM removes therapy thresholds from the case-mix adjustment 
methodology thereby eliminating the financial incentive to provide 
unnecessary therapy visits in order to maximize payment. In addition, 
we believe the proposed HHGM is a more simplified, clinically 
intuitive, and patient-centered approach to payment compared to the 
existing case-mix adjustment methodology. We invite comments on the 
alternatives discussed in this analysis.
3. HHVBP Model Proposals
    An alternative to our proposal to use 40 completed HHCAHPS surveys 
beginning with PY 1 would be to continue calculating quality scores at 
20 completed HHCAHPS surveys as finalized in the CY 2016 HH PPS final 
rule.
    Another alternative would be to use 40 completed HHCAHPS surveys 
beginning with PY 2 and subsequent years, but keep the 20 completed 
HHCAHPS surveys calculation for PY 1; however, this would give HHAs a 
short amount of time to analyze from year to year a change in threshold 
from 20 to 40 completed HHCAHPS surveys.
    Rather than removing the Drug Education on All Medications Provided 
to Patient/Caregiver during all Episodes of Care measure from the set 
of applicable measures, an alternative would be to keep the measure in 
the set of applicable measures for the HHVBP Model. Doing so would 
continue HHAs' awareness of the importance of drug education for 
patient and caregivers during all episodes of care. Nevertheless, there 
would be a lack of variability in the measure across the participating 
HHAs and the measure does not address the quality or intensity of the 
education provided.

E. Accounting Statement and Table

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Tables 61 and 62, we 
have prepared an accounting statement showing the classification of the 
transfers and costs associated with the HH PPS provisions of this 
proposed rule. Table 61 provides our best estimate of the decrease in 
Medicare payments under the HH PPS as a result of the changes presented 
in this proposed rule for the HH PPS provisions in CY 2018. Table 62 
provides our estimate as a result of the changes associated with the 
HHGM proposed for CY 2019. Table 63 provides our best estimates of the

[[Page 35390]]

changes associated with the HH QRP proposals.

   Table 61--Accounting Statement: HH PPS Classification of Estimated
                    Transfers, From CYs 2017 to 2018
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  -$80 million.
From Whom to Whom?                          Federal Government to HHAs.
------------------------------------------------------------------------


   Table 62--Accounting Statement: HH PPS Classification of Estimated
 Transfers due to Implementation of Proposed HHGM, From CYs 2018 to 2019
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers (Not      -$950 million.
 Budget Neutral).
Annualized Monetized Transfers           -$480 million.
 (Partially Budget Neutral).
From Whom to Whom?.....................  Federal Government to HHAs.
------------------------------------------------------------------------


   Table 63--Accounting Statement: HH QRP Classification of Estimated
                      Costs, From CYs 2018 to 2019
------------------------------------------------------------------------
                Category                              Costs
------------------------------------------------------------------------
Annualized Monetized Net Burden for      -$44.9 million.
 HHAs Submission of the OASIS.
------------------------------------------------------------------------

F. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, entitled Reducing Regulation and Controlling 
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. Under 
E.O. 13771, this rule would be considered deregulatory if finalized as 
proposed.

G. Conclusion

1. HH PPS
    In conclusion, we estimate that the net impact of the HH PPS 
policies in this rule is a decrease of 0.4 percent, or $80 million, in 
Medicare payments to HHAs for CY 2018. The -$80 million impact reflects 
the effects of a 0.5 percent reduction in payments due to the sunset of 
the rural add-on provision ($100 million decrease), a 1 percent CY 2018 
HH payment update percentage ($190 million increase), and a 0.9 percent 
decrease in payments due to the 0.97 percent reduction to the national, 
standardized 60-day episode payment rate in CY 2017 to account for 
nominal case-mix growth ($170 million decrease). We estimate that the 
net impact of the proposed HHGM is a decrease of 4.3 percent ($950 
million decrease) in Medicare payments to HHAs in CY 2019 if the 
proposed HHGM is implemented in a fully non-budget neutral manner. We 
estimate that the net impact of the proposed HHGM is a decrease of 2.2 
percent ($480 million decrease) in Medicare payments to HHAs in CY 2019 
if the proposed HHGM is implemented in a partially budget-neutral 
manner in CY 2019 with the removal of the HHGM partial budget 
neutrality adjustment factor in CY 2020.
    This analysis, together with the remainder of this preamble, 
provides an initial Regulatory Flexibility Analysis.
2. HHVBP Model
    In conclusion, we estimate there would be no net impact (to include 
either a net increase or reduction in payments) in this proposed rule 
in Medicare payments to HHAs competing in the HHVBP Model for CY 2018. 
However, the overall economic impact of the HHVBP Model provision is an 
estimated $378 million in total savings from a reduction in unnecessary 
hospitalizations and SNF usage as a result of greater quality 
improvements in the home health industry over the life of the HHVBP 
Model.
3. HH QRP
    In conclusion, for CY 2019 we estimate that there will be a total 
decrease in costs of $44,952,846.87 associated with the proposed 
changes to the HH QRP.

X. Federalism Analysis

    Executive Order 13132 on Federalism (August 4, 1999) establishes 
certain requirements that an agency must meet when it promulgates a 
final rule that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. We have reviewed this proposed rule under the threshold 
criteria of Executive Order 13132, Federalism, and have determined that 
it will not have substantial direct effects on the rights, roles, and 
responsibilities of states, local or tribal governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 409

    Health facilities, Medicare.

42 CFR Part 484

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 409--HOSPITAL INSURANCE BENEFITS

0
1. The authority citation for part 409 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Act (42 U.S.C. 1302 and 
1395hh).

0
2. Section Sec.  409.43 is amended by--
0
a. Revising paragraphs (c)(2) and (c)(3)(ii);
0
b. In paragraph (e)(1)(iii), removing the phrase ``during the 60-day 
episode'' and adding in its place the phrase ``within 60 days after 
discharge''.
    The revisions read as follows:


Sec.  409.43  Plan of care requirements.

* * * * *
    (c) * * *
    (2) Reduction or disapproval of anticipated payment requests. CMS 
has

[[Page 35391]]

the authority to reduce or disapprove requests for anticipated payments 
in situations when protecting Medicare program integrity warrants this 
action. Since the request for anticipated payment is based on verbal 
orders as specified in paragraph (c)(1)(i) of this section and/or a 
prescribing referral as specified in paragraph (c)(1)(ii) of this 
section and is not a Medicare claim for purposes of the Act (although 
it is a ``claim'' for purposes of Federal, civil, criminal, and 
administrative law enforcement authorities, including but not limited 
to the Civil Monetary Penalties Law (as defined in 42 U.S.C. 1320a-
7a(i)(2)), the Civil False Claims Act (as defined in 31 U.S.C. 
3729(c)), and the Criminal False Claims Act (18 U.S.C. 287)), the 
request for anticipated payment will be canceled and recovered unless 
the claim is submitted within the greater of one of the following:
    (i) 60 days from the end of the episode (for claims beginning on or 
before December 31, 2018);
    (ii) 60 days from the end of the 30-day period of care (for claims 
beginning on or after January 1, 2019); or
    (iii) 60 days from the issuance of the request for anticipated 
payment.
    (3) * * *
    (ii) Before the claims for each episode (for a 60-day episode of 
care beginning on or before December 31, 2018) or period (for a 30-day 
period of care beginning on or after January 1, 2019) for services is 
submitted for the final percentage prospective payment.
* * * * *

PART 484--HOME HEALTH SERVICES

0
3. The authority citation for part 484 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Act (42 U.S.C. 1302 and 
1395(hh)) unless otherwise indicated.

0
4. Section 484.202 is amended by revising the definitions of ``Rural 
area'' and ``Urban area'' to read as follows:


Sec.  484.202  Definitions.

* * * * *
    Rural area means an area defined in Sec.  412.64(b)(1)(ii)(C) of 
this chapter.
    Urban area means an area defined in Sec.  412.64(b)(1)(ii)(A) and 
(B) of this chapter.
0
5. Section 484.205 is revised to read as follows:


Sec.  484.205  Basis of payment.

    (a) Method of payment. An HHA receives a national, standardized 
prospective payment amount for home health services previously paid on 
a reasonable cost basis (except the osteoporosis drug defined in 
section 1861(kk) of the Act) as of August 5, 1997. The national, 
standardized prospective payment is determined in accordance with Sec.  
484.215.
    (b) Unit of payment. For episodes beginning on or before December 
31, 2018, an HHA receives a national, standardized prospective 60-day 
episode payment amount. For periods beginning on or after January 1, 
2019, a HHA receives a national, standardized prospective 30-day 
payment amount.
    (c) OASIS data. A HHA must submit to CMS the OASIS data described 
at Sec.  484.55(b) and (d) in order for CMS to administer the payment 
rate methodologies described in Sec. Sec.  484.215, 484.220, 484.230, 
484.235, and 484.240.
    (d) Payment adjustments. The national, standardized prospective 
payment amount is subject to the following adjustments and additional 
payments:
    (1) A low-utilization payment adjustment (LUPA) of a predetermined 
per-visit rate as specified in Sec.  484.230.
    (2) A partial payment adjustment as specified in Sec.  484.235.
    (3) An outlier payment as specified in Sec.  484.240.
    (e) Medical review. All payments under this system may be subject 
to medical review with respect to beneficiary eligibility, medical 
necessity, and case-mix group assignment.
    (f) Durable medical equipment (DME) and disposable devices. DME 
provided as a home health service as defined in section 1861(m) of the 
Act is paid the fee schedule amount. Separate payment is made for 
``furnishing NPWT using a disposable device,'' as that term is defined 
in Sec.  484.202, and is not included in the national, standardized 
prospective payment amount.
    (g) Split percentage payments. Split percentage payments are made 
in accordance with requirements at Sec.  409.43(c) of this chapter.
    (1) Split percentage payments for episodes beginning on or before 
December 31, 2018:
    (i) The initial payment for initial episodes is paid to an HHA at 
60 percent of the case-mix and wage-adjusted 60-day episode rate. The 
residual final payment for initial episodes is paid at 40 percent of 
the case-mix and wage-adjusted 60-day episode rate.
    (ii) The initial payment for subsequent episodes is paid to an HHA 
at 50 percent of the case-mix and wage-adjusted 60-day episode rate. 
The residual final payment for subsequent episodes is paid at 50 
percent of the case-mix and wage-adjusted 60-day episode rate.
    (2) Split percentage payments for periods beginning on or after 
January 1, 2019:
    (i) The initial payment for initial 30-day periods is paid to an 
HHA at 60 percent of the case-mix and wage-adjusted 30-day payment 
rate. The residual final payment for initial 30-day periods is paid at 
40 percent of the case-mix and wage-adjusted 30-day payment rate.
    (ii) The initial payment for subsequent 30-day periods is paid to 
an HHA at 50 percent of the case-mix and wage-adjusted 30-day payment 
rate. The residual final payment for subsequent 30-day periods is paid 
at 50 percent of the case-mix and wage-adjusted 30-day payment rate.


Sec.  484.210  [Removed and Reserved]

0
6. Section 484.210 is removed and reserved.
0
7. Section 484.215 is amended by--
0
a. Revising the section heading;
0
b. Revising paragraph (d) introductory text; and
0
c. Adding paragraph (f).
    The revisions and addition read as follows:


Sec.  484.215   Initial establishment of the calculation of the 
national, standardized prospective 60-day episode payment and 30-day 
payment rates.

* * * * *
    (d) Calculation of the unadjusted national average prospective 
payment amount for the 60-day episode. For episodes beginning on or 
before December 31, 2018, CMS calculates the unadjusted national 60-day 
episode payment in the following manner:
* * * * *
    (f) For periods beginning on or after January 1, 2019, a national, 
standardized prospective 30-day payment rate applies. The national, 
standardized prospective 30-day payment rate is an amount determined by 
the Secretary, as subsequently updated pursuant to Sec.  484.225.
0
8. Section 484.220 is amended by--
0
a. Revising the section heading;
0
b. Revising the introductory text; and
0
c. In paragraph (a) introductory text, removing the phrase ``national 
prospective 60-day episode'' and adding in its place the phrase 
``national, standardized prospective''.
    The revisions read as follows:


Sec.  484.220  Calculation of the case-mix and wage area adjusted 
prospective payment rates.

    CMS adjusts the national, standardized prospective payment rates as 
referenced in Sec.  484.215 to account for the following:
* * * * *

[[Page 35392]]

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9. Section 484.225 is amended by--
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a. Revising the section heading;
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b. Revising paragraph (a);
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c. In paragraphs (b) and (c), removing the phrase ``national 
prospective 60-day episode'' and adding the phrase ``national 
standardized prospective''; and
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d. Adding paragraph (d).
    The revisions and addition read as follows:


Sec.  484.225  Annual update of the unadjusted national, standardized 
prospective payment rates.

    (a) CMS annually updates the unadjusted national, standardized 
prospective payment rate on a calendar year basis in accordance with 
section 1895(b)(3)(B) of the Act.
* * * * *
    (d) For CY 2019, the national, standardized prospective 30-day 
payment amount is an amount determined by the Secretary. CMS annually 
updates this amount on a calendar year basis in accordance with 
paragraphs (a) through (c) of this section.
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10. Section 484.230 is revised to read as follows:


Sec.  484.230  Low-utilization payment adjustments.

    (a) For episodes beginning on or before December 31, 2018, an 
episode with four or fewer visits is paid the national per-visit amount 
by discipline updated annually by the applicable market basket for each 
visit type, in accordance with Sec.  484.225. The national per-visit 
amount is adjusted by the appropriate wage index based on the site of 
service of the beneficiary. An amount will be added to the low-
utilization payment adjustments for low-utilization episodes that occur 
as the beneficiary's only episode or initial episode in a sequence of 
adjacent episodes. For purposes of the home health PPS, a sequence of 
adjacent episodes for a beneficiary is a series of claims with no more 
than 60 days without home care between the end of one episode, which is 
the 60th day (except for episodes that have been PEP-adjusted), and the 
beginning of the next episode.
    (b) For periods beginning on or after January 1, 2019, an HHA 
receives a national 30-day payment of a predetermined rate for home 
health services, unless CMS determines at the end of the 30-day period 
that the HHA furnished minimal services to a patient during the 30-day 
period. For each payment group used to case-mix adjust the 30-day 
payment rate, the 10th percentile value of total visits during a 30-day 
period of care will be used to create payment group specific thresholds 
with a minimum threshold of at least 2 visits for each case-mix group. 
A 30-day period with a total number of visits less than the threshold 
is paid the national per-visit amount by discipline updated annually by 
the applicable market basket for each visit type. The national per-
visit amount is adjusted by the appropriate wage index based on the 
site of service for the beneficiary.
    (c) An amount will be added to low-utilization payment adjustments 
for low-utilization periods that occur as the beneficiary's only 30-day 
period or initial 30-day period in a sequence of adjacent periods of 
care. For purposes of the home health PPS, a sequence of adjacent 
periods of care for a beneficiary is a series of claims with no more 
than 60 days without home care between the end of one period, which is 
the 30th day (except for episodes that have been partial payment 
adjusted), and the beginning of the next episode.
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11. Section 484.235 is revised to read as follows:


Sec.  484.235  Partial payment adjustments.

    (a) Partial episode payments (PEPs) for episodes beginning on or 
before December 31, 2018. (1) An HHA receives a national, standardized 
60-day payment of a predetermined rate for home health services unless 
CMS determines that an intervening event has occurred, which warrants a 
new 60-day episode for purposes of payment. A start of care OASIS 
assessment and physician certification of the new plan of care are 
required. An intervening event is defined as either a beneficiary 
elected transfer or a discharge with goals met or no expectation of 
return to home health, but the beneficiary returned to home health 
during the 60-day episode.
    (2) The PEP adjustment will not apply in situations of transfers 
among HHAs under common ownership. Those situations will be considered 
services provided under arrangement on behalf of the originating HHA by 
the receiving HHA with the common ownership interest for the balance of 
the 60-day episode. The common ownership exception to the transfer PEP 
adjustment does not apply if the beneficiary moves to a different MSA 
or Non-MSA during the 60-day episode before the transfer to the 
receiving HHA. The transferring HHA in situations of common ownership 
not only serves as a billing agent, but must also exercise professional 
responsibility over the arranged-for services in order for services 
provided under arrangements to be paid.
    (3) If the intervening event warrants a new 60-day payment and a 
new physician certification and a new plan of care, the initial HHA 
receives a partial episode payment adjustment reflecting the length of 
time the patient remained under its care based on the first billable 
visit date through and including the last billable visit date. The PEP 
is calculated by determining the actual days served as a proportion of 
60 multiplied by the initial 60-day payment amount.
    (b) Partial payment adjustments for periods beginning on or after 
January 1, 2019. (1) An HHA receives a national, standardized 30-day 
payment of a predetermined rate for home health services unless CMS 
determines that an intervening event has occurred, which warrants a new 
30-day period for purposes of payment. A start of care OASIS assessment 
and physician certification of the new plan of care are required. An 
intervening event is defined as either a beneficiary elected transfer 
or a discharge and return to home health during the 30-day period.
    (2) The partial payment adjustment will not apply in situations of 
transfers among HHAs of common ownership. Those situations will be 
considered services provided under arrangement on behalf of the 
originating HHA by the receiving HHA with the common ownership interest 
for the balance of the 30-day period. The common ownership exception to 
the transfer partial payment adjustment does not apply if the 
beneficiary moves to a different MSA or Non-MSA during the 30-day 
period before the transfer to the receiving HHA. The transferring HHA 
in situations of common ownership not only serves as a billing agent, 
but must also exercise professional responsibility over the arranged-
for services in order for services provided under arrangements to be 
paid.
    (3) If the intervening event warrants a new 30-day payment and thus 
a new physician certification and a new plan of care, the initial HHA 
receives a partial payment adjustment reflecting the length of time the 
patient remained under its care based on the first billable visit date 
through and including the last billable visit date. The partial payment 
is calculated by determining the actual days served as a proportion of 
30 multiplied by the initial 30-day payment amount.
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12. Section 484.240 is revised to read as follows:


Sec. [thinsp]484.240   Outlier payments.

    (a) For episodes beginning on or before December 31, 2018, an HHA 
receives an outlier payment for an

[[Page 35393]]

episode whose estimated costs exceeds a threshold amount for each case-
mix group. The outlier threshold for each case-mix group is the episode 
payment amount for that group, or the PEP adjustment amount for the 
episode, plus a fixed dollar loss amount that is the same for all case-
mix groups.
    (b) For periods beginning on or after January 1, 2019, an HHA 
receives an outlier payment for a 30-day period whose estimated cost 
exceeds a threshold amount for each case-mix group. The outlier 
threshold for each case-mix group is the 30-day payment amount for that 
group, or the partial payment adjustment amount for the 30-day period, 
plus a fixed dollar loss amount that is the same for all case-mix 
groups.
    (c) The outlier payment is a proportion of the amount of estimated 
cost beyond the threshold.
    (d) CMS estimates the cost for each episode by multiplying the 
national per-15 minute unit amount of each discipline by the number of 
15 minute units in the discipline and computing the total estimated 
cost for all disciplines.
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13. Section 484.250 is amended by revising paragraph (a)(1) and adding 
paragraphs (d) through (f) to read as follows:


Sec.  484.250   Patient assessment data.

    (a) * * *
    (1) The OASIS data described at Sec.  484.55(b) and (d) for CMS to 
administer the payment rate methodologies described in Sec. Sec.  
484.215, 484.220, 484. 230, 484.235, and 484.240; and to meet the 
quality reporting requirements of section 1895(b)(3)(B)(v) of the Act.
* * * * *
    (d) Exceptions and extension requirements. (1) A HHA may request 
and CMS may grant exceptions or extensions to the reporting 
requirements under section 1895(b)(3)(B)(v) of the Act for one or more 
quarters, when there are certain extraordinary circumstances beyond the 
control of the HHA.
    (2) A HHA may request an exception or extension within 90 days of 
the date that the extraordinary circumstances occurred by sending an 
email to CMS HHAPU reconsiderations at 
[email protected] that contains all of the following 
information:
    (i) HHA CMS Certification Number (CCN).
    (ii) HHA Business Name.
    (iii) HHA Business Address.
    (iv) CEO or CEO-designated personnel contact information including 
name, telephone number, title, email address, and mailing address (The 
address must be a physical address, not a post office box).
    (v) HHA's reason for requesting the exception or extension.
    (vi) Evidence of the impact of extraordinary circumstances, 
including, but not limited to, photographs, newspaper, and other media 
articles.
    (vii) Date when the HHA believes it will be able to again submit 
data under section 1895(b)(3)(B)(v) of the Act and a justification for 
the proposed date.
    (3) Except as provided in paragraph (d)(4) of this section, CMS 
will not consider an exception or extension request unless the HHA 
requesting such exception or extension has complied fully with the 
requirements in this paragraph (d).
    (4) CMS may grant exceptions or extensions to HHAs without a 
request if it is determines that one or more of the following has 
occurred:
    (i) An extraordinary circumstance affects an entire region or 
locale.
    (ii) A systemic problem with one of CMS's data collection systems 
directly affected the ability of a HHA to submit data under section 
1895(b)(3)(B)(v) of the Act.
    (e) Reconsideration. (1) HHAs that do not meet the quality 
reporting requirements under section 1895(b)(3)(B)(v) of the Act for a 
program year will receive a letter of non-compliance through the USPS 
and via notification in CASPER. An HHA may request reconsideration no 
later than 30 calendar days after the date identified on the letter of 
non-compliance.
    (2) Reconsideration requests may be submitted to CMS by sending an 
email to CMS HHAPU reconsiderations at 
[email protected] containing all of the following 
information:
    (i) HHA CCN.
    (ii) HHA Business Name.
    (iii) HHA Business Address.
    (iv) CEO or CEO-designated personnel contact information including 
name, telephone number, title, email address, and mailing address (The 
address must be a physical address, not a post office box).
    (v) CMS identified reason(s) for non-compliance from the non-
compliance letter.
    (vi) Reason(s) for requesting reconsideration, including all 
supporting documentation. CMS will not consider an exception or 
extension request unless the HHA has complied fully with the 
requirements in paragraph (e)(2) of this section.
    (3) CMS will make a decision on the request for reconsideration and 
provide notice of the decision to the HHA through CASPER and via letter 
sent through the United States Postal Service.
    (f) Appeals. (1) A HHA that is dissatisfied with CMS' decision on a 
reconsideration request submitted under paragraph (e) of this section 
may file an appeal with the Provider Reimbursement Review Board (PRRB) 
under 42 CFR part 405, subpart R.
    (2) [Reserved]
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14. Section 484.305 is amended by revising the definition of 
``Applicable measure'' to read as follows:


Sec.  484.305   Definitions.

* * * * *
    Applicable measure means a measure for which a competing HHA has 
provided a minimum of:
    (1) 20 home health episodes of care per year for the OASIS-based 
measures;
    (2) 20 home health episodes of care per year for the claims-based 
measures; or
    (3) 40 completed surveys for the HHCAHPS measures.
* * * * *

    Dated: June 29, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: June 30, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-15825 Filed 7-25-17; 4:15 pm]
 BILLING CODE 4120-01-P