[Federal Register Volume 84, Number 151 (Tuesday, August 6, 2019)]
[Rules and Regulations]
[Pages 38484-38544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16583]



[[Page 38483]]

Vol. 84

Tuesday,

No. 151

August 6, 2019

Part IV





 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; Final Rule

  Federal Register / Vol. 84 , No. 151 / Tuesday, August 6, 2019 / 
Rules and Regulations  

[[Page 38484]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1714-F]
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: Final rule.

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SUMMARY: This final rule updates the hospice wage index, payment rates, 
and cap amount for fiscal year 2020. This rule also rebases 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 modifies the election statement by requiring an 
addendum that includes information aimed at increasing coverage 
transparency for patient under a hospice election. Finally, this rule 
includes changes to the Hospice Quality Reporting Program.

DATES: These regulations are effective on October 1, 2019.

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: 

I. Executive Summary

A. Purpose

    This final rule makes 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 also 
rebases 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 changes 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 
modifies 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 includes changes 
to the Hospice Quality Reporting Program.

B. Summary of the Major Provisions

    Section III.A.2 of this final 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 of this final rule rebases 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 finalizes 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 rule eliminates 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 updates 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.3 of this rule, we 
discuss the FY 2020 hospice payment update percentage of 2.6 percent. 
Section III.B.4 outlines the final FY 2020 hospice payment rates. 
Section III.B.5 of this final rule updates the hospice cap amount for 
FY 2020 by the hospice payment update percentage discussed in section 
III.B.3 of this rule. Section III.C modifies 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.
    Finally, in section III.E of this 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 final rule is estimated to be 
$520 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

[[Page 38485]]

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. CHC 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 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 (routine home 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.

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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 or 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, 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

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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. In the FY 2014 hospice final rule (78 FR 48242), we 
clarified that ``Debility'' or ``adult failure to thrive'' should not 
be used as a principal hospice diagnosis on the Hospice claim form per 
ICD-9-CM Coding Guidelines. Since this clarification, there has been an 
increase in the reporting of neurological conditions as the principal 
diagnosis 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 diagnoses, and 82.1 
percent of claims included at least three diagnoses.

III. Provisions of the Final Rule

A. 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 (RHC, CHC, IRC, and 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 
hospice benefit, the base payment rates 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 costs 
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 implemented 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.

[[Page 38488]]

    In the FY 2020 proposed rule (84 FR 17577) we described the 
information that was collected on hospice claims effective April 1, 
2014 and additional changes in reporting requirements over the 
following years.\2\ 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. 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.
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    \2\ CMS Transmittal 2864. Additional Data Reporting Requirements 
for Hospice Claims. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864CP.pdf.
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    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). 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.\3\
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    \3\ The Provider Reimbursement Manual--Part 2. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html.
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    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.\4\ 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.
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    \4\ 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.
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2. Methodology and Analysis of Costs per Day for Continuous Home Care, 
Inpatient Respite Care, and General Inpatient Care
a. Hospice Cost Report Data
    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. In the FY 2020 proposed 
rule, we provided a walkthrough of the methodology and analysis of 
costs per day for continuous home care, inpatient respite care, and 
general inpatient care (84 FR 17578). For this final rule, although we 
used more recent cost report and claims data (still covering FY 2017), 
the methodology to calculate such costs remains the same as in the FY 
2020 proposed rule.
    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. To determine the average per-day costs of providing 
hospice services, we conducted initial analysis of both freestanding 
and provider-based hospice cost reports.\5\
---------------------------------------------------------------------------

    \5\ Cost reports from FY 2017 had a start date on or after 
October 1, 2016 and before October 1, 2017.
---------------------------------------------------------------------------

    As mentioned in the FY 2020 proposed rule (84 FR 17578), to create 
the initial analytic file, we took a number of data cleaning steps to 
exclude certain hospices such as excluding a small number of hospices 
(as represented by CCN) that had multiple FY 2017 cost reports in the 
HCRIS cost report data file (exclusion 1). For those hospices, we kept 
the cost report that covered the greatest length of time in FY 2017.\6\ 
We eliminated SNF, HHA, and hospital cost reports that did not contain 
a hospice CCN (exclusion 2); and we eliminated cost reports (as 
represented by CCN) due to the same CCN listed multiple times (that is, 
there might be two separate reports of RHC costs for the same CCN 
within a provider-based cost report, or a CCN appeared in a 
freestanding cost report as well as appeared in a provider based cost 
report)(exclusion 3). In order to limit each hospice to one single cost 
report, we selected the cost report with the highest RHC cost.\7\
---------------------------------------------------------------------------

    \6\ 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.
    \7\ 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.
---------------------------------------------------------------------------

    Next, we constructed a series of flags to identify hospice 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.\8\ These 
instructions describe a number of new Level I edit conditions that 
required freestanding hospices to fill out certain parts of their cost 
reports effective for freestanding hospice cost reports with a 
reporting period that ended on or after December 31, 2017.
---------------------------------------------------------------------------

    \8\ Medicare Provider Reimbursement Manual--Part 2, Provider 
Cost Reporting Forms and Instructions, Chapter 43, Form CMS-1984-14. 
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R3P243.pdf.
---------------------------------------------------------------------------

    Finally, 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). 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''. 
After applying the trimming exclusions, including the Level I edits, 
1,232 freestanding hospice cost reports remained as noted in Table 1 
below:

[[Page 38489]]



 Table 1--Number of FY 2017 Freestanding Hospice Cost Reports After the
                   Level I Edits Exclusion and 1% Trim
------------------------------------------------------------------------
                                          Number of cost  Number of days
              Level of care                reports after    by level of
                                            exclusions     care (FY2017)
------------------------------------------------------------------------
RHC.....................................           1,109      43,255,420
GIP.....................................             817         790,195
CHC.....................................             440         187,554
IRC.....................................             915         135,384
------------------------------------------------------------------------
Note: We begin with the 3,223 freestanding cost reports that remained
  after applying exclusions in 1-3. After applying the Level I edits,
  1,232 freestanding cost reports remained. Not all cost reports contain
  information on each level of care. Numbers noted above indicate the
  number of cost reports available for analysis for each level of care
  after all exclusions, including the 1% trim are applied.

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 
statistical area (CBSA) where a particular day's hospice services took 
place.\9\ We merged information from the June 2018 release of the CMS 
Provider of Services (POS) file to identify characteristics of each 
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.
---------------------------------------------------------------------------

    \9\ FY 2017 Final Hospice Wage Index. 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 in the FY 2020 proposed rule (84 FR 
17580).
    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:

------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 Adjusted RHC cost per day = (RHC cost per day from 2017 cost reports) *
 (0.6871) / (Hospice's average wage index for all RHC days in FY 2017) +
         (RHC cost per day from 2017 cost reports) * (1-0.6871)
------------------------------------------------------------------------
Note: 0.6871 is the labor share used to wage index adjust RHC payments.

    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,\10\ ownership type,\11\ urban/rural status,\12\ and size.\13\
---------------------------------------------------------------------------

    \10\ Freestanding versus provider-based.
    \11\ 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.
    \12\ Urban/rural status is reported on the POS and corresponds 
to the mailing address of the hospice.
    \13\ 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).
---------------------------------------------------------------------------

    For each category of hospices and the calculations for each level 
of care, we use the following steps:
    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; 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.\14\
---------------------------------------------------------------------------

    \14\ 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] TR06AU19.028

    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

[[Page 38490]]

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 and in the FY 2020 
proposed rule, average costs per day by level of care in FY 2017 are 
listed in Table 2 below:

         Table 2--Average Cost per Day by Level of Care, FY 2017
------------------------------------------------------------------------
                                                           Average cost
                      Level of care                           per day
------------------------------------------------------------------------
RHC.....................................................         $130.85
CHC (24 Hours)..........................................        1,307.76
CHC (Per Hour)..........................................           54.49
IRC.....................................................          441.03
GIP.....................................................          952.56
------------------------------------------------------------------------

    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. Hospice 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:
     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 labor share component of 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. We only applied the resource ratio to the labor share 
component because the resource ratio is calculated using minutes of 
direct patient care as reported on the claims. This approach is 
consistent with what was done in the FY 2016 hospice final rule (80 FR 
47166) to construct the two-tiered payment. The resulting average cost 
per day for RHC is shown in Table 3.

                                           Table 3--Average RHC Costs
                              [FY 2017 per day for days 1 through 60 and days 61+]
----------------------------------------------------------------------------------------------------------------
                                                                               Resource use
                                                                               ratio (only
                                                                              applied to the    Average cost per
                   RHC level of care                      Average cost per     labor share,      day in FY2017
                                                                day          which is 68.71%   (based on days of
                                                                                of the RHC            RHC)
                                                                              payment rate)
----------------------------------------------------------------------------------------------------------------
Days 1-60..............................................            $130.85             1.2603            $154.25
Days 61+...............................................             130.85             0.8722             119.36
----------------------------------------------------------------------------------------------------------------

    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 for FY 2018 (82 FR 36649) 
and FY 2019 (83 FR 38630) less the multifactor productivity (MFP) 
adjustments corresponding to each year. The estimated average costs for 
FY 2019 (that is, taking the average FY 2017 cost per day by each level 
of care inflated to FY 2019 dollars) is detailed in Table 4.

                        Table 4--Estimated Average Costs (FY 2019) for CHC, IRC, and GIP
----------------------------------------------------------------------------------------------------------------
                                                          FY 2018 hospice    FY 2019 hospice
                                                           market basket      market basket
            Level of care              FY 2017 average      update less        update less     FY 2019 estimated
                                            costs           productivity       productivity      average costs
                                                             adjustment         adjustment
----------------------------------------------------------------------------------------------------------------
CHC (per Hour)......................             $54.49             x1.021             x1.021             $56.80
IRC.................................             441.03             x1.021             x1.021             459.75
GIP.................................             952.56             x1.021             x1.021             992.99
----------------------------------------------------------------------------------------------------------------

    We also analyzed the average costs of 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 for FY 2018 and FY 
2019 less the MFP adjustments corresponding to each year. The estimated 
average costs for RHC by days for FY 2019 is shown in Table 5 below.

[[Page 38491]]



                Table 5--Estimated Average Costs for RHC (FY 2019) Days 1 Through 60 and Days 61+
----------------------------------------------------------------------------------------------------------------
                                                          FY 2018 hospice    FY 2019 hospice
                                                           market basket      market basket
            Level of care              FY 2017 average      update less        update less     FY 2019 estimated
                                            costs           productivity       productivity      average costs
                                                             adjustment         adjustment
----------------------------------------------------------------------------------------------------------------
RHC Days 1-60.......................            $154.25             x1.021             x1.021            $160.80
RHC Days 61+........................             119.36             x1.021             x1.021             124.43
----------------------------------------------------------------------------------------------------------------

    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 6 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.

                 Table 6--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 day     payment rates     needed to align
                                  in FY 2018 *                                                     with costs
----------------------------------------------------------------------------------------------------------------
CHC..........................                0.2  $1,363.26/$56.80 (per        $997.38/$41.56              +36.6
                                                   hour).
IRC..........................                0.3  $459.75.................             176.01             +161.2
GIP..........................                1.3  $992.99.................             758.07              +31.0
----------------------------------------------------------------------------------------------------------------
* Note: We used the FY 2018 percent of days by level of care as this is the most current data available.

    We also compared the FY 2019 average costs for RHC for the first 60 
days and for any RHC days after day 60 to the FY 2019 payment rates for 
RHC and the percentage difference between payment and average costs. 
The percent difference between costs and payment represents how much we 
would need to reduce the RHC payments in order to align payments with 
costs. The results are shown in Table 7 below. However, we did not 
propose to rebase the RHC payment rates as any changes to the CHC, IRC, 
and GIP payment rates must be done in a budget-neutral manner as 
required by law.

                         Table 7--Comparison of FY 2019 Average Costs to Payment for RHC
----------------------------------------------------------------------------------------------------------------
                                                                                                    Percent
                                                            Estimated FY     FY 2019  payment      difference
                     Level of care                          2019 average          rates          between  costs
                                                           costs per day                          and  payment
----------------------------------------------------------------------------------------------------------------
RHC Days 1-60..........................................            $160.80            $196.25              -18.1
RHC Days 61+...........................................             124.43             154.21              -19.3
----------------------------------------------------------------------------------------------------------------

3. Rebasing of the CHC, IRC, and GIP Payment Rates for FY 2020
    As described in the proposed rule (84 FR 17582) and in this final 
rule, 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, in the FY 2020 proposed rule., we proposed 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.B.3 of this final rule. Using the 
updated cost report and claims data as shown previously in this final 
rule, the rebased payment rates for CHC, IRC, and GIP are as follows:

         Table 8--Rebased Payment Rates for CHC, IRC, and GIP *
------------------------------------------------------------------------
               Level of care                   Rebased payment rates *
------------------------------------------------------------------------
Continuous Home Care (CHC)................  $56.80 per hour/$1,363.26
                                             (per day.**
Inpatient Respite Care (IRC)..............  $437.86.***
General Inpatient Care (GIP)..............  $992.99.
------------------------------------------------------------------------
* Prior to application of the hospice payment update of 2.6 percent
  outlined in section III.B.3 of this final rule.
** Based on a full CHC per day payment (which covers 24 hours).
*** IRC payment rate accounts for 5 percent coinsurance ($459.75/1.05 =
  $437.86).

    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

[[Page 38492]]

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. The results of the calculations demonstrated in the 
FY 2020 proposed rule (84 FR 17583) show that in order to rebase the 
payment rates for the 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 2.71 percent reduction would be applied to the RHC payment 
rates for the first 60 days and RHC days after day 60. However, using 
more recent claims data for this final rule, these same calculations 
show that the actual reduction to the RHC payment rate would need to be 
2.72 percent. To calculate the 2.72 percent reduction to the RHC 
payment rates, we first calculated 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.
    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.\15\
---------------------------------------------------------------------------

    \15\ 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 $468,223,480.70 for those levels of 
care. The RHC payments that were made under the payment rates in 
place during FY 2019 were $17,238,380,386.58. One minus the value of 
the extra payments over the RHC payments equals 0.9728.
---------------------------------------------------------------------------

    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. 
Essentially, the reduction is the weighted difference between non-RHC 
costs and payments divided by the weighted RHC payments, where the 
weights are the percent of days by level of care.
    The results of this calculation demonstrate that in order to rebase 
the payment rates for the CHC, IRC, and GIP levels of care in a budget 
neutral manner, the RHC payment rates would need to be reduced by 2.72 
percent. The 2.72 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 0.9728 to 
determine the FY 2019 RHC payment rates).
    Therefore, in order to offset the increases in payment rates to the 
CHC, IRC, and GIP levels of care, we would reduce the RHC payment rates 
by 2.72 percent in order to implement rebasing in a budget-neutral 
manner in FY 2020. However, 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 2.72 percent. Therefore, 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 2.72 percent reduction 
does not bring the RHC payment in alignment with the costs of providing 
this level of care. The purpose of the 2.72 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.
    We received 113 unique comments regarding the rebasing methodology 
and analysis, as well as the rebased payment rates for CHC, IRC, and 
GIP. Most of these comments were from hospices, industry associations 
and other relevant stakeholders, including comments from the Medicare 
Payment Advisory Commission (MedPAC). These comments are summarized 
below along with our responses:
    Comment: Several commenters were supportive of CMS' proposal to 
rebase the per diem payment amounts for CHC, GIP and IRC in order to 
ensure that payments are closer to the estimated cost of providing each 
level of care. Commenters stated that rebasing the rates for these 
three levels of care addresses concerns that hospices lose money on the 
increased costs of providing more complex medical management. These 
commenters stated that hospices often have to pay contractors and the 
facilities providing this increased level of care more than the payment 
rates the hospices are currently receiving. Further, commenters 
suggested that, were CMS to finalize this proposal, the potential 
increase in availability of hospices to provide these levels of care 
would benefit patients and their caregivers. A few commenters stated 
that rebasing the CHC, GIP, and IRC rates would benefit rural hospices 
who have fewer facilities and contractors with which to provide this 
care.
    Response: We thank commenters for their thoughtful review and 
support of our efforts to better align hospice costs of providing care 
for patients receiving CHC, GIP, and IRC and to support hospices 
working with outside contractors and facilities. We agree that rebasing 
these rates would adequately cover the costs of providing these higher 
intensity levels of care, could ensure that hospices have access to the 
providers needed to comply with the hospice Conditions of Participation 
(CoPs), and promote patient access to all levels of care.
    Comment: CMS received several comments about the large number of 
cost reports eliminated with exclusion 2 (that is, we eliminated SNF, 
HHA and hospital cost reports that did not contain a hospice CCN) and 
as reported in Table 2 of the proposed rule (84 FR 17578). Many 
commenters also mentioned that CMS used cost reports for FY 2017 and 
applied Level I edits; however, the edits went into effect for cost 
reporting periods that ended on or after December 31, 2017. These 
commenters expressed concern that CMS applied the Level I edits to 
freestanding and provider-based cost reports even though the edits were 
not applicable to provider-based cost

[[Page 38493]]

reports for 2017 or subsequent cost reports thus stating we shouldn't 
use them in our analysis. Several commenters recommended that CMS 
include provider-based cost reports as the sample size used for the 
analysis and methodology is relatively small. These commenters 
suggested that using larger sample of cost reports by incorporating 
cost reports from provider-based hospices when rebasing CHC, IRC and 
GIP per diem rates would provide more robust and accurate information.
    Response: For the FY 2020 final rule, CMS updated the FY 2017 cost 
reports using the hospice cost report file http://downloads.cms.gov/Files/hcris/HOSPC14-ALL-YEARS.zip from the proposed rule (84 FR 17578). 
There are 4,195 hospice cost reports as of June 21, 2019 versus 4,125 
from the proposed rule. We describe, in detail, in this final rule and 
in the FY 2020 hospice proposed rule (84 FR 17570), all of the 
exclusions applied to hospice cost reports to estimate the average cost 
per day by level of care. And in this final rule, we remind commenters 
that the final sample of cost reports is higher than described in the 
proposed rule (1,232 cost reports for this final rule compared to 1,120 
in the proposed rule). We note that most SNFs do not have a hospice CCN 
associated with it, so most of the SNF cost reports were dropped. We 
believe that eliminating these SNF cost reports with no associated 
hospice CCN would more accurately filter out those costs not related to 
the cost of providing hospice care and where much of the reported costs 
may be for the provision of SNF services. Additionally, we considered 
proposing to use freestanding and provider-based cost reports to rebase 
CHC, IRC, and GIP payment rates, rather than just using freestanding 
cost reports. However, when we analyzed both freestanding and provider-
based cost reports, the results tend to be similar. On average, 
incorporating provider-based cost reports results in higher costs than 
the cost reports for freestanding hospices only, as shown in Table 27 
of the FY 2020 hospice proposed rule (84 FR 17616).
    Similarly, when we rebased the national, standardized 60-day 
episode payment rate for home health agencies beginning in CY 2014, we 
estimated costs using only freestanding HHA cost reports for the same 
reasons detailed in the FY 2020 hospice proposed rule (that is, 
freestanding cost reports reflect actual hospice costs and not those 
additional costs borne from the parent entity). Therefore, it is not 
unprecedented in Medicare payment systems to use only freestanding cost 
reports, rather than including provider-based cost reports for rebasing 
purposes.
    Additionally, in MedPAC's March 2018 report to Congress, MedPAC 
stated that overhead costs allocated from the parent provider are 
included in the costs for provider-based hospices, which contributes to 
provider-based hospices having higher costs than freestanding hospices. 
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. Ultimately, we used 
freestanding cost reports to estimate the average cost per day by level 
of care.
    As detailed in the FY 2020 proposed rule, we also applied Level I 
edits (and removed certain reports with missing data from our sample) 
manually because not all FY 2017 freestanding cost reports had a 
reporting period that ended on or after December 31, 2017. We decided 
to apply Level I edits based on suggestions by industry representatives 
to apply certain edits to force adherence to certain cost-reporting 
principles that could lead to the reporting of higher-quality cost 
data. Therefore, we believe it is most technically appropriate to apply 
the Level I edits. Furthermore, we show in Table 26 of the proposed 
rule (84 FR 17616) that the differences in costs between including and 
not including exclusions based on the Level I edits were minimal for 
RHC, CHC, and GIP. The difference between applying Level I edits versus 
not applying the edits is less than one dollar for RHC, CHC, and GIP. 
However, the IRC cost per day between the two trimming methodologies 
was more pronounced, but still not significantly so. In looking at FY 
2017 estimated average per day costs using all of the trimming 
exclusions, and as shown in Table 26 in the proposed rule, the cost for 
IRC was $438.97; applying all of the trimming exclusions, excluding the 
Level I edits, the cost for IRC was $467.78 (a 6.6% increase). 
Therefore, for purposes of estimating the costs by level of care, we 
believe that applying the Level I edits is appropriate given these 
edits are now applied for hospice cost reports and there was minimal 
effect on the average costs per day.
    Comment: Several commenters stated that many hospices do not 
accurately or consistently complete cost reports, thus rendering the 
data inaccurate. These commenters stated that because of the 
inaccuracies in the cost reports, CMS should not use hospice cost 
reports as the source of data to estimate costs. Several commenters 
mentioned concerns about the accuracy of the cost report data in the FY 
2017 cost reports that CMS used for their analysis and methodology. A 
few commenters stated that CMS did not provide additional information 
about which provider's data was used.
    Response: We remind hospices that each hospice cost report is 
required to be certified by the medical officer or hospice 
administrator. The hospice Medicare Cost Report (MCR) form (CMS-1984-
14) includes a dated and signed statement indicating that all 
information is true, correct, and prepared from the books and records 
of the provider in accordance with applicable instructions, except as 
noted. Additionally, as required by section Sec.  413.24(f)(4)(iv)(A) 
the cost report must be signed by either the Chief Financial Officer or 
the Administrator. If there are errors within a cost report, they must 
be filed on time and if there is any type of problem with it that 
cannot be addressed timely, the MAC may withhold Medicare payments. 
Therefore, we expect and it is required that hospice cost reports 
contain accurate and complete data on which to base our analyses.
    As always, we encourage providers to fill out the Medicare cost 
reports as accurately as possible. The Provider Reimbursement Manual 
\15\ provides detailed instructions on filling out the cost reports. 
CMS further encourages hospice providers to contact the appropriate 
Medicare Administrative Contractor (MAC) if additional instruction or 
assistance is needed. Furthermore, as the cost reports are to reflect 
all of the costs associated with providing hospice care by level of 
care, we believe that it is the most appropriate mechanism in which to 
estimate costs for rebasing payment rates.
---------------------------------------------------------------------------

    \15\ The Provider Reimbursement Manual--Part 2. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html.
---------------------------------------------------------------------------

    Our cost report analysis was based on information obtained from the 
Healthcare Cost Report Information System (HCRIS). As mentioned in the 
proposed rule (84 FR 17578), the hospice cost report data contains cost 
and statistical data for freestanding and provider-based hospice 
providers. For the proposed rule, we used HCRIS data files from 
December 31, 2018. For this final rule we used more up to date cost 
report data from March 31, 2019. The updated data contains 4,195 
hospice cost reports versus 4,125 from the

[[Page 38494]]

proposed rule. In our analysis, we used Worksheet S-2 to determine if 
the provider-based cost reports had a hospice CCN. Information 
regarding costs per day by level of care came from worksheet O8 for 
provider-based cost reports and worksheet C for freestanding cost 
reports. Information needed to construct the level I edits came from 
worksheet A for freestanding cost reports and worksheet O and O5 for 
provider-based cost reports. We feel confident that the cost reports 
that the hospice providers submit are accurate and that the signatures 
obtained by the administrator and or Officer are true, correct, 
complete, and prepared from the books and records of the provider in 
accordance with applicable instructions.
    Comment: Several commenters disagreed with the proposal to rebase 
the CHC, IRC, and GIP payment rates stating that the reduction in the 
RHC payment rate in order to maintain budget neutrality effectively 
turns the rebasing proposal into a rate cut even after the proposed 
payment update. These commenters stated that this would create 
financial and staffing hardships for hospices, especially smaller rural 
hospices. Some commenters stated that payment adjustments that more 
accurately capture and compensate for differences in costs of providing 
hospice services in rural versus urban communities may first be 
necessary before CMS rebases payment rates. A few commenters stated 
that the effect of rebasing will be felt unevenly across providers, 
depending on the amount of GIP, CHC and IRC being provided by an 
individual hospice and that CMS should ensure that payment adjustments 
adequately account for differences in costs based on geography.
    Response: Section 1814(i)(6)(D)(ii) of the Act requires that any 
revisions to the hospice payment rates be done in a budget neutral 
manner. Meaning the revisions in payment for GIP, IRC and CHC must 
result in the same estimated aggregate expenditures had the revisions 
not been implemented. After applying the FY 2020 hospice payment update 
of 2.6 percent and accounting for the rebasing of the GIP, IRC and CHC 
payment rates (which requires a 2.72 percent reduction to the RHC 
payment rate) the net result would only be a reduction of 0.19 percent 
to the RHC payment rate. That reduction equates to approximately 37 
cents on RHC days 1 through 60 and 29 cents on days 61 plus (compared 
to the FY 2019 RHC payment rates). Given that MedPAC in their recent 
March 2019 Report recommended a 2 percent reduction to the hospice base 
payment rates and projects Medicare hospice margins to be 10.1 percent 
for 2019, we feel the reduction to the RHC payment rate would not 
create financial hardships for hospices. Furthermore, in their March 
2019 report, and their comments on the proposed rule, MedPAC reported 
that the aggregate 2016 Medicare margin, which is an indicator of the 
adequacy of Medicare payments relative to providers' costs, was 10.9 
percent, up from 9.9 percent in 2015. They stated that hospice costs 
per day vary substantially by type of provider, which is one reason for 
differences in hospice margins across provider types. In 2016, hospice 
costs per day across all hospice providers were about $149 on average, 
a slight decrease from $150 in the previous year. Some of the decline 
in cost per day is accounted for by a shift in the mix of hospice days, 
with the share of days accounted for by routine home care (the lowest 
cost level of care) increasing in 2016. Freestanding hospices had lower 
costs per day than provider-based hospices (that is, home health-based 
hospices and hospital based hospices). For-profit, above-cap, and rural 
hospices also had lower average costs per day than their respective 
counterparts.
    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. 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. Overall, rural 
hospices would have a slight decrease (estimated to be less than 1 
percent) in payments as a result of the rebased payment rates for CHC, 
GIP, and IRC. However, rural, non-profit HHAs will see an increase in 
payments, compared to rural for-profit HHAs who will see a slight 
decrease in payments as a result of the rebased rates.
    Comment: Several commenters, including a national industry group, 
agreed that while the CHC, IRC, and GIP payment rates need to be 
increased, they expressed concern that CMS needs to examine any 
negative impact on access to care.
    Response: We disagree that increasing the rates for CHC, IRC, and 
GIP would have a negative impact on access to care. Conversely, we 
believe that aligning the payment with the cost of providing care 
should have a positive effect on access to needed levels of care. We 
believe that hospices who currently cannot provide adequate CHC will 
now have the resources to hire adequate staff to ensure patients 
needing CHC level of care will have the needed nursing support during a 
time of symptom crisis. Likewise, for those hospices who do not have 
their own freestanding, inpatient unit, we believe the higher payment 
rates for IRC and GIP will afford them more latitude when negotiating 
contracts with skilled nursing facilities and hospitals to best meet 
the needs of their patients requiring inpatient levels of care. 
However, we will continue to monitor the effects of these rebased rates 
to determine if there are any notable shifts in the provision of care 
or any other perverse utilization patterns that would warrant any 
program integrity or survey actions.
    Comment: Many commenters suggested to postpone any rebasing for 2 
years so that CMS has enough time to validate cost reports and accuracy 
of data to support the changes, or at the very least, implement a 
phased-in approach to increasing the payment rates for CHC, IRC, and 
GIP payment rates and reducing the RHC payment rates.
    Response: While we understand why some hospices would prefer to 
postpone or phase-in rebasing of the CHC, IRC, and GIP payments and the 
corresponding reduction to RHC payments to maintain budget neutrality, 
we disagree with either of these approaches as this would not align 
payment with the costs of providing the higher intensity levels of 
care.
    We will continue to monitor utilization with implementation of 
these rebased rates to see if there are any trends that may warrant 
other appropriate actions, including program integrity measures. 
Furthermore, a phased-in approach would require a recalculation of the 
RHC amount each year based on the most recent utilization of CHC, IRC 
and GIP. If there was an increase in utilization of those levels (CHC, 
IRC, GIP) we would then have to further adjust the RHC rate to account 
for the increase in utilization, which could further reduce the RHC 
rate. Likewise, even with the 2.72 percent reduction to the RHC rates, 
the payment for both days 1-60 and days 61+ still exceeds the cost of 
providing this level of care, as shown in Table 7 in this final rule.
    Comment: Several commenters noted that the changes to the IRC per 
diem payments would make it easier to

[[Page 38495]]

provide respite care to patients and their families needing such 
support. One commenter noted that the rebasing of GIP would have a 
positive impact on those hospices that provide GIP in their own 
freestanding facilities. Hospice providers stated that this change 
would allow their freestanding facility to operate with positive 
margins for the first time. Other commenters remarked that the 
increased IRC rates will enable them to find nursing facilities willing 
to contract with them for respite stays. A large number of commenters 
stated that upward adjustment for CHC, GIP, and IRC is warranted given 
the misalignment between payment and costs.
    Response: We appreciate these comments and agree that rebasing the 
IRC payment rate may result in greater access to inpatient respite care 
for terminally ill patients and their families. Likewise, the rebasing 
proposals help to align payment with the cost of providing care and we 
believe that this proposal is responsive to industry concerns and 
challenges related to providing these higher intensity levels of care.
    Comment: Many hospices, along with MedPAC, noted concerns about 
creating incentives for hospices to improperly expand the use of 
inpatient levels of care as a result of rebasing. They suggested 
considering a prospective payment adjustment to GIP to maintain budget 
neutrality if aggregate payments increase as a result of these payment 
changes. MedPAC also expressed concern about the proposed increase in 
the GIP payment rate provided in a skilled nursing facility (SNF) and 
urged CMS to maintain the current payment rate of GIP provided in SNFs. 
MedPAC cited reports from hospice providers that it costs less to 
contract for GIP in a SNF than with a hospital. A few other commenters 
suggested that CMS reconsider increasing the GIP per diem payment rate 
in skilled nursing facilities (SNFs). They suggested that an increase 
in the payment rate for GIP would likely make providing GIP in SNFs 
quite profitable and could create incentives for more hospice providers 
to furnish GIP in SNFs. They further note that GIP care in the SNF 
setting tends to be less resource intensive and less costly than in a 
hospital or hospice facility.
    Response: We believe that the rebased rates will help appropriately 
increase access to care but we are aware of the perverse incentives 
that could occur with increases in payment rates. We recognize that 
there may be an increase in utilization of these higher intensity 
levels of care but we believe that this may be appropriate to meet 
patient care needs. We remind stakeholders that there are criteria for 
receiving these higher levels of care which may potentially buffer any 
inappropriate increases in utilization. Continuous home care may be 
provided only during a period of crisis as necessary to maintain an 
individual at home. Either homemaker or home health aide (hospice aide) 
services or both may be covered on a 24-hour continuous basis during 
periods of crisis but care during these periods must be predominantly 
nursing care. A period of crisis is a period in which a patient 
requires continuous care to achieve palliation or management of acute 
medical symptoms. The hospice must provide a minimum of 8 hours of care 
during a 24-hour day, which begins and ends at midnight. This care need 
not be continuous; for example, 4 hours could be provided in the 
morning and another 4 hours in the evening. In addition to the 8 hour 
minimum, the services provided must be predominantly nursing care, 
provided by either an RN, an LPN, or an LVN. Respite care is short-term 
inpatient care provided to the individual only when necessary to 
relieve the family members or other persons who normally care for the 
individual at home. Respite care may be provided only on an occasional 
basis and may not be reimbursed for more than 5 consecutive days at a 
time. Payment for the sixth and any subsequent day of respite care is 
made at the routine home care rate, and the patient would be liable for 
room and board. Respite care cannot be provided to hospice patients who 
reside in a facility (such as a long term care nursing facility). 
Provision of respite care depends upon the needs of the patient and of 
the patient's caregiver (and is subject to the regulatory limitations 
set out at Sec.  418.302(e)(5)). And finally, GIP is allowed when the 
patient's medical condition warrants a short term inpatient stay for 
pain control or acute or chronic symptom management that cannot 
feasibly be provided in other settings.
    To address MedPAC and other stakeholder comments regarding the 
difference in the provision of GIP in a SNF compared to an inpatient 
hospital, we note the current cost report does not allocate costs for 
GIP by site of service. Additionally, our analysis has shown that very 
few GIP days are provided in a SNF compared to other freestanding 
facilities and inpatient hospitals. Likewise, the types of hospices 
providing GIP in a SNF may be different in other ways compared to 
hospices that do not provide GIP in a SNF. It is possible those 
differences are correlated with the costs.
    Additionally, we continue to expect hospices to provide care in 
accordance with the individualized plan of care as required by the 
hospice CoPs at Sec.  418.56. This means that we do not expect that 
hospices would move patients into higher intensity levels of care 
solely to receive higher payments. As mentioned in the proposed rule, 
we believe that rebasing the per diem payment amounts for CHC, GIP, and 
IRC is appropriate in order to align payments with cost of providing 
care. Likewise, potential, subsequent increases in utilization would 
not necessarily be inappropriate. Hospice providers still need to meet 
the necessary requirements stated in section 1861(dd) of the Act and 
the hospice CoPs, which require that hospice agencies regardless of 
size, location or other organizational or market characteristics must 
be able to provide all four levels of hospice care. As part of our 
routine monitoring of hospice utilization, we will continue to closely 
analyze any changes in the patterns of care in response to these 
rebased payment rates to determine if any additional actions are 
warranted.
    Comment: Several commenters suggested that CMS should increase its 
oversight of hospice providers not delivering the services required 
under the hospice CoPs and exhibiting inappropriate practices 
highlighted by the OIG and the MedPAC.
    Response: We note that compliance with the hospice CoPs is 
monitored through the survey process. The IMPACT Act of 2014 currently 
requires hospice survey/recertifications every 3 years. Survey 
protocols and Interpretive Guidelines are established to provide 
guidance to personnel conducting surveys of hospices. They serve to 
clarify and/or explain the intent of the regulations. All surveyors are 
required to use them in assessing compliance with federal 
requirements.\16\ There are different types of surveys including survey 
for initial certification for participation in Medicare; a 
recertification survey which are unannounced and must verify compliance 
with all the regulatory requirements contained at Sec. Sec.  418.52 
thru 418.116; a post-survey onsite revisit is to reevaluate the 
specific care and services that were cited during a previous survey 
that cannot be adequately assessed by mail, telephone

[[Page 38496]]

or electronic contact, or; a complaint investigation in which a survey 
is conducted to investigate and resolve a complaint against a hospice. 
We believe that there are already systems in place to ensure compliance 
with the hospice CoPs and we will continue to coordinate with the State 
Agencies to identify any ongoing concerns as they relate to the CoPs 
and to determine whether any additional oversight mechanisms need to be 
in place. We are committed to encouraging providers to supply the best 
quality care in the most appropriate ways, and we will continue to work 
to incentivize and monitor for the most appropriate practices in the 
hospice provider community.
---------------------------------------------------------------------------

    \16\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters expressed concern that increasing the 
rates for IRC and GIP will result in contracted facilities raising the 
rates they charge hospices to provide these levels of care. 
Stakeholders remarked that these are essentially ``pass-through 
payments'' to contracted providers and would require hospice providers 
to bear the cost of providing these services while taking a large 
reduction to the RHC reimbursements. Some commenters stated that IRC 
and GIP can be supplied by hospice in various ways resulting in wide 
differences in costs for providing these levels of care. Commenters 
asserted that a small proportion of hospices operate hospice inpatient 
units directly, while some others are system or SNF-based and secure 
inpatient care through a parent entity. They suggested that the vast 
majority of hospice providers, more than 75 percent, enter into 
contracts with local hospitals or other facilities and therefore costs 
for inpatient days vary significantly. One commenter suggested that the 
estimated cost of IRC reported in the proposed rule does not accurately 
reflect the average cost of providing this level of care as it is being 
affected by high cost outliers and therefore the rebased payment rate 
may be inaccurate.
    Response: We remind stakeholders that CMS does not have the 
authority to mandate specific contractual agreements between hospices 
and other entities which have entered into an agreement to provide 
arranged hospice services. Hospices are required, in accordance with 
the CoPs at Sec. Sec.  418.100 and 418.108, to be able to provide all 
levels of hospice care. This means it is the responsibility of hospices 
to secure the necessary contracts to provide inpatient levels of care 
if the hospice does not provide them in their own freestanding 
facility. As such, hospices would have to negotiate appropriate rates 
with the contracted providers to ensure that the hospice has sufficient 
resources to provide the necessary care.
    To address the comment about IRC cost outliers, in the proposed 
rule, we trimmed the top and bottom 1 percent of cost reports, which 
excluded some outliers and have done so for the final rule. We 
recognize that IRC does have a wide distribution with outliers (even 
after taking out the top and bottom 1 percent). While there may be some 
high-cost outliers that affect the estimated, average cost of IRC, we 
remind stakeholders that utilization of IRC is low, accounting for 0.3 
percent of total hospice days and it would not take many outliers to 
impact the estimated costs of providing this level of care. As such, we 
would not want to make any further exclusions to only one particular 
level of care. Additionally, we note that the rebased payment rate for 
IRC excludes the 5 percent coinsurance for each day of respite care. 
However, commenters on the proposed rule stated that most hospices do 
not collect this coinsurance from beneficiaries. Therefore, overall 
payment to hospices for IRC is even further reduced in those 
circumstances when hospices do not collect this coinsurance.
    Final Decision: After considering the comments received in response 
to the proposed rule and for the reasons discussed above, we are 
finalizing our proposal to rebase the payment rates for CHC and GIP and 
set these rates equal to their average FY 2019 costs per day as shown 
in Table 8 of this final rule. We are finalizing rebasing of IRC 
payment rates and setting this rate equal to the estimated FY 2019 
average costs per day, with a reduction of 5 percent to the FY 2019 
average cost per day to account for coinsurance, also as shown in Table 
8 of this final rule. Lastly, we are finalizing a 2.72 percent 
reduction to the RHC payment rates to offset the increases to CHC, IRC, 
and GIP payment rates to implement this policy in a budget-neutral 
manner in accordance with section 1814(i)(6) of the Act.

B. FY 2020 Hospice Wage Index and Rate Update

1. 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, in the FY 2020 hospice 
proposed rule (84 FR 17584), we proposed to change the hospice wage 
index methodology. Specifically, we proposed 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 proposed 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 inpatient hospital prospective payment systems already use 
the most current wage index data as the basis for their wage indices. 
Thus, 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 9 
below.
BILLING CODE 4120-01-P

[[Page 38497]]

[GRAPHIC] [TIFF OMITTED] TR06AU19.029


[[Page 38498]]


[GRAPHIC] [TIFF OMITTED] TR06AU19.030

BILLING CODE 4120-01-C
2. 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 the FY 2020 proposed rule (84 FR 17586), 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, the only CBSA without a hospital from which hospital wage 
data can be derived is 25980, Hinesville-Fort Stewart, Georgia. The FY 
2020 wage index value Hinesville-Fort Stewart, Georgia is 0.8322. 
Please note that CBSA 16180 Carson City, NV had no provider wage data 
for the FY 2020 proposed hospice rule (84 FR 17586). However, this CBSA 
now has provider wage data for the updated final wage index file. The 
new wage index value for CBSA 16180 is 1.0070.
    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

[[Page 38499]]

to one another of almost all of Puerto Rico's various urban and non-
urban areas, this methodology would produce a wage index for rural 
Puerto Rico that is higher than that in half of its urban areas); 
instead, we would continue to use the most recent wage index previously 
available for that area. For FY 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.
    We identified a slight error in the proposed rule wage index values 
after the FY 2020 Hospice Wage Index and Payment Rate Update proposed 
rule was published. A programming error caused the data for all 
providers in a single county to be included twice, which affected the 
national average hourly rate, and therefore affected nearly all wage 
index values. We have changed the programming logic so this error 
cannot occur again. In addition, we corrected the classification of one 
provider in North Carolina that was erroneously identified as being in 
an urban CBSA. We also standardized our procedures for rounding, to 
ensure consistency. The correction to the proposed rule wage index data 
was not completed until after the comment period closed June 18, 2019. 
This final rule reflects the corrected and updated wage index data. The 
final 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.
    We received approximately 22 comments on the FY 2020 hospice index 
proposals from various stakeholders including hospices, national 
industry associations and MedPAC. A summary of these comments and our 
responses to those comments appear below:
    Comment: Several commenters expressed support for the wage index 
lag elimination. Several commenters stated that changing the lag with 
the Hospital Wage Index will help hospices be more competitive in the 
labor market, allow wages to track closer to market shifts, and allow 
hospices to compete in tight labor markets. One commenter expressed 
support for CMS' efforts to eliminate differences between provider 
types by removing the time lag. A few commenters suggested the proposed 
changes to the wage index calculations would provide consistency with 
the other Medicare payment systems. One commenter suggested that the 
existing lag makes it difficult for agencies and companies operating in 
multiple states. One commenter stated that there is value in 
consistency across provider types so that all providers can compete in 
same labor pool. The commenter further asserted that hospices may be 
able to provide input to hospitals on proposed wage index values. One 
commenter expressed support for eliminating the lag year and recognizes 
the value in having wage index consistency across provider types to 
enhance the ability of all employers in a given area to compete for 
staff from the same labor pool. The commenter further asserted that 
elimination of the lag year also provides some potential for hospices 
to provide input to local hospitals when proposed wage index values 
appear to undervalue the cost of labor in a geographic area.
    Response: While we appreciate the commenters' careful review of the 
proposal and the support for the removal of the wage index lag 
elimination, we reiterate that using the most current year's data will 
most accurately adjust payment to account for geographic wage 
differences.
    Comment: Several commenters suggested utilizing a transitional year 
wage index value that is a 50-50 blend of the lag year value and FY 
2020 wage index value. One commenter suggested that a transitional wage 
index would provide some relief from substantial negative impact that 
many providers would experience by going directly to the FY 2020 wage 
index. The commenter further asserted that wage index values for the 
other regions under a blend would still exceed the values they would 
have been assigned in FY 2019. One commenter recommended a phase-in to 
the removal over multiple years to minimize the disruption of the 
impact on the industry. The commenter further asserted that a phase-in 
is appropriate given the significant redistribution created by the 
proposed change. One commenter stated that while not opposed to 
removing the 1-year lag as other types use the most current wage index 
in calculating their indices, the commenter is concerned that the 
proposed rule does not provide additional adjustments.
    Response: While we appreciate commenters' suggestion to create a 
transitional wage index that is a 50-50 blend of FY 2019 and FY 2020 
wage index values, we believe that it is important to use the most 
recent data to increase payment accuracy. We also believe it is 
important to stay in alignment with other CMS payment systems so that 
there is parity and consistency in the wage index methodology.
    Comment: A few commenters expressed concern that removing the 1-
year lag would have a negative impact on hospices. One commenter 
suggested that removing the lag would have a negative short-term impact 
on hospices due to a shorter time period for providers to plan in cases 
where the wage index drops substantially. One commenter stated that the 
current 1-year lag allows hospices to plan for wage index changes which 
would be far more difficult if changes were based on the current year's 
wage index. One commenter stated that the proposal disadvantages 
providers because they would no longer have advance warning of wage 
index changes. The commenter further asserted that providers will be 
unable to plan for any significant shifts (particularly negative 
shifts). One commenter stated that elimination of the lag year allows 
hospices a much shorter period of time to adapt or adjust their 
financial expectations and absorb the impact of negative wage index 
swings, particularly swings under which the wage index value for an 
area drops precipitously.
    Response: We disagree that removing the 1-year lag would have a 
negative impact on hospices and we refer commenters to Table 9 of this 
final rule to see the impact with and without the 1 year wage index 
lag. We continue to believe that using the most current year's wage 
index would improve overall payment accuracy.
    Final Decision: After considering the comments we received on the 
elimination of the wage index lag, we

[[Page 38500]]

are finalizing the removal of the 1 year wage index lag. We are 
finalizing that we will use the current year's wage index to 
geographically wage adjust hospice payments, so for the FY 2020 hospice 
per diem payment rates, these will be geographically wage-adjusted 
using the FY 2020 wage index. Using the most current up to date 
information will increase payment accuracy and result in more 
consistency and parity in the wage index methodology used by Medicare.
    We also received comments on the hospice wage index in general and 
these are summarized below, along with our responses.
    Comment: Several commenters suggested that providers be guaranteed 
a wage index value that does not drop below the rural wage index 
applicable in their state of operation.
    Response: The hospice wage index does not contain a rural floor 
provision. Section 4410(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33) provides that the area wage index applicable to any hospital 
that is located in an urban area of a state may not be less than the 
area wage index applicable to hospitals located in rural areas in that 
state. This rural floor provision is specific to hospitals. Because the 
hospital rural floor applies only to hospitals, and not to hospices, we 
continue to believe the use of the pre-floor and pre-reclassified 
hospital wage index results in the most appropriate adjustment to the 
labor portion of the hospice payment rates. This position is 
longstanding and consistent with other Medicare payment systems (for 
example, SNF PPS, IRF PPS, and HH PPS). The hospice floor is applicable 
to all CBSAs, both rural and urban. 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.
    Comment: One commenter expressed concern that hospitals currently 
receive special consideration in a number of ways, but hospices and 
other small provider types are not granted the same considerations. The 
commenter suggested that creating value that is consistent across 
provider types will ensure that providers can compete in same labor 
pool. One commenter expressed concern that the current wage index 
system does not provide parity to all providers competing for the same 
professionals from the same labor pool. One commenter expressed concern 
that hospitals are allowed to reclassify and post-acute care facilities 
are at a disadvantage when competing for employees. The commenter 
suggested that until CMS can create a hospice specific wage index 
methodology, CMS should equalize rates between hospitals and post-acute 
care. One commenter expressed concern that while the same data are used 
to establish the basic wage index values applicable to most provider 
types, hospitals are permitted to seek geographic reclassification from 
their assigned geographic area (thereby receiving higher wage 
adjustments to their payments).
    Response: The current statute and regulations that govern the 
hospice payment system do not currently provide a mechanism for 
allowing hospices to seek geographic reclassification. The 
reclassification provision is found in section 1886(d)(10)(C)(i) of the 
Act, which states, ``The Board shall consider the application of any 
subsection (d) hospital requesting that the Secretary change the 
hospital's geographic classification . . .'' This provision is only 
applicable to hospitals as defined in section 1886(d) of the Act. In 
addition, we do not believe that using hospital reclassification data 
would be appropriate, as these data are specific to the requesting 
hospitals and they may or may not apply to a given hospice.
    Comment: One commenter expressed concern that wage index values, at 
some times and in some localities, are subject to significant year-to-
year swings. This volatility has a disproportionate impact on not-for-
profit hospice programs that have smaller operating margins and 
therefore less ability to absorb large cost swings. One commenter 
expressed appreciation for adjustments in wages that recognize the need 
to recruit and contain a stable workforce for hospice. However, the 
commenter also expressed concern that for programs with tight margins, 
the continued compression of rates will result in more limited choices 
of hospice providers, particularly in rural areas and non profit 
hospices. One commenter expressed concern that hospice payment rules 
adopt the hospital wage index (HWI) of the Medicare Inpatient Hospital 
Prospective Payment Systems (IPPS) which can make Medicare payments to 
Hospices volatile when there are changes in the hospital wage costs, 
particularly in rural communities. The commenter further asserted that 
the HWI is threatening the financial stability of several hospices in 
Washington State and potentially across the country, including 
precipitous reductions in Medicare reimbursement having nothing to do 
with local factors, but triggered instead by organizational changes at 
nearby hospitals. The commenter suggested that the wage index should be 
based on wages and hours of labor directly tied to Medicare Part A 
services. One commenter stated that the wage index varies for their 
southern service areas, with significant year to year swings. One 
commenter expressed concern that providers experience swings in wage 
index values from year to year, and they are often surprised by the 
variation in their rates.
    Response: The annual changes in the wage index reflect real 
variations in costs of providing care in various geographic locations. 
We utilize efficient means to ensure and review the accuracy of the 
hospital cost report data and resulting wage index. The hospice wage 
index is derived from the pre-floor, pre-reclassified wage index, which 
is calculated based on cost report data from hospitals. All Inpatient 
Prospective Payment System (IPPS) hospitals must complete the wage 
index survey (Worksheet S-3, Parts II and III) as part of their 
Medicare cost reports. Cost reports will be rejected if Worksheet S-3 
is not completed. In addition, our Medicare contractors perform desk 
reviews on all hospitals' Worksheet S-3 wage data, and we run edits on 
the wage data to further ensure the accuracy and validity of the wage 
data. Our review processes result in an accurate reflection of the 
applicable wages for the areas given. In addition, we finalized a 
hospice wage index standardization factor in FY 2017 (81 FR 52156) to 
ensure overall budget neutrality when updating the hospice wage index 
with more recent hospital wage data. Applying a wage index 
standardization factor to hospice payments will eliminate the aggregate 
effect of annual variations in hospital wage data. Our policy of 
utilizing a hospice wage index standardization factor provides a 
safeguard to the Medicare program as well as to hospices because it 
will mitigate fluctuations in the wage index by ensuring that wage 
index updates and revisions are implemented in a budget neutral manner.
    Comment: One commenter expressed concern that hospices in 
Montgomery County, Maryland are at a long-term competitive disadvantage 
due to a Medicare hospice federal payment inequity involving core-based 
statistical areas (CBSAs). The commenter suggested that the out 
migration adjustment referenced in section 505 of the Medicare 
Prescription Drug, Improvement and Modernization Act of 2003 be applied 
to the hospice wage index. Section 505 introduced a hospital wage index 
adjustment that is based on commuting patterns. One commenter stated 
that CMS's and OMB's decision to view the current CBSA area designation 
in the ``aggregate'' for a

[[Page 38501]]

large geographic region like NYC (making it a NY and New Jersey area) 
fails to account for the higher costs faced by New York providers. The 
commenter also disagreed with CMS's assertion that OMB's CBSA 
designations are reasonable and appropriate, reflecting the most recent 
available geographic classifications, and suggested wholesale revisions 
and reform of the hospice and home health wage index to more accurately 
reflect local market conditions.
    Response: We further believe that using the most current OMB 
delineations will increase the integrity of the hospice wage index by 
creating a more accurate representation of geographic variation in wage 
levels. We recognize that the OMB cautions that the delineations should 
not be used to develop and implement federal, state, and local 
nonstatistical programs and policies without full consideration of the 
effects of using these delineations for such purposes. As discussed in 
the OMB Bulletin No. 03-04 (June 6, 2003), the OMB stated that, ``In 
cases where there is no statutory requirement and an agency elects to 
use the Metropolitan, Micropolitan, or Combined Statistical Area 
definitions in nonstatistical programs, it is the sponsoring agency's 
responsibility to ensure that the definitions are appropriate for such 
use. When an agency is publishing for comment a proposed regulation 
that would use the definitions for a nonstatistical purpose, the agency 
should seek public comment on the proposed use.'' \17\ While we 
recognize that OMB's geographic area delineations are not designed 
specifically for use in nonstatistical programs or for program 
purposes, including the allocation of federal funds, we continue to 
believe that the OMB's geographic area delineations represent a useful 
proxy for differentiating between labor markets and that the geographic 
area delineations are appropriate for use in determining Medicare 
hospice payments. In implementing the use of CBSAs for hospice payment 
purposes in our FY 2006 final rule (70 FR 45130), we considered the 
effects of using these delineations. We have used CBSAs for determining 
hospice payments for 13 years (since FY 2006). In addition, other 
provider types, such as IPPS hospital, home health, SNF, IRF), and the 
ESRD program, have used CBSAs to define their labor market areas for 
the last decade.
---------------------------------------------------------------------------

    \17\ Bulletin 05-02, Update of Statistical Area Definitions and 
Guidance on Their Uses. February 2005. https://www.whitehouse.gov/wp-content/uploads/2017/11/bulletins_fy05_b05-02.pdf.
---------------------------------------------------------------------------

    Comment: MedPAC recommended that the Congress repeal the existing 
hospital wage index and instead implement a market-level wage index for 
use across other prospective payment systems, including certain post-
acute care providers. MedPAC suggested that their recommended wage 
index would: Use wage data from all employers and industry-specific 
occupational weights, adjust for geographic differences in the ratio of 
benefits to wages, adjust at the county level and smooth large 
differences between counties, and include a transition period to 
mitigate large changes in wage index values. Several commenters 
recommended that CMS should develop a wage index model in line with the 
system recommended by MedPAC. One commenter questioned whether the 
hospital wage index sufficiently takes into account the labor costs 
associated with the extensive travel routinely required in the delivery 
of hospice care. The commenter further asserted that the travel costs 
are even higher on a per-patient per-day basis for hospices that serve 
rural populations with large catchment areas, where patients may be 
located in remote and geographically isolated areas. The commenter 
suggested that CMS should analyze cost data to determine the extent to 
which costs vary based on geographic setting and should incorporate 
findings from its analysis into payment through appropriate payment 
adjustments, in order to protect and promote access to hospice care for 
rural beneficiaries with terminal illness.
    Response: We appreciate MedPAC's recommendations; however, we do 
not have the authority to repeal the existing hospital wage index 
absent Congressional action. We note that our regulations at Sec.  
418.306(c) require that each hospice's labor market is determined based 
on definitions of Metropolitan Statistical Areas (MSAs) issued by OMB. 
We will issue annually, in the Federal Register, a hospice wage index 
based on the most current available CMS hospital wage data, including 
changes to the definition of MSAs. The urban and rural area geographic 
classifications are defined in Sec.  412.64(b)(1)(ii)(A) through (C). 
The payment rates established by us are adjusted by the Medicare 
contractor to reflect local differences in wages according to the 
revised wage data. Any changes to the way we adjust hospice payments to 
account for geographic wage differences would have to go through the 
rulemaking with comment process. We note that in the proposed rule, we 
did solicit requests for information to explore alternate ways to wage-
adjust payments. We will review all comments for any consideration in 
future rulemaking.
    To address the comment whether the hospital wage index sufficiently 
takes into account the labor costs associated with, the extensive 
travel routinely required in the delivery of hospice care, we note that 
the hospital wage index reflects the area wages and does not factor in 
any travel expenses. We recognize that hospices do incur travel 
expenses and with the rebasing of the CHC, IRC, and GIP payment rates 
finalized in this rule, such expenses were captured to more accurately 
align payment with the cost of providing care.
    Final Decision: After considering the comments received in response 
to the proposed rule and for the reasons discussed above, we are 
finalizing our proposal to use the current year's pre-floor, pre-
reclassified hospital inpatient wage index as the wage adjustment to 
the labor portion of the hospice rates. For FY 2020, the updated wage 
data are for hospital cost reporting periods beginning on or after 
October 1, 2014 and before October 1, 2015 (FY 2015 cost report data). 
The wage index applicable for FY 2020 is available on our website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html. The hospice wage index for FY 2020 will be 
effective October 1, 2019 through September 30, 2020.
3. 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

[[Page 38502]]

the 10-year moving average of changes in annual economy-wide private 
nonfarm business multifactor productivity (MFP).
    The hospice payment update percentage for FY 2020 is based on the 
estimated inpatient hospital market basket update of 3.0 percent (based 
on IHS Global Inc.'s second-quarter 2019 forecast with historical data 
through the first quarter 2019). 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 3.0 percent must 
be reduced by a MFP adjustment as mandated by Affordable Care Act 
(currently estimated to be 0.4 percentage point for FY 2020). In 
effect, the hospice payment update percentage for FY 2020 is 2.6 
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.
    While a majority of the comments received were about the rebasing 
methodology and analysis, we did receive a few comments regarding the 
hospice payment update percentage. Our responses to those comments are 
below:
    Comment: MedPAC recognizes that CMS is required by statute to 
propose an increase to the FY 2020 base rates of 2.7 percent, however 
they noted that in their 2019 report to Congress, they recommended that 
Congress reduce the aggregate level of payment to hospices for FY 2020 
by 2 percent.
    Response: We appreciate the comment, however, we do not have the 
statutory authority to use an alternate methodology to determine the 
amount of the annual payment updates to hospice payment rates.
    Comment: One commenter stated that for organizations that rely on 
contractual arrangements to meet their inpatient care requirements, the 
budget neutrality component that lowers the RHC payment rates 
effectively turns the rebasing proposal into a rate cut even after the 
proposed 2.7 percent payment update.
    Response: We note that we are statutorily required, as set forth in 
section 1814(i)(1)(C)(ii)(VII) of the Act, to update the hospice rates 
annually by the inpatient market basket percentage increase for that 
FY.
    Final Decision: We are finalizing the hospice payment update 
percentage for FY 2020 as proposed. Based on IHS Global, Inc.'s updated 
forecast of the inpatient hospital market basket update and the 
multifactor productivity adjustment, the hospice payment update 
percentage for FY 2020 is equal to 2.6 percent for hospices that submit 
the required quality data and 0.6 percent (FY 2020 hospice payment 
update of 2.6 percent minus 2 percentage points) for hospices that do 
not submit the required data.
4. 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 reflects the proposed increase in the hourly 
rate for CHC as a result of rebasing, discussed in section III.A.3 of 
this final 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 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 10 and 12 below.
    As discussed in section III.A.3, we are finalizing rebasing of the 
per diem payment rates for CHC, IRC, and GIP levels of care. As 
mentioned above and outlined in the Affordable Care Act, hospice 
payment reform must be done in a budget-neutral manner. In order to 
rebase the per diem payment amounts for CHC, IRC, and GIP in a budget-
neutral manner, as described in section III.A.3, increases to the CHC, 
IRC, and GIP per diem payment amounts will be offset by corresponding 
decreases to the RHC per diem payment amounts to maintain overall 
budget neutrality.
    The FY 2020 RHC per diem payment rates are the FY 2019 rebased 
payment rates, reduced by a budget neutrality factor as a result of 
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

[[Page 38503]]

the 2.6 percent hospice payment update percentage as shown in Table 10. 
The FY 2020 rebased CHC, IRC, and GIP per diem payment rates are equal 
to the FY 2019 rebased payment rates, adjusted by the wage index 
standardization factor and increased by the hospice payment update 
percentage (2.6 percent) as shown in Table 11.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR06AU19.031

[GRAPHIC] [TIFF OMITTED] TR06AU19.032

    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 FY 2020 rates for hospices that do not submit 
the required quality data is updated by the FY 2020 hospice payment 
update percentage of 2.6 percent minus 2 percentage points. These rates 
are shown in Tables 12 and 13.

[[Page 38504]]

[GRAPHIC] [TIFF OMITTED] TR06AU19.033

[GRAPHIC] [TIFF OMITTED] TR06AU19.034

BILLING CODE 4120-01-C

[[Page 38505]]

    Final Decision: We are finalizing the FY 2020 payment rates in 
accordance with statutorily mandated requirements.
5. 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 hospice cap amount for the FY 2020 cap year will 
be $29,964.78, which is equal to the FY 2019 cap amount ($29,205.44) 
updated by the FY 2020 hospice payment update percentage of 2.6 
percent. A summary of the comments we received regarding the hospice 
cap amount and our responses to those comments appear below:
    Comment: A few commenters suggested that geographical differences 
should be considered when calculating the annual cap amounts. One 
commenter stated that the cap discriminates against providers with 
higher daily reimbursement rates because the cap is applied on a 
national basis, without regard to the geographical location of the 
patient. Another commenter suggested adjusting the hospice cap amounts 
for wage index in the same manner that the per diem payments are 
adjusted. This commenter further asserted that wage adjusting the 
payments and not the cap has the effect of reversing the wage index, 
since the caps will be reached (and exceeded) more quickly in high wage 
labor markets than in low wage labor markets. The commenter suggested 
that this creates an unintended penalty or benefit to a hospice based 
on where it is located, not on the quality or efficiency of the care 
provided.
    Response: We appreciate the commenters' suggestion that we consider 
geographical differences when calculating the annual cap amount. 
However, the restriction set forth in section 1814(i)(2)(B) of the Act, 
as amended by section 3(d) of the IMPACT Act, does not give us 
discretion to adjust the cap amount.
    Comment: One commenter recommended that funds allocated for the cap 
amount increase instead be applied to reducing the cut to the RHC. The 
commenter suggested that holding the cap at its current level would 
also likely hold down margins from high-margin hospices. A few 
commenters also suggested that lowering the aggregate cap amount for 
all hospices by at least 10 percent from the FY 2019 amount would be a 
better way to control hospice spending.
    Response: We appreciate the commenter's suggestion that we lower 
the annual cap amount. However, the restriction set forth in section 
1814(i)(2)(B) of the Act, as amended by section 3(d) of the IMPACT Act, 
does not give us discretion to adjust the cap amount.
    Comment: One commenter suggested the cap amount be used to explore 
questionable practices by hospices. Specifically, this commenter was 
referring to hospices that come up to the cap limit, but do not exceed 
it, because they are deliberately discharging beneficiaries solely to 
avoid any overpayments. This commenter also stated that CMS should 
further investigate those hospices that routinely exceed the cap limit 
to see if there is any aberrant patterns of care that may warrant 
targeted program integrity efforts. The commenter stated that CMS could 
use its program integrity authority using claims and quality data to 
address this issue with little additional burden to hospice agencies.
    Response: We appreciate the commenter's suggestion to consider 
looking into the practices of hospices that regularly reach or exceed 
the annual aggregate cap amount to target further program integrity 
investigations. We remind stakeholders that under the Medicare hospice 
benefit, Sec.  418.26(a)(1), (2), and (3), there are limited reasons 
why a hospice can discharge a beneficiary alive: The beneficiary 
decides to revoke the hospice benefit; the beneficiary transfers to 
another hospice; or, the beneficiary is no longer terminally ill. 
Hospice care is provided to beneficiaries who are nearing the end of 
life and provides comfort for the dying, neither hastening death nor 
prolonging life by attempting to cure the terminal illness. Discharging 
a beneficiary solely to avoid exceeding the cap limit is in violation 
of the regulations at Sec.  418.26 and may cause undue distress and 
potential harm to terminally ill patients who would have to seek care 
outside of the hospice benefit. We will closely monitor this issue and 
address any identified concerns, if necessary.
    Final Decision: We are finalizing the update to the hospice cap in 
accordance with statutorily mandated requirements.

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

1. Background
    In the FY 2020 hospice proposed rule (84 FR 17589), we provided 
background on the holistic nature of the services provided under the 
Medicare hospice benefit, as well as the current statutory and 
regulatory requirements for care planning and patient rights. We stated 
that 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).
    Additionally, in the FY 2015 proposed rule (79 FR 26555), we 
described the eligibility, certification, and election requirements for 
receipt of hospice services as set forth at 42 CFR 418.20, 418.22 and 
418.24. We also emphasized that 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 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) and the hospice CoPs at Sec.  
418.102(b). 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

[[Page 38506]]

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.\18\ Likewise, the 
regulations at Sec.  476.78(b)(3) 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.
---------------------------------------------------------------------------

    \18\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

    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 
interdisciplinary team (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. However, 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, 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). 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.\19\ 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.
---------------------------------------------------------------------------

    \19\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

2. Services Unrelated to the Terminal Illness and Related Conditions
    In the FY 2020 hospice proposed rule, we reiterated 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 as articulated upon the implementation of the benefit (48 FR 
56008, 56010, December 16, 1983). 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). In the FY 2020 hospice proposed rule, we 
detailed numerous anecdotal reports from beneficiaries, families, the 
Medicare Ombudsman's office, and non-hospice providers where hospice 
patients were obtaining needed items, services, and drugs outside of 
the hospice benefit because they had been told that hospice would not 
cover these items, services, and drugs, as the hospice had determined 
that they were unrelated to the terminal illness and related 
conditions. Many of these anecdotal reports state that the 
beneficiaries and families believed that these items, services, and 
drugs were related to the terminal illness and related conditions and 
thought 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. We remind stakeholders that the Medicare Beneficiary 
Ombudsman (MBO) is charged with supporting CMS' customer service and 
administration efforts by receiving and responding to beneficiary and 
other stakeholder inquiries and complaints, working with partners to 
provide outreach and education to beneficiaries, and providing 
recommendations for improving the administration of Medicare. The MBO 
also provides an annual report to

[[Page 38507]]

Congress that are posted on the MBO website.\20\
---------------------------------------------------------------------------

    \20\ Medicare Beneficiary Ombudsman (MBO). https://www.cms.gov/Center/Special-Topic/Ombudsman/Medicare-Beneficiary-Ombudsman-Home.html.
---------------------------------------------------------------------------

    In accordance with the hospice CoPs at Sec.  418.56(e)(5), and in 
alignment with continuity of care principles,\21\ 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,\22\ 
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 1815(a) and 1833(e) 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.
---------------------------------------------------------------------------

    \21\ 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.
    \22\ National Quality Forum (NQF), Preferred Practices and 
Performance Measures for Measuring and Reporting Care Coordination: 
A Consensus Report, Washington, DC: NQF; 2010. https://www.qualityforum.org/Publications/2010/10/Preferred_Practices_and_Performance_Measures_for_Measuring_and_Reporting_Care_Coordination.aspx.
---------------------------------------------------------------------------

    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, as described in the June, 2012 OIG report \23\ 
identifying situations where Medicare may have been paying twice for 
prescription drugs for hospice beneficiaries.
---------------------------------------------------------------------------

    \23\ Medicare Could Be Paying Twice for Prescription Drugs for 
Beneficiaries in Hospice (A-06-10-00059). June 28, 2012. https://oig.hhs.gov/oas/reports/region6/61000059.pdf.
---------------------------------------------------------------------------

    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. 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.
    However, in spite of the data provided and reiteration of 
longstanding policy regarding the comprehensive nature of hospice 
services covered under Medicare, we continue to have concerns that 
these decisions as to what hospices will cover and not cover 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.
3. Election Statement Content Modifications and Addendum To Provide 
Greater Coverage Transparency and Safeguard Patient Rights
    The regulations, as described previously, require the hospice to 
include all services needed for the palliation and management of the 
terminal illness and related conditions on the individualized hospice 
plan of care, and 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 other non-hospice 
healthcare providers who may be furnishing services unrelated to the 
terminal illness and related conditions.\24\ 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 incidence of anecdotal reports and 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. We believe 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. Not having this 
information 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.
---------------------------------------------------------------------------

    \24\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf. (L-Tag 538)
---------------------------------------------------------------------------

    Therefore, in the FY 2020 hospice proposed rule (84 FR 17570), we 
proposed 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 proposed that hospices also 
would be

[[Page 38508]]

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 proposed to make the corresponding regulations text 
changes at Sec.  418.24(b).
    Additionally, we proposed a new requirement where hospices would be 
required, but only upon request, to provide to the beneficiary (or 
representative) an election statement addendum (hereafter called ``the 
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 proposed that 
hospices would be required to provide the addendum, upon request, to 
other non-hospice providers that are treating such conditions, and 
Medicare contractors who request such information. We proposed that if 
the 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 
proposed 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. 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 proposed 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. We also proposed that hospices would 
be exempt from completing this addendum if the beneficiary died within 
48 hours of the election date of hospice care.
    The purpose of the proposed addendum is to inform beneficiaries and 
their families of hospice-determined 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 would help facilitate communication and benefit 
coordination between hospices and non-hospice providers.
    We proposed that hospices would develop and design the addendum to 
meet their needs, similar to how hospices develop their own hospice 
election statement. We proposed the addendum would be titled ``Patient 
Notification of Hospice Non-Covered Items, Services, and Drugs.'' We 
proposed that the addendum would include the following information:
    1. Name of the hospice;
    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.
    b. Right to Immediate Advocacy.
    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.
    We proposed to add the election statement modifications and the 
election statement addendum content requirements to the regulations at 
Sec.  418.24.
    Finally, we proposed that the signed addendum (and any signed 
updates) would be a new condition for payment. We also stated that this 
would 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, we proposed that 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 of 1996 (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).
    Ninety-two unique stakeholders submitted their comments on the 
proposed modifications to the election statement content requirements 
and the proposed election statement addendum. These stakeholders 
included hospices, national and state industry associations, individual 
commenters, as well as the Medicare Payment Advisory Commission 
(MedPAC).

[[Page 38509]]

Election Statement Modifications
    While many commenters supported the modifications to the election 
statement content requirements, several had concerns regarding these 
changes. These comments, along with our responses, are summarized 
below.
    Comment: Several commenters, including MedPAC, supported the 
proposal to modify the hospice election statement content requirements 
to increase coverage transparency for patients under a hospice 
election. Commenters agreed with CMS' efforts to educate and empower 
patients to make informed decisions. They reiterated the importance of 
beneficiaries and their families understanding what is covered by the 
hospice benefit and being informed of the resources available to appeal 
decisions by hospice providers if they have concerns or disagree with 
coverage determinations made by their hospice provider.
    Response: We appreciate these comments and thank commenters for 
their thoughtful review and support of our efforts to provide patients 
with complete information regarding payment and cost-sharing 
obligations as well as implications for other providers.
    Comment: One commenter disagreed with the proposal that the 
election statement include information on individual cost-sharing for 
hospice services. This commenter stated that hospices are permitted, 
but not required, to impose small coinsurance payments for hospice 
drugs and inpatient respite care, and that most hospices do not charge 
patients for this coinsurance. This commenter remarked that including 
this information on the election statement would be confusing for 
patients and burdensome for hospices to have to explain. Other 
commenters suggested that additional language should be added to the 
election statement to indicate that Medicare continues to pay for any 
such unrelated items under traditional Medicare benefits.
    Response: To provide full transparency regarding hospice coverage 
under the Medicare hospice benefit, we believe that the election 
statement should include information that there may be individual cost-
sharing for certain hospice services while under a hospice election. We 
did not propose specific language requirements for communicating 
information on cost-sharing for hospice services and we believe this 
information can be communicated simply and in a straightforward fashion 
to beneficiaries. For example, a general statement saying that while 
under a hospice election there may be cost-sharing for hospice 
medications and inpatient respite allows beneficiaries to ask the 
hospice for more information on such cost-sharing, if needed. Likewise, 
if a hospice does not charge any coinsurance for hospice drugs of 
inpatient respite care, it could include such a statement on their 
election statements.
    As for the suggestion that CMS should require hospices to indicate 
that there is coverage for unrelated items, services, and drugs on the 
election statement itself, hospices can add whatever language they feel 
best communicates information to the beneficiary about coverage under 
the Medicare hospice benefit as long as such information is in 
accordance with the hospice regulations. This could include a 
disclaimer statement that unrelated items, services, and drugs may be 
covered through other Medicare benefits. We note that in 2016, we 
provided a model election statement as part of a MLN Matters[supreg] 
article (SE1631) \25\ in which there is a statement that reads: ``I 
understand that services not related to my terminal illness or related 
conditions will continue to be eligible for coverage by Medicare.'' 
Hospices could adopt such language on the election statement to best 
meet their needs and to adequately communicate this information to 
beneficiaries and their families at the time of hospice election. One 
industry commenter stated that many hospices already use this model 
election statement and simple modifications to this election statement 
could be easily achieved to satisfy the proposed changes to the 
election statement content requirements.
---------------------------------------------------------------------------

    \25\ Sample Hospice Election Statement. MLN Matters[supreg] 
Number: SE1631 Revised. December 2016. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1631.pdf.
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Election Statement Addendum
    Comment: Several commenters stated that the time of hospice 
election is an overwhelming and confusing time for individuals and 
their families. Commenters remarked that the addendum might have the 
unintended consequence of further overwhelming and frightening patients 
and their families, giving the impression that patients would not be 
given the symptom-controlling medications that they need. Some 
commenters believe that the addendum may delay access to needed 
services because of the time it would take to make these determinations 
and consult with the IDG and could potentially deter individuals from 
electing the benefit.
    Response: 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. 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 for terminally ill patients (48 FR 56010). As such, we 
understand that the decision to elect hospice is not one that is taken 
lightly and it is because of the significance of this decision that we 
believe individuals and their families need to have full disclosure and 
coverage transparency regarding the services provided and not provided 
by the hospice as they approach the end of life.
    The hospice CoPs at Sec.  418.52(a) require that during the initial 
assessment visit, in advance of furnishing care, the hospice must 
provide the patient or representative with verbal (meaning spoken) and 
written notice of the patient's rights and responsibilities in a 
language and manner that the patient understands. Furthermore, hospices 
are to inform the beneficiary of the services covered under the 
Medicare hospice benefit, as well as the scope of such services. The 
intent of this standard was to ensure that patients were aware of their 
potential out-of-pocket costs for hospice care, such as co-payments, so 
that they would not be surprised by financial concerns at this 
stressful time (73 FR 32097). Therefore, hospices are already tasked 
with providing detailed information on hospice services and limitations 
to those services to the patient upon election of the benefit. We 
believe that the addendum further complements these requirements by 
ensuring that the hospice informs them of any items, services, or drugs 
which the terminally ill individual would have to seek outside of the 
benefit.
    Because of the longstanding requirements to communicate the breadth 
of the Medicare hospice benefit to individuals and their families prior 
to the provision of any hospice services, we do not believe that 
providing full coverage transparency at the time of hospice election 
would generally deter or unnecessarily overwhelm individuals from 
electing hospice, thereby limiting access to such services. Terminally 
ill

[[Page 38510]]

individuals and their families are making decisions for how the 
individual chooses to live out their remaining days at the end of life.
    As the hospice model of care is for palliation and comfort, rather 
than for a cure, the Medicare hospice benefit must be elected by the 
terminally ill individual who is agreeing to this model of care, as 
well as waiving the right to Medicare payment for items, services and 
drugs for the treatment of the terminal illness and related conditions. 
The purpose of the addendum as noted in the proposed and this final 
rule is to provide for coverage transparency to help ensure individuals 
are fully informed when making such a decision. If, after receiving 
information about all of the items, services, and drugs the hospice 
will and will not cover, the individual chooses not to elect the 
benefit (or to discontinue the benefit), then the individual has made 
an informed choice based on his or her goals and preferences of care. 
Hospices should be able to communicate this information in a clear, 
thoughtful, and compassionate manner in accordance with the spirit of 
hospice philosophy where the individual and the family are the center 
of the care team. In doing so, the hospice will have made every effort 
to ensure patients are aware of all services covered and not covered by 
the hospice. We believe that an informed beneficiary will make the most 
appropriate choice to meet his or her needs and it is the hospice's 
responsibility to provide this information to support and promote 
beneficiary choice and access to needed services.
    Comment: A few commenters disagreed with providing a written 
clinical reason for why certain diagnoses/conditions, items, services, 
and drugs are not covered to beneficiaries (or their representatives) 
and non-hospice providers. These commenters stated that hospices may be 
inconsistent with using evidence-based rationale or may use different 
sources to support their determinations. Others voiced concerns over 
disagreements between non-hospice providers and hospice providers on 
the unrelated determinations and stated this may result in debate 
regarding the hospice physician's reasoning. Commenters stated that 
varying clinical opinions between hospice and non-hospice providers may 
delay the provision of items, services, and drugs.
    Response: We believe it is not only important to inform 
beneficiaries of what items, services, and drugs the hospice will not 
be covering because they have determined these items, services, and 
drugs to be unrelated to the terminal illness and related conditions, 
but why the hospice has made this determination. As noted previously, 
beneficiaries are making a choice to elect hospice care and we believe 
it to be of utmost importance to promote transparency, autonomy, and 
patient choice, and patients need to understand the rationale for 
decisions being made that affect their care. While we proposed that 
hospices would provide a clinical rationale as part of the proposed 
addendum, we did not propose requirements as to specific sources of 
such information as we believe that hospices would use evidence-based 
information to communicate the rationale to patients in a manner in 
which they understand. There is a large quantity of available 
information and hospices can choose to use supporting materials to best 
communicate the clinical rationale to their patients. We do not expect 
that this would mean hospices would have to provide complex or 
technical supporting information to patients to rationalize their 
determinations. However, similar to hospices explaining what items, 
services, and drugs are related to the palliation and management of the 
terminal illness and related conditions, we also believe that they have 
the expertise to explain to patients why certain items, services and 
drugs are not related. Furthermore, while there may be debate between 
hospices and non-hospice providers regarding whether or not certain 
items, services, or drugs are unrelated, we believe that the addendum 
provides a tool to steer the debate and prompt meaningful communication 
and care coordination between all providers rendering care to 
terminally ill beneficiaries.
    We agree with the hospice industry's views that hospice care is 
``the nation's first coordinated care model'' and should show how the 
health care system can work at its best for patients at the end of 
life.\26\ We think that an important part of this care coordination is 
communication with non-hospice providers who are also providing care to 
the patient, in order to ensure that continuity of care and access to 
needed services is part of the decision-making process and we do not 
anticipate any delay in the furnishing of items, services, and drugs 
due to the provision of this information to the patient. Similarly, the 
hospice CoPs at 418.56(e)(5) require that hospices provide for an 
ongoing sharing of information with other non-hospice healthcare 
providers furnishing services unrelated to the terminal illness and 
related conditions.
---------------------------------------------------------------------------

    \26\ NHPCO Op-ed: ``Coordinated Care Is More Than a Buzzword for 
Hospice Providers'', April 24, 2018. https://morningconsult.com/opinions/coordinated-care-more-than-buzzword-for-hospice-providers/
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    Comment: Overall, while commenters did not disagree in general with 
the proposal of the election statement addendum, the majority of 
commenters stated concern with the proposed timeframe with which the 
hospice would be required to provide the patient and caregiver such 
information. Commenters indicated that 48 hours after the time of 
hospice election is insufficient considering that the hospice has 5 
days to complete the comprehensive assessment. Commenters noted that 
prior to the comprehensive assessment, hospices may not have a complete 
patient profile, including the services or medications a patient is 
currently utilizing. These commenters stated that this may require 
hospices to anticipate covered and non-covered services, which would 
lead to an inaccurate election statement addendum. Commenters stated 
that this fails to provide patients with the information the election 
statement addendum is intended to convey. A few commenters stated that 
the 48 hour timeframe would not allow adequate time to consult with the 
patient's certifying physician and/or the medical director regarding 
medications and treatments, or to provide a written clinical 
explanation of why the medications or services are unrelated. Other 
commenters noted that nurses may be required to complete and print the 
election statement addendum in the patient's home, where clinical 
practice and policy guidelines may not be readily accessible, and would 
necessitate the hospice providing nurses with printers. Similarly, 
commenters stated that this timeframe may pose problems meeting 
signature requirements if the patient or representative does not return 
the signed election statement addendum within the required timeframe. 
Another commenter suggested that this may require a costly electronic 
solution or modifications to the existing electronic medical record 
(EMR).
    Response: We understand the concern regarding the proposed 48 hour 
timeframe for providing the addendum if requested at the time of a 
hospice election. We recognize that in order to provide the patient or 
representative with the most accurate information, and ensure the 
usefulness of the proposed addendum, it would be beneficial to align 
the timeframe of the completion of

[[Page 38511]]

the addendum with the timeframe requirement of the completion of the 
comprehensive assessment, that is, if an addendum is requested at the 
time of a hospice election, the hospice would have 5 calendar days to 
provide the addendum to the requesting beneficiary (or representative). 
This would allow hospices sufficient time to assess all of the patient 
and family needs, establish the individualized plan of care, and make 
decisions about any items, services, or drugs they will not be 
covering, as they have determined them to be unrelated to the terminal 
illness and related conditions. Furthermore, if a beneficiary requests 
the addendum at the time of hospice election and dies within 5 days 
from the start of the hospice election, the hospice would not be 
required to furnish such addendum as this requirement would be deemed 
as being met in this circumstance.
    We also understand that if the beneficiary, representative, non-
hospice provider, or Medicare contractor requests an addendum at any 
time during the course of hospice care (that is, after the election of 
hospice), the hospice would need sufficient time for the IDG to 
adequately review the patient's plan of care and review any decisions 
on those items, services, or drugs they have determined to be unrelated 
to the individual's terminal illness and related conditions. As such, 
we believe that the hospice should have additional time to complete the 
addendum, rather than the proposal to require the hospice to provide it 
immediately upon request during the course of hospice care. Because the 
hospice has already completed the comprehensive assessment and has 
begun providing care, we believe 72 hours after a patient, 
representative, non-hospice provider or Medicare contractor request for 
such information represents a sufficient timeframe for reviewing the 
patient record and completing the addendum if this information is 
requested during the course of hospice care. As the plan of care should 
identify the conditions or symptoms that the hospice determines to be 
``unrelated,'' this information should be readily accessible to the 
hospice in order to allow for the timely completion of the addendum. 
Expanding the timeframe for completion would ensure that the hospice 
has adequate time to determine those items, services, and drugs that 
are unrelated, complete the written addendum, and provide this 
information to the patient (or his or her representative).
    As detailed in the FY 2020 hospice proposed rule, we proposed that 
each individual hospice develop and incorporate the addendum into their 
current admissions process in a way that best meets the hospices' 
needs, as well as providing this information as quickly as possible 
considering the potential for beneficiary cost-sharing. Likewise, non-
hospice providers should have timely access to this information in 
order to promote continuity of care and communication amongst all 
patient providers and to ensure appropriate claims submission.
    Comment: Many commenters suggested modifying the current Advance 
Beneficiary Notice of Non-coverage (ABN) (Form CMS-R-131) or the Home 
Health Change of Care Notice (HHCCN) (Form CMS-10280) to be hospice-
specific to communicate unrelated information regarding items, 
services, and drugs, rather than requiring hospices to develop a new 
form. One industry association suggested a ``Hospice Change of Care 
Notice'' be developed and provided to patients and representatives upon 
request to meet the requirements for communication about items and 
services determined to be unrelated to the terminal prognosis. This 
commenter suggested providing this form after the initial and 
comprehensive assessment has been completed, the plan of care has been 
established, and members of the IDG have agreed upon the unrelated 
items and services.
    Others suggested offering patients (and their representatives), 
upon request, a list of known diagnoses unrelated to the terminal 
illness and related conditions with the recommendation that this list 
could be updated through the course of care if any new unrelated 
diagnoses/conditions became known. These commenters stated that this 
would improve transparency and hold hospices more accountable for 
documenting and communicating these unrelated diagnoses to the patient 
and representative. A few commenters suggested the need for a patient/
representative statement acknowledging that the patient or patient 
representative has reviewed the items, services, and medications with 
the hospice representative in order to protect the hospice from 
inadvertently excluding any medications or treatments the patient is 
receiving at the time of admission, but that may not be revealed. 
Commenters also suggested that the patient be required to acknowledge 
that a new election statement addendum would be signed if additional 
non-covered items, services, or medications were identified during the 
course of treatment.
    Additionally, commenters noted that the addendum should address 
items, services and drugs that may be related, but that the hospice is 
not covering, for example a generic drug over a brand name drug due to 
patient preference or if a patient requests to continue using a 
specific drug that the hospice determines is no longer providing 
medical benefit to the patient. A few commenters recommended using the 
Medicare form, Hospice Information for Medicare Part D (OMB Form 0938-
1269) stating that most hospices already use this form and that 
requiring a separate addendum is redundant and not necessary. 
Conversely, a few commenters stated that the aforementioned Part D form 
is fraught with issues and there is inconsistency with its use amongst 
hospices and Part D plan sponsors. A few commenters stated that this 
proposal is unreasonable because no other healthcare provider is 
required to furnish references for any decision that the provider makes 
regarding services not provided nor requires a patient to sign a 
detailed document listing what will not be provided.
    Response: We agree with commenters that the list of items, 
services, and drugs not covered by the hospice because they have 
determined them to be unrelated to the terminal illness and related 
conditions should be in a format that communicates this information to 
patients and their representatives in the most clear and unobtrusive 
way possible. As stated earlier, we believe that hospices should 
develop this addendum, with the required content elements, to best meet 
their patients' needs and to align with their current admission 
processes and other business procedures. We disagree with commenters 
about using a modified ABN to communicate information about hospice 
non-covered items, services and drugs determined to be unrelated to the 
terminal illness and related conditions. The ABN, Form CMS-R-131, is 
issued by providers (including independent laboratories, home health 
agencies, and hospices), physicians, practitioners, and suppliers to 
Original Medicare (fee for service--FFS) beneficiaries in situations 
where Medicare payment is expected to be denied. The ABN is issued in 
order to transfer potential financial liability to the Medicare 
beneficiary in certain instances. Guidelines for issuing the ABN are 
published in the Medicare Claims Processing Manual, Chapter 30, Section 
50.\27\ As such, the purpose of

[[Page 38512]]

the ABN is to inform beneficiaries of the listed items and services 
that Medicare is not expected to approve, and the specific denial 
reason (that is, not medically reasonable and necessary), whereas, the 
proposed hospice addendum is intended to inform beneficiaries of items 
and services that the hospice will not cover as the hospice has 
determined them to be unrelated to the terminal illness and related 
conditions, and therefore, subject to coverage under other Medicare 
benefits. Similarly, mandatory use of the ABN is very limited for 
hospices. The three situations that would require issuance of the ABN 
by a hospice are:
---------------------------------------------------------------------------

    \27\ Medicare Claims Processing Manual Chapter 30--Financial 
Liability Protections. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c30.pdf.
---------------------------------------------------------------------------

     Ineligibility because the beneficiary is not determined to 
be ``terminally ill'' as defined in Sec.  1879(g)(2) of the Act;
     Specific items or services that are billed separately from 
the hospice payment, such as physician services, are not reasonable and 
necessary as defined in either Sec.  1862(a)(1)(A) or Sec.  
1862(a)(1)(C); or
     The level of hospice care is determined to be not 
reasonable or medically necessary as defined in Sec.  1862(a)(1)(A) or 
Sec.  1862(a)(1)(C), specifically for the management of the terminal 
illness and/or related conditions.
    An ABN is not required to be given to a beneficiary for items and 
services unrelated to the terminal illness and related conditions. 
Additionally, an ABN cannot be issued to transfer liability to the 
beneficiary when Medicare would otherwise pay for items and services. 
Because the purpose of the ABN is to notify beneficiaries of Medicare 
non-coverage and shift financial liability for payment of such services 
to the beneficiary, we believe that modifying the ABN for purposes of 
notifying the beneficiary of items, services, and drugs not covered by 
the hospice as unrelated, may be more confusing for patients in 
understanding exactly what the hospice is communicating and how to seek 
coverage from other benefits.
    The Home Health Change of Care Notice (HHCCN) is provided to 
beneficiaries to notify them of home health plan of care changes. That 
is, the HHCCN is given to a beneficiary where there is a reduction or 
termination of services listed on the home health plan of care due to 
physician/provider orders or limitations of the HHA providing the 
specific service. While we agree that the HHCCN has some similar 
components of the proposed addendum (for example, the addendum would 
inform beneficiaries of changes to non-covered items and services and 
the reason for the change), there are also inherent differences between 
the HHCCN and the proposed addendum. As stated in the FY 2020 hospice 
proposed rule (84 FR 17594), the purpose of the proposed addendum is to 
inform beneficiaries and their families of those items, services, and 
drugs determined by the hospice to be unrelated to the terminal illness 
and related conditions, and therefore, not covered by hospice. In other 
words, these are determined not to be hospice items, services or drugs 
related to the terminal illness, and therefore, would not be considered 
the hospice's responsibility to provide. We believe that the addendum 
should clearly state that these are items, services, and drugs that the 
hospice has determined to be unrelated and therefore, not covered by 
the hospice. However, as we are proposing that hospices develop their 
own addendum, there is nothing prohibiting them from mirroring forms 
such as the HHCCN to facilitate clear communication between the hospice 
beneficiary and their representative, as long as the addendum includes 
the required elements.
    The suggested ``Hospice Change of Care Notice'' sounds very much 
like the proposed addendum given the purpose of this suggested change 
of care notice is to communicate similar information as the addendum. 
However, the timeframes accompanying the suggested ``Hospice Change of 
Care Notice'' allow more time to complete the initial and comprehensive 
assessment, establish the plan of care with IDG input and secure 
agreement of those items unrelated to the terminal illness and related 
conditions. As described above, we agree that the timeframe for 
completion of the requested addendum should more accurately align with 
already existing requirements. However, as stated above, we believe 
that the addendum should be clear in its purpose that these are items, 
services, and drugs the hospice has determined to be unrelated to the 
terminal illness and therefore not the hospice's coverage 
responsibility, but may be covered under other Medicare benefits.
    We believe that 5 days to complete the addendum, if requested at 
the time of a hospice election, should provide adequate time for all of 
these activities to occur and is in alignment with the timeframe 
requirements at Sec.  418.54(b) for completion of the comprehensive 
assessment. We remind hospices that the hospice CoPs at Sec.  418.54(b) 
require that the RN, in consultation with the other members of the IDG, 
considers the information gathered from the initial assessment as they 
develop the plan of care and the group determines who should visit the 
patient/family during the first 5 days of hospice care in accordance 
with patient/family needs and desires, and the hospice's own policies 
and procedures. A hospice does not have to wait 5 days to complete the 
comprehensive assessment as hospices may choose to complete the 
comprehensive assessment earlier than 5 days after the effective date 
of the election (for example, the hospice may complete the 
comprehensive assessment at the same time as the initial assessment). 
Care planning begins as soon as the individual elects hospice care and 
much of the care planning and the decision-making occurs throughout 
this period of time, so we believe that completing the addendum within 
5 days of the hospice election (or within 72 hours if the addendum is 
requested during the course of hospice care) is not unreasonable.
    While some commenters suggested adding statements to the addendum 
to acknowledge that the patient or patient representative has reviewed 
the items, services, and medications with the hospice representative in 
order to protect the hospice from inadvertently excluding any 
medications or treatments the patient is receiving at the time of 
admission, and to acknowledge that a new addendum would be signed if 
additional non-covered items, services, or medications are identified 
during the course of treatment, we proposed that the addendum would 
include a statement that the addendum is subject to review and shall be 
updated, as applicable, in writing, to the beneficiary (or 
representative). Additionally, we proposed that the addendum would 
include a statement that signing the addendum (and any updates) is only 
an acknowledgement of receipt of the addendum and not necessarily the 
beneficiary's agreement with the hospice's determinations (84 FR 
17595). If the beneficiary (or representative) requests the addendum at 
the time of the hospice election (that is, at the time of admission to 
hospice), hospices could include language on the addendum that those 
unrelated conditions, items, services, and drugs are those the hospice 
has identified as present on admission and that any changes to this 
list (due to new, changing, or inadvertently excluded conditions, 
items, services, and drugs) would be reflected in written updates to 
the addendum. While we expect hospices to be as thorough as possible 
when completing the election statement

[[Page 38513]]

addendum, we recognize that there may be times when they are not aware 
of all of the individual's conditions/diagnoses at the time of the 
hospice election, which could result in information inadvertently 
excluded on the addendum. Consequently, hospices have the option to 
make updates to the addendum, if necessary, to include such conditions, 
items, services and drugs they determine to be unrelated throughout the 
course of a hospice election. We believe that the requirements proposed 
and these suggestions would mitigate hospices' concerns regarding any 
items, services, or drugs that may have been inadvertently excluded 
when completing the addendum.
    Given that hospices would develop their own addendum, hospices may 
add additional language to inform beneficiaries that the addendum 
reflects the most accurate information that they have at the time the 
addendum is completed and that updates would be provided, in writing, 
if there are any changes that would need to be included based on any 
new information.
    While some commenters stated that addendum should also address 
those items, services, and drugs that may be related, but that the 
hospice is not covering, for example a brand name drug as opposed to a 
hospice formulary drug, or if a patient requests to continue using a 
specific drug that the hospice determines is no longer providing 
medical benefit to the patient, we do not think the addendum is the 
appropriate mechanism to communicate this information. The 
individualized hospice plan of care is developed in accordance with 
patient preferences and goals in mind, including those related to 
drugs. Decisions about those items, services, and drugs should be made 
based on collaboration between members of the interdisciplinary group 
(IDG), the patient's attending physician (if any), as well as the 
patient and their family. This decision-making would include 
determinations of what is reasonable and necessary to meet the care 
plan goals. We remind stakeholders that when a beneficiary elects the 
hospice benefit, he or she agrees to forego the right to Medicare 
payment for services related to the terminal illness and related 
conditions unless provided by the hospice. This would mean that if a 
beneficiary wants to use a brand name drug instead of its' generic 
equivalent, or wants to continue a drug that the hospice has determined 
to no longer be reasonable and necessary, the beneficiary is liable for 
payment for the drug. The purpose of the addendum is to inform the 
beneficiary of those items, services and drugs the hospice has 
determined to be unrelated to the terminal illness and related 
conditions. The scenario described by these commenters reflects a 
situation in which the drug would be related to the terminal illness 
and related conditions but is not on the hospice formulary. Therefore, 
we believe it would be confusing to provide beneficiaries information 
on related items, services, and drugs on the addendum meant to document 
unrelated items, services, and drugs not covered by the hospice. While 
we do not routinely receive reports of beneficiaries preferring to use 
a brand name drug instead of a generic equivalent drug on a hospice's 
formulary, we are aware of a few instances in which that to be the 
case. Therefore, we will continue to monitor reports of these types of 
situations to consider whether the use of the addendum could be 
expanded and we would make such proposals in future rulemaking if 
warranted.
    However, if there is a situation in which the patient wants to 
continue with related items, services, and drugs that the hospice has 
previously been providing, but that the hospice determines are no 
longer reasonable and necessary, or the patient decides to switch to a 
brand name drug rather than the generic equivalent on the hospice 
formulary, and the hospice provides the item, service, or drug, the 
hospice would provide the beneficiary with an ABN to notify the 
beneficiary that he or she would be financially liable. If the hospice 
does not continue to provide the item, service, or drug, no ABN is 
required to be given to the beneficiary.
    If the beneficiary desires to continue taking drugs that are not 
covered by Medicare Part A (hospice) or Part D, then the hospice must 
fully inform the beneficiary of his or her financial liability. 
Beneficiaries may also submit quality of care complaints to a Quality 
Improvement Organization (QIO) when the beneficiary prefers a non-
formulary drug because, for example, it's believed to be more 
efficacious than the formulary drug prescribed by the hospice.
    Beneficiaries who disagree with such determinations may continue 
raising these issues through the Medicare fee-for-service appeals 
process if the determination relates to Part A or B coverage and the 
Part D appeals process if the determination relates to Part D coverage. 
Whether or not the hospice furnishes the drug, if the beneficiary feels 
that the Medicare hospice should cover the cost of the drug, the 
beneficiary may submit a claim for the medication directly to Medicare 
on Form CMS-1490S. If the claim is denied, the beneficiary may file an 
appeal of that determination under the appeals process set forth in 
part 405, subpart I.
    We note that the hospice CoPs at Sec.  418.56 require a review of 
the hospice plan of care at least every 15 days, or more often as the 
patient conditions requires. This ensures that there are ongoing 
discussions with the beneficiary so that all hospice care is provided 
in accordance with patient needs. Similarly, the IDG should be 
proactive in developing each patient's plan of care by planning ahead 
for anticipated patient changes and needs. Decisions should reflect 
patient/family preferences and should not solely be a response to a 
crisis.\28\ We believe that the addendum is to be used as a tool to 
have these discussions both at the time of hospice election, when care 
planning begins, and throughout the course of a hospice election, as 
care planning changes to meet the needs of hospice patients and their 
families.
---------------------------------------------------------------------------

    \28\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

    Regarding the use of the current Hospice Information for Medicare 
Part D (OMB Form 0938-1269), we note that 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). A voluntary, standardized prior 
authorization (PA) 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 reject edit at point-of-sale; and
    (3) Communicating a change in the patient's hospice status.\29\
---------------------------------------------------------------------------

    \29\ Hospice Information for Medicare Part D Plans, OMB-approved 
form (No. 0938-1269). https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Instruction-and-Form-for-Hospice-and-Medicare-Part-D.pdf.
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    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. We don't agree that use of the Hospice Information for 
Medicare Part D (OMB Form 0938-1269) meets the purpose of the addendum 
as the Hospice Information for Medicare Part D (OMB Form 0938-1269) is 
exclusively for use for the identified four classes of

[[Page 38514]]

drugs (analgesics, anti-nausea, anti-anxiety, and laxatives) for 
hospice beneficiaries who are seeking to receive these drugs through 
their Part D prescription coverage. Unfortunately, this particular form 
is not comprehensive enough to communicate those items, services, and 
drugs (not just the four classes) the hospice has determined to be 
unrelated to the terminal illness and related conditions.
    However, as mentioned in the FY 2020 hospice proposed rule (84 FR 
17596), we intend to work with hospices and Part D plans to develop a 
process in which the addendum 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.
    Comment: Several commenters report that obtaining signatures on the 
addendum statement would be prohibitively challenging. These commenters 
cited instances where it is extremely difficult obtaining the patient/
representative signature for the hospice election statement and 
expressed concerns about having a requirement to obtain a signature 
again on the addendum. Reasons for these challenges included having 
representatives who live in a different state from the hospice 
beneficiary who may be unable to make healthcare decisions on his or 
her own, lack of readily available technology such as patients or 
representatives not having email accounts or access to a fax machine in 
order to return signed documents. Other commenters asked specific 
questions regarding the frequency of providing the addendum and whether 
the signature would be required on each version of the addendum. 
Another commenter remarked that other providers, such as home health 
agencies, are not required to obtain patient/representative signature 
for changes to the plan of care and stated that as the addendum would 
be similar to a change in the home health plan of care, requirements 
for the hospice addendum should be a similar process. A few commenters 
requested further guidance regarding the acceptance of an electronic 
patient signature for the addendum.
    Response: We note that the hospice regulations at Sec.  418.24(b) 
require that the patient or representative sign the election statement. 
We appreciate the challenges that commenters have identified in 
obtaining a signature on the election statement, however, we note that 
obtaining the required signatures on the election statement has been a 
longstanding regulatory requirement. We expect that hospices already 
have processes and procedures in place to ensure that required 
signatures are obtained, either from the beneficiary or his or her 
representative in the event that the beneficiary is unable to sign and 
we expect that the same procedures may be used for obtaining signatures 
on the addendum. Likewise, the hospice CoPs at Sec.  418.52(a)(3) 
require that the hospice obtain the patient's or representative's 
signature confirming that he or she has received a copy of the notice 
of rights and responsibilities. Therefore, we believe that it is not 
unreasonable to require that the addendum also be signed to ensure that 
the patient is aware of the important information about hospice non-
covered items, services, and drugs. As noted previously in this rule 
and in the proposed rule (84 FR 17608), 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.
    Contrary to commenters' statements that beneficiaries receiving 
home health services are not required to sign when there are changes to 
the home health plan of care, the HHCCN form (CMS Form 10280) is 
completed when there are changes to the home health plan of care due to 
a reduction or termination of home health services, and the beneficiary 
or representative is required to sign and date the HHCCN confirming his 
or her review and understanding of the notice.30 31 
Additionally, the home health CoPs at Sec.  484.60(c)(3)(ii) require 
that any revisions related to plans for the patient's discharge must be 
communicated to the patient, representative, caregiver, all physicians 
issuing orders for the HHA plan of care, and the patient's primary care 
practitioner or other health care professional who will be responsible 
for providing care and services to the patient after discharge from the 
HHA (if any). We also remind stakeholders that the HHCCN references 
services that are or were provided under the home health plan of care. 
Conversely, the addendum is used to communicate items, services, and 
drugs that would not be on the initial (or subsequent) hospice plan of 
care to ensure coverage transparency where the hospice has determined 
that certain items, services, or drugs would not be covered (that is, 
furnished and paid for by the hospice) because they are unrelated to 
the terminal illness and related conditions.
---------------------------------------------------------------------------

    \30\ Form Instructions for the Home Health Change of Care Notice 
(HHCCN) CMS-10280. https://www.cms.gov/Medicare/Medicare-General-Information/BNI/Downloads/HHCCN-Form-Instructions.pdf.
    \31\ Medicare Claims Processing Manual Chapter 30--Financial 
Liability Protections. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c30.pdf.
---------------------------------------------------------------------------

    In summary, we continue to believe that because of the significance 
of the decision to elect hospice care and waive the right to Medicare 
payment for care related to terminal illness and related conditions, 
the terminally ill individual (and his or her representative) must have 
information related to all aspects of their care, including what the 
hospice has determined to be ``unrelated''. Requiring the patient to 
sign the written addendum memorializes that this important information 
has been provided by the hospice to the beneficiary.
    Comment: Several stakeholders strongly urged CMS to examine non-
hospice expenditures to determine what proportion is actually the 
responsibility of, and within the control of, the hospice before 
implementing a mandatory process for hospices. Commenters noted that 
there are frequent instances when care is provided to hospice patients 
without the hospice's knowledge and the hospice discovers that the 
item, service, or drug has been provided only after the fact. An 
industry association stated that the language in the proposed rule 
presupposes that it is only the hospice's responsibility to communicate 
with other providers and offered ideas for improving the flow of 
communication between hospice and non-hospice providers. Commenters 
noted that other providers may be unaware that a patient has elected 
hospice and that they need to coordinate with the patient's hospice to 
determine whether the services are unrelated to the terminal prognosis 
and that these non-hospice providers must treat claims for hospice 
beneficiaries differently with the use of modifiers or a condition 
code. These commenters recommended that CMS and Medicare Administrative 
Contractors (MACs) provide clear guidance to physicians on billing 
requirements for using the GV and GW modifiers and to circulate this 
guidance widely in a variety of publications to promote awareness of 
these billing requirements as they

[[Page 38515]]

related to non-hospice care for hospice beneficiaries. Some suggested 
that non-hospice providers should share in the responsibility of 
identifying their patients who are under a hospice election. These 
suggestions included making Medicare system changes to allow for a 
shortened process that would expedite the notification of election in 
the Common Working File (CWF), implementing flags in the Medicare 
claims processing systems to notify other provider types of the hospice 
election and requiring these other providers to communicate and 
coordinate with the hospice, as well as asking beneficiaries and/or 
their representative if they are a hospice patient.
    Response: While we agree that all participating Medicare providers 
should actively engage in ongoing communication and care coordination 
to ensure that Medicare beneficiaries receive appropriate care, the 
proposed rule primarily focused on the hospice's responsibility in 
these activities. The hospice CoPs at Sec.  418.56(e) detail the 
requirements of hospice care coordination. Specifically, the hospice 
CoPs require that the hospice provide for an ongoing sharing of 
information with other non-hospice healthcare providers furnishing 
services unrelated to the terminal illness and related conditions. 
Furthermore, hospices are required to have systems in place to 
facilitate the exchange of information and coordination of services 
among staff and with other non-hospice healthcare providers. Likewise, 
hospices are required to have documentation in the clinical record of 
the sharing of information between all disciplines providing care and 
with other healthcare providers furnishing services to the patient.\32\ 
The goal of this coordination is to ensure that the patient's hospice 
plan of care is implemented, and that the hospice care is furnished in 
concert with other care sources to ensure that all patient needs are 
met (73 FR 32099). We expect the hospice plan of care to address all 
patient goals in some way. If a patient has a goal that is not related 
to the terminal illness and related conditions, and if the hospice does 
not intend to address this goal, then the hospice plan of care should 
identify the party that is responsible for meeting the unrelated goal. 
Furthermore, Sec.  418.56(e) requires the hospice to actively 
communicate with the outside party to ensure that the goal is 
addressed. Therefore, given the comprehensive nature of the Medicare 
hospice benefit and the CoPs regarding the pivotal role hospices are 
required to play in care coordination, we believe hospices are 
primarily responsible for communication and care coordination with non-
hospice providers while a beneficiary is under a hospice election. 
Likewise, the requirement that care is provided under the direction of 
an IDG means that the approach to patient care under hospice is 
holistic and requires the hospice to be primarily responsible for the 
medical, emotional, and spiritual care of the individual.
---------------------------------------------------------------------------

    \32\ State Operations Manual Appendix M--Guidance to Surveyors: 
Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf.
---------------------------------------------------------------------------

    To address comments regarding physician education on the 
appropriate use of the GW and GV modifiers, we remind stakeholders that 
CMS does routinely provide information on various aspects of the 
Medicare program include educational materials on Medicare benefits and 
claims processing. There is a MLN Matters[supreg] article, ``Hospice 
Related Services--Part B'', intended for physicians submitting claims 
to Medicare Administrative Contractors (MACs) for services provided to 
Medicare beneficiaries who are in a hospice period of coverage.\33\ 
Likewise, the Medicare claims processing manual, chapter 11, 
``Processing Hospice Claims'' includes detailed information on the 
appropriate use of the GW and GV modifiers. We believe these are the 
most appropriate CMS mechanisms for providing such information to 
physicians and other providers of services.
---------------------------------------------------------------------------

    \33\ MLN Matters[supreg]Number: SE1321, Hospice Related 
Services--Part B.November 2014. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1321.pdf.
---------------------------------------------------------------------------

    To address comments regarding making changes to the Medicare 
systems to allow for a shortened process to update the CWF, we note 
that CWF processing time still varies because of whether an NOE must go 
through the one-time out of service area (OSA) process. OSA processing 
occurs when a beneficiary's master record is not found on the local CWF 
host site for the MAC and several nightly batch cycles are required to 
query each of the other host sites to find it. This process is standard 
for all claims and cannot be revised just for hospice without creating 
risk for all other Medicare payments. While Electronic Data Interchange 
(EDI) submission of NOEs does not affect the processing time in CWF, it 
reduces delays caused by keying errors. Once the NOE is accepted at 
CWF, the hospice record is available for all providers on the HIPAA 
(Health Insurance Portability and Accountability Act) Eligibility 
Transaction System (HETS) inquiries. The HETS allows providers to check 
Medicare beneficiary eligibility data in real-time. Providers are 
encourage to use HETS to prepare accurate Medicare claims, determine 
beneficiary liability, or check eligibility for specific services.
    Comment: A few commenters expressed concern over the role of the 
QIO when beneficiaries disagree with the hospice determination as to 
those items, services, and drugs. These commenters disagreed with 
having to include QIO information on the election statement given 
hospices are already required to provide information to beneficiaries 
regarding QIOs at hospice admission. Other commenters expressed 
concerns over how QIO determinations would be made, given that these 
determinations are within the scope of a hospice physician who has 
medical information in the clinical record with which to base such a 
determination. These commenters stated that unless the QIO reviewer is 
a physician with experience/training in end-of-life care and has 
sufficient information, the QIO reviewer could not make a determination 
as to whether the hospice's determination of unrelatedness is correct 
and appropriate. Commenters request additional clarity about the BFCC-
QIO findings and how the hospice is to implement them so there is no 
confusion regarding the authority of the BFCC-QIO, the hospice medical 
director, and the MACs when determining relatedness, eligibility, and 
continued coverage of hospice services.
    A few commenters remarked that the crux of the issue is the lack of 
guidelines provided by CMS as to how determinations of relatedness are 
made, other than it is the responsibility of the hospice physician. One 
commenter stated that relatedness is vague. One industry association 
reiterated that there is a lack of clarity around what ``relatedness'' 
means and that guidance should be updated and be more specific. This 
commenter stated that the repeated requests for clarification 
underscores the reality of how decisions are being made. This commenter 
went on to state that there are those hospices that have a broad, 
holistic view and philosophy of care that is in alignment with CMS' 
intent and is aligned with their organizational mission and values, 
though this commenter remarked that there are those hospices that take 
advantage of the ``gray space'' and manipulate the system to avoid 
payment of items, services, and drugs that should be the hospices' 
responsibility. Finally,

[[Page 38516]]

this commenter recommended that CMS work with stakeholders to develop 
more standardized definitions of related and unrelated in order to 
promote consistency of delivery across the benefit and where the need 
for an addendum would be unnecessary as a result.
    Response: We remind stakeholders that Immediate Advocacy with the 
Beneficiary and Family Centered Care Quality Improvement Organization 
(BFCC-QIO) is an informal alternative dispute resolution process used 
to quickly resolve a Medicare beneficiary's (or his or her 
representative's) verbal complaint regarding the quality of Medicare-
covered health care received or services that accompany medical care 
(for example, medical equipment). This process involves the BFCC-QIO 
directly contacting the beneficiary's practitioner or provider, usually 
by telephone. The process is voluntary for both the beneficiary and the 
provider or practitioner. The purpose of Immediate Advocacy is to 
provide a flexible, dialogue-based resolution process between the 
beneficiary and the provider.
    There are specific criteria for eligibility for Immediate Advocacy. 
A QIO may offer Immediate Advocacy to the beneficiary prior to 
obtaining a written beneficiary complaint when the following criteria 
are met:
    1. After initially screening the complaint, the QIO determines the 
complaint was received within 6 months from the date of service on 
which the care occurred concerning the complaints and:
    a. The beneficiary complains about a matter that is unrelated to 
the clinical quality of health care itself but that relates to items or 
services that accompany or are incidental to the medical care and are 
provided by a practitioner and/or provider (for example, beneficiary in 
search of or needing an intervention for resources and/or services 
covered by Medicare, such as a wheelchair that was not delivered, a 
beneficiary concerned about the quality of communication with their 
practitioner and/or provider); or
    b. The beneficiary complains about a matter that, while related to 
the clinical quality of health care the beneficiary received, does not 
rise to the level of being a ``gross and flagrant,'' ``substantial,'' 
or ``serious or urgent'' quality of care concern. This may include 
situations where the QIO determines that the medical information will 
most likely not contain evidence related to the complaint.
    2. The beneficiary agrees to the disclosure of his or her name. (42 
CFR 476.110(a)(3)).
    3. All parties orally consent to the use of Immediate Advocacy. (42 
CFR 476.110(a)(4)).
    4. All parties agree to the limitations on redisclosure; namely, 
all communications, written and oral, exchanged during the Immediate 
Advocacy process must not be redisclosed without the written consent of 
all parties (42 CFR 476.110(c) and 480.107).
    If the practitioner/provider opts NOT to participate in the 
Immediate Advocacy process, the QIO must immediately contact the 
beneficiary and give him or her the opportunity to file his or her 
complaint in writing.\34\
---------------------------------------------------------------------------

    \34\ Quality Improvement Organization Manual Chapter 5--Quality 
of Care Review. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/qio110c05.pdf.
---------------------------------------------------------------------------

    As noted previously, the regulations at Sec.  476.110 set forth the 
requirements as they relate to the Immediate Advocacy process which is 
meant to be an informal alternative dispute resolution process used to 
quickly resolve an oral complaint a Medicare beneficiary or his or her 
representation has regarding the quality of Medicare covered health 
care received. This process involves a QIO representative's direct 
contact with the provider and/or practitioner. When a quality of care 
complaint is handled through the Immediate Advocacy process, the QIO 
does not make clinical determinations based on whether or not it agrees 
with the hospice's determination about whether or not the disputed 
items, services, or drugs are unrelated to the terminal illness and 
related conditions, but rather facilitates discussion between the 
beneficiary and the hospice to see if the two parties can come to a 
satisfactory resolution. While it cannot require services be covered, 
provided, or be paid for by Medicare, the BFCC-QIO addresses quality of 
care issues for Medicare beneficiaries. Additionally, with the 
agreement to use Immediate Advocacy, a Peer Review is not performed. A 
Peer Review is a review by health care practitioners of services 
ordered or furnished by other practitioners in the same professional 
field and is generally part of the written complaint process through 
the QIO. If the QIO receives a written complaint, Immediate Advocacy 
may not be offered; rather the written complaint would be subject to 
the Beneficiary Complaint Review Peer Review process.\35\ Furthermore, 
medical information should not be requested from the practitioner or 
provider for this Immediate Advocacy process. While the goal of 
Immediate Advocacy is to informally and quickly resolve the 
beneficiary's complaint, in certain instances the beneficiary might 
remain dissatisfied after completion of Immediate Advocacy. Should this 
occur, the QIO must advise the beneficiary of his or her right to file 
a written complaint. Therefore, we reiterate to commenters that the 
role and scope of the BFCC-QIO's Immediate Advocacy authority is 
limited, as described in regulation.
---------------------------------------------------------------------------

    \35\ Quality Improvement Organization Manual Chapter 5--Quality 
of Care Review. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/qio110c05.pdf.
---------------------------------------------------------------------------

    We also remind commenters that the hospice medical director must 
consider all health conditions, whether related or unrelated to the 
terminal condition, as well as current clinically relevant information 
supporting all diagnoses when making the decision to admit a patient 
into hospice (42 CFR 418.25). Additionally, all hospice care and 
services furnished to patients and their families must follow the 
individualized written plan of care established by the hospice 
interdisciplinary group in collaboration with the attending physician 
(if any), the patient or representative, and the primary caregiver in 
accordance with the patient's needs if any of them so desire (42 CFR 
418.56). The hospice must ensure that each patient and the primary care 
giver(s) receive education and training provided by the hospice as 
appropriate to their responsibilities for the care and services 
identified in the plan of care. The plan of care must specify the 
hospice care and services necessary to meet the patient and family-
specific needs identified in the comprehensive assessment as such needs 
relate to the terminal illness and related conditions (42 CFR 418.56). 
Based on this information, each hospice makes the determination as to 
what items, services, or drugs are considered related to the terminal 
illness and related conditions, and belong on the plan of care. 
However, that is not to say that these determinations cannot be 
questioned by the beneficiary, or his or her representative. Therefore, 
the addendum is to provide the information on hospice determinations as 
to what unrelated items, services, and drugs it will not be covering to 
spur conversations with the patient about these determinations and the 
impact on the patient. In addition, Immediate Advocacy is a process in 
which the beneficiary can question such determinations.

[[Page 38517]]

    In response to comments regarding concerns about the vagueness of 
``relatedness'' and requests for additional CMS guidance as to what is 
``related'' and ``unrelated'', we remind commenters that since the 
implementation of the Medicare hospice benefit, it has been our 
position that virtually all of the care needed by terminally ill 
individuals should be provided by the hospice (48 FR 56010). As such, 
there should not be a voluminous list of unrelated items, services, and 
drugs given the comprehensive nature of hospice services under the 
Medicare hospice benefit and the requirement that the hospice provide 
care addressing the physical, medical, psychosocial, emotional, and 
spiritual needs of hospice patients and families facing terminal 
illness and bereavement. We note that in the FY 2015 hospice proposed 
rule (79 FR 26538) we solicited comments on definitions of ``terminal 
illness and related conditions.'' We received a significant number of 
comments on these definitions, with most commenters opposing CMS 
proposing these definitions. Commenters stated that hospices were the 
experts at making such clinical determinations and that the statute and 
hospice regulations allow for hospices to make such determinations. 
Commenters noted that the hospice should be the entity that establishes 
a process to make determinations as to what is related and unrelated to 
the terminal illness and related conditions on a patient-by-patient 
basis. Due to this feedback, we have not proposed definitions for 
``terminal illness or related conditions''.
    We understand that national industry associations have subsequently 
engaged in activities with hospices to communicate a process for 
helping hospices make these relatedness determinations in the form of 
clinical decision-making process workflows.\36\ We appreciate these 
efforts and ongoing dialogue amongst the hospice industry in addressing 
best practices in making clinical decisions to provide comprehensive 
and holistic care to hospice beneficiaries and their families.
---------------------------------------------------------------------------

    \36\ Determining Relatedness to the Terminal Prognosis Process 
Flow, National Hospice and Palliative Care Organization. December 
2014. https://wshpco.org/media/Relatedness_Process_Flow_FINAL_2.14.pdf.
---------------------------------------------------------------------------

    Comment: Some commenters suggested that rather than implement 
sweeping regulations required of all hospices, CMS should implement a 
more targeted approach by analyzing data to identify hospices that are 
out of compliance with the coverage of DME and disease-specific drugs 
and penalizing them directly for failure to provide such services. One 
commenter remarked that most hospices provide all items, services, and 
drugs in good faith and in accordance with Medicare regulations and 
therefore should not be subject to unnecessary requirements. Another 
commenter recommended that CMS take additional steps to identify the 
breadth of the issues contributing to non-hospice spending and address 
inappropriate spending outside of the hospice benefit accordingly. 
Specifically, this commenter suggested that CMS determine what 
proportion of hospice spending is occurring within the first few weeks 
of hospice care when the CMS systems have not been updated with 
Medicare notice of election information and where the hospice is 
informing non-hospice providers that the item, service, or drug is 
unrelated. One commenter stated that a simple solution would be to 
block all Medicare services without hospice approval. One commenter 
wrote that the addendum proposal would make hospices look like ``the 
bad guy'' in communicating those items, services, and drugs they have 
determined to be unrelated even if the hospice is providing this 
information in good faith.
    Response: For those providers who do furnish all items, services 
and drugs for hospice patients, this requirement would be met in that 
there would be no request for an addendum as the hospice would be 
furnishing all of the patient's care needs. We remind stakeholders that 
the hospice regulations are applicable to all Medicare-participating 
hospice providers. Program integrity audits and survey actions are 
appropriate mechanisms to enforce the payment regulations and the CoPs. 
If there are identified program integrity concerns or CoP violations, 
the appropriate targeted actions can then be taken for those who do not 
meet the requirements.
    To reduce the incidence of inappropriate payments for beneficiaries 
under a hospice election, hospices are required to submit a Notice of 
Election (NOE with its Medicare contractor within 5 calendar days after 
the effective date of the election statement. The purpose of a timely-
filed the NOE is to alert the Medicare claims processing system that a 
beneficiary is under a hospice election to avoid inappropriate or 
duplicative payments to other Part A, Part B, or Part D providers, and 
to safeguard beneficiaries from inappropriate liability for copayments 
or deductibles.
    We have been analyzing non-hospice spending for a number of years 
and have been presenting information on the breadth of this issue in 
proposed and final rules (for instance, our FY 2016 hospice wage index 
proposed rule at 80 FR 25849, and our FY 2019 hospice wage index 
proposed rule at 83 FR 20946). We also note that in examining non-
hospice spending, we have excluded admission and discharge dates as 
part of our analysis. In the future, we will consider examining other 
time points of non-hospice spending, including the proportion of 
spending that is occurring in the first 5 days of a hospice election 
where the claims processing system may not yet be aware of the hospice 
election.
    We oppose blocking all beneficiary access to services ordinarily 
covered by Medicare without hospice approval because the complexity of 
instituting such a process would potentially delay access to needed 
items, services, and drugs.
    Non-hospice providers are already required to submit claims with 
the appropriate modifier when furnishing services to beneficiaries 
under a hospice election. Non-hospice providers are required to report 
the GW modifier (or condition code 07 for institutional providers) to 
identify that services were unrelated to the terminal illness and 
related conditions or the GV modifier to identify that services were 
related to the terminal illness and related conditions. For 
beneficiaries enrolled in hospice, A/B MACs (B) shall deny any services 
on professional claims that are submitted without either the GV or GW 
modifier. Therefore, there is already a mechanism in place to prevent 
inappropriate payments during a hospice election. As we stated in the 
FY 2020 proposed rule (84 FR 17597), we also believe that the 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 were 
given access to a patient's addendum, this potentially could provide 
evidence under section 1870 of the Act in demonstrating that the non-
hospice provider did or did not have reason to know that the services 
provided by the non-hospice provider were duplicative, or otherwise not 
reasonable and necessary (considering the service itself was otherwise 
reasonable and necessary and satisfied all other requirements for 
payment). Moreover, if a non-hospice provider submitted a claim to 
Medicare for

[[Page 38518]]

services provided to a beneficiary that were unrelated to the terminal 
illness and related conditions but did not have the supporting 
documentation demonstrating that the services were unrelated, this 
could, among other things, delay payment. 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.
    Finally, we disagree that the purpose of furnishing an addendum to 
communicate hospice non-covered, unrelated items, services, and drugs 
is to make the hospice look like ``the bad guy''. Again, hospices are 
already required to inform beneficiaries of coverage under the Medicare 
hospice benefit. As such, providing this information supports the 
philosophy of care of putting patients first, promoting patient choice, 
and advocating for patient autonomy.
    Comment: A majority of commenters opposed the proposal that the 
addendum be a condition for payment. Many commenters suggested that 
instead of a condition for payment, the proposed addendum should be a 
CoP, as they believe that protection of patient rights is more 
appropriately reviewed under the survey oversight process. Commenters 
stated that in order for the proposed addendum to be a condition for 
payment, there would need to be a standardized process of recording any 
unrelated items, services, and drugs and documenting whether or not the 
addendum was requested in the patient's medical record. Several 
commenters questioned how an addendum that is mandatory, but only upon 
request, could be appropriately used as a condition for payment. Many 
commenters expressed concern over the implications for auditing under 
medical review. Specifically, commenters asked how to protect 
themselves from claims denials if there is no addendum (or addendum 
updates) present in the medical record because there was no patient (or 
representative) or provider request. Others question whether the MACs 
would use the addendum for claims denials if the MAC disagrees with the 
hospice's determinations. A national industry association stated that 
the process to determine whether the addendum was requested, when it 
was requested, whether it is present, and whether the condition for 
payment requirement has been met, is fraught with issues. Several 
commenters requested that CMS develop specific protections to prevent 
claims denials solely because an addendum is not in the medical record 
and to state that the addendum would not be used to dispute 
determinations of relatedness which could result in claims denials. A 
few commenters thought that the addendum should be provided to every 
hospice beneficiary, whether requested or not, to protect the hospice 
from claims denials resulting from missing addendums in patients' 
medical records. A few commenters stated that the vast majority of 
patients have no unrelated conditions and therefore it seems 
unnecessary to require such a form. Another commenter believed that the 
addendum would have a chilling effect at the time of hospice election 
and may deter admissions, especially for those patients who are 
reluctant to discontinue certain services and drugs, like maintenance 
medications.
    Response: While we understand stakeholder concerns about including 
an addendum statement as a condition for payment, we believe this is 
necessary to ensure that hospices are diligent in providing this 
information to Medicare hospice beneficiaries on request. We regard 
this addendum as an important mechanism of accountability for hospices 
to provide coverage information to beneficiaries electing the hospice 
benefit. We also believe that the various reports by the OIG (for 
example; OEI-02-16-00570, July, 2018, ``Vulnerabilities in the Medicare 
Hospice Program Affect Quality Care and Program Integrity: An OIG 
Portfolio,'' \37\ and A-06-10-00059, June 2012, ``Medicare Could Be 
Paying Twice For Prescription Drugs For Beneficiaries In Hospice'') 
\38\ highlight the issues with a patient's lack of knowledge of 
hospices' limitation on their coverage, and the possibility of hospices 
potentially not covering items, services, and drugs that should be 
hospices' responsibility. We reiterate that the election statement 
addendum, as a condition for payment, would achieve the goal of 
increasing comprehensive patient education, awareness, empowerment, and 
coverage transparency. As stated in the FY 2020 hospice proposed rule, 
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. Likewise, this addendum 
would not be required to be submitted with any hospice claims. While we 
agree that this could be a CoP as opposed to a condition for payment, 
we continue to believe that as a condition for payment, this would 
ensure a more comprehensive and thoughtful approach by hospices in 
communicating important coverage information to beneficiaries.
---------------------------------------------------------------------------

    \37\ Vulnerabilities in the Medicare Hospice Program Affect 
Quality Care and Program Integrity: An OIG Portfolio. July 2018. 
https://oig.hhs.gov/oei/reports/oei-02-16-00570.pdf.
    \38\ Medicare Could Be Paying Twice for Prescription Drugs for 
Beneficiaries in Hospice (A-06-10-00059). June 2012. https://oig.hhs.gov/oas/reports/region6/61000059.pdf.
---------------------------------------------------------------------------

    We agree that it would be helpful for hospices to have a 
standardized documentation process for recording any unrelated items, 
services, and drugs and expect that many hospices may already have a 
documentation process in place, given the existing requirements for 
admission to hospice and development of the individualized plan of 
care. We would expect hospices to document, in some fashion, that the 
addendum was discussed with the patient (or representative) at the time 
of admission, similar to how other patient and family discussions are 
documented. Likewise, hospices can develop a way to document whether or 
not the addendum was requested at the time of hospice election (or at 
any time throughout the course of hospice care). This could be done in 
checklist format or as anecdotal notes by the nurse. However, we did 
not propose a specific format in which to document such conversations 
and hospices can develop their own processes to incorporate into their 
workflow. We believe that careful documentation that the addendum was 
discussed and whether or not it was requested would be an essential 
step hospices could take to protect themselves from claims denials 
related to any absence of an addendum (or addendum update) in the 
medical record.
    We are aware of commenter concerns about the potential for this 
addendum to be used for medical review auditing purposes if it is a 
condition for payment. We note that there is no current process for the 
MACs to make determinations of ``relatedness''. We remind commenters 
that the regulations

[[Page 38519]]

afford hospices this responsibility in accordance with the CoPs at 
Sec.  418.56. Therefore, the hospices' determination of those unrelated 
items, services, or drugs reported on the addendum could not be used 
solely to deny hospice claims. Nonetheless, to assuage commenter 
concerns about increased claims denials and documentation requests, we 
will collaborate with the MACs to establish clear guidelines on the use 
of the addendum as a condition for payment and we will propose any 
requirements in future rulemaking, as necessary. We do not want 
hospices to perceive that the purpose of this addendum is punitive 
against hospices, nor that it is a mechanism to deny claims; rather we 
want hospices to understand that the intent of this addendum is to keep 
patients at the forefront of their decision-making equipped with 
adequate information to make care choices as they approach the end of 
life.
    While hospices can choose to provide the addendum to every electing 
beneficiary, we are not requiring that it is mandatory, unless the 
patient (or representative) requests the addendum. We encourage 
hospices to review their current admission processes to see how the 
addendum could assimilate into their procedures to help ameliorate any 
issues upon implementation. We believe that because hospices already 
should have processes in place to make determinations about those 
items, services, and drugs that they will not cover because they are 
unrelated to the terminal illness and related conditions, hospices will 
be able to adapt the addendum into their current processes.
    Finally, we disagree that the provision of the addendum would have 
a ``chilling effect'' on hospice admissions. Generally, beneficiaries 
make decisions that are based on information furnished by providers 
rendering care. We continue to assert that the information provided in 
the addendum will allow beneficiaries to make those decisions to best 
meet their preferences and goals of care and will mitigate any 
unexpected need to seek services outside of the hospice and assume the 
associated cost-sharing. We believe beneficiaries and their families 
would appreciate full disclosure from the hospice as to what to expect 
when electing the Medicare hospice benefit.
    Comment: The majority of commenters agreed that if the addendum is 
finalized, the effective date should be delayed until FY 2021, at 
minimum, in order to ensure that hospices and software vendors have 
adequate time to develop the addendum, modify the existing election 
statement to include the new content requirements, and develop and 
educate on the protocols and procedural changes necessary to 
incorporate the addendum into hospice work flow processes, as well as 
work with non-hospice providers to ensure compliance.
    Response: We understand that making modifications to the election 
statement and developing an addendum to accompany the election 
statement will take time for hospices to create, educate staff, and 
incorporate into current admission processes. Likewise, we recognize 
that there are some additional logistical and operation considerations 
(see response below) that we will need to consider and communicate to 
the hospice industry to help ensure a more seamless implementation. 
Therefore, we will finalize an effective date of FY 2021 for the 
election statement modifications and the addendum. This delayed 
effective date will allow sufficient time for us to develop a model 
election statement addendum to provide the industry as they move 
forward making the changes to their own election statements and as they 
develop an addendum to communicate those items, services, and drugs 
they will not be covering because they have determined them to be 
unrelated to the terminal illness and related conditions. This 
additional year will allow hospices to make any current process and 
software changes to incorporate the addendum into their workflow.
    Comment: Many commenters stated that CMS underestimated the amount 
of time it would take for the nurse to complete the addendum stating 
that 10 minutes is an insufficient amount of time to extrapolate this 
information from the existing documentation. A few commenters stated 
that this would take between 20 and 30 minutes to complete. Others 
stated that this is not just a process of extrapolating the 
information, but that this is often a process of information gathering 
as not all relevant information is readily available at the time of the 
initial assessment. However, a few commenters believed that even though 
the timeframe to complete the addendum would be longer than 10 minutes, 
they suggested that the addendum should not be optional but patients 
(or their representatives) should be provided this detailed list as 
this is critical to the care process, patient empowerment, quality of 
care, and transparency. One commenter stated that the addendum proposal 
would be improved by adding appropriate reimbursement for the time and 
process redesign needed to make this a successful addition to hospice 
practice.
    Additionally, the majority of commenters stated that this would 
significantly increase burden for hospices, as well as for patients and 
their families and could potentially impede access to care stating that 
this conflicts with CMS' Patients over Paperwork initiative. Commenters 
cited such concerns as the increase in time spent gathering, 
documenting, and communicating this information, as well as providing 
copies of such information, in writing, to patients, their 
representatives, non-hospice providers, and Medicare contractors.
    Response: While we understand commenter concerns over the time it 
takes to complete the addendum, we remind hospices that the addendum is 
not a requirement for every electing beneficiary. Several commenters 
stated that because they do provide such a comprehensive range of 
services most beneficiaries would not need an addendum. We continue to 
believe that once a beneficiary elects the hospice benefit, most items, 
services, and drugs would be for the palliation and management of the 
terminal illness and related conditions and that there would be few 
things that would be unrelated.
    Furthermore, because hospices should already be considering those 
items, services, and drugs they have determined to be unrelated as part 
of the admission and care planning process, we believe that providing 
such information, in writing, to the beneficiary (or representative) 
should not take a significant amount of time. Additionally, hospices 
would develop their own addendums, in a format that suits them to best 
meet the requirements and patient needs while minimizing operational 
burden. We also stated in the proposed rule that we would develop a 
model addendum to help hospices in developing their own. Several 
commenters stated that most hospices use the current model election 
statement so we trust that hospices would take advantage of the model 
addendum to help mitigate any burden in developing their own addendum 
to meet this requirement.
    Additionally, we are finalizing expansion of the time to complete 
the addendum to 5 days in accordance with the timeframe to complete the 
comprehensive assessment. This means that if a requesting beneficiary 
dies within the first 5 days of the hospice election, hospices would 
not be required to complete any requested addendum as this requirement 
would be deemed as being met in this circumstance. Given that almost 28 
percent of beneficiaries die within the first 5 days of hospice care, 
this would

[[Page 38520]]

further reduce hospice burden. We have recalculated the burden estimate 
in section IV. of this final rule to account for the expanded timeframe 
to complete the addendum where there would be fewer eligible elections 
subject to this requirement and thus, less burden on hospices.
    We agree with those commenters who stated that the addendum would 
be critical in the care process and would promote patient empowerment, 
quality of care, and transparency. However, we are not making this a 
mandatory requirement for all hospice elections; we reiterate that the 
requirement is that the addendum would be provided only upon request as 
we believe this would best achieve coverage transparency without 
imposing undue burden on hospices. Likewise, because we believe that 
hospices should already have processes in place to make determinations 
of unrelatedness, additional payment should not be made for completion 
of the addendum.
    Finally, while we recognize that the addendum, may result in a 
small increase in operational burden for some hospices, we believe this 
burden is outweighed by our initiative to put patients first. We 
believe that if a requirement results in promoting patient choice, 
autonomy, and coverage transparency then it is within the framework of 
this initiative.
    Comment: In addition to the comments summarized above, we received 
numerous comments from hospices, industry associations, and other 
stakeholders who stated concerns with operational and logistical 
aspects of the addendum policy. Furthermore, commenters wrote that CMS 
drastically underestimated the operational complexity and the impact 
this particular requirement would have on hospice providers and 
patients.
    Generally, commenters had questions on the logistics of delivering 
the addendum to the patient and family within 48 hours, the clinician 
who would be responsible for delivering the addendum, and whether this 
would require the nurse to have a mobile printer to deliver such 
information. Others asked what the expectations would be when there are 
changes to the plan of care after admission; whether the timeframe is 
based on when CMS accepts the election or when the provider submits the 
NOE; what provisions would be made for weekends and holidays; what 
education would be provided to MACs and the BFCC-QIOs regarding their 
role in this process; how CMS would expect evidence that the unrelated 
items, services, and drugs were discussed at admission or at other time 
points during a hospice election; documentation requirements in the 
medical record referencing the addendum, including who requested such 
information and when; what CMS means when we state that the clinical 
rationale should be provided in ``language a beneficiary can 
understand''; how CMS would determine whether the clinical rationale is 
adequately supported; and how differences between clinical opinion 
between the hospice physician and non-hospice providers would be 
handled.
    Response: We realize that commenters have concerns over some of the 
operational and logistical details of developing and implementing an 
addendum to communicate, in writing, those items, services, and drugs 
the hospice will not cover as they have been determined by the hospice 
to be unrelated to the terminal illness and related conditions. As 
mentioned previously, hospices have asked for additional guidance and 
details on some of these issues including the submission of handwritten 
versus electronic signatures, expectations of the type of documentation 
expected in the medical record regarding whether or not the addendum 
was requested; what documentation would be requested by the MACs when 
an Additional Documentation Request (ADR) is made; whether the addendum 
could be provided in an electronic format; the provision of MAC and 
BFCC-QIO education, among others. Some of these issues have been 
addressed in previous responses in this final rule.
    Because of some of the issues brought to light by commenters, we 
will delay the effective date for implementation of the election 
statement modifications and the addendum until FY 2021 to allow 
additional consideration of these operational and logistical issues. 
This will allow CMS more time to fully investigate the details brought 
up by commenters specifically regarding operational and auditing 
processes, training and education, and we will engage in rulemaking for 
FY 2021 as necessary to seek any additional comments on any operational 
or logistical proposals.
    Final Decision: We are finalizing the election statement 
modifications as proposed. We are also finalizing our proposal that the 
addendum be titled ``Patient Notification of Hospice Non-Covered Items, 
Services, and Drugs'' and would include the following content 
requirements:
    1. Name of the hospice;
    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
    b. Right to Immediate Advocacy
    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.
    We are finalizing that the election statement modifications apply 
to all hospice elections but the addendum only would be furnished to 
beneficiaries, their representatives, non-hospice providers, or 
Medicare contractors who request such information. Additionally, we are 
finalizing our policy that if the beneficiary (or representative) 
requests an addendum at the time of hospice election, the hospice would 
have 5 days from the start of hospice care to furnish this information 
in writing. We are finalizing our proposal that if the beneficiary 
requests the election statement at the time of hospice election but 
dies within 5 days, the hospice would not be required to furnish the 
addendum as the requirement would be deemed as being met in this 
circumstance. If the addendum is requested during the course of hospice 
care (that is, after the date of the hospice election), we are 
finalizing that the

[[Page 38521]]

hospice would have 72 hours from the date of the request to provide the 
written addendum. We are finalizing our proposal that the election 
statement modifications and the addendum be effective for hospice 
elections beginning on and after October 1, 2020 (that is, FY 2021). As 
noted previously, we will continue to examine some of the operational 
and logistical issues highlighted by commenters to determine if any 
additional proposals are required for FY 2021 rulemaking.
    At Sec.  418.24(b), we are finalizing the provisions regarding the 
election statement modifications and the election statement addendum. 
In addition, we made several revisions to Sec.  418.24. Specifically, 
we redesignated paragraphs (c) through (f) as paragraphs (d) through 
(g). This redesignation would affect two cross-references in Sec.  
418.26(c)(2) and Sec.  418.28(c)(2). As a result, we made conforming 
changes to accompany the redesignations in Sec.  418.24. Likewise, at 
Sec.  418.3, we define the term BFCC-QIO as the Beneficiary and Family 
Centered Care Quality Improvement Organization. Because these 
conforming changes were not proposed in the proposed rule, we are 
adopting them here under a ``good cause'' waiver of proposed 
rulemaking. The specific changes we are making in the regulations 
simply codify the final policies we described in the proposed rule and 
do not reflect any additional substantive changes.

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

    In the FY 2020 Hospice Wage Index and Rate Update proposed rule (84 
FR 17598), we solicited public comments on the interaction of the 
Medicare hospice benefit and various alternative care delivery models, 
including Medicare Advantage (MA), Accountable Care Organizations 
(ACOs), and other future models designed to change the incentives in 
providing care under traditional FFS Medicare. We specifically sought 
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 further 
solicited comments on any care coordination differences for hospice 
patients that received Medicare through traditional FFS prior to a 
hospice election, were enrolled in an MA plan prior to hospice 
election, or received care from providers that participate in an ACO 
prior to a hospice election.
    We appreciate the thoughtful input and suggestions provided by 
commenters in response to this request for information (RFI). We 
generally do not summarize or respond to comments in the final rule for 
requests for information as the purpose of such requests is to help CMS 
for future rulemaking or the development of models through CMS' 
Innovation Center. However, as we continue to review the comments 
received, we believe that the information gathered under this RFI will 
help inform: (1) Future CMS payment models; (2) the role of 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 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. The Meaningful Measures initiative is not 
intended to replace any existing programs, but will help programs 
identify and select individual measures. The 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 to 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 the HQRP in order 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,

[[Page 38522]]

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 solicited public input on measure concepts 
and 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' 
quality reporting programs, such as the Inpatient Quality Reporting 
Program (QRP) and the post-acute care (PAC) QRPs, have adopted claims-
based measures. 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 management 
and symptom management, which are 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 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 did not propose any new 
claims-based or outcome measures at this time. However, we solicited 
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.
    A summary of the comments received regarding the future claims-
based and outcome measure concepts and our responses to those comments 
appear below:
    Comment: Several commenters support CMS efforts to develop outcome 
measures for hospice care. Additionally, many commenters support using 
claims data to develop new measures and cited the importance of a 
balanced measure portfolio comprising different measure types and data 
sources. We also received many comments in support of using data from 
the hospice assessment tool under development to create new patient and 
family outcome measures. Several commenters noted concerns about using 
claims data for quality measurement. Specifically the commenters noted 
that claims data only capture processes and not outcomes of patient 
care, and some commenters stated that the number of visits was not a 
good indicator of care quality. Commenters also stated that claims do 
not reflect the full scope of hospice experience because not all 
disciplines of the hospice team, such as volunteers or spiritual staff, 
are captured on a claim. Several commenters stated that claims data do 
not provide sufficient information to adequately represent hospice 
practice. Additionally, some commenters recommended that CMS modify 
hospice claims to capture information on all hospice disciplines such 
as chaplain visits.
    Response: We appreciate the commenters' support for outcome measure 
development and reiterate our commitment to measuring outcomes as part 
of the Meaningful Measures Initiative. We also appreciate the support 
for using a future hospice assessment tool to develop additional 
quality measures. We will take these recommendations under 
consideration as we pursue new measure development.
    Regarding the limited focus of claims data, we refer readers to our 
discussion in the FY 2016 Hospice Wage Index and Payment Rate Update 
final rule (80 FR 47189) where we address those concerns regarding 
claims-based measures. As previously noted, claims-based measures place 
minimal burden on providers, as they do not require additional data 
collection and data submission, and follow a relatively consistent 
format, using standardized and established coding. Claims-based 
measures would be only one type of

[[Page 38523]]

quality measure in the QRP. This is in line with our efforts to create 
a broader set of quality measurement that include outcome and claims-
based measures, since currently we report measures based on HIS and 
CAHPS[supreg] Hospice data that are process and outcome measures. We 
will take these comments into consideration as we continue to address 
the high priority areas of identifying gaps in care and reducing 
regulatory burden as we explore the development of other claims-based 
and outcome measures for the HQRP.
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 subject of 
potentially avoidable hospice care transitions. While the 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 the MAP's concerns with the measure could be mitigated. 
Areas that the MAP recommended included reconsidering the exclusion 
criteria for the measure. Specifically, they recommended that we review 
the exclusion for Medicare Advantage patients, 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 
that we 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 solicited public comments on ways to further develop these 
two measure concepts and different measure concepts that fall under 
these high priority areas. A summary of those comments and our 
responses to the comments appear below:
    While commenters supported measuring potentially-avoidable 
transitions and access to levels of care and agreed that these are high 
priority areas, they had several concerns and suggested modifying the 
measures, requested more detail and encouraged CMS to consider the 
feedback and recommendations from the National Quality Forum's MAP in 
2018 for modifying the measure specifications. They also recommended 
more measure testing in the measure development to help gain further 
support for these measures.
    Comment: Several commenters noted concerns about how a hospice 
transitions measure would capture patient and family choices to revoke 
hospice in favor of other types of treatment or access to additional 
services. They recommended excluding from the measure live discharges 
when the patient elects a different hospice provider or is discharged 
for cause, and noted that patients' decisions to seek acute care is 
outside of a hospice provider's control. Some commenters recommended 
that claims data capture the reasons for a live discharge, noting there 
could be many different ones. Several commenters recommended the 
measure be simplified by separating into two separate measures, as it 
is addressing different concepts by including both death within 30 days 
and admission to an acute care use within 7 days. They also recommended 
shortening the measurement period to create a stronger nexus between 
the hospice stay and the adverse event.
    Comment: Several commenters noted that claims data do not 
sufficiently reflect the factors that determine appropriate provision 
of the various levels of hospice care and that patient and caregiver 
needs vary greatly. They noted that claims only indicate if the hospice 
has billed one of the four levels of care. They further noted that 
patient needs vary and the acuity information need to evaluate 
appropriate GIP and CHC utilization is not available in claims data. 
Commenters recommended looking at interdependent patterns of care and 
monitoring for unintended consequences, such as providing higher levels 
of care than needed.
    Response: CMS appreciates the comments and the support for 
continuing to refine efforts to measure these two high priority 
concepts identified by the OIG in its 2018 report, entitled 
``Vulnerabilities in the Medicare Hospice Program Affect Quality Care 
and Program Integrity: An OIG Portfolio'' and available at https://oig.hhs.gov/oei/reports/oei-02-16-00570.asp. We will take these 
comments under advisement as we continue exploring options for 
measuring these constructs and reiterate our commitment to working with 
NQF and the MAP. With respect to potentially-avoidable transitions, we 
are carefully considering stakeholder and MAP feedback, and are looking 
at multiple ways to measure this construct, including separating out 
the components to reduce the measure's complexity. In our ongoing 
development efforts we are examining the potential impact of these 
measures, including any unintended consequences.
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

[[Page 38524]]

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, 
admission and discharge data from HIS 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 develop quality measures and any 
possible future payment considerations to include bridging 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 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 solicited public comments 
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.
    Comment: We received several comments expressing strong support for 
the development a new assessment tool for use in conducting patient 
assessments in real-time to assist in the plan of care and also for 
developing future measures to benefit hospice providers and consumers. 
These commenters also appreciated our ongoing and regular engagement of 
stakeholders via sub-regulatory means in the development process.
    Commenters also expressed support for changing the name and acronym 
of an assessment tool, to avoid confusion. Commenters offered the 
following suggestions: Hospice Comprehensive Assessment Tool or the 
Comprehensive Assessment Tool for Hospice; Hospice Outcomes & Patient 
Evaluation (HOPE); Hospice Care Assessment Tool; Hospice Assessment 
Tool (HAT); and Evaluation and Assessment Reporting Tool for Hospice 
(EARTH). One commenter recommended rather than renaming the HEART 
(Hospice Evaluation Assessment Reporting Tool), CMS rename the Hospice 
Abstraction Reporting Tool (HART) to the Hospice Assessment Software 
Tool (HAST).
    Response: We appreciate the support for and feedback on developing 
a new hospice assessment. We are continuing the process of developing a 
new hospice assessment that meets the objectives of patient-centered 
care. This process includes additional information gathering, including 
review of feedback on the HEART tool, and stakeholder engagement to 
develop a draft instrument for alpha testing that will ultimately 
support a national beta test. We intend to use rule-making to propose a 
timeline and process for implementing the final, tested assessment 
tool. We appreciate the support for wanting to use a new assessment to 
development outcome measures and reiterate our commitment to providing 
updates and engaging stakeholders through sub-regulatory means.
    While HIS is a standardized mechanism for extracting medical record 
data, it is not a patient assessment instrument that can capture 
patient data in real time for use in care planning. Our goal for a 
hospice assessment tool is to be more comprehensive than the HIS by 
capturing care needs in real-time and throughout the end of life; not 
just at admission and discharge. This includes flexibility to 
accommodate patients with varying lengths of stay. In addition, a 
comprehensive assessment tool will provide standardized data as all 
Medicare-certified hospices will be collecting the same data in 
standardized manner. By aligning the assessment with regular patient 
care, we intend to capture baseline data to support care planning and 
to inform quality measurement for the Hospice QRP, including outcome 
measures, and to support providers' quality improvement efforts. A new 
hospice assessment tool is intended to support quality measure 
development and care planning. We intend to offer training and other 
supports as the new tool is being prepared for implementation; the 
timeline for roll-out will be established through rule-making.
    We also appreciate commenter's support for changing the name of the 
assessment under development. After reviewing the many great 
suggestions, we like the name, Hospice Outcomes & Patient Evaluation 
(HOPE). Both the full name and acronym, HOPE, captures our goals for 
this assessment tool. It is a patient evaluation for use by hospices 
and enables CMS to develop outcome measures that will help consumers in 
selecting hospices when publicly reported. The acronym, HOPE, also 
provides the sentiment of hope for patients achieving the quality of 
life per their goals and wishes and supported by the hospice.
    Final Decision: After considering the comments received in response 
to the proposed rule and for the reasons discussed above, we are 
finalizing our proposal to call the hospice assessment tool the Hospice 
Outcomes & Patient Evaluation (HOPE).
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.

[[Page 38525]]

b. Update on the CMS System for Reporting Quality Measures and 
Standardized Patient Assessment Data and Associated Procedural Issues
    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 will 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 solicited public comment on the iQIES and received no comments.
    Final Decision: For the reasons discussed in the above paragraph, 
we will be migrating to the iQIES system as soon as FY 2020 and will 
provide further information regarding the migration and any future 
system of record changes via sub-regulatory mechanisms to make this 
transition as smooth as possible.
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 publicly reported on a designated CMS 
website that is currently 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 proposed 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 
solicited comments about the CAHPS[supreg] Hospice Survey 
questionnaire. We solicited 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.
    A summary of those comments and our responses to them appear below:
    Comment: Some commenters suggested that the survey was too long, 
too complex and duplicative. Other commenters stated that the language 
could be ``friendlier,'' that the setting of the patient's death should 
determine the survey questions asked, and that the survey should be 
offered in a web-based version.
    Response: We are currently exploring ways to simplify and shorten 
the survey and we are examining the feasibility of using web-based data 
collection in conjunction with traditional survey methods. In addition, 
we had a literacy-level review of the questionnaire and are reviewing 
what changes may be feasible to make. When we designed the survey, we 
considered allowing the setting of the patient's death to determine the 
questions. However, the results from testing showed this would be 
burdensome to patients, hospices and vendors and determined a single 
survey would be easier to administer.
    Comment: Some commenters requested changes to the timing of data 
collection. Most of the commenters suggested that we should start data 
collection sooner after the death, 45 days instead of a lag of 2 
months.
    Response: In the initial development of the survey, the original 
timeframe for sending out the survey was trying to balance respecting 
the difficult time the loved one was going through following the death 
and not waiting too long after the hospice services were provided. We 
will take this into consideration as we consider potential changes to 
the survey.
    Comment: Some commenters stated that patients' families do not make 
a distinction between the hospice staff and nursing home/assistance 
living facility staff when responding to the questionnaire.
    Response: To help the respondent make these distinctions, we 
include specific references to the hospice involved as part of the mail 
questionnaire and the telephone questionnaire script.
    Comment: Several commenters requested a variety of different 
wording changes to the questionnaire, including changes to the response 
options and the addition of ``not applicable'' as a response. Some 
commenters stated that the hospice logo should be included in mailing 
packages.
    Response: During survey development we conducted extensive 
cognitive interviews with potential respondents to see if they could 
understand the response scales. The respondents had no problems 
understanding or using our response options. We do not need to include 
``not applicable'' as a response option because we provide instructions 
for skipping inapplicable items. We do allow hospice logos to be placed 
on the questionnaire for mail surveys. Please refer to the Quality 
Assurance Guidelines Manual on the survey website 
(www.hospicecahpssurvey.org).
    Comment: Some commenters suggested changes to the survey 
exclusions, in particular the exclusion of patients who have been in 
hospice less than 48 hours when they died. In addition, several 
commenters stated that we should ``give credit'' for the response of 
``usually,'' as there may be persons who are uncomfortable with 
absolutes such as ``always.'' A few commenters suggested the inclusion 
of questions specifically about veterans and to use ethnicity as a 
case-mix adjustment factor.
    Response: The reason we excluded patients who die within 48 hours 
is because we were concerned that caregivers did not have enough 
experience with the hospice to provide informed responses to the 
survey. We do publicly report the results including responses of 
``usually''. We determined that we would not require the inclusion of 
questions specifically about veterans because it would make the survey 
even longer. We also note that among our case-mix adjustments are 
variables for the language in which the survey was administered, along 
with the language the caregiver reports speaking at home. The goal of 
case-mix adjustment is to adjust for differences in patient or 
caregiver characteristics that impact response tendencies. We generally 
do not adjust for race and ethnicity in order to not mask true 
differences in the quality of care across racial and ethnic groups.
    Comment: Several commenters stated that we should take into 
consideration hospice characteristics, including rural versus urban, 
and hospice size.

[[Page 38526]]

    Response: We publicly report hospice size. We consider a variety of 
variables, including urban and rural characteristics, when looking at 
quality measures. Internal analysis of our data shows that 
approximately eight in ten hospices that report CAHPS data are urban 
and about two in ten are rural. Please note that rural hospices may be 
more likely to qualify for size exemptions and therefore may not 
participate in the CAHPS[supreg] Hospice Survey.
    Final Decision: We appreciate the feedback on potential changes to 
the CAHPS[supreg] Hospice Survey and will take these comments into 
consideration as we consider changes. Any potential changes will be 
proposed through future rulemaking.
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 proposed 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 or 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 proposed 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 
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 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 in the reference year, but that have a total of fewer than 50 
survey-eligible decedent/caregiver pairs, will not be granted an 
automatic exemption. However, hospices may qualify to apply for a size 
exemption if they have fewer than 50 survey-eligible decedent/caregiver 
pairs (for example, if a patient dies in hospice care less than 48 
hours after admission, they and their caregiver is not considered to be 
survey-eligible). Similarly, if a caregiver has an address outside the 
United States (U.S.) and its possessions, then that decedent/caregiver 
pair is not survey-eligible. Hospices may 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 solicited feedback on these proposals.

                           Table 14--Size Exemption Key Dates FY 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 proposed 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).

[[Page 38527]]



Table 15--CAHPS[supreg] Hospice Survey Data Submission Dates for the APU
                    in FY 2023, FY 2024, and FY 2025
------------------------------------------------------------------------
                                         CAHPS[supreg] quarterly data
  Sample months (month of death) *          submission deadlines **
------------------------------------------------------------------------
                               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 4)  May 11, 2022.
------------------------------------------------------------------------
                               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 4)  May 10, 2023.
------------------------------------------------------------------------
                               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 4)  May 80, 2024.
------------------------------------------------------------------------
* Data collection for each sample month initiates 2 months following the
  month of patient death (for example, in April for deaths occurring in
  January).
** 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 
call 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; please see the following rules 
where these topics were discussed, FY 2016 Hospice Wage Index and 
Payment Rate Update (80 FR 47199); FY 2017 Hospice Wage Index and 
Payment Rate Update (81 FR 52184); FY 2018 Hospice Wage Index and 
Payment Rate Update (82 FR 36675); and FY 2019 Hospice Wage Index and 
Payment Rate Update (83 FR 38640).
b. Update to ``Hospice Visits when Death is Imminent'' Measure To Be 
Publicly Displayed in August 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 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 through 38645, 
August 6, 2018), quality measures are publicly reported on Hospice 
Compare or other CMS websites 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, we have 
conducted further measure testing activities according to 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,

[[Page 38528]]

validity, and reportability. Therefore, the measure is being publicly 
reported as stated in the FY 2019 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements (83 FR 38645 through 
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 did not meet readiness standards for public reporting and 
additional testing was needed before we could make a decision on the 
public reporting of Measure 2. Therefore, we decided not to publish 
Measure 2 of the ``Hospice Visits when Death is Imminent'' measure 
pair. 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, 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 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 public 
reporting.
    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. We will 
announce any policy changes through the notice and comment rulemaking 
process.
    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 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 beginning in August 2019. Therefore, we proposed 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.
    Comments: We received support from several commenters for our 
proposal to continue data collection of relevant data to support 
testing through September 30, 2020. We also received support for 
continued testing of Measure 2 of the ``Hospice Visits when Death is 
Imminent'' measure pair to evaluate if it should be publicly-reported.
    Some commenters also confirmed the value of visit information for 
quality purposes. In addition, commenters provided suggestions for 
modifying Measure 2. These included addressing higher levels of care 
and short lengths of stay, including RN visits in the definition, and 
capturing whether patients and their families declined a visit during 
the last days of life, potentially through skip logic. Some commenters 
stated that Measure 1 and Measure 2 were paired metrics that should be 
reported together. A few commenters noted location of care and rural 
versus urban settings as factors that could affect measure results.
    Response: We appreciate the commenters' feedback and support for 
our plans to continue data collection and testing to assess options for 
assuring this measure meets the highest standards of scientific 
acceptability and reportability for public reporting. We intend to 
consider commenters' specific suggestions during our testing process 
for this quality measure. We note that we do include urban and rural 
issues and location of care as we develop, modify, or re-specify this 
and other measures. Overall, we have found that

[[Page 38529]]

there is no statistical difference between the visits in urban versus 
rural locations and this is further supported by the literature \39\ 
that supports this position.
---------------------------------------------------------------------------

    \39\ Teno JM, Plotzke M, Christian T, Gozalo P. Examining 
Variation in Hospice Visits by Professional Staff in the Last 2 Days 
of Life. JAMA Intern Med. 2016;176(3):364-370. doi:10.1001/
jamainternmed.2015.7479
---------------------------------------------------------------------------

    The two visit measures are referred to as paired because they 
relate to the same topic of measuring visits in the last days of life 
by hospice disciplines. However, the measures are independent 
constructs and can be reported separately. The measures are each 
developed using different number of visits and different hospice 
disciplines. They are unique measures that each provide useful and 
distinct information for separate public reporting.
    Final Decision: After considering the comments received in response 
to the proposed rule and for the reasons discussed in the above 
paragraph, we are finalizing our proposal to continue 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 will continue to use a variety of 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, to provide ongoing updates 
of testing results and our plans for modifying and reporting this 
measure.
c. Display of Publicly Available Government Data Along With CMS and 
Medicare Hospice Related Data as Information for Public Reporting
1. Update To Posting of Public Use File (PUF) Data as Information for 
Public Reporting
    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 other publicly available CMS data to the Hospice Compare 
or other CMS 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, displayed 
under a new section on Hospice Compare in May 2019. This new section 
precede the existing ``Family Experience of Care'' section on the 
Hospice Compare website. Tables 16 through 18 show how these data 
displayed on Hospice Compare.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR06AU19.035


[[Page 38530]]


[GRAPHIC] [TIFF OMITTED] TR06AU19.036


[[Page 38531]]


[GRAPHIC] [TIFF OMITTED] TR06AU19.037

BILLING CODE 4120-01-C
2. Posting Information From Government Data Sources as Information for 
Public Reporting
    As part of our ongoing efforts to make public reporting more 
meaningful and informative to our beneficiaries, their caregivers, and 
families, we propose to publicly post information that utilizes 
publicly available government data from other agencies, in addition to 
the data from the PUF or other CMS or Medicare sources, at some time in 
the future. We propose to use comparative and complementary data from 
other government sources as part of public reporting on Hospice Compare 
or other CMS websites in the future and as soon as FY 2020. Examples 
include information compiled by the U.S. Census Bureau, Centers for 
Disease Control and Prevention, Bureau of Labor Statistics, and 
National Institutes of Health.
    We may use information available in these public government files 
to augment the section described above. This section including PUF data 
and information from other public government data will provide 
additional information along with the HQRP measures currently from the 
HIS and CAHPS[supreg] quality measures that are already displayed.
    Any future reporting of public government data as information for 
public reporting will be displayed in a consumer-friendly format on 
Hospice Compare or other CMS website. 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 
publicly display 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

[[Page 38532]]

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 data as information 
from the U.S. Census Bureau in coordination with this service area from 
Medicare claims data 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 or 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 or 
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 solicited public comment on our proposal to post information 
from publicly available government sources for public reporting in the 
future.
    A summary of those comments and our responses to them appear below:
    Comment: Overall commenters supported publicly posting contextual 
government information to supplement the already posted CMS and 
Medicare public data, but several requested more detail on the specific 
information for posting data from other U.S. government websites and 
how it would be used. Some commenters recommended that there be a 
correlation between any other U.S. government data and the quality of 
hospice care or meaningful context of hospice and questioned the 
sources noted. They also recommended seeking stakeholder input prior to 
adding information for public reporting and making sure any posted 
information was clearly explained.
    Response: We appreciate the commenters' support and request for 
more detail about any additional data from public other U.S. government 
websites under consideration for posting publicly. We confirm our 
commitment to using sub-regulatory processes for soliciting and 
receiving ongoing stakeholder information and feedback as we develop 
these data. As part of this effort, we will provide mock-ups of the 
data for stakeholder feedback and show the relationship between the 
data from other U.S. government websites and hospice related data. The 
goal is for the information to help consumers in comparing providers. 
We reiterate our intent to conduct plain language testing, including 
distinguishing this information from quality data.
    Final Decision: After considering the comments received in response 
to the proposed rule and for the reasons discussed in the above 
paragraph, we are finalizing our proposal to post information from 
other publicly-available U.S. government sources to publicly report in 
the future and as soon as FY 2020 on Hospice Compare or other CMS 
website.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment before the provisions of a 
rule take effect in accordance with section 553(b) of the 
Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we can 
waive this notice and comment procedure if the Secretary finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefore in the rule. This 
hospice proposed rule has previously been subjected to notice and 
comment procedures. These corrections do not make substantive changes 
to this policy. Specifically, we redesignated paragraphs (c) through 
(f) as paragraphs (d) through (g). This redesignation would affect two 
cross-references in Sec.  418.26(c) (2) and Sec.  418.28(c) (2). As a 
result, we made conforming changes to accompany the redesignations in 
Sec.  418.24. Likewise, at Sec.  418.3, we define the term BFCC-QIO as 
the Beneficiary and Family Centered Care Quality Improvement 
Organization. Because these conforming changes were not proposed in the 
proposed rule, we are adopting them here under a ``good cause'' waiver 
of proposed rulemaking. The specific changes we are making in the 
regulations simply codify the final policies we described in the 
proposed rule and do not reflect any additional substantive changes. 
Therefore, we find that undertaking further notice and comment 
procedures to incorporate these corrections into the final rule is 
unnecessary and contrary to the public interest.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-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 solicited 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, 2018 BLS data for 
each discipline. Table 19 contains our burden estimate assumptions for 
the proposed Election Statement Addendum: ``Patient Notification of 
Hospice Non-Covered Items, Services, and Drugs'' discussed in section 
III.C. of this final rule. The required addendum would not be required 
until FY 2021; that is, the addendum would be required, upon

[[Page 38533]]

request, for those hospice elections beginning on or after October 1, 
2020. This burden estimate represents what the estimated costs would be 
if implemented in FY 2020. We will re-estimate this burden in the FY 
2021 proposed rule using more recent claims data to more accurately 
reflect costs for FY 2021 implementation. For the purposes of this 
estimate, we are assuming that all beneficiaries electing the hospice 
benefit, and who do not die within the first 5 days of care, would 
request the addendum.

    Table 19--Election Statement Addendum: ``Patient Notification of Hospice Non-Covered Items, Services, and
                                       Drugs'' Burden Estimate Assumptions
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Number of Medicare-billing hospices, from FY 2017       4,465.
 Medicare Enrollment Database, Provider of Service
 files.
Number of hospice elections in FY 2017................  (1,268,497 x 0.72) = 913,318.
Hourly rate of an office employee (Executive            $59.18 ($29.59 x 2.00).
 Secretaries and Executive Administrative Assistants,
 43-6011).
Hourly rate of an administrator (General and            $119.12 ($59.56 x 2.00).
 Operations Managers, 11-1021).
Hourly rate of registered nurses (Registered Nurses,    $72.60 ($36.30 x 2.00).
 29-1141).
Hourly rate of pharmacy technicians (Pharmacy           $32.70 ($16.35 x 2.00).
 Technicians, 29-2052).
----------------------------------------------------------------------------------------------------------------
Source: FY 2017 hospice claims data. 28 percent of beneficiaries die within the first 5 days of hospice care.
  Hospices are exempt for completing addendum if beneficiary dies within first the first 5 days of care.

    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.  
418.22 and Sec.  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 or 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:
    (1) 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.
    (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.
    (3) Acknowledgement that certain Medicare services, as set forth in 
Sec.  418.24(d) of this section, are waived by the election.
    (4) 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.
    (5) 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'

[[Page 38534]]

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.
    Hospices already are required to review, determine, and document 
information on unrelated conditions in accordance with 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 are finalizing 
additions to the regulations at Sec.  418.24(b) and (c) for FY 2021, 
which will require an election statement addendum titled ``Patient 
Notification of Hospice Non-Covered Items, Services, and Drugs'' that 
must be issued, on request, to the patient (or representative) within 5 
days 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 5 days 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) effective for hospice elections beginning on and 
after October 1, 2020.
    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 5 days 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 
and associated items, services, and drugs, as well as provide a 
clinical explanation as to why these conditions and associated 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 a template 
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 $59.18 per hour 
for an executive administrative assistant, the cost per hospice would 
be (0.25 x $59.18) = $14.80. At $119.12 per hour for the 
administrator's time, the cost per hospice would be (0.25 x $119.12) = 
$29.78. Therefore, the one-time cost, per hospice, for the development 
of the template would be ($14.80 + 29.78) = $44.58, and the total one-
time cost for all hospices would be ($44.58 x 4,465) = $199,050.
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 28 percent of 
hospice beneficiaries die within the first 5 days after the hospice 
election date. Hospices would not be required to complete the election 
statement addendum for those hospice beneficiaries that die within 5 
days 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 0.72) = 913,318. There are 
4,465 Medicare-certified hospices, so on average there would be 
(913,318/4,465) = 205 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 
$72.60 per hour for a registered nurse over 10 minutes (0.1667 x $72.60 
= $12.10), we estimate the total cost of RN time to complete the 
addendum per hospice in FY 2020 to be ($12.10 x 205) = $2,481, and the 
total cost of RN time to complete the addendum for all hospices in FY 
2020 would be ($2,481 x 4,465) = $11,077,665. 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 20 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 38535]]

[GRAPHIC] [TIFF OMITTED] TR06AU19.038

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 final 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.
    For the calculation of this burden estimate, we did drop those 
elections where the beneficiary died within the first 5 days. 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 21 below summarizes Part A, B and D claims 
that overlap with hospice episodes in FY 2017.

[[Page 38536]]

[GRAPHIC] [TIFF OMITTED] TR06AU19.039

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 drugs 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 19,226. At $72.60 per 
hour for a registered nurse (0.25 x $72.60) = $18.15, we estimate the 
total cost per institutional, non-hospice provider furnishing services 
to hospice beneficiaries in FY 2020 to be ($18.15 x 11) = $199.65 and 
the annual total cost for all institutional, non-hospice providers in 
FY 2018 would be ($199.65 x 19,226) = $3,838,471.
    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 11 
per year, which would mean each provider would have an average of 11 
communication encounters with a hospice. The total number of non-
institutional, non-hospice providers servicing hospice beneficiaries in 
FY 2017 was 74,933. At $72.60 per hour for a registered nurse (0.25 x 
$72.60) = $18.15, we estimate the total cost per non-institutional, 
non-hospice provider furnishing services to hospice beneficiaries in FY 
2020 to be ($18.15 x 11) = $199.65 and the annual total cost for all 
non-institutional, non-hospice providers in FY 2018 would be ($199.65 x 
74,933) = $14,960,373.
    For pharmacies dispensing Part D 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 pharmacy dispensing Part D 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 pharmacies dispensing Part 
D maintenance drugs to hospice beneficiaries in FY 2017 was 60,632. At 
$32.70 per hour for a pharmacy technician (0.25 x $32.70) = $8.18, we 
estimate the total cost per pharmacy dispensing Part D maintenance 
drugs to be ($8.18 x 12) = $98.16 and the annual total cost for all 
pharmacies dispensing Part D maintenance drugs to be ($98.16 x 60,632) 
= $5,951,637. 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 $24,750,481 ($3,838,471 + $14,960,373 + 
$5,951,637).
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 from 15 
minutes in the absence of the addendum 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 19,226. At $72.60 per hour for a registered nurse (0.0833 x 
$72.60) = $6.05, we estimate the total cost per institutional non-
hospice provider in FY 2020 to be ($6.05 x 11) = $66.55 and the

[[Page 38537]]

annual total cost for all institutional non-hospice providers in FY 
2020 would be ($66.55 x 19,226) = $1,279,490 an annual decrease in 
burden by ($3,838,471 - 1,279,490) = $2,558,981.
    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 11 per year. The total number of 
non-institutional, non-hospice providers servicing hospice 
beneficiaries in FY 2017 was 74,933. At $72.60 per hour for a 
registered nurse (0.0833 x $72.60) = $6.05, we estimate the total cost 
per non-institutional, non-hospice provider in FY 2020 to be ($6.05 x 
11) = $66.55 and the annual total cost for all non-institutional, non-
hospice providers in FY 2020 would be ($66.55 x 74,933) = $4,986,791, 
an annual decrease in burden by ($14,960,373 - 4,986,791) = $9,973,582.
    For pharmacies dispensing Part D 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 from pharmacies dispensing Part D maintenance drugs 
is 12 per year. The total number of pharmacies dispensing Part D 
maintenance drugs to hospice beneficiaries in FY 2017 was 60,632. At 
$32.70 per hour for a pharmacy technicians (0.0833 x $32.70) = $2.72, 
we estimate the total cost per pharmacies dispensing Part D maintenance 
drugs to be ($2.72 x 12) = $32.64 and the annual total cost for all 
pharmacies dispensing Part D maintenance drugs to be ($32.64 x 60,632) 
= $1,979,028, an annual decrease in burden by ($5,951,637 - $1,979,028) 
= $3,972,609. 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 $8,245,309 ($1,279,490 + $4,986,791 + $1,979,028) 
for an overall burden reduction of ($24,750,481 - $8,245,309) = 
$16,505,172. The total reduction in burden for all institutional, non-
institutional, and Part D pharmacy non-hospice providers is summarized 
in Table 22 below.
[GRAPHIC] [TIFF OMITTED] TR06AU19.040

    The use of the ``Patient Notification of Hospice Non-Covered Items, 
Services, and Drugs'' election statement addendum would result in an 
estimated, annual net reduction in burden of $5,228,457 ($11,276,715-
$16,505,172) in FY 2020. Table 23 below summarizes the FY 2020 
estimated total burden reduction.

[[Page 38538]]

[GRAPHIC] [TIFF OMITTED] TR06AU19.041

B. Comments

    We note that many commenters stated that CMS underestimated the 
amount of time it would take for the nurse to complete the addendum 
stating that 10 minutes is an insufficient amount of time to 
extrapolate this information from the existing documentation. A few 
commenters stated that this would take between 20 and 30 minutes to 
complete. Others stated that this is not just a process of 
extrapolating the information, but that this is often a process of 
information gathering as not all relevant information is readily 
available at the time of the initial assessment. However, a few 
commenters believed that even though the timeframe to complete the 
addendum would be longer than 10 minutes, they suggested that the 
addendum should not be optional but patients (or their representatives) 
should be provided this detailed list as this is critical to the care 
process, patient empowerment, quality of care, and transparency. 
However, we remind hospices that the addendum is only required if the 
beneficiary (or representative) requests this information, though for 
purposes of this burden reduction estimate we calculate it as it every 
eligible beneficiary requests the addendum. Additionally, there are 
those hospices that will cover all items, services, and drugs, and 
therefore, this would further reduce the number of hospice elections in 
which the addendum would be provided. Furthermore, if a beneficiary 
requests the addendum at the time of hospice election but dies within 5 
days, the hospice would not be required to furnish the addendum and the 
requirement would be deemed as having being met in this circumstance.

C. Submission of PRA-Related Comments

    We have submitted a copy of this final 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.

VI. Regulatory Impact Analysis

A. Statement of Need

    This final 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 final rule also updates 
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 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 final rule would result in an estimated increase of $520 million 
in payments to hospices, resulting from the hospice payment update 
percentage of 2.6 percent for FY 2020. Section 1814(i)(6)(D)(ii) of the 
Act requires the final 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 final rebased rates for CHC, GIP, and 
IRC would not result in an overall payment impact for the Medicare 
program as we are finalizing the reduction of the RHC payment rates to 
ensure that total estimated payments to hospices are budget-neutral 
given the increases to the CHC, GIP, and IRC payment rates. In 
addition, the final 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

[[Page 38539]]

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 2.6 percent, or $520 million. The distributional effects of the 
final 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 final 
FY 2020 increases to the CHC, IRC, and GIP per diem payment rates as a 
result of rebasing, offset by a 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 final rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on the published proposed rule will be the number of 
reviewers of this final rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this final rule. It is 
possible that not all commenters reviewed the proposed 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 
final 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 final rule consists of approximately 57,000 
words in its entirety. Assuming an average reading speed of 250 words 
per minute, it would take approximately 2 hours for the staff to review 
half of it. For each hospice that reviews the rule, the estimated cost 
is approximately $215.00 (2 hours x $107.38). Therefore, we estimate 
that the total cost of reviewing this regulation is $32,250 ($215.00 x 
150 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

[[Page 38540]]

second column shows the number of hospices in each of the categories in 
the first column. The third column shows the effects of applying the 
final 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 final FY 2020 hospice payment update percentage of 2.6 
percent as mandated by section 1814(i)(1)(C) of the Act, and is 
consistent for all providers. The 2.6 percent hospice payment update 
percentage is based on an estimated 3.0 percent inpatient hospital 
market basket update, reduced by a 0.4 percentage point productivity 
adjustment. It is projected that aggregate payments would increase by 
2.6 percent, assuming hospices do not change their service and billing 
practices. The sixth column shows the 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 by rebasing the CHC, GIP, and IRC payment rates by a 
corresponding decrease to the RHC payment rates).
    In addition, to assist providers in understanding the impacts of 
the final wage index without the lag and the 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 May 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 24, the combined effects of all the 
proposals vary by specific types of providers and by location.
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[GRAPHIC] [TIFF OMITTED] TR06AU19.042


[[Page 38542]]


[GRAPHIC] [TIFF OMITTED] TR06AU19.043

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2. Hospice Election Statement Addendum
    This final rule includes requirements related to the election 
statement addendum that must be provided, upon request, to hospice 
beneficiaries (or representative), non-hospice providers, and Medicare 
contractors. This change is effective for hospice elections on and 
after October 1, 2020. The burden estimate for hospices to develop and 
complete the election statement addendum is provided in section V of 
this final rule. However, the election statement addendum adds 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 rule. Furthermore, 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 $5.2 million in an 
annualized net reduction in burden, or $3.7 million per year on an 
ongoing basis discounted at 7 percent relative to year 2016, over a 
perpetual time horizon beginning in FY 2021. The burden reduction 
estimate for the addendum is detailed in section V of this final rule 
and the total annual reduction is included in Table 25.

E. 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 25, we have prepared an accounting statement showing the 
classification of the transfers and costs associated with the 
provisions of this final rule. This table shows an estimated $520 
million in transfers to hospices in FY 2020. All expenditures are 
classified as transfers to hospices. Table 25 also reflects the 
estimated change in costs and burden for hospices and non-hospice 
providers as a result of the finalized election statement addendum 
requirements described in section III.C. Table 20 provides our best 
estimate of a one-time burden for hospices to develop the election 
statement addendum form of approximately 2,233 hours or $199,050, as 
well as our estimate of the annual burden for hospices to complete the 
election statement addendum of approximately 746 hours or $11 million 
for an estimated total burden for hospices of $11.2 million, as 
described in section IV of this final rule. Additionally, we estimate a 
net reduction in burden for non-hospice providers of approximately 
25,900 hours or $16.5 million (see section IV of this final rule) for 
an

[[Page 38543]]

estimated overall, annualized net reduction in burden with the proposed 
election statement addendum of $5.2 million.
[GRAPHIC] [TIFF OMITTED] TR06AU19.044

F. 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 final rule is expected to be an E.O. 
13771 deregulatory action with $5.2 million in an annualized net 
reduction in burden, or $3.7 million per year on an ongoing basis 
discounted at 7 percent relative to year 2016, over a perpetual time 
horizon beginning in FY 2021. The burden reduction for the addendum is 
detailed in section V of this final rule and the total annual net 
reduction in burden is included in Table 25. Details on the estimated 
net reduction in burden of this rule can be found in the rule's 
collection of information and economic analysis.

G. Conclusion

    We estimate that aggregate payments to hospices in FY 2020 will 
increase by $520 million, or 2.6 percent, compared to payments in FY 
2019. We estimate that in FY 2020, hospices in urban and rural areas 
will experience, on average, 2.7 percent and 1.8 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 4.5 percent, 2.6 percent, and 2.6 percent, respectively. 
Hospices serving patients in the West North Central and outlying 
regions would experience, on average, the lowest estimated increase of 
1.4 percent and -0.3 percent, respectively in FY 2020 payments. We are 
finalizing the modifications to the election statement including the 
election statement addendum in this final rule with an implementation 
date of October 1, 2020 to allow hospices additional time to make the 
necessary changes to meet these requirements. We also estimate an 
overall net reduction in burden of $5.2 million beginning in FY 2021 as 
a result of the finalized 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 amends 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 418.3 is amended by adding the definition of ``BFCC-QIO'' to 
read as follows:


Sec.  418.3  Definitions.

* * * * *

[[Page 38544]]

    BFCC-QIO means Beneficiary and Family Centered Care Quality 
Improvement Organization.
* * * * *

0
3. 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. For Hospice elections beginning on or after 
October 1, 2020, this would include 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) For Hospice elections beginning on or after October 1, 2020, 
the Hospice must provide information on individual cost-sharing for 
hospice services.
    (6) For Hospice elections beginning on or after October 1, 2020, 
the Hospice must provide 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.
    (7) For Hospice elections beginning on or after October 1, 2020, 
the Hospice must provide information on the Beneficiary and Family 
Centered Care Quality Improvement Organization (BFCC-QIO), including 
the right to immediate advocacy and BFCC-QIO contact information.
* * * * *
    (c) Content of hospice election statement addendum. For Hospice 
elections beginning on or after October 1, 2020, 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 initial hospice 
election (that is, at the time of admission to hospice), the hospice 
must provide this information, in writing, to the individual (or 
representative) within 5 days from the date of the election. If this 
addendum is requested during the course of hospice care (that is, after 
the hospice election date), the hospice must provide this information, 
in writing, within 72 hours of the request 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 hospice care, 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.
* * * * *


Sec.  418.26  [Amended]

0
4. Section 418.26 is amended in paragraph (c)(2) by removing the 
reference ``Sec.  418.24(d)'' and adding in its place the reference 
``Sec.  418.24(e)''.


Sec.  418.28  [Amended]

0
5. Section 418.28 is amended in paragraph (c)(2) by removing the 
reference ``Sec.  418.24(e)(2)'' and adding in its place the reference 
``Sec.  418.24(f)(2)''.

    Dated: July 25, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: July 26, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-16583 Filed 7-31-19; 4:15 pm]
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