[Federal Register Volume 84, Number 80 (Thursday, April 25, 2019)]
[Proposed Rules]
[Pages 17570-17618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08143]



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Vol. 84

Thursday,

No. 80

April 25, 2019

Part III





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 418





 Medicare Program; FY 2020 Hospice Wage Index and Payment Rate Update 
and Hospice Quality Reporting Requirements; Proposed Rule

  Federal Register / Vol. 84 , No. 80 / Thursday, April 25, 2019 / 
Proposed Rules  

[[Page 17570]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1714-P]
RIN 0938-AT71


Medicare Program; FY 2020 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the hospice wage index, 
payment rates, and cap amount for fiscal year 2020. This rule proposes 
to rebase the continuous home care, general inpatient care, and the 
inpatient respite care per diem payment rates in a budget-neutral 
manner to more accurately align Medicare payments with the costs of 
providing care. In addition, this rule proposes to modify the election 
statement by requiring an addendum that includes information aimed at 
increasing coverage transparency for patient under a hospice election. 
Finally, this rule proposes changes to the Hospice Quality Reporting 
Program.

DATES: Comments: To be assured consideration, comments must be received 
at one of the addresses provided below, no later than 5 p.m. on June 
18, 2019.

ADDRESSES: In commenting, refer to file code CMS-1714-P. Because of 
staff and resource limitations, we cannot accept comments by facsimile 
(FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (choose only one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1714-P, P.O. Box 8010, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1714-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

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

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 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments. Wage index addenda will be available only through 
the internet on our website at: (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.)

I. Executive Summary

A. Purpose

    This rule proposes updates to the hospice wage index, payment 
rates, and cap amount for fiscal year (FY) 2020, as required under 
section 1814(i) of the Social Security Act (the Act). This rule 
proposes to rebase the continuous home care (CHC), general inpatient 
care (GIP), and inpatient respite care (IRC) per diem payment rates in 
a budget neutral manner to more accurately align payments with the 
costs of providing care, using the hospice payment reform authority 
under section 1814(i)(6) of the Act. This rule also proposes a change 
to the hospice wage index to remove the 1-year lag in data by using the 
current year's hospital wage data to establish the hospice wage index. 
In addition, this rule proposes to modify the hospice election 
statement by requiring an addendum that includes information aimed at 
increasing coverage transparency for patients under a hospice election. 
Finally, this rule proposes changes to the Hospice Quality Reporting 
Program.

B. Summary of the Major Provisions

    Section III.A of this proposed rule describes the FY 2020 hospice 
per diem payment rebasing methodology, cost reports and calculations. 
Using the hospice payment reform authority under section 1814(i)(6) of 
the Act, section III.A.3 proposes to rebase the FY 2020 per diem 
payment rates for CHC, IRC, and GIP levels of care. As required in 
section 1814(i)(6)(D)(ii) of the Act, any changes to hospice payment 
rates must be done in a budget neutral manner. As such, section III.A.3 
also proposes a reduction to the routine home care (RHC) payment 
amounts for FY 2020 in order to maintain overall budget neutrality. 
Section III.B.1 of this proposed rule proposes to eliminate the 1-year 
lag of the pre-floor, pre-reclassified hospital wage index that is used 
in calculating the hospice wage index. Section III.B.2 proposes updates 
to the hospice wage index and makes the application of the updated wage 
data budget neutral for all four levels of hospice care. In section 
III.B.4 of this proposed rule, we discuss the proposed FY 2020 hospice 
payment update percentage of 2.7 percent. Section III.B.5 outlines the 
proposed FY 2020 hospice payment rates that result from the policies 
proposed in section III.A. Section III.B.6 of this proposed rule 
updates the hospice cap amount for FY 2020 by the hospice payment 
update percentage discussed in section III.B.4 of this rule. Section 
III.C proposes to modify the hospice election statement content 
requirements at Sec.  418.24(b) to increase coverage transparency for 
patients under a hospice election by notifying beneficiaries if there 
are services that will not be covered by the hospice.
    In addition, section III.D describes a request for information 
(RFI) as it relates to the Medicare Fee-For-Service (FFS) Hospice 
benefit and coordination of care at end-of-life. Finally, in section 
III.E of this proposed rule, we discuss updates to the Hospice Quality 
Reporting Program (HQRP), including: The development of claims-based 
and outcome measures, measure concepts, and the hospice assessment 
tool. We also provide updates on the public reporting change for the 
``Hospice Visits When Death is Imminent'' measure pair, the posting of 
publicly available government data to the CMS Hospice Compare website 
and the CAHPS[supreg] Hospice Survey.

C. Summary of Impacts

    The overall economic impact of this proposed rule is estimated to 
be $540

[[Page 17571]]

million in increased payments to hospices for FY 2020.

II. Background

A. Hospice Care

    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes the impending death of a terminally ill individual and 
warrants a change in the focus from curative care to palliative care 
for relief of pain and for symptom management. Medicare regulations 
define ``palliative care'' as patient and family-centered care that 
optimizes quality of life by anticipating, preventing, and treating 
suffering. Palliative care throughout the continuum of illness involves 
addressing physical, intellectual, emotional, social, and spiritual 
needs and to facilitate patient autonomy, access to information, and 
choice (42 CFR 418.3). Palliative care is at the core of hospice 
philosophy and care practices, and is a critical component of the 
Medicare hospice benefit.
    The goal of hospice care is to help terminally ill individuals 
continue life with minimal disruption to normal activities while 
remaining primarily in the home environment. A hospice uses an 
interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through a 
collaboration of professionals and other caregivers, with the goal of 
making the beneficiary as physically and emotionally comfortable as 
possible. Hospice is compassionate beneficiary and family/caregiver-
centered care for those who are terminally ill.
    As referenced in our regulations at Sec.  418.22(b)(1), to be 
eligible for Medicare hospice services, the patient's attending 
physician (if any) and the hospice medical director must certify that 
the individual is ``terminally ill,'' as defined in section 
1861(dd)(3)(A) of the Act and our regulations at Sec.  418.3; that is, 
the individual's prognosis is for a life expectancy of 6 months or less 
if the terminal illness runs its normal course. The regulations at 
Sec.  418.22(b)(3) require that the certification and recertification 
forms include a brief narrative explanation of the clinical findings 
that support a life expectancy of 6 months or less.
    Under the Medicare hospice benefit, the election of hospice care is 
a patient choice and once a terminally ill patient elects to receive 
hospice care, a hospice interdisciplinary group is essential in the 
seamless provision of services. These hospice services are provided 
primarily in the individual's home. The hospice interdisciplinary group 
works with the beneficiary, family, and caregivers to develop a 
coordinated, comprehensive care plan; reduce unnecessary diagnostics or 
ineffective therapies; and maintain ongoing communication with 
individuals and their families about changes in their condition. The 
beneficiary's care plan will shift over time to meet the changing needs 
of the individual, family, and caregiver(s) as the individual 
approaches the end of life.
    If, in the judgment of the hospice interdisciplinary team, which 
includes the hospice physician, the patient's symptoms cannot be 
effectively managed at home, then the patient is eligible for general 
inpatient care (GIP), a more medically intense level of care. GIP must 
be provided in a Medicare-certified hospice freestanding facility, 
skilled nursing facility, or hospital. GIP is provided to ensure that 
any new or worsening symptoms are intensively addressed so that the 
beneficiary can return to his or her home and continue to receive 
routine home care. Limited, short-term, intermittent, inpatient respite 
care (IRC) is also available because of the absence or need for relief 
of the family or other caregivers. Additionally, an individual can 
receive continuous home care (CHC) during a period of crisis in which 
an individual requires continuous care to achieve palliation or 
management of acute medical symptoms so that the individual can remain 
at home. Continuous home care may be covered for as much as 24 hours a 
day, and these periods must be predominantly nursing care, in 
accordance with our regulations at Sec.  418.204. A minimum of 8 hours 
of nursing care, or nursing and aide care, must be furnished on a 
particular day to qualify for the continuous home care rate (Sec.  
418.302(e)(4)).
    Hospices must comply with applicable civil rights laws,\1\ 
including Section 504 of the Rehabilitation Act of 1973 and the 
Americans with Disabilities Act, under which covered entities must take 
appropriate steps to ensure effective communication with patients and 
patient care representatives with disabilities, including the 
provisions of auxiliary aids and services. Additionally, they must take 
reasonable steps to ensure meaningful access for individuals with 
limited English proficiency, consistent with Title VI of the Civil 
Rights Act of 1964. Further information about these requirements may be 
found at: http://www.hhs.gov/ocr/civilrights.
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    \1\ Hospices are also subject to additional Federal civil rights 
laws, including the Age Discrimination Act, Section 1557 of the 
Affordable Care Act, and conscience and religious freedom laws.
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B. Services Covered by the Medicare Hospice Benefit

    Coverage under the Medicare Hospice benefit requires that hospice 
services must be reasonable and necessary for the palliation and 
management of the terminal illness and related conditions. Section 
1861(dd)(1) of the Act establishes the services that are to be rendered 
by a Medicare-certified hospice program. These covered services 
include: Nursing care; physical therapy; occupational therapy; speech-
language pathology therapy; medical social services; home health aide 
services (now called hospice aide services); physician services; 
homemaker services; medical supplies (including drugs and biologicals); 
medical appliances; counseling services (including dietary counseling); 
short-term inpatient care in a hospital, nursing facility, or hospice 
inpatient facility (including both respite care and procedures 
necessary for pain control and acute or chronic symptom management); 
continuous home care during periods of crisis, and only as necessary to 
maintain the terminally ill individual at home; and any other item or 
service which is specified in the plan of care and for which payment 
may otherwise be made under Medicare, in accordance with Title XVIII of 
the Act.
    Section 1814(a)(7)(B) of the Act requires that a written plan for 
providing hospice care to a beneficiary who is a hospice patient be 
established before care is provided by, or under arrangements made by, 
that hospice program; and that the written plan be periodically 
reviewed by the beneficiary's attending physician (if any), the hospice 
medical director, and an interdisciplinary group (described in section 
1861(dd)(2)(B) of the Act). The services offered under the Medicare 
hospice benefit must be available to beneficiaries as needed, 24 hours 
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act).
    Upon the implementation of the hospice benefit, the Congress also 
expected hospices to continue to use volunteer services, though these 
services are not reimbursed by Medicare (see section 1861(dd)(2)(E) of 
the Act). As stated in the FY 1983 Hospice Wage Index and Rate Update 
proposed rule (48 FR 38149), the hospice interdisciplinary group should 
comprise paid hospice employees as well as hospice volunteers, and that 
``the hospice benefit and the resulting Medicare reimbursement is not 
intended to diminish the voluntary

[[Page 17572]]

spirit of hospices.'' This expectation supports the hospice philosophy 
of community based, holistic, comprehensive, and compassionate end-of-
life care.

C. Medicare Payment for Hospice Care

    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and our regulations in 42 CFR part 418, establish eligibility 
requirements, payment standards and procedures; define covered 
services; and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart 
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (RHC, CHC, IRC, and GIP), 
based on each day a qualified Medicare beneficiary is under hospice 
care (once the individual has elected). This per diem payment is to 
include all of the hospice services and items needed to manage the 
beneficiary's care, as required by section 1861(dd)(1) of the Act. 
There has been little change in the hospice payment structure since the 
benefit's inception. The per diem rate based on level of care was 
established in 1983, and this payment structure remains today with some 
adjustments, as noted below.
1. Omnibus Budget Reconciliation Act of 1989
    Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided 
changes in the methodology concerning updating the daily payment rates 
based on the hospital market basket percentage increase applied to the 
payment rates in effect during the previous federal fiscal year.
2. Balanced Budget Act of 1997
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) established that updates to the hospice payment rates beginning 
FY 2002 and subsequent FYs be the hospital market basket percentage 
increase for the FY.
3. FY 1998 Hospice Wage Index Final Rule
    The FY 1998 Hospice Wage Index final rule (62 FR 42860), 
implemented a new methodology for calculating the hospice wage index 
and instituted an annual Budget Neutrality Adjustment Factor (BNAF) so 
aggregate Medicare payments to hospices would remain budget neutral to 
payments calculated using the 1983 wage index.
4. FY 2010 Hospice Wage Index Final Rule
    The FY 2010 Hospice Wage Index and Rate Update final rule (74 FR 
39384) instituted an incremental 7-year phase-out of the BNAF beginning 
in FY 2010 through FY 2016. The BNAF phase-out reduced the amount of 
the BNAF increase applied to the hospice wage index value, but was not 
a reduction in the hospice wage index value itself or in the hospice 
payment rates.
5. The Affordable Care Act
    Starting with FY 2013 (and in subsequent FYs), the market basket 
percentage update under the hospice payment system referenced in 
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act is 
subject to annual reductions related to changes in economy-wide 
productivity, as specified in section 1814(i)(1)(C)(iv) of the Act.
    In addition, sections 1814(i)(5)(A) through (C) of the Act, as 
added by section 3132(a) of the Patient Protection and Affordable Care 
Act (PPACA) (Pub. L. 111-148), required hospices to begin submitting 
quality data, based on measures specified by the Secretary of the 
Department of Health and Human Services (the Secretary), for FY 2014 
and subsequent FYs. Beginning in FY 2014, hospices that fail to report 
quality data have their market basket percentage increase reduced by 2 
percentage points.
    Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) 
of the PPACA, required, effective January 1, 2011, that a hospice 
physician or nurse practitioner have a face-to-face encounter with the 
beneficiary to determine continued eligibility of the beneficiary's 
hospice care prior to the 180th day recertification and each subsequent 
recertification, and to attest that such visit took place. When 
implementing this provision, we finalized in the FY 2011 Hospice Wage 
Index final rule (75 FR 70435) that the 180th day recertification and 
subsequent recertifications would correspond to the beneficiary's third 
or subsequent benefit periods. Further, section 1814(i)(6) of the Act, 
as added by section 3132(a)(1)(B) of the PPACA, authorized the 
Secretary to collect additional data and information determined 
appropriate to revise payments for hospice care and other purposes. The 
types of data and information suggested in the PPACA could capture 
accurate resource utilization, which could be collected on claims, cost 
reports, and possibly other mechanisms, as the Secretary determined to 
be appropriate. The data collected could be used to revise the 
methodology for determining the payment rates for RHC and other 
services included in hospice care, no earlier than October 1, 2013, as 
described in section 1814(i)(6)(D) of the Act. In addition, we were 
required to consult with hospice programs and the Medicare Payment 
Advisory Commission (MedPAC) regarding additional data collection and 
payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
    In the FY 2012 Hospice Wage Index final rule (76 FR 47308 through 
47314) we announced that beginning in 2012, the hospice aggregate cap 
would be calculated using the patient-by-patient proportional 
methodology, within certain limits. We allowed existing hospices the 
option of having their cap calculated through the original streamlined 
methodology, also within certain limits. As of FY 2012, new hospices 
have their cap determinations calculated using the patient-by-patient 
proportional methodology. If a hospice's total Medicare payments for 
the cap year exceed the hospice aggregate cap, then the hospice must 
repay the excess back to Medicare.
7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50452) finalized a requirement that the Notice of Election (NOE) be 
filed within 5 calendar days after the effective date of hospice 
election. If the NOE is filed beyond this 5-day period, hospice 
providers are liable for the services furnished during the days from 
the effective date of hospice election to the date of NOE filing (79 FR 
50474). Similar to the NOE, the claims processing system must be 
notified of a beneficiary's discharge from hospice or hospice benefit 
revocation within 5 calendar days after the effective date of the 
discharge/revocation (unless the hospice has already filed a final 
claim) through the submission of a final claim or a Notice of 
Termination or Revocation (NOTR).
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50479) also finalized a requirement that the election form include the 
beneficiary's choice of attending physician and that the beneficiary 
provide the hospice with a signed document when he or she chooses to 
change attending physicians.
    In addition, the FY 2015 Hospice Wage Index and Rate Update final 
rule (79 FR 50496) provided background, eligibility criteria, survey 
respondents,

[[Page 17573]]

and implementation of the Hospice Experience of Care Survey for 
informal caregivers. Hospice providers were required to begin using 
this survey for hospice patients as of 2015.
    Finally, the FY 2015 Hospice Wage Index and Rate Update final rule 
required providers to complete their aggregate cap determination not 
sooner than 3 months after the end of the cap year, and not later than 
5 months after, and remit any overpayments. Those hospices that failed 
to timely submit their aggregate cap determinations had their payments 
suspended until the determination is completed and received by the 
Medicare contractor (79 FR 50503).
8. IMPACT Act of 2014
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act) (Pub. L. 113-185) became law on October 6, 2014. Section 
3(a) of the IMPACT Act mandated that all Medicare certified hospices be 
surveyed every 3 years beginning April 6, 2015 and ending September 30, 
2025. In addition, section 3(c) of the IMPACT Act requires medical 
review of hospice cases involving beneficiaries receiving more than 180 
days of care in select hospices that show a preponderance of such 
patients; section 3(d) of the IMPACT Act contains a new provision 
mandating that the cap amount for accounting years that end after 
September 30, 2016, and before October 1, 2025 be updated by the 
hospice payment update rather than using the consumer price index for 
urban consumers (CPI-U) for medical care expenditures.
9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47172), we created two different payment rates for RHC that resulted in 
a higher base payment rate for the first 60 days of hospice care and a 
reduced base payment rate for subsequent days of hospice care. We also 
created a Service Intensity Add-on (SIA) payment payable for services 
during the last 7 days of the beneficiary's life, equal to the CHC 
hourly payment rate multiplied by the amount of direct patient care 
provided by a registered nurse (RN) or social worker that occurs during 
the last 7 days (80 FR 47177).
    In addition to the hospice payment reform changes discussed, the FY 
2016 Hospice Wage Index and Rate Update final rule (80 FR 47186) 
implemented changes mandated by the IMPACT Act, in which the cap amount 
for accounting years that end after September 30, 2016 and before 
October 1, 2025 is updated by the hospice payment update percentage 
rather than using the CPI-U. This was applied to the 2016 cap year, 
starting on November 1, 2015 and ending on October 31, 2016. In 
addition, we finalized a provision to align the cap accounting year for 
both the inpatient cap and the hospice aggregate cap with the fiscal 
year for FY 2017 and thereafter. Finally, the FY 2016 Hospice Wage 
Index and Rate Update final rule (80 FR 47144) clarified that hospices 
must report all diagnoses of the beneficiary on the hospice claim as a 
part of the ongoing data collection efforts for possible future hospice 
payment refinements.
10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 
52160), we finalized several new policies and requirements related to 
the HQRP. First, we codified our policy that if the National Quality 
Forum (NQF) made non-substantive changes to specifications for HQRP 
measures as part of the NQF's re-endorsement process, we would continue 
to utilize the measure in its new endorsed status, without going 
through new notice-and-comment rulemaking. We would continue to use 
rulemaking to adopt substantive updates made by the NQF to the endorsed 
measures we have adopted for the HQRP; determinations about what 
constitutes a substantive versus non-substantive change would be made 
on a measure-by-measure basis. Second, we finalized two new quality 
measures for the HQRP for the FY 2019 payment determination and 
subsequent years: Hospice Visits when Death is Imminent Measure Pair 
and Hospice and Palliative Care Composite Process Measure-Comprehensive 
Assessment at Admission (81 FR 52173). The data collection mechanism 
for both of these measures is the HIS, and the measures were effective 
April 1, 2017. Regarding the CAHPS[supreg] Hospice Survey, we finalized 
a policy that hospices that receive their CMS Certification Number 
(CCN) after January 1, 2017 for the FY 2019 Annual Payment Update (APU) 
and January 1, 2018 for the FY 2020 APU will be exempted from the 
Hospice Consumer Assessment of Healthcare Providers and Systems 
(CAHPS[supreg]) requirements due to newness (81 FR 52182). The 
exemption is determined by CMS and is for 1 year only.

D. Trends in Medicare Hospice Utilization

    Since the implementation of the hospice benefit in 1983, there has 
been substantial growth in hospice utilization. The number of Medicare 
beneficiaries receiving hospice services has grown from 513,000 in FY 
2000 to over 1.5 million in FY 2018. Medicare hospice expenditures have 
risen from $2.8 billion in FY 2000 to approximately $18.7 billion in FY 
2018. CMS' Office of the Actuary (OACT) projects that hospice 
expenditures are expected to continue to increase, by approximately 8.5 
percent annually, reflecting an increase in the number of Medicare 
beneficiaries, more beneficiary awareness of the Medicare hospice 
benefit for end-of-life care, and a growing preference for care 
provided in home and community-based settings.
    As a part of our ongoing analysis of hospice utilization trends, we 
examined the distribution of total hospice days by level of care. A 
review of claims over the last 10 years shows that RHC remains the 
highest utilized level of care, accounting for an average of 97.6 
percent of total hospice days; GIP accounting for 1.7 percent of total 
hospice days; CHC accounting for 0.4 percent of total hospice days; 
and, IRC accounting for 0.3 percent of total hospice days.
    There have also been notable changes in the diagnosis patterns 
among Medicare hospice enrollees. At the time of the implementation of 
the Medicare hospice benefit, cancer diagnoses were the most frequently 
reported diagnoses. However, there has been a significant increase in 
the reporting of neurologically-based diagnoses, including Alzheimer's 
disease, which has been the top-reported diagnosis on hospice claims 
since 2014. The increase in the reporting of neurological conditions as 
the principal diagnosis on hospice claims corresponds to a 
clarification in the FY 2014 hospice final rule (78 FR 48242) on 
diagnosis reporting where ``debility'' and ``adult failure to thrive'' 
are no longer permitted to be reported as principal diagnosis codes on 
hospice claims. Our ongoing analysis of diagnosis reporting trends 
finds that neurological and organ-based failure conditions remain top-
reported principal diagnoses.
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47201), we clarified that hospices are to report all diagnoses 
identified in the initial and comprehensive assessments on hospice 
claims, whether related or unrelated to the terminal prognosis of the 
individual, effective October 1, 2015. Analysis of FY 2018 hospice 
claims show that 100 percent of claims included at least one diagnosis, 
90.3 percent of claims included at least two

[[Page 17574]]

diagnoses, and 82.1 percent of claims included at least three 
diagnoses.
    Finally, we examined hospice trends relating to hospice length of 
stay. The number of days that a hospice beneficiary receives care under 
a hospice election is referred to as the hospice length of stay (LOS). 
Length of stay can be analyzed in several ways. Total lifetime length 
of stay includes the sum of all days of hospice care across all hospice 
elections. This would mean if a beneficiary had one hospice election, 
was discharged alive, and then reelected the benefit at a later date, 
the sum of both elections would count towards their lifetime length of 
stay. Average length of stay refers to the number of hospice days 
during a single hospice election at the date of live discharge or 
death. The median length of stay reflects the 50th percentile and is 
often the most meaningful comparison measure for evaluating LOS data as 
the total lifetime length of stay and the average length of stay are 
affected by extremely short and extremely long lengths of stay. Table 1 
lists the clinical categories of principal diagnoses reported on 
hospice claims along with the corresponding number of decedents, as 
well as the average, total lifetime and median lengths of stay.

                                          Table 1--Average Length of Stay in Days for Hospice Users in FY 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of
                                                           hospice users                                     Number of
                                                              who are         Average         Median         elections    Average length   Median length
                        Category                           discharged at     lifetime        lifetime       (elections      of election     of election
                                                           the end of FY  length of stay  length of stay   ending in FY
                                                               2018                                            2018)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alzheimer's, Dementia, and Parkinson's..................         203,349           167.4              50         215,547           124.9              37
CVA/Stroke..............................................          55,321           142.7              30          58,457           109.7              24
Cancers.................................................         286,131            53.6              17         303,507            46.0              16
Chronic Kidney Disease..................................          27,527            43.9               8          28,740            34.6               7
Heart (CHF and Other Heart Disease).....................         203,613           106.0              24         216,161            83.7              20
Lung (COPD and Pneumonias)..............................         114,399           103.9              18         122,579            79.6              16
Other...................................................         335,777            78.7              13         352,288            61.3              12
                                                         -----------------------------------------------------------------------------------------------
    All Diagnoses.......................................       1,226,117            96.6              19       1,297,279            75.3              17
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FY 2018 hospice claims data from CCW on January 29, 2019.
Note(s): Only beneficiaries whose last day of hospice in FY 2018 was not associated with a discharge status code of ``30'' were counted (``30''
  indicates they remained in hospice). Lifetime length of stay is determined using all hospice elections over the beneficiary's lifetime.

III. Provisions of the Proposed Rule

A. Proposed Rebasing of the Continuous Home Care, Inpatient Respite 
Care, and General Inpatient Care Payment Rates for FY 2020

1. Background
    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and our regulations in part 418, establish eligibility 
requirements, payment standards and procedures; define covered 
services; and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart 
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (routine home care (RHC), 
continuous home care (CHC), inpatient respite care (IRC) and general 
inpatient care (GIP)), based on each day a qualified Medicare 
beneficiary is under a hospice election. These per diem payments 
include reimbursement for all of the hospice services and items needed 
to manage the beneficiary's care, as required by section 1861(dd)(1) of 
the Act. There has been little change in the hospice payment structure 
since the benefit's inception. The per diem rate based on level of care 
was established in 1983, and this payment structure remains today.
    We originally set the base payment rates for each level of care in 
1983 using information from a relatively small set (n=26) of hospices 
that were participating in a CMS hospice demonstration. As a result of 
technological changes to providing hospice care that have occurred 
since the early 1980's, as well as changes in the patient population 
that uses the hospice benefit, it is possible that the current per diem 
payment rates for the Medicare hospice benefit do not align accurately 
with the costs of providing care. Since the establishment of the base 
payment rates, they have been updated through the years to primarily 
account for inflation, but we have not implemented any large scale 
changes to reflect non-inflationary changes in cost over time, with the 
exception of the bifurcation of the RHC payment rate and the creation 
of the SIA payment finalized in the FY 2016 Hospice Wage Index and 
Payment Rate Update final rule for implementation on January 1, 2016 
(80 FR 47142).
    For over a decade, MedPAC and other organizations reported findings 
that suggested that the hospice benefit's fixed per-diem payment system 
was inconsistent with the true variance of service costs over the 
course of an episode. Specifically, MedPAC cited both academic and non-
academic studies, as well as its own analyses (as summarized and 
articulated in MedPAC's 2002,\2\ 2004,\3\ 2006,\4\ 2008,\5\ and 2009 
\6\ Reports to Congress), demonstrating that the intensity of services 
over the duration of a hospice stay manifests in a `U-Shaped' pattern 
(that is, the intensity of services provided is higher both at 
admission and near death and, conversely, is relatively lower during 
the middle period of the hospice episode). Since hospice care is most 
profitable during the long, low-cost middle portions of an episode, 
longer episodes have very

[[Page 17575]]

profitable, long middle segments. In its March 2009 report, ``Reforming 
Medicare's Hospice Benefit,'' As mentioned previously, this led to CMS 
finalizing a bifurcated payment rate for RHC level of care in the FY 
2016 (80 FR 47172) hospice final rule. These dual RHC payment rates 
were derived from observed resource utilization reflecting the cost of 
providing care for the clinical service (labor) components of the RHC 
across the entire episode, that would produce higher payments during 
times when service is more intensive (the beginning of a stay or the 
end of life) and produce lower payments during times when service is 
less intensive (such as the ``middle period'' of the stay). For the 
establishment of the dual RHC rates we used visit intensity as a close 
proxy for the reasonable cost of providing hospice care absent data on 
the non-labor components of the RHC rate, such as drugs and DME. In 
addition to the dual RHC payment rates, CMS also finalized a Service 
Intensity Add-on (SIA) payment payable for services during the last 7 
days of the beneficiary's life, equal to the CHC hourly payment rate 
multiplied by the amount of direct patient care provided by a 
registered nurse (RN) or social worker that occurs during the last 7 
days (80 FR 47177). While we made changes to the RHC payment rate based 
on resource utilization and established an SIA payment to account for 
differences in resource use throughout the course of hospice care, we 
did not make any changes to the per diem payment rates for CHC, IRC or 
GIP. Likewise, the dual RHC rates did not reflect the total costs of 
providing hospice care given the lack of more comprehensive information 
on the costs associated with the services provided by hospices to 
Medicare beneficiaries by level of care at that time.
---------------------------------------------------------------------------

    \2\ Medicare Payment Advisory Commission (MedPAC). ``Report to 
the Congress: Medicare Payment Policy.'' Washington, DC. March 2002. 
P. 48. http://www.medpac.gov/docs/default-source/reports/Mar02_Entire_report.pdf.
    \3\ Medicare Payment Advisory Commission (MedPAC). ``Report to 
the Congress: Medicare Payment Policy.'' Washington, DC. March 2004. 
http://www.medpac.gov/docs/default-source/reports/Mar04_Entire_reportv3.pdf?sfvrsn=0.
    \4\ Medicare Payment Advisory Commission (MedPAC). ``Report to 
the Congress: Medicare Payment Policy.'' Washington, DC. March 2006. 
http://www.medpac.gov/docs/default-source/reports/Mar06_EntireReport.pdf?sfvrsn=0.
    \5\ Medicare Payment Advisory Commission (MedPAC). ``Report to 
the Congress: Medicare Payment Policy.'' Washington, DC. March 2008. 
http://www.medpac.gov/docs/default-source/reports/mar08_entirereport.pdf?sfvrsn=0.
    \6\ Medicare Payment Advisory Commission (MedPAC). ``Report to 
the Congress: Medicare Payment Policy.'' Washington, DC. March 2009. 
P 347 http://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    Hospices are paid per day, regardless of whether any services are 
provided to a hospice patient on any given day. The CHC level of care 
is paid based on an hourly rate when a hospice patient, who is not in 
an inpatient facility, receives hospice care consisting predominantly 
of nursing care on a continuous basis at home. The hospice must provide 
a minimum of 8 hours of care in a 24 hour period in order for such 
services to be covered as CHC. The GIP level of care is a day in which 
a hospice patient receives care in an inpatient facility for pain 
control or acute or chronic symptom management that cannot be managed 
in other settings. The IRC level of care is short-term care provided 
only when necessary to relieve the family members or other persons 
caring for the hospice patient at home. IRC can be provided for up to 5 
consecutive days.
    While hospices must provide all levels of care to meet the hospice 
Conditions of Participation (CoPs), there is much lower utilization of 
CHC, IRC, and GIP compared to RHC. As part of our ongoing reform work, 
we analyzed the trends in hospice days and payments by level of care. 
Our analysis found that between FY 2009 and FY 2018 RHC days as a 
percent of total hospice days increased from 97.2 percent to 98.2 
percent. Conversely, during this time frame CHC and GIP days as a 
percent of total hospice days decreased. CHC days as a percent of total 
hospice days decreased by half, and in FY 2018, CHC was only 0.2 
percent of total hospice days compared to 0.4 percent in FY 2009. GIP 
days as a percent of total hospice days decreased from 2.1 percent in 
FY 2009 to 1.3 percent in FY 2018. Finally, the percent of IRC days 
remained relatively constant from FY 2009-FY 2018 at 0.3 percent of 
total hospice days in FY 2018. The results were similar for the percent 
of payments by level of care. RHC payments as a percent of total 
hospice payments increased from 89.2 percent in FY 2009 to 93.4 percent 
in FY 2018. CHC payments as a percent of total payments decreased from 
1.9 percent of payments in FY 2009 to 1.0 percent in FY 2018. GIP 
payments decreased from 8.7 percent of total hospice payments in FY 
2009 to 5.3 percent in FY 2018. Finally, IRC payments as a percent of 
total hospice payments increased slightly to 0.3 percent in 2018 from 
0.2 percent in 2009.\7\ Figure 1 shows the trends of total hospice days 
by level of care for FYs 2009-2018 and Figure 2 shows the trends of 
total hospice payments by level of care for FYs 2009-2018.
---------------------------------------------------------------------------

    \7\ FY 2009 through FY 2018 hospice claims data, accessed from 
the Chronic Conditions Data Warehouse (CCW) on January 3, 2019.
---------------------------------------------------------------------------

BILLING CODE 4120-01-P

[[Page 17576]]

[GRAPHIC] [TIFF OMITTED] TP25AP19.008

BILLING CODE 4120-01-C

[[Page 17577]]

    As discussed previously in this proposed rule, section 1814(i)(6) 
of the Act, as amended by section 3132(a)(1)(B) of the Affordable Care 
Act, authorizes the Secretary to collect additional data and 
information determined appropriate to revise payments for hospice care 
and for other purposes. The data collected may be used to revise the 
methodology for determining the payment rates for RHC and other hospice 
services (in a budget-neutral manner in the first year), no earlier 
than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. 
Furthermore, section 3132(a)(1)(C) of the Affordable Care Act specifies 
that the Secretary may collect additional data and information on cost 
reports, claims, or other mechanisms as the Secretary determines to be 
appropriate.
    The Secretary is required to consult with hospice programs and the 
MedPAC regarding additional data collection and payment reform options. 
We have transparently conducted payment reform analysis and have 
released research findings to the public in our 2013 and 2014 Technical 
Reports,8 9 as well as in the FYs 2014 and 2015 
Hospice Wage Index and Payment Rate Update final rules (78 FR 48234 and 
80 FR 50452). These research findings and concepts provided a basis for 
the initial step toward hospice payment reform.
---------------------------------------------------------------------------

    \8\ Medicare Hospice Payment Reform: Hospice Study Technical 
Report. Cambridge, MA. April 2013. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-Study-Technical-Report.pdf.
    \9\ Medicare Hospice Payment Reform: Analyses to Support Payment 
Reform. Cambridge, MA. May 2014. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-Study-Technical-Report.pdf.
---------------------------------------------------------------------------

    Based on stakeholder suggestions, we began collecting additional 
information on the hospice claims form as of April 1, 2014.\10\ These 
changes include the reporting of line-item visit data for hospice staff 
providing GIP to hospice patients in skilled nursing facilities (site 
of service Healthcare Common Procedure Coding System (HCPCS) code 
Q5004) or in hospitals (site of service HCPCS codes Q5005, Q5007, 
Q5008). This includes visits by hospice nurses, aides, social workers, 
physical therapists, occupational therapists, and speech-language 
pathologists, on a line-item basis, with visit and visit length 
reported as is done for RHC and CHC. It also includes certain calls by 
hospice social workers (as described in CR 6440, Transmittal 1738),\11\ 
on a line-item basis, with call and call length reported, as is done 
for RHC and CHC. However, we did not change the existing GIP visit 
reporting requirements when the site of service is a hospice inpatient 
unit (site of service HCPCS code Q5006). Only visits/calls made by the 
paid hospice staff are to be reported; hospices do not report visits by 
non-hospice staff. Additionally, hospices are required to report visits 
and length of visits (rounded to the nearest 15 minute increment), for 
nurses, aides, social workers, and therapists who are employed by the 
hospice, that occur on the date of death, after the patient has passed 
away. Finally, these changes included the requirement that hospice 
agencies report injectable and non-injectable prescription drugs for 
the palliation and management of the terminal illness and related 
conditions on their claims. Both injectable and non-injectable 
prescription drugs would be reported on claims on a line-item basis per 
fill, based on the amount dispensed by the pharmacy. Over-the-counter 
drugs would not be reported on the claim. However, we removed the 
requirement to report detailed drug data on the hospice claim as a way 
to reduce burden for hospices. Instead, hospices are now only required 
to report total durable medical equipment (DME) and medication charges 
on the claim. This change became effective October 1, 2018.
---------------------------------------------------------------------------

    \10\ CMS Transmittal 2864. ``Additional Data Reporting 
Requirements for Hospice Claims.'' Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864CP.pdf.
    \11\ CR 6440, Transmittal 1738. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1738CP.pdf.
---------------------------------------------------------------------------

    Effective for cost reporting periods beginning on or after October 
1, 2014, freestanding hospices are required to file the revised hospice 
cost report (Form CMS-1984-14).\12\ Provider-based hospices began using 
the revised cost report form for cost reporting periods beginning on or 
after October 1, 2015. The revised cost report expands data collection 
requirements to supply greater detail related to hospice costs by level 
of care. Hospices are required to report all direct patient care costs 
by multiple cost categories into the respective level of care. Within 
the revised cost report changes in 2014, there were modifications in 
the manner in which general service costs and statistical information 
is accumulated by the hospice and an expansion of the general service 
cost centers. Instructions for completing the freestanding hospice cost 
report (Form CMS-1984-14) are found in the Medicare Provider 
Reimbursement Manual--Part 2, Chapter 43.\13\
---------------------------------------------------------------------------

    \12\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1P243.pdf.
    \13\ The Provider Reimbursement Manual--Part 2. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html.
---------------------------------------------------------------------------

    In the FY 2016 Hospice Wage Index and Payment Rate Update final 
rule (80 FR 47142) we stated that we received many suggestions for ways 
to improve data collection to support larger payment reform efforts in 
the future and that we expected to analyze additional claims and cost 
report data reported by hospices to determine whether additional 
regulatory proposals to reform and strengthen the Medicare hospice 
benefit would be warranted (80 FR 47161). Likewise, MedPAC, the 
Government Accountability Office (GAO), and the Office of the Inspector 
General (OIG) have all recommended that CMS collect more comprehensive 
data to better evaluate trends in utilization of the Medicare hospice 
benefit.
    We continued to analyze hospice claims and cost report data to 
determine whether additional changes need to be made to more accurately 
align hospice payment with the costs of providing care. Specifically, 
we have continued to examine whether there is a misalignment between 
payment and costs for CHC, IRC, and GIP. In its March 2018 Report to 
the Congress, MedPAC stated Medicare's payment rates for the CHC, IRC 
and GIP levels of care appear to be lower than the average and median 
costs per day for freestanding providers and suggested that rebalancing 
the payment rates may be warranted.\14\
---------------------------------------------------------------------------

    \14\ Medicare Payment Advisory Commission (MedPAC). ``Hospice 
Services.'' Report to the Congress: Medicare Payment Policy. 
Washington, DC. March 2018. P. 341. http://www.medpac.gov/docs/default-source/reports/mar18_medpac_ch12_sec.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    Additionally, we received public comments on past rules that 
indicated the payment rates for CHC, IRC and GIP are much different 
from the average costs of providing those levels of care. Specifically, 
several commenters expressed concerns regarding the rates for these 
levels of care being insufficient to acquire and maintain contracts for 
inpatient levels of care. In response to the FY 2015 Hospice Wage Index 
and Payment Rate Update proposed rule (79 FR 26538), a commenter 
suggested that hospices have difficulty contracting for respite care in 
many areas because the hospice respite rate may be $5 to $50 less per 
day than the facility's Medicaid rate. This commenter also stated that 
nursing facilities in many states do not want to accept less than their 
Medicaid

[[Page 17578]]

room and board rate. In response to the FY 2016 Hospice Wage Index and 
Payment Rate Update proposed rule (80 FR 25832) one commenter stated 
that some hospitals do not want to accept the GIP hospice rate which 
leaves hospices unable to provide the GIP level of care. Finally, in 
response to the FY 2019 Hospice Wage Index and Payment Rate Update 
proposed rule (83 FR 20934), one commenter stated that providers have 
reported that it is more difficult to obtain new GIP contracts with 
hospitals and skilled nursing facilities and to retain existing 
contracts as they are renegotiated because the hospice GIP rate is less 
than the hospital would receive for an acute inpatient stay. Some 
commenters also suggested that hospices must pay the contracting 
facility the full daily hospice reimbursement rate in order to secure a 
contract for inpatient care. The Hospice CoPs at Sec.  418.108 require 
that inpatient care must be available for pain control, symptom 
management, and respite purposes, and must be provided in a 
participating Medicare or Medicaid facility. Therefore, hospices that 
do not provide inpatient care and are unable to negotiate contracts 
with hospitals or skilled nursing facilities (SNFs) for inpatient level 
of care are in violation of the hospice CoPs. However, through public 
comments and anecdotal reports from hospices, we continue to hear that 
the payment rates for CHC, IRC, and GIP are a significant factor in 
whether or not hospices can secure the necessary contracts to provide 
these levels of care.
    Using information collected from the revised hospice cost report, 
for the first time, we are able to estimate hospices' average costs per 
day by level of care. As required by section 1814(i)(1)(A) of the Act, 
payment for hospice services must be an amount equal to the costs which 
are reasonable and related to providing hospice care, or which are 
based on such other tests of reasonableness as the Secretary may 
prescribe in regulations. Therefore, given that we now have several 
years' worth of cost report data from the revised hospice cost report, 
we calculated the average costs per day by level of care and compared 
such costs to the per diem payment rates by level of care to determine 
if there is a misalignment between payment and costs and whether the 
per diem payment rates for CHC, IRC, and GIP should be rebased. To 
conduct this analysis, we used a variety of different data sources, 
including cost reports and hospice claims data. We also used additional 
sources such as prior hospice final rules that detail wage indices and 
payment rate updates, as well as the CMS Provider of Services (POS) 
file. The methodology of this analysis is described below.
2. Methodology and Analysis of Costs per Day for Continuous Home Care, 
Inpatient Respite Care, and General Inpatient Care
a. Hospice Cost Report Data
    Our analysis was based on information obtained from the Healthcare 
Cost Report Information System (HCRIS). The Hospice Cost Report Data 
contains cost and statistical data for freestanding and provider-based 
hospice providers. The dataset is normally updated quarterly and is 
available on the last day of the month following the quarter's end. To 
determine the average per-day costs of providing hospice services, we 
conducted initial analysis of both freestanding and provider-based 
Medicare hospice cost reports. We used the following HCRIS data files 
as of December 31, 2018, for cost reports from FY 2017 to support our 
analyses: \15\
---------------------------------------------------------------------------

    \15\ Cost reports from FY 2017 had a start date on or after 
October 1, 2016 and before October 1, 2017.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Freestanding Hospices........  http://downloads.cms.gov/Files/hcris/HOSPC14-ALL-YEARS.zip.
Skilled Nursing Facility       https://www.cms.gov/Research-Statistics-
 (SNF) Based Hospices.          Data-and-Systems/Downloadable-Public-Use-
                                Files/Cost-Reports/Cost-Reports-by-
                                Fiscal-Year-Items/SNF10-DL-2017.html.
Home Health Agency (HHA)       https://www.cms.gov/Research-Statistics-
 Based Hospices.                Data-and-Systems/Downloadable-Public-Use-
                                Files/Cost-Reports/Cost-Reports-by-
                                Fiscal-Year-Items/HHA-DL-2017.html.
Hospital Based Hospices......  https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Cost-Reports-by-Fiscal-Year-Items/HOSPITAL10-DL-2017.html.
------------------------------------------------------------------------

The HCRIS data as of December 31, 2018, were downloaded February 2019. 
To create the initial analytic file, we took a number of data cleaning 
steps to exclude certain hospices. Specifically, we made the following 
exclusions: \16\
---------------------------------------------------------------------------

    \16\ For the three exclusions, we found information on hospice 
CCNs using Worksheet S-2 of provider-based cost reports. 
Specifically, we used information from Worksheet S-2, Part I, line 
14 and its subscripts for hospital-based cost reports, Worksheet S-
2, Part I, line 12 and its subscripts for SNF based cost reports, 
and Worksheet S-2, line 3.50 and its subscripts for home health 
agency cost reports. Additionally, a single provider-based cost 
report could contain information on multiple hospice CCNs, in which 
case we considered each hospice CCN as a separate cost report.
---------------------------------------------------------------------------

    Exclusion 1: A small number of hospices (as represented by CMS 
Certification Number (CCN)) had multiple FY 2017 cost reports in the 
HCRIS cost report data file. For those hospices, we kept the cost 
report that covered the greatest length of time in FY 2017; \17\
---------------------------------------------------------------------------

    \17\ We determined the length of the cost report by subtracting 
the cost reports fiscal year begin date from the cost reports fiscal 
year end date.
---------------------------------------------------------------------------

    Exclusion 2: We eliminated SNF, HHA, and hospital cost reports that 
did not contain a hospice CCN; and
    Exclusion 3: We eliminated 15 cost reports (as represented by CCN) 
due to the following reasons:
    a. Sometimes within a provider-based cost report, the same CCN was 
listed multiple times (that is, there might be two separate reports of 
RHC costs for the same CCN within a provider-based cost report). In 
order to limit each hospice to one single cost report, we selected the 
cost report with the highest RHC cost.\18\
---------------------------------------------------------------------------

    \18\ For example, in one home health agency-based cost report, 
the home health agency reported costs for the same hospice CCN three 
different times on the same cost report.
---------------------------------------------------------------------------

    b. Sometimes a CCN appeared in a freestanding cost report as well 
as appeared in a provider-based cost report.
    Table 2 below shows the starting sample and the number of hospice 
cost reports after applying the exclusions listed above.

                        Table 2--Number of Medicare Hospice Cost Reports After Exclusions
----------------------------------------------------------------------------------------------------------------
                                                     Starting                                       Exclusion 3
               Type of cost report                    sample        Exclusion 1     Exclusion 2        \19\
----------------------------------------------------------------------------------------------------------------
Freestanding....................................           3,253           3,213           3,213           3,207
Skilled Nursing Facility (SNF)..................          14,883          14,068              26              26

[[Page 17579]]

 
Home Health Agency (HHA)........................          10,227          10,090             476             473
Hospital........................................           5,480           5,413             425             419
----------------------------------------------------------------------------------------------------------------

    Next, we constructed a series of flags to identify cost reports 
that did not fill out fields that we would expect hospices to report 
(for example, nursing services). We identified those cost report fields 
using information from the Provider Reimbursement Manual--Part 2, 
Provider Cost Reporting Forms and Instructions, Chapter 43, Form CMS-
1984-14, Transmittal 3, dated April 13, 2018, that updated cost 
reporting instructions for freestanding hospice cost reports.\20\ These 
instructions describe a number of new Level I edit conditions that 
required freestanding hospices to fill out certain parts of their cost 
reports. Specifically, section 4395 of this transmittal revised edit 
1050A in the new Level I edits portion of ``Table 6--Edits'' to require 
that values entered into Worksheet A, column 7, lines 1, 2, 3, 4, 13, 
28, 33, 37, and 38 must be greater than zero; and the sum of lines 14 
and 42.50 must also be greater than zero. These Level I edits went into 
effect for freestanding hospice cost reports with a reporting period 
that ended on or after December 31, 2017.
---------------------------------------------------------------------------

    \19\ FY 2017 cost reports had a start date on or after October 
1, 2016 and before October 1, 2017.
    \20\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R3P243.pdf.
---------------------------------------------------------------------------

    Next, to remove outliers from this analysis, we applied another set 
of exclusions as described in the FY 2019 Hospice Wage Index and 
Payment Rate Update proposed rule (83 FR 20948). Specifically, we 
described how a trimming methodology is applied to cost reports so that 
statistical anomalies were minimized. For each calculated outcome (for 
example, average RHC costs per day), we excluded those values that are 
above the 99th percentile and those values that are below the 1st 
percentile. We refer to this trim as the ``1% Trim''. The data we 
exclude vary for each level of care. For example, we may exclude a 
hospice's data when calculating RHC costs per day, but not exclude it 
when calculating GIP costs per day. After all the described exclusions 
were applied, table 3 below shows how many freestanding cost reports 
were used for this analysis.

  Table 3--Number of Freestanding Cost Reports After the Level I Edits
                          Exclusion and 1% Trim
------------------------------------------------------------------------
                                    Number of cost     Number of days by
          Level of care              reports after     level of care (FY
                                      exclusions             2017)
------------------------------------------------------------------------
RHC.............................               1,098          41,329,675
GIP.............................                 809             783,335
CHC.............................                 437             187,498
IRC.............................                 906             134,146
------------------------------------------------------------------------
Note: We begin with the 3,207 freestanding cost reports that remained
  after applying exclusions in 1-3 (table 2). After applying the Level I
  edits, 1,120 freestanding cost reports remained. Not all cost reports
  contain information on each level of care. Numbers shown indicate the
  number of cost reports available for analysis for each level of care
  after all exclusions, including the 1% trim are applied.

    Primarily, due to the small sample size of provider-based hospices 
after these exclusions (see explanation below), we ultimately decided 
to only use freestanding hospice cost reports. As shown in table 2, 
there were 918 provider-based cost reports (that is, 26 SNF, 473 HHA, 
and 419 hospital) before applying the new Level I edits to the 
provider-based hospice cost reports. After applying the new Level I 
edits there were 96 provider-based cost reports remaining. Likewise, in 
MedPAC's March 2017 Report to Congress, they stated that included in 
the costs of provider-based hospices are overhead costs allocated from 
the parent provider, which contribute to provider-based hospices having 
higher costs than freestanding hospices. The Commission believes 
payment policy should focus on the efficient delivery of services to 
Medicare beneficiaries. If freestanding hospices are able to provide 
high-quality care at a lower cost than provider-based hospices, payment 
rates should be set accordingly, and the higher costs of provider-based 
hospices should not be a reason for increasing Medicare payment 
rates.\21\ Industry representatives also suggested various edits to 
improve the quality of data submitted on the cost report before being 
accepted by the Medicare Administrative Contractors (MACs) (83 FR 
20949).
---------------------------------------------------------------------------

    \21\ Medicare Payment Advisory Commission (MedPAC). ``Hospice 
Services.'' Report to the Congress: Medicare Payment Policy. 
Washington, DC. March 2018. P. 341. http://www.medpac.gov/docs/default-source/reports/mar18_medpac_ch12_sec.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    However, we did consider using both freestanding and provider-based 
cost reports, with all cost report adjustments, including Level I 
edits, to rebase the payment rates for CHC, IRC, and GIP. We also 
considered not applying the Level I edits to the freestanding cost 
reports for this rebasing analysis. Both of these alternative 
approaches are described in section V.E. of this proposed rule. The 
remaining discussion in this section will focus on our analysis of 
freestanding hospice cost reports for FY 2017. This analysis focused on 
the costs per day by level of care found within the hospice cost 
reports and reported on Worksheet C, column 3, Lines 3, 8, 13 and 18.
b. Hospice Claims Data
    We created an analytic data set based on Medicare hospice claims 
downloaded from the Chronic Condition Data Warehouse--Virtual Research 
Data Center (CCW VRDC) to examine hospice utilization on specific days 
during FY 2017. We assigned a wage index (using the FY 2017 hospice 
wage indices) to each day of hospice service based on the core-based

[[Page 17580]]

statistical area (CBSA) where a particular day's hospice services took 
place.\22\ We merged information from the June 2018 release of the CMS 
POS file to identify characteristics of the hospice including: 
Ownership type, census division (based on the hospice's state), and 
whether the hospice's main office was located either in an urban or 
rural location. This data was used in the subsequent section in 
calculating costs per day by level of care.
---------------------------------------------------------------------------

    \22\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index/FY-2017-Final-Hospice-Wage-Index.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=descending
---------------------------------------------------------------------------

c. Calculating Costs per Day by Level of Care
    In order to compute the average cost per day for each level of care 
using information from the freestanding hospice cost reports, after 
applying the exclusions, we made several adjustments to the average 
cost calculations, as described below.
    Costs reported on Medicare cost reports vary due to many factors, 
including variation in costs driven by geographic location. For 
example, all else equal, hospices in high wage areas (for example, New 
York City) may have higher costs compared to hospices in low wage 
areas. Daily payment rates for hospice are adjusted to account for 
geographic differences in wage rates. However, this geographic wage 
adjustment is only applied to the labor share of the base payment rate. 
The labor share for RHC and CHC is 68.71 percent, for GIP it is 64.01 
percent and for IRC, it is 54.13 percent. Medicare adjusts for these 
wage differences by first multiplying the base payment rate paid to 
hospices by the labor share of the base payment rate. That value is 
then multiplied by the wage index assigned to the CBSA where the 
hospice provided services to the patient. Therefore, it is important to 
calculate average costs after removing any regional differences that 
may be driven by wages, otherwise we would over-adjust for wage 
differences across regions. For example, we remove the wage differences 
in RHC costs by calculating the following value for each hospice:
[GRAPHIC] [TIFF OMITTED] TP25AP19.009

    We perform a similar calculation for the other levels of care using 
the corresponding cost per day from FY 2017 cost reports and the 
appropriate labor share for CHC, IRC, and GIP. For example, the 
adjusted GIP cost per day uses the same formula, but instead includes 
GIP cost per day from FY 2017 cost reports, the hospice's average wage 
index for all GIP days in the formula, and the GIP labor share of 64.01 
percent.
    Due to exclusions mentioned previously, not all hospices that 
submitted claims during FY 2017 have a corresponding cost report in our 
final sample. As a result, the characteristics of the sample of cost 
reports used to calculate average cost per day for each level of care 
do not necessarily match up with the characteristics of all hospices 
that submitted claims during FY 2017. If not accounted for, our sample 
of cost reports may over-represent certain types of hospices. To 
correct for this, we categorize each hospice in our sample by facility 
type,\23\ ownership type,\24\ urban/rural status,\25\ and size.\26\ For 
each category of hospices and the calculations for each level of care, 
we use the following steps:
---------------------------------------------------------------------------

    \23\ Freestanding versus provider-based.
    \24\ We only divide the freestanding cost reports into ownership 
type categories. We use the ownership type categories from the POS: 
For-profit, government, non-profit, and other. Due to limited sample 
size we do not break out the provider-based hospices into ownership 
type.
    \25\ Urban/rural status is reported on the POS and corresponds 
to the mailing address of the hospice.
    \26\ We divide hospices into three categories based on their 
number of RHC days in FY 2017: Large (>=20,000 RHC days), medium 
(3,500-19,999 RHC days), and small (0-3,499 RHC days).
---------------------------------------------------------------------------

    1. Using claims, we compute the total number of days provided in FY 
2017 by all hospices within a particular category;
    2. We compute the total number of days, as reported on the claims 
provided in FY 2017, using only the hospices in our trimmed sample of 
cost reports within a particular category (Table 3); and
    3. For each level of care and each category of hospices, we 
construct a ratio using the value in Step 1 over the value in Step 2.
    For each cost report in our sample, we multiply each provider's 
days (as reported on claims) by level of care by the ratio in order to 
make the sample cost reports more representative of the overall 
population of hospices. We then multiply the provider's average per 
diem cost as reported on the cost report times the number of adjusted 
days from the prior step to yield total costs by level of care for that 
provider. We then compute the weighted average for each level of care 
by summing across hospices the total costs by level of care divided by 
the sum of the adjusted days across the cost reports in our sample.\27\
---------------------------------------------------------------------------

    \27\ The formula describes the average cost per day calculation 
for IRC, however, the same formula can be adapted for each level of 
care.
[GRAPHIC] [TIFF OMITTED] TP25AP19.014


[[Page 17581]]


    We compute the weighted average equation for each level of care. 
For example, we use a separate equation to calculate the average GIP 
cost per day that uses GIP costs and GIP days. The equation as 
described above is an approach to calculate the average per day cost 
for each level of care. However, Medicare pays for the CHC level of 
care using a per hour rate instead of a per day rate. We calculated 
each hospice's hourly cost of CHC by taking their CHC cost per day from 
the hospice cost report and dividing it by their average number of 
hours of CHC provided on CHC days occurring in FY 2017 as reported on 
each hospice's claims. Each hospice's CHC cost per hour (adjusted by 
average number of hours of CHC) is then averaged (using the weighted 
average formula discussed above) across all hospices in our sample to 
create the overall average of CHC cost per hour. To convert the CHC 
cost per hour into a CHC cost per day we multiply the average CHC cost 
per hour by 24 hours. It is important to note that each hospice's 
hourly CHC cost is based on their average number of CHC minutes per 
day, which is less than 24 hours. That means a full CHC per day payment 
(which covers 24 hours) will be larger than the average CHC cost per 
day (which covers a time period less than 24 hours).
    Applying all of the steps as described above, average costs per day 
by level of care in FY 2017 are listed in Table 4 below:

         Table 4--Average Cost per Day by Level of Care, FY 2017
------------------------------------------------------------------------
                                                           Average cost
                      Level of care                           per day
------------------------------------------------------------------------
RHC.....................................................         $130.83
CHC (24 Hours) \28\.....................................        1,307.76
CHC (Per Hour)..........................................           54.49
IRC.....................................................          438.98
GIP.....................................................          953.96
------------------------------------------------------------------------

The current payment system pays hospices a two-tiered rate for RHC. RHC 
days during the first 60 days are paid a higher per diem rate compared 
to any RHC days after day 60. Hospices do not report RHC costs 
separately for the first 60 days versus RHC days after day 60. However, 
we can estimate the RHC costs in the first 60 days versus after 60 days 
by making the same assumption that was made to calculate the two-tiered 
payment. That is, in the FY 2016 hospice final rule (80 FR 47166), we 
calculated resource use ratios to determine the differences in resource 
utilization for the first 60 days and any RHC days after day 60. For 
the creation of the two-tiered RHC rate (80 FR 47166), the following 
ratios were used:
---------------------------------------------------------------------------

    \28\ Based off a full CHC per day payment (which covers 24 
hours).
---------------------------------------------------------------------------

     Days 1 through 60: The ratio of average resource use for 
RHC days in days 1 through 60 to average resource use across all RHC 
days was 1.2603 to 1.
     Days 61 and beyond: The ratio of average resource use for 
RHC days after day 60 to the average resource use across all RHC days 
was 0.8722 to 1.
    We multiplied the average cost per day for RHC in FY 2017 by the 
corresponding resource use ratio to calculate the average cost per day 
for the first 60 days and any RHC days after 60 days. The resulting 
average cost per day for RHC is shown in Table 5.

                 Table 5--Average RHC Costs (FY 2017) per Day for Days 1 Through 60 and Days 61+
----------------------------------------------------------------------------------------------------------------
                                                                                                   Average cost
                                                                   Average cost    Resource use    per day in FY
                        RHC level of care                             per day          ratio      2017 (based on
                                                                                                   days of RHC)
----------------------------------------------------------------------------------------------------------------
Days 1-60.......................................................         $130.83          1.2603         $164.89
Days 61+........................................................          130.83          0.8722          114.11
----------------------------------------------------------------------------------------------------------------

    To determine if there is any misalignment between the average costs 
of providing CHC, IRC and GIP and the per diem payment rates for these 
levels of care, we inflated the average costs in FY 2017 to FY 2019 
dollars. We did this by multiplying the average FY 2017 costs by level 
of care by the hospice market basket update payment update for FY 2018 
(82 FR 36649) and FY 2019 (83 FR 38630) less the multifactor 
productivity adjustments (MFP). Table 6 below shows the estimated 
average costs for CHC, IRC and GIP for FY 2019 (that is, taking the 
average FY 2017 cost per day by each level of care inflated to 2019 
dollars).

                         Table 6--Estimated Average Costs (FY 2019) for CHC, IRC and GIP
----------------------------------------------------------------------------------------------------------------
                                                                      FY 2018         FY 2019
                                                                  hospice market  hospice market
                                                      FY 2017      basket update   basket update      FY 2019
                  Level of care                    average costs       less            less          estimated
                                                                   productivity    productivity    average costs
                                                                    adjustment      adjustment
----------------------------------------------------------------------------------------------------------------
CHC (per Hour)..................................          $54.49         x 1.021         x 1.021          $56.80
IRC.............................................          438.98         x 1.021         x 1.021          457.61
GIP.............................................          953.96         x 1.021         x 1.021          994.45
----------------------------------------------------------------------------------------------------------------

    We also analyzed the average costs of the RHC for the first 60 days 
and any RHC days after day 60 inflated from FY 2017 dollars to FY 2019 
dollars by applying the hospice market basket update less the MFP 
adjustments. The results in Table 7 show the estimated average costs 
for RHC by days for FY 2019.

[[Page 17582]]



                Table 7--Estimated Average Costs for RHC (FY 2019) Days 1 Through 60 and Days 61+
----------------------------------------------------------------------------------------------------------------
                                                                      FY 2018         FY 2019
                                                                  hospice market  hospice market
                                                      FY 2017      basket update   basket update      FY 2019
                  Level of care                    average costs       less            less          estimated
                                                                   productivity    productivity    average costs
                                                                    adjustment      adjustment
----------------------------------------------------------------------------------------------------------------
RHC Days 1-60...................................         $164.89         x 1.021         x 1.021         $171.89
RHC Days 61+....................................          114.11         x 1.021         x 1.021          118.95
----------------------------------------------------------------------------------------------------------------

    We then compared the FY 2019 average costs for CHC, IRC and GIP to 
the FY 2019 payment rates for these three levels of care. Our analysis 
shows that there is a misalignment between average costs and payment 
for these three levels of care. Table 8 below shows: The percent of 
total hospice days by level of care; the estimated average FY 2019 
costs by level of care; the current FY 2019 per diem payment rates; and 
the estimated percent increase to the payment rates to more accurately 
align the per diem payments for CHC, IRC and GIP with the costs of 
providing these levels of care.
---------------------------------------------------------------------------

    \29\ Based off a full CHC per day payment (which covers 24 
hours).

                  Table 8--Comparison of FY 2019 Average Costs to Payments for CHC, IRC and GIP
----------------------------------------------------------------------------------------------------------------
                                                                                               Estimated percent
                                   Percent of days    Estimated FY 2019     FY 2019 per diem    payment increase
          Level of care            by level of care   average costs per      payment rates      needed to align
                                     in FY 2018 *            day                                   with costs
----------------------------------------------------------------------------------------------------------------
CHC.............................                0.2  $1,363.26/$56.80     $997.38/$41.56 (per              +36.6
                                                      (per hour) \29\.     hour).
IRC.............................                0.3  $457.61............  $176.01............             +160.0
GIP.............................                1.3  $994.45............  $758.07............              +31.2
----------------------------------------------------------------------------------------------------------------
* RHC days accounted for 98.2 percent of all hospice days in FY 2018.

    The payment rates for CHC, IRC, and GIP are significantly less than 
the average costs of providing care. We also compared the FY 2019 
average costs for RHC for the first 60 days and any RHC days after day 
60 to the FY 2019 payment rates for RHC and the percentage difference 
between payment and average costs and the results are shown in Table 9 
below.

                         Table 9--Comparison of FY 2019 Average Costs to Payment for RHC
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent
                                                                   Estimated FY                     difference
                          Level of care                            2019 average       FY 2019         between
                                                                   costs per day   payment rates    payment and
                                                                                                       costs
----------------------------------------------------------------------------------------------------------------
RHC Days 1-60...................................................         $171.89         $196.25           +14.2
RHC Days 61+....................................................          118.95          154.21           +29.6
----------------------------------------------------------------------------------------------------------------

    For RHC, the payment rates significantly exceed the average costs 
of providing care for this level of care for the first 60 days and any 
RHC days after day 60.
3. Proposed Rebasing of the CHC, IRC, and GIP Payment Rates for FY 2020
    As mentioned above, section 1814(i)(1)(A) of the Act requires that 
payment for hospice services must be an amount equal to the costs which 
are reasonable and related to the cost of providing hospice care. As 
described above, the average costs of providing CHC, IRC and GIP are 
significantly higher than the payment amounts for these three levels of 
care. Using the hospice payment reform authority under section 
1814(i)(6) of the Act, we are proposing to rebase the payment rates for 
CHC, IRC, and GIP by setting these payment amounts equal to the FY 2019 
estimated average costs per day, as described in the methodology above, 
before application of the hospice payment update percentage outlined in 
section III.C of this proposed rule. We are proposing to rebase the 
payment rates for CHC, IRC, and GIP as follows:
---------------------------------------------------------------------------

    \30\ Based off a full CHC per day payment (which covers 24 
hours).

    Table 10--Proposed Rebased Payment Rates for CHC, IRC, and GIP *
------------------------------------------------------------------------
                                              Proposed rebased payment
               Level of care                           rates *
------------------------------------------------------------------------
Continuous Home Care (CHC)................  $56.80 per hour/$1,363.26
                                             (per day).\30\
Inpatient Respite Care (IRC)..............  $435.82.**
General Inpatient Care (GIP)..............  $994.45.
------------------------------------------------------------------------
* Prior to application of the hospice payment update percentage of 2.7
  percent outlined in section III.B of this proposed rule.
** IRC payment rate accounts for 5 percent coinsurance ($457.61/1.05 =
  $435.82).

    Although there is no coinsurance amount for RHC, CHC or GIP, the

[[Page 17583]]

amount of coinsurance for each respite care day is equal to 5 percent 
of the payment made by Medicare for a respite care day. Section 
1813(a)(4)(A)(ii) of the Act states that the amount payable for hospice 
care shall be reduced in the case of respite care provided by (or under 
arrangements made by) the hospice program, by a coinsurance amount 
equal to 5 percent of the amount estimated by the hospice program (in 
accordance with regulations of the Secretary) to be equal to the amount 
of payment under section 1814(i) to that program for respite care. To 
ensure payments (both paid by Medicare and collected from the 
beneficiary via coinsurance) under a rebased IRC rate equal the average 
per-diem cost of IRC, we set the rebased IRC payment rate equal to the 
average per-diem cost of IRC divided by 1.05. The amount of the 
individual's coinsurance liability for respite care during a hospice 
coinsurance period may not exceed the inpatient hospital deductible 
applicable for the year in which the hospice coinsurance period began. 
The individual hospice coinsurance period begins on the first day an 
election is in effect for the beneficiary and ends with the close of 
the first period of 14 consecutive days on each of which an election is 
not in effect for the beneficiary.
    Section 1814(i)(6)(D)(ii) of the Act requires that any revisions to 
the methodology for determining the payment rates for other services 
included in hospice care to be done in a budget-neutral manner in the 
fiscal year in which such revisions in payment are implemented as would 
have been made for care in the fiscal year if such revisions had not 
been implemented. Therefore, in order to offset the proposed increases 
in payment rates to the CHC, IRC, and GIP levels of care, we are 
proposing to reduce the RHC payment rates by 2.71 percent in order to 
implement rebasing in a budget-neutral manner in FY 2020. Reducing the 
RHC payment rate to a level equal to the estimated RHC costs would 
require a reduction in the RHC payment rate that exceeds the proposed 
2.71 percent. While we are rebasing the per diem payment rates for CHC, 
GIP, and IRC to more accurately align the payment with costs, the 
reduction to the RHC payment rates is not considered rebasing as the 
2.71 percent reduction does not bring the RHC payment in alignment with 
the costs of providing this level of care. The purpose of the 2.71 
percent reduction to the RHC payment rates is to ensure that the 
revisions to the payment rates for CHC, GIP and IRC are made in a 
budget-neutral manner, in accordance with the law.
    To calculate the proposed 2.71 percent reduction to the RHC payment 
rates, we first calculate two sets of payments using different payment 
parameters.
    1. Total payments for hospice days provided during FY 2018 under 
the existing FY 2019 payment rates and FY 2019 wage indices.\31\
---------------------------------------------------------------------------

    \31\ FY 2018 is the most, current full year of data available.
---------------------------------------------------------------------------

    2. Total payments for hospice days provided during FY 2018 under a 
new RHC payment rate and the rebased payment rates for CHC, IRC, and 
GIP.
    We set the RHC payment rate in step (2) equal to the value that 
makes total payments between step (1) and step (2) equivalent. We 
calculate that rate using the following steps:
    1. We calculate the difference in Medicare payments when using the 
rebased CHC, IRC, and GIP payment rates instead of the payment rates in 
place during FY 2019.
    2. We calculate one minus the value from Step (1) over the RHC 
payments made under the payment rates in place during FY 2019.\32\
---------------------------------------------------------------------------

    \32\ Using the average per-diem costs generated from our sample 
of freestanding hospice cost reports, rebasing CHC, IRC, and GIP 
results in extra payments of $465,983,031.15 for those levels of 
care. The RHC payments that were made under the payment rates in 
place during FY 2019 were $17,218,209,794.15. One minus the value of 
the extra payments over the RHC payments equals 0.9729.
---------------------------------------------------------------------------

    3. We multiply the value in Step (2) by each RHC payment rate (the 
first 60 days and any RHC days after day 60) in place during FY 2019 to 
establish the budget- neutral RHC payment rates (the first 60 days and 
any RHC days after day 60).
    The calculated payment rates in Step (3) will make the total 
payments made under the rebased FY 2019 payment rates equal to the 
total payments made under the existing FY 2019 payment rates.
    The results of this calculation demonstrate that in order to rebase 
CHC, IRC, and GIP levels of care in a budget-neutral manner, the RHC 
payment rates would need to be reduced by 2.71 percent. The proposed 
2.71 percent reduction would be applied to the RHC payment rates for 
the first 60 days and RHC days after day 60 (that is we would take each 
of the RHC payment rates and multiply by the 0.9729 to determine the FY 
2019 RHC payment rates).
    To summarize, we are proposing: To rebase the payment rates for CHC 
and GIP and set these rates equal to their estimated FY 2019 average 
costs per day (see Table 10 above); we are proposing to rebase the 
payment rate for IRC and set this rate equal to the estimated FY 2019 
average cost per day, with a reduction of 5 percent to the estimated FY 
2019 average cost per day to account for coinsurance (see Table 10 
above); and we are proposing a 2.71 percent reduction to the RHC 
payment rates to offset the proposed increases to the CHC, IRC, and GIP 
payment rates as the proposed increases in the payment rates for these 
three levels of care must be implemented in a budget-neutral manner in 
accordance with section 1814(i)(6)(D)(ii) of the Act. While the per 
diem payments were a reasonable way to pay hospices, we think the 
proposal to rebase the per diem payments for CHC, GIP, and IRC better 
reflects the costs of providing care. This proposal is in accordance 
with section 1814(i)(A) of the Act that provides the authority to set 
such payments reasonable to the cost of providing hospice care.
    It is our intent to ensure that payment rates under the hospice 
benefit align as closely as possible with the average costs hospices 
incur when efficiently providing covered services to beneficiaries. 
This proposal is not intended to place an arbitrary limit on hospice 
services and we believe the rebased rates for CHC, IRC, and GIP may 
help appropriately increase access to these levels of care. We continue 
to expect hospices to adhere to the long-standing policy to provide 
``virtually all'' care during a hospice election as articulated in the 
1983 Hospice Care proposed and final rules as well as most recently in 
FY 2019 Hospice Wage Index and Payment Rate Update final rule. We also 
believe this proposal is responsive to industry concerns regarding the 
challenges in securing needed contracts with facilities to provide 
inpatient levels of care by more accurately aligning Medicare payments 
for hospice services for higher cost levels of care. We are soliciting 
comments on our proposal to rebase the payment rates for CHC, IRC, and 
GIP, which results in an increase in the payment rates to those three 
levels of care, and to maintain overall budget neutrality through a 
proposed reduction to the RHC payment rates.
    We believe that rebasing the per diem payment amounts for CHC, GIP, 
and IRC is appropriate in order to better align payments with the costs 
of providing care and that potential, subsequent increases in 
utilization of those levels of care would not necessarily be 
inappropriate. However, we are also soliciting comment on whether 
rebasing the payment amounts for CHC, GIP, and

[[Page 17584]]

IRC could create an adverse incentive for providers to inappropriately 
steer patients to a higher, more specialized level of care when that 
level of care is not medically indicated.

B. Proposed FY 2020 Hospice Wage Index and Rate Update

1. Proposed Wage Index Lag Elimination
    Historically we have calculated the hospice wage index values by 
using the prior fiscal year's pre-floor, pre-reclassified hospital wage 
index. In an effort to align with the Inpatient Prospective Payment 
System (IPPS) and other payment systems, we are proposing to change the 
hospice wage index methodology. Specifically, we are proposing to 
change from our established policy of using the pre-floor, pre-
reclassified acute care hospital wage index from the prior fiscal year 
as the basis for the hospice wage index, and instead to align with the 
same timeframe used by the IPPS and other payment systems. In other 
words, we are proposing to use the pre-floor, pre-reclassified hospital 
wage index from the current fiscal year as the basis for the hospice 
wage index. Under this proposal, the FY 2020 hospice wage index would 
be based on the FY 2020 pre-floor, pre-reclassified IPPS hospital wage 
index rather than on the FY 2019 pre-floor, pre-reclassified IPPS 
hospital wage index.
    Using the concurrent pre-floor, pre-reclassified hospital wage 
index would result in the most up-to-date wage data being the basis for 
the hospice wage index, increasing payment accuracy. It would also 
result in more consistency and parity in the wage index methodology 
used by Medicare. Medicare's skilled nursing facility (SNF), home 
health and acute care hospital prospective payment systems already use 
the most current wage index data as the basis for their wage indices. 
Thus, if our proposal is finalized, the wage-adjusted Medicare payments 
of various provider types would be based upon wage index data from the 
same timeframe. We are considering similar policies to use the 
concurrent pre-floor, pre-reclassified hospital wage index data in 
other Medicare payment systems, such as inpatient psychiatric 
facilities and inpatient rehabilitation facilities.
    Overall, the impact between the FY 2020 wage index with the 1-year 
lag and the proposed FY 2020 wage index removing the 1-year lag is 0.0 
percent due to the wage index standardization factor, which ensures 
that wage index updates and revisions are implemented in a budget-
neutral manner. The anticipated impact on Medicare hospice payments due 
to the change in the wage index methodology can be found in table 11 
below.
BILLING CODE 4120-01-P

[[Page 17585]]

[GRAPHIC] [TIFF OMITTED] TP25AP19.015


[[Page 17586]]


[GRAPHIC] [TIFF OMITTED] TP25AP19.016

BILLING CODE 4120-01-C
    We invite comments on this proposal to align the hospice wage index 
with that of the SNF PPS and Home Health PPS, by using the most current 
pre-floor, pre-reclassified IPPS hospital wage index as the basis for 
the hospice wage index.
2. Proposed FY 2020 Hospice Wage Index
    The hospice wage index is used to adjust payment rates for hospice 
agencies under the Medicare program to reflect local differences in 
area wage levels, based on the location where services are furnished. 
The hospice wage index utilizes the wage adjustment factors used by the 
Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital 
wage adjustments. Our regulations at Sec.  418.306(c) require each 
labor market to be established using the most current hospital wage 
data available, including any changes made by Office of Management and 
Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.
    In section III.B.1 above, we proposed to use the current FY's 
hospital wage index data to calculate the hospice wage index values. 
For FY 2020, the proposed hospice wage index would be based on the FY 
2020 hospital pre-floor, pre-reclassified wage index. This means that 
the hospital wage data used for the hospice wage index are not adjusted 
to take into account any geographic reclassification of hospitals 
including those in accordance with section 1886(d)(8)(B) or 1886(d)(10) 
of the Act. The appropriate wage index value is applied to the labor 
portion of the hospice payment rate based on the geographic area in 
which the beneficiary resides when receiving RHC or CHC. The 
appropriate wage index value is applied to the labor portion of the 
payment rate based on the geographic location of the facility for 
beneficiaries receiving GIP or IRC.
    In the FY 2006 Hospice Wage Index final rule (70 FR 45135), we 
adopted the policy that, for urban labor markets without a hospital 
from which hospital wage index data could be derived, all of the Core-
Based Statistical Areas (CBSAs) within the state would be used to 
calculate a statewide urban average pre-floor, pre-reclassified 
hospital wage index value to use as a reasonable proxy for these areas. 
For FY 2020, there are two CBSAs without a hospital from which hospital 
wage data can be derived: 25980, Hinesville-Fort Stewart, Georgia and 
16180, Carson City, NV. The FY 2020 wage index value for Carson City, 
NV is 1.0518 and the wage index value for Hinesville-Fort Stewart, 
Georgia is 0.8237.
    There exist some geographic areas where there were no hospitals, 
and thus, no hospital wage data on which to base the calculation of the 
hospice wage index. In the FY 2008 Hospice Wage Index final rule (72 FR 
50217 through 50218), we implemented a methodology to update the 
hospice wage index for rural areas without hospital wage data. In cases 
where there was a rural area without rural hospital wage data, we use 
the average pre-floor, pre-reclassified hospital wage index data from 
all contiguous CBSAs, to represent a reasonable proxy for the rural 
area. The term ``contiguous'' means sharing a border (72 FR 50217). 
Currently, the only rural area without a hospital from which hospital 
wage data could be derived is Puerto Rico. However, for rural Puerto 
Rico, we would not apply this methodology due to the distinct economic 
circumstances that exist there (for example, due to the close proximity 
to one another of almost all of Puerto Rico's various urban and non-
urban areas, this methodology would produce a wage index for rural 
Puerto Rico that is higher than that in half of its urban areas); 
instead, we would continue to use the most recent wage index previously 
available for that area. For

[[Page 17587]]

FY 2020, we propose to continue to use the most recent pre-floor, pre-
reclassified hospital wage index value available for Puerto Rico, which 
is 0.4047, subsequently adjusted by the hospice floor.
    As described in the August 8, 1997 Hospice Wage Index final rule 
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index 
is used as the raw wage index for the hospice benefit. These raw wage 
index values are subject to application of the hospice floor to compute 
the hospice wage index used to determine payments to hospices. Pre-
floor, pre-reclassified hospital wage index values below 0.8 are 
adjusted by a 15 percent increase subject to a maximum wage index value 
of 0.8. For example, if County A has a pre-floor, pre-reclassified 
hospital wage index value of 0.3994, we would multiply 0.3994 by 1.15, 
which equals 0.4593. Since 0.4593 is not greater than 0.8, then County 
A's hospice wage index would be 0.4593. In another example, if County B 
has a pre-floor, pre-reclassified hospital wage index value of 0.7440, 
we would multiply 0.7440 by 1.15 which equals 0.8556. Because 0.8556 is 
greater than 0.8, County B's hospice wage index would be 0.8.
    The proposed hospice wage index applicable for FY 2020 (October 1, 
2019 through September 30, 2020) is available on our website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.
3. Wage Index Comment Solicitation
    As we stated above, historically, we have calculated the hospice 
wage index values using unadjusted wage index values from another 
provider setting. Stakeholders have frequently commented on certain 
aspects of the hospice wage index values and their impact on payments. 
We are soliciting comments on concerns stakeholders may have regarding 
the wage index used to adjust hospice payments and suggestions for 
possible updates and improvements to the geographic adjustment of 
hospice payments.
4. Proposed FY 2020 Hospice Payment Update Percentage
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish 
updates to hospice rates for FYs 1998 through 2002. Hospice rates were 
to be updated by a factor equal to the inpatient hospital market basket 
percentage increase set out under section 1886(b)(3)(B)(iii) of the 
Act, minus 1 percentage point. Payment rates for FYs since 2002 have 
been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, 
which states that the update to the payment rates for subsequent FYs 
must be the inpatient market basket percentage increase for that FY.
    Section 3401(g) of the Affordable Care Act mandated that, starting 
with FY 2013 (and in subsequent FYs), the hospice payment update 
percentage would be annually reduced by changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
The statute defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm 
business multifactor productivity (MFP).
    The proposed hospice payment update percentage for FY 2020 is based 
on the estimated inpatient hospital market basket update of 3.2 percent 
(based on IHS Global Inc.'s fourth-quarter 2018 forecast with 
historical data through the third quarter 2018). Due to the 
requirements at sections 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of 
the Act, the estimated inpatient hospital market basket update for FY 
2020 of 3.2 percent must be reduced by a MFP adjustment as mandated by 
Affordable Care Act (currently estimated to be 0.5 percentage point for 
FY 2020). In effect, the proposed hospice payment update percentage for 
FY 2020 would be 2.7 percent.
    Currently, the labor portion of the hospice payment rates is as 
follows: For RHC, 68.71 percent; for CHC, 68.71 percent; for General 
Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The 
non-labor portion is equal to 100 percent minus the labor portion for 
each level of care. Therefore, the non-labor portion of the payment 
rates is as follows: For RHC, 31.29 percent; for CHC, 31.29 percent; 
for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 
percent. Beginning with cost reporting periods starting on or after 
October 1, 2014, freestanding hospice providers are required to submit 
cost data using CMS Form 1984-14 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospice-2014.html). We continue to analyze this data for possible use 
in updating the labor portion of the hospice payment rates. Any changes 
to the labor portions would be proposed in future rulemaking and would 
be subject to public comments.
5. Proposed FY 2020 Rebased Hospice Payment Rates
    There are four hospice payment categories, all of which are 
distinguished by the location and intensity of the services provided. 
The base payments are adjusted for geographic differences in wages by 
multiplying the labor share, which varies by category, of each base 
rate by the applicable hospice wage index. A hospice is paid the RHC 
rate for each day the beneficiary is enrolled in hospice, unless the 
hospice provides CHC, IRC, or GIP. CHC is provided during a period of 
patient crisis to maintain the patient at home; IRC is short-term care 
to allow the usual caregiver to rest and be relieved from caregiving; 
and GIP is provided to treat symptoms that cannot be managed in another 
setting.
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47172), we implemented two different RHC payment 
rates, one RHC rate for the first 60 days and a second RHC rate for 
days 61 and beyond. In addition, in that final rule, we implemented a 
Service Intensity Add-on (SIA) payment for RHC when direct patient care 
is provided by a RN or social worker during the last 7 days of the 
beneficiary's life. The SIA payment is equal to the CHC hourly rate 
multiplied by the hours of nursing or social work provided (up to 4 
hours total) that occurred on the day of service, if certain criteria 
are met. In order to maintain budget neutrality, as required under 
section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were adjusted 
by a SIA budget neutrality factor.
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47177), we will continue to make the SIA payments 
budget neutral through an annual determination of the SIA budget 
neutrality factor (SBNF), which will then be applied to the RHC payment 
rates. The SBNF will be calculated for each FY using the most current 
and complete utilization data available at the time of rulemaking. For 
FY 2020, this calculation would also reflect the proposed increase in 
the hourly rate for CHC as a result of rebasing, discussed in section 
III.A.2.c of this proposed rule.
    In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 
52156), we initiated a policy of applying a wage index standardization 
factor to hospice payments in order to eliminate the aggregate effect 
of annual variations in hospital wage data. In order to calculate the 
wage index

[[Page 17588]]

standardization factor, we simulate total payments using the proposed 
FY 2020 hospice wage index (no lag) and compare it to our simulation of 
total payments using the FY 2019 hospice wage index. By dividing 
payments for each level of care using the FY 2020 wage index (no lag) 
by payments for each level of care using the FY 2019 wage index, we 
obtain a wage index standardization factor for each level of care (the 
first 60 RHC days and RHC days after day 60 and, CHC, IRC, and GIP). 
The wage index standardization factors for each level of care are shown 
in the tables 12 and 13 below.
    As discussed in section III.A.3 of this proposed rule, we are 
proposing to rebase the per diem payment rates for the CHC, IRC, and 
GIP levels of care. Section 1814(i)(6) of the Act, as amended by 
section 3132(a)(1)(B) of the Affordable Care Act, authorizes the 
Secretary to collect additional data and information determined 
appropriate to revise payments for hospice care and for other purposes. 
The data collected may be used to revise the methodology for 
determining the payment rates for RHC and other hospice services (in a 
budget-neutral manner in the first year), no earlier than October 1, 
2013, as described in section 1814(i)(6)(D) of the Act. As mentioned 
above and outlined in the Affordable Care Act, hospice payment reform 
must be done in a budget-neutral manner. In other words, total 
estimated hospice expenditures under these rebased payment rates must 
equal total estimated hospice expenditures absent rebasing (we are 
assuming no change in utilization). In order to rebase the per diem 
payment amounts for CHC, IRC, and GIP in a budget-neutral manner, in 
section III.A.2.c we proposed that increases to the CHC, IRC, and GIP 
per diem payment amounts would be offset by corresponding decreases to 
the RHC per diem payment amounts to maintain overall budget neutrality.
    The proposed FY 2020 payment rates for RHC would be the proposed FY 
2019 payment rates, reduced by a budget neutrality factor as a result 
of the proposed rebasing of the CHC, IRC, and GIP payment amounts, 
adjusted by the SIA budget neutrality factor, adjusted by the wage 
index standardization factor, and increased by the 2.7 hospice payment 
update percentage as shown in table 12. The proposed FY 2020 rebased 
payment rates for CHC, IRC, and GIP would be the proposed rebased FY 
2019 payment rates, adjusted by the wage index standardization factor 
and increased by the 2.7 market basket update percent as shown in table 
13.

                                                  Table 12--Proposed FY 2020 Hospice RHC Payment Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Proposed FY
                                                                        2019 budget-     SIA budget        Wage index       Proposed FY     Proposed FY
               Code                            Description               neutral RHC     neutrality     standardization    2020 hospice    2020 payment
                                                                        payment rates      factor          factor **      payment update       rates
                                                                              *
--------------------------------------------------------------------------------------------------------------------------------------------------------
651...............................  Routine Home Care (days 1-60)....         $190.93        x 0.9924           x 1.0054         x 1.027         $195.65
651...............................  Routine Home Care (days 61+).....          150.03        x 0.9982           x 1.0054         x 1.027          154.63
--------------------------------------------------------------------------------------------------------------------------------------------------------
* FY 2019 RHC payment rate for days 1-60: = $196.25 * 0.9729 = $190.93. FY 2019 RHC payment rate for days 61+ = $154.21 * 0.9729 = $150.03.
** Transition from FY 2019 Wage Index to FY 2020 Wage Index without 1-Year Lag.


                       Table 13--Proposed FY 2020 Hospice CHC, IRC, and GIP Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                 Proposed FY       Wage index       Proposed FY     Proposed FY
         Code                Description        2019 rebased    standardization    2020 hospice    2020 payment
                                                payment rates       factor *      payment update       rates
----------------------------------------------------------------------------------------------------------------
652...................  Continuous Home Care        $1,363.26           x 1.0041         x 1.027       $1,405.81
                         Full Rate = 24 hours
                         of care ($56.80 =
                         hourly rate).
655...................  Inpatient Respite              435.82           x 1.0049         x 1.027          449.78
                         Care.
656...................  General Inpatient              994.45           x 1.0060         x 1.027        1,027.43
                         Care.
----------------------------------------------------------------------------------------------------------------
* Transition from FY 2019 Wage Index to FY 2020 Wage Index without 1-Year Lag.

    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data, based on measures to be specified by the 
Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320 
through 47324), we implemented a Hospice Quality Reporting Program as 
required by section 3004 of the Affordable Care Act. Hospices were 
required to begin collecting quality data in October 2012, and submit 
that quality data in 2013. Section 1814(i)(5)(A)(i) of the Act requires 
that beginning with FY 2014 and each subsequent FY, the Secretary shall 
reduce the market basket update by 2 percentage points for any hospice 
that does not comply with the quality data submission requirements with 
respect to that FY. The proposed FY 2020 rates for hospices that do not 
submit the required quality data would be updated by the proposed FY 
2020 hospice payment update percentage of 2.7 percent minus 2 
percentage points. These rates are shown in tables 14 and 15.

[[Page 17589]]



                     Table 14--Proposed FY 2020 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Proposed FY
                                                                         Proposed FY                                       2020 hospice
                                                                        2019 budget-     SIA budget        Wage index     payment update    Proposed FY
               Code                            Description               neutral RHC     neutrality     standardization    of 2.7% minus   2020 payment
                                                                        payment rates      factor          factor **       2 percentage        rates
                                                                              *                                           points = +0.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
651...............................  Routine Home Care (days 1-60)....         $190.93        x 0.9924           x 1.0054         x 1.007         $191.84
651...............................  Routine Home Care (days 61+).....          150.03        x 0.9982           x 1.0054         x 1.007          151.62
--------------------------------------------------------------------------------------------------------------------------------------------------------
* FY 2019 RHC payment rate for days 1-60 = $196.25 * 0.9729 = $190.93. FY 2019 RHC rate for days 61+ = $154.21 * 0.9729 = $150.03.
** Transition from FY 2019 Wage Index to FY 2020 Wage Index without 1-Year Lag.


 Table 15--Proposed FY 2020 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required
                                                  Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                    Proposed FY
                                                                                   2020 hospice
                                                 Proposed FY       Wage index     payment update    Proposed FY
          Code                Description       2019 rebased    standardization    of 2.7% minus   2020 payment
                                                payment rates       factor *       2 percentage        rates
                                                                                  points = +0.7%
----------------------------------------------------------------------------------------------------------------
652.....................  Continuous Home           $1,363.26           x 1.0041         x 1.007       $1,378.43
                           Care Full Rate =
                           24 hours of care
                           ($56.80 = hourly
                           rate).
655.....................  Inpatient Respite            435.82           x 1.0049         x 1.007          441.02
                           Care.
656.....................  General Inpatient            994.45           x 1.0060         x 1.007        1,007.42
                           Care.
----------------------------------------------------------------------------------------------------------------
* Transition from FY 2019 Wage Index to FY 2020 Wage Index without 1-Year Lag.

6. Proposed Hospice Cap Amount for FY 2020
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47183), we implemented changes mandated by the IMPACT 
Act of 2014 (Pub. L. 113-185). Specifically, for accounting years that 
end after September 30, 2016, and before October 1, 2025, the hospice 
cap is updated by the hospice payment update percentage rather than 
using the CPI-U. The proposed hospice cap amount for the FY 2020 cap 
year will be $29,993.99, which is equal to the FY 2019 cap amount 
($29,205.44) updated by the proposed FY 2020 hospice payment update 
percentage of 2.7 percent.

C. Proposed Election Statement Content Modifications and Proposed 
Addendum To Provide Greater Coverage Transparency and Safeguard Patient 
Rights

1. Background
    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes the impending death of an individual may necessitate a 
transition from curative to palliative care if the individual so 
chooses. Medicare hospice care services are virtually all-inclusive, 
and are focused on meeting the physical, emotional, psychosocial and 
spiritual needs of the terminally ill individual and his or her family. 
In order to make an informed choice about whether to receive hospice 
care, the patient, family, and caregiver must have an understanding of 
what services are going to be provided by the hospice and that, because 
there is no longer a reasonable expectation for a cure, care should now 
focus on comfort and quality of life. The services covered under the 
Medicare hospice benefit are comprehensive such that, upon election, 
the individual waives all rights to Medicare payment for services 
related to the treatment of the individual's condition with respect to 
which a diagnosis of terminal illness has been made, except when 
provided by the designated hospice or attending physician. Because of 
the significance of this decision, the terminally ill individual must 
elect hospice care in order to receive services under the Medicare 
hospice benefit. Since we first implemented the Medicare hospice 
benefit in 1983, it has been our general view that the waiver required 
by law requires hospices to provide virtually all the care that is 
needed by terminally ill patients (48 FR 56010).
2. Current Statutory and Regulatory Requirements for Care Planning and 
Patient Rights
    In order to be eligible to elect the Medicare hospice benefit, a 
beneficiary must be certified as terminally ill, meaning that the 
beneficiary has a medical prognosis of a life expectancy of 6 months or 
less if the illness runs its normal course (42 CFR 418.3). For the 
initial certification, the patient-designated attending physician (if 
any) and the hospice medical director (or hospice physician member of 
the interdisciplinary group (IDG)) must each certify in writing, at the 
beginning of the period, that the individual is terminally ill based on 
the physician's or medical director's clinical judgment regarding the 
normal course of the individual's illness. The regulations Sec.  418.25 
require that the hospice admit a patient only on the recommendation of 
the medical director in consultation with, or with input from, the 
patient's attending physician (if any).
    In reaching a decision to certify that the patient is terminally 
ill, the hospice medical director must consider the principal diagnosis 
of the patient, all other health conditions, whether related or 
unrelated to the terminal condition, and all clinically relevant 
information

[[Page 17590]]

supporting all diagnoses. The clinical information and other 
documentation that support the medical prognosis must accompany the 
written certification and must be filed in the individuals' hospice 
medical record in accordance with the regulations at Sec.  
418.22(b)(2). Likewise, for the initial certification of terminal 
illness, the hospice CoPs at Sec.  418.102(b) require that the hospice 
medical director (or hospice physician designee) consider not only the 
principal diagnosis and related conditions, but also current signs and 
symptoms affecting the patient, current medications and treatment 
interventions, and the medical management of unrelated conditions. 
Therefore, even prior to a patient's admission to hospice, the hospice 
medical director (or hospice physician designee) plays a pivotal role 
in making clinical determinations regarding related and unrelated 
conditions of terminally ill individuals. Once a beneficiary is 
certified as terminally ill, he or she becomes eligible to elect 
hospice care under the Medicare hospice benefit.
    Because the receipt of hospice services under the Medicare hospice 
benefit is dependent upon the eligible beneficiary electing to receive 
hospice care, the regulations at Sec.  418.24 provide the requirements 
of the hospice election statement. The election statement must include 
the identification of the designated hospice and attending physician 
(if any); the individual's or representative's acknowledgement that he 
or she has been given a full understanding of the palliative rather 
than curative nature of hospice care; and the individual's or 
representative's acknowledgement that the individual waives the right 
to Medicare payment for services related to the terminal illness and 
related conditions, except when provided by the designated hospice or 
attending physician. Services unrelated to the terminal illness and 
related conditions remain eligible for Medicare coverage and payment 
outside of the hospice benefit.
    Once the beneficiary has elected hospice care, the hospice conducts 
an initial assessment visit in advance of furnishing care. During this 
visit, the hospice must provide the patient or representative with a 
spoken and written notice of the patient's rights and responsibilities 
as required by the CoPs at Sec.  418.52. Our rules state that the 
beneficiary has the right to be involved in developing his or her 
hospice plan of care; receive information about the services covered 
under the hospice benefit; and receive information about the scope of 
services that the hospice will provide and specific limitations on 
those services. The hospice program must assure the patient that its 
staff will protect patients' rights and will involve patients in 
decisions about their care, treatment and services.\33\ Likewise, the 
regulations at Sec.  476.78 state that providers must inform Medicare 
beneficiaries at the time of admission, in writing, that the care for 
which Medicare payment is sought will be subject to Quality Improvement 
Organization (QIO) review. CMS identifies the core functions of the QIO 
Program as:
---------------------------------------------------------------------------

    \33\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

     Improving quality of care for beneficiaries;
     Protecting the integrity of the Medicare Trust Fund by 
ensuring that Medicare pays only for services and goods that are 
reasonable and necessary and that are provided in the most appropriate 
setting; and
     Protecting beneficiaries by expeditiously addressing 
individual complaints.
    Changes to the QIO Program were made to ensure that Medicare 
beneficiary needs are better met by designating a special type of 
organization, a Medicare Beneficiary and Family--Centered Care--Quality 
Improvement Organization (BFCC-QIO), to address quality of care 
concerns and appeals. When Medicare beneficiaries have a complaint that 
is not related to the clinical quality of healthcare, they and their 
healthcare provider can agree to participate in a flexible, dialogue-
based resolution process, called ``immediate advocacy,'' which is 
coordinated by the BFCC-QIO (Sec.  476.110).
    The patient rights are provided to the beneficiary at the beginning 
of a hospice election. Likewise, the hospice CoPs at Sec.  418.54 
require that the hospice registered nurse must complete the initial 
assessment within 48 hours after the election of hospice care, unless 
the physician, patient, or representative requests that the initial 
assessment be completed in less than 48 hours. The initial assessment 
is to gather critical information necessary to treat the patient/
family's immediate care needs. The hospice IDG, in consultation with 
the individual's attending physician (if any), must complete a 
comprehensive assessment no later than 5 calendar days after the 
election of hospice care. Additionally, the hospice CoPs at Sec.  
418.54(c) provide the content requirements for the initial and 
comprehensive assessments used to identify patient, family, and 
caregiver needs for physical, emotional, psychosocial, and spiritual 
care. As part of the comprehensive assessment, the hospice is required 
to assess the patient for complications and risk factors, which can 
affect care planning. The needs identified in these assessments drive 
the development and revisions of an individualized written plan of care 
for each patient as required by the CoPs at Sec.  418.56. Collectively, 
the IDG, in consultation with the patient's attending physician (if 
any), makes care plan decisions for each patient to ensure that each 
care plan is individualized to meet the unique needs of each hospice 
beneficiary. The plan of care also must reflect patient, family, and 
caregiver preferences, goals, and interventions based on the problems 
identified in the initial, comprehensive, and updated comprehensive 
assessments. The plan of care must include all services necessary for 
the palliation and management of the terminal illness and related 
conditions and the CoPs at Sec.  418.56(c) detail the plan of care 
content requirements, including the following:
    (1) Interventions to manage pain and symptoms.
    (2) A detailed statement of the scope and frequency of services 
necessary to meet the specific patient and family needs.
    (3) Measurable outcomes anticipated from implementing and 
coordinating the plan of care.
    (4) Drugs and treatment necessary to meet the needs of the patient.
    (5) Medical supplies and appliances necessary to meet the needs of 
the patient.
    (6) The interdisciplinary group's documentation of the patient's or 
representative's level of understanding, involvement, and agreement 
with the plan of care, in accordance with the hospice's own policies, 
in the clinical record. Furthermore, as a condition for payment, the 
services provided must be consistent with the plan of care (Sec.  
418.200).
    Though hospices are responsible for providing all services needed 
for palliation and management of the terminal illness and related 
conditions, the 2008 Hospice Conditions of Participation final rule (73 
FR 32088, June 5, 2008) states that while needs unrelated to the 
terminal illness and related conditions are not the responsibility of 
the hospice, the hospice may choose to furnish services for those needs 
regardless of responsibility (73 FR 32114). If a hospice does not 
choose to furnish services for those needs unrelated to the terminal 
illness and related conditions,

[[Page 17591]]

the hospice is to document such needs and communicate and coordinate 
with those health care providers who are identified as caring for the 
unrelated needs, as set out at Sec.  418.56(e)(5). In the 2008 final 
rule, we stressed that the intent of the plan of care requirements are 
to show a direct link between the needs identified in the comprehensive 
assessment and the plan of care developed by the hospice. This also 
means that even if the hospice identified other needs in the patient 
assessment that were unrelated to the terminal illness and related 
conditions, these needs could not simply be ignored by the hospice; 
rather, the hospice would have to communicate and coordinate with the 
non-hospice providers that would be managing those conditions (73 FR 
32114).
    To ensure comprehensive and coordinated care, at Sec.  418.56(e) we 
require hospices to have a communication system that allows for the 
exchange of information with other non-hospice health care providers 
who are furnishing care unrelated to the terminal illness and related 
conditions. We also require hospices to designate a registered nurse 
(RN) who is a member of the IDG to coordinate implementation of the 
comprehensive plan of care. The designated RN must assure that 
coordination of care and continuous assessment of patient, family, and 
caregiver needs occur among staff providing services to the patient, 
family, and caregiver so that all IDG members are kept informed of the 
patient/family's status.\34\ The goal of a coordinated communication 
process and a designated nurse coordinator is to adequately ensure that 
each patient's hospice care is coordinated both within the hospice and 
with other health care providers.
---------------------------------------------------------------------------

    \34\ https://www.cms.gov/RegulationsandGuidance/Guidance/Manuals/downloads/som107ap_hospice.pdf.
---------------------------------------------------------------------------

3. Services Unrelated to the Terminal Illness and Related Conditions
    As discussed in section III.C.2., the hospice medical director, the 
attending physician (if any), and the hospice IDG determine, for each 
patient, what items and services are related and unrelated to the 
palliation and management of the terminal illness and related 
conditions during the admission process, the initial and comprehensive 
assessments, and in the development of the hospice plan of care. To the 
extent that individuals receive services outside of the Medicare 
hospice benefit during a hospice election, Medicare coverage is 
determined by whether or not the services are for the treatment of a 
condition completely unrelated to the individual's terminal illness and 
related conditions (48 FR 38146, 38148, August 22, 1983). As such, it 
is our long-standing position that services unrelated to the terminal 
illness and related conditions should be exceptional, unusual and rare 
given the comprehensive nature of the services covered under the 
Medicare hospice benefit (48 FR 56008, 56010, December 16, 1983). The 
Medicare claims processing system has edits in place to prevent other 
non-hospice claims from being processed while a patient is under a 
hospice election. For claims unrelated to the terminal illness and 
related conditions to be processed for Medicare payment while a patient 
is under a hospice election, the non-hospice provider or supplier must 
use a modifier or condition code on the claim to indicate that the 
service billed is unrelated to the patient's terminal condition. This 
is to help ensure that payment is made from the appropriate Medicare 
trust fund, and that duplicate payments are avoided.
    In accordance with the hospice CoPs at Sec.  418.56(e)(5), and in 
alignment with continuity of care principles,\35\ the ongoing sharing 
of information with other non-hospice healthcare providers and 
suppliers furnishing services unrelated to the terminal illness and 
related conditions is necessary to ensure coordination of services and 
to meet the patient, family, and caregiver needs. The coordination 
requirements include that the hospice must develop and maintain a 
system of communication and integration amongst all providers 
furnishing care to the terminally ill patient. This communication helps 
to minimize fragmented care and to improve quality of life. Part of 
that communication process is the clear identification of what the 
related and unrelated conditions are and who is responsible for 
providing reasonable and necessary services for those conditions. As is 
the preferred practice for care coordination and communication,\36\ 
both hospice and non-hospice providers typically document these 
discussions, which then becomes part of the patient's medical record 
with each provider. Accordingly, all Medicare providers and suppliers 
must be able to provide medical documentation to support payment for 
services billed (sections 1833(e) and 1815(a) of the Act). For non-
hospice providers or suppliers billing Medicare for services received 
by hospice beneficiaries unrelated to their terminal illness and 
related conditions, this includes being able to provide documentation 
from the hospice listing the conditions (and thus items, drugs, and 
services) the hospice determined to be unrelated and documented as such 
on the hospice plan of care.
---------------------------------------------------------------------------

    \35\ Uijena, A., Schersa, H., Schellevisb, F., van den Bosch, W. 
How unique is continuity of care? A review of continuity and related 
concepts. Family Practice 2012; 29:264-271 doi:10.1093/fampra/
cmr104.
    \36\ National Quality Forum (NQF), Preferred Practices and 
Performance Measures for Measuring and Reporting Care Coordination: 
A Consensus Report, Washington, DC: NQF; 2010.
---------------------------------------------------------------------------

    While hospices are required by the CoPs to have a system of 
communication with non-hospice providers to furnish such information, 
we have heard anecdotally from non-hospice providers stating that they 
are unable to reach or do not receive return calls from the hospice to 
discuss the hospice beneficiary's coordination of services that the 
hospice has determined unrelated to his or her terminal illness and 
related condition(s). Likewise, we have also received anecdotal reports 
from hospices who state they were unaware that patients had received 
care from non-hospice providers. In these reports, the hospice would 
first learn of this outside care when non-hospice providers would 
contact the hospice seeking reimbursement. If this care was related to 
the terminal illness and related conditions and the hospice did not 
make arrangements for such care, the beneficiary would be liable for 
the costs of receiving that care. Additionally, if non-hospice 
providers bill Medicare for services that potentially should have been 
the coverage responsibility of hospice, Medicare could be making 
duplicative payments for care related to the terminal illness and 
related conditions.
    The OIG released a report in June of 2012 identifying situations 
where Medicare may have been paying twice for prescription drugs for 
hospice beneficiaries. This report also suggests that Medicare hospice 
beneficiaries themselves could also be paying unnecessary co-payments 
or coinsurance for prescription drugs.\37\ In addition to being liable 
for unnecessary co-payments or coinsurance, if beneficiaries fill 
prescriptions to treat conditions that are related to the terminal 
illness and related conditions without such fills being arranged for by 
the hospice, the patient would be liable for the entire cost of the 
prescription.

[[Page 17592]]

The OIG identified four common categories of prescription drugs that 
are typically used to treat end-of-life symptoms that were being 
covered under Part D for beneficiaries under a hospice election. These 
four categories of drugs included analgesics, anti-nauseants, 
laxatives, and antianxiety agents. As a result of this report, CMS 
issued the first of several memoranda seeking to clarify the criteria 
for determining payment responsibility under the Part A hospice benefit 
and Part D for drugs prescribed to hospice beneficiaries. Part D plan 
sponsors were encouraged to place beneficiary-level prior authorization 
(PA) requirements on drugs being processed through Part D for hospice 
beneficiaries. The purpose of this PA form is to facilitate 
coordination between Part D sponsors, hospices, and pharmacists. Two 
primary uses are to document that a drug is unrelated to a 
beneficiary's terminal prognosis and to convey a beneficiary's change 
in hospice status. It may also be used by hospice providers to 
communicate and update the medication list from the beneficiary's plan 
of care.\38\ In 2014, when the PA was instituted for all beneficiaries 
enrolled in hospice, utilization was reduced for both drugs in and 
outside of the four categories. However, when the PA was lifted for 
drugs not in the four categories (that is, maintenance drugs) there 
have been steady increases in utilization of these drugs by hospice 
beneficiaries through Part D.\39\ Recent analyses of Part D 
prescription drug event (PDE) data suggest that the current PA process 
has reduced Part D program payments for drugs in the four targeted 
categories and that utilization patterns are sensitive to the PA 
process.\40\
---------------------------------------------------------------------------

    \37\ Office of the Inspector General, Department of Health and 
Human Services. Medicare Could Be Paying Twice for Prescription 
Drugs for Beneficiaries in Hospice. June, 2012. A-06-10-00059. 
https://oig.hhs.gov/oas/reports/region6/61000059.pdf.
    \38\ https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/Downloads/Instruction-and-Form-for-Hospice-and-Medicare-Part-D.pdf.
    \39\ The four categories of drugs listed above are not included 
in the analyses of maintenance drugs.
    \40\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.
---------------------------------------------------------------------------

    After a hospice election, many maintenance drugs or drugs used to 
treat or cure a condition are typically discontinued as the focus of 
care shifts to palliation and comfort measures. However, there are 
maintenance drugs that are appropriate to continue as they may offer 
symptom relief for the palliation and management of the terminal 
illness and related conditions. Some examples of maintenance drugs 
include those to manage conditions such as heart disease, COPD, and 
diabetes. We continue to receive complaints from Part D plan sponsors 
and pharmacies that some hospice providers fail to respond to frequent 
outreach efforts from Part D sponsors seeking recovery for claims in 
the four categories or to clarify payment responsibility for 
medications for hospice beneficiaries. We believe that this represents 
a lack of coordination between hospices and Part D pharmacies and 
sponsors, which ultimately affects the quality of care furnished to an 
especially vulnerable population and results in additional costs to 
beneficiaries, as well as Part D plan sponsors.
    In previous years' hospice proposed rules, we have included data on 
non-hospice expenditures for beneficiaries under a hospice election. 
These total non-hospice expenditures include beneficiary cost-sharing 
amounts. For Parts A and B, the beneficiary cost-sharing amounts in FY 
2017 totaled approximately $138 million and for Part D, the beneficiary 
cost-sharing totaled approximately $68.6 million (83 FR 20946 through 
20947). We believe that this is a substantial financial burden being 
placed on terminally ill individuals for services that potentially 
should have been covered by hospice. In previous years' rules, we have 
provided data and case studies on the most frequently reported 
principal diagnoses on hospice claims and their associated non-hospice 
expenditures for what were determined to be services for unrelated 
conditions (80 FR 47154 and 81 FR 25510). These diagnoses included lung 
cancer, cerebral degeneration of the brain (that is, conditions that 
cause dementia), chronic obstructive pulmonary disease (COPD), and 
congestive heart failure (CHF). We also discussed the recommended 
evidence-based clinical practice guidelines for those diagnoses, 
including the use of certain types of DME, supplies and drugs. Our 
analysis revealed that items such as oxygen, respiratory agents, 
hospital beds, wheelchairs, common palliative drugs, and disease-
specific drugs were not being furnished or covered by hospice even 
though we would expect such items to be clinically indicated and 
provided for the palliation and management of the terminal illness and 
related conditions (80 FR 47154). This suggests that hospice 
beneficiaries may be incurring unnecessary financial burden as they are 
having to seek out and pay for items and services for pain and symptom 
relief--services that hospice should be furnishing and covering.
    We have received numerous anecdotal reports from beneficiaries, 
families, and non-hospice providers that hospice patients are obtaining 
needed drugs and other services outside of the hospice benefit because 
they have been told that hospice would not cover the drugs as the 
hospice determined that they were unrelated to the terminal illness and 
related conditions. Many of these anecdotal reports state that the 
beneficiaries and families believe that these items, services, and 
drugs were related to the terminal illness and related conditions and 
believed that they should have been provided by the hospice. The 
beneficiaries and/or the families stated that they did not know they 
would have to seek care outside of the hospice benefit for these 
conditions because the hospice did not tell them these items, services, 
and drugs would not be furnished by the hospice until the patient 
needed them. The Medicare Beneficiary Ombudsman Office also has 
received similar reports. The Medicare Ombudsman helps beneficiaries 
with Medicare-related complaints, grievances, and information requests, 
regarding what beneficiaries need to know to make appropriate health 
care decisions; beneficiary rights and protections under Medicare; and 
how to get issues resolved.\41\ Whereas the Medicare Ombudsman helps 
with providing general information about Medicare and navigating 
through various Medicare processes to resolve issues, the BFCC-QIOs 
assist Medicare beneficiaries with specific quality of care complaints 
for people with Medicare to improve the effectiveness, efficiency, 
economy, and quality of services for people with Medicare. The BFCC-
QIOs provide services to help Medicare beneficiaries file appeals if 
they think their coverage is ending too soon; to conduct quality of 
care and medical necessity reviews, and; to help with grievances. Both 
entities are in place to make sure beneficiary rights are protected.
---------------------------------------------------------------------------

    \41\ https://www.cms.gov/Center/Special-Topic/Ombudsman/How-the-Medicare-Beneficiary-Ombudsman-Works-for-You.pdf.
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    The Medicare Ombudsman also shares information with the Secretary 
of Health and Human Services, Congress, and other organizations about 
what does and doesn't work well to improve the quality of the services 
and care beneficiaries get through Medicare. Examples of recent 
Medicare Ombudsman reports of patients being told only after electing 
the benefit and the commencement of hospice care that certain items, 
services or drugs were not covered by the hospice include:
     An incident was reported to the Medicare Beneficiary 
Ombudsman Office by a hospice beneficiary who stated that when she ran 
out of her

[[Page 17593]]

diabetic test strips, the hospice refused to furnish them. The patient 
stated that the diabetic glucose testing was necessary to ensure the 
appropriate dosage of medication to control her blood glucose level, 
and hence prevent any symptoms that would be associated with 
hyperglycemia. When contacted, the hospice informed the Ombudsman that 
the hospice determined the patient's diabetes was not related to the 
patient's principal diagnosis of congestive heart failure (CHF) and 
thus the hospice was not furnishing any services to manage the 
patient's diabetes. While this hospice told the patient that her 
diabetes was unrelated to her congestive heart failure, they did not do 
so until after the beneficiary elected hospice and ran out of her test 
strips. The beneficiary disagreed with that determination but was not 
made aware of options for advocacy to assist in resolving this 
disagreement with the plan of care. Because of this lack of 
communication, the beneficiary felt she had no choice but to obtain her 
test strips and pay for them herself.
     A family member contacted CMS on behalf of his mother and 
stated that the hospice refused to furnish a seated walker because the 
hospice had determined the need for a seated walker was unrelated to 
the beneficiary's terminal illness and related conditions. This 
beneficiary was unable to ambulate without having to stop and sit down 
because of shortness of breath due to her end-stage lung cancer. The 
family member mentioned that his father was going to purchase the 
walker out of pocket, but he wanted to check with Medicare before doing 
so. The beneficiary was very distressed because being able to ambulate 
in her own home lessened the pain of lying in bed for prolonged periods 
of time and improved the quality of her life. The family member stated 
he did not know whom to call because he was under the impression that 
hospice was to cover everything his mother needed.
     During a CMS field office site visit, one hospice 
beneficiary reported that the hospice would not cover the cost of his 
benign prostatic hypertrophy (BPH) medication as the hospice stated the 
medication was unrelated to his terminal illness and related 
conditions. This medication helped alleviate urinary retention which 
caused him significant discomfort. This beneficiary had a hospice-
reported principal diagnosis of sepsis due to a urinary tract 
infection. The beneficiary obtained his BPH medication through his 
pharmacy benefit but he stated he thought hospice was to provide him 
with all of his medications because that was the impression the hospice 
had given him when he elected hospice. He said he was never told by the 
hospice what medications or services he would have to obtain on his 
own.
     CMS has received multiple reports of hospice beneficiaries 
requiring palliative chemotherapy or palliative radiation for pain and 
symptom management, but these beneficiaries are told by hospices that 
these services are not covered under the hospice benefit because these 
treatments are curative in nature and therefore not in alignment with 
the hospice philosophy of care. These beneficiaries report that they 
were not told this when they elected hospice and they revoked the 
hospice benefit in order to receive needed treatments to alleviate 
pain.
     Similarly, CMS has met with physician associations to 
discuss the Medicare hospice benefit and physicians report that when 
they try to refer patients to hospice who require palliative blood 
transfusions for symptom management, the physicians and their patients 
are being told by hospices that the Medicare hospice benefit does not 
cover palliative blood transfusions. The physicians reported that they 
either do not refer these patients to hospice to ensure that the 
patients can continue their palliative blood transfusions, or for those 
patients that do elect the hospice benefit, those patients revoke 
hospice care to receive their palliative blood transfusions and then 
re-elect hospice care after they have received these services. We note 
that the Medicare hospice benefit does cover services for pain and 
symptom management, including palliative chemotherapy, radiation and 
blood transfusions. The per diem payment amounts paid to hospices 
account for such services and hospices are required to cover those 
items, services, and drugs for the palliation and management of the 
terminal illness and related conditions.
    The continued anecdotal reports we receive from various 
stakeholders may suggest that some hospices are not adequately 
informing hospice patients at hospice election about the scope of 
services covered under the hospice benefit and thus hospice patients 
may not have complete benefit coverage information when electing the 
hospice benefit. This lack of coverage transparency may result in 
hospice patients having to seek out needed items, services and drugs 
outside of the Medicare hospice benefit and incur unexpected financial 
liability as a result. This also may suggest that hospices could be 
making care plan decisions based on cost or convenience rather than 
based on the needs, preferences and goals of the patient. This is not 
in alignment with the Medicare hospice benefit regulations and CoPs. We 
expect that services received outside of the hospice benefit to be 
rare.
    Since the implementation of the Medicare hospice benefit, we have 
received frequent requests, via informal means and through the formal 
rulemaking process to provide additional guidance about determining 
what are considered ``related conditions'' as these are the coverage 
responsibility of hospice. Our position has been the same since the 
implementation of the Medicare hospice benefit in 1983. We believe that 
hospices are required to provide virtually all of the care needed by 
the terminally ill individual (48 FR 56010). Any services needed 
outside of the hospice benefit (that is, ``unrelated'') should be 
exceptional and unusual. We reiterate that the terminally ill 
individual's unique clinical condition makes it necessary for these 
determinations of related versus unrelated conditions to be made for 
each patient. To be responsive to the numerous requests for more 
guidance, in recent years' rules we have provided additional guidance 
regarding eligibility requirements for hospice admission (79 FR 50470 
and 80 FR 25878); assessment of other conditions and comorbidities (80 
FR 25878 through 25879); and, reporting of related and unrelated 
conditions on hospice claims (80 FR 25880). However, in spite of the 
guidance provided, we continue to have concerns that these decisions 
are based on a more narrow view of the overall condition of the 
individual, as is evidenced by the non-trivial amount of items, 
services, and drugs for potentially related conditions provided by non-
hospice providers to beneficiaries under a hospice election.
4. Proposed Election Statement Content Modifications and Proposed 
Addendum To Provide Greater Coverage Transparency and Safeguard Patient 
Rights
    As mentioned previously, the CoPs at Sec.  418.56 require that the 
hospice include all services needed for the palliation and management 
of the terminal illness and related conditions on the individualized 
hospice plan of care. Similarly, the hospice interpretative guidelines 
for Sec.  418.56 state that the plan of care should also identify the 
conditions or symptoms that the hospice determines to be ``unrelated'' 
so hospices can provide ongoing sharing of information with

[[Page 17594]]

other non-hospice healthcare providers who may be furnishing services 
unrelated to the terminal illness and related conditions.\42\ Although 
hospices are required to educate each patient and the primary 
caregiver(s) on the services identified on the plan of care and 
document the patient's or representative's level of understanding, 
involvement, and agreement with the plan of care, the amount and nature 
of the non-hospice services being billed to Medicare outside of the 
hospice benefit suggests that hospice beneficiaries may not be fully 
informed, at the time of admission or throughout the hospice election, 
of the items, services, and drugs the hospice has determined to be 
unrelated to their terminal illness and related conditions. This is 
necessary information for patients and their families to make informed 
care decisions and to anticipate any financial liability associated 
with needed items, services, and drugs not provided under the Medicare 
hospice benefit.
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    \42\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf (L-Tag 538).
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    The Medicare hospice regulations and CoPs are designed to ensure 
comprehensive coverage of hospice services and to help educate patients 
and their families regarding the scope of hospice services. Patient 
protection, empowerment, and advocacy are of such utmost importance 
that the CoPs at Sec.  418.52 explicitly require that the hospice 
inform the patient of his or her rights and promote the exercise of 
these rights. However, as described in section III.C.3 above, we have 
concerns about whether patients are being adequately informed about the 
scope of services covered under the Medicare hospice benefit and 
whether patient rights are being fully promoted and protected. 
Furthermore, we continue to be concerned about the currently reported 
poor or absent communication between hospice and non-hospice providers 
needed to ensure coordination of all reasonable and necessary services 
for Medicare hospice beneficiaries. This may result in a lack of 
coverage transparency and where beneficiaries are unaware of their 
financial liability while under a hospice election for those items, 
services, and drugs the hospice has determined to be unrelated to their 
terminal prognosis.
    Patients and their families must be provided complete and accurate 
information regarding their hospice benefit under Medicare, as well as 
their rights, responsibilities, and financial liability to ensure that 
they are empowered to make informed treatment decisions that align with 
their personal needs, preferences, and goals. In order to receive 
services under the Medicare hospice benefit, the beneficiary must make 
a choice to elect the benefit. As with all medical choices, this would 
mean that the beneficiary (or representative) has given informed 
consent for services. Stated simply, informed consent in medical care, 
which includes hospice care, is a process of communication between a 
clinician and a patient that results in the patient's authorization or 
agreement to undergo a specific medical intervention or mode of 
care.\43\
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    \43\ https://www.jointcommission.org/assets/1/23/Quick_Safety_Issue_Twenty-One_February_2016.pdf.
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    Therefore, we are proposing to modify the hospice election 
statement content requirements at Sec.  418.24(b) to increase coverage 
transparency for patients under a hospice election. In addition to the 
existing election statement content requirements at Sec.  418.24(b), we 
are proposing that hospices also would be required to include the 
following on the election statement:
     Information about the holistic, comprehensive nature of 
the Medicare hospice benefit;
     A statement that, although it would be rare, there could 
be some necessary items, drugs, or services that will not be covered by 
the hospice because the hospice has determined that these items, drugs, 
or services are to treat a condition that is unrelated to the terminal 
illness and related conditions.
     Information about beneficiary cost-sharing for hospice 
services.
     Notification of the beneficiary's (or representative's) 
right to request an election statement addendum that includes a written 
list and a rationale for the conditions, items, drugs, or services that 
the hospice has determined to be unrelated to the terminal illness and 
related conditions and that immediate advocacy is available through the 
BFCC-QIO if the beneficiary (or representative) disagrees with the 
hospice's determination.
    Likewise, we are proposing to make the corresponding regulations 
text changes at Sec.  418.24(b).
    Additionally, we are proposing that hospices would be required, 
upon request, to provide to the beneficiary (or representative) an 
election statement addendum with a list and rationale for the 
conditions, items, services, and drugs that the hospice has determined 
as unrelated to the terminal illness and related conditions. Similarly, 
we are proposing that hospices would be required to provide the 
election statement addendum upon request to other non-hospice providers 
that are treating such conditions, and Medicare contractors who request 
such information. We are proposing that if the election statement 
addendum is requested at the time of hospice election, the hospice must 
provide this information, in writing, to the individual (or 
representative) within 48 hours of the request. Furthermore, we are 
proposing that if this addendum is requested during the course of 
hospice care, the hospice must provide this information, in writing, 
immediately to the requesting individual (or representative), non-
hospice provider, or Medicare contractor, as this information should be 
readily available in the beneficiary's hospice medical record. While we 
believe that hospices should be able to immediately provide this 
information, in writing, to the requesting beneficiary (or 
representative), non-hospice provider or Medicare contractor, we are 
soliciting comment on the appropriate timeframe to provide this 
information to the requesting party if such information is requested 
after the election of hospice care. During the course of hospice care, 
if there are changes to the plan of care that result in a determination 
that a new illness or condition has arisen, we are proposing that 
hospices would be required to issue an updated addendum to the patient 
(or representative) reflecting whether or not items, services and 
supplies related to the new illness or condition will be provided by 
the hospice.
    The purpose of the proposed addendum is to inform beneficiaries and 
their families of non-covered conditions, items, services, and drugs to 
provide full coverage transparency to hospice patients and their 
families to assist in making treatment decisions. Likewise, the 
addendum will help facilitate communication and benefit coordination 
between hospices and non-hospice providers. We propose that if there is 
a request for the addendum, the presence of the signed addendum (and 
updated, signed addenda) in the beneficiary's hospice medical record 
would be a new condition for payment for Medicare hospice services.
    Hospices can develop and design the addendum to meet their needs, 
similar to how hospices develop their own hospice election statement. 
We propose the addendum would be titled ``Patient Notification of 
Hospice Non-Covered Items, Services, and Drugs.'' We propose that the 
addendum would include the following information:
    1. Name of the hospice;

[[Page 17595]]

    2. Beneficiary's name and hospice medical record identifier;
    3. Identification of the beneficiary's terminal illness and related 
conditions;
    4. A list of the beneficiary's current diagnoses/conditions present 
on hospice admission (or upon plan of care update, as applicable) and 
the associated items, services, and drugs, not covered by the hospice 
because they have been determined by the hospice to be unrelated to the 
terminal illness and related conditions;
    5. A written clinical explanation, in language the beneficiary and 
his or her representative can understand, as to why the identified 
conditions, items, services, and drugs are considered unrelated to the 
terminal illness and related conditions and not needed for pain or 
symptom management. This clinical explanation would be accompanied by a 
general statement that the decision as to whether or not conditions, 
items, services, and drugs is related is made for each patient and that 
the beneficiary should share this clinical explanation with other 
health care providers from which they seek services unrelated to their 
terminal illness and related conditions;
    6. References to any relevant clinical practice, policy, or 
coverage guidelines.
    7. Information on the following domains:
a. Purpose of Addendum
    i. The purpose of the addendum is to notify the hospice beneficiary 
(or representative) of those conditions, items, services, and drugs the 
hospice will not be covering because the hospice has determined they 
are unrelated to the beneficiary's terminal illness and related 
conditions.
    ii. The addendum is subject to review and shall be updated, as 
needed, when the plan of care is updated in accordance with Sec.  
418.56. The hospice will provide these updates, in writing, to the 
beneficiary (or representative).
b. Right to Immediate Advocacy
    The addendum must include language that immediate advocacy is 
available through the BFCC-QIO if the beneficiary (or representative) 
disagrees with the hospice's determination. Specifically, the language 
must include contact information for the BFCC-QIO, as well as, the 
following statement: ``We encourage you to contact your hospice 
provider to discuss any concerns about the diagnoses/conditions, as 
well as items, services, and medications listed on this form that you 
believe should be covered by the hospice. Beyond issues related to 
Medicare coverage, if you believe that your care concerns were not 
adequately addressed by your hospice provider, you may contact the 
Medicare Beneficiary and Family Centered Care Quality Improvement 
Organization (BFCC-QIO) to help you. While it cannot require services 
be covered, provided, or be paid for by Medicare, the BFCC-QIO 
addresses quality of care issues for people with Medicare. There are 
various ways the BFCC-QIO can assist you: (a) verbally engaging 
providers on your behalf to seek quick resolution, known as Immediate 
Advocacy, or (b) by having an independent physician review of your 
medical documentation to determine if there was a quality issue.''
    8. Name and signature of Medicare hospice beneficiary (or 
representative) and date signed, along with a statement that signing 
this addendum (or its updates) is only acknowledgement of receipt of 
the addendum (or its updates) and not necessarily the beneficiary's 
agreement with the hospice's determinations.
    Finally, we are proposing to add the election statement addendum 
content requirements to the regulations at Sec.  418.24.
    As discussed and proposed above, the signed addendum (and any 
signed updates) would be a new condition for payment. This does not 
mean that in order to meet this condition for payment that the 
beneficiary (or representative), or non-hospice provider must agree 
with the hospice's determination. For purposes of this condition for 
payment, the signed addendum is only acknowledgement of the 
beneficiary's (or representative's) receipt of the addendum (or its 
updates) and this payment requirement would be met if there was a 
signed addendum (and any signed updates) in the requesting 
beneficiary's medical record with the hospice. This addendum would not 
be required to be submitted with any hospice claims. Likewise, the 
hospice beneficiary (or representative) would not have to separately 
consent to the release of this information to non-hospice providers 
furnishing services for unrelated conditions as the Health Insurance 
Portability and Accountability Act (HIPAA) Privacy Rule allows those 
doctors, nurses, hospitals, laboratory technicians, and other health 
care providers that are covered entities to use or disclose protected 
health information, such as X-rays, laboratory and pathology reports, 
diagnoses, and other medical information for treatment purposes without 
the patient's express authorization. This includes sharing the 
information to consult with other providers, including providers who 
are not covered entities, to treat a different patient, or to refer the 
patient (45 CFR 164.506).
    This hospice election statement addendum would only be required for 
Medicare hospice beneficiaries who request such information, though 
hospices may choose to provide this addendum to all of their hospice 
patients, regardless of payer source (after making appropriate 
adjustments for the specific payer). Hospices can determine which 
member of the IDG would be responsible for completing this addendum, 
but we would expect that this typically would be the function of the 
hospice registered nurse responsible for the patient's plan of care. As 
mentioned previously, hospices must designate a registered nurse (RN), 
who is a member of the IDG, to coordinate implementation of the 
comprehensive plan of care. The designated RN must assure that 
coordination of care and continuous assessment of patient, family, and 
caregiver needs occur among staff providing services to the patient, 
family, and caregiver so that all IDG members are kept informed of the 
patient/family/caregiver's status (Sec.  418.56(a)).
    While ideally this addendum would be provided to the requesting 
beneficiary (or representative) at the time of hospice election, we 
recognize that hospices may need some leeway to have discussion amongst 
the members of the IDG to finish developing the hospice plan of care. 
Therefore, we are proposing that the addendum would be required to be 
provided to the requesting beneficiary (or representative) within 48 
hours of the hospice election date; and the beneficiary would sign the 
addendum and receive a completed, signed copy at that time for his/her 
records. This is in alignment with the current CoP requirements at 
Sec.  418.54(a) stating that the hospice registered nurse must complete 
an initial assessment within 48 hours after the election of hospice 
care. Hospices would be exempt from completing this addendum if the 
beneficiary died within 48 hours of the election date of hospice care. 
The original beneficiary or representative-signed election statement 
and addendum would be included in the patient's hospice medical record 
as already required by the hospice CoPs at Sec.  418.104(a)(2).
    If the beneficiary (or representative) requests this addendum after 
admission to hospice, we are proposing that the hospice would provide 
the addendum immediately to the beneficiary (or representative), as 
this information should already be readily available in the 
beneficiary's hospice medical

[[Page 17596]]

record. Additionally, we are proposing that hospices would be required, 
upon request, to provide a copy of the addendum (with the list of non-
covered items, services and drugs) to non-hospice providers rendering 
services to the hospice beneficiary to support the hospice's 
determination that those items, services, or drugs are for unrelated 
conditions. Likewise, if there are any changes to the conditions, 
items, services, and/or drugs listed on the addendum that occur after 
the hospice election and during the course of hospice care, the hospice 
would update the addendum accordingly and the beneficiary would sign 
and date any updates to acknowledge that he/she has received the 
information. This would occur for both additions to and removal of any 
unrelated conditions, items, services, and/or drugs. However, we do not 
expect that additions to addendum would be a frequent occurrence. Body 
systems are interrelated and as an individual progresses closer to 
death, all care is related to the dying process and thus we would not 
expect to see unrelated conditions, items, services, or drugs routinely 
added to the addendum.
    While the proposed election statement addendum outlines the content 
requirements for the addendum, it does not mandate the use of a 
specific form. Hospices are able to design the addendum in the form or 
format that best meets their needs, assuming all content requirements 
are met. As there is currently a model election statement available in 
a MLN Matters[supreg] article, SE1631,\44\ we also will assist hospices 
in developing the addendum. If finalized, we would post a model 
election statement with the added content requirements, as well as a 
model addendum on the Hospice Center web page to help hospices in 
developing their addendums and thereby minimizing their costs.
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    \44\ https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnmattersarticles/downloads/se1631.pdf.
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    Furthermore, Part D plan sponsors currently have a prior 
authorization process in place for their member enrolled in hospice for 
the four categories of drugs (analgesics, anti-nausea, anti-anxiety, 
and laxatives) and a voluntary, standardized form was developed with 
industry input for hospices to submit to Part D plans in order to 
assist in: (1) Proactively avoiding a drug claim from rejecting at 
point-of-sale; (2) overriding a reject edit at point-of-sale; and (3) 
communicating a change in the a patient's hospice status.\45\ Hospices 
currently can use the standardized PA form as a means of notifying a 
Part D plan that their member has elected hospice care, as well as to 
document specific drugs that are or are not being covered by the 
hospice. As such, we intend to work with hospices and Part D plans to 
develop a process in which the ``Patient Notification of Hospice Non-
covered Items, Services and Drugs'' potentially could be used at the 
point-of-service when hospice beneficiaries are filling drug 
prescriptions to ensure timely access to needed drugs. Complete 
documentation on the part of the hospice, coupled with timely 
notification of Part D sponsors, mitigates the risk for possible double 
payment by the Medicare program for drugs, and is anticipated to 
prevent Part D enrollees in hospice from having a hospice-related 
medication billed by a pharmacy to their Part D plan, potentially 
subjecting the beneficiary to out-of-pocket expenses.
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    \45\ Hospice Information for Medicare Part D Plans, OMB-approved 
form (No. 0938-1269).
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    While the CoPs already require that information on unrelated 
conditions should be documented and communicated to beneficiaries and 
non-hospice providers (Sec.  418.56), we believe that making this a 
condition for payment will help to ensure that hospices are diligent in 
providing this information to Medicare hospice beneficiaries. It is 
important to note that the proposed modifications to the hospice 
election statement and the election statement addendum, ``Patient 
Notification of Hospice Non-Covered Items, Services, and Drugs,'' 
leverages existing hospice regulations, CoPs, and QIO requirements for 
hospices to:
     Identify those conditions and services present on hospice 
admission (and at plan of care update, as necessary) that the hospice 
has determined to be unrelated to the terminal illness and related 
conditions (Sec. Sec.  418.22, 418.54(c)(2), 418.102), as outlined in 
element 4 of the addendum as noted above;
     Inform the beneficiary and family about what is covered 
and not covered by the hospice on the plan of care (Sec. Sec.  418.52 
and 418.56(b)), as outlined in the proposed additional election 
statement content requirements and elements 3, 4, 5, and 6 of the 
addendum as noted above;
     Coordinate with providers that are providing care 
unrelated to the terminal illness and related conditions (Sec.  
418.56(e)(5)), as outlined in the proposed, additional election 
statement content requirements and elements 4, 5, and 6 of the addendum 
as noted above; Educate beneficiaries about their patient rights 
(Sec. Sec.  418.52(a) and 476.78(b)(3)), as outlined in the proposed, 
additional election statement content requirements and element 7 of the 
addendum as noted above.
    We believe that the election statement addendum will promote 
greater transparency regarding coverage under the Medicare hospice 
benefit, as well as informing the beneficiary as to those services they 
might need to seek outside of the hospice benefit. This would help in 
beneficiary decision-making regarding needed items, services, and 
drugs, and to determine the model of care that best meets their 
treatment preferences and goals of care. Likewise, we believe the 
addendum would provide information that would allow hospice 
beneficiaries to anticipate potential financial liability for health 
care services outside of the hospice benefit. Because hospices would 
have to provide a list and clinical rationale for those items, 
services, and drugs that they will not be covering because the hospice 
has determined them to be unrelated to the terminal illness and related 
conditions, to requesting hospice beneficiaries (or representatives), 
non-hospice providers rendering services to hospice beneficiaries, and/
or Medicare contractors, we believe this accountability may mitigate 
unnecessary financial burden for hospice beneficiaries. A primary goal 
of the election statement addendum is to hold hospices more accountable 
to hospice beneficiaries through benefit coverage transparency. 
Hospices should already be holistic and comprehensive in their approach 
to the provision of hospice services. We believe this proposal would be 
an incremental step in ensuring beneficiaries are receiving information 
regarding the full scope of Medicare hospice benefits. Subsequently, if 
the proposed addendum is finalized, we would continue to monitor 
hospice utilization trends, including non-hospice spending, to 
determine whether any additional changes may be warranted.
    As the hospice regulations and the CoPs already require the 
assessment and documentation of unrelated conditions as described 
throughout this section, we believe there is no increase in hospice 
burden resulting from this addendum requirement to communicate with 
non-hospice providers. Similarly, we believe the collection of 
information for the election statement and the addendum is already 
accounted for in the hospice CoP burden estimates in its information 
collection request (OMB control number: 0938-1067) that was re-

[[Page 17597]]

approved in November, 2017.\46\ However, we estimate a one-time hospice 
cost burden to develop the election statement addendum, as well as a 
small increase in the time spent to complete the addendum. This 
estimate is described in section IV of this proposed rule. We believe 
that this election statement addendum would serve to streamline 
existing regulatory requirements into a single tool for communicating 
with beneficiaries and their families, the beneficiary's designated 
independent attending physician (if any), as well as, with non-hospice 
providers furnishing items, services, and drugs to hospice 
beneficiaries. As the addendum should also be used to provide for an 
ongoing sharing of information with other non-hospice healthcare 
providers furnishing services unrelated to the terminal illness and 
related conditions, as required by the CoPs, it would likely minimize 
time spent by IDG members looking through a beneficiary's medical 
record to locate the information on unrelated conditions, items, 
services, and drugs when such information is requested by non-hospice 
providers.
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    \46\ https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201809-0938-005.
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    Furthermore, this addendum, if filled out completely, updated 
regularly, and shared proactively and in a timely manner with non-
hospice providers and pharmacies, would minimize multiple calls from 
non-hospice providers and pharmacies to the hospice requesting 
information on a patient's unrelated conditions, items, services, and 
drugs since the addendum would provide this comprehensive information 
in a practical, consistent, and useful format. In effect, this addendum 
would reduce burden for non-hospice providers because this addendum 
could assist in making treatment decisions and support the coding of an 
appropriate modifier or condition code on non-hospice claims for 
services unrelated to the terminal illness and related conditions. Non-
hospice providers providing services to hospice beneficiaries are 
required to report the following on Medicare claims to identify that 
the items or services were for the treatment of conditions unrelated to 
the terminal illness and related conditions:
     Institutional providers would submit a claim with 
condition code 07.
     Physicians would submit a claim with modifier GW.
    The election statement addendum may allow the non-hospice provider 
to be ``without fault'' if there is any question regarding an 
overpayment. In accordance with section 1870 of the Act, a provider is 
responsible for an overpayment if the provider knew or had reason to 
know that service(s) were not reasonable and necessary, and/or the 
provider did not follow correct procedures or use care in billing or 
receiving payment. If non-hospice providers have the addendum, this 
potentially could satisfy section 1870 of the Act in providing that the 
non-hospice provider did not have reason to know that the services were 
not reasonable and necessary (considering the service itself is 
reasonable and necessary and satisfies all other requirements for 
payment). Moreover, if a non-hospice provider submits a claim to 
Medicare for services provided to a beneficiary that are unrelated to 
the terminal illness and related conditions but does not have the 
supporting documentation that the services are unrelated, this could be 
considered a false claim under the False Claims Act.\47\ Having the 
addendum identifying the unrelated conditions, items, services, and 
drugs may provide the necessary documentation support that the non-
hospice provider was rendering services unrelated to the terminal 
illness and related conditions. Therefore, the addendum could assist in 
more accurate claims submission, mitigate potential duplicative 
payments, and provide non-hospice providers with documentation to 
support a ``without fault'' determination. To provide transparency in 
how we believe this addendum reduces non-hospice provider burden, we 
have included a burden reduction estimate in section IV of this 
proposed rule. While this burden estimate assumes that an itemized list 
would be requested by every hospice beneficiary (or representative) 
receiving non-hospice services, or by the non-hospice providers 
rendering these unrelated services, we believe the actual burden would 
be less as hospices are already required to be comprehensive in their 
approach to covered services. As such, there would be hospices that 
would not have to complete the addendum as the hospice would be 
providing all items, services, and drugs.
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    \47\ The False Claims Act, Title 3, section 3729. https://www.govinfo.gov/content/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf.
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    We note that this addendum is not to be used by hospices as a 
vehicle in which to exercise unlimited ability to determine services as 
unrelated to the terminal illness and related conditions. It has always 
been CMS' expectation that hospice would be providing virtually all of 
the care needed by terminally ill individuals (48 FR 56010). Similarly, 
in a 1993 HCFA (now CMS) ruling, ``Weight To Be Given To a Treating 
Physician's Opinion In Determining Medicare Coverage Of Inpatient Care 
In a Hospital Or Skilled Nursing Facility,'' we stated that even though 
a physician's opinion is very important in making treatment 
determinations, no presumptive weight should be assigned to the 
treating physician's medical opinion alone, as coverage decisions are 
not made solely on this opinion.\48\ That is, while the physician's 
determination carries great weight, other factors such as the condition 
of the patient upon admission, the nature of the principal diagnosis 
and the existence of comorbid conditions play an important role in 
coverage determinations. Hospices are to continue to make 
determinations about unrelated conditions, items, services, and drugs 
for each patient taking into account the needs, preferences and goals 
of the terminally ill individual and his or her family. In doing so, 
hospices are to conduct a thoughtful review of all of the beneficiary's 
conditions, related and unrelated to the terminal illness and related 
conditions, and current clinically relevant information supporting all 
diagnoses as required by regulation at Sec.  418.25. This process 
requires clinical judgment in which hospices need to consider clinical 
practice guidelines and relevant research when making determinations of 
whether items, services, and drugs are related or unrelated to the 
terminal illness and related conditions.
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    \48\ HCFA Ruling No. 93-1, ``Weight to Be Given to a Treating 
Physician's Opinion in Determining Medicare Coverage of Inpatient 
Care in a Hospital or Skilled Nursing Facility,'' May, 1993. https://www.cms.gov/Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/Downloads/HCFAR931v508.pdf.
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    We believe that the proposed election statement addendum, as a 
condition for payment, will achieve the goal of increasing 
comprehensive patient education, awareness, empowerment, and coverage 
transparency by:
     Providing information to the beneficiary (or 
representative), upon request, regarding those conditions, items, 
services, and drugs not covered by the hospice in an uncomplicated 
written format;
     Promoting informed consent;
     Encouraging discussion between the hospice and the 
terminally ill individual and their family regarding hospice covered 
and non-covered conditions, items, services, and drugs;
     Safeguarding patient rights and protecting the integrity 
of the hospice benefit by informing beneficiaries of an already 
established process through

[[Page 17598]]

which they are able to receive BFCC-QIO Immediate Advocacy to dispute 
the hospice's determination regarding non-covered items and services 
for unrelated conditions when the beneficiary thinks they might be 
related;
     Providing a communication mechanism between hospice and 
non-hospice providers to help ensure benefit coordination for 
terminally ill patients.
    This proposal outlines the modifications to the election statement 
content requirements and the required elements of the election 
statement addendum that we would require; we expect that hospices 
should already be complying with the existing, underlying coverage 
requirements. We are soliciting public comment on all aspects of the 
proposed modifications to the election statement content requirements, 
and the proposed election statement addendum, ``Patient Notification of 
Hospice Non-Covered Items, Services, and Drugs,'' as described in this 
section as well as the corresponding proposed revision to the 
regulations at Sec.  418.24(b) in section VI of this proposed rule.

D. Request for Information Regarding the Role of Hospice and 
Coordination of Care at End-of-Life

    The Medicare hospice benefit is currently only available as part of 
traditional, fee-for-service (FFS) Medicare as hospice care is excluded 
from the scope of what Medicare Advantage (MA) plans must offer under 
section 1852(a)(1)(B)(i) of the Act. MA enrollees that are eligible for 
and elect the hospice benefit remain in their MA plan, but receive 
hospice care through traditional FFS Medicare. In turn, CMS pays 
hospice organizations directly for hospice services based on the FFS 
payment system. Generally, following the month the enrollee elects 
hospice, CMS pays the MA plan the rebate amount, but not the risk-
adjusted capitated amount for Part A and Part B services. The MA plan 
remains responsible for the provision of supplemental benefits, and in 
the case of an MA-PD, Part D drugs that the hospice has determined are 
unrelated to the enrollee's terminal illness and related conditions. 
However, if the beneficiary requires items, services, or non-Part D 
drugs that the hospice has determined to be unrelated to the 
beneficiary's terminal illness and related conditions, then the costs 
for any treatment are borne by Medicare FFS rather than the MA plan in 
accordance with the MA program's special rules for hospice care at 
Sec. Sec.  422.320(c)(3) and 417.585. Incorporating hospice into other 
kinds of care delivery models may be a way of alleviating the payment 
fragmentation described above.
    As outlined above, the Medicare hospice benefit is currently only 
available as part of traditional FFS Medicare. As part of delivery 
system transformation, we seek information on the interaction of the 
hospice benefit and various alternative care delivery models, including 
MA, Accountable Care Organizations (ACOs), and other future models 
designed to change the incentives in providing care under traditional 
FFS Medicare. Finally, we seek information on the impact of alternative 
delivery and payment models implemented outside of the Medicare program 
on the provision of hospice care and any lessons learned that we should 
consider for the future design of the Medicare hospice benefit. The 
questions and complexities around incorporating hospice into MA are 
indicative of the operational considerations that would need to be 
addressed around any long-term programmatic change, especially with 
regards to other contexts, such as ACOs or other models or changes 
within the Medicare hospice benefit to adapt to a changing payor mix 
and environment. For example, with respect to MA, unless an alternative 
approach to building hospice into the current bid for Part A and B 
services were followed, county benchmarks and the risk adjustment model 
would need to be revised to incorporate the cost of these 
beneficiaries. Additionally, although alternative network approaches 
might be considered, incorporating hospice into MA could result in MA 
plans only contracting with a subset of local hospices, thereby 
potentially limiting patient access and choice, and network adequacy 
standards would need to be developed by CMS. Additionally, given that 
CMS cannot and should not interfere in the contracting process between 
MA plans and their contracted providers, if hospice providers agree to 
payment rates that are lower than what Medicare currently pays that may 
result in changes in the quantity and types of services provided. One 
way managed care or value-based arrangements could address these issues 
may be to construct payments for hospice care such that they align 
closely with how hospices are paid under traditional FFS Medicare.
    We note that we are testing ways to incorporate hospice into other 
kinds of care delivery models to alleviate payment fragmentation. One 
approach is to test incorporating hospice into MA under the CMS 
Innovation Center's authority (section 1115A of the Social Security 
Act). Under this voluntary model, beginning in 2021, MA enrollees in 
participating plans will have hospice care provided through their 
chosen MA plan. Through this RFI, we are seeking public comments on 
other broader approaches, beyond the model noted above, regarding the 
appropriate role of hospice as part of the care options available. 
Specifically, we are seeking public comments on how hospice under 
Medicare FFS relates to other treatment options, how it impacts the 
provision of a spectrum of care for those that need supportive and 
palliative care before becoming hospice eligible and after, and whether 
rates of live discharge are a reflection of the current structure of 
Medicare FFS. We are also seeking comment on any care coordination 
differences for hospice patients that received Medicare through 
traditional FFS prior to hospice election, were enrolled in an MA plan 
prior to hospice election, or received care from providers that 
participate in an Accountable Care Organization (ACO) prior to hospice 
election. Finally, we are soliciting public comments on the pros and 
cons of including hospice services as the part of the benefits provided 
in value-based or capitated payment arrangements given that some 
hospices likely have experience with ACOs and experience with Medicaid 
managed care when providing hospice care through the Medicaid program, 
as well as experience in providing hospice care to patients enrolled in 
``commercial coverage'' (non-Medicare/Medicaid managed care plans). We 
believe the information gathered under this RFI will help to inform: 
(1) Future CMS payment models; (2) the role hospice with respect to 
ACOs; and (3) our general understanding of the traditional FFS hospice 
environment in relation to the increasing penetration of managed care 
through the MA program.

E. Updates to the Hospice Quality Reporting Program (HQRP)

1. Background and Statutory Authority
    The Hospice Quality Reporting Program includes meeting the 
reporting requirements for both the Hospice Item Set (HIS) and Consumer 
Assessment of Healthcare Providers and Systems (CAHPS[supreg]) Hospice 
Survey. Section 3004(c) of the Affordable Care Act amended section 
1814(i)(5) of the Act to authorize a quality reporting program for 
hospices. Section 1814(i)(5)(A)(i) of the Act requires that beginning 
with FY 2014 and each subsequent FY, the Secretary shall reduce the 
market basket update by 2 percentage points for any hospice that does 
not comply with the quality data submission requirements for that FY. 
Depending on the amount

[[Page 17599]]

of the annual update for a particular year, a reduction of 2 percentage 
points could result in the annual market basket update being less than 
0 percent for a FY and may result in payment rates that are less than 
payment rates for the preceding FY. Any reduction based on failure to 
comply with the reporting requirements, as required by section 
1814(i)(5)(B) of the Act, would apply only for the particular year 
involved. Any such reduction would not be cumulative nor be taken into 
account in computing the payment amount for subsequent FYs. Section 
1814(i)(5)(C) of the Act requires that each hospice submit data to the 
Secretary on quality measures specified by the Secretary. The data must 
be submitted in a form, manner, and at a time specified by the 
Secretary.
2. Update to Quality Measure Development for Future Years
    As stated in the FY 2019 Hospice Wage Index and Payment Rate Update 
and Hospice Quality Reporting Requirements (83 FR 38622), we launched 
the Meaningful Measures initiative (which identifies high priority 
areas for quality measurement and improvement) to improve outcomes for 
patients, their families, and providers while also reducing burden on 
clinicians and providers. Meaningful Measures initiative is not 
intended to replace any existing programs, but will help programs 
identify and select individual measures. Meaningful Measure Initiative 
areas are intended to increase measure alignment across our programs 
and other public and private initiatives. Additionally, it will point 
to high priority areas where there may be gaps in available quality 
measures while helping guide our efforts to develop and implement 
quality measures to fill those gaps. More information about the 
Meaningful Measures initiative can be found at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    The Meaningful Measures initiative fits well with the HQRP since it 
has changed little since we began with FY 2014 Hospice Wage Index and 
Payment Rate Update final rule, (76 FR 26806). The Meaningful Measures 
initiative enables us to review HQRP to close the gaps in quality 
measures to reflect the hospice industry as it has progressed to meet 
hospice care, including symptom management for its patients regardless 
of where hospice care is provided.
    In the FY 2014 Hospice Wage Index and Payment Rate Update final 
rule (78 FR 48257), and in compliance with section 1814(i)(5)(C) of the 
Act, we finalized the specific collection of data items that support 
the following 7 National Quality Forum (NQF)-endorsed measures for 
hospice:
     NQF #1617 Patients Treated with an Opioid who are Given a 
Bowel Regimen,
     NQF #1634 Pain Screening,
     NQF #1637 Pain Assessment,
     NQF #1638 Dyspnea Treatment,
     NQF #1639 Dyspnea Screening,
     NQF #1641 Treatment Preferences,
     NQF #1647 Beliefs/Values Addressed (if desired by the 
patient).
    We finalized the following two additional measures in the FY 2017 
Hospice Wage Index and Payment Rate Update final rule, effective April 
1, 2017. Data collected will, if not reported, affect payments for FY 
2019 and subsequent years. (81 FR 52163 through 52173):
     Hospice Visits when Death is Imminent,
     Hospice and Palliative Care
    Composite Process Measure--Comprehensive Assessment at Admission. 
The Hospice and Palliative Care Composite Process Measure--
Comprehensive Assessment at Admission measure (hereafter referred to as 
``the Hospice Comprehensive Assessment Measure'') underwent an off-
cycle review by the NQF Palliative and End-of-Life Standing Committee 
and successfully received NQF endorsement in July 2017.
    Data for the ``Hospice Visits when Death is Imminent'' measure pair 
is being collected using new items added to the HIS V2.00.0, effective 
April 1, 2017.
    Our goal is to identify measures that provide a window into hospice 
care throughout the dying process, fit well with the hospice business 
model, and meet the objectives of the Meaningful Measures initiative. 
Quality measures should provide timely, understandable, comprehensive, 
clinically valid, and meaningful feedback to hospice leadership, all of 
its staff, and their different teams regardless of the hospice setting 
where care is provided. We seek public input on measure concepts and/or 
actual quality measures along with public comment on the discussions 
presented below.
a. Claims-Based and Outcome Quality Measure Development for Future 
Years
    As part of Meaningful Measures initiative, we seek to develop 
claims-based and outcome measures as part of the future for the HQRP. 
While we acknowledge that there are limitations of using claims data as 
a source for measure development, there are several advantages to using 
claims data as part of a robust hospice quality reporting program. 
Claims-based measures place minimal burden on providers as they do not 
require additional data collection and data submission. Furthermore, in 
contrast to self-reported data that are dependent on hospice, patient, 
or caregiver participation, claims data has the benefit of following a 
relatively consistent format and of using a standard set of pre-
established codes that describe specific diagnoses, procedures, and 
drugs. Additionally, nearly every encounter that a patient has with the 
healthcare system leads to the generation of a claim, creating an 
abundant and standardized source of patient information. This makes 
claims data widely available, relatively inexpensive, and amenable to 
analysis because they are readily available in an electronic format.
    Medicare is the largest payer of hospice services and Medicare-
certified providers predominate in hospice so it makes good sense to 
use claims data to reflect hospice care. Further, other settings, such 
as the Inpatient Quality Reporting Program (QRP) and the post-acute 
care (PAC) QRPs, have adopted claims-based measures, and the NQF has 
endorsed claims-based measures and believes they can capture quality 
even when not directly assessing clinical care. Although claims data 
have some limitations, such as incomplete reflection of care processes 
and patient outcomes, they will continue to be a valuable and important 
source of data for quality reporting for a selected set of metrics and 
as part of a hospice quality reporting program that includes other 
measures, such as HIS and CAHPS[supreg] Hospice Survey.
    While not mutually exclusive of claims-based measures, we also seek 
to develop outcome measures as part of the Meaningful Measures 
initiative. Outcome measures could help with improving pain and symptom 
management, which is core to hospice care. They could also help 
identify the value of different staff providing care at different times 
in hospice. For these reasons, we plan to explore the development of 
other claims-based and outcome measures for the HQRP to work toward the 
high priority areas of reducing regulatory burden and identifying gaps 
in care. In identifying high priority areas for future measure 
enhancement and development, CMS takes into consideration input from 
all stakeholders including; Measures Application Partnership (MAP); the 
Office of the Inspector General (OIG); the Medicare Payment Advisory 
Commission (MedPAC); Technical

[[Page 17600]]

Expert Panels (TEP); issues raised through the Beneficiary and Family-
Centered Care Quality Improvement Organization; and national 
priorities, such as those established by the National Priorities 
Partnership, the HHS Strategic Plan, the National Strategy for Quality 
Improvement in Healthcare, the CMS Quality Strategy, the Meaningful 
Measures initiative and the general public, such as through rulemaking. 
In addition, CMS considers feedback and input from published research 
and reports. We are not proposing any claims-based or outcome measures 
at this time. However, we are soliciting public comments and 
suggestions related to ideas for future claims-based and outcome 
measure concepts and quality measures in the HQRP that could also be 
tied to the goals of the Meaningful Measures initiative.
b. Update on Claims-Based Measure Development
    The FY 2018 Hospice Wage Index and Payment Rate Update and Hospice 
Quality Reporting Requirements, (82 FR 36638), noted that, based on 
input from stakeholders, CMS has identified two ``high priority'' areas 
that will be addressed by claims-based measure development: Potentially 
avoidable hospice care transitions and access to levels of hospice 
care. The potentially avoidable hospice care transitions concept was 
developed as a measure under consideration called Transitions from 
Hospice Care, Followed by Death or Acute Care. The goal of this measure 
is to identify hospices that have notably higher rates of live 
discharges followed shortly by death or acute care utilization, when 
compared to their peers. Details about this measure can be found in the 
FY 2017 Hospice Wage Index and Payment Rate Update and the NQF website, 
http://www.qualityforum.org/map/, where it went on the measures under 
consideration (MUC) list in July 2018 and was reviewed by the MAP in 
December 2018. At this time, we are revisiting the potentially 
avoidable hospice care transitions. While MAP did not support the 
measure as specified, MAP recognized the impact that care transitions 
at the end of life can have on patients and suggested a number of ways 
MAP's concerns with the measure could be mitigated. Areas that the MAP 
recommended included reconsidering the exclusion criteria for the 
measure. Specifically, the exclusion for Medicare Advantage patients 
should be reviewed as this may be excluding too many patients. 
Additionally, the MAP suggested adding an exclusion to allow for 
patient choice, as there are a number of reasons a patient may choose 
to transition from hospice. For example, a patient may choose to pursue 
additional curative treatment, have cultural beliefs that influence the 
definition of a good death, have limited access to primary care, or may 
need to revoke the hospice benefit to avoid a financial penalty for 
seeking more acute care. MAP also noted that the measure may provide 
more useful information if it separates out the concepts addressed in 
the measure, as the measure may be trying to address different concepts 
by including both death within 30 days and admission to an acute care 
use within 7 days. The MAP also requested to consider shortening the 
timeframe for the measure, MAP 2019 Considerations for Implementing 
Measures in Federal Programs: Post-Acute Care and Long-Term Care, Final 
Report February 15, 2019, https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=89400.
    The access to levels of hospice care measure concept is also 
detailed in the FY 2018 Hospice Wage Index and Payment Rate Update. 
After further analyses, it was determined that this measure concept as 
currently specified could result in hospices providing higher levels of 
care when it is not required by the plan of care or expected by CMS. We 
remain committed to developing claims-based measures that meet high 
priority areas and are rethinking both measures based on feedback from 
the MAP and our analyses. We are seeking public comment on ways to 
further develop these two measure concepts and different measure 
concepts that fall under these high priority areas.
c. Update on the Hospice Assessment Tool
    We discussed the plan to develop a hospice assessment tool in the 
FY 2018 Hospice Wage Index and Payment Rate Update and Hospice Quality 
Reporting Requirements, (82 FR 36638). A technical expert panel on 
development of such an assessment tool was held in October 2017 
followed by a pilot study that began with training 9 hospice sites in 
December 2017. We are sincerely thankful for and appreciative of the 9 
Medicare hospices that participated in the pilot study. We learned much 
from them during the pilot study and afterwards in lessons learned 
interviews. Information from that pilot study, referred to as Pilot A, 
can be found on the HQRP website at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HEART.html. We also discussed Pilot A findings, lessons 
learned, and goals of a hospice assessment tool at the September 2018 
special open door forum (SODF). The transcript for that SODF can be 
found at, https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts.html. Key concepts in developing a 
hospice assessment tool include understanding the care needs of people 
through the dying process and ensuring the safety and comfort of 
individuals enrolled in hospice institutions nationwide. Currently we 
collect data at admission and discharge via HIS that are used to 
calculate measures in the HQRP. We would like to replace HIS and 
capture data with a hospice assessment instrument in order to bridge 
the gap to achieve a fuller understanding of patient care needs. While 
it must be recognized that hospice care differs from other PAC 
settings, there is a need to create a comprehensive assessment 
instrument for hospice care to align with other PAC settings, where 
feasible and practical. As such, objectives of a comprehensive 
assessment instrument must include the ability to establish goals of 
care that embrace the individual's values and preferences, and are 
consistent with a person-centered approach that values the person and 
caregiver in the care continuum with an emphasis on physical, 
psychosocial, spiritual, and emotional support. We continue our 
commitment to engaging stakeholders at regular SODF meetings and/or 
other means like the HQRP website, open door forums (ODF), webinars, 
and other sub-regulatory means.
    One of the requests raised at the September 2018 SODF was to change 
the name of the hospice assessment tool from Hospice Evaluation 
Assessment Reporting Tool (HEART) to a name that is not as easily 
confused with other HQRP related tools like the Hospice Abstraction 
Reporting Tool (HART). We agree with this feedback since people refer 
to both by their same sounding acronyms and seek public comment on the 
name for the hospice assessment tool.
    We will keep providers informed about future measure and assessment 
tool development efforts and solicit key stakeholder input through 
regular sub-regulatory channels. Additionally, future measure concepts 
under development, including details regarding measure definitions, 
data sources, data collection approaches, and timeline for 
implementation will be communicated in future rulemaking.

[[Page 17601]]

3. Form, Manner, and Timing of Quality Data Submission
a. Background
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
Such data must be submitted in a form and manner, and at a time 
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act 
requires that beginning with the FY 2014 and for each subsequent FY, 
the Secretary shall reduce the market basket update by 2 percentage 
points for any hospice that does not comply with the quality data 
submission requirements for that FY.
b. Update on the CMS System for Reporting Quality Measures and 
Standardized Patient Assessment Data and Associated Procedural 
Proposals
    Hospices are currently required to submit HIS data to CMS using the 
Quality Improvement and Evaluation System (QIES) Assessment and the 
Submission Processing (ASAP) system. We will be migrating to a new 
internet Quality Improvement and Evaluation System (iQIES) as soon as 
FY 2020 that will enable us to make real-time upgrades, and we are 
designating that system as the data submission system for the Hospice 
QRP. Effective October 1, 2019, we are proposing to notify the public 
of any changes to the CMS-designated system in the future using sub-
regulatory mechanisms such as web page postings, listserv messaging, 
and webinars. We are inviting public comment on this proposal.
4. CAHPS[supreg] Hospice Survey Participation Requirements for the FY 
2023 APU and Subsequent Years
a. Background and Description of the CAHPS[supreg] Hospice Survey
    The CAHPS[supreg] Hospice Survey is a component of the CMS HQRP 
which is used to collect data on the experiences of hospice patients 
and the primary caregivers listed in their hospice records. Readers who 
want more information about the development of the survey, originally 
called the Hospice Experience of Care Survey, may refer to 79 FR 50452 
and 78 FR 48261. National implementation of the CAHPS[supreg] Hospice 
Survey commenced January 1, 2015 as stated in the FY 2015 Hospice Wage 
Index and Payment Rate Update final rule (79 FR 50452).
b. Overview of the CAHPS[supreg] Hospice Survey Measures
    The CAHPS[supreg] Hospice Survey measures received NQF endorsement 
on October 26th, 2016 (NQF #2651). We adopted these 8 survey based 
measures for the CY 2018 data collection period and for subsequent 
years. These 8 measures are reported on Hospice Compare.
c. Data Sources
    We previously finalized the participation requirements for the FY 
2020, FY 2021, and FY 2022 APUs (see 82 FR 36673). We propose to extend 
the same participation requirements for the HQRP for FY 2023 and all 
future years. As part of the Patients Over Paperwork initiative, we 
solicit comments about the CAHPS Hospice Survey questionnaire. We seek 
comments regarding suggested changes, additions or deletions to the 
instrument that would improve its value to hospices for quality 
improvement and consumers for selecting a hospice.
d. Public Reporting of CAHPS[supreg] Hospice Survey Results
    We began public reporting of the results of the CAHPS[supreg] 
Hospice Survey on Hospice Compare as of February 2018. We report the 
most recent 8 quarters of data on the basis of a rolling average, with 
the most recent quarter of data being added and the oldest quarter of 
data removed from the averages for each data refresh. We refresh the 
data 4 times a year in the months of February, May, August, and 
November.
e. Volume-Based Exemption for CAHPS[supreg] Hospice Survey Data 
Collection and Reporting Requirements
    We previously finalized a volume-based exemption for CAHPS[supreg] 
Hospice Survey Data Collection and Reporting requirements in the FY 
2017 Hospice Wage Index and Payment Rate Update final rule (82 FR 
36671). We propose to continue our policy for a volume-based exemption 
for CAHPS[supreg] Hospice Survey Data Collection for FY 2021 and every 
year thereafter. For example, for the FY 2021 APU, hospices that have 
fewer than 50 survey eligible decedents/caregivers in the period from 
January 1, 2018 through December 31, 2018 (reference year) are eligible 
to apply for an exemption from CAHPS[supreg] Hospice Survey data 
collection and reporting requirements (corresponds to the CY 2019 data 
collection period). To qualify, hospices must submit an exemption 
request form for the FY 2021 APU. The exemption request form is 
available on the official CAHPS[supreg] Hospice Survey website: http://www.hospiceCAHPSsurvey.org. Hospices that intend to claim the size 
exemption are required to submit to CMS their completed exemption 
request form covering their total unique patient count for the 
reference year (for the CY 2019 data collection period the reference 
year is January 1, 2018 through December 31, 2018). The due date for 
submitting the exemption request form for the FY 2021 APU is December 
31, 2019. Exemptions for size are active for 1 year only. If a hospice 
continues to meet the eligibility requirements for this exemption in 
future FY APU periods, the organization needs to request the exemption 
annually for every applicable FY APU period by the final day of the 
calendar year. Subsequent periods will follow the same pattern of using 
the year before the data collection year as the reference year for 
determining eligibility.
    Starting with FY 2022 we propose to provide an automatic exemption 
to any hospice that (1) is an active agency and (2) according to CMS 
data sources has served less than a total of 50 unique decedents/
caregivers in the reference year. The automatic exemption is good for 1 
year and will be reassessed in subsequent years. Hospices with fewer 
than 50 unique decedents/caregivers in the reference year would not be 
required to submit an exemption request form.
    Hospices that have a total patient count of more than 50 unique 
decedents/caregivers in the reference year, but who have a total of 
fewer than 50 survey-eligible decedents/caregivers will not be granted 
an automatic exemption. For example, hospices may have more than 50 
unique decedents/caregivers, but have some decedents/caregivers who are 
not eligible to be sampled for the CAHPS Hospice Survey, which would 
therefore lead to fewer than 50 survey-eligible decedents/caregivers. 
Such hospices may qualify for a size exemption. To do so, they must 
apply for a size exemption by submitting the size exemption request 
form as outlined above. This exemption is valid for 1 year only. If the 
hospice remains eligible for the size exemption, it must request the 
exemption annually for every applicable FY APU period. We solicit 
feedback on these proposals.

[[Page 17602]]



                             Table 16--Size Exemption Key Dates 2021 Through FY 2025
----------------------------------------------------------------------------------------------------------------
                                             Data
              Fiscal year                 collection    Reference year   Size exemption form submission deadline
                                             year
----------------------------------------------------------------------------------------------------------------
FY 2021...............................            2019            2018  December 31, 2019.
FY 2022...............................            2020            2019  December 31, 2020.
FY 2023...............................            2021            2020  December 31, 2021.
FY 2024...............................            2022            2021  December 31, 2022.
FY 2025...............................            2023            2022  December 31, 2023.
----------------------------------------------------------------------------------------------------------------

f. Newness Exemption for CAHPS[supreg] Hospice Survey Data Collection 
and Reporting Requirements
    We previously finalized a one-time newness exemption for hospices 
that meet the criteria as stated in the FY 2017 Hospice Wage Index and 
Payment Rate Update final rule (81 FR 52181). In the FY 2019 Hospice 
Wage Index and Payment Rate Update final rule (83 FR 38642), we 
continued the newness exemption for FY 2023, FY 2024, FY 2025, and all 
future years. We encourage hospices to keep the letter they receive 
providing them with their CCN. The letter can be used to show when you 
received your number.
g. Survey Participation Requirements
    We previously finalized survey participation requirements for FY 
2022 through FY 2025 as stated in the FY 2018 and FY 2019 Hospice Wage 
Index and Payment Rate Update final rules (82 FR 36670 and 83 FR 38642 
through 38643). We propose to continue those requirements in all 
subsequent years. Below we reprint the Hospice Survey data submission 
dates finalized in the FY 2019 Hospice Wage Index and Payment Rate 
Update final rule (83 FR 38643).

------------------------------------------------------------------------
                                        CAHPS[supreg] quarterly data
Sample months (month of death) \1\        submission deadlines \2\
------------------------------------------------------------------------
                               FY 2023 APU
------------------------------------------------------------------------
CY January-March 2021 (Quarter 1).  August 11, 2021.
CY April-June 2021 (Quarter 2)....  November 10, 2021.
CY July-September 2021 (Quarter 3)  February 9, 2022.
CY October-December 2021 (Quarter   May 11, 2022.
 4).
------------------------------------------------------------------------
                               FY 2024 APU
------------------------------------------------------------------------
CY January-March 2022 (Quarter 1).  August 10, 2022.
CY April-June 2022 (Quarter 2)....  November 9, 2022.
CY July-September 2022 (Quarter 3)  February 8, 2023.
CY October-December 2022 (Quarter   May 10, 2023.
 4).
------------------------------------------------------------------------
                               FY 2025 APU
------------------------------------------------------------------------
CY January-March 2023 (Quarter 1).  August 9, 2023.
CY April-June 2023 (Quarter 2)....  November 8, 2023.
CY July-September 2023 (Quarter 3)  February 14, 2024.
CY October-December 2023 (Quarter   May 80, 2024.
 4).
------------------------------------------------------------------------
\1\ Data collection for each sample month initiates 2 months following
  the month of patient death (for example, in April for deaths occurring
  in January).
\2\ Data submission deadlines are the second Wednesday of the submission
  months, which are the months August, November, February, and May.

    For further information about the CAHPS[supreg] Hospice Survey, we 
encourage hospices and other entities to visit: https://www.hospiceCAHPSsurvey.org. For direct questions, contact the 
CAHPS[supreg] Hospice Survey Team at [email protected] or 
telephone 1-844-472-4621.
5. Public Display of Quality Measures and Other Hospice Data for the 
HQRP
a. Background
    Under section 1814(i)(5)(E) of the Act, the Secretary is required 
to establish procedures for making any quality data submitted by 
hospices available to the public. These procedures shall ensure that a 
hospice has the opportunity to review the data that is to be made 
public prior to such data being made public; the data will be available 
on our public website.
    To meet the Act's requirement for making quality measure data 
public, we launched the Hospice Compare website in August 2017. This 
website allows consumers, providers, and other stakeholders to search 
for all Medicare-certified hospice providers and view their information 
and quality measure scores. Since its release, the CMS Hospice Compare 
website has reported 7 HIS Measures (NQF #1641, NQF #1647, NQF #1634, 
NQF #1637, NQF #1639, NQF #1638, and NQF #1617). In February 2018, 
CAHPS[supreg] Hospice Survey measures (NQF #2651) were added to the 
website, and in November 2018, the Hospice and Palliative Care 
Composite Process Measure--Comprehensive Assessment at Admission (NQF 
#3235) was added to the website.
b. Update to Quality Measures To Be Displayed on Hospice Compare in FY 
2019
1. Background and Description of ``Hospice Visits When Death Is 
Imminent'' Measure Pair
    In the FY 2017 Hospice Wage Index and Payment Rate Update (81 FR 
52163 to 52169, August 6, 2016), we finalized the ``Hospice Visits when 
Death is Imminent'' measure pair for

[[Page 17603]]

implementation April 1, 2017. This measure pair assesses whether the 
needs of hospice patients and their caregivers were addressed by the 
hospice staff during the last days of life. The ``Hospice Visits when 
Death is Imminent'' measure pair is made up of two measures, Measure 1 
and Measure 2. Measure 1 of the pair assesses the percentage of 
patients receiving at least 1 visit from a registered nurse, physician, 
nurse practitioner, or physician assistant in the last 3 days of life. 
Measure 2 assesses the percentage of patients receiving at least 2 
visits from social workers, chaplains or spiritual counselors, licensed 
practical nurses, or aides in the last 7 days of life.
2. Update to Public Reporting of the ``Hospice Visits When Death Is 
Imminent'' Measure Pair
    As stated in the FY 2019 Hospice Wage Index and Payment Rate Update 
and Hospice Quality Reporting Requirements (83 FR 38643 to 38645, 
August 6, 2018), quality measures are added to Hospice Compare once 
they meet the readiness standards for public reporting, which is 
determined through rigorous testing for reliability, validity, and 
reportability. Since the proposal of the ``Hospice Visits when Death is 
Imminent'' measure pair, CMS has conducted further measure testing 
activities according to National Quality Forum (NQF) guidelines and the 
Blueprint for the CMS Measures Management System Version 14.0 available 
at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/Downloads/BlueprintVer14.pdf. This testing is conducted 
to ensure that measures demonstrate scientific acceptability (including 
reliability and validity) and meet the goals of the HQRP, which include 
distinguishing performance among hospices and contributing to better 
patient outcomes.
    As we assessed the scientific acceptability of ``Hospice Visits 
when Death is Imminent'' measure pair, we determined that Measure 1 
meets established standards for reliability, validity, and 
reportability. Therefore, the measure will be publicly reported in FY 
2019 as stated in the FY 2019 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements (83 FR 38645 to 
38648). Our testing of Measure 2 of the ``Hospice Visits when Death is 
Imminent'' measure pair (referred to as Measure 2) revealed that the 
measure does not meet readiness standards for public reporting at this 
time and additional testing is needed before we are able to make a 
decision on the public reporting of Measure 2. Therefore, we have 
decided not to publish Measure 2 of the ``Hospice Visits when Death is 
Imminent'' measure pair at this time. See our discussion on our 
website: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Public-Reporting-Background-and-Announcements.html for more information.
    Although Measure 2 will not be publicly reported at this time, we 
believe that Measure 2 focuses on an important aspect of quality care 
for imminently dying patients. Therefore, we will include quality 
performance data on the measure in each hospice's confidential Quality 
Measure Reports and the Review and Correct Report available on the 
Certification and Survey Provider Enhanced Reporting (CASPER) system. 
Hospices will also still receive credit for reporting on Measure 2 as 
part of the HQRP requirements. Furthermore, Measure 2 aligns with our 
Meaningful Measures initiative and its quality priorities, particularly 
``Strengthen Person and Family Engagement as Partners in Their Care--
End of Life Care according to Preferences.'' While Measure 1 of the 
``Hospice Visits when Death is Imminent'' measure pair (referred to as 
Measure 1) addresses case management and clinical care, Measure 2, 
which includes visits from social workers, chaplains or spiritual 
counselors, licensed practical nurses, and aides, recognizes providers' 
flexibility to provide individualized care from a variety of 
disciplines that is in line with the patient, family, and caregiver's 
preferences and goals for care and contributes to the overall well-
being of the individual and others important to them at the end of 
life. As such, we believe that Measure 2 addresses a high-priority 
measure area where there is significant opportunity for improvement, as 
well as is meaningful to patients, clinicians, and providers alike.
    We will conduct additional testing on Measure 2 to determine if and 
how the measure specifications may be modified or re-specified, and/or 
if the method for displaying the measure may be adjusted, so that this 
measure meets the highest standards of scientific acceptability and 
reportability. Additional testing will also ensure that Measure 2 is 
thoroughly evaluated to determine that it meets the criteria for 
display on Hospice Compare.
    The results of the additional testing will inform the next steps 
regarding the public reporting of Measure 2 of ``Hospice Visits when 
Death is Imminent'' measure pair. As stated in the FY 2019 Hospice Wage 
Index and Payment Rate Update and Hospice Quality Reporting 
Requirements (83 FR 38643), we will inform providers of updates to 
testing and public reporting of quality measures, including Measure 2 
of the ``Hospice Visits when Death is Imminent'' measure pair, through 
sub-regulatory channels and regular HQRP communication strategies, such 
as Open Door Forums, Medicare Learning Network, CMS.gov website 
announcements, listserv messaging, and other opportunities.
    While we have decided not to publicly report Measure 2 of the 
``Hospice Visits when Death is Imminent'' measure pair on the Provider 
Preview Reports and Hospice Compare at this time, the measure will 
remain on provider's CASPER Quality Measure (QM) Reports. CASPER QM 
Reports are intended for providers' internal use and are meant to aid 
hospices in quality improvement efforts. Although the measure will not 
be publicly reported at this time, we believe that it is important for 
providers to internally review and be informed by these data, to ensure 
that they are providing their patients and caregivers the 
individualized support they need in the patients' last days of life. 
Our decision not to publicly report Measure 2 of the ``Hospice Visits 
when Death is Imminent'' measure pair at this time is distinct from our 
interest in continuing collecting these data. Specifically, these data 
are needed to determine whether a measure meets all the criteria for 
public reporting. Continued data collection will enable us to test and 
modify or re-specify a measure so that these criteria are satisfied. We 
seek to balance these data collection effort with the section 
1814(i)(5)(E) of the Act, which states, ``The Secretary shall report 
quality measures that relate to hospice care provided by hospice 
programs on the internet website of the Centers for Medicare & Medicaid 
Services.'' We believe that information required for the robust 
analyses to further develop this measure, modify or re-specify it to 
allow for public reporting justifies continuing data collection.
    The data collection and submission requirements for the ``Hospice 
Visits When Death is Imminent'' measure pair will not change in order 
to collect the data for measure 1, which will be publicly reported 
beginning with FY 2019. Measure 2, which will not be publicly reported 
at this time, needs to be further evaluated for modification or re-
specification. Measure 2 of ``Hospice Visits when Death is Imminent'' 
measure pair is calculated using items

[[Page 17604]]

O5010, O5020 and O5030 from the HIS V2.00.0. These items collect data 
on hospice visits in the final 3 days of life, level of care in the 
final 7 days of life, and hospice visits in the three to six days prior 
to death. Because the measure is not being removed from the HQRP, 
providers should continue to complete these items accurately and 
completely and submit HIS records to us in a timely manner. We require 
data from Section O to calculate Hospice Visits when Death is Imminent 
Measure 1, which will be publicly reported on Hospice Compare beginning 
in FY 2019. Therefore, we propose continued collection of this data to 
complete additional testing and to make a determination about the 
public reporting of Measure 2 of the ``Hospice Visits when Death is 
Imminent'' measure pair. We expect to complete our analysis by the end 
of FY 2020, and determine next steps for public reporting based on 
meeting established standards for reliability, validity, and 
reportability.
    We are cognizant and respectful of the time and effort that 
hospices take to complete the HIS V2.00.0 items used to calculate and 
test Measure 2. We will continually evaluate the volume and robustness 
of the resulting data to determine when data collection is no longer 
required.
c. Display of Publicly Available Government Data on the Hospice Compare 
Website
1. Update to Posting of Public Use File (PUF) Data to the Hospice 
Compare Website
    In the FY 2019 Hospice Wage Index and Payment Rate Update and 
Hospice Quality Reporting Requirements (83 FR 38649), we finalized 
plans to publicly post information from the Medicare Provider 
Utilization and Payment Data: Physician and Other Supplier Public Use 
File (PUF) and/or other publicly available CMS data to the Hospice 
Compare website. This PUF data, along with clear text explaining the 
purpose and uses of this information and suggesting consumers discuss 
this information with their healthcare provider, will be displayed 
under a new ``General information'' section on Hospice Compare in 
summer 2019. This new section will precede the existing ``Family 
Experience of Care'' section on the Hospice Compare website. Tables 17 
through 19 show how these data will displayed on Hospice Compare.
BILLING CODE 4120-01-P

[[Page 17605]]

[GRAPHIC] [TIFF OMITTED] TP25AP19.010


[[Page 17606]]


[GRAPHIC] [TIFF OMITTED] TP25AP19.011

2. Proposal to Post Information From Government Data Sources to the 
Hospice Compare Website
    As part of our ongoing efforts to make the Hospice Compare website 
more meaningful and informative to our beneficiaries, their caregivers, 
and families, we propose to post information from other publicly 
available government data, in addition to the data from the PUF or 
other CMS sources, to the Hospice Compare website at some time in the 
future. We are proposing to be able to use informative data from other 
government sources on Hospice Compare in the future and as soon as FY 
2020. Examples, provided for illustration, from where CMS could pull 
publicly available government data include the United States Census 
Bureau, Centers for Disease Control and Prevention, and National 
Institutes of Health.
    We may use information available in these public government files 
to augment the ``General Information'' section described above. This 
``General Information'' section including PUF data and, if this 
proposal is finalized, information from other public government data 
will provide additional information along with the HIS and 
CAHPS[supreg] quality measures that are already displayed.
    Any future reporting of public government data on the Hospice 
Compare website will be displayed in a consumer-friendly format. This 
means we may display the data as shown in these publicly available 
government files or present the data after additional calculations. For 
example, the data could be averaged over multiple years, displayed as a 
percentage rather than the raw number, or other calculations could be 
based on a given year or over multiple years, so the data has meaning 
to end-users. Furthermore, by performing these calculations, we can 
make the data apply to hospices broadly regardless of size, location, 
or other factors.
    Also, we would like to note that data used from these publicly 
available sources are not quality measures. Rather, they present 
supplementary information that many consumers seek during the provider 
selection process and, therefore, will help them to make an informed 
decision. This is similar to other useful information we already 
display on Hospice Compare under the Spotlight, Tools and Tips, and 
Additional Information sections on the Hospice Compare homepage. Data 
from publicly available data sources can serve as one more piece of 
information, along with quality of care metrics from the HIS and 
CAHPS[supreg] Hospice Survey and other useful information, to help 
consumers effectively and efficiently compare hospice providers and 
make an informed decision about their care in a stressful time. We also 
believe such information may be useful to providers. For example, 
adding information from the United States Census Bureau may help 
consumers better understand the service area in which they are looking 
for services (for example, if there is a large population of people 
from a similar race/ethnicity in the area). This information may also 
help providers better understand their service area to see if there are 
any business development opportunities (for example, if there is a 
large population of a similar race/ethnicity, the provider may consider 
investing resources in better serving patients from this background).
    To ensure that end-users understand that these data provide 
information about hospice characteristics and are not a reflection of 
the quality of care a hospice provides, we will, with consultation from 
key stakeholders, carefully craft explanatory language to ensure that 
consumers understand the information and how the data are meant for 
informational purposes only.
    As we determine which publicly available government data sources we 
will use and how we will be using and presenting information from these 
sources, we will inform the public and engage with stakeholders via 
sub-regulatory processes, including regular HQRP communication 
strategies such as Open Door Forums, Medicare Learning Network, 
Spotlight Announcements, and other opportunities.
    We are soliciting public comment on our proposal to post 
information from publicly available government sources to the Hospice 
Compare website in the future.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
This data must be submitted in a form and manner, and at a time 
specified by the Secretary.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. Election Statement Addendum: ``Patient Notification of Hospice Non-
Covered Items, Services, and Drugs''

    To calculate this burden estimate, we use salary information from 
the Bureau of Labor Statistics (BLS) website at https://www.bls.gov/ 
and include a fringe benefits package worth 100 percent of the base 
salary. The mean hourly wage rates are based on May, 2017 BLS data for 
each discipline. Table 20 contains our burden estimate assumptions for 
the proposed Election Statement Addendum: ``Patient Notification of 
Hospice Non-Covered

[[Page 17607]]

Items, Services, and Drugs'' discussed in section III.C. of this 
proposed rule.

Table 20--Election Statement Addendum: ``Patient Notification of Hospice
  Non-Covered Items, Services, and Drugs'' Burden Estimate Assumptions
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of Medicare-billing hospices, from FY      4,465.
 2017 Medicare Enrollment Database, Provider of
 Service files.
Number of hospice elections in FY 2017..........  (1,268,497 x 0.84) =
                                                   1,065,537.
Hourly rate of an office employee (Executive      $57.12 ($28.56 x
 Secretaries and Executive Administrative          2.00).
 Assistants, 43-6011).
Hourly rate of an administrator (General and      $118.70 ($59.35 x
 Operations Managers, 11-1021).                    2.00).
Hourly rate of registered nurses (Registered      $70.72 ($35.36 x
 Nurses, 29-1141).                                 2.00).
Hourly rate of pharmacy technicians (Pharmacy     $31.80 ($15.90 x
 Technicians, 29-2052).                            2.00).
------------------------------------------------------------------------
Source: FY 2017 hospice claims data. 16 percent of beneficiaries die
  within the first 48 hours. Hospices are exempt for completing addendum
  if beneficiary dies within first 48 hours.

    Section 1814(a)(7) of the Act requires for the first 90-day period 
of a hospice election the individual's attending physician (as defined 
in section 1861(dd)(3)(B) of the Act) (which for purposes of this 
subparagraph does not include a nurse practitioner), and the medical 
director (or physician member of the interdisciplinary group described 
in section 1861(dd)(2)(B) of the Act) of the hospice program providing 
(or arranging for) the care, each certify in writing, at the beginning 
of the period, that the individual is terminally ill (as defined in 
section 1861(dd)(3)(A) of the Act). The regulations codified at 
Sec. Sec.  418.22 and 418.25 provide the requirements regarding the 
certification of terminal illness and admission to hospice care. The 
hospice medical director must specify that the individual's prognosis 
is for a life expectancy of 6 months or less if the terminal illness 
runs its normal course. Additionally, clinical information and other 
documentation that support the medical prognosis must accompany the 
certification and must be filed in the medical record with the written 
certification. The physician must include a brief narrative explanation 
of the clinical findings that supports a life expectancy of 6 months or 
less as part of the certification. The aforementioned regulations also 
require that the hospice medical director must consider both related 
and unrelated conditions and current clinically relevant information 
when making the decision to certify the individual as terminally ill. 
Likewise, the hospice CoPs at Sec.  418.102(b) provide the requirements 
regarding the certification responsibility of the hospice medical 
director or hospice physician designee which includes a review of the 
clinical information, including both related and unrelated conditions, 
for each hospice patient.
    In order to receive hospice services under the Medicare hospice 
benefit, eligible beneficiaries must elect to receive hospice care by 
completing an election statement. By signing this election statement, 
the individual acknowledges that he/she waives all rights to Medicare 
payments for treatment related to the terminal illness and related 
conditions. The content requirements for the hospice election statement 
are listed at Sec.  418.24(b) and each hospice election statement must 
include the following information:
     Identification of the particular hospice and of the 
attending physician that will provide care to the individual. The 
individual or representative must acknowledge that the identified 
attending physician was his or her choice.
     The individual's or representative's acknowledgement that 
he or she has been given a full understanding of the palliative rather 
than curative nature of hospice care, as it relates to the individual's 
terminal illness.
     Acknowledgement that certain Medicare services, as set 
forth in Sec.  418.24(d), are waived by the election.
     The effective date of the election, which may be the first 
day of hospice care or a later date, but may be no earlier than the 
date of the election statement.
     The signature of the individual or representative.
    Once a beneficiary is certified as terminally ill and elects the 
Medicare hospice benefit, the hospice conducts an initial assessment 
visit in advance of furnishing care. During this visit, the hospice 
must provide the patient or representative with verbal and written 
notice of the patient's rights and responsibilities as required by the 
CoPs at Sec.  418.52. Likewise, the regulations at Sec.  476.78 state 
that providers must inform Medicare beneficiaries at the time of 
admission, in writing, that the care for which Medicare payment is 
sought will be subject to Quality Improvement Organization (QIO) 
review.
    The beneficiary needs identified in the initial and comprehensive 
assessments drive the development and revisions of an individualized 
written plan of care for each patient as required by the hospice CoPs 
at Sec.  418.56. The hospice plan of care is established, reviewed and 
updated by the hospice IDG and must include all services necessary for 
the palliation and management of the terminal illness and related 
conditions. While needs unrelated to the terminal illness and related 
conditions are not the responsibility of the hospice, the hospice may 
choose to furnish services for those needs regardless of 
responsibility. However, if a hospice does not choose to furnish 
services for those needs unrelated to the terminal illness and related 
conditions, the hospice is to communicate and coordinate with those 
health care providers who are caring for the unrelated needs, as 
described in Sec.  418.56(e). In accordance with the CoPs, the hospice 
must document the services and treatments that address how they will 
meet the patient and family-specific needs related to the terminal 
illness and related conditions in the plan of care, and those needs 
unrelated to the terminal illness and related conditions that are 
present when the patient elects hospice should also be documented. This 
documentation ensures that the hospice is aware of those unrelated 
needs and who is addressing them. This documentation provides the 
support for the hospices' financial responsibility for the hospice 
services they will be providing. There is limited beneficiary financial 
liability for hospice services upon election of the Medicare hospice 
benefit. However, for any services received that are unrelated to the 
terminal illness and related conditions, the beneficiary would incur 
any associated copayments and coinsurance.

[[Page 17608]]

    Hospices already are required to review, determine, and document 
information on unrelated conditions per the hospice regulations and 
CoPs. However, to ensure Medicare beneficiaries are provided disclosure 
of those conditions, items, services, and drugs the hospice has 
determined to be unrelated to the terminal illness and related 
conditions at the time of admission, we propose to add to the 
regulations at Sec.  418.24(b) and (c), the requirement of an election 
statement addendum titled ``Patient Notification of Hospice Non-Covered 
Items, Services, and Drugs'' that would be issued to the patient (or 
representative) within 48 hours of the hospice election date to ensure 
that Medicare beneficiaries are fully informed whether or not all 
items, services, and drugs identified on the hospice plan of care will 
be furnished by the hospice. The addendum statement would not be 
required if the beneficiary died within 48 hours of the hospice 
election date. This addendum would accompany the hospice election 
statement and each hospice would use the required proposed elements to 
develop and design their own addendum to best meet their needs and the 
requirement. This requirement for payment would be added to the 
regulations at Sec.  418.24(b) and (c).
    The burden associated with the documentation requirement for the 
addendum includes the time for each hospice to develop the addendum 
that the hospice provides to the beneficiary (or their representative) 
within 48 hours of election of the Medicare hospice benefit. The 
addendum must include the name of the issuing hospice, beneficiary's 
name, and hospice medical record identifier. The addendum must also 
allow the hospice registered nurse to document a list of non-covered 
conditions, items, services, and drugs, as well as provide a clinical 
explanation as to why these conditions, items, services, and drugs have 
been determined to be unrelated to the terminal illness and related 
conditions. This documentation would include references to any relevant 
clinical practice, policy, or coverage guidelines. The addendum must 
include statements informing the patient as to the purpose of the 
addendum and information on BFCC-QIO Immediate Advocacy rights and 
contact information. The addendum would be signed by the beneficiary as 
an acknowledgement that he or she has received this information, but 
signing it does not mean the beneficiary agrees with the determination. 
We believe that the burden for the hospice associated with the election 
statements addendum would be the cost of developing the form and the 
cost of filling out the form. There is no associated burden for 
hospices to communicate/coordinate with non-hospice providers regarding 
the content of the addendum statement because the hospice CoPs, as 
described above, have always required hospices to have a system of 
communication with non-hospice providers in place. However, we believe 
that the election statement addendum would reduce burden for non-
hospice providers through a consistent and streamlined process by which 
non-hospice providers can make informed treatment decisions and 
accurately submit claims with the appropriate condition code or 
modifier.
1. Estimated Hospice Burden With Election Statement Addendum
a. Estimated One-Time Form Development
    We estimate a one-time burden for the development of the election 
statement addendum. We estimate that it would take a hospice 
administrative assistant 15 minutes (15/60 = 0.25 hours) to develop the 
addendum with the required elements, and the hospice administrator 15 
minutes (15/60 = 0.25 hours) to review the addendum. The clerical time 
plus administrator time equals a one-time burden of 30 minutes or (30/
60 = 0.50 hours) per hospice. For all 4,465 hospices, the total time 
required would be (0.50 x 4,465) = 2,232.5 hours. At $57.12 per hour 
for an executive administrative assistant, the cost per hospice would 
be (0.25 x $57.12) = $14.28. At $118.70 per hour for the 
administrator's time, the cost per hospice would be (0.25 x $118.70) = 
$29.68. Therefore, the one-time cost, per hospice, for the development 
of the form would be ($14.28+29.68) = $43.96, and the total one-time 
cost for all hospices would be ($43.96 x 4,465) = $196,281.
b. Estimated Time for Hospice To Complete Addendum
    Per the hospice CoPs at Sec.  418.56(a), the hospice must designate 
a registered nurse that is a member of the interdisciplinary group to 
provide coordination of care and to ensure continuous assessment of 
each patient's and family's needs and implementation of the 
interdisciplinary plan of care. The hospice CoPs at Sec.  418.54 
require that a registered nurse conduct the initial assessment, 
therefore, the registered nurse would be responsible for completing the 
addendum for each hospice election as part of the routine admission 
paperwork. We estimate that there would be 1,268,497 hospice elections 
in a year based on FY 2017 claims data. Approximately 16 percent of 
hospice beneficiaries die within the first 48 hours after the hospice 
election date. Hospices would not be required to complete the election 
statement addendum for those hospice beneficiaries that die within 48 
hours of hospice election. Therefore, the estimated total number of 
hospice elections in FY 2020 that would require the hospice election 
statement addendum would be (1,268,497 x 0.84) = 1,065,537. There are 
4,465 Medicare-certified hospices, so on average there would be 
(1,065,537/4,465) = 239 hospice elections per hospice. The estimated 
burden for the hospice registered nurse to extrapolate this information 
from the existing documentation in the patient's hospice medical record 
and complete this addendum would be 10 minutes (10/60 = 0.1667). At 
$70.72 per hour for a registered nurse over 10 minutes (0.1667 x $70.72 
= $11.79), we estimate the total cost of RN time to complete the 
addendum per hospice in FY 2020 to be ($11.79 x 239) = $2,818, and the 
total cost of RN time to complete the addendum for all hospices in FY 
2020 would be ($2,818 x 4,465) = $12,582,370. The estimated total per 
hospice and total annual hospice cost associated with the proposed 
addendum (including one-time form development and total RN costs) in FY 
2020 are shown in table 21 below. These total costs would include the 
one-time development of the addendum, so subsequent years' costs would 
only include the cost for the RN to complete the addendum statement. 
Providing this information to the beneficiary would be part of the 
routine admissions process and, as such, incurs no additional burden to 
that process.

[[Page 17609]]

[GRAPHIC] [TIFF OMITTED] TP25AP19.019

2. Estimated Burden Reduction for Non-Hospice Providers
    To ensure comprehensive and coordinated care, the CoPs at Sec.  
418.56(e) require hospices to have a communication system that allows 
for the exchange of information with other non-hospice health care 
providers who are furnishing care unrelated to the terminal illness and 
related conditions. Therefore, it is our expectation that hospices are 
already determining what is related and unrelated to the terminal 
illness and related conditions. The election statement addendum would 
add no additional burden for communicating with non-hospice providers, 
as this decision-making process has been a long-standing CoP 
requirement, as described above and in the preamble of this proposed 
rule. However, burden would be reduced for non-hospice providers, 
including institutional, non-institutional and pharmacy providers 
because less time would be spent trying to obtain needed information 
for treatment decisions and accurate claims submissions.
    To estimate the cost burden reduction, we first calculated the 
estimated current burden, in the absence of the addendum, for 
communicating and coordinating information regarding unrelated 
conditions between hospice and non-hospice providers. Next, we 
calculated the estimated burden, using the addendum for communicating 
and coordinating information regarding unrelated conditions between 
hospice and non-hospice providers. Finally, we analyzed the difference 
between the burden estimates to see if there is any overall reduction. 
To do this, we analyzed all Medicare Parts A and B non-hospice claims 
for beneficiaries under a hospice election in FY 2017. We also examined 
the Part D claims for drugs provided to hospice beneficiaries under a 
hospice election. Specifically, we analyzed the following:
     The total number of non-hospice, institutional claims with 
condition code 07 (to indicate the services were unrelated to the 
terminal illness and related conditions).
     The total number of non-hospice, non-institutional claims 
with ``GW'' modifier (to indicate the services were unrelated to the 
terminal illness and related conditions).
     The total number of Part D claims for beneficiaries under 
a hospice election.
     The average number of hospice beneficiaries per non-
hospice provider with institutional claims with condition code 07.
     The average number of hospice beneficiaries per non-
hospice provider with non-institutional claims with ``GW'' modifier.
     The average number of hospice beneficiaries per non-
hospice provider with Part D claims.
    To calculate the average number of hospice beneficiaries per non-
hospice provider, we count the number of unique beneficiaries 
associated with each non-hospice provider as beneficiaries may receive 
services by more than one non-hospice provider. This means that some 
beneficiaries are double-counted. However, given this estimate is 
calculated based on the number of expected communication encounters 
between hospices and non-hospice providers, this is the appropriate 
approach. Because we double-counted beneficiaries, we expect that 
average to be larger than the ratio of unique beneficiaries to unique 
non-hospice providers. Table 22 below summarizes Part A, B and D claims 
that overlap with hospice episodes in FY 2017.

             Table 22--Summary of Part A, B and D Claims That Overlap With Hospice Episodes, FY 2017
----------------------------------------------------------------------------------------------------------------
                                                                                               Average number of
                                                  Number of    Number of non-     Number of    hospice benes per
            Non-hospice claim type                 hospice         hospice         hospice        non-hospice
                                                beneficiaries     providers       providers         provider
----------------------------------------------------------------------------------------------------------------
Part A & B, Non-Hospice Total................         473,587          94,535           4,341  .................

[[Page 17610]]

 
Institutional Claims w/07....................         173,060          19,354           4,117               11.0
Non-Institutional Lines w/GW.................         431,379          75,181           4,321               12.0
Part D.......................................         591,543          60,632           4,416               12.0
----------------------------------------------------------------------------------------------------------------
Source: FY 2017 Parts A, B, and D claims.

3. Burden Estimate Without Election Statement Addendum for Non-Hospice 
Providers
    In order for non-hospice providers to make treatment decisions 
regarding services, items and medications for hospice beneficiaries and 
to submit the appropriate modifier or condition code on Medicare 
claims, they need supporting information from the hospice regarding 
related and unrelated conditions. As such, we first estimate the 
current burden associated with this communication and coordination in 
the absence of the election statement addendum. We believe this would 
require the non-hospice providers to contact the hospice and have a 
detailed phone call to obtain and document the information on unrelated 
conditions, items, services, and medications. For non-hospice providers 
submitting institutional claims (including inpatient acute care 
hospitals, SNFs, HHAs, and institutional outpatient providers), 
typically nurse case managers provide coordination of care for those 
beneficiaries in these settings who are receiving inpatient services or 
who are preparing to transition to a post-acute care setting or home. 
The estimated burden for the registered nurse to contact the hospice to 
obtain the needed information would be 15 minutes (15/60 = 0.25). The 
average number of hospice beneficiaries receiving services per 
institutional, non-hospice provider is 11 per year, which would mean 
each institutional, non-hospice provider would have an average of 11 
communication encounters with hospice. The total number of 
institutional, non-hospice providers servicing hospice beneficiaries in 
FY 2017 was 19,354. At $70.72 per hour for a registered nurse (0.25 x 
$70.72) = $17.68, we estimate the total cost per institutional, non-
hospice provider furnishing services to hospice beneficiaries in FY 
2020 to be ($17.68 x 11) = $194.48 and the annual total cost for all 
institutional, non-hospice providers in FY 2018 would be ($194.48 x 
19,354) = $3,763,966.
    For non-institutional, non-hospice providers (including 
physicians), we also expect that a nurse would contact the hospice to 
obtain the needed clinical information on unrelated conditions, items, 
services and drugs. The estimated burden for the registered nurse to 
contact the hospice to obtain the needed information would be 15 
minutes (15/60 = 0.25). The average number of hospice beneficiaries 
receiving services per non-institutional, non-hospice provider is 12 
per year, which would mean each provider would have an average of 12 
communication encounters with a hospice. The total number of non-
institutional, non-hospice providers servicing hospice beneficiaries in 
FY 2017 was 75,181. At $70.72 per hour for a registered nurse (0.25 x 
$70.72) = $17.68, we estimate the total cost per non-institutional, 
non-hospice provider furnishing services to hospice beneficiaries in FY 
2020 to be ($17.68 x 12) = $212.16 and the annual total cost for all 
non-institutional, non-hospice providers in FY 2018 would be ($212.16 x 
75,181) = $15,950,401.
    For Part D providers furnishing drugs to hospice beneficiaries, the 
estimated burden for the pharmacy technician at the point of service to 
contact the hospice to obtain the needed clinical information regarding 
the drugs deemed by the hospice as unrelated to the terminal illness 
and related conditions would be 15 minutes (15/60 = 0.25). The average 
number of hospice beneficiaries receiving services per Part D pharmacy 
providing maintenance drugs is 12 per year, which would mean each 
pharmacy would have an average of 12 communication encounters with 
hospice. The total number of Part D pharmacies providing maintenance 
drugs to hospice beneficiaries in FY 2017 was 60,632. At $31.80 per 
hour for a pharmacy technician (0.25 x $31.80) = $7.95, we estimate the 
total cost per Part D pharmacy providing maintenance drugs to be ($7.95 
x 12) = $95.40 and the annual total cost for all Part D pharmacies 
providing maintenance drugs to be ($95.40 x 60,632) = $5,784,293. The 
estimated total annual burden for all non-hospice providers furnishing 
services, items and medications to hospice beneficiaries in FY 2020 
without the availability of the hospice election statement addendum 
identifying unrelated conditions, items, services and drugs would be 
$25,498,660 ($3,763,966 + $15,950,401 + $5,784,293).
4. Burden Reduction Estimate With Election Statement Addendum for Non-
Hospice Providers
    However, with the availability of the ``Patient Notification of 
Hospice Covered/Non-Covered Items, Services, and Drugs'' election 
statement addendum, we believe this estimated burden would be reduced 
for non-hospice providers through a streamlining of the communication 
and coordination process. For institutional, non-hospice providers 
(those who would submit claims for unrelated services with condition 
code 07), the estimated burden for the registered nurse to contact the 
hospice to obtain the needed information would be reduced to 5 minutes 
(5/60 = 0.0833). The average number of hospice beneficiaries receiving 
services per institutional non-hospice provider is 11 per year. The 
total number of institutional non-hospice providers servicing hospice 
beneficiaries in FY 2017 was 19,354. At $70.72 per hour for a 
registered nurse (0.0833 x $70.72) = $5.89, we estimate the total cost 
per institutional non-hospice provider in FY 2020 to be ($5.89 x 11) = 
$64.79 and the annual total cost for all institutional non-hospice 
providers in FY 2020 would be ($64.79 x 19,354) = $1,253,945.66 an 
annual decrease in burden by ($3,763,966-$1,253,945.66) = 
$2,510,020.34.
    For non-institutional, non-hospice providers (those who would 
submit claims for unrelated services with modifier GW), the estimated 
burden for the registered nurse to contact the hospice to obtain the 
needed information would be reduced to 5 minutes (5/60 = 0.0833). The 
average number of hospice beneficiaries receiving services per non-
institutional, non-hospice provider is 12 per year. The total number of 
non-institutional, non-hospice providers servicing hospice

[[Page 17611]]

beneficiaries in FY 2017 was 75,181. At $70.72 per hour for a 
registered nurse (0.0833 x $70.72) = $5.89, we estimate the total cost 
per non-institutional, non-hospice provider in FY 2020 to be ($5.89 x 
12) = $70.68 and the annual total cost for all non-institutional, non-
hospice providers in FY 2020 would be ($70.68 x 75,181) = 
$5,313,793.08, an annual decrease in burden by ($15,950,401 - 
5,313,793.08) = $10,636,607.92.
    For Part D pharmacies providing drugs to hospice beneficiaries, the 
estimated burden for the pharmacy technician at the point of service to 
contact the hospice to obtain the needed clinical information regarding 
the drugs deemed by the hospice as unrelated to the terminal illness 
and related conditions would be reduce to 5 minutes (5/60 = 0.0833). 
The average number of hospice beneficiaries receiving services per Part 
D pharmacy providing maintenance drugs is 12 per year. The total number 
of Part D pharmacies providing maintenance drugs to hospice 
beneficiaries in FY 2017 was 60,632. At $31.80 per hour for a pharmacy 
technicians (0.0833 x $31.80) = $2.65, we estimate the total cost per 
Part D pharmacy providing maintenance drugs to be ($2.65 x 12) = $31.80 
and the annual total cost for all Part D pharmacies providing 
maintenance drugs to be ($31.80 x 60,632) = $1,928,097.60, an annual 
decrease in burden by ($5,784,293 - $1,928,097.60) = $3,856,195.40. The 
estimated total annual burden for all non-hospice providers furnishing 
services, items and drugs to hospice beneficiaries in FY 2020 with the 
availability of the hospice election statement addendum identifying 
unrelated conditions, items, services and medication would be 
$8,495,836.66 for an overall burden reduction of ($25,498,660 - 
$8,495,836.66) = $17,002,823.34. The total reduction in burden for all 
institutional, non-institutional, and Part D pharmacy non-hospice 
providers is summarized in table 23 below.

  Table 23--FY 2020 Estimated Total Overall Burden Reduction for Non-Hospice Providers Using Election Statement
                                                    Addendum
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated
                                                                                                      burden
                       Non-hospice claims                         Burden without    Burden with    reduction for
                                                                     addendum        addendum       non-hospice
                                                                                                     providers
----------------------------------------------------------------------------------------------------------------
Institutional Claims with Condition Code 07.....................      $3,763,966      $1,253,945      $2,510,021
Non-institutional Claims with GW Modifier.......................      15,950,401       5,313,793      10,636,608
Part D Maintenance Drugs........................................       5,784,293       1,928,098       3,856,195
                                                                 -----------------------------------------------
    Total Burden Reduction for Non-Hospice Providers............      25,498,660       8,495,836      17,002,824
----------------------------------------------------------------------------------------------------------------

    The use of the ``Patient Notification of Hospice Non-Covered Items, 
Services, and Drugs'' election statement addendum would result in an 
estimated, total overall provider burden reduction of -$4,224,173 
($12,778,651 - $17,002,824) in FY 2020. Table 24 below summarizes the 
FY 2020 estimated total burden reduction.

    Table 24--FY 2020 Estimated Total Provider Burden Reduction Using
                       Election Statement Addendum
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FY 2020 Estimated Cost for Election Statement Addendum..   + $12,778,651
FY 2020 Estimated Non-hospice Provider Burden Reduction.      -7,002,824
                                                         ---------------
    FY 2020 Estimated Total Burden Reduction............     (4,224,173)
------------------------------------------------------------------------

B. 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.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections previously discussed, visit our website 
at: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html, or call the Reports 
Clearance Office at (410) 786-1326.
    We invite public comments on these information collection 
requirements. If you wish to comment, submit your comments 
electronically as specified in the DATES and ADDRESSES sections of this 
proposed rule and identify the rule (CMS-1714-P) and, where applicable, 
indicate the ICR's CFR citation, CMS ID number, and OMB control number.

V. Response to Comments

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

VI. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule meets the requirements of our regulations at 
Sec.  418.306(c) and (d), which require annual issuance, in the Federal 
Register, of the hospice wage index based on the most current available 
CMS hospital wage data, including any changes to the definitions of 
Core-Based Statistical Areas (CBSAs) or previously used Metropolitan 
Statistical Areas (MSAs), as well as any changes to the methodology for 
determining the per diem payment rates. This proposed rule would also 
update payment rates for each of the categories of hospice care, 
described in Sec.  418.302(b), for FY 2020 as required under section 
1814(i)(1)(C)(ii)(VII) of the Act. The payment rate updates are subject 
to changes in economy-wide productivity as specified in section 
1886(b)(3)(B)(xi)(II) of the Act. Lastly, section 3004 of the 
Affordable Care Act amended the Act to authorize a quality reporting 
program for hospices, and this

[[Page 17612]]

rule discusses changes in the requirements for the hospice quality 
reporting program in accordance with section 1814(i)(5) of the Act.

B. Overall Impacts

    We estimate that the aggregate impact of the payment provisions in 
this proposed rule would result in an estimated increase of $540 
million in payments to hospices, resulting from the hospice payment 
update percentage of 2.7 percent for FY 2020. Section 1814(i)(6)(D)(ii) 
of the Act requires the proposed rebasing of the per diem payment rates 
for CHC, GIP, and IRC to be done in a budget-neutral manner in the 
first year of implementation. Therefore, the proposed rebased rates for 
CHC, GIP, and IRC would not result in an overall payment impact for the 
Medicare program as we are proposing to reduce the RHC payment rates to 
ensure that total estimated payments to hospices are budget-neutral 
given the proposed increases to the CHC, GIP, and IRC payment rates. In 
addition, the proposed change in the hospice wage index to use the FY 
2020 pre-floor, pre-reclassified hospital wage index (rather than the 
FY 2019 pre-floor, pre-reclassified hospital wage index) as the basis 
for the FY 2020 hospice wage index would not result in an overall 
payment impact for the Medicare program as annual wage index updates 
are now similarly implemented in a budget-neutral manner. Certain 
events may limit the scope or accuracy of our impact analysis, because 
such an analysis is susceptible to forecasting errors due to other 
changes in the forecasted impact time period. The nature of the 
Medicare program is such that the changes may interact, and the 
complexity of the interaction of these changes could make it difficult 
to predict accurately the full scope of the impact upon hospices.
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). We estimate that this rulemaking is ``economically significant'' 
as measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we have prepared a RIA 
that, to the best of our ability presents the costs and benefits of the 
rulemaking.

C. Anticipated Effects

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
options for regulatory relief of small businesses if a rule has a 
significant impact on a substantial number of small entities. The great 
majority of hospitals and most other health care providers and 
suppliers are small entities by meeting the Small Business 
Administration (SBA) definition of a small business (in the service 
sector, having revenues of less than $7.5 million to $38.5 million in 
any 1 year), or being nonprofit organizations. For purposes of the RFA, 
we consider all hospices as small entities as that term is used in the 
RFA. HHS's practice in interpreting the RFA is to consider effects 
economically ``significant'' only if greater than 5 percent of 
providers reach a threshold of 3 to 5 percent or more of total revenue 
or total costs. The effect of the FY 2020 hospice payment update 
percentage results in an overall increase in estimated hospice payments 
of 2.7 percent, or $540 million. The distributional effects of the 
proposed FY 2020 hospice wage index do not result in a greater than 5 
percent of hospices experiencing decreases in payments of 3 percent or 
more of total revenue. Finally, the distributional effects of the 
proposed FY 2020 increases to the CHC, IRC, and GIP per diem payment 
rates as a result of rebasing, offset by a proposed decrease to the FY 
2020 RHC payment rates of less than 3 percent to maintain budget 
neutrality in the first year of implementation, do not result in a 
greater than 5 percent of hospices experiencing decreases in payments 
of 3 percent or more of total revenue. Therefore, the Secretary has 
determined that this rule will not create a significant economic impact 
on a substantial number of small entities.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a metropolitan statistical area and has fewer than 100 beds. This rule 
will only affect hospices. Therefore, the Secretary has determined that 
this rule will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. The 2019 UMRA 
threshold is $154 million. This rule is not anticipated to have an 
effect on state, local, or tribal governments, in the aggregate, or on 
the private sector of $154 million or more.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. We have reviewed this rule under these criteria of 
Executive Order 13132, and have determined that it will not impose 
substantial direct costs on state or local governments.
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the

[[Page 17613]]

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 proposed 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 proposed rule.
    Using the wage information from the Bureau of Labor Statistics 
(BLS) for medical and health service managers (Code 11-9111), we 
estimate that the cost of reviewing this rule is $107.38 per hour, 
including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). This proposed rule consists of approximately 
43,000 words. Assuming an average reading speed of 250 words per 
minute, it would take approximately one and a half hour for the staff 
to review half of it. For each hospice that reviews the rule, the 
estimated cost is $153.55 (1.43 hour x $107.38). Therefore, we estimate 
that the total cost of reviewing this regulation is $18,733.10 ($153.55 
x 122 reviewers).

D. Detailed Economic Analysis

1. Hospice Payment Update for FY 2020
    The FY 2020 hospice payment impacts appear in table 24. We tabulate 
the resulting payments according to the classifications (for example, 
provider type, geographic region, facility size), and compare the 
difference between current and future payments to determine the overall 
impact. The first column shows the breakdown of all hospices by 
provider type and control (non-profit, for-profit, government, other), 
facility location, facility size. The second column shows the number of 
hospices in each of the categories in the first column. The third 
column shows our estimate of applying the proposed rebased payment 
rates of CHC, IRC, and GIP (and the decreased RHC rate used to achieve 
budget neutrality). The fourth column shows the hospice payments using 
FY 2018 Hospice Claims, FY 2020 rebased Payments, and FY 2020 Wage 
Index without the 1-Year lag. The fifth column show the proposed FY 
2020 hospice payment update percentage of 2.7 percent as mandated by 
section 1814(i)(1)(C) of the Act, and is consistent for all providers. 
The 2.7 percent hospice payment update percentage is based on an 
estimated 3.2 percent inpatient hospital market basket update, reduced 
by a 0.5 percentage point productivity adjustment. It is projected that 
aggregate payments would increase by 2.7 percent, assuming hospices do 
not change their service and billing practices. The sixth column shows 
the estimated total impact for FY 2020. We have set the rates so the 
overall impact is zero percent due to the requirement that any 
revisions in payment are implemented in a budget-neutral manner in 
accordance with section 1814(i)(6)(D)(ii) of the Act (accomplished for 
the proposed rebasing of the CHC, GIP, and IRC payment rates by a 
corresponding proposed decrease to the RHC payment rates).
    In addition, to assist providers in understanding the potential 
impacts of the proposed wage index with and without the lag and the 
proposed rebasing of CHC, IRC, and GIP, we are providing a provider-
specific impact analysis file, which is available on our website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Regulations-and-Notices.html. We note that simulated payments 
are based on utilization in FY 2018 as seen on Medicare hospice claims 
(accessed from the CCW in January of 2019) and only include payments 
related to the level of care and do not include payments related to the 
service intensity add-on.
    As illustrated in table 25, the combined effects of all the 
proposals vary by specific types of providers and by location.
BILLING CODE 4120-01-P

[[Page 17614]]

[GRAPHIC] [TIFF OMITTED] TP25AP19.012


[[Page 17615]]


[GRAPHIC] [TIFF OMITTED] TP25AP19.013

BILLING CODE 4120-01-C
2. Proposed Hospice Election Statement Addendum
    This proposed rule includes proposals related to the election 
statement addendum that would be provided, upon request, to hospice 
beneficiaries (or representative), non-hospice providers, and Medicare 
contractors. If finalized, this change would become effective for 
hospice elections on and after October 1, 2019. The election statement 
addendum would add no additional burden for communicating with non-
hospice providers, as this decision-making process has been a long-
standing CoP requirement, as described in the preamble of this proposed 
rule. However, burden would be reduced for non-hospice providers, 
including institutional, non-institutional and pharmacy providers 
because less time would be spent trying to obtain needed information 
for treatment decisions and accurate claims submissions. As a result of 
this election statement addendum, we estimate that this rule generates 
$4.2 million in annualized cost savings, or $3 million per year on an 
ongoing basis discounted at 7 percent relative to year 2016, over a 
perpetual time horizon beginning in FY 2020. The burden reduction for 
this proposal is detailed in section IV of this proposed rule and the 
total annual reduction is included in table 24.

E. Alternatives Considered

    For the FY 2020 Hospice Wage Index and Rate Update proposed rule, 
we considered alternatives to the proposals articulated in section 
III.A. First, we considered not applying the Level I edits to the 
freestanding cost reports to estimate the FY 2017 costs per day by 
level of care. Our analysis showed that the differences in costs for 
each level of care between these two approaches were minimal. As 
described in the FY 2019 hospice proposed rule (89 FR 20949), industry 
representatives have suggested using these Level I edits to force 
adherence to certain cost reporting principles that could lead to the 
reporting of higher-quality hospice cost data and therefore, we believe 
it is most technically appropriate to apply the Level I edits. Table 26 
describes the FY 2017 estimated, average per day costs by level of care 
applying all cost report adjustments, and those same estimated costs 
applying all cost report adjustments except the Level I edits.

[[Page 17616]]



  Table 26--Freestanding Hospice Average per Day Costs Without Level I
                             Edits, FY 2017
------------------------------------------------------------------------
                                                      Estimated average
                                Estimated average    cost per day using
        Level of care          cost per day using     all adjustments,
                                 all adjustments    except Level I edits
------------------------------------------------------------------------
RHC (Days 1-60).............  $164.89.............  $164.17.
RHC (Days 61+)..............  $114.11.............  $113.62.
CHC.........................  $54.49 ($1,307.76     $53.83 ($1,291.92
                               for 24 hours).        for 24 hours).
IRC.........................  $438.97.............  $467.78.
GIP.........................  $953.95.............  $960.12.
------------------------------------------------------------------------

    We also considered proposing to use freestanding and provider-based 
cost reports to rebase CHC, IRC, and GIP per diem rates, rather than 
using only freestanding hospice cost reports. When we analyzed both 
freestanding and provider-based cost reports, the results from these 
two samples tend to be similar, however, on average, incorporating 
provider-based cost reports results in higher costs than the cost 
reports for freestanding hospices only as shown in table 27.

 Table 27--Freestanding and Provider-Based Average Cost per Day by Level
                            of Care, FY 2017
------------------------------------------------------------------------
                              Freestanding average     Provider-based
        Level of care             cost per day      average cost per day
------------------------------------------------------------------------
RHC (Days 1-60).............  $164.89.............  $169.36.
RHC (Days 61+)..............  $114.11.............  $117.21.
CHC.........................  $54.49 ($1,307.76     $56.20 ($1,348.80
                               for 24 hours).        for 24 hours).
IRC.........................  $438.98.............  $521.74.
GIP.........................  $953.96.............  $956.04.
------------------------------------------------------------------------
--With all cost report adjustments applied.
--With Level I Edits.

    Since the costs are higher, the FY 2019 rebased payment rates for 
CHC, GIP, and IRC when using cost reports for both freestanding and 
provider-based hospices would also be higher and we would need to 
reduce the RHC payment more in order to maintain budget neutrality as 
shown in table 28. If we utilized freestanding and provider-based cost 
reports, RHC would need to be reduced by 2.92 percent to offset the 
increases to the per diem payment amounts for CHC, GIP, and IRC.\49\
---------------------------------------------------------------------------

    \49\ Using the average per-diem costs generated from our sample 
of freestanding and provider-based hospice cost reports, rebasing 
CHC, IRC, and GIP results in extra payments of $503,162,283.48 for 
those levels of care. The RHC payments that were made under the 
payment rates in place during FY 2019 were $17,218,209,794.15. One 
minus the value of the extra payments over the RHC payments equals 
0.9708.

   Table 28--Rebased Payment Rates for CHC, IRC, and GIP Levels of Care Using Freestanding and Provider-Based
                                          Hospice Cost Reports, FY 2019
----------------------------------------------------------------------------------------------------------------
                Level of care                                        Rebased payment rates
----------------------------------------------------------------------------------------------------------------
Continuous Home Care (CHC)..................  $58.59 per hour/$1,406.04 (per day).
Inpatient Respite Care (IRC)................  $517.98.*
General Inpatient Care (GIP)................  $996.62.
----------------------------------------------------------------------------------------------------------------
Note:
--Prior to application of the hospice payment update percentage of 2.7 percent outlined in section III.B.4 of
  this proposed rule.
--Includes Level I edits.
* IRC payment rate accounts for 5 percent coinsurance ($543.88 / 1.05 = $517.98).

    In MedPAC's March 2018 Report to Congress, MedPAC stated that 
included in the costs of provider-based hospices are overhead costs 
allocated from the parent provider, which contributes to provider-based 
hospices having higher costs than freestanding providers. The 
Commission believes payment policy should focus on the efficient 
delivery of services to Medicare's beneficiaries. If freestanding 
hospices are able to provide high-quality care at a lower cost than 
provider-based hospices, payment rates should be set accordingly, and 
the higher costs of provider-based hospices should not be a reason for 
increasing Medicare payment rates.\50\ Similarly, the application of 
the cost report exclusions yielded a small sample size of provider-
based cost reports and when we applied the Level I cost report edits to 
the provider-based cost reports, this trimmed out nearly all of the 
provider-based cost reports. Therefore, we are less confident in the 
calculations of the average costs per day by level of care using 
provider-based hospice cost reports as very few of such providers had 
costs reports that were not trimmed out due to the recently implemented 
Level I cost report edits. We invite comments on the alternatives 
considered discussed in this analysis.
---------------------------------------------------------------------------

    \50\ Medicare Payment Advisory Commission (MedPAC). ``Hospice 
Services.'' Report to the Congress: Medicare Payment Policy. 
Washington, DC. March 2018. P. 341. http://www.medpac.gov/docs/default-source/reports/mar18_medpac_ch12_sec.pdf?sfvrsn=0.
---------------------------------------------------------------------------

F. Accounting Statement

    As required by OMB Circular A-4 (available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in table 29, we have prepared an accounting statement showing 
the classification of the transfers and costs

[[Page 17617]]

associated with the provisions of this proposed rule. This table shows 
an estimated $540 million in transfers to hospices in FY 2020. All 
expenditures are classified as transfers to hospices. Table 29 also 
reflects the estimated change in costs and burden for hospices and non-
hospice providers as a result of the proposed election statement 
addendum requirements described in section III.C. Table 29 provides our 
best estimate of a one-time burden for hospices to develop the election 
statement addendum form of 2,233 hours or $196,281, as well as our 
estimate of the annual burden for hospices to complete the election 
statement addendum of 744 hours or $12.6 million for an estimated total 
burden for hospices of $12.8 million, as described in section IV of 
this proposed rule. Additionally, we estimate a net reduction in burden 
for non-hospice providers of 25,866 hours or $17 million (see section 
IV of this proposed rule) for an estimated overall, annualized net 
reduction in burden with the proposed election statement addendum of 
$4.2 million.

    Table 29--Accounting Statement: Classification of Estimated Transfers and Costs, From FY 2019 to FY 2020
----------------------------------------------------------------------------------------------------------------
                                Category                                                Transfers
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Transfers.........................................  $ 540 million.*
From Whom to Whom?.....................................................  Federal Government to Medicare
                                                                          Hospices.
----------------------------------------------------------------------------------------------------------------
                                Category                                                  Costs
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Net Reduction in Burden for Non-Hospice Providers   -$17.0 million.
 with the Proposed Regulations Change at Sec.   418.24, Election
 Statement Addendum.
Annualized Net Burden for Hospice Providers with the One-time Form       +$12.8 million.
 Development and Completion of Election Statement Addendum.
Total Annualized Net Reduction In Burden with the Proposed Election      -$4.2 million.
 Statement Addendum.
----------------------------------------------------------------------------------------------------------------
* The net increase of $540 million in transfer payments is a result of the 2.7 percent hospice payment update
  compared to payments in FY 2019.

G. Regulatory Reform Analysis Under E.O. 13771

    Executive Order 13771, entitled ``Reducing Regulation and 
Controlling Regulatory Costs,'' was issued on January 30, 2017 (82 FR 
9339, February 3, 2017) and requires that the costs associated with 
significant new regulations ``shall, to the extent permitted by law, be 
offset by the elimination of existing costs associated with at least 
two prior regulations.'' This proposed rule is expected to be an E.O. 
13771 deregulatory action with $4.2 million in annualized cost savings, 
or $3 million per year on an ongoing basis discounted at 7 percent 
relative to year 2016, over a perpetual time horizon beginning in FY 
2020. The burden reduction for this proposal is detailed in section IV 
of this proposed rule and the total annual reduction is included in 
Table 24. Details on the estimated cost savings of this rule with 
comment period can be found in the rule's collection of information and 
economic analysis.

H. Conclusion

    We estimate that aggregate payments to hospices in FY 2020 will 
increase by $540 million, or 2.7 percent, compared to payments in FY 
2019. We estimate that in FY 2020, hospices in urban and rural areas 
will experience, on average, 2.8 percent and 2.1 percent increases, 
respectively, in estimated payments compared to FY 2019. Hospices 
providing services in the South Atlantic, Middle Atlantic and East 
North Central regions would experience the largest estimated increases 
in payments of 4.7 percent and 2.8 percent, respectively. Hospices 
serving patients in the Pacific and outlying regions would experience, 
on average, the lowest estimated increase of 1.0 and -0.3 percent, 
respectively in FY 2020 payments. We also estimate an overall reduction 
in burden of $4.2 million as a result of the proposed election 
statement addendum. In accordance with the provisions of Executive 
Order 12866, this regulation was reviewed by the Office of Management 
and Budget.

List of Subjects in 42 CFR Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.

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

PART 418-HOSPICE CARE

0
1. The authority citation for part 418 is revised to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.

0
2. Section 418.24 is amended by--
0
 a. Revising paragraphs (b)(2) and (3);
0
 b. Redesignating paragraph (b)(5) as paragraph (b)(8);
0
 c. Adding new paragraphs (b)(5), (6), and (7);
0
d. Redesignating paragraphs (c) through (f) as paragraphs (d) through 
(g), respectively; and
0
 e. Adding a new paragraph (c).
    The revisions and additions read as follows:


Sec.  418.24  Election of hospice care.

* * * * *
    (b) * * *
    (2) The individual's or representative's acknowledgement that he or 
she has been given a full understanding of the palliative rather than 
curative nature of hospice care, as it relates to the individual's 
terminal illness and related conditions.
    (3) Acknowledgement that the individual has been provided 
information on the hospice's coverage responsibility and that certain 
Medicare services, as set forth in paragraph (e) of this section, are 
waived by the election. This includes providing the individual with 
information indicating that services unrelated to the terminal illness 
and related conditions are exceptional and unusual and hospice should 
be providing virtually all care needed by the individual who has 
elected hospice.
* * * * *
    (5) Information on individual cost-sharing for hospice services.
    (6) Notification of the individual's (or representative's) right to 
receive an election statement addendum, as set forth in paragraph (c) 
of this section, if there are conditions, items, services, and drugs 
the hospice has determined to be unrelated to the individual's terminal 
illness and related conditions and would not be covered by the hospice.

[[Page 17618]]

    (7) Information on BFCC-QIO, including the right to immediate 
advocacy and BFCC-QIO contact information.
* * * * *
    (c) Content of hospice election statement addendum. In the event 
that the hospice determines there are conditions, items, services, or 
drugs that are unrelated to the individual's terminal illness and 
related conditions, the individual (or representative), non-hospice 
providers furnishing such items, services, or drugs, or Medicare 
contractors may request a written list as an addendum to the election 
statement. If the election statement addendum is requested at the time 
of hospice election, the hospice must provide this information, in 
writing, to the individual (or representative) within 48 hours. If this 
addendum is requested during the course of the hospice election, the 
hospice must provide this information, in writing, immediately to the 
requesting individual (or representative), non-hospice provider, or 
Medicare contractor. If there are any changes to the content on the 
addendum during the course of the hospice election, the hospice must 
update the addendum and provide these updates, in writing, to the 
individual (or representative). The election statement addendum must 
include the following:
    (1) The addendum must be titled ``Patient Notification of Hospice 
Non-Covered Items, Services, and Drugs.''
    (2) Name of the hospice.
    (3) Individual's name and hospice medical record identifier.
    (4) Identification of the individual's terminal illness and related 
conditions.
    (5) A list of the individual's conditions present on hospice 
admission (or upon plan of care update) and the associated items, 
services, and drugs not covered by the hospice because they have been 
determined by the hospice to be unrelated to the terminal illness and 
related conditions.
    (6) A written clinical explanation, in language the individual (or 
representative) can understand, as to why the identified conditions, 
items, services, and drugs are considered unrelated to the individual's 
terminal illness and related conditions and not needed for pain or 
symptom management. This clinical explanation must be accompanied by a 
general statement that the decision as to whether or not conditions, 
items, services, and drugs are related is made for each patient and 
that the individual should share this clinical explanation with other 
health care providers from which they seek items, services, or drugs 
unrelated to their terminal illness and related conditions.
    (7) References to any relevant clinical practice, policy, or 
coverage guidelines.
    (8) Information on the following--
    (i) Purpose of addendum. The purpose of the addendum is to notify 
the individual (or representative), in writing, of those conditions, 
items, services, and drugs the hospice will not be covering because the 
hospice has determined they are unrelated to the individual's terminal 
illness and related conditions.
    (ii) Right to immediate advocacy. The addendum must include 
language that immediate advocacy is available through the Medicare 
Beneficiary and Family Centered Care-Quality Improvement Organization 
(BFCC-QIO) if the individual (or representative) disagrees with the 
hospice's determination.
    (9) Name and signature of the individual (or representative) and 
date signed, along with a statement that signing this addendum (or its 
updates) is only acknowledgement of receipt of the addendum (or its 
updates) and not necessarily the individual's (or representative's) 
agreement with the hospice's determinations.
* * * * *

    Dated: April 4, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: April 9, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-08143 Filed 4-19-19; 4:15 pm]
 BILLING CODE 4120-01-P