[Federal Register Volume 86, Number 127 (Wednesday, July 7, 2021)]
[Proposed Rules]
[Pages 35874-36016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13763]



[[Page 35873]]

Vol. 86

Wednesday,

No. 127

July 7, 2021

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 409, 424, et al.





Medicare and Medicaid Programs; CY 2022 Home Health Prospective Payment 
System Rate Update; Home Health Value-Based Purchasing Model 
Requirements and Proposed Model Expansion; Home Health Quality 
Reporting Requirements; Home Infusion Therapy Services Requirements; 
Survey and Enforcement Requirements for Hospice Programs; Medicare 
Provider Enrollment Requirements; Inpatient Rehabilitation Facility 
Quality Reporting Program Requirements; and Long-Term Care Hospital 
Quality Reporting Program Requirements; Proposed Rule

  Federal Register / Vol. 86 , No. 127 / Wednesday, July 7, 2021 / 
Proposed Rules  

[[Page 35874]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409, 424, 484, 488, 489, and 498

[CMS-1747-P]
RIN 0938-AU37


Medicare and Medicaid Programs; CY 2022 Home Health Prospective 
Payment System Rate Update; Home Health Value-Based Purchasing Model 
Requirements and Proposed Model Expansion; Home Health Quality 
Reporting Requirements; Home Infusion Therapy Services Requirements; 
Survey and Enforcement Requirements for Hospice Programs; Medicare 
Provider Enrollment Requirements; Inpatient Rehabilitation Facility 
Quality Reporting Program Requirements; and Long-Term Care Hospital 
Quality Reporting Program Requirements

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would set forth routine updates to the home 
health and home infusion therapy services payment rates for calendar 
year (CY) 2022 in accordance with existing statutory and regulatory 
requirements. This rule also provides monitoring and analysis of the 
Patient-Driven Groupings Model (PDGM); solicits comments on a 
methodology for determining the difference between assumed versus 
actual behavior change on estimated aggregate expenditures for home 
health payments as result of the change in the unit of payment to 30 
days and the implementation of the PDGM case-mix adjustment 
methodology; and proposes to recalibrate the PDGM case-mix weights, 
functional levels, and comorbidity adjustment subgroups while 
maintaining the low utilization payment adjustment (LUPA) thresholds 
for CY 2022. Additionally, this rulemaking proposes to utilize the 
physical therapy LUPA add-on factor to establish the occupational 
therapy add-on factor for the LUPA add-on payment amounts; and make 
conforming regulations text changes to reflect that allowed 
practitioners are able to establish and review the plan of care.
    This rulemaking also proposes changes to the Home Health Quality 
Reporting Program (QRP) to remove one measure, remove two claims-based 
measures and replace them with one claims-based measure, publicly 
report two measures, propose a modification to the effective date for 
the reporting of the Transfer of Health to Provider-Post Acute Care and 
Transfer of Health to Patient-Post Acute Care (TOH) measures and 
Standardized Patient Assessment Data Elements and requests information 
on two topics: Advancing to digital quality measurement through the use 
of Fast Healthcare Interoperability Resources and our efforts 
surrounding closing the health equity gap. It also proposes 
modifications to the effective date for the reporting of TOH measures 
and certain Standardized Patient Assessment Data Elements. 
Additionally, this proposed rule requests information on two topics: 
Advancing to digital quality measurement through the use of Fast 
Healthcare Interoperability Resources and our efforts surrounding 
closing the health equity gap. It also proposes modifications to the 
effective date for the reporting of TOH measures and certain 
Standardized Patient Assessment Data Elements in the Inpatient 
Rehabilitation Facility (IRF) QRP and Long-Term Care Hospital (LTCH) 
QRP. In addition, this proposed rule would incorporate into regulation 
certain Medicare provider and supplier enrollment policies.
    In addition, this rulemaking proposes to make permanent selected 
regulatory blanket waivers related to home health aide supervision that 
were issued to Medicare participating home health agencies during the 
COVID-19 public health emergency (PHE), and would update the home 
health conditions of participation to implement Division CC, section 
115 of the Consolidated Appropriations Act, 2021 (CAA 2021) regarding 
occupational therapists completing the initial and comprehensive 
assessments reflect these changes.
    This proposed rule also would expand the Home Health Value-Based 
Purchasing (HHVBP) Model, beginning January 1, 2022, to the 50 States, 
territories, and District of Columbia. This rulemaking also proposes to 
end the original HHVBP Model one year early for the home health 
agencies (HHAs) in the nine original Model States, such that CY 2020 
performance data would not be used to calculate a payment adjustment 
for CY 2022 under the original Model.
    Additionally, this proposed rule establishes survey and enforcement 
requirements for hospice programs as set forth in Division CC, section 
407, of the CAA 2021.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on August 27, 2021.

ADDRESSES: In commenting, please refer to file code CMS-1747-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1747-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1747-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Brian Slater, (410) 786-5229, for home 
health and home infusion therapy payment inquiries. For general 
information about home infusion payment, send your inquiry via email to 
[email protected].
    For general information about the Home Health Prospective Payment 
System (HH PPS), send your inquiry via email to 
[email protected].
    For more information about the Home Health Value-Based Purchasing 
Model, send your inquiry via email to [email protected].
    For information about the Home Health Quality Reporting Program (HH 
QRP), send your inquiry via email to [email protected].
    For information about the home health conditions of participation, 
contact Mary Rossi-Coajou at: [email protected], James 
Cowher at [email protected], or Jeannine Cramer at 
[email protected].
    For provider and supplier enrollment process inquiries: Frank 
Whelan, (410) 786-1302.

[[Page 35875]]

    For information about the survey and enforcement requirements for 
hospice programs, send your inquiry via email to 
[email protected].

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that website to view public comments.

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of the Provisions of This Rule
    C. Summary of Costs, Transfers, and Benefits
II. Home Health Prospective Payment System
    A. Overview of the Home Health Prospective Payment System
    B. Proposed Provisions for Payment Under the HH PPS
III. Home Health Value-Based Purchasing (HHVBP) Model
    A. Proposal To Expand the HHVBP Model Nationwide
    B. Provisions Under the Home Health Value-Based Purchasing 
(HHVBP) Original Model
IV. Home Health Quality Reporting Program (HH QRP) and Other Home 
Health Related Provisions
    A. Vaccinations for Home Health Agency Health Care Personnel
    B. Advancing Health Information Exchange
    C. Home Health Quality Reporting Program (HH QRP)
    D. Proposed Changes to the Home Health Conditions of 
Participation
V. Home Infusion Therapy Services: Annual Payment Updates for CY 
2022
    A. Home Infusion Therapy Payment Categories
    B. Payment Adjustments for CY 2022 Home Infusion Therapy 
Services
    C. CY 2022 Payment Amounts for Home Infusion Therapy Services
VI. Medicare Provider and Supplier Enrollment Changes
    A. Background--Provider and Supplier Enrollment Process
    B. Proposed Provisions
VII. Survey and Enforcement Requirements for Hospice Programs
    A. Background
    B. Provisions of the Proposed Rule
VIII. Requests for Information
    A. Fast Healthcare Interoperability Resources (FHIR) in Support 
of Digital Quality Measurement in Post-Acute Care Quality Reporting 
Programs--Request for Information
    B. Closing the Health Equity Gap in Post-Acute Care Quality 
Reporting Programs--Request for Information
IX. Revised Compliance Date for Certain Reporting Requirements 
Adopted for Inpatient Rehabilitation Facilities (IRF) QRP and Long-
Term Care Facilities Quality QRP
    A. Proposal of a Revised Compliance Date for Certain Inpatient 
Rehabilitation Facility (IRF) QRP Reporting Requirements
    B. Proposal of a Revised Compliance Date for Certain Long-Term 
Care Hospital (LTCH) QRP Reporting Requirements
X. Collection of Information Requirements
    A. Statutory Requirement for Solicitation of Comments
    B. Collection of Information Requirements
    C. Submission of PRA-Related Comments
XI. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Detailed Economic Analysis
    D. Limitations of Our Analysis
    E. Regulatory Review Cost Estimation
    F. Alternatives Considered
    G. Accounting Statement and Tables
    H. Regulatory Flexibility Act (RFA)
    I. Unfunded Mandates Reform Act (UMRA)
    J. Federalism
    K. Conclusion
    L. Executive Order 12866
Regulations Text

I. Executive Summary

A. Purpose

1. Home Health Prospective Payment System (HH PPS)
    This proposed rule provides preliminary monitoring analysis of the 
implementation of the PDGM, discusses the change in the unit of payment 
to 30 days and the implementation of the PDGM case-mix adjustment 
methodology on estimated aggregate expenditures under the HH PPS, and 
includes a comment solicitation on the methodology for determining the 
difference between assumed versus actual behavior change on estimated 
aggregate expenditures for home health payments. This proposed rule 
would update the payment rates for HHAs for CY 2022, as required under 
section 1895(b) of the Social Security Act (the Act). This rule also 
proposes to maintain the CY 2021 LUPA thresholds for CY 2022. However, 
the rule also proposes to recalibrate the case-mix weights under 
section 1895(b)(4)(A)(i) and (b)(4)(B) of the Act for 30-day periods of 
care in CY 2022. This proposed rule would update the CY 2022 fixed-
dollar loss ratio (FDL) for outlier payments (outlier payments as a 
percentage of estimated total payments are not to exceed 2.5 percent, 
as required by section 1895(b)(5)(A) of the Act). Finally, this rule 
proposes to use the physical therapy (PT) add-on factor to establish 
the occupational therapy (OT) LUPA add-on factor and proposes 
conforming regulations text changes at Sec.  409.43, ensuring the 
regulations reflect that allowed practitioners, in addition to 
physicians, may establish and periodically review the home health plan 
of care.
2. Home Health Value Based Purchasing (HHVBP) Model
    In this proposed rule, we would expand the Home Health Value-Based 
Purchasing (HHVBP) Model to all Medicare-certified HHAs in the 50 
States, territories, and District of Columbia beginning January 1, 2022 
with CY 2022 as the first performance year and CY 2024 as the first 
payment year, based on HHA performance in CY 2022. This rule also 
proposes to end the original HHVBP Model 1 year early for the HHAs in 
the nine original Model States, such that CY 2020 performance data 
would not be used to calculate a payment adjustment for CY 2022.
3. Home Health (HH) Quality Reporting Program (HH QRP), Inpatient 
Rehabilitation Facility (IRF) QRP and Long-Term Care Hospital (LTCH) 
QRP
    This proposed rule would update the HH QRP by removing an OASIS-
based measure, the Drug Education on All Medications Provided to 
Patient/Caregiver During All Episodes of Care measure, from the HH QRP 
under measure removal factor 1: Measure performance among HHAs is so 
high and unvarying that meaningful distinctions in improvements in 
performance can no longer be made. This proposed rule also proposes to 
replace the Acute Care Hospitalization During the First 60 Days of Home 
Health (NQF #0171) measure and Emergency Department Use Without 
Hospitalization During the First 60 Days of Home Health (NQF #0173) 
measure with the Home Health Within Stay Potentially Preventable 
measure and proposes to publicly report the Percent of Residents 
Experiencing One or More Major Falls with Injury measure and 
Application of Percent of Long-Term Care Hospital Patients with an 
Admission and Discharge Functional Assessment and a Care Plan that 
Addresses Function (NQF #2631) measure beginning in April 2022. 
Finally, this proposed rule proposes revisions for certain HHA QRP 
reporting requirements. This proposed rule would also revise similar 
compliance dates for certain IRF QRP and LTCH QRP requirements.
4. Proposed Changes to the Home Health Conditions of Participation
    In this rule, we propose to make permanent selected regulatory 
blanket waivers related to home health aide

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supervision that were issued to Medicare participating home health 
agencies during the COVID-19 PHE. In addition, Division CC, section 115 
of CAA 2021 requires CMS to permit an occupational therapist to conduct 
a home health initial assessment visit and complete a comprehensive 
assessment under the Medicare program, but only when occupational 
therapy is on the home health plan of care, with either physical 
therapy or speech therapy, and when skilled nursing services are not 
initially in the plan of care.
    We are proposing changes to the home health aide supervision 
requirements at Sec.  484.80(h)(1) and Sec.  484.80(h)(2) and 
conforming regulation text changes at Sec.  484.55(a)(2) and (b)(3), 
respectively, to allow occupational therapists to complete the initial 
and comprehensive assessments for patients in accordance with changes 
in the law.
5. Medicare Coverage of Home Infusion Therapy
    This proposed rule includes updates to the home infusion therapy 
services payment rates for CY 2022, as required by section 1834(u) of 
the Act.
6. Provider and Supplier Enrollment Processes
    In section VI. of this proposed rule, we address a number of 
provisions regarding Medicare provider and supplier enrollment. Most of 
these provisions involve the incorporation into 42 CFR part 424, 
subpart P of certain subregulatory policies. These are addressed in 
section VI.B. of this proposed rule and include, for example, policies 
related to: (1) The effective date of billing privileges for certain 
provider and supplier types and certain provider enrollment 
transactions; and (2) the deactivation of a provider or supplier's 
billing privileges.
    In addition, we propose in section VI.C. of this proposed rule two 
regulatory clarifications related to HHA changes of ownership and HHA 
capitalization requirements.
7. Survey and Enforcement Requirements for Hospice Programs
    In this proposed rule, CMS seeks to increase and improve 
transparency, oversight, and enforcement for hospice programs in 
addition to implementing the provisions of Division CC, section 407(b) 
of CAA 2021. CMS continues to review and revise our health and safety 
requirements and survey processes to ensure that they are effective in 
driving quality of care for hospice programs.

B. Summary of the Provisions of This Rule

1. Home Health Prospective Payment System (HH PPS)
    In section II.B.1. of this rule, we provide data analyses on PDGM 
utilization since implementation of the new payment system in CY 2020. 
We describe a methodology for determining budget neutrality for CY 2020 
and solicit comments on the difference between assumed versus actual 
behavior change on estimated aggregate expenditures.
    In section II.B.3. of this rule, we propose to recalibrate the PDGM 
case-mix weights, functional levels, and comorbidity adjustment 
subgroups while proposing to maintain the CY 2021 LUPA thresholds for 
CY 2022. The PDGM relies on clinical characteristics and other patient 
information to place patients into meaningful payment categories and 
eliminates the use of therapy service thresholds, as required by 
section 1895(b)(4)(B) of the Act, as amended by section 51001(a)(3) of 
the Bipartisan Budget Act of 2018 (BBA of 2018).
    In section II.B.4. of this rule, we propose to update the home 
health wage index, the CY 2022 national, standardized 30-day period 
payment amounts and the CY 2022 national per-visit payment amounts by 
the home health payment update percentage. The home health payment 
update percentage for CY 2022 is estimated to be 1.8 percent. 
Additionally, this proposed rule proposes to update the FDL ratio to 
0.41 for CY 2022.
    In section II.B.4.(c).(5). of this proposed rule, we discuss the 
regulations under Division CC, section 115 of CAA 2021 that revised 
Sec. Sec.  484.55(a)(2) and 484.55(b)(3) to allow occupational 
therapists (OTs) to conduct initial and comprehensive assessments for 
all Medicare beneficiaries under the home health benefit when the plan 
of care does not initially include skilled nursing care. We propose to 
utilize the physical therapy (PT) LUPA add-on factor to establish the 
OT add-on factor for the LUPA add-on payment amounts.
    In section II.B.6. of this proposed rule, we are proposing 
conforming regulations text changes at Sec.  409.43 to reflect that 
allowed practitioners, in addition to physicians, may establish and 
periodically review the home health plan of care in accordance with 
section 3708 of the Coronavirus Aid, Relief, and Economic Security Act 
(CARES Act) (Pub. L. 116-136, March 27, 2020).
2. Home Health Value Based Purchasing (HHVBP) Model
    In section III.A. of this proposed rule, we are proposing to expand 
the HHVBP Model to all Medicare-certified HHAs in the 50 States, 
territories, and District of Columbia beginning January 1, 2022 with CY 
2022 as the first performance year and CY 2024 as the first payment 
year, with a proposed maximum payment adjustment, upward or downward, 
of 5-percent. We propose that the expanded Model would generally use 
benchmarks, achievement thresholds, and improvement thresholds based on 
CY 2019 data to assess achievement or improvement of HHA performance on 
applicable quality measures and that HHAs would compete nationally in 
their applicable size cohort, smaller-volume HHAs or larger-volume 
HHAs, as defined by the number of complete unique beneficiary episodes 
for each HHA in the year prior to the performance year. All HHAs 
certified to participate in the Medicare program prior to January 1, 
2021 would be required to participate and eligible to receive an annual 
Total Performance Score based on their CY 2022 performance. We propose 
the applicable measure set for the expanded Model, as well as policies 
related to the removal, modification, and suspension of quality 
measures, and the addition of new measures and the form, manner and 
timing of the OASIS-based, HHCAHPS survey-based, and claims-based 
measures submission in the proposed applicable measure set beginning CY 
2022 and subsequent years. We also include proposals for an appeals 
process, an extraordinary circumstances exception policy, and public 
reporting of annual performance data under the expanded Model.
    In section III.B. of this proposed rule, we propose to end the 
original HHVBP Model one year early. We propose that we would not use 
CY 2020 performance data for the HHAs in the nine original Model States 
to apply payment adjustments for the CY 2022 payment year. We also 
propose that we would not publicly report CY 2020 (performance year 5) 
annual performance data under the original HHVBP Model.
3. HH QRP
    In section IV.C. of this proposed rule, we propose updates to the 
HH QRP including: The removal of one OASIS-based measure, replacement 
of two claims-based measures with one claims-based quality measure; 
public reporting of two measures; revising the compliance date for 
certain reporting

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requirements for certain HH QRP reporting requirements and requests for 
information regarding digital quality measures and health equity.
4. Proposed Changes to the Home Health Conditions of Participation
    In section IV.D. of this rule, we propose to make permanent 
selected regulatory blanket waivers related to home health aide 
supervision that were issued to Medicare participating home health 
agencies during the COVID-19 PHE. In addition, Division CC, section 115 
of CAA 2021 requires CMS to permit an occupational therapist to conduct 
the initial assessment visit and complete the comprehensive assessment 
under the Medicare program, but only when occupational therapy is on 
the home health plan of care with either physical therapy or speech 
therapy and skilled nursing services are not initially on the plan of 
care. We are proposing changes to the home health aide supervision 
requirements at Sec.  484.80(h)(1) and (h)(2) and we are proposing 
conforming regulation text changes at Sec.  484.55(a)(2) and (b)(3), 
respectively to allow occupational therapists completing the initial 
and comprehensive assessments for patients
5. Medicare Coverage of Home Infusion Therapy
    In section V.A.1. of this proposed rule, we discuss the home 
infusion therapy services payment categories, as finalized in the CYs 
2019 and 2020 HH PPS final rules with comment period (83 FR 56406, 84 
FR 60611). In section V.A.2. of this proposed rule, we discuss the home 
infusion therapy services payment adjustments including a proposal to 
update the GAFs used for wage adjustment and a proposal to maintain the 
percentages finalized for the initial and subsequent visit policy. In 
section V.A.3. of this proposed rule, we discuss updates to the home 
infusion therapy services payment rates for CY 2022, as required by 
section 1834(u) of the Act.
6. Provider and Supplier Enrollment Processes
    In section VI. of this proposed rule, we address a number of 
provisions regarding Medicare provider and supplier enrollment. Most of 
these provisions involve the incorporation into 42 CFR part 424, 
subpart P of certain subregulatory policies. These are addressed in 
section VI.B. of this proposed rule and include, for example, policies 
related to: (1) The effective date of billing privileges for certain 
provider and supplier types and certain provider enrollment 
transactions; and (2) the deactivation of a provider or supplier's 
billing privileges.
    In addition, we propose in section VI.C. of this proposed rule two 
regulatory clarifications related to HHA changes of ownership and HHA 
capitalization requirements.
7. Survey and Enforcement Requirements for Hospice Programs
    In section VII. of this proposed rule, there are a number of 
provisions related to Division CC, section 407 of CAA 2021. These 
proposed provisions enhance the hospice program survey process by 
requiring the use of multidisciplinary survey teams, prohibiting 
surveyor conflicts of interest, expanding CMS-based surveyor training 
to accrediting organizations (AOs), and requiring AOs with CMS-approved 
hospice programs to begin use of the Form CMS-2567. Additionally, the 
proposed provisions establish a hospice program complaint hotline. 
Finally, the proposed provisions create a Special Focus Program (SFP) 
for poor-performing hospice programs and the authority for imposing 
enforcement remedies for noncompliant hospice programs including the 
development and implementation of a range of remedies as well as 
procedures for appealing determinations regarding these remedies.
    Section 1865(a) of the Act provides that CMS may recognize and 
approve national AO Medicare accreditation programs which demonstrate 
that their health and safety standards and survey and oversight 
processes meet or exceed those used by CMS to determine compliance with 
applicable requirements. The CAA 2021 provisions expanding requirements 
for AOs will apply to AOs that accredit and ``deem'' hospice programs, 
and currently there are three such AOs: Accreditation Commission for 
Health Care (ACHC), Community Health Accreditation Partner (CHAP), and 
The Joint Commission (TJC). Half of all the Medicare-certified hospices 
have been deemed by these AOs.
    We describe and solicit comments on all aspects of these proposed 
survey and enforcement provisions for hospice programs.
8. Inpatient Rehabilitation Facility Quality Reporting Program
    In section IX.A. of this proposed rule, we propose to modify the 
compliance date for certain reporting requirements in the IRF QRP.
9. Long Term Care Hospital Quality Reporting Program
    In section IX.B. of this proposed rule, we propose to modify the 
compliance date for certain reporting requirements in the -LTCH QRP.

C. Summary of Costs, Transfers, and Benefits

BILLING CODE 4120-01-P

[[Page 35878]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.000

BILLING CODE 4120-01-C

II. Home Health Prospective Payment System

A. Overview of the Home Health Prospective Payment System

1. Statutory Background
    Section 1895(b)(1) of the Act requires the Secretary to establish a 
Home Health Prospective Payment System (HH PPS) for all costs of home 
health services paid under Medicare. Section 1895(b)(2) of the Act 
required that, in defining a prospective payment amount, the Secretary 
will consider an appropriate unit of service and the number, type, and 
duration of visits provided within that unit, potential changes in the 
mix of services provided within that unit and their cost, and a general 
system design that provides for continued access to quality services.
    In accordance with the statute, as amended by the Balanced Budget 
Act of 1997 (BBA), (Pub. L. 105-33, enacted August 5, 1997) we 
published a final rule in the July 3, 2000 Federal Register (65 FR 
41128) to implement the HH PPS legislation. Section 4603(a) of the BBA 
allowed the Secretary to consider an appropriate unit of service and at 
such time, a 60-day unit of payment was established. The July 2000 
final rule established requirements for the new HH PPS for home health 
services as required by section 4603 of the BBA, as subsequently 
amended by section 5101 of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act for Fiscal Year 1999 (OCESAA) (Pub. L. 
105-277, enacted October 21, 1998); and by sections 302, 305, and 306 
of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999, (BBRA) (Pub. L. 106-113,

[[Page 35879]]

enacted November 29, 1999). For a complete and full description of the 
HH PPS as required by the BBA, see the July 2000 HH PPS final rule (65 
FR 41128 through 41214).
    Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 
109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) 
to the Act, requiring home health agencies (HHAs) to submit data for 
purposes of measuring health care quality, and linking the quality data 
submission to the annual applicable payment percentage increase. This 
data submission requirement is applicable for CY 2007 and each 
subsequent year. If an HHA does not submit quality data, the home 
health market basket percentage increase is reduced by 2 percentage 
points. In the November 9, 2006 Federal Register (71 FR 65935), we 
published a final rule to implement the pay-for-reporting requirement 
of the DRA, which was codified at Sec.  484.225(h) and (i) in 
accordance with the statute. The pay-for-reporting requirement was 
implemented on January 1, 2007.
    Section 51001(a)(1)(B) of the Bipartisan Budget Act of 2018 (BBA of 
2018) (Pub. L. 115-123) amended section 1895(b) of the Act to require a 
change to the home health unit of payment to 30-day periods beginning 
January 1, 2020. Section 51001(a)(2)(A) of the BBA of 2018 added a new 
subclause (iv) under section 1895(b)(3)(A) of the Act, requiring the 
Secretary to calculate a standard prospective payment amount (or 
amounts) for 30-day units of service furnished that end during the 12-
month period beginning January 1, 2020, in a budget neutral manner, 
such that estimated aggregate expenditures under the HH PPS during CY 
2020 are equal to the estimated aggregate expenditures that otherwise 
would have been made under the HH PPS during CY 2020 in the absence of 
the change to a 30-day unit of service. Section 1895(b)(3)(A)(iv) of 
the Act requires that the calculation of the standard prospective 
payment amount (or amounts) for CY 2020 be made before the application 
of the annual update to the standard prospective payment amount as 
required by section 1895(b)(3)(B) of the Act.
    Additionally, section 1895(b)(3)(A)(iv) of the Act requires that in 
calculating the standard prospective payment amount (or amounts), the 
Secretary must make assumptions about behavior changes that could occur 
as a result of the implementation of the 30-day unit of service under 
section 1895(b)(2)(B) of the Act and case-mix adjustment factors 
established under section 1895(b)(4)(B) of the Act. Section 
1895(b)(3)(A)(iv) of the Act further requires the Secretary to provide 
a description of the behavior assumptions made in notice and comment 
rulemaking. CMS finalized these behavior assumptions in the CY 2019 HH 
PPS final rule with comment period (83 FR 56461).
    Section 51001(a)(2)(B) of the BBA of 2018 also added a new 
subparagraph (D) to section 1895(b)(3) of the Act. Section 
1895(b)(3)(D)(i) of the Act requires the Secretary to annually 
determine the impact of differences between assumed behavior changes, 
as described in section 1895(b)(3)(A)(iv) of the Act, and actual 
behavior changes on estimated aggregate expenditures under the HH PPS 
with respect to years beginning with 2020 and ending with 2026. Section 
1895(b)(3)(D)(ii) of the Act requires the Secretary, at a time and in a 
manner determined appropriate, through notice and comment rulemaking, 
to provide for one or more permanent increases or decreases to the 
standard prospective payment amount (or amounts) for applicable years, 
on a prospective basis, to offset for such increases or decreases in 
estimated aggregate expenditures, as determined under section 
1895(b)(3)(D)(i) of the Act. Additionally, 1895(b)(3)(D)(iii) of the 
Act requires the Secretary, at a time and in a manner determined 
appropriate, through notice and comment rulemaking, to provide for one 
or more temporary increases or decreases to the payment amount for a 
unit of home health services for applicable years, on a prospective 
basis, to offset for such increases or decreases in estimated aggregate 
expenditures, as determined under section 1895(b)(3)(D)(i) of the Act. 
Such a temporary increase or decrease shall apply only with respect to 
the year for which such temporary increase or decrease is made, and the 
Secretary shall not take into account such a temporary increase or 
decrease in computing the payment amount for a unit of home health 
services for a subsequent year. Finally, section 51001(a)(3) of the BBA 
of 2018 amends section 1895(b)(4)(B) of the Act by adding a new clause 
(ii) to require the Secretary to eliminate the use of therapy 
thresholds in the case-mix system for CY 2020 and subsequent years.
2. Current System for Payment of Home Health Services Beginning in CY 
2020 and Subsequent Years
    For home health periods of care beginning on or after January 1, 
2020, Medicare makes payment under the HH PPS on the basis of a 
national, standardized 30-day period payment rate that is adjusted for 
case-mix and area wage differences in accordance with section 
51001(a)(1)(B) of the BBA of 2018. The national, standardized 30-day 
period payment rate includes payment for the six home health 
disciplines (skilled nursing, home health aide, physical therapy, 
speech-language pathology, occupational therapy, and medical social 
services). Payment for non-routine supplies (NRS) is now also part of 
the national, standardized 30-day period rate. Durable medical 
equipment provided as a home health service, as defined in section 
1861(m) of the Act, is paid the fee schedule amount or is paid through 
the competitive bidding program and such payment is not included in the 
national, standardized 30-day period payment amount.
    To better align payment with patient care needs and to better 
ensure that clinically complex and ill beneficiaries have adequate 
access to home health care, in the CY 2019 HH PPS final rule with 
comment period (83 FR 56406), we finalized case-mix methodology 
refinements through the Patient-Driven Groupings Model (PDGM) for home 
health periods of care beginning on or after January 1, 2020. The PDGM 
did not change eligibility or coverage criteria for Medicare home 
health services, and as long as the individual meets the criteria for 
home health services as described at 42 CFR 409.42, the individual can 
receive Medicare home health services, including therapy services. For 
more information about the role of therapy services under the PDGM, we 
refer readers to the Medicare Learning Network (MLN) Matters article 
SE2000 available at https://www.cms.gov/regulations-and-guidanceguidancetransmittals2020-transmittals/se20005. To adjust for 
case-mix for 30-day periods of care beginning on and after January 1, 
2020, the HH PPS uses a 432-category case mix classification system to 
assign patients to a home health resource group (HHRG) using patient 
characteristics and other clinical information from Medicare claims and 
the Outcome and Assessment Information Set (OASIS) assessment 
instrument. These 432 HHRGs represent the different payment groups 
based on five main case-mix categories under the PDGM, as shown in 
Figure 1. Each HHRG has an associated case-mix weight that is used in 
calculating the payment for a 30-day period of care. For periods of 
care with visits less than the low-utilization payment adjustment 
(LUPA) threshold for the HHRG, Medicare pays national per-visit rates 
based on the discipline(s) providing the

[[Page 35880]]

services. Medicare also adjusts the national standardized 30-day period 
payment rate for certain intervening events that are subject to a 
partial payment adjustment (PEP). For certain cases that exceed a 
specific cost threshold, an outlier adjustment may also be available.
    Under this case-mix methodology, case-mix weights are generated for 
each of the different PDGM payment groups by regressing resource use 
for each of the five categories (admission source, timing clinical 
grouping, functional impairment level, and comorbidity adjustment) 
using a fixed effects model. A detailed description of each of the 
case-mix variables under the PDGM have been described previously, and 
we refer readers to the CY 2021 HH PPS final rule (85 FR 70303 through 
70305).
[GRAPHIC] [TIFF OMITTED] TP07JY21.001

B. Proposed Provisions for Payment Under the HH PPS

1. Monitoring the Effects of the Implementation of PDGM
a. Background
    The PDGM made several changes to the HH PPS, including replacing 
60-day episodes of care with 30-day periods of care, removing therapy 
volume from directly determining payment, and developing 432 case-mix 
adjusted payment groups in place of the previous 153 groups. In the CY 
2020 HH PPS final rule with comment period (84 FR 60513), we stated 
that continued monitoring is needed to understand how the PDGM, 
including the variables that determine the case-mix weights, affects 
the provision of home health care in order to inform any future 
refinements, if needed.
    CMS recognizes it takes time for HHAs to operationalize and adjust 
to a new payment system. We believe these adjustments are still 
occurring and HHAs are still adjusting to the new payment system given 
that these changes are the most significant changes to the HH PPS since 
its inception in

[[Page 35881]]

2000. Additionally, the COVID-19 PHE was declared on January 31, 2020 
and was retroactive to January 27, 2020.\1\ Therefore, any emerging 
trends may or may not be temporary, permanent, or unrelated to the 
implementation of the PDGM. Nevertheless, we understand stakeholders 
want to learn about how home health utilization patterns may have 
changed under the PDGM, so we are providing preliminary information in 
this proposed rule.
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    \1\ https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
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b. Claims Data Overview Used in PDGM Monitoring
    We believe using actual claims data, whenever possible, will 
provide the most comprehensive and complete evaluation of changes 
before and after implementation of the PDGM. Prior to the PDGM, HHAs 
were paid a case-mix adjusted payment for 60-day episodes of care using 
one of the 153 HHRGs with various therapy utilization thresholds. Under 
the PDGM, HHAs are paid a case-mix adjusted payment for 30-day periods 
of care using one of the 432 HHRGs that do not include therapy 
thresholds. For our analysis, we used the analytic file described in 
the CY 2020 HH PPS final rule with comment period (84 FR 60512) and 
applied the three behavioral assumptions to only half of the 30-day 
periods of care (randomly selected). That is, we used the CY 2018 home 
health data to divide one 60-day episode of care into two simulated 30-
day periods of care that were used to set payment rates in the CY 2020 
HH PPS final rule with comment period (84 FR 60518). We also used the 
analytic file described in the CY 2021 HH PPS final rule (85 FR 70298) 
and applied the three behavioral assumptions to only half of the 30-day 
periods of care (randomly selected). That is, we used the CY 2019 home 
health data to divide one 60-day episode of care into two simulated 30-
day periods of care that we used to for routine rate-setting updates 
and changes for CY 2021. The simulated data in these analytical files 
represent pre-PDGM utilization. We refer readers to the CY 2019 HH PPS 
proposed rule (83 FR 32382 through 32388) for a detailed description of 
how these analytical files were created. Finally, we used CY 2020 
claims data as of March 30, 2021 to analyze utilization changes post-
implementation of the PDGM and 30-day unit of payment.
c. Routine PDGM Monitoring
    As noted previously, section 1895(b)(3)(D) of the Act requires CMS 
to annually determine the impact of assumed versus actual behavior 
changes on aggregate expenditures under the HH PPS for CYs 2020 through 
2026. Analyses for routine monitoring may include, but would not be 
limited to, analyzing: Overall total 30-day periods of care and average 
periods of care per HHA user; the distribution of visits in a 30-day 
period of care; the percentage of periods that receive the low-
utilization payment adjustment (LUPA); the percentage of 30-day periods 
of care by clinical group, comorbidity adjustment, admission source, 
timing, and functional impairment level; and the proportion of 30-day 
periods of care with and without any therapy visits. As a reminder, the 
beginning of CY 2020 included ongoing 60-day episodes of care that 
began in CY 2019 and ended in CY 2020. Depending on the length of the 
remainder of the episode, those 60-day episodes were simulated into one 
or two 30-day periods of care and are included in this year's proposed 
rule monitoring tables. Approximately, 6.1 percent of the 30-day 
periods of care in CY 2020 data were simulated because the original 60-
day episode of care began in CY 2019 and ended in CY 2020. We remind 
readers, our preliminary analysis described in this section is not tied 
to any quality program.
(1) Utilization
    We evaluate utilization by comparing our simulated 30-day periods 
in our analytical files, to actual CY 2020 PDGM claims, as described 
previously. The analytic files used for annual ratesetting do not 
include all 60-day episodes or 30-day periods of care because some of 
these episodes/periods are dropped for various reasons (for example, 
the claim could not be matched to an OASIS assessment). For all of the 
tables that follow, we examined utilization for CY 2018 simulated 30-
day periods of care, CY 2019 simulated 30-day periods of care, and CY 
2020 actual 30-day periods of care. Table 2 shows the overall 
utilization of home health over time. Table 3 shows utilization of 
visits per 30-day period of care by home health discipline over time. 
Preliminary data indicates while the number of 30-day periods of care 
decreased between CY 2018 and CY 2020, the average number of 30-day 
periods of care per unique HHA user is similar. Additionally, our 
preliminary data indicates, on average, the number of visits per 30-day 
period of care for all disciplines decreased between CY 2018 and CY 
2020. On average, the total number of visits decreased by 1.27 visits 
per 30-day period of care between CY 2018 and CY 2020. Table 4 shows 
the proportion of 30-day periods of care that are LUPAs and the average 
number of visits per discipline of those LUPA 30-day periods of care 
over time.
BILLING CODE 4120-01-P

[[Page 35882]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.002

[GRAPHIC] [TIFF OMITTED] TP07JY21.003


[[Page 35883]]


[GRAPHIC] [TIFF OMITTED] TP07JY21.004

BILLING CODE 4120-01-C
(2) Analysis of 2019 Cost Report Data for 30-Day Periods of Care
    In the CY 2020 HH PPS final rule with comment period (84 FR 60483), 
we provided a summary of analysis on fiscal year (FY) 2017 HHA cost 
report data and how such data, if used, would impact our estimate of 
the percentage difference between Medicare payments; the CY 2020 30-day 
payment amount and estimated, average HHA costs for a 30-day period of 
care. In that rule, we utilized FY 2017 cost reports and CY 2017 home 
health claims to estimate both 60-day episode of care and 30-day period 
of care costs. We then updated the estimated CY 2017 60-day episode 
costs and 30-day period of care costs by the home health market basket 
update, reduced by the productivity adjustment for CYs 2018, 2019 and 
2020 to calculate the 2020 estimated 60-day episode and 30-day period 
of care costs. As stated in the CY 2020 HH PPS final rule with comment 
period (84 FR 60485), we estimated that the CY 2020 30-day payment 
amount was approximately 16 percent higher than the average costs for a 
30-day period of care. In MedPAC's March 2020 Report to Congress,\2\ 
their review of home health payment adequacy found that ``access is 
more than adequate in most areas and that Medicare payments are 
substantially in excess of costs''.
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    \2\ http://www.medpac.gov/docs/default-source/reports/mar20_medpac_ch9_sec.pdf?sfvrsn=0.
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    In this proposed rule, we examined 2019 HHA Medicare cost reports, 
as this is the most recent and complete cost report data at the time of 
rulemaking, and CY 2020 30-day period of care home health claims, to 
estimate 30-day period of care costs. We excluded LUPAs and PEPs in the 
average number of visits. The 2019 average NRS costs per visit is 
$3.94. We updated the estimated 30-day period of care costs, 2019 
average costs per visit with NRS by the CY 2020 home health market 
basket update, reduced by the productivity adjustment of 2.6 percent. 
Table 5 shows the estimated average costs for 30-day periods of care by 
discipline with NRS and the total 30-day period of care costs with NRS 
for CY 2020.

[[Page 35884]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.005

    The CY 2020 national, standardized 30-day period payment rate was 
$1,864.03, which is approximately 34 percent more than the estimated CY 
2020 30-day period cost of $1,394.68. Note that in the CY 2020 HH PPS 
final rule with comment period (84 FR 60484), the estimated average 
number of visits for a 30-day period of care in 2017 was estimated to 
be 10.5 visits. Using actual CY 2020 claims data, the average number of 
visits in a 30-day period was 9.25 visits--a decrease of approximately 
12 percent. We recognize that with the COVID-19 PHE, the 2019 data on 
the Medicare cost reports may not reflect the most recent changes such 
as increased telecommunications technology costs, increased personal 
protective equipment (PPE) costs, and hazard pay. In its March 2021 
Report to Congress, to estimate Medicare margins for 2021, MedPAC 
assumed a cost growth of 3 percent for CY 2020 (2 percentage points due 
to inflation and higher expenses for PPE and telehealth and 1 
percentage point due to temporary surge pricing for PPE and other 
temporary costs of the PHE).\3\ Furthermore, MedPAC noted that for more 
than a decade, payments under the HH PPS have significantly exceeded 
HHAs' costs primarily due to two factors--agencies reducing visits to 
reduce episode costs and cost growth in recent years has been lower 
than the annual payment updates.\4\ As shown in Table 3 in this 
proposed rule, HHAs have reduced visits under the PDGM in CY 2020. When 
the 2020 cost reports become available, we will update the estimated 
30-day period of care costs in CY 2020 in future rulemaking.
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    \3\ http://www.medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf?sfvrsn=0.
    \4\ Ibid.
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(3) Clinical Groupings and Comorbidities
    Each 30-day period of care is grouped into one of 12 clinical 
groups, which describe the primary reason for which patients are 
receiving home health services under the Medicare home health benefit. 
The clinical grouping is based on the principal diagnosis reported on 
the home health claim. Table 6 shows the distribution of the 12 
clinical groups over time. We also include the average case-mix weight 
for all 30-day periods in each of the clinical groups in CY 2020. In 
other words, the average case-mix weight for each clinical group 
includes all possible comorbidity adjustments, admission source and 
timing, and functional impairment levels. We refer readers to Table 16 
in the CY 2020 HH PPS final rule with comment period (84 FR 60522 
through 60533) for the CY 2020 PDGM LUPA threshold and case mix weight 
for each HHRG payment group.

[[Page 35885]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.006

    Thirty-day periods will receive a comorbidity adjustment category 
based on the presence of certain secondary diagnoses reported on home 
health claims. These diagnoses are based on a home health specific list 
of clinically and statistically significant secondary diagnosis 
subgroups with similar resource use. We refer readers to section II. of 
this proposed rule and the CY 2020 final rule with comment period (84 
FR 60493) for further information on the categories of the comorbidity 
adjustment. Home health 30-day periods of care can receive a low or a 
high comorbidity adjustment, or no comorbidity adjustment. Table 7 
shows the distribution of 30-day periods of care by comorbidity 
adjustment category for all 30-day periods. We also include the average 
case-mix weight for each of the comorbidity adjustments in CY 2020. In 
other words, the average case-mix weight for each comorbidity 
adjustment includes all possible clinical groupings, admission source 
and timing, and functional impairment levels.
[GRAPHIC] [TIFF OMITTED] TP07JY21.007

(4) Admission Source and Timing
    Each 30-day period of care is classified into one of two admission 
source categories--community or institutional--depending on what 
healthcare setting was utilized in the 14 days prior to receiving home 
health care. Thirty-day periods of care for beneficiaries with any 
inpatient acute care hospitalizations, inpatient psychiatric facility 
(IPF) stays, skilled nursing facility (SNF) stays, inpatient 
rehabilitation facility (IRF) stays, or long-term care hospital (LTCH) 
stays within 14 days prior to a home health admission are designated as 
institutional admissions. Thirty-day periods of care are classified as 
``early'' or ``late'' depending on when they occur within a sequence of 
30-day periods of care. The first 30-day period of care is classified 
as early and all subsequent 30-day periods of care in the sequence 
(second or later) are classified as late. A subsequent 30-day period of 
care would not be considered early unless there is

[[Page 35886]]

a gap of more than 60 days between the end of one previous period of 
care and the start of another. Information regarding the timing of a 
30-day period of care comes from Medicare home health claims data and 
not the OASIS assessment to determine if a 30-day period of care is 
``early'' or ``late''. Table 8 shows the distribution of 30-day periods 
of care by admission source and timing over time. We also include the 
average case-mix weight for each of the admission source and period 
timing in CY 2020. In other words, the average case-mix weight for each 
admission source and period timing includes all possible clinical 
groupings, comorbidity adjustment, and functional impairment levels. We 
refer readers to Table 16 in the CY 2020 HH PPS Final Rule with comment 
period (84 FR 60522 through 60533) for the CY 2020 PDGM LUPA threshold 
and case mix weight for each HHRG payment group.
[GRAPHIC] [TIFF OMITTED] TP07JY21.008

(5) Functional Impairment Level
    Each 30-day period of care is placed into one of three functional 
impairment levels (low, medium, or high) based on responses to certain 
OASIS functional items associated with grooming, bathing, dressing, 
ambulating, transferring, and risk for hospitalization. The specific 
OASIS items that are used for the functional impairment level are found 
in Table 7 in the CY 2020 HH PPS final rule with comment period (84 FR, 
60490). Responses to these OASIS items are grouped together into 
response categories with similar resource use and each response 
category has associated points. A more detailed description as to how 
these response categories were established can be found in the 
technical report, ``Overview of the Home Health Groupings Model'' 
posted on the HHA web page.\5\ The sum of these points' results in a 
functional impairment level score used to group 30-day periods of care 
into a functional impairment level with similar resource use. The 
scores associated with the functional impairment levels vary by 
clinical group to account for differences in resource utilization. The 
functional impairment level will remain the same for the first and 
second 30-day periods of care unless there has been a significant 
change in condition which that warranted an ``other follow-up'' 
assessment prior to the second 30-day period of care. For each 30-day 
period of care, the Medicare claims processing system will look for the 
most recent OASIS assessment based on the claims ``from date.'' Table 9 
shows the distribution of 30-day periods by functional status. We also 
include the average case-mix weight for each functional impairment 
level in CY 2020. In other words, the average case-mix weight for each 
functional impairment level includes all possible clinical groupings, 
comorbidity adjustment, and admission source and period timing. We 
refer readers to Table 16 in the CY 2020 HH PPS Final Rule with comment 
period (84 FR 60522 through 60533) for the CY 2020 PDGM LUPA threshold 
and case mix weight for each HHRG payment group.
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    \5\ Overview of the Home Health Groupings Model. November 18, 
2016. https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
[GRAPHIC] [TIFF OMITTED] TP07JY21.009


[[Page 35887]]


    Currently, the functional impairment level is determined by 
responses to certain OASIS items associated with functional activities 
of daily living and risk of hospitalization; that is, responses to 
OASIS items M1800-M1860 and M1032. However, the Improving Medicare 
Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-
185, enacted on October 6, 2014) amended Title XVIII of the Act to 
include enacting new data reporting requirements for certain post-acute 
care (PAC) providers, including HHAs. Sections 1899B(b)(1)(A) of the 
Act requires the Secretary to require home health agencies to report 
standardized patient assessment data beginning no later than January 1, 
2019. The standardized patient assessment data categories include 
functional status, such as mobility and self-care at admission and 
discharge, in accordance with 1899B(b)(1)(B)(i) of the Act. As such, 
CMS finalized adding the functional items, Section GG, ``Functional 
Abilities and Goals'', to the OASIS data set, effective January 1, 
2019, in order to be able to measure functional status across PAC 
providers. At the time of CY 2020 rulemaking, we did not yet have the 
data to determine the effect, if any, of these newly added items on 
resource costs utilization during a home health period of care for use 
in the PDGM. Therefore, the GG functional items are not currently used 
to determine the functional impairment level under the PDGM.
    We have examined the correlation between the current functional 
items used for payment (that is, M1800-1860) and the analogous GG 
items. We note that M1032, Risk for Hospitalization, does not have a 
corresponding GG item. Our preliminary analysis shows there is a 
correlation between the current responses to the M1800-1860 items and 
the GG items. However, there are certain information in M1800 items 
that are being collected at follow-up that are not collected with GG 
items (for example, the M1800 items associated with upper and lower 
body dressing are collected at follow up). Additionally, the GG items 
include an ``Activity Not Attempted'' (ANA) option, meaning the 
clinician did not put a response for the patient. Furthermore, there 
are a variety of ANA responses, including ``Not attempted due to 
medical or safety concerns'', and ``Not applicable''. Figure 2 shows 
the frequencies by response type in CY 2020 to the OASIS GG items.
[GRAPHIC] [TIFF OMITTED] TP07JY21.010

    Our analysis of the GG items shows a significant amount of these 
ANA responses, making it difficult to map to the corresponding M1800-
1860 item responses. Therefore, we will continue to monitor the GG 
items to determine the correlation between the current functional items 
used to case-mix adjust home health payments and the GG items, and we 
will provide additional analysis of the GG functional items in future 
rulemaking.
(6) Therapy Visits
    Beginning in CY 2020, section 1895(b)(4)(B)(ii) of the Act 
eliminated the use of therapy thresholds in calculating payments for CY 
2020 and subsequent years. Prior to implementation of the PDGM, HHAs 
could receive an adjustment to payment based on the number of therapy 
visits provided during a 60-day episode of care. As such, we examined 
the proportion of simulated 30-day periods with and without any therapy 
visits for CYs 2018 and 2019, prior to the removal of therapy 
thresholds. We also examined the proportion of actual 30-day periods of 
care with and without therapy visits for CY 2020, after the removal of 
therapy thresholds. To be

[[Page 35888]]

covered as skilled therapy, the services must require the skills of a 
qualified therapist (that is, PT, OT, or SLP) or qualified therapist 
assistant and must be reasonable and necessary for the treatment of the 
patient's illness or injury.\6\ As shown in Table 3, we are monitoring 
the number of visits per 30-day periods of care by each home health 
discipline. Any 30-day period of care can include both therapy and non-
therapy visits. If any 30-day period of care consisted of only visits 
for PT, OT, and/or SLP, then this 30-day period of care is considered 
``therapy only''. If any 30-day period of care consisted of only visits 
for skilled nursing, home health aide, or social worker, then this 30-
day period of care is considered ``no therapy''. If any 30-day period 
of care consisted of at least one therapy visit and one non-therapy, 
then this 30-day period of care is considered ``therapy + non-
therapy''. Table 10 shows the proportion of 30-day periods of care with 
only therapy visits, at least one therapy visit and one non-therapy 
visits, and no therapy visits. Figure 3 shows the proportion of 30-day 
periods of care by the number of therapy visits (excluding zero) 
provided during 30-day periods of care.
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    \6\ Medicare Benefit Policy Manual, Chapter 7 Home Health 
Services, Section 40.2 Skilled Therapy Services https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c07.pdf.
[GRAPHIC] [TIFF OMITTED] TP07JY21.011

[GRAPHIC] [TIFF OMITTED] TP07JY21.012

    Both Table 10 and Figure 3, as previously discussed, indicate there 
have been changes in the distribution of both therapy and non-therapy 
visits in CY 2020. For example, the percent of 30-day periods with six 
or less therapy

[[Page 35889]]

visits during a 30-day period increased in CY 2020. However, the 
percent of 30-day periods with seven or more therapy visits decreased 
in CY 2020.
    In addition, we also examined the proportion of 30-day periods of 
care with and without skilled nursing, social work, or home health aide 
visits for CYs 2018, 2019 and 2020. Table 11 shows the number of 30-day 
periods of care with only skilled nursing visits, at least one skilled 
nursing visit and one other visit type (therapy or non-therapy), and no 
skilled nursing visits. Table 13 shows the number of 30-day periods of 
care with and without home health aide and/or social worker visits.
[GRAPHIC] [TIFF OMITTED] TP07JY21.013

[GRAPHIC] [TIFF OMITTED] TP07JY21.014

    We will continue to monitor the provision of home health services, 
including any changes in the number and duration of home health visits, 
composition of the disciplines providing such services, and overall 
home health payments to determine if refinements to the case-mix 
adjustment methodology may be needed in the future.
    We solicit public comments on the preliminary data analysis 
presented in this rule and we solicit comments on whether there are 
other analyses that should be conducted to examine the effects of the 
PDGM on home health expenditures and utilization.
2. Comment Solicitation on the Annual Determination of the Impact of 
Differences Between Assumed Behavior Changes and Actual Behavior 
Changes on Estimated Aggregate Payment Expenditures Under the HH PPS
a. Background
    Section 1895(b)(3)(A)(iv) of the Act, required CMS, with respect to 
payments for home health units of service furnished that end during the 
12-month period beginning January 1, 2020, to calculate a standard 
prospective payment amount (or amounts) for 30-day units of service in 
a manner such that the estimated aggregate amount of expenditures would 
be equal to the estimated aggregate amount of expenditures that 
otherwise would have been made had the 30-day unit of payment not been 
enacted. In calculating such amount (or amounts), CMS was required to 
make assumptions about behavior changes that could occur as a result of 
the implementation of the 30-day unit of payment and the case-mix 
adjustment factors that eliminated the use of therapy thresholds. CMS 
was to provide a description of such assumptions through notice and 
comment rulemaking.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56454), 
as required by law, we stated that this means we were required to 
calculate a 30-day period payment amount for CY 2020 in a budget 
neutral manner such that estimated aggregate expenditures under the HH 
PPS during CY 2020 were equal to the estimated aggregate expenditures 
that otherwise would have been made under the HH PPS during CY 2020 in 
the absence of the change to a 30-day unit of payment and the 
implementation of the PDGM case-mix adjustment methodology. This means

[[Page 35890]]

that aggregate Medicare payments under the new 432-group payment system 
and 30-day unit of payment would be the same as they would have been 
under the 153-group payment system and 60-day unit of payment.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56455), 
we finalized three behavior assumptions in order to calculate a 30-day 
budget-neutral payment amount for CY 2020:
     Clinical Group Coding: The clinical group is determined by 
the principal diagnosis code for the patient as reported by the HHA on 
the home health claim. This behavior assumption assumes that HHAs will 
change their documentation and coding practices and put the highest 
paying diagnosis code as the principal diagnosis code in order to have 
a 30-day period be placed into a higher-paying clinical group.
     Comorbidity Coding: The PDGM further adjusts payments 
based on patients' secondary diagnoses as reported by the HHA on the 
home health claim. The OASIS only allows HHAs to designate 1 principal 
diagnosis and 5 secondary diagnoses while the home health claim allows 
HHAs to designate 1 principal diagnosis and up to 24 secondary 
diagnoses. This behavior assumption assumes that by taking into account 
additional ICD-10-CM diagnosis codes listed on the home health claim 
(beyond the 6 allowed on the OASIS), more 30-day periods of care will 
receive a comorbidity adjustment.
     LUPA Threshold: This behavior assumption assumes that for 
one-third of LUPAs that are 1 to 2 visits away from the LUPA threshold 
HHAs will provide 1 to 2 extra visits to receive a full 30-day payment.
    There are overlaps and interactions between these behavior 
assumptions, and when combined, the budget-neutral payment amount for 
CY 2020 resulted in a proposed -8.389 percent adjustment to the 30-day 
period payment amount compared to the payment amount calculated in a 
budget neutral manner without these assumptions applied. In response to 
the proposed rule, commenters stated that CMS overestimated the 
magnitude of the assumed behavior changes. We reconsidered the 
frequency of the assumed behaviors during the first year of the 
transition to the new unit of payment and case-mix adjustment 
methodology in response to these comments, and in the CY 2020 HH PPS 
final rule with comment period (84 FR 60519), we finalized a -4.36 
percent behavior assumption adjustment in order to calculate a 
national, standardized 30-day base payment rate. After applying the 
wage index budget neutrality factor and the home health payment update, 
the CY 2020 30-day payment rate was set at $1,864.03, and for 
determining outlier payments the fixed-dollar loss (FDL) ratio was set 
at 0.56.
    Section 1895(b)(3)(D)(i) of the Act requires CMS to annually 
determine the impact of the differences between assumed behavior 
changes and actual behavior changes on estimated aggregate expenditures 
beginning with 2020 and ending with 2026. In the CY 2020 final rule (84 
FR 60513), we stated that we interpret actual behavior changes to 
encompass both behavior changes that were previously outlined, as 
assumed by CMS, and other behavior changes not identified at the time 
that the budget neutral 30-day payment for CY 2020 was determined. As 
required by 1895(b)(3)(D)(ii) of the Act, the Secretary shall, at a 
time and in a manner determined appropriate, through notice and comment 
rulemaking, provide for one or more permanent increases or decreases to 
the standard prospective payment amount (or amounts) for applicable 
years, on a prospective basis, to offset for such increases or 
decreases in estimated aggregate expenditures.
    As required by section 1895(b)(3)(D)(iii) of the Act, the Secretary 
shall, at a time and in a manner determined appropriate, through notice 
and comment rulemaking, provide for one or more temporary increases or 
decreases to the payment amount for a unit of home health services for 
applicable years, on a prospective basis, to offset for such increases 
or decreases in estimated aggregate expenditures. Such a temporary 
increase or decrease shall apply only with respect to the year for 
which such temporary increase or decrease is made, and the Secretary 
shall not take into account such a temporary increase or decrease in 
computing such amount for a subsequent year. That is, we are required 
to retrospectively determine if the 30-day payment amount in CY 2020 
resulted in the same level of estimated aggregate expenditures that 
would have been made if the change in the unit of payment and the PDGM 
case-mix adjustment methodology had not been implemented, and make 
adjustments to the 30-day payment amount prospectively, if needed.
b. Methodology To Determine the Difference Between Assumed Versus 
Actual Behavior Changes on Estimated Aggregate Expenditures
    Using CY 2020 data (as of March 30, 2021), the most recent, 
complete data available at the time of this proposed rule, we analyzed 
the impact of the differences between assumed behavior changes and 
actual behavior changes on estimated aggregate expenditures to 
determine whether a temporary and/or a permanent increase or decrease 
is needed to the national, standardized 30-day period payment in CY 
2022. We analyzed data to determine if the CY 2020 30-day payment 
amount resulted in the same estimated aggregate expenditures that would 
have been paid if the PDGM and change in the unit of payment had not 
been implemented.
    To evaluate if whether the 30-day budget neutral payment amount for 
CY 2020 maintained budget neutrality given the change to a 30-day unit 
of payment and the implementation of a new case-mix adjustment 
methodology without therapy thresholds was accurate, we used actual CY 
2020 30-day period claims data to simulate 60-day episodes and we 
determined what CY 2020 payments would have been under the 153-group 
case-mix system and 60-day unit of payment. To do this, we used the 
steps outlined as follows as detailed in this section of this rule.
    The first step in repricing CY 2020 PDGM claims was to determine 
which 30-day periods of care could be grouped together to form 60-day 
episodes of care. To facilitate grouping, we made some exclusions and 
assumptions.
(1) Exclusions
    We limited the sample to 30-day periods where the claim occurrence 
code 50 date (representing the OASIS assessment date) occurred on or 
before October 31, 2020. This was done to ensure the simulated 60-day 
episodes we constructed contained both 30-day periods and would not be 
simulated 60-day episodes that would have overlapped into 2021.
    We excluded the following:
     Beneficiaries and all of their claims if they had 
overlapping claims from the same provider (as identified by CCN).\7\
---------------------------------------------------------------------------

    \7\ All of a beneficiary's claims were dropped so as not to 
create problems with assigning episode timing if only a subset of 
claims were dropped. 1,320 claims from 224 beneficiaries are 
excluded.
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     Beneficiaries and all of their claims if three or more 
claims from the same provider are linked to the same occurrence code 50 
date.\8\
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    \8\ This was done because if three or more claims linked to the 
same OASIS it would not be clear which claims should be joined to 
simulate a 60-day episode. 11,794 claims from 351 beneficiaries are 
excluded.
---------------------------------------------------------------------------

(2) Assumptions
    We assumed the following:
     If two 30-day periods of care from the same provider 
reference the same

[[Page 35891]]

OASIS assessment date (using occurrence code 50), and then we assume 
those two 30-day periods of care would have been billed as a 60-day 
episode of care under the 153-group system.
     If there are two 30 day-periods of care that reference 
different OASIS assessment dates and each of those assessment dates is 
referenced by a single 30-day period of care and those two 30-day 
periods of care occur together close in time (that is, the from date of 
the later 30-day period of care is between 0 to 14 days after the 
through date of the earlier 30-day period of care), then we assume 
those two 30-day periods of care also would have been billed as a 60-
day episode of care under the 153-group system.
     For all other 30-day periods of care, we assumed that they 
would not be combined with another 30-day period of care and would have 
been billed alone. We excluded such periods that occurred at the start 
of the year (January 1, 2020-January 14, 2020) or end of the year 
(December 1-31, 2020) so as not to count a single 30-day period of care 
that may have had a counterpart that could not be observed.
    Once we applied our exclusions and assumptions, we assigned each 
60-day episode of care as a normal episode, PEP, LUPA, or outlier based 
on the payment parameters established in the CY 2020 final rule with 
comment period (84 FR 60478) for 60-day episodes of care. Next, using 
the 3M Home Health Grouper (v8219) we assigned a Health Insurance 
Prospective Payment System (HIPPS) code to each simulated 60-day 
episode of care using the 153-group methodology. Finally, we priced out 
the simulated 60-day episodes of care using the payment parameters 
described in the CY 2020 final rule with comment period (84 FR 60537) 
for 60-day episodes of care. Before comparing payments for the 30-day 
periods of care using the 432-group PDGM methodology, we first removed 
any claim that was excluded in the simulated 60-day episode dataset. 
Therefore, our comparison between payments had the same utilization 
between the CY 2020 simulated 60-day episodes of care and the CY 2020 
actual 30-day periods of care.
    We began with 8,165,808 30-day periods of care and dropped 524,163 
30-day periods of care that had a claim occurrence code 50 date after 
October 31, 2020. We also eliminated 81,641 30-day periods of care that 
appeared to not group with another 30-day period of care to form a 60-
day episode of care if the 30-day period of care had a ``from date'' 
before January 15, 2020 or a ``through date after'' November 30, 2020. 
This was done to ensure the 30-day period of care would not have been 
part of a 60-day episode of care that would have spanned into a prior 
or subsequent year. As described previously, we excluded claims and 
made assumptions when combining two 30-day periods of care. 
Additionally, any simulated 60-day episode of care where no OASIS 
information was available or could not be grouped to a HIPPS due to a 
missing primary diagnosis or other reason was excluded from analysis. 
Our simulated 60-day episodes of care produced a distribution between 
two 30-day periods of care (69.8 percent) and single 30-day periods of 
care (30.2 percent) that was similar to what we found when we simulated 
two 30-day periods of care for implementation of the PDGM. After all 
exclusions and assumptions were applied, the final dataset included 
7,441,602 actual 30-day periods of care and 4,378,823 simulated 60-day 
episodes of care for CY 2020.
    For the simulated 60-day episodes of care and before any adjustment 
for PEP, LUPA, or outliers were applied, payments were calculated using 
the CY 2020 153-group 60-day base payment rate of $3,220.79, the 153-
group case-mix adjustment methodology, and FDL of 0.51, as described in 
the CY 2020 HH PPS final rule with comment period (84 FR 60537). For 
the actual 30-day periods of care that constructed the simulated 60-day 
episodes of care and before any adjustment for PEP, LUPA, or outliers 
were applied, payments were calculated using the CY 2020 30-day base 
payment rate of $1,864.03, the 432-group PDGM case-mix adjustment 
methodology, and FDL of 0.56 as described in the CY 2020 final rule 
with comment period (84 FR 60539). After the claims in the simulated 
60-day episodes of care and 30-day periods of care were priced using 
the payment rates described previously, we calculated the total 
payments for all periods, normal periods, PEPs, LUPAs, and outliers 
(excluding the base payment to ensure outlier payments were no more 
than 2.5 percent of total estimated HH PPS payments). Our preliminary 
results indicated that aggregate payments to HHAs were higher in CY 
2020 under the PDGM case-mix adjustment methodology and the 30-day unit 
of payment compared to what HHAs would have been paid had the PDGM and 
30-day unit of payment not been implemented.
    Next, we calculated what the CY 2020 30-day periods of care base 
payment rate and FDL should have been, to achieve the estimated 
aggregate payments for the simulated 60-day episodes in CY 2020. We 
then calculated a percent change between the payment rates. In other 
words, we divided the CY 2020 repriced 30-day base payment rate by the 
actual CY 2020 base-payment rate minus one. We determined the CY 2020 
30-day base payment rate was approximately 6 percent higher than it 
should have been, and would require temporary retrospective adjustments 
for CY 2020 and subsequent years until a permanent prospective 
adjustment could be implemented in future rulemaking.
    One of the driving factors between what we paid HHAs under the 
current 432-group PDGM methodology with a 30-day unit of payment and 
what we would have paid HHAs under the previous 153-group case-mix 
adjustment methodology with a 60-day unit of payment is related to the 
average case-mix weights. The average case-mix weight for the 30-day 
periods of care used to construct the simulated 60-day of care episodes 
was 1.0310; compared to the average case-mix weight for the simulated 
60-day of care episodes was 0.9657, a difference of 0.0653. As the 
difference between the two average case-mix weights increases (that is, 
farther from zero) the higher the difference in payments; conversely as 
the difference between the two average case-mix weights decreases (that 
is, closer to zero) the smaller the difference in payments. HHAs should 
be providing visits in accordance with patient care needs.
    The law provides flexibility for the Secretary to make an increase 
or decrease adjustment to the 30-day payment amount to offset any 
difference between assumed versus actual behavior of estimated 
aggregate expenditures, at a time and manner determined appropriate and 
allows for prospective adjustments based on retrospective behavior. As 
stated previously, currently our preliminary analysis shows an 
additional payment decrease would more appropriately account for 
behaviors reflected in CY 2020, after the implementation of the PDGM 
and 30-day unit of payment. However, we anticipate potentially seeing 
further variability in this percentage as we continue to analyze full 
claims data from CY 2020 and subsequent years, and considering that the 
COVID-19 PHE is still ongoing. We intend to propose a methodology and, 
if appropriate, a temporary and permanent payment adjustment based on 
our analysis in future rulemaking. However, we note that by not 
proposing any adjustment for CY 2022, this could potentially result in 
larger, compounding payment adjustments in future years to fully

[[Page 35892]]

account for the difference between assumed versus actual behavior 
change on estimated aggregate expenditures beginning in CY 2020.
    We recognize that stakeholders may have other ways to analyze the 
data to determine the difference between assumed versus actual behavior 
change on estimated aggregate expenditures, such as analysis of nominal 
case-mix growth or calculating the percent difference and percent 
change of payments between simulated 30-day periods of care and actual 
30-day periods of care. We solicit comments on the described repricing 
method for evaluating budget neutrality for CY 2020 and any alternate 
approaches to annually determine the difference between assumed and 
actual behavioral changes on estimated aggregate expenditures under the 
HH PPS.
3. CY 2022 PDGM LUPA Thresholds and PDGM Case-Mix Weights
a. Proposed CY 2022 PDGM LUPA Thresholds
    Under the HH PPS, LUPAs are paid when a certain visit threshold for 
a payment group during a 30-day period of care is not met. In the CY 
2019 HH PPS final rule (83 FR 56492),) we finalized that the LUPA 
thresholds would be set at the 10th percentile of visits or 2 visits, 
whichever is higher, for each payment group. This means that the LUPA 
threshold for each 30-day period of care varies depending on the PDGM 
payment group to which it is assigned. If the LUPA threshold for the 
payment group is met under the PDGM, the 30-day period of care will be 
paid the full 30-day period case-mix adjusted payment amount (subject 
to any PEP or outlier adjustments). If a 30-day period of care does not 
meet the PDGM LUPA visit threshold, then payment will be made using the 
CY 2022 per-visit payment amounts as described in Section III of this 
proposed rule. For example, if the LUPA visit threshold is four, and a 
30-day period of care has four or more visits, it is paid the full 30-
day period payment amount; if the period of care has three or less 
visits, payment is made using the per-visit payment amounts.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56492), 
we finalized our policy that the LUPA thresholds for each PDGM payment 
group would be reevaluated every year based on the most current 
utilization data available at the time of rulemaking. However, CY 2020 
was the first year of the new case-mix adjustment methodology and we 
stated in the CY 2021 final rule (85 FR 70305, 70306) we would maintain 
the LUPA thresholds that were finalized and shown in Table 17 of the CY 
2020 HH PPS final rule with comment period (84 FR 60522) for CY 2021 
payment purposes. At that time, we did not have sufficient CY 2020 data 
to reevaluate the LUPA thresholds for CY 2021.
    We have received anecdotal feedback from stakeholders that in CY 
2020, HHAs billed more LUPAs because patients requested fewer in-person 
visits due the COVID-19 PHE. As discussed further in this section of 
this rule, while we are proposing to update the case-mix weights for CY 
2022 using CY 2020 data, there are several factors that contribute to 
how the case-mix weight is set for a particular case-mix group (such as 
the number of visits, length of visits, types of disciplines providing 
visits, and non-routine supplies) and the case-mix weight is derived by 
comparing the average resource use for the case-mix group relative to 
the average resource use across all groups. CMS believes that the PHE 
would have impacted utilization within all case-mix groups similarly. 
Therefore, the impact of any reduction in resource use caused by the 
PHE on the calculation of the case-mix weight would be minimized since 
the impact would be accounted for both in the numerator and denominator 
of the formula used to calculate the case-mix weight. However, in 
contrast, the LUPA thresholds are based on the number of overall visits 
in a particular case-mix group (the threshold is the 10th percentile of 
visits or 2 visits, whichever is greater) instead of a relative value 
(like what is used to generate the case-mix weight) that would control 
for the impacts of the PHE. We note that visit patterns and some of the 
decrease in overall visits in CY 2020 may not be representative of 
visit patterns in CY 2022. If we were to set the LUPA thresholds in 
this proposed rule using CY 2020 data and then set the LUPA thresholds 
again for CY 2023 using data from CY 2021, it is likely that there 
would be an increase in these thresholds due to the lower number of 
visits that occurred in CY 2020. Therefore, to mitigate any potential 
future and significant short-term variability in the LUPA thresholds 
due to the COVID-19 PHE, we are proposing to maintain the LUPA 
thresholds finalized and displayed in Table 17 in the CY 2020 HH PPS 
final rule with comment period (84 FR 60522) for CY 2022 payment 
purposes. We believe that maintaining the LUPA thresholds for CY 2022 
is the best approach because it mitigates potential fluctuations in the 
thresholds caused by visit patterns changing from what we observed in 
CY 2020 potentially due to the PHE. We will repost these LUPA 
thresholds (along with the case-mix weights) that will be used for CY 
2022 on the HHA Center web page.\9\ We solicit public comments on 
maintaining the LUPA thresholds for CY 2022 payment purposes.
---------------------------------------------------------------------------

    \9\ https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
---------------------------------------------------------------------------

b. CY 2022 Functional Impairment Levels
    Under the PDGM, the functional impairment level is determined by 
responses to certain OASIS items associated with activities of daily 
living and risk of hospitalization; that is, responses to OASIS items 
M1800-M1860 and M1032. A home health period of care receives points 
based on each of the responses associated with these functional OASIS 
items, which are then converted into a table of points corresponding to 
increased resource use. The sum of all of these points results in a 
functional score which is used to group home health periods into a 
functional level with similar resource use. That is, the higher the 
points, the higher the response is associated with increased resource 
use. The sum of all of these points results in a functional impairment 
score which is used to group home health periods into one of three 
functional impairment levels with similar resource use. The three 
functional impairment levels of low, medium, and high were designed so 
that approximately one-third of home health periods from each of the 
clinical groups fall within each level. This means home health periods 
in the low impairment level have responses for the functional OASIS 
items that are associated with the lowest resource use, on average. 
Home health periods in the high impairment level have responses for the 
functional OASIS items that are associated with the highest resource 
use on average.
    For CY 2022, we propose to use CY 2020 claims data to update the 
functional points and functional impairment levels by clinical group. 
The CY 2018 HH PPS Proposed rule (82 FR 35320) and the HHGM technical 
report from December 2016 posted on the HHA Center web page provide a 
more detailed explanation as to the construction of these functional 
impairment levels using the OASIS items. We are proposing to use this 
same methodology previously finalized to update the functional 
impairment levels for CY 2022. The updated OASIS functional points 
table and the table of

[[Page 35893]]

functional impairment levels by clinical group for CY 2022 are listed 
in Tables 13 and 14, respectively. We solicit public comments on the 
updates to functional points and the functional impairment levels by 
clinical group.
BILLING CODE 4120-01-P
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c. CY 2022 Comorbidity Subgroups
    Thirty-day periods of care receive a comorbidity adjustment 
category based on the presence of certain secondary diagnoses reported 
on home health claims. These diagnoses are based on a home-health 
specific list of clinically and statistically significant secondary 
diagnosis subgroups with similar resource use, meaning the diagnoses 
have at least as high as the median resource use and are reported in 
more than 0.1 percent of 30-day periods of care. Home health 30-day 
periods of care can receive a comorbidity adjustment under the 
following circumstances:
     Low comorbidity adjustment: There is a reported secondary 
diagnosis on the home health-specific comorbidity subgroup list that is 
associated with higher resource use.
     High comorbidity adjustment: There are two or more 
secondary diagnoses on the home health-specific comorbidity subgroup 
interaction list that are associated with higher resource use when both 
are reported together compared to if they were reported separately. 
That is, the two diagnoses

[[Page 35895]]

may interact with one another, resulting in higher resource use.
     No comorbidity adjustment: A 30- day period of care 
receives no comorbidity adjustment if no secondary diagnoses exist or 
none meet the criteria for a low or high comorbidity adjustment.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56406) 
we stated that we would continue to examine the relationship of 
reported comorbidities on resource utilization and make the appropriate 
payment refinements to help ensure that payment is in alignment with 
the actual costs of providing care. For CY 2022, we propose to use the 
same methodology used to establish the comorbidity subgroups to update 
the comorbidity subgroups using CY 2020 home health data.
    For CY 2022, we propose to update the comorbidity subgroups to 
include 20 low comorbidity adjustment subgroups as identified in Table 
15 and 85 high comorbidity adjustment interaction subgroups as 
identified in Table 16. The proposed CY 2022 low comorbidity adjustment 
subgroups and the high comorbidity adjustment interaction subgroups 
including those diagnoses within each of these comorbidity adjustments 
will also be posted on the HHA Center web page at https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
    We invite comments on the proposed updates to the low comorbidity 
adjustment subgroups and the high comorbidity adjustment interactions 
for CY 2022.
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BILLING CODE 4120-01-C
d. CY 2022 PDGM Case-Mix Weights
    As finalized in the CY 2019 HH PPS final rule with comment period 
(83 FR 56502), the PDGM places patients into meaningful payment 
categories based on patient and other characteristics, such as timing, 
admission source, clinical grouping using the reported principal 
diagnosis, functional impairment level, and comorbid conditions. The 
PDGM case-mix methodology results in 432 unique case-mix groups called 
home health resource groups (HHRGs). We also finalized in the CY 2019 
HH PPS final rule with comment period (83 FR 56515) to annually 
recalibrate the PDGM case-mix weights using a fixed effects model with 
the most recent and complete utilization data available at the time of 
annual rulemaking. Annual recalibration of the PDGM case-mix weights 
ensures that the case-mix weights reflect, as accurately as possible, 
current home health resource use and changes in utilization patterns. 
To generate the proposed recalibrated CY 2022 case-mix weights, we used 
CY 2020 home health claims data with linked OASIS data (as of March 30, 
2021). These data are the most current and complete data available at 
this time. We believe that recalibrating the case-mix weights using 
data from CY 2020 would be more reflective of PDGM utilization and 
patient resource use than case-mix weights that were set using 
simulated claims data of 60-day

[[Page 35898]]

episodes grouped under the old system. Using data from CY 2020 would 
begin to shift case-mix weights derived from data with 60-day episodes 
grouped under the old system to data from actual 30-day periods under 
the PDGM.
    The claims data provide visit-level data and data on whether NRS 
was provided during the period and the total charges of NRS. We 
determine the case-mix weight for each of the 432 different PDGM 
payment groups by regressing resource use on a series of indicator 
variables for each of the categories using a fixed effects model as 
described in the following steps:
    Step 1: Estimate a regression model to assign a functional 
impairment level to each 30-day period. The regression model estimates 
the relationship between a 30-day period's resource use and the 
functional status and risk of hospitalization items included in the 
PDGM, which are obtained from certain OASIS items. We refer readers to 
Table 11 for further information on the OASIS items used for the 
functional impairment level under the PDGM. We measure resource use 
with the cost-per-minute + NRS approach that uses information from 2019 
home health cost reports. We use 2019 home health cost report data 
because it is the most complete data available at the time of 
rulemaking. Other variables in the regression model include the 30-day 
period's admission source, clinical group, and 30-day period timing. We 
also include home health agency level fixed effects in the regression 
model. After estimating the regression model using 30-day periods, we 
divide the coefficients that correspond to the functional status and 
risk of hospitalization items by 10 and round to the nearest whole 
number. Those rounded numbers are used to compute a functional score 
for each 30-day period by summing together the rounded numbers for the 
functional status and risk of hospitalization items that are applicable 
to each 30-day period. Next, each 30-day period is assigned to a 
functional impairment level (low, medium, or high) depending on the 30-
day period's total functional score. Each clinical group has a separate 
set of functional thresholds used to assign 30-day periods into a low, 
medium or high functional impairment level. We set those thresholds so 
that we assign roughly a third of 30-day periods within each clinical 
group to each functional impairment level (low, medium, or high).
    Step 2: A second regression model estimates the relationship 
between a 30-day period's resource use and indicator variables for the 
presence of any of the comorbidities and comorbidity interactions that 
were originally examined for inclusion in the PDGM. Like the first 
regression model, this model also includes home health agency level 
fixed effects and includes control variables for each 30-day period's 
admission source, clinical group, timing, and functional impairment 
level. After we estimate the model, we assign comorbidities to the low 
comorbidity adjustment if any comorbidities have a coefficient that is 
statistically significant (p-value of 0.05 or less) and which have a 
coefficient that is larger than the 50th percentile of positive and 
statistically significant comorbidity coefficients. If two 
comorbidities in the model and their interaction term have coefficients 
that sum together to exceed $150 and the interaction term is 
statistically significant (p-value of 0.05 or less), we assign the two 
comorbidities together to the high comorbidity adjustment.
    Step 3: Hold the LUPA thresholds at their current thresholds as 
described previously in this proposed rule.
    Step 4: Take all non-LUPA 30-day periods and regress resource use 
on the 30-day period's clinical group, admission source category, 
episode timing category, functional impairment level, and comorbidity 
adjustment category. The regression includes fixed effects at the level 
of the home health agency. After we estimate the model, the model 
coefficients are used to predict each 30-day period's resource use. To 
create the case-mix weight for each 30- day period, the predicted 
resource use is divided by the overall resource use of the 30-day 
periods used to estimate the regression.
    The case-mix weight is then used to adjust the base payment rate to 
determine each 30-day period's payment. Table 17 shows the coefficients 
of the payment regression used to generate the weights, and the 
coefficients divided by average resource use.
BILLING CODE 4120-01-P

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[[Page 35900]]


    The case-mix weights proposed for CY 2022 are listed in Table 19 
and will also be posted on the HHA Center web page \10\ upon display of 
this proposed rule.
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    \10\ HHA Center web page: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center
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BILLING CODE 4120-01-C
    To ensure the changes to the PDGM case-mix weights are implemented 
in a budget neutral manner, we then apply a case-mix budget neutrality 
factor to the CY 2022 national, standardized 30-day period payment 
rate. Typically, the case-mix weight budget neutrality factor is 
calculated using the most recent, complete home health claims data 
available. However, due to the COVID-19 PHE, we looked at using the 
previous calendar year's home health claims data (CY 2019) to determine 
if there were significant differences between utilizing CY 2019 and CY 
2020 claims data. We note that CY 2020 is the first year of actual PDGM 
utilization data, therefore, if we were to use CY 2019 data due to the 
PHE we would need to simulate 30-day periods from 60-day episodes under 
the old system. We believe that using CY 2020 utilization data is more 
appropriate than using CY 2019 utilization data because it is actual 
PDGM utilization data. The case-mix budget neutrality factor is 
calculated as the ratio of 30-day base payment rates such that total 
payments when the CY 2022 PDGM case-mix weights

[[Page 35909]]

(developed using CY 2020 home health claims data) are applied to CY 
2020 utilization (claims) data are equal to total payments when CY 2021 
PDGM case-mix weights (developed using CY 2018 home health claims data) 
are applied to CY 2020 utilization data. This produces a case-mix 
budget neutrality factor for CY 2022 of 1.0344. For reasons described 
previously, CY 2020 utilization data was used to calculate the case-mix 
weight budget neutrality factor because it is the most recent complete 
data we have at the time of this rulemaking.
    We invite comments on the CY 2022 proposed case-mix weights and 
proposed case-mix weight budget neutrality factor.
4. Proposed CY 2022 Home Health Payment Rate Updates
a. Proposed CY 2022 Home Health Market Basket Update for HHAs
    Section 1895(b)(3)(B) of the Act requires that the standard 
prospective payment amounts for home health be increased by a factor 
equal to the applicable home health market basket update for those HHAs 
that submit quality data as required by the Secretary. In the CY 2019 
HH PPS final rule with comment period (83 FR 56425), we finalized a 
rebasing of the home health market basket to reflect 2016 cost report 
data. As such, based on the rebased 2016-based home health market 
basket, we finalized that the labor share is 76.1 percent and the non-
labor share is 23.9 percent. A detailed description of how we rebased 
the HHA market basket is available in the CY 2019 HH PPS final rule 
with comment period (83 FR 56425 through 56436).
    Section 1895(b)(3)(B) of the Act requires that in CY 2015 and in 
subsequent calendar years, except CY 2018 (under section 411(c) of the 
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 
114-10, enacted April 16, 2015)), and CY 2020 (under section 53110 of 
the Bipartisan Budget Act of 2018 (BBA) (Pub. L. 115-123, enacted 
February 9, 2018)), the market basket percentage under the HHA 
prospective payment system, as described in section 1895(b)(3)(B) of 
the Act, be annually adjusted by changes in economy-wide productivity. 
Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity 
adjustment to be equal to the 10-year moving average of changes in 
annual economy-wide private nonfarm business multifactor productivity 
(MFP) (as projected by the Secretary for the 10-year period ending with 
the applicable fiscal year, calendar year, cost reporting period, or 
other annual period). The Bureau of Labor Statistics (BLS) is the 
agency that publishes the official measure of private nonfarm business 
MFP. Please visit http://www.bls.gov/mfp, to obtain the BLS historical 
published MFP data.
    The proposed home health update percentage for CY 2022 is based on 
the estimated home health market basket update, specified at section 
1895(b)(3)(B)(iii) of the Act, of 2.4 percent (based on IHS Global 
Inc.'s first-quarter 2021 forecast with historical data through fourth-
quarter 2020). The estimated CY 2022 home health market basket update 
of 2.4 percent is then reduced by a productivity adjustment, as 
mandated by the section 3401 of the Patient Protection and Affordable 
Care Act (the Affordable Care Act) (Pub. L. 111-148), currently 
estimated to be 0.6 percentage point for CY 2022. In effect, the 
proposed home health payment update percentage for CY 2022 is a 1.8 
percent increase. Section 1895(b)(3)(B)(v) of the Act requires that the 
home health update be decreased by 2 percentage points for those HHAs 
that do not submit quality data as required by the Secretary. For HHAs 
that do not submit the required quality data for CY 2022, the home 
health payment update would be -0.2 percent (1.8 percent minus 2 
percentage points). If more recent data becomes available after the 
publication of this proposed rule and before the publication of the 
final rule (for example, more recent estimates of the home health 
market basket update and productivity adjustment), we would use such 
data, if appropriate, to determine the home health payment update 
percentage for CY 2022 in the final rule.
b. CY 2022 Home Health Wage Index
    Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the 
Secretary to provide appropriate adjustments to the proportion of the 
payment amount under the HH PPS that account for area wage differences, 
using adjustment factors that reflect the relative level of wages and 
wage-related costs applicable to the furnishing of home health 
services. Since the inception of the HH PPS, we have used inpatient 
hospital wage data in developing a wage index to be applied to home 
payments. We propose to continue this practice for CY 2022, as we 
continue to believe that, in the absence of home health-specific wage 
data that accounts for area differences, using inpatient hospital wage 
data is appropriate and reasonable for the HH PPS.
    In the FY 2021 HH PPS final rule (85 FR 70298), we finalized the 
proposal to adopt the revised OMB delineations with a 5 percent cap on 
wage index decreases, where the estimated reduction in a geographic 
area's wage index would be capped at 5 percent in CY 2021 only and no 
cap would be applied to wage index decreases for the second year (CY 
2022). Therefore, we propose to use the FY 2022 pre-floor, pre-
reclassified hospital wage index with no 5 percent cap on decreases as 
the CY 2022 wage adjustment to the labor portion of the HH PPS rates. 
For CY 2022, the updated wage data are for hospital cost reporting 
periods beginning on or after October 1, 2017, and before October 1, 
2018 (FY 2018 cost report data). We apply the appropriate wage index 
value to the labor portion of the HH PPS rates based on the site of 
service for the beneficiary (defined by section 1861(m) of the Act as 
the beneficiary's place of residence).
    To address those geographic areas in which there are no inpatient 
hospitals, and thus, no hospital wage data on which to base the 
calculation of the CY 2022 HH PPS wage index, we propose to continue to 
use the same methodology discussed in the CY 2007 HH PPS final rule (71 
FR 65884) to address those geographic areas in which there are no 
inpatient hospitals. For rural areas that do not have inpatient 
hospitals, we propose to use the average wage index from all contiguous 
Core Based Statistical Areas (CBSAs) as a reasonable proxy. Currently, 
the only rural area without a hospital from which hospital wage data 
could be derived is Puerto Rico. However, for rural Puerto Rico, we do 
not apply this methodology due to the distinct economic circumstances 
that exist there (for example, due to the close proximity to one 
another of almost all of Puerto Rico's various urban and non-urban 
areas, this methodology would produce a wage index for rural Puerto 
Rico that is higher than that in half of its urban areas). Instead, we 
propose to continue to use the most recent wage index previously 
available for that area. The most recent wage index previously 
available for rural Puerto Rico is 0.4047. For urban areas without 
inpatient hospitals, we use the average wage index of all urban areas 
within the State as a reasonable proxy for the wage index for that 
CBSA. For CY 2022, the only urban area without inpatient hospital wage 
data is Hinesville, GA (CBSA 25980). The CY 2022 wage index value for 
Hinesville, GA is 0.8557.
    On February 28, 2013, OMB issued Bulletin No. 13-01, announcing 
revisions to the delineations of MSAs, Micropolitan Statistical Areas, 
and CBSAs, and guidance on uses of the

[[Page 35910]]

delineation of these areas. In the CY 2015 HH PPS final rule (79 FR 
66085 through 66087), we adopted OMB's area delineations using a 1-year 
transition.
    On August 15, 2017, OMB issued Bulletin No. 17-01 in which it 
announced that one Micropolitan Statistical Area, Twin Falls, Idaho, 
now qualifies as a Metropolitan Statistical Area. The new CBSA (46300) 
comprises the principal city of Twin Falls, Idaho in Jerome County, 
Idaho and Twin Falls County, Idaho. The CY 2022 HH PPS wage index value 
for CBSA 46300, Twin Falls, Idaho, will be 0.8757. Bulletin No. 17-01 
is available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.
    On April 10, 2018 OMB issued OMB Bulletin No. 18-03 which 
superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14, 
2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10, 
2018 OMB Bulletin No. 18-03. These bulletins established revised 
delineations for Metropolitan Statistical Areas, Micropolitan 
Statistical Areas, and Combined Statistical Areas, and provided 
guidance on the use of the delineations of these statistical areas. A 
copy of OMB Bulletin No. 18-04 may be obtained at: https://www.bls.gov/bls/omb-bulletin-18-04-revised-delineations-of-metropolitan-statistical-areas.pdf.
    On March 6, 2020, OMB issued Bulletin No. 20-01, which provided 
updates to and superseded OMB Bulletin No. 18-04 that was issued on 
September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided 
detailed information on the update to statistical areas since September 
14, 2018, and were based on the application of the 2010 Standards for 
Delineating Metropolitan and Micropolitan Statistical Areas to Census 
Bureau population estimates for July 1, 2017 and July 1, 2018. (For a 
copy of this bulletin, we refer readers to https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). In OMB Bulletin No. 20-
01, OMB announced one new Micropolitan Statistical Area, one new 
component of an existing Combined Statistical Are and changes to New 
England City and Town Area (NECTA) delineations. In the CY 2021 HH PPS 
final rule (85 FR 70298) we stated that if appropriate, we would 
propose any updates from OMB Bulletin No. 20-01 in future rulemaking. 
After reviewing OMB Bulletin No. 20-01, we have determined that the 
changes in Bulletin 20-01 encompassed delineation changes that would 
not affect the Medicare wage index for CY 2022. Specifically, the 
updates consisted of changes to NECTA delineations and the 
redesignation of a single rural county into a newly created 
Micropolitan Statistical Area. The Medicare wage index does not utilize 
NECTA definitions, and, as most recently discussed in the CY 2021 HH 
PPS final rule (85 FR 70298) we include hospitals located in 
Micropolitan Statistical areas in each State's rural wage index. 
Therefore, while we are proposing to adopt the updates set forth in OMB 
Bulletin No. 20-01 consistent with our longstanding policy of adopting 
OMB delineation updates, we note that specific wage index updates would 
not be necessary for CY 2022 as a result of adopting these OMB updates. 
In other words, these OMB updates would not affect any geographic areas 
for purposes of the wage index calculation for CY 2022.
    The proposed CY 2022 wage index is available on the CMS website at: 
https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
c. CY 2022 Annual Payment Update
(1) Background
    The HH PPS has been in effect since October 1, 2000. As set forth 
in the July 3, 2000 final rule (65 FR 41128), the base unit of payment 
under the HH PPS was a national, standardized 60-day episode payment 
rate. As finalized in the CY 2019 HH PPS final rule with comment period 
(83 FR 56406), and as described in the CY 2020 HH PPS final rule with 
comment period (84 FR 60478), the unit of home health payment changed 
from a 60-day episode to a 30-day period effective for those 30-day 
periods beginning on or after January 1, 2020.
    As set forth in Sec.  484.220, we adjust the national, standardized 
prospective payment rates by a case-mix relative weight and a wage 
index value based on the site of service for the beneficiary. To 
provide appropriate adjustments to the proportion of the payment amount 
under the HH PPS to account for area wage differences, we apply the 
appropriate wage index value to the labor portion of the HH PPS rates. 
In the CY 2019 HH PPS final rule with comment period (83 FR 56435), we 
finalized rebasing the home health market basket to reflect 2016 
Medicare cost report data. We also finalized a revision to the labor 
share to reflect the 2016-based home health market basket compensation 
(Wages and Salaries plus Benefits) cost weight. We finalized that for 
CY 2019 and subsequent years, the labor share would be 76.1 percent and 
the non-labor share would be 23.9 percent. The following are the steps 
we take to compute the case-mix and wage-adjusted 30-day period payment 
amount for CY 2021:
     Multiply the national, standardized 30-day period rate by 
the patient's applicable case-mix weight.
     Divide the case-mix adjusted amount into a labor (76.1 
percent) and a non-labor portion (23.9 percent).
     Multiply the labor portion by the applicable wage index 
based on the site of service of the beneficiary.
     Add the wage-adjusted portion to the non-labor portion, 
yielding the case-mix and wage adjusted 30-day period payment amount, 
subject to any additional applicable adjustments.
    We provide annual updates of the HH PPS rate in accordance with 
section 1895(b)(3)(B) of the Act. Section 484.225 sets forth the 
specific annual percentage update methodology. In accordance with 
section 1895(b)(3)(B)(v) of the Act and Sec.  484.225(i), for an HHA 
that does not submit home health quality data, as specified by the 
Secretary, the unadjusted national prospective 30-day period rate is 
equal to the rate for the previous calendar year increased by the 
applicable home health payment update, minus 2 percentage points. Any 
reduction of the percentage change would apply only to the calendar 
year involved and would not be considered in computing the prospective 
payment amount for a subsequent calendar year.
    The final claim that the HHA submits for payment determines the 
total payment amount for the period and whether we make an applicable 
adjustment to the 30-day case-mix and wage-adjusted payment amount. The 
end date of the 30-day period, as reported on the claim, determines 
which calendar year rates Medicare will use to pay the claim.
    We may adjust a 30-day case-mix and wage-adjusted payment based on 
the information submitted on the claim to reflect the following:
     A LUPA is provided on a per-visit basis as set forth in 
Sec. Sec.  484.205(d)(1) and 484.230.
     A PEP adjustment as set forth in Sec. Sec.  484.205(d)(2) 
and 484.235.
     An outlier payment as set forth in Sec. Sec.  
484.205(d)(3) and 484.240.
(2) CY 2022 National, Standardized 30-Day Period Payment Amount
    CMS provided preliminary monitoring data for the first year of PDGM 
and presented a repricing method to determine the differences between 
assumed and actual behavior changes and the impact of such on estimated 
aggregate expenditures, as discussed in Section III.B of this

[[Page 35911]]

proposed rule. For CY 2022, we are not proposing to make any additional 
permanent or temporary adjustments to the national, standardized 30-day 
period payment in this proposed rule in accordance with section 
1895(b)(3)(D) of the Act.
    Section 1895(b)(3)(A)(i) of the Act requires that the standard 
prospective payment rate and other applicable amounts be standardized 
in a manner that eliminates the effects of variations in relative case-
mix and area wage adjustments among different home health agencies in a 
budget-neutral manner. To determine the CY 2022 national, standardized 
30-day period payment rate, we apply a case-mix weights recalibration 
budget neutrality factor, a wage index budget neutrality factor and the 
home health payment update percentage discussed in Section III.C.2 of 
this proposed rule. As discussed previously, to ensure the changes to 
the PDGM case-mix weights are implemented in a budget neutral manner, 
we apply a case-mix weights budget neutrality factor to the CY 2021 
national, standardized 30-day period payment rate. The proposed case-
mix weights budget neutrality factor for CY 2022 is 1.0344.
    Additionally, we also apply a wage index budget neutrality to 
ensure that wage index updates and revisions are implemented in a 
budget neutral manner. Typically, the wage index budget neutrality 
factor is calculated using the most recent, complete home health claims 
data available. However, due to the COVID-19 PHE, we looked at using 
the previous calendar year's home health claims data (CY 2019) to 
determine if there were significant differences between utilizing 2019 
and 2020 claims data. Our analysis showed that there is only a small 
difference between the wage index budget neutrality factors calculated 
using CY 2019 and CY 2020 home health claims data. Therefore, we have 
decided to continue our practice of using the most recent, complete 
home health claims data available; that is we are using CY 2020 claims 
data for the CY 2022 payment rate updates.
    To calculate the wage index budget neutrality factor, we simulated 
total payments using CY 2020 home health claims utilization data for 
non-LUPA 30-day periods using the proposed CY 2022 wage index and 
compared it to our simulation of total payments for non-LUPA 30-day 
periods using the CY 2021 wage index. By dividing the total payments 
for non-LUPA 30-day periods using the CY 2022 wage index by the total 
payments for non-LUPA 30-day periods using the CY 2021 wage index, we 
obtain a wage index budget neutrality factor of 1.0013. We would apply 
the wage index budget neutrality factor of 1.0013 to the 30-day period 
payment rate.
    Next, we would update the 30-day period payment rate by the CY 2022 
home health payment update percentage of 1.8 percent. The CY 2022 
national, standardized 30-day period payment rate is calculated in 
Table 19.
[GRAPHIC] [TIFF OMITTED] TP07JY21.031

    The CY 2022 national, standardized 30-day period payment rate for a 
HHA that does not submit the required quality data is updated by the CY 
2022 home health payment update of 1.8 percent minus 2 percentage 
points and is shown in Table 20.
[GRAPHIC] [TIFF OMITTED] TP07JY21.032

(3) CY 2022 National Per-Visit Rates for 30-Day Periods of Care
    The national per-visit rates are used to pay LUPAs and are also 
used to compute imputed costs in outlier calculations. The per-visit 
rates are paid by type of visit or HH discipline. The six HH 
disciplines are as follows:
     Home health aide (HH aide).
     Medical Social Services (MSS).
     Occupational therapy (OT).
     Physical therapy (PT).
     Skilled nursing (SN).
     Speech-language pathology (SLP).
    To calculate the CY 2022 national per-visit rates, we started with 
the CY 2021 national per-visit rates. Then we applied a wage index 
budget neutrality factor to ensure budget neutrality for LUPA per-

[[Page 35912]]

visit payments. We calculated the wage index budget neutrality factor 
by simulating total payments for LUPA 30-day periods of care using the 
CY 2022 wage index and comparing it to simulated total payments for 
LUPA 30-day periods of care using the CY 2021 wage index. By dividing 
the total payments for LUPA 30-day periods of care using the CY 2022 
wage index by the total payments for LUPA 30-day periods of care using 
the CY 2021 wage index, we obtained a wage index budget neutrality 
factor of 1.0014. We apply the wage index budget neutrality factor in 
order to calculate the CY 2022 national per-visit rates.
    The LUPA per-visit rates are not calculated using case-mix weights. 
Therefore, no case-mix weights budget neutrality factor is needed to 
ensure budget neutrality for LUPA payments. Lastly, the per-visit rates 
for each discipline are updated by the CY 2022 home health payment 
update percentage of 1.8 percent. The national per-visit rates are 
adjusted by the wage index based on the site of service of the 
beneficiary. The per-visit payments for LUPAs are separate from the 
LUPA add-on payment amount, which is paid for episodes that occur as 
the only episode or initial episode in a sequence of adjacent episodes. 
The CY 2022 national per-visit rates for HHAs that submit the required 
quality data are updated by the CY 2022 home health payment update 
percentage of 1.8 percent and are shown in Table 21.
[GRAPHIC] [TIFF OMITTED] TP07JY21.033

    The CY 2022 per-visit payment rates for HHAs that do not submit the 
required quality data are updated by the CY 2020 home health payment 
update percentage of 1.8 percent minus 2 percentage points and are 
shown in Table 22.
[GRAPHIC] [TIFF OMITTED] TP07JY21.034

    We are reminding stakeholders of the policies finalized in the CY 
2020 HH PPS final rule with comment period (84 FR 60544) and the 
implementation of a new one-time Notice of Admission (NOA) process 
starting in CY 2022. In that final rule, we finalized the lowering of 
the up-front payment made in response to Requests for Anticipated 
Payment (RAPs) to zero percent for all 30-day periods of care beginning 
on or after January 1, 2021 (84 FR 60544). For CY 2021, all HHAs (both 
existing and newly-enrolled HHAs) were required to submit a RAP at the 
beginning of each 30-day period in order to establish the home health 
period of care in the common working file and also to trigger the 
consolidated billing edits. With the removal of the upfront RAP payment 
for CY 2021, we relaxed the required information for submitting the RAP 
for CY 2021 and also stated that the information required for 
submitting an NOA for CYs 2022 and beyond would mirror that of the RAP 
in CY 2021. Starting in CY 2022, HHAs will submit a one-time NOA that 
establishes the home health period of care and covers all contiguous 
30-day periods of care until the individual is discharged from Medicare 
home health services. Also, for the one-time NOA for CYs 2022 and

[[Page 35913]]

beyond, we finalized a payment reduction if the HHA does not submit the 
NOA for CYs 2022 and beyond within 5 calendar days from the start of 
care. That is, if an HHA fails to submit a timely NOA for CYs 2022 and 
beyond, the reduction in payment amount would be equal to a one-
thirtieth reduction to the wage and case-mix adjusted 30-day period 
payment amount for each day from the home health start of care date 
until the date the HHA submitted the NOA. In other words, the one-
thirtieth reduction would be to the 30-day period adjusted payment 
amount, including any outlier payment, that the HHA otherwise would 
have received absent any reduction. For LUPA 30-day periods of care in 
which an HHA fails to submit a timely NOA, no LUPA payments would be 
made for days that fall within the period of care prior to the 
submission of the NOA. We stated that these days would be a provider 
liability, the payment reduction could not exceed the total payment of 
the claim, and that the provider may not bill the beneficiary for these 
days.
    We remind stakeholders that for purposes of determining if an NOA 
is timely-filed, the NOA must be submitted within 5 calendar days after 
the start of care for the first 30-day period of care. For example, if 
the start of care for the first 30-day period is January 1, 2022, the 
NOA would be considered timely-filed if it is submitted on or before 
January 6, 2022.
Example
    1/1/2022 = Day 0 (start of the first 30- day period of care)
    1/6/2022 = Day 5 (An NOA submitted on or before this date would be 
considered ``timely-filed''.)
    1/7/2022 and after = Day 6 and beyond (An NOA submitted on and 
after this date will trigger the penalty.) In the event that the NOA is 
not timely-filed, the penalty is calculated from the first day of that 
30-day period (in the example, the penalty calculation would begin with 
the start of care date of January 1, 2022, counting as the first day of 
the penalty) until the date of the submission of the NOA.
    Also, in the CY 2020 HH PPS final rule with comment period (84 FR 
60478), we finalized exceptions to the timely filing consequences of 
the NOA requirements at Sec.  484.205(j)(4). Specifically, we finalized 
that CMS may waive the consequences of failure to submit a timely-filed 
NOA if it is determined that a circumstance encountered by a home 
health agency is exceptional and qualifies for waiver of the 
consequence. As finalized in the CY 2020 HH PPS final rule with comment 
period and as set forth in regulation at Sec.  484.205(j)(4), an 
exceptional circumstance may be due to, but is not limited to the 
following:
     Fires, floods, earthquakes, or similar unusual events that 
inflict extensive damage to the home health agency's ability to 
operate.
     A CMS or Medicare contractor systems issue that is beyond 
the control of the home health agency.
     A newly Medicare-certified home health agency that is 
notified of that certification after the Medicare certification date, 
or which is awaiting its user ID from its Medicare contractor.
     Other situations determined by CMS to be beyond the 
control of the home health agency.
    If an HHA believes that there is a circumstance that may qualify 
for an exception, the HHA must fully document and furnish any requested 
documentation to their MAC for a determination of exception.
    For more in-depth information regarding the finalized policies 
associated with the new one-time NOA process, we refer readers to the 
CY 2020 HH PPS final rule with comment period (84 FR 60544) as well as 
the regulations at Sec.  484.205(j).
(4) LUPA Add-On Factors
    Prior to the implementation of the 30-day unit of payment, LUPA 
episodes were eligible for a LUPA add-on payment if the episode of care 
was the first or only episode in a sequence of adjacent episodes. As 
stated in the CY 2008 HH PPS final rule, the average visit lengths in 
these initial LUPAs are 16 to 18 percent higher than the average visit 
lengths in initial non-LUPA episodes (72 FR 49848). LUPA episodes that 
occur as the only episode or as an initial episode in a sequence of 
adjacent episodes are adjusted by applying an additional amount to the 
LUPA payment before adjusting for area wage differences. In the CY 2014 
HH PPS final rule (78 FR 72305), we changed the methodology for 
calculating the LUPA add-on amount by finalizing the use of three LUPA 
add-on factors: 1.8451 for SN; 1.6700 for PT; and 1.6266 for SLP. We 
multiply the per-visit payment amount for the first SN, PT, or SLP 
visit in LUPA episodes that occur as the only episode or an initial 
episode in a sequence of adjacent episodes by the appropriate factor to 
determine the LUPA add-on payment amount.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56440), 
in addition to finalizing a 30-day unit of payment, we finalized our 
policy of continuing to multiply the per-visit payment amount for the 
first skilled nursing, physical therapy, or speech-language pathology 
visit in LUPA periods that occur as the only period of care or the 
initial 30-day period of care in a sequence of adjacent 30-day periods 
of care by the appropriate add-on factor (1.8451 for SN, 1.6700 for PT, 
and 1.6266 for SLP) to determine the LUPA add-on payment amount for 30-
day periods of care under the PDGM. For example, using the proposed CY 
2022 per-visit payment rates for those HHAs that submit the required 
quality data, for LUPA periods that occur as the only period or an 
initial period in a sequence of adjacent periods, if the first skilled 
visit is SN, the payment for that visit would be $287.06 (1.8451 
multiplied by $155.58), subject to area wage adjustment.
(5) Proposed Occupational Therapy LUPA Add-On Factor
    In order to implement Division CC, section 115, of CAA 2021, we are 
proposing conforming changes to regulations at Sec. Sec.  484.55(a)(2) 
and 484.55(b)(3) that were revised to allow OTs to conduct initial and 
comprehensive assessments for all Medicare beneficiaries under the home 
health benefit when the plan of care does not initially include skilled 
nursing care, but includes either PT or SLP. Because of this change, we 
are proposing to establish a LUPA add-on factor for calculating the 
LUPA add-on payment amount for the first skilled occupational therapy 
visit in LUPA periods that occurs as the only period of care or the 
initial 30-day period of care in a sequence of adjacent 30-day periods 
of care. Currently, there are no sufficient data regarding the average 
excess of minutes for the first visit in LUPA periods where the initial 
and comprehensive assessments are conducted by occupational therapists. 
Therefore, we propose to utilize the PT LUPA add-on factor of 1.6700 as 
a proxy until we have CY 2022 data to establish a more accurate OT add-
on factor for the LUPA add-on payment amounts. We believe that the 
similarity in the per-visit payment rates for both PT and OT make the 
PT LUPA add-on factor the most appropriate proxy. We welcome comments 
on this proposal.
d. Rural Add-On Payments for CY 2022
(1) Background
    Section 421(a) of the Medicare Prescription Drug Improvement and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) required, for home 
health services furnished in a rural area (as defined in section 
1886(d)(2)(D) of the Act), for episodes or visits ending on or

[[Page 35914]]

after April 1, 2004, and before April 1, 2005, that the Secretary 
increase the payment amount that otherwise would have been made under 
section 1895 of the Act for the services by 5 percent. Section 5201 of 
the Deficit Reduction Act of 2003 (DRA) (Pub. L. 108-171) amended 
section 421(a) of the MMA. The amended section 421(a) of the MMA 
required, for home health services furnished in a rural area (as 
defined in section 1886(d)(2)(D) of the Act), on or after January 1, 
2006, and before January 1, 2007, that the Secretary increase the 
payment amount otherwise made under section 1895 of the Act for those 
services by 5 percent.
    Section 3131(c) of the Affordable Care Act amended section 421(a) 
of the MMA to provide an increase of 3 percent of the payment amount 
otherwise made under section 1895 of the Act for home health services 
furnished in a rural area (as defined in section 1886(d)(2)(D) of the 
Act), for episodes and visits ending on or after April 1, 2010, and 
before January 1, 2016. Section 210 of the MACRA amended section 421(a) 
of the MMA to extend the rural add-on by providing an increase of 3 
percent of the payment amount otherwise made under section 1895 of the 
Act for home health services provided in a rural area (as defined in 
section 1886(d)(2)(D) of the Act), for episodes and visits ending 
before January 1, 2018.
    Section 50208(a) of the BBA of 2018 amended section 421(a) of the 
MMA to extend the rural add-on by providing an increase of 3 percent of 
the payment amount otherwise made under section 1895 of the Act for 
home health services provided in a rural area (as defined in section 
1886(d)(2)(D) of the Act), for episodes and visits ending before 
January 1, 2019.
(2) Rural Add-On Payments for CYs 2019 Through CY 2022
    Section 50208(a)(1)(D) of the BBA of 2018 added a new subsection 
(b) to section 421 of the MMA to provide rural add-on payments for 
episodes or visits ending during CYs 2019 through 2022. It also 
mandated implementation of a new methodology for applying those 
payments. Unlike previous rural add-ons, which were applied to all 
rural areas uniformly, the extension provided varying add-on amounts 
depending on the rural county (or equivalent area) classification by 
classifying each rural county (or equivalent area) into one of three 
distinct categories: (1) Rural counties and equivalent areas in the 
highest quartile of all counties and equivalent areas based on the 
number of Medicare home health episodes furnished per 100 individuals 
who are entitled to, or enrolled for, benefits under Part A of Medicare 
or enrolled for benefits under Part B of Medicare only, but not 
enrolled in a Medicare Advantage plan under Part C of Medicare (the 
``High utilization'' category); (2) rural counties and equivalent areas 
with a population density of 6 individuals or fewer per square mile of 
land area and are not included in the ``High utilization'' category 
(the ``Low population density'' category); and (3) rural counties and 
equivalent areas not in either the ``High utilization'' or ``Low 
population density'' categories (the ``All other'' category).
    In the CY 2019 HH PPS final rule with comment period (83 FR 56443), 
CMS finalized policies for the rural add-on payments for CY 2019 
through CY 2022, in accordance with section 50208 of the BBA of 2018. 
The CY 2019 HH PPS proposed rule (83 FR 32373) described the provisions 
of the rural add-on payments, the methodology for applying the new 
payments, and outlined how we categorized rural counties (or equivalent 
areas) based on claims data, the Medicare Beneficiary Summary File and 
Census data. The data used to categorize each county or equivalent area 
is available in the Downloads section associated with the publication 
of this rule at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices.html. In addition, an Excel file containing the 
rural county or equivalent area name, their Federal Information 
Processing Standards (FIPS) State and county codes, and their 
designation into one of the three rural add-on categories is available 
for download.
    The HH PRICER module, located within CMS' claims processing system, 
will increase the CY 2022 30-day base payment rates, described in 
section III.C.3. of this proposed rule, by the appropriate rural add-on 
percentage prior to applying any case-mix and wage index adjustments. 
The CY 2019 through CY 2022 rural add-on percentages outlined in law 
are shown in Table 23.
[GRAPHIC] [TIFF OMITTED] TP07JY21.035

e. Proposed Payments for High-Cost Outliers Under the HH PPS
(1) Background
    Section 1895(b)(5) of the Act allows for the provision of an 
addition or adjustment to the home health payment amount otherwise made 
in the case of outliers because of unusual variations in the type or 
amount of medically necessary care. Under the HH PPS and the previous 
unit of payment (that is, 60-day episodes), outlier payments were made 
for 60-day episodes whose estimated costs exceed a threshold amount for 
each Home Health Resource Group (HHRG). The episode's estimated cost 
was established as the sum of the national wage-adjusted per visit 
payment amounts delivered during the episode. The outlier threshold for 
each case-mix group or PEP adjustment defined as the 60-day episode 
payment or PEP adjustment for that group plus a fixed-dollar loss (FDL) 
amount. For the purposes of the HH PPS, the FDL amount is calculated by 
multiplying the home health FDL ratio by a case's wage-adjusted 
national, standardized 60-day episode payment rate, which yields an FDL 
dollar amount for the case. The outlier threshold amount is the sum of 
the wage and case-mix adjusted PPS episode amount and wage-adjusted FDL 
amount. The outlier payment is defined to be a proportion of the wage-
adjusted estimated cost that surpasses the wage-adjusted threshold. The 
proportion of additional costs over the outlier

[[Page 35915]]

threshold amount paid as outlier payments is referred to as the loss-
sharing ratio.
    As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through 
70399), section 3131(b)(1) of the Affordable Care Act amended section 
1895(b)(3)(C) of the Act to require that the Secretary reduce the HH 
PPS payment rates such that aggregate HH PPS payments were reduced by 5 
percent. In addition, section 3131(b)(2) of the Affordable Care Act 
amended section 1895(b)(5) of the Act by redesignating the existing 
language as section 1895(b)(5)(A) of the Act and revised the language 
to state that the total amount of the additional payments or payment 
adjustments for outlier episodes could not exceed 2.5 percent of the 
estimated total HH PPS payments for that year. Section 3131(b)(2)(C) of 
the Affordable Care Act also added section 1895(b)(5)(B) of the Act, 
which capped outlier payments as a percent of total payments for each 
HHA for each year at 10 percent.
    As such, beginning in CY 2011, we reduced payment rates by 5 
percent and targeted up to 2.5 percent of total estimated HH PPS 
payments to be paid as outliers. To do so, we first returned the 2.5 
percent held for the target CY 2010 outlier pool to the national, 
standardized 60-day episode rates, the national per visit rates, the 
LUPA add-on payment amount, and the NRS conversion factor for CY 2010. 
We then reduced the rates by 5 percent as required by section 
1895(b)(3)(C) of the Act, as amended by section 3131(b)(1) of the 
Affordable Care Act. For CY 2011 and subsequent calendar years we 
targeted up to 2.5 percent of estimated total payments to be paid as 
outlier payments, and apply a 10-percent agency-level outlier cap.
    In the CY 2017 HH PPS proposed and final rules (81 FR 43737 through 
43742 and 81 FR 76702), we described our concerns regarding patterns 
observed in home health outlier episodes. Specifically, we noted the 
methodology for calculating home health outlier payments may have 
created a financial incentive for providers to increase the number of 
visits during an episode of care in order to surpass the outlier 
threshold; and simultaneously created a disincentive for providers to 
treat medically complex beneficiaries who require fewer but longer 
visits. Given these concerns, in the CY 2017 HH PPS final rule (81 FR 
76702), we finalized changes to the methodology used to calculate 
outlier payments, using a cost-per-unit approach rather than a cost-
per-visit approach. This change in methodology allows for more accurate 
payment for outlier episodes, accounting for both the number of visits 
during an episode of care and the length of the visits provided. Using 
this approach, we now convert the national per-visit rates into per 15-
minute unit rates. These per 15-minute unit rates are used to calculate 
the estimated cost of an episode to determine whether the claim will 
receive an outlier payment and the amount of payment for an episode of 
care. In conjunction with our finalized policy to change to a cost-per-
unit approach to estimate episode costs and determine whether an 
outlier episode should receive outlier payments, in the CY 2017 HH PPS 
final rule we also finalized the implementation of a cap on the amount 
of time per day that would be counted toward the estimation of an 
episode's costs for outlier calculation purposes (81 FR 76725). 
Specifically, we limit the amount of time per day (summed across the 
six disciplines of care) to 8 hours (32 units) per day when estimating 
the cost of an episode for outlier calculation purposes.
    In the CY 2017 HH PPS final rule (81 FR 76724), we stated that we 
did not plan to re-estimate the average minutes per visit by discipline 
every year. Additionally, the per unit rates used to estimate an 
episode's cost were updated by the home health update percentage each 
year, meaning we would start with the national per visit amounts for 
the same calendar year when calculating the cost-per-unit used to 
determine the cost of an episode of care (81 FR 76727). We will 
continue to monitor the visit length by discipline as more recent data 
becomes available, and may propose to update the rates as needed in the 
future.
    In the CY 2019 HH PPS final rule with comment period (83 FR 56521), 
we finalized a policy to maintain the current methodology for payment 
of high-cost outliers upon implementation of PDGM beginning in CY 2020 
and calculated payment for high-cost outliers based upon 30-day period 
of care. Upon implementation of the PDGM and 30-day unit of payment, we 
finalized the FDL ratio of 0.56 for 30-day periods of care in CY 2020. 
Given that CY 2020 was the first year of the PDGM and the change to a 
30-day unit of payment, we finalized to maintain the same FDL ratio of 
0.56 in CY 2021 as we did not have sufficient CY 2020 data at the time 
of CY 2021 rulemaking to proposed a change to the FDL ratio for CY 
2021.
(2) Fixed Dollar Loss (FDL) Ratio for CY 2022
    For a given level of outlier payments, there is a trade-off between 
the values selected for the FDL ratio and the loss-sharing ratio. A 
high FDL ratio reduces the number of periods that can receive outlier 
payments, but makes it possible to select a higher loss-sharing ratio, 
and therefore, increase outlier payments for qualifying outlier 
periods. Alternatively, a lower FDL ratio means that more periods can 
qualify for outlier payments, but outlier payments per period must be 
lower.
    The FDL ratio and the loss-sharing ratio are selected so that the 
estimated total outlier payments do not exceed the 2.5 percent 
aggregate level (as required by section 1895(b)(5)(A) of the Act). 
Historically, we have used a value of 0.80 for the loss-sharing ratio, 
which, we believe, preserves incentives for agencies to attempt to 
provide care efficiently for outlier cases. With a loss-sharing ratio 
of 0.80, Medicare pays 80 percent of the additional estimated costs 
that exceed the outlier threshold amount. Using CY 2020 claims data (as 
of March 30, 2021), and given the statutory requirement that total 
outlier payments does not exceed 2.5 percent of the total payments 
estimated to be made under the HH PPS, we are proposing a FDL ratio of 
0.41 for CY 2022.
6. Conforming Regulations Text Changes Regarding Allowed Practitioners
    As stated in the May 2020 COVID-19 interim final rule with comment 
period (85 FR 27550), we amended the regulations at parts 409, 424, and 
484 to implement section 3708 of the CARES Act. This included defining 
a nurse practitioner (NP), a clinical nurse specialist (CNS), and a 
physician's assistant (PA) (as such qualifications are defined at 
Sec. Sec.  410.74 through 410.76) as ``allowed practitioners'' (85 FR 
27572). This means that in addition to a physician, as defined at 
section 1861(r) of the Act, an allowed practitioner may certify, 
establish and periodically review the plan of care, as well as 
supervise the provision of items and services for beneficiaries under 
the Medicare home health benefit. Additionally, we amended the 
regulations to reflect that we would expect the allowed practitioner to 
also perform the face-to-face encounter for the patient for whom they 
are certifying eligibility; however, if a face-to-face encounter is 
performed by a physician or an allowed non-physician practitioner 
(NPP), as set forth in Sec.  424.22(a)(1)(v)(A), in an acute or post-
acute facility, from which the patient was directly admitted to home 
health, the certifying allowed practitioner may be different from the 
provider physician or allowed practitioner that performed the face-to-
face encounter. These regulations text changes are not time

[[Page 35916]]

limited to the period of the COVID-19 PHE.
    When implementing plan of care changes in the CY 2021 HH PPS final 
rule (85 FR 70298), the term ``allowed practitioner'' was inadvertently 
deleted from the regulation text at Sec.  409.43. Therefore, in this 
proposed rule we are proposing conforming regulations text changes at 
Sec.  409.43 to reflect that allowed practitioners, in addition to 
physicians, may establish and periodically review the plan of care.

III. Home Health Value-Based Purchasing (HHVBP) Model

A. Proposal To Expand the HHVBP Model Nationwide

1. Background
    As authorized by section 1115A of the Act and finalized in the CY 
2016 HH PPS final rule (80 FR 68624), the CMS Center for Medicare and 
Medicaid Innovation (Innovation Center) implemented the Home Health 
Value-Based Purchasing Model (original Model) in nine States on January 
1, 2016. The last year of data collection for the original Model ended 
on December 31, 2020. The original Model design leveraged the successes 
of and lessons learned from other value-based purchasing programs and 
demonstrations to shift from volume-based payments to a Model designed 
to promote the delivery of higher quality care to Medicare 
beneficiaries. The specific goals of the original Model were to: (1) 
Provide incentives for better quality care with greater efficiency; (2) 
study new potential quality and efficiency measures for appropriateness 
in the home health setting; and (3) enhance the current public 
reporting process.
    Using the randomized selection methodology finalized in the CY 2016 
HH PPS final rule, we selected nine States for inclusion in the 
original HHVBP Model, representing each geographic area across the 
nation. All Medicare-certified home health agencies (HHAs) providing 
services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, 
North Carolina, Tennessee, and Washington were required to compete in 
the original Model. We stated that requiring all Medicare-certified 
HHAs in the selected States to participate in the Model ensures that 
there is no selection bias, participants are representative of HHAs 
nationally, and there would be sufficient participation to generate 
meaningful results.
    The original Model uses the waiver authority under section 
1115A(d)(1) of the Act to adjust the Medicare payment amounts under 
section 1895(b) of the Act based on the competing HHAs' performance on 
applicable quality measures. Under the original Model, CMS adjusts fee-
for-service payments to Medicare-certified HHAs based on each HHA's 
performance on a set of quality measures in a given performance year 
measured against a baseline year and relative to peers in its State. 
The maximum payment adjustment percentage increased incrementally, 
upward or downward, over the course of the original Model in the 
following manner: (1) 3 percent in CY 2018; (2) 5 percent in CY 2019; 
(3) 6 percent in CY 2020; (4) 7 percent in CY 2021; and (5) 8 percent 
in CY 2022. Payment adjustments are based on each HHA's Total 
Performance Score (TPS) in a given performance year, which is comprised 
of performance on: (1) A set of measures already reported via the 
Outcome and Assessment Information Set (OASIS),\11\ completed Home 
Health Consumer Assessment of Healthcare Providers and Systems 
(HHCAHPS) surveys, and claims-based measures; and (2) three New 
Measures for which points were achieved for reporting data. Payment 
adjustments for a given year are based on the TPS calculated for 
performance two years' prior; for example, the CY 2018 payment 
adjustments were based on CY 2016 performance.
---------------------------------------------------------------------------

    \11\ OASIS is the instrument/data collection tool used to 
collect and report performance data by HHAs.
---------------------------------------------------------------------------

    In the CY 2017 HH PPS final rule (81 FR 76741 through 76752), CY 
2018 HH PPS final rule (83 FR 51701 through 51706), and CY 2019 HH PPS 
final rule (83 FR 56527 through 56547), we finalized changes to the 
original Model. Some of those changes included adding and removing 
measures from the applicable measure set, revising our methodology for 
calculating benchmarks and achievement thresholds at the State level, 
creating an appeals process for recalculation requests, and revising 
our methodologies for weighting measures and assigning improvement 
points.
    On January 8, 2021, we announced that the HHVBP Model had been 
certified for expansion nationwide,\12\ as well as our intent to expand 
the Model through notice and comment rulemaking beginning no sooner 
than CY 2022. The original Model has resulted in an average 4.6 percent 
improvement in home health agencies' quality scores as well as average 
annual savings of $141 million to Medicare.\13\
---------------------------------------------------------------------------

    \12\ https://www.cms.gov/files/document/certification-home-health-value-based-purchasing-hhvbp-model.pdf.
    \13\ https://innovation.cms.gov/data-and-reports/2020/hhvbp-thirdann-rpt.
---------------------------------------------------------------------------

    As described in this proposed rule, we are proposing to expand the 
HHVBP Model (expanded Model/Model expansion) to all 50 States, the 
District of Columbia and the territories starting in CY 2022. We are 
proposing to codify HHVBP Model expansion policies at Sec. Sec.  
484.340; 484.345; 484.350; 484.355; 484.360; 484.365; 484.370; and 
484.375, as discussed in more detail in the sections that follow.
2. Requirements for Expansion
    Section 1115A(c) of the Act provides the Secretary with the 
authority to expand (including implementation on a nationwide basis), 
through notice and comment rulemaking, the duration and scope of a 
model that is being tested under section 1115A(b) of the Act if the 
following findings are made, taking into account the evaluation of the 
model under section 1115A(b)(4) of the Act: (1) The Secretary 
determines that the expansion is expected to either reduce spending 
without reducing quality of care or improve the quality of patient care 
without increasing spending; (2) the CMS Chief Actuary certifies that 
the expansion would reduce (or would not result in any increase in) net 
program spending; and (3) the Secretary determines that the expansion 
would not deny or limit the coverage or provision of benefits.
     Improved Quality of Care without Increased Spending: As 
observed in the Third Annual Evaluation Report,\14\ the HHVBP Model 
resulted in improved quality of care (for example, consistently 
increasing TPS scores) and a reduction in Medicare expenditures through 
three performance years of the HHVBP Model (CYs 2016 to 2018). The 
HHVBP Model's intervention has led to savings without evidence of 
adverse risks. The evaluation also found reductions in unplanned acute 
care hospitalizations and skilled nursing facility (SNF) visits, 
resulting in reductions in inpatient and SNF spending. Based on these 
findings, the Secretary determined that expansion of the HHVBP Model 
would reduce spending and improve the quality of care.
---------------------------------------------------------------------------

    \14\ The HHVBP Third Annual Evaluation Report is available at 
https://innovation.cms.gov/data-and-reports/2020/hhvbp-thirdann-rpt.
---------------------------------------------------------------------------

     Impact on Medicare Spending: The CMS Chief Actuary has 
certified that expansion of the HHVBP Model would

[[Page 35917]]

produce Medicare savings if expanded to all States.\15\
---------------------------------------------------------------------------

    \15\ The full CMS Actuary Report is available at https://www.cms.gov/files/document/certification-home-health-value-based-purchasing-hhvbp-model.pdf.
---------------------------------------------------------------------------

     No Alteration in Coverage or Provision of Benefits: The 
HHVBP Model did not make any changes to coverage or provision of 
benefits for Medicare beneficiaries. Therefore, the Secretary has 
determined that expansion of the HHVBP Model would not deny or limit 
the coverage or provision of Medicare benefits for Medicare 
beneficiaries.
    Consistent with our statutory authority, we would continue to test 
and evaluate the expanded HHVBP Model. In the future, we would assess 
whether the expanded implementation of HHVBP is continuing to reduce 
Medicare spending without reducing quality of care or to improve the 
quality of patient care without increasing spending, and could modify 
the expanded HHVBP Model as appropriate through rulemaking.
3. Overview
    The proposed HHVBP Model expansion presents an opportunity to 
improve the quality of care furnished to Medicare beneficiaries 
nationwide through payment incentives to HHAs. If finalized, all 
Medicare-certified HHAs in the 50 States, District of Columbia and the 
territories would be required to participate in the expanded HHVBP 
Model beginning January 1, 2022. These HHAs would compete on value 
based on an array of quality measures related to the care that HHAs 
furnish.
    The proposed Model expansion would be tested under section 1115A of 
the Act. Under section 1115A(d)(1) of the Act, the Secretary may waive 
such requirements of Titles XI and XVIII and of sections 1902(a)(1), 
1902(a)(13), and 1903(m)(2)(A)(iii) of the Act as may be necessary 
solely for purposes of carrying out section 1115A of the Act with 
respect to testing models described in section 1115A(b) of the Act. The 
Secretary is not issuing any waivers of the fraud and abuse provisions 
in sections 1128A, 1128B, and 1877 of the Act or any other Medicare or 
Medicaid fraud and abuse laws for this Model expansion at this time. In 
addition, CMS has determined that the anti-kickback statute safe harbor 
for CMS-sponsored model arrangements and CMS-sponsored model patient 
incentives (42 CFR 1001.952(hh)(9)(ii)) will not be available to 
protect remuneration exchanged pursuant to any financial arrangements 
or patient incentives permitted under the Model. Thus, notwithstanding 
any other provisions of this proposed rule, all Medicare-certified HHAs 
in the 50 States, District of Columbia and the territories must comply 
with all applicable fraud and abuse laws and regulations.
    We are proposing to use the section 1115A(d)(1) of the Act waiver 
authority to apply a reduction or increase of up to 5 percent to 
Medicare payments to Medicare-certified HHAs delivering care to 
beneficiaries in the 50 States, District of Columbia and the 
territories, depending on the HHA's performance on specified quality 
measures relative to its peers. Specifically, the expanded HHVBP Model 
proposes to utilize the section 1115A(d)(1) of the Act waiver authority 
to adjust the Medicare payment amounts under section 1895(b) of the 
Act. In accordance with the authority granted to the Secretary in 
section 1115A(d)(1) of the Act, we would waive section 1895(b)(4) of 
the Act only to the extent necessary to adjust payment amounts to 
reflect the value-based payment adjustments under this proposed 
expanded Model for Medicare-certified HHAs in the 50 States, District 
of Columbia and the territories. We may make changes to the payment 
adjustment percentage through rulemaking in future years of the 
expansion, as additional evaluation data from the HHVBP expanded Model 
become available, and we learn about performance within the Model under 
the expansion. The evaluation of the expanded Model would use a time 
series type approach to examine the outcomes of interest (cost or 
utilization) over time prior to the start of the intervention and 
follow that outcome after the start of the expansion.
a. Overview of Timing and Scope
    As noted, we are proposing to begin the expanded HHVBP Model on 
January 1, 2022. Under this proposal, CY 2022 would be the first 
performance year and CY 2024 would be the first payment year, with 
payment adjustments in CY 2024 based on an HHA's performance in CY 
2022. Performance year means the calendar year during which data are 
collected for the purpose of calculating a competing HHA's performance 
on applicable quality measures. Payment year means the calendar year in 
which the applicable percent, a maximum upward or downward adjustment, 
applies.
    The proposed expanded Model would apply to all Medicare-certified 
HHAs in the 50 States, District of Columbia and the territories, which 
means that all Medicare-certified HHAs that provide services in the 50 
States, District of Columbia and the territories would be required to 
compete in the expanded Model. We are proposing to codify this 
requirement at Sec.  484.350. We are proposing to define a `competing 
HHA' within the scope of the proposed expanded HHVBP Model as an HHA 
that has a current Medicare certification and is being paid by CMS for 
home health care services. We propose that all HHAs certified for 
participation in Medicare before January 1, 2021 would have their CY 
2022 performance assessed and would be eligible for a CY 2024 payment 
adjustment. We propose to base participation in the expanded Model on 
CMS Certification Numbers (CCNs), meaning that the Total Performance 
Score as discussed further in section III.A.7.a. of this proposed rule 
and payment adjustment would be calculated based on an HHA's CCN.\16\
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    \16\ HHAs are required to report OASIS data and any other 
quality measures by its own unique CMS Certification Number (CCN) as 
defined under Title 42, Chapter IV, Subchapter G, Sec.  484.20 
Available at URL http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title42/42cfr484_main_02.tpl.
---------------------------------------------------------------------------

b. Overview of the Payment Adjustment
    As proposed, the distribution of payment adjustments would be based 
on quality performance, as measured by both achievement and 
improvement, across a proposed set of quality measures constructed to 
minimize burden as much as possible and improve care. Competing HHAs 
that demonstrate they can deliver higher quality of care in a given 
performance year measured against a baseline year relative to peers 
nationwide (as defined by larger- versus smaller-volume cohorts based 
upon their unique beneficiary count in the prior calendar year), could 
have their HH PPS claims final payment amount adjusted higher than the 
amount that otherwise would be paid. Competing HHAs that do not perform 
as well as other competing HHAs in the same volume-based cohort might 
have their HH PPS claims final payment amount reduced and those 
competing HHAs that perform similarly to others in the same volume-
based cohort might have no payment adjustment. This operational concept 
is similar in practice to what is used in the Hospital Value-Based 
Purchasing (HVBP) Program (76 FR 26531).
    We expect that the risk of having payments adjusted in this manner 
would provide an incentive among all competing HHAs to provide 
significantly better quality through improved planning, coordination, 
and management of care. Under the expanded duration and scope of this 
Model, we would continue to examine

[[Page 35918]]

whether the proposed adjustments to the Medicare payment amounts that 
would otherwise be made to competing HHAs would result in statistically 
significant improvements in the quality of care being delivered to 
Medicare beneficiaries, as well as reductions in Medicare spending. The 
degree of the payment adjustment would be dependent on the level of 
quality achieved or improved from the baseline year, with the highest 
upward performance adjustments going to competing HHAs with the highest 
overall level of performance based on either achievement or improvement 
in quality. The size of a competing HHA's payment adjustment for each 
year under the expanded Model would be dependent upon that HHA's 
performance with respect to the applicable performance year relative to 
other competing HHAs in the same volume-based cohort and relative to 
its own performance during the baseline year. Details are discussed in 
sections III.A.4, III.A.5, and III.A.7.a of this proposed rule.
    In addition, at Sec.  484.345 we propose to add the following 
definitions:

 Achievement threshold
 Applicable measure
 Applicable percent
 Baseline year
 Benchmark
 Competing home health agency
 Home health prospective payment system
 Improvement threshold
 Larger-volume cohort
 Linear exchange function
 Nationwide
 Payment adjustment
 Payment year
 Performance year
 Smaller-volume cohort
 Total Performance Score
4. Defining Cohorts for Benchmarking and Competition
    Under the original HHVBP Model, we grouped HHAs into cohorts by 
State for setting benchmarks and achievement thresholds and by both 
State and smaller- versus larger-volume HHAs when determining the 
cohorts used for competing for payment adjustments, in accordance with 
Sec.  484.330. For the nationwide expansion of the HHVBP Model, we are 
proposing to redefine the cohort structure to account for States, 
territories, and the District of Columbia with smaller numbers of HHAs, 
while also allowing for the use of volume-based cohorts in determining 
benchmarks, achievement thresholds, and payment adjustments.
a. Proposed Smaller- and Larger-Volume Cohorts
    As discussed further in this section, we believe that separating 
smaller- and larger-volume HHAs into cohorts under the expanded Model 
would facilitate like comparisons by allowing for the majority of HHAs 
to receive benchmarks and compete for payment against other HHAs of 
similar size and based on the same set of measures. As under the 
original HHVBP Model, we propose to align the larger-volume cohort with 
the group of competing HHAs that administers the Home Health Care 
Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) 
survey, in accordance with the HH QRP regulations concerning the 
HHCAHPS survey in Sec.  484.245(b), and we propose to align the Model's 
smaller-volume HHA cohort with the group of HHAs that are exempt from 
submitting the HHCAHPS survey under HH QRP under Sec.  
484.245(b)(1)(iii)(A). Under the expanded HHVBP Model, we would not 
alter the HHCAHPS survey current scoring methodology or the 
participation requirements in any way. Details on HHCAHPS survey 
scoring methodology are available at: https://homehealthcahps.org/Survey-and-Protocols/Survey-Materials.\17\
---------------------------------------------------------------------------

    \17\ Detailed scoring information is contained in the Protocols 
and Guidelines manual posted on the HHCAHPS website and available at 
https://homehealthcahps.org/Survey-and-Protocols/Survey-Materials.
---------------------------------------------------------------------------

    The HH QRP requires, in part, that an HHA submit HHCAHPS survey 
data to CMS. An HHA that has fewer than 60 eligible unique HHCAHPS 
survey patients must annually submit their total HHCAHPS survey patient 
count to CMS to be exempt from the HHCAHPS survey reporting 
requirements for a calendar year. As under the original HHVBP Model, we 
propose to align with this HHCAHPS survey reporting requirement by 
defining the larger-volume cohort as those HHAs that are required to 
submit an HHCAHPS survey in the performance year. As under the original 
Model, we also propose to set an HHCAHPS survey measure minimum of at 
least 40 completed HHCAHPS surveys in the performance year for those 
HHAs to receive a score on the HHCAHPS survey measure, as reflected in 
proposed Sec. Sec.  484.345 and 484.360. Accordingly, because smaller-
volume HHAs are less likely to be assessed on the HHCAHPS survey 
measure, which would account for 30 percent of the overall performance 
score in the expanded Model, we believe that separating smaller- and 
larger-volume HHAs into distinct cohorts would allow for the majority 
of HHAs to compete against other HHAs of similar size and based on the 
same set of measures.
b. Proposed Cohorts for the Model Expansion
    As discussed, we believe that applying separate larger- and 
smaller-volume cohorts within the expanded HHVBP Model would group HHAs 
that are of similar size and are more likely to receive scores on the 
same set of measures for purposes of setting benchmarks and achievement 
thresholds and determining payment adjustments. However, a valid cohort 
must have a sufficient number of HHAs to--(1) create a robust 
distribution of Total Performance Scores, which allows meaningful and 
reasonable translation into payment adjustments using the linear 
exchange function (LEF);\18\ and (2) set stable, reliable benchmarks 
and achievement thresholds that are not heavily skewed by outliers. The 
LEF is designed so that the majority of the payment adjustment values 
fall closer to the median and a smaller percentage of HHAs receive 
adjustments at the higher and lower ends of the distribution. However, 
when only a small number of HHAs fall within a cohort, one HHA's 
outlier TPS could skew the payment adjustments and deviate from the 
intended design of the LEF payment methodology. As a result, a key 
consideration in defining the cohorts is ensuring sufficient HHA counts 
within each cohort.
---------------------------------------------------------------------------

    \18\ The Linear Exchange Function (LEF) is used to translate an 
HHA's TPS into a percentage of the value-based payment adjustment 
earned by each HHA. For a more detailed description, please see 
section III.A.8. of this proposed rule.
---------------------------------------------------------------------------

    Under the original Model, CMS applied a minimum of eight HHAs for 
any size cohort, such that a smaller-volume cohort must have a minimum 
of eight HHAs in order for the HHAs in that cohort to be compared only 
against each other, and not against the HHAs in the larger-volume 
cohort (81 FR 76742). This policy was based on an analysis of the 
minimum number of HHAs needed in a smaller-volume cohort in order to 
insulate that cohort from the effect of outliers. Expanding the HHVBP 
Model beyond the nine mid- to large-sized States included in the 
original Model requires us to re-examine these cohort definitions 
because, certain territories and the District of Columbia would fall 
short of the original Model's minimum of 8 HHAs to compose their own 
cohort even where the volume-based cohorts are combined. This was not 
an issue in the original Model because the nine selected States are 
relatively populous as compared to the smaller States,

[[Page 35919]]

territories, and the District of Columbia that would be included in the 
expanded Model. Based on CY 2019 Home Health Compare Star Ratings, we 
evaluated the viability of smaller- and larger-volume cohorts, as 
defined previously, for each of the 55 States, territories, and the 
District of Columbia. Based on our analysis, of the 110 potential 
cohorts based on both State and HHA volume for the expanded HHVBP 
Model, 46 of the 110 potential cohorts had too few HHAs to reliably 
meet the original Model minimum of 8 HHAs, after accounting for the 
risk of attrition from the expanded Model. Under this approach, for 42 
of these 46 States and territories, the smaller-volume cohorts would 
need to be combined with the larger-volume cohorts in their States and 
territories, while 3 territories and the District of Columbia would 
need to be combined with other States or territories since they do not 
meet the 8 HHA minimum after consolidating the volume-based cohorts. 
See Table 24 for the counts of HHAs in each of the potential cohorts, 
if we were to apply separate State- and volume-based cohorts for each 
State, territory, and the District of Columbia under the expanded 
Model.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP07JY21.036

BILLING CODE 4120-01-C
    As noted, under the original HHVBP Model, a minimum of eight HHAs 
is required for each size cohort. For the expanded HHVBP Model, we are 
proposing to establish cohorts prospectively and with sufficient HHA 
counts to prevent the need to combine multiple cohorts retrospectively. 
We propose to provide HHAs with their

[[Page 35920]]

applicable benchmarks and achievement thresholds prior to the start of 
or during the performance year so that they can be used to set 
performance targets to guide HHAs' quality improvement projects. To 
reliably define cohorts prospectively and to avoid regrouping multiple 
States, territories, or the District of Columbia into a single cohort 
retrospectively based solely on their lower HHA counts, we estimate 
that a minimum of 20 HHAs in each cohort would be necessary to ensure 
that attrition and variation in episode counts do not lead to 
insufficient HHA counts at the end of the performance year. Based on 
the data set forth in Table 24, 61 out of the 110 potential cohorts 
would have fewer than 20 HHAs in a size-based cohort, and 11 out of 
those potential cohorts would not meet the 20 HHA minimum after 
combining the size-based cohorts.
    To allow for a sufficient number of HHAs in each volume-based 
cohort, for purposes of setting benchmarks and achievement thresholds 
and determining payment adjustments, we are proposing to use cohorts 
based on all HHAs nationwide, rather than by State as under the 
original Model. Referencing the CY 2019 data in Table 24, under this 
approach, 7,084 HHAs would fall within the larger-volume cohort and 485 
HHAs fall within the smaller-volume cohort. These HHA counts would 
provide a sufficiently large number of values in each cohort to allow 
ranking of HHA performance scores and payment adjustment percentages 
across the range of -5 percent to +5 percent. Further, our analysis 
found that many of the smaller-volume HHAs would not receive a score on 
the HHCAHPS survey measures, which are proposed to account for 
30percent of the overall TPS, while most of the larger-volume cohort 
HHAs would be scored on the full set of applicable measures. 
Accordingly, and as previously discussed, we believe the volume-based 
cohorts would allow for competition among HHAs across similar measures. 
Using nationwide rather than State/territory-based cohorts in 
performance comparisons would also be consistent with the Skilled 
Nursing Facility and Hospital VBP Programs, in addition to the Home 
Health Compare Star Ratings. Finally, this option would be the least 
operationally complex to implement.
    For the reasons discussed, we believe the use of nationwide 
smaller- and larger-volume-based cohorts would allow for appropriate 
groupings of HHAs under the expanded Model while also providing 
sufficient numbers of HHAs in each cohort for purposes of setting 
stable and reliable benchmarks and achievement thresholds and allowing 
for a robust distribution of payment adjustments. However, we also 
considered an alternative approach of using State/territory-based 
cohorts, without volume-based groupings. Applying the State, territory, 
and District of Columbia-level cohorts, we found that 11 of the 55 
potential cohorts would have fewer than 20 HHAs based on the CY 2019 
Home Health Star Ratings data. As noted, we do not believe this would 
allow for a sufficient number of HHAs to develop prospective benchmarks 
and achievement thresholds. While one approach would be to exclude any 
States, territories, or the District of Columbia from the expanded 
Model for years in which there are fewer than 20 HHAs in the cohort, we 
believe such a policy would be inconsistent with the goal of including 
all eligible HHAs nationwide in the Model. Another option would be to 
consolidate those States, territories, and the District of Columbia 
with less than 20 HHAs in the cohort, and to calculate benchmarks, 
achievement thresholds, and payment adjustments based on that 
consolidated grouping of HHAs. We note that while slight differences do 
exist between quality measure scores based on geographic location, we 
do not believe that codifying these small differences into long-term 
performance standards is necessary to appropriately determine payment 
adjustments under the expanded Model.
    We are proposing to establish nationwide volume-based cohorts for 
the expanded HHVBP Model, such that HHAs nationwide would compete 
within either the larger-volume cohort or the smaller-volume cohort. We 
propose to codify this policy at Sec.  484.370, and to codify the 
proposed definitions of smaller-volume cohort and larger-volume cohort 
at Sec.  484.345. Under this proposal, HHAs currently participating in 
the original HHVBP Model would no longer compete within just their 
State. We are also requesting comment on the alternative approach of 
applying State/territory-based cohorts only, without volume-based 
cohorts, which we may finalize after consideration of comments 
received.
    We seek public comment on these proposals.
5. Proposed Payment Adjustment Percentage and Performance Assessment 
and Payment Adjustment Periods
a. Proposed Payment Adjustment
    Under the original Model, the payment adjustment ranges from a 
minimum of 3 percent in 2018 to maximum of 8 percent in 2022. For the 
expanded Model, we are proposing that the maximum payment adjustment, 
upward or downward, would be 5 percent. We believe that beginning the 
expansion with a 5 percent maximum payment adjustment would strike a 
balance between the 3 percent maximum adjustment that applied for CY 
2018, the first payment year of the original HHVBP Model, and the 7 
percent maximum adjustment currently in place for CY 2021. As proposed 
in section III.A.3.a. of this proposed rule, the first payment year of 
the expanded HHVBP Model would be CY 2024 (January 1, 2024 through 
December 31, 2024), with payment adjustments based on performance in CY 
2022 (January 1, 2022 through December 31, 2022). We may consider 
changes to the proposed 5 percent maximum payment adjustment percentage 
through rulemaking in future years of the expansion, as additional 
evaluation data from the original Model and expansion become available. 
We note that the CMS Actuary certification was based on evaluation of 
the Model when the maximum payment adjustment was 3 percent. However, 
in their certification memo, they indicated they believe the Model 
would result in savings at higher payment adjustment amounts as well.
    We seek public comment on the proposed payment adjustment 
percentage.
b. Proposed Baseline Year
(1) General
    For the expanded HHVBP Model, due to the potentially de-stabilizing 
effects of the COVID-19 public health emergency (PHE) on quality 
measure data in CY 2020, we propose that the baseline year would be CY 
2019 (January 1, 2019 through December 31, 2019) for the CY 2022 
performance year/CY 2024 payment year and subsequent years. The data 
from this baseline year would provide a basis from which each 
respective HHA's performance would be measured for purposes of 
calculating achievement and improvement points under the expanded 
Model. We may propose to update the baseline year for subsequent years 
of the expanded Model through future rulemaking. We would also propose 
the applicable baseline year for any additional quality measures that 
may be added to the measure set for the expanded HHVBP Model through 
future rulemaking.
    We seek public comment on the proposed baseline year for the 
expanded Model.

[[Page 35921]]

(2) New HHAs
    As noted, we are generally proposing that for the expanded Model, 
the baseline year would be CY 2019 (January 1, 2019 through December 
31, 2019) for the CY 2022 performance year/CY 2024 payment year and 
subsequent years. For new HHAs, specifically those HHAs that are 
certified by Medicare on or after January 1, 2019, we are proposing 
that the baseline year under the expanded Model would be the HHA's 
first full CY of services beginning after the date of Medicare 
certification, with the exception of HHAs certified on January 1, 2019 
through December 31, 2019, for which the baseline year would be CY 
2021. Furthermore, we propose that new HHAs would begin competing under 
the expanded HHVBP Model in the first full calendar year following the 
full calendar year baseline year. For example, and as previously 
discussed, we are proposing that all HHAs certified for participation 
in Medicare before January 1, 2021 would have their CY 2022 performance 
assessed and would be eligible for a CY 2024 payment adjustment. For 
HHAs certified on January 1, 2020 through December 31, 2020, the 
baseline year would be CY 2021, the first full CY of services beginning 
after the date of Medicare certification. For those HHAs certified on 
January 1, 2019 through December 31, 2019, the baseline year would also 
be CY 2021, rather than CY 2020 (the first full CY of services 
beginning after the date of Medicare certification), due to the 
potentially destabilizing effects of the PHE on quality measure data in 
CY 2020. For an HHA certified by Medicare on January 1, 2021 through 
December 31, 2021, for example, the first full calendar year of 
services that would establish the HHA's baseline year would be CY 2022. 
The HHA's first performance year would be CY 2023 and the HHA's first 
payment year, based on CY 2023 performance, would be CY 2025. Table 25 
shows the proposed HHA baseline, performance and payment years based on 
the HHA's Medicare-certification date through December 31, 2021.
[GRAPHIC] [TIFF OMITTED] TP07JY21.037

    We also propose to codify our proposal on new HHAs at Sec.  
484.350. We seek public comment on this proposal.
6. Quality Measures
a. General Considerations Used for the Selection of Quality Measures 
for the Expanded HHVBP Model
    We plan to apply, to the extent possible, principles from CMS' 
Meaningful Measures Initiative in selecting the applicable measures as 
defined at Sec.  484.345 to be included in the Model expansion. A 
central driver of the proposed applicable measure set is to have a 
broad, high impact on care delivery and support priorities to improve 
health outcomes, quality, safety, efficiency, and experience of care 
for patients. To frame the selection process, we also considered the 
domains of the CMS Quality Strategy \19\ that maps to the six National 
Quality Strategy (NQS) \20\ priority areas: Clinical quality of care; 
Care coordination; Population/community health; efficiency and cost 
reduction; safety; and, Patient and caregiver-centered experience.
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    \19\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
    \20\ For NQF endorsed measures see The NQF Quality Positioning 
System available at http://www.qualityforum.org/QPS. For non-NQF 
measures using OASIS see links for data tables related to OASIS 
measures at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits.
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    We believe that Medicare-certified HHAs should be evaluated using 
measures designed to encompass multiple NQS domains, and provide future 
flexibility to incorporate and study newly developed measures over 
time. Additionally, so that measures for the expanded HHVBP Model take 
a more holistic view of the patient beyond a particular disease, 
functional status, State or care setting, we would prioritize outcome 
measures that have the potential to follow patients across multiple 
settings, reflect a multi-faceted approach, and foster the intersection 
of health care delivery and population health.
    The proposed expanded Model measures mostly align with those under 
the HH QRP. However, we intend to consider new measures for inclusion 
in subsequent years of the expanded HHVBP Model through future 
rulemaking. We may consider adding new measures to the expanded HHVBP 
Model measure set that address gaps within the NQS domains or the home 
health service line and are good indicators of home health quality of 
care. When available, NQF endorsed measures would be used. The expanded 
Model's section 1115A of the Act authority also affords the opportunity 
to study other measures, such as, measures developed in other care 
settings or new to the home health industry, should CMS identify such 
measures. A key consideration behind this approach is to use measures 
that are readily available, and, in subsequent Model years, augment the 
applicable measure set with innovative measures that have the potential 
to be impactful and fill critical measure gap areas. This approach to 
quality measure selection aims to balance the burden of collecting data 
with the inclusion of new and important measures. We would carefully 
consider the potential burden on HHAs to report the measure data that 
is not already collected through existing quality measure data 
reporting systems and reiterate that we would propose any new measures 
through future rulemaking.

[[Page 35922]]

b. Proposed Measure Set Beginning With the CY 2022 Performance Year/CY 
2024 Payment Year and Subsequent Years
    We propose that the initial applicable measure set for the expanded 
HHVBP Model for the CY 2022 performance year focus on patient outcome 
and functional status, utilization, and patient experience. The 
proposed measures were also used under the original Model (83 FR 
56533). However, we note that no ``New Measures'' as defined in the 
original Model (80 FR 68674) are being proposed for data collection 
under the expanded Model beginning with the CY 2022 performance year 
given there was sufficient data collected on the ``New Measures'' under 
the original Model for analysis of the appropriateness for use in the 
home health setting. We note that any future additional measures 
proposed for the expanded HHVBP Model would not be considered ``New 
Measures'' as used in the original Model.
    Beginning with the CY 2022 performance year/CY 2024 payment year 
and for subsequent years, we propose the following measures as detailed 
in Table 26 for inclusion in the expanded Model. The measure set also 
includes outcome measures, which illustrate the end result of care 
delivered to HHA patients and address an important quality aim for HHA 
patients. We believe the proposed measure set under the expanded HHVBP 
Model, where most measures currently align with HH QRP measures, 
supports enhancing quality because of the value-based incentives 
provided under the expanded Model. Further, we believe that the 
expanded Model measure set, as proposed, includes an array of measures 
that would capture the care that HHAs furnish and incentivize quality 
improvement. The measures in the proposed measure set are divided into 
measure categories based on their data source as indicated in Table 26: 
Claims-based, OASIS-based, and the HHCAHPS survey-based. We note that 
the HHCAHPS survey-based measure has five individual components. The 
term ``applicable measure'' applies to each of the five components for 
which a competing HHA has submitted a minimum of 40 completed HHCAHPS 
surveys (This is discussed in more detail in sections III.A.4.a., 
III.A.7.c., and III.A.7.d. of this proposed rule). That is, each 
component counts as one applicable measure towards the five measure 
minimum that is required for an HHA to receive a Total Performance 
Score (TPS) (this is discussed in more detail in section III.A.7.d of 
this proposed rule).
BILLING CODE 4120-01-P

[[Page 35923]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.038


[[Page 35924]]


[GRAPHIC] [TIFF OMITTED] TP07JY21.039

    Table 27 provides more granular detail on the elements of the Home 
Health Care Consumer Assessment of Healthcare Providers and Systems 
(HHCAHPS) Survey measure.

[[Page 35925]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.040


[[Page 35926]]


[GRAPHIC] [TIFF OMITTED] TP07JY21.041


[[Page 35927]]


BILLING CODE 4120-01-C
(1) Additional Background on the Total Normalized Composite Measures
    The proposed measure set includes two composite measures: Total 
Normalized Composite (TNC) Self-Care and TNC Mobility, which were 
included in the original HHVBP Model measure set in CY 2019, as 
finalized in the CY 2019 HH PPS final rule (83 FR 56529 through 56535). 
The methodology for these measures take into account patients who may 
not have goals for improvement.
    The proposed TNC Self-Care measure computes the magnitude of 
change, either positive or negative, based on a normalized amount of 
possible change on each of six OASIS-based quality outcomes. These six 
outcomes are as follows:

 Improvement in Grooming (M1800)
 Improvement in Upper Body Dressing (M1810)
 Improvement in Lower Body Dressing (M1820)
 Improvement in Bathing (M1830)
 Improvement in Toileting Hygiene (M1845)
 Improvement in Eating (M1870)

    The TNC Mobility measure computes the magnitude of change, either 
positive or negative, based on the normalized amount of possible change 
on each of three OASIS-based quality outcomes. These three outcomes are 
as follows:

 Improvement in Toilet Transferring (M1840)
 Improvement in Bed Transferring (M1850)
 Improvement in Ambulation/Locomotion (M1860)

    For each TNC measure, we calculate at the episode level and then 
aggregate to the home health agency level using a five-step process: 
Steps 1 to 3 calculate the normalized change values for each applicable 
OASIS item at the episode level. Steps 4 and 5 aggregate these values 
to the agency level. As composite measures, the TNC Self-Care and TNC 
Mobility measures reflect multiple OASIS items, so there are no 
numerators or denominators for these two measures. A detailed 
description of the five steps can be found at: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/hhvbp%20computing%20the%20hhvbp%20composite%20measures.pdf. We expect 
that HHAs already focus on improvement in such areas not just because 
such items are included in the OASIS, but because self-care and 
mobility are areas of great importance to patients and families. 
Improvement in such areas may allow beneficiaries to remain in the home 
setting (versus an institution) and contribute to beneficiaries' 
quality of life. The risk adjustment methodology for these two measures 
recalibrates the expectations for improvement by including risk factors 
for a wide variety of beneficiary-level factors, including age, risk 
for hospitalization, condition categories, living arrangements and 
caregivers available, pain, cognitive function, baseline functional 
status, and others. For instance, a beneficiary with impaired cognition 
would not be expected to improve in self-care as much as a beneficiary 
with intact cognition. In effect, the self-care improvement score would 
shift up slightly for a beneficiary with impaired cognition relative to 
a beneficiary without cognitive impairment to account for the 
difference in expectations. Both TNC measures' computations can be 
found at https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/hhvbp%20computing%20the%20hhvbp%20composite%20measures.pdf 
and the technical specifications can be found at: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/hhvbp%20technical%20specification%20resource%20for%20composite%20outcome%20measures_4.pdf. Additional information on the predictive modeling 
and methodology for the composite measures can be found in the CY 2019 
HH PPS final rule (83 FR 56529 through 56535).
    We note that we had considered the inclusion of stabilization 
measures which are measures that identify all patients whose function 
has not declined, including both those who have improved or stayed the 
same in the original HHVBP Model's measure set and refer readers to the 
CY 2016 HH PPS final rule (80 FR 68669 through 68670) and the CY 2019 
HH PPS final rule (83 FR 56529 through 56535). In the CY 2016 final 
rule, we explained that we considered using some of the stabilization 
measures for the original Model and found that the average HHA 
stabilization measure scores ranged from 94 to 96 percent and, with 
average rates of nearly 100 percent. We do not believe these high 
measure scores would allow for meaningful comparisons between 
competing-HHAs on the quality of care delivered. We acknowledge that 
skilled care may be necessary to improve a patient's current condition, 
to maintain the patient's current condition, or to prevent or slow 
further deterioration of the patient's condition. However, we believe 
that the two proposed TNC measures represent a new direction in how 
quality of patient care is measured in home health as patients who 
receive care from an HHA may have functional limitations and may be at 
risk for further decline in function because of limited mobility and 
ambulation.
(2) Additional Background on the Home Health Care Consumer Assessment 
of Healthcare Providers and Systems Survey Measure
    The Home Health Care Consumer Assessment of Healthcare Providers 
and Systems Survey (HHCAHPS) survey is part of a family of 
CAHPS[supreg] surveys that asks patients to report on and rate their 
experiences with health care. The HHCAHPS survey specifically presents 
home health patients with a set of standardized questions about their 
home health care providers and about the quality of their home health 
care. The survey is designed to measure the experiences of people 
receiving home health care from Medicare-certified home health care 
agencies and meet the following three broad goals to: (1) Produce 
comparable data on the patient's perspective that allows objective and 
meaningful comparisons between HHAs on domains that are important to 
consumers; (2) create incentives through public reporting of survey 
results for agencies to improve their quality of care; and (3) enhance 
public accountability in health care by increasing the transparency of 
the quality of care provided in return for public investment through 
public reporting.\21\
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    \21\ https://homehealthcahps.org/General-Information/About-Home-Health-Care-CAHPS-Survey.
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    We note that the HHCAHPS survey is also part of the HH QRP's data 
submission requirements, which are codified for that program at 42 CFR 
484.245(b). As proposed, expanded HHVBP Model participants would not 
need to submit separate HHCAHPS survey measure data already submitted 
as a requirement under HH QRP, because the requirements as proposed for 
the expanded Model are aligned with those currently under HH QRP. For 
more details about the HHCAHPS Survey, please see https://homehealthcahps.org/.
    We invite public comment on our proposed measure set.
c. Measure Modifications
    During the expanded Model, we would monitor the quality measures 
for lessons learned and address any needed

[[Page 35928]]

adjustments or modifications to the expanded Model measure set.
(1) Proposed Substantive vs. Non-Substantive Changes Policy
    Updates to measures may result from various sources including, for 
example, measure stewards and owners, new clinical guidelines, a public 
health emergency, CMS-identified, a technical expert panel (TEP), or 
NQF. How we incorporate those updates would depend on whether the 
changes are substantive or non-substantive.
    With respect to what constitutes a substantive versus a non-
substantive change, we expect to make this determination on a measure-
by-measure basis. Examples of such non-substantive changes might 
include updated diagnosis or procedure codes, medication updates for 
categories of medications, broadening of age ranges, and changes to 
exclusions for a measure. We believe that non-substantive changes may 
include updates to measures based upon changes to guidelines upon which 
the measures are based. These types of maintenance changes are distinct 
from more substantive changes to measures that result in what can be 
considered new or different measures, and that they do not trigger the 
same agency obligations under the Administrative Procedure Act.
    We propose that, in the event that an update to a measure is 
necessary in a manner that we consider to not substantially change the 
nature of the measure, we will use a sub-regulatory process to 
incorporate those updates to the measure specifications. Specifically, 
we would revise the information that is posted on the CMS website so 
that it clearly identifies the updates and provides links to where 
additional information on the updates can be found. In addition, we 
would provide sufficient lead time for HHAs to implement the changes 
where changes to the data collection systems would be necessary.
    We are also proposing to use notice and comment rulemaking to adopt 
changes to measures that we consider to substantially change the nature 
of the measure. Examples of changes that we might consider to be 
substantive would be those in which the changes are so significant that 
the measure is no longer the same measure, or when a standard of 
performance assessed by a measure becomes more stringent, such as 
changes in acceptable timing of medication, procedure/process, test 
administration, or expansion of the measure to a new setting. We 
believe that our proposal adequately balances the need to incorporate 
changes to measures used in the expanded HHVBP Model in the most 
expeditious manner possible, while preserving the public's ability to 
comment on updates to measures that so fundamentally change a measure 
that it is no longer the same measure originally adopted. We note that 
CMS adopted a similar policy for the HH QRP in the CY 2015 HH PPS final 
rule (79 FR 66079 through 66081).
    We invite public comment on our proposal.
d. Measure Removals
    The measure set used for the expanded Model would be subject to 
change including the removal of measures during subsequent years. In 
this proposed rule, for greater transparency, we propose factors we 
would consider in proposing to remove a measure as well as a policy for 
when immediate suspension is necessary.
(1) Proposed Removal Factors
    We propose to generally use the below removal factors when 
considering a quality measure for removal for use in the expanded HHVBP 
Model:
     Factor 1. Measure performance among HHAs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made (that is, topped out). To determine ``topped-
out'' criteria, we will calculate the top distribution of HHA 
performance on each measure, and if the 75th and 90th percentiles are 
statistically indistinguishable, we will consider the measure topped-
out.
     Factor 2. Performance or improvement on a measure does not 
result in better patient outcomes.
     Factor 3. A measure does not align with current clinical 
guidelines or practice.
     Factor 4. A more broadly applicable measure (across 
settings, populations, or conditions) for the particular topic is 
available.
     Factor 5. A measure that is more proximal in time to 
desired patient outcomes for the particular topic is available.
     Factor 6. A measure that is more strongly associated with 
desired patient outcomes for the particular topic is available.
     Factor 7. Collection or public reporting of a measure 
leads to negative unintended consequences other than patient harm.
     Factor 8. The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    With respect to Factor 8, under our Meaningful Measures Initiative, 
we are engaging in efforts to ensure that the expanded HHVBP Model 
measure set continues to promote improved health outcomes for 
beneficiaries while minimizing the overall costs associated with the 
program. We believe that these costs are multifaceted and include not 
only the burden associated with reporting, but also the costs 
associated with implementing and maintaining the expanded HHVBP Model. 
We have identified several different types of costs, including, but not 
limited to the following:
     Provider and clinician information collection burden and 
burden associated with the submitting/reporting of quality measures to 
CMS.
     The provider and clinician cost associated with complying 
with other HH programmatic requirements.
     The provider and clinician cost associated with 
participating in multiple quality programs, and tracking multiple 
similar or duplicative measures within or across those programs.
     The cost to CMS associated with the program oversight of 
the measure, including measure maintenance and public display.
     The provider and clinician cost associated with compliance 
with other Federal and State regulations (if applicable).
    For example, it may be of limited benefit to retain or maintain a 
measure which our analyses show no longer meaningfully supports the 
expanded HHVBP Model goals (for example, no longer provides incentives 
for better quality care with greater efficiency). It may also be costly 
for HHAs to track confidential feedback and publicly reported 
information on a measure where we use the measure in more than one 
initiative, model, or program. We may also have to expend resources to 
maintain the specifications for the measure, including the tools needed 
to collect, validate, analyze, and publicly report the measure data.
    When these costs outweigh the evidence supporting the continued use 
of a measure in the expanded HHVBP Model, we believe that it may be 
appropriate to remove the measure from the Model. Although we recognize 
that the expanded HHVBP Model is to encourage HHAs to improve 
beneficiary outcomes by incentivizing health care providers, we also 
recognize that this can have limited utility where, for example, the 
data is of limited use because it is not meaningful. In these cases, 
removing the measure from the expanded HHVBP Model may better 
accommodate the costs of expansion administration and compliance 
without sacrificing improved health outcomes.

[[Page 35929]]

    We propose that we would remove measures based on Factor 8 on a 
case-by-case basis. For example, we may decide to retain a measure that 
is burdensome for HHAs to report if we conclude that the benefit to 
beneficiaries is so high that it justifies the reporting burden. Our 
goal is to move the expanded HHVBP Model forward in the least 
burdensome manner possible, while maintaining a parsimonious set of 
meaningful quality measures and continuing to incentivize improvement 
in the quality of care provided to patients.
    We believe that even if one or more of the measure removal factors 
applies, we might nonetheless choose to retain the measure for certain 
specified reasons. Examples of such instances could include when a 
particular measure addresses a gap in quality that is so significant 
that removing the measure could result in poor quality. We would apply 
these factors on a case-by-case basis.
    In addition, as noted previously, the authority to expand the HHVBP 
Model affords the opportunity to study new measures that are not 
currently collected or submitted to CMS by HHAs. Because of this, there 
may be other unforeseen reasons that necessitates the removal of a 
measure that is not currently captured in one of the factors noted 
previously. In such cases, we would still use notice and comment 
rulemaking to remove the measure and provide the reasons for doing so.
    We seek public comment on our proposals.
(2) Proposed Measure Suspension Policy
    Removal of an expanded HHVBP Model measure would take place through 
notice and comment rulemaking as proposed above unless we determine 
that a measure is causing concern for patient safety or harm. We 
propose that in the case of an expanded HHVBP Model measure for which 
there is a reason to believe that the continued collection raises 
possible patient safety concerns, we would promptly suspend the measure 
and immediately notify HHAs and the public through the usual 
communication channels, including listening sessions, memos, email 
notification, and Web postings. We would then propose to remove or 
modify the measure as appropriate during the next rulemaking cycle.
    We request public comment on our proposal.
e. Future Topics or Measure Considerations
(1) Consideration To Align or Remove Measures With the HH QRP
    We note that in section IV.C. of this proposed rule, the CMS 
proposes to replace the Acute Care Hospitalization During the First 60 
Days of Home Health (ACH) measure and Emergency Department Use Without 
Hospitalization During the First 60 days of Home Health (ED Use) 
measure with the Home Health Within-Stay Potentially Preventable 
Hospitalization (PPH) for the HH QRP measure beginning with the CY 2023 
under the in the HH QRP. We note that while both the ACH and ED Use 
measure are being proposed for removal under the HH QRP, these measures 
are being proposed for inclusion in the expanded HHVBP Model beginning 
with the CY 2022 performance year. We seek public comment on whether we 
should instead align the expanded HHVBP Model with the proposed changes 
for HH QRP by proposing to remove the same two measures from the 
expanded Model in a future year. We note that any measure removals 
would be proposed in future notice and comment rulemaking.
    We request public feedback on this future consideration.
(2) Health Equity Considerations for the Expanded HHVBP Model
    In section VIII.B. of this proposed rule, we include a Request for 
Information on ways to close the health equity gap in post-acute care 
quality reporting programs, including the HH QRP. We refer readers to 
that section for discussion of our current health equity efforts in 
quality measurement and reporting and potential modifications we have 
considered or may consider in the future. However, in recognition of 
persistent health disparities and the importance of closing the health 
equity gap, we request public comment on ways in which we could 
incorporate health equity goals and principles into the expanded HHVBP 
Model. Specifically, we seek comment on the challenges unique to value-
based purchasing frameworks in terms of promoting health equity, and 
ways in which we could incorporate health equity goals into the 
expanded HHVBP Model.
f. Measure Submissions--Form, Manner, and Timing
    We propose at Sec.  484.355 that home health agencies will be 
evaluated using a set of quality measures, and data submitted under the 
expanded Model must be submitted in the form and manner, and at a time, 
specified by CMS. Additional details regarding specific types of 
measures are discussed later in this section.
    As noted previously, the expanded HHVBP Model measures in the 
proposed measure set beginning with the CY 2022 performance year would 
use data currently already reported by HHAs. The proposed measure set 
includes OASIS \22\ measures, submitted through the OASIS assessment, 
which is required to be submitted as part of the Medicare Conditions of 
Participation (CoPs), the HHCAHPS survey measure, which is required 
under the HH QRP, and claims-based measures, which are calculated by 
CMS based on claims data HHAs already submit for purposes of payment. 
In many cases, measures from the expanded HHVBP Model overlap with 
those in the HH QRP, and HHAs would only need to submit data once to 
fulfill requirements of both. However, as described in section III.6.a. 
of this proposed rule, in the future we may propose new measures that 
may not otherwise already be collected or submitted by HHAs.
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    \22\ For detailed information on OASIS see the official CMS web 
resource available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits.
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    We request comment on our proposal.
(1) Form, Manner, and Timing of OASIS Measure Data
    CMS home health regulations, codified at Sec.  484.250(a), require 
HHAs to submit to CMS OASIS data as is necessary for CMS to administer 
payment rate methodologies. All HHAs must electronically report all 
Outcome and Assessment Information Set (OASIS) \23\ data collected in 
accordance with Sec.  484.55(b), (c) and (d) in order to meet the 
Medicare CoPs, and as a condition for payment at Sec.  484.205(c). The 
OASIS assessment contains data items developed to measure patient 
outcomes and improve home health care. HHAs submit the OASIS assessment 
in the internet Quality Improvement Evaluation System (iQIES) (https://iqies.cms.gov/). We note that the CoPs require OASIS accuracy and that 
monitoring and reviewing is done by CMS surveyors (Sec.  488.68(c)). It 
is important to note that to calculate quality measures from OASIS 
data, there must be a complete quality episode, which requires both a 
Start of Care (initial assessment) or Resumption of Care OASIS 
assessment and a Transfer or Discharge OASIS

[[Page 35930]]

assessment. Failure to submit sufficient OASIS assessments to allow 
calculation of quality measures, including transfer and discharge 
assessments, is a failure to comply with the CoPs Sec.  484.225(i). 
HHAs do not need to submit OASIS data for patients who are excluded 
from the OASIS submission requirements Reporting Outcome and Assessment 
Information Set Data as Part of the Conditions of Participation for 
Home Health Agencies final rule (70 FR 76202) where we excluded 
patients--
---------------------------------------------------------------------------

    \23\ For detailed information on OASIS see the official CMS web 
resource available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits.
---------------------------------------------------------------------------

     Receiving only non-skilled services;
     For whom neither Medicare nor Medicaid is paying for HH 
care (patients receiving care under a Medicare or Medicaid Managed Care 
Plan are not excluded from the OASIS reporting requirement);
     Receiving pre- or post-partum services; or
     Under the age of 18 years.
    We are proposing that HHAs participating in the expanded HHVBP 
Model would also be required to submit OASIS data according to the 
requirements of the CMS home health regulations codified at Sec.  
484.250(a) and OASIS data described in Sec.  484.55(b), (c) and (d). If 
finalized, this would mean that HHAs would not be required to submit 
additional data through OASIS specifically for the expanded Model 
compared to what is already required for COPs, and there would be no 
additional burden. We note that this proposed requirement also aligns 
with requirements under the Home Health QRP (82 FR 4578).
    For the expanded Model, we propose that the underlying source data 
used to calculate an OASIS quality measure score beginning with the CY 
2022 performance year comes from 12 months of OASIS assessment data 
from the applicable performance period via iQIES. The data extracted 
from iQIES for all OASIS measures, besides the two TNC measures, are 
aggregated to the monthly level for each HHA, separated by observed and 
predicted values used to calculate risk adjusted values. For the two 
TNC measures, we propose to use raw OASIS assessments to calculate 
applicable measure scores consistent with how we developed these 
measures.
    We request comment on our proposals.
(2) Form, Manner, and Timing of HHCAHPS Survey Measure Data
    Under the HH QRP, HHAs are required to contract with an approved, 
independent HHCAHPS survey vendor to administer the HHCAHPS on its 
behalf (42 CFR 484.245(b)(1)(iii)(B)) among other requirements.
    For purposes of the expanded HHVBP Model, we propose similar 
requirements that align with the HH QRP HHCAHPS survey measure data 
reporting requirement at 484.245(b)(1)(iii). Specifically, under the 
expanded Model we propose that--
     HHAs must contract with an approved, independent HHCAHPS 
survey vendor to administer the HHCAHPS survey on its behalf;
     CMS approves an HHCAHPS survey vendor if the applicant has 
been in business for a minimum of 3 years and has conducted surveys of 
individuals and samples for at least 2 years;
     A ``survey of individuals'' is defined as the collection 
of data from at least 600 individuals selected by statistical sampling 
methods and the data collected are used for statistical purposes;
     No organization, firm, or business that owns, operates, or 
provides staffing for an HHA is permitted to administer its own HHCAHPS 
Survey or administer the survey on behalf of any other HHA in the 
capacity as an HHCAHPS survey vendor. Such organizations are not be 
approved by CMS as HHCAHPS survey vendors;
     Approved HHCAHPS survey vendors must fully comply with all 
HHCAHPS survey oversight activities, including allowing CMS and its 
HHCAHPS survey team to perform site visits at the vendors' company 
locations; and
     Patient count exemption: HHAs that have fewer than 60 
eligible unique HHCAHPS survey patients must annually submit to CMS 
their total HHCAHPS survey patient count to CMS to be exempt from the 
HHCAHPS survey reporting requirements for a calendar year.
    A CMS contractor provides the agency with the HHCAHPS survey 
measure score aggregated to the 12-months of data for the applicable 
performance period.
    The list of approved HHCAHPS survey vendors is available at https://homehealthcahps.org or contact the HHCAHPS help desk [email protected]. 
Again, we reiterate that these proposed requirements would align with 
those under the HH QRP and would not add additional burden to HHAs.
    We also propose to codify these proposals at Sec.  
484.355(a)(1)(ii).
    We request public comment on these proposals.
(3) Form, Manner, and Timing of Claims-Based Measures
    Claims-based measures are derived from claims data submitted to CMS 
for payment purposes. Claims-based utilization measures provide 
information related to the use of health care services (for example, 
hospitals, emergency departments, etc.) resulting from a change in 
patient health status. We calculate claims-based measures based on 
claims data submitted to CMS for payment purposes. Therefore, HHAs do 
not need to submit additional information for purposes of calculating 
claims-based measures.
    We propose that the underlying source data for claims-based 
measures is 12 months of claims data during the applicable performance 
period for purposes of payment under the expanded Model.
    We request comment on our proposal.
(4) Proposed Data Reporting for Monitoring and Evaluation of the 
Expanded HHVBP Model
    Consistent with requirements under the original HHVBP Model atSec.  
484.315(c), we propose that competing HHAs under the expanded HHVBP 
Model would be required to collect and report information to CMS 
necessary for the purposes of monitoring and evaluating this model as 
required by statute.\24\ We also propose to codify this at Sec.  
484.355(b).
---------------------------------------------------------------------------

    \24\ See 1115A(b)(4) of the Act (42 U.S.C. 1315a).
---------------------------------------------------------------------------

    We seek public comment on these proposals.
(5) Proposal To Use Authority Under Section 1115A(d)(1) of the Act To 
Waive Provisions Outlined in 1890A(a)(1) and (3) Through (6) of the Act
    In section III.A.11. of this proposed rule, we propose a public 
reporting framework for the expanded HHVBP Model that would include 
annual public reporting of quality performance data. This data includes 
national benchmarks and achievement thresholds, HHA-level performance 
results for HHAs that qualify for an annual payment adjustment that 
includes applicable quality measure scores, Total Performance Scores 
and percentile rankings, improvement thresholds, and payment adjustment 
percentages. Section 1890A(a)(1) through (6) of the Act set forth 
requirements regarding the pre-rulemaking process for the selection of 
quality and efficiency measures described in section 1890(b)(7)(B) of 
the Act, including quality and efficiency measures used in reporting 
performance information to the public. We are proposing to utilize the 
Center for Medicare and Medicaid Innovation's waiver authority under 
section 1115A(d)(1) of the Act to waive the steps outlined in section 
1890A(a)(1) and (3) through (6) of the Act that

[[Page 35931]]

pertain to the pre-rulemaking process for publicly reporting 
performance information to the extent necessary to test the proposed 
expanded Model.
    Section 1115A(d)(1) of the Act allows the Secretary to waive 
certain statutory requirements ``as may be necessary solely for 
purposes of carrying out this section with respect to testing models 
described in subsection (b).'' Specifically, we propose to waive 
section1890A(a)(1) and (3) through (6) of the Act which pertains to: 
Convening multi-stakeholder groups to provide input to the Secretary on 
the use of quality and efficiency measures; transmitting the input from 
the multi-stakeholder groups to the Secretary; consideration of the 
input by the Secretary from the multi-stakeholder groups; publication 
in the Federal Register of the rationale on the quality and efficiency 
measures not endorsed for use; and, conduct an impact assessment every 
three years on the use of such measures.
    We note that we are not proposing to waive step 2 of the 6 steps in 
the pre-rulemaking process. Step 2 pertains to the public availability 
of measures considered for selection. Section 1890A(a)(2) of the Act 
specifically applies to quality and efficiency measures under Title 
XVIII, whereas the expanded model would be implemented under section 
1115A of the Act, which is in Title XI.
    We are proposing to waive the steps outlined in sections 
1890A(a)(1) and (3) through (6) of the Act to the extent necessary in 
order to allow maximum flexibility to continue to test the expanded 
HHVBP Model under authority of section 1115A of the Act. The timeline 
associated with completing the steps described by these provisions 
would impede our ability to support testing new measures in a timely 
fashion, as well as testing new ways to incentivize quality performance 
in the home health setting and a new way to pay for home health care 
services. We plan to continue to seek input from a Technical Expert 
Panel (TEP) and to monitor quality measure performance to inform 
potential measure set changes under the expanded Model. Waiving the 
five steps noted previously for the expanded HHVBP Model would allow 
for a more flexible timeline with more timely evaluation and monitoring 
of quality performance and results.
    Flexibility in timing to adjust the quality measure set and/or 
methodology to respond to unexpected events and trends in home health 
care, as well as to respond timely to any stakeholder concerns, is 
critical to the success of the HHVBP Model expansion. The ongoing 
uncertainty levied by the COVID-19 pandemic, and similar events that 
may come in the future, requires us to maintain responsiveness to 
anomalies in the quality measure data. These challenges may require the 
flexibility to timely implement changes to ensure that measure sets 
continue to appropriately assess performance in light of external 
factors. In addition, trends in market consolidation and small business 
policies in the home health care industry could require certain 
adjustments to measure methodology, that is, minimum volume 
requirements, or require adjustment to the applicability of measures. 
The home health care sector is also becoming a more important source of 
care for beneficiaries who prefer to age in the community, rather than 
in an institution. This trend, in addition to the national shift in 
beneficiary demographics, could require flexibility in the quality 
measure set. This flexibility would be a key lever to adapt the Model 
to the unpredictable changes led by beneficiary preference, industry 
trends, and unforeseen nationwide events that HHAs are particularly 
sensitive to. We seek comment on our proposal to waive the steps 
outlined in section 1890A(a)(1) and (3) through (6) of the Act as 
applicable and to the extent necessary to test the proposed expanded 
Model.
7. Proposed Performance Scoring Methodology
a. Considerations for Developing the Proposed Total Performance Score 
Methodology
    We considered several factors when we initially developed and 
subsequently refined the performance scoring methodology over the 
course of the original Model, and we are proposing to apply a similar 
methodology for the expanded HHVBP Model. We explain later in this 
section how we propose to calculate a ``performance score'' for each 
applicable measure for each competing HHA, which is defined as the 
achievement or improvement score (whichever is greater). The ``Total 
Performance Score,'' or ``TPS,'' is the numeric score, ranging from 0 
to 100, awarded to each qualifying HHA based on the weighted sum of the 
performance scores for each applicable quality measure under the HHVBP 
Model expansion. The following principles guided the original Model's 
design, as well as these proposals for the expanded Model.
    First, we believe the performance scoring methodology should be 
straightforward and transparent to HHAs, beneficiaries, and other 
stakeholders. HHAs should be able to clearly understand performance 
scoring methods and performance expectations to optimize quality 
improvement efforts. The public should also understand performance 
score methods to utilize publicly-reported information when choosing 
HHAs.
    Second, we believe the performance scoring methodology for the 
proposed HHVBP Model expansion should be aligned appropriately with the 
quality measurements adopted for other Medicare value-based purchasing 
programs, including those introduced in the hospital and skilled 
nursing home settings. This alignment would facilitate the public's 
understanding of quality measurement information disseminated in these 
programs and foster more informed consumer decision-making about their 
health care choices.
    Third, we believe that differences in performance scores must 
reflect true differences in performance. To make sure that this point 
is addressed in the performance scoring methodology for the proposed 
HHVBP Model expansion, we assessed quantitative characteristics of the 
measures, including the current state of measure development, number of 
measures, and the number and grouping of measure categories.
    Fourth, we believe that both quality achievement and improvement 
must be measured appropriately in the performance scoring methodology 
for the expanded HHVBP Model. The proposed methodology specifies that 
performance scores under the expanded HHVBP Model would be calculated 
utilizing the higher of achievement or improvement scores for each 
measure, with achievement out of 10 points and improvement out of 9. We 
considered the impact of performance scores utilizing achievement and 
improvement on HHAs' behavior and the resulting payment implications. 
As under the original Model, using the higher of achievement or 
improvement scores would allow the Model expansion to recognize HHAs 
that have made improvements, though their measured performance score 
may still be relatively lower in comparison to other HHAs. By limiting 
the improvement score to a scale across 0 to 9, we prioritize 
achievement relative to improvement.
    Fifth, we intend that the expanded Model would utilize the most 
currently available data to assess HHA performance, to the extent 
appropriate and feasible within the current technology landscape. We 
recognize that not all HHAs have the ability to submit data 
electronically or digitally

[[Page 35932]]

and that the proposed quality measure data would not be available 
instantaneously due to the time required to collect, submit, and 
process quality measurement information accurately; however, we intend 
to process data as efficiently as possible.
b. Proposed Performance Score Methodology
(1) Overview
    The goal of the performance scoring methodology would be to produce 
a TPS for each qualifying HHA based on its raw scores on each 
applicable quality measure included in the expanded HHVBP Model. We 
would then use the HHA's TPS to determine the HHA's payment adjustment 
percentage. At a high level, the following summarizes the proposed 
steps for determining an HHA's TPS under the expanded Model, which is 
similar to the approach used under the original Model: (1) Each HHA 
would receive a raw quality measure score for each applicable measure 
during the performance year; (2) the HHA would receive an ``achievement 
score'' for each applicable measure, which is defined as a numeric 
value between 0 and 10 that quantifies an HHA's performance on a given 
quality measure compared to other HHAs in the same cohort in the 
baseline year (calculated using the achievement threshold and 
benchmark, as defined in section III.A.7.b.2. of this proposed rule); 
(3) each HHA would also receive an ``improvement score'' for each 
applicable measure, which is defined as a numeric value between 0 and 
9, that quantifies an HHA's performance on a given quality measure 
compared to its own individual performance in the baseline year (the 
improvement threshold, as defined in section III.A.7.b.2. of this 
proposed rule); (4) each HHA would be assigned a ``performance score'' 
on each applicable measure that is the higher of the achievement score 
or the improvement score, as described in section III.A.7.b.2 of this 
proposed rule; and (5) each performance score would then be weighted, 
using each measure's assigned weight, and summed to generate the HHA's 
TPS, as described in section III.A.7.e. of this proposed rule. The 
result of this process would be a TPS for each competing HHA that can 
be translated into a payment adjustment percentage using the LEF 
applicable to each cohort, as described in section III.A.8. of this 
proposed rule.
    Our proposal for the performance scoring methodology under the 
expanded HHVBP Model follows closely to that of the original Model. As 
discussed in more depth in the sections that follow, under the expanded 
HHVBP Model, we propose that we would assess each HHA's TPS based upon 
all applicable quality measures (defined below) in the expanded Model 
measure set in the applicable performance year. Each competing HHA 
would receive an interim assessment on a quarterly basis, as described 
in detail in section III.A.9.a. of this proposed rule. The performance 
scoring methodology would be used to determine an annual distribution 
of value-based payment adjustments among HHAs in a cohort so that HHAs 
achieving the highest performance scores would receive the largest 
upward payment adjustment. The proposed methodology includes three 
primary features, each of which is discussed in more detail in the 
sections that follow:
     The HHA's TPS would reflect all of the claims- and OASIS-
based measures for which the HHA meets the minimum of 20 home health 
episodes of care per year and all of the individual components that 
compose an HHCAHPS survey measure for which the HHA meets the minimum 
of 40 HHCAHPS surveys received in the performance year, defined as 
``applicable measures''.
     An HHA's TPS would be determined by weighting and summing 
the higher of that HHA's achievement or improvement score for each 
applicable measure as described in section III.A.7.b. of this proposed 
rule.
     The claims-based, OASIS assessment-based, and the HHCAHPS 
survey-based measure categories would be weighted 35 percent, 35 
percent, and 30 percent, respectively, and would account for 100 
percent of the TPS. If an HHA is missing a measure category or a 
measure within the OASIS-based measure category, the measures would be 
reweighted, as described further in section III.A.7.e. of this proposed 
rule.
    As noted, we are proposing that many of the key elements from the 
original Model's performance scoring methodology would also apply for 
the expanded HHVBP Model, as we discuss in more detail in the sections 
that follow. The primary changes between the original Model and the 
expanded Model would be that first, because we are not proposing to 
require submission of the New Measures data, we would not consider New 
Measures in calculating the TPS under the expanded Model. The New 
Measures reporting currently accounts for 10 percent of the TPS under 
the original HHVBP Model. In addition, we are proposing small changes 
to the achievement and improvement score formulas to simplify their 
calculation and interpretation, without materially changing the output. 
We are also proposing to calculate benchmarks and achievement 
thresholds based on national volume-based cohorts, as opposed to the 
State-based cohorts under the original Model, to align with the 
proposal for volume-based cohorts as described in section III.A.4. of 
this proposed rule. Finally, we are proposing to change the potential 
score range for the TNC Mobility and TNC Self-Care measures from 0 to 
15 points for achievement and 0 to 13.5 points for improvement as under 
the original Model, to 0 to 10 points for achievement and 0 to 9 points 
for improvement in the expanded Model. This change simplifies and 
aligns the calculation of the composite measure scores. The proposed 
weighting in the expanded Model, which follows the original Model, 
accounts for the intended increase in relative contribution from these 
composite measures to the TPS.
(2) Proposed Calculation of the Benchmark and Achievement Threshold
    For scoring HHAs' performance on measures in the claims-based, 
OASIS-based, and the HHCAHPS survey-based categories, we propose 
similar elements of the scoring methodology as set forth in the 
original Model (as described in Sec.  484.320), including allocating 
points based on achievement or improvement and calculating those points 
based on benchmarks and thresholds. As proposed in section III.A.5.b.1. 
of this proposed rule, with the exception of new HHAs, the baseline 
year would be CY 2019 (January 1, 2019 through December 31, 2019) for 
the CY 2022 performance period/CY 2024 payment year and subsequent 
years. All benchmarks and achievement thresholds would be set based on 
HHA performance in the designated baseline year.
    We propose that to determine achievement points for each measure, 
HHAs would receive points along an achievement range, which is a scale 
between the achievement threshold and a benchmark. We propose to define 
the ``achievement threshold'' as the median (50th percentile) of all 
HHAs' performance scores on the specified quality measure during the 
baseline year, calculated separately for the larger- and smaller-volume 
cohorts. We propose to calculate the benchmark as the mean of the top 
decile of all HHAs' performance scores on the specified quality measure 
during the baseline year, calculated separately for the larger- and 
smaller-volume cohorts. Unlike the original Model, for the expanded 
HHVBP Model, we are proposing to use

[[Page 35933]]

a national sample separated into larger-volume and smaller-volume HHA 
cohorts to calculate both the achievement threshold and the benchmark, 
rather than calculating individual values for each selected State as in 
the original Model, as described in section III.A.4.b. of this proposed 
rule. We also propose that to determine improvement points for each 
measure, HHAs would receive points along an improvement range, which is 
a scale between an HHA's performance during the baseline year and the 
benchmark. The HHA's baseline year score is termed the ``improvement 
threshold.'' The benchmark is the same benchmark used in the 
achievement calculation. The achievement threshold and benchmarks for 
each cohort, and the improvement threshold for each HHA, calculated 
using baseline year performance scores, would be provided to the HHAs 
as soon as feasible. In addition, benchmarks, achievement thresholds, 
and improvement thresholds for each measure would be restated on each 
HHA's interim performance report (IPR). We also propose to codify the 
proposed definitions of achievement threshold, benchmark, and 
improvement threshold at Sec.  484.345. We seek public comment on these 
proposals.
(i) Proposed Calculation of Achievement Score
    In the original Model, we calculated the achievement score by 
dividing the difference between the HHA's performance score and the 
achievement threshold by the difference between the benchmark and the 
achievement threshold, multiplying the quotient by 9, and then taking 
the product and adding 0.5 (80 FR 68681).
    Under the expanded HHVBP Model, we propose a similar approach, but 
with minor modifications intended to improve and simplify the 
calculation and the interpretation of the achievement score. Under the 
expanded Model, as under the original Model, we propose that an HHA 
could earn between 0 to 10 achievement points for each applicable 
measure based on its performance during the performance year relative 
to other HHAs in its cohort in the baseline years, quantified by the 
achievement threshold and the benchmark, as proposed in section 
III.A.7.b.2. of this proposed rule. We propose to calculate the 
achievement score using the following formula:
[GRAPHIC] [TIFF OMITTED] TP07JY21.042

Relative to the original Model, this proposed equation is simplified, 
for ease of calculation and interpretation, by multiplying it by 10, as 
opposed to 9, and by no longer adding 0.5. The performance rankings 
would not be materially affected by this change. Should the calculated 
achievement points exceed 10 in the equation, we propose that the 
maximum achievement points would be capped at 10 achievement points. As 
under the original Model, we propose to round each measure's 
achievement points up or down to the third decimal point under the 
expanded HHVBP Model. For example, an achievement score of 4.5555 would 
be rounded to 4.556. This ensures precision in scoring and ranking HHAs 
within each cohort. In determining an achievement score based on the 
HHA's raw quality measure score, we propose to apply the following 
rules to the achievement score calculation to ensure the achievement 
score falls within the range of 0 to 10 points to align with the 
simplified equation:
     An HHA with a raw quality measure score greater than or 
equal to the benchmark receives the maximum of 10 points for 
achievement.
     An HHA with a raw quality measure score greater than the 
achievement threshold (but below the benchmark) receives greater than 0 
but less than 10 points for achievement (prior to rounding), by 
applying the achievement score formula.
     An HHA with a raw quality measure score that is less than 
or equal to the achievement threshold receives 0 points for 
achievement.
    We are proposing to no longer calculate the achievement scoring for 
the TNC Self-Care and TNC Mobility measures out of 15 possible points, 
as under the original Model, and to instead simplify and align the 
calculation with other measures by calculating achievement scoring for 
the composite measures out of 10 possible points. The proposed 
weighting, consistent with the original Model, would already assign a 
larger contribution from these composite measures to the overall OASIS 
category score, as described in section III.A.7.e.(2).(iii). of this 
proposed rule. We also propose to codify these proposals at Sec.  
484.360. We seek public comment on these proposals.
(ii) Proposed Calculation of the Improvement Score
    In the original Model, beginning with performance year 4, we 
calculated improvement scores by dividing the difference between the 
HHA's performance year score and the HHA's baseline year score by the 
difference between the benchmark and the HHA's baseline year score, 
multiplying the quotient by 9, and then taking the product and 
subtracting 0.5 to calculate the improvement score (83 FR 56543).
    Similarly, under the expanded HHVBP Model, we propose to allocate 0 
to 9 improvement points to an HHA for each applicable measure based 
upon how much an HHA's performance score in the performance year 
improved relative to its performance score during the baseline year. 
The expanded HHVBP Model aims to ensure that all HHAs provide high 
quality care and awarding more points for achievement than for 
improvement supports this goal. This continues to also align with the 
HVBP Program, where hospitals can earn a maximum of 9 improvement 
points if their measure score falls between the improvement threshold 
and the benchmark (76 FR 26515).
    We propose to establish a unique improvement range for each measure 
and for each HHA that defines the difference between the HHA's baseline 
year score (referred to as the ``improvement threshold'') and the 
benchmark for the applicable measure, calculated for the applicable 
volume-based HHA cohort, which is the same benchmark used in the 
achievement scoring calculation. The following proposed improvement 
score formula quantifies the HHA's performance on each applicable 
measure in the performance year relative to its own performance in the 
baseline year by calculating the improvement score:
[GRAPHIC] [TIFF OMITTED] TP07JY21.043


[[Page 35934]]


Relative to the original Model, this proposed equation is simplified, 
for ease of calculation and interpretation, by no longer subtracting 
0.5. Should the calculated points exceed 9, we propose that the maximum 
improvement points would be capped at 9 improvement points. Like the 
achievement points, we propose to round each measure's improvement 
points up or down to the third decimal point under the expanded HHVBP 
Model.
    In calculating the improvement score based on the HHA's raw quality 
measure score, we are proposing to apply the following rules to the 
improvement score calculation to ensure the improvement score falls 
within the range of 0 to 9 points to align with the simplified 
equation:
     If the HHA's raw quality measure score is greater than or 
equal to the benchmark, the HHA would receive an improvement score of 9 
points--an HHA with a raw quality measure score greater than or equal 
to the benchmark could still receive the maximum of 10 points for 
achievement.
     If the HHA's raw quality measure score is greater than its 
improvement threshold but below the benchmark (within the improvement 
range), the HHA would receive an improvement score that is greater than 
0 and less than 9 (before rounding) based on the improvement score 
formula and as illustrated in the examples in the next section.
     If the HHA's raw quality measure score is less than or 
equal to or its improvement threshold for the measure, the HHA would 
receive 0 points for improvement.
    We are proposing to no longer calculate the improvement scoring for 
the TNC Self-Care and TNC Mobility measures out of 13.5 possible 
points, as under the original Model, and to instead simplify and align 
the calculation with other measures by calculating improvement scoring 
for the composite measures out of 10 possible points. The proposed 
weighting, consistent with the original Model, would already assign a 
larger contribution from these composite measures to the overall OASIS 
category, as described in section III.A.7.e.(2).(iii). of this proposed 
rule. We also propose to codify these proposals at Sec.  484.360. We 
seek public comment on these proposals.
(iii) Examples of Calculating Achievement and Improvement Scores
    For illustrative purposes, the following examples demonstrate how 
the performance scoring methodology would be applied in the context of 
the measures in the claims-based, OASIS-based, and the HHCAHPS survey-
based categories. These HHA examples are based on illustrative data 
from CY 2019 (for the baseline year) and hypothetical data for CY 2022 
(for the performance year). The benchmark calculated for the Dyspnea 
measure is 97.676 for HHA A (calculated as the mean of the top decile 
of HHA performance from the CY 2019 baseline year for the volume-based 
cohort). The achievement threshold is 75.358 (calculated as the median 
or the 50th percentile of HHA performance from the CY 2019 baseline 
year for the same volume-based cohort).
    Figure 4 shows the scoring for HHA `A' as an example. HHA A's CY 
2022 performance year score for the Dyspnea measure was 98.348, 
exceeding both the CY 2019 achievement threshold and benchmark, which 
means that HHA A earned the maximum 10 points based on its achievement 
score. Its improvement score is irrelevant in the calculation because 
the HHA's performance score for this measure exceeded the benchmark, 
and the maximum number of improvement points possible is 9.
    Figure 4 also shows the scoring for HHA `B.' HHA B's performance on 
the Dyspnea measure was 52.168 for the CY 2019 baseline year (HHA B's 
improvement threshold) and increased to 76.765 (which is above the 
achievement threshold of 75.358) for the CY 2022 performance year. To 
calculate the achievement score, HHA B would earn 0.630 achievement 
points, calculated as follows: 10 * (76.765-75.358)/(97.676-75.358) = 
0.630.\25\ Calculating HHA B's improvement score yields the following 
result: Based on HHA B's period-to-period improvement, from 52.168 in 
the baseline year to 76.765 in the performance year, HHA B would earn 
4.864 improvement points, calculated as follows: 9 * (76.765-52.168)/
(97.676-52.168) = 4.864.\26\ Because the higher of the achievement and 
improvement scores is used, HHA B would receive 4.864 improvement 
points for this measure.
---------------------------------------------------------------------------

    \25\ The proposed formula for calculating achievement points is 
10 * (HHA Performance Year Score-Achievement Threshold)/(Benchmark-
Achievement Threshold).
    \26\ The proposed formula for calculating improvement points is 
9 * (HHA Performance Year Score-HHA Improvement Threshold)/(HHA 
Benchmark-HHA Improvement Threshold).
---------------------------------------------------------------------------

    In Figure 5, HHA `C' yielded a decline in performance on the TNC 
Self-Care measure, falling from 70.266 to 58.487. HHA C's performance 
during the performance year was lower than the achievement threshold of 
75.358 and, as a result, HHA C would receive zero points based on 
achievement. It would also receive zero points for improvement because 
its performance during the performance year was lower than its 
improvement threshold.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TP07JY21.044


[[Page 35936]]


[GRAPHIC] [TIFF OMITTED] TP07JY21.045

BILLING CODE 4120-01-C
c. Minimum Threshold Number of Cases for Claims-Based, OASIS-Based, and 
HHCAHPS Survey-Based Measures To Receive a Measure Score
    For the expanded Model, we are proposing to apply the same policies 
around minimum case counts for each measure as implemented under the 
original Model, as described in proposed Sec.  484.345. We propose to 
continue to award an HHA the higher-of achievement or improvement 
points, as proposed previously, for ``applicable measures'' only. Under 
this proposal, for the measures included in the claims-based and OASIS-
based measure categories, an ``applicable measure'' is one for which 
the HHA has provided a minimum of 20 home health episodes of care per 
year and, therefore, has at least 20 cases in the denominator. We are 
proposing this minimum to align with the original HHVBP Model and the 
measure specifications used for the Patient Quality of Care Star 
Ratings.\27\ For the individual components that compose the HHCAHPS 
survey measure, an ``applicable measure'' means a component for which a 
competing HHA has submitted a minimum of 40 completed HHCAHPS surveys. 
A minimum of 40 completed HHCAHPS surveys for each applicable measure 
for the expanded Model represents a balance between providing 
meaningful data for payment adjustments and having more HHAs with 
sufficient numbers of measures with performance scores. Moreover, using 
a minimum of 40 completed HHCAHPS surveys for each applicable measure 
would align with the Patient Survey Star Ratings on Home Health 
Compare.\28\
---------------------------------------------------------------------------

    \27\ Centers for Medicare & Medicaid Services. (2020, April). 
Quality of Patient Care Star Ratings Methodology. Home Health 
Quality of Patient Care Star Ratings. https://www.cms.gov/files/document/quality-patient-care-star-ratings-methodologyapril-2020.pdf.
    \28\ Centers for Medicare & Medicaid Services. (2016, March). 
Technical Notes for HHCAHPS Star Ratings. Home Health HHCAHPS Star 
Ratings. https://homehealthcahps.org/Portals/0/HHCAHPS_Stars_Tech_Notes.pdf.
---------------------------------------------------------------------------

    We also propose to codify this proposed definition of an 
``applicable measure'' at Sec.  484.345. We seek public comment on 
these proposals.
d. Minimum Number of Applicable Measures for an HHA To Receive a Total 
Performance Score
    For the expanded Model, we are proposing to apply the same policies 
around the minimum number of applicable measures to receive a TPS, as 
implemented under the original Model. We are proposing that, beginning 
with the CY 2022 performance year and for subsequent years, an HHA that 
does not meet the minimum threshold of cases or completed HHCAHPS 
surveys, as applicable, on five or more measures under the expanded 
Model would not receive a TPS or a payment adjustment based on that 
performance year. Under the expanded Model, this means 5 of the 12 
possible applicable measures in the measure set, which includes two 
claims-based measures, 5 OASIS-based measures, and the 5 components 
from the HHCAHPS survey measure. HHAs without five applicable measures 
for a performance year would be paid for HHA services in an amount 
equivalent to the amount that would have been paid under section 1895 
of the Act. We believe that a minimum of five applicable measures 
allows for a robust basis on which to adjust payment while also 
maximizing the number of HHAs eligible for the payment adjustment.
    Although those HHAs that do not meet this minimum would not be 
subject to payment adjustments under the expanded Model, we propose 
that other applicable policies under the expanded HHVBP Model would 
still apply. We propose that these HHAs

[[Page 35937]]

would receive IPRs for any measures that meet the definition of 
applicable measure, and they would continue to have future 
opportunities to compete for payment adjustments. Based on the most 
recent data available, the vast majority of HHAs are reporting on at 
least five applicable measures. In 2019, those with less than five 
applicable measures account for less than 2.4 percent of the claims 
made (and 2.0 percent of claims payments made) across the 9,526 HHAs 
delivering care nationwide.
    We also propose to codify this proposal at Sec.  484.360(c). We 
seek public comment on this proposal.
e. Proposed Weights for the Claims-Based, OASIS-Based, and HHCAHPS 
Survey Measures
    Except for removing the New Measures category, for the expanded 
HHVBP Model, we are generally proposing the same policies regarding the 
weighting of measures and the re-distribution of weights when measures 
or measure categories are missing as under the original Model (83 FR 
56536).
(1) Proposed Weighting and Re-Distribution of Weights Between the 
Measure Categories
    In this proposed rule, we propose to group the expanded Model 
proposed measures into measure categories based on their data source as 
indicated in Table 28: Claims-based, OASIS-based, and the HHCAHPS 
survey-based. We propose that claims-based, OASIS-based, and the 
HHCAHPS survey-based categories would be weighted 35 percent, 35 
percent, and 30 percent, respectively, when the HHA has applicable 
measures in all three categories and otherwise meets the minimum 
threshold to receive a TPS. Together, all three categories would 
account for 100 percent of the TPS. The measure weights reflect 
prioritization of the two claims-based measures because they may have a 
greater impact on reducing Medicare expenditures. In addition, we also 
place slightly more weight on the OASIS-based measures since they 
represent a larger variety of measures covering a range of quality 
topics as compared to the HHCAHPS survey measure.
    We also propose that where an HHA is missing all measures from a 
single measure category, the weights for the remaining two measure 
categories would be redistributed such that the proportional 
contribution remains consistent with the original weights. For 
instance, some smaller-volume HHAs may be missing the HHCAHPS survey 
measure, which would require re-distributing weights to the claims-
based (otherwise weighted 35 percent) and OASIS-based (otherwise 
weighted 35 percent) measure categories, such that the claims-based and 
OASIS-based measure categories would each be weighted at 50 percent of 
the total TPS. Where an HHA is missing the claims-based category, the 
OASIS-based (otherwise weighted 35 percent) and the HHCAHPS survey 
(otherwise weighted 30 percent) measure categories would be reweighted 
to 53.85 percent for the OASIS-based measures and 46.15 percent for the 
HHCAHPS survey measure.29 30 Finally, we propose that if two 
measure categories are missing, the remaining category would be 
weighted 100 percent. We refer readers to Table 29 for the distribution 
of measure category weights under various scenarios.
---------------------------------------------------------------------------

    \29\ OASIS-based measures reweighting = 35% original OASIS 
weight/(35% original OASIS weight + 30% original HHCAHPS weight) = 
53.85% revised OASIS weight.
    \30\ HHCAHPS reweighting = 30% original HHCAHPS weight/(35% 
original OASIS weight + 30% original HHCAHPS weight) = 46.15% 
revised HHCAHPS weight.
---------------------------------------------------------------------------

(2) Proposed Quality Measure Weights Within Measure Categories
    Within the measure categories, we are proposing to weight certain 
individual measures differently than other measures in the same 
category.
(i) HHCAHPS Survey Measure Category
    For the HHCAHPS survey measure category, we propose that all five 
components are weighted equally to determine the overall HHCAHPS survey 
measure percentage, which would contribute 30 percent to the overall 
TPS. This measure category would not require re-distribution of weights 
for the individual components because HHAs either meet the minimum 
requirement for number of completed surveys for all HHCAHPS survey 
measure components or they do not meet the minimum requirements.
(ii) Claims-Based Measure Category
    For the claims-based measure category, we are proposing to weight 
the ACH measure at 75 percent, and the ED Use measure at 25 percent of 
the total measure weight for this measure category. We are proposing to 
place a higher weight on the ACH measure because it reflects a more 
severe health event and because inpatient hospitalizations generally 
result in more Medicare spending than the average emergency department 
visit that does not lead to an acute hospital admission. Like the 
HHCAHPS survey measure components, an HHA would either have sufficient 
volume for both claims-based measures to be applicable measures or it 
would have data for neither measure since both measures require the 
same minimum of 20 episodes per performance year. Consequently, re-
distributing weights for either measure within the claims-based measure 
category should not be necessary.
(iii) OASIS-Based Measure Category
    For the OASIS-based measure category, we propose to weight both the 
TNC Self Care and TNC Mobility measures at 25 percent each; and the 
Dyspnea, Discharged to Community, and Oral Medications measures at 
16.67 percent each of the total measure weight for this measure 
category. Both the TNC Self-Care and TNC Mobility measures are composed 
of several measures that are consolidated into two composite measures; 
because of this, we are proposing to weight them slightly more than the 
other three measures, which are not composite measures, as under the 
original Model. Under this proposal, should any measures in the 
category be missing, we propose to re-distribute weights across the 
measures such that the original proportions are maintained. For 
instance, should an HHA be missing both the TNC Self-Care and Dyspnea 
measures, the remaining measures would be weighted as 42.85 percent for 
the TNC Mobility measure, 28.57 percent for the Discharged to Community 
measure, and 28.57 percent for the Oral Medications measure, which 
reflects the relative ratios of 25 percent to 16.67 percent to 16.67 
percent, respectively.31 32 33
---------------------------------------------------------------------------

    \31\ TNC Mobility reweighting = 25% original TNC Mobility 
weight/(25% original TNC Mobility weight + 16.67% original 
Discharged to Community weight + 16.67% original Oral Medications 
weight) = 42.85% revised TNC Mobility weight.
    \32\ Discharged to Community reweighting = 16.67% original 
Discharged to Community weight/(25% original TNC Mobility weight + 
16.67% original Discharged to Community weight + 16.67% original 
Oral Medications weight) = 28.57% revised Discharged to Community 
weight.
    \33\ Oral Medications reweighting = 16.67% original Oral 
Medications weight/(25% original TNC Mobility weight + 16.67% 
original Discharged to Community weight + 16.67% original Oral 
Medications weight) = 28.57% revised Oral Medications weight.
---------------------------------------------------------------------------

    See Table 28 for a comprehensive list of the proposed within-
category measure weights.

[[Page 35938]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.046

    Table 29 presents the proposed weights for the proposed measures 
and measure categories under various reporting scenarios.
[GRAPHIC] [TIFF OMITTED] TP07JY21.047

    We also propose to codify these proposals at Sec.  484.360. We seek 
public comment on these proposals.
f. Examples of the Total Performance Score Calculation
    The following are two examples of the proposed performance score 
calculation, beginning with the assigned achievement vs. improvement 
points. The following describes the TPS calculations for HHA ``D'' and 
HHA ``E.''
    In this first example, out of a possible 12 applicable measures, 
which includes two claims-based measures, five OASIS assessment-based 
measures, and five components that make up the HHCAHPS survey measure, 
HHA ``D'' has at least 20 episodes of care and received at least 40 
completed HHCAHPS surveys in the 12-month performance year, which means 
the HHA received scores on all 12 quality

[[Page 35939]]

measures. Under the proposed scoring methodology outlined previously, 
for HHA D, the measure category weights would be as follows: 35 percent 
for the claims-based measures, 35 percent for the OASIS assessment-
based measures, and 30 percent for the HHCAHPS Survey-based measures. 
See Table 30 for a detailed calculation of the TPS. For each measure in 
column 1, HHA D receives the highest of its achievement or improvement 
score, which is listed in column 2. Each applicable measure's weight is 
listed in column 3. To determine the weighted points in column 4, 
multiply the measure score in column 2 by the measure's weight in 
column 3 and then by 10. The total performance score is the sum of all 
the weighted points listed in column 4. In the case of HHA D, the TPS 
is 46.021.
[GRAPHIC] [TIFF OMITTED] TP07JY21.048

    In the second example, HHA ``E'' has only seven applicable 
measures. Because it did not receive the minimum count of HHCAHPS 
surveys for all components, HHA E did not receive any scores on the 
HHCAHPS Survey components. Where an HHA is missing the HHCAHPS Survey 
components, the HHA's HHCAHPS Survey measure category is re-weighted at 
0% and the remaining two measure categories are re-weighted such that 
their proportional contribution remains consistent with the original 
weights and the total of the weights sums to 100 percent. Based on the 
ratio of the original weights for the claims-based (35 percent) and the 
OASIS-based (35 percent) measure categories, each category contributes 
50 percent to the TPS. See Table 30 for the detailed calculation of the 
TPS. For each applicable measure in column 1, HHA E received the 
highest of its achievement or improvement score, which is listed in 
column 2. Column 2 lists N/A for each of the HHCAHPS Survey measure 
components since this HHA had fewer than 40 HHCAHPS surveys in the 
performance year. Each applicable measure's weight is listed in column 
3. To determine the weighted points in column 4, multiply the measure 
score in column 2 by the applicable measure's weight in column 3 and 
then by 10. The total performance score is the sum of all the weighted 
points listed in column 4. In the case of HHA E, the TPS is 27.750.

[[Page 35940]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.049

8. Proposed Payment Adjustment Methodology
    We finalized the use of the Linear Exchange Function (LEF) for the 
original Model (80 FR 68686) because it was the simplest and most 
straightforward option to provide the same marginal incentives to all 
HHAs, and we believe the same to be true for the HHVBP Model expansion. 
The LEF is used to translate an HHA's TPS into a percentage of the 
value-based payment adjustment earned by each HHA. Performance 
measurement is based on a linear exchange function which only includes 
competing-HHAs.
    Under the expanded HHVBP Model, we propose to codify at Sec.  
484.370 a methodology for applying value-based payment adjustments to 
home health services. We propose that payment adjustments would be made 
to the HH PPS final claim payment amount as calculated in accordance 
with HH PPS regulations at Sec.  484.205 using a LEF, similar to the 
methodology utilized by the HVBP Program (76 FR 26533). We propose the 
function's intercept at zero percent, meaning those HHAs that have a 
TPS that is average in relationship to other HHAs in their cohort would 
not receive any payment adjustment. Under this proposal, payment 
adjustments for each HHA with a score above zero percent would be 
determined by the slope of the LEF. We propose to set the slope of the 
LEF for the given performance year so that the estimated aggregate 
value-based payment adjustments for that performance year are equal to 
5% (the proposed maximum payment adjustment for CY 2024) of the 
estimated aggregate base operating payment amount for the corresponding 
payment year, calculated separately for the larger and smaller volume 
cohorts nationwide. The estimated aggregate base operating payment 
amount is the total amount of payments made to all the HHAs by Medicare 
nationwide in each of the larger- and smaller-volume cohorts.
    We propose that the LEF would be calculated using the following 
steps, after calculating and ranking the Total Performance Score (TPS) 
(the range of the TPS is 0-100) for each HHA in the cohort:
     Step 1, Determine the `Prior Year Aggregate HHA Payment 
Amount' that each HHA was paid in the prior year.
     Step 2, Determine the `X-percent (the applicable payment 
year payment adjustment percent) Payment Reduction Amount' by 
multiplying the Prior Year Aggregate HHA Payment Amount per HHA by the 
`X-percent Reduction Rate'; the sum of these amounts is the numerator 
of the LEF.
     Step 3, Determine the `TPS Adjusted Reduction Amount' by 
multiplying the `X-percent Payment Reduction Amount' by the TPS/100 . 
The sum of these amounts is the denominator of the LEF.
     Step 4, Calculate the LEF by dividing the sum of all HHAs' 
`X-percent Payment Reduction Amount' by the sum of the `TPS Adjusted 
Reduction Amount'.
     Step 5, Determine the `Final TPS Adjusted Payment Amount' 
by multiplying the LEF by the `TPS Adjusted Reduction Amount' for each 
HHA.
     Step 6, Determine the `Quality Adjusted Payment Rate' by 
dividing the `Final TPS Adjusted Payment Amount' by the `Prior Year 
Aggregate HHA Payment Amount'.
     Step 7, Determine the `Final Percent Payment Adjustment' 
that will be applied to the HHA payments by subtracting the `X-percent 
Reduction Rate' from the `Quality Adjusted Payment Rate'.
    Table 32 provides an example of how the LEF would be calculated and 
how it would be applied to calculate the percentage payment adjustment 
to an HHA's TPS. For this example, we applied the maximum 5-percent 
payment adjustment proposed for the expanded HHVBP Model for the CY 
2024 payment year.

[[Page 35941]]

    Step #1 involves the calculation of the `Prior Year Aggregate HHA 
Payment Amount' (C2 in Table 32) that each HHA was paid from claims 
data under the HH PPS in the year prior to the performance year. For 
the CY 2024 payment year, from claims data, all payments are summed 
together for each HHA for CY 2021, the year prior to the performance 
year.
    Step #2 involves the calculation of the `5-percent Payment 
Reduction Amount' (C3 of Table 32 for each HHA, which is calculated by 
multiplying the `Prior Year Aggregate HHA Payment Amount', from Step #1 
by the `5-percent Payment Reduction Rate'. The aggregate of the `5-
percent Payment Reduction Amount' is the numerator of the LEF.
    Step #3 involves the calculation of the `TPS Adjusted Reduction 
Amount' (C4 of Table 32) by multiplying the `5-percent Payment 
Reduction Amount' from Step #2 by the TPS (C1) divided by 100. The 
aggregate of the `TPS Adjusted Reduction Amount' is the denominator of 
the LEF.
    Step #4 involves calculating the LEF (C5 of Table 32) by dividing 
the sum of `5- percent Payment Reduction Amount' calculated in Step #2 
by the sum of `TPS Adjusted Reduction Amount' calculated in Step #3.
    Step #5 involves the calculation of the `Final TPS Adjusted Payment 
Amount' (C6 of Table 32) by multiplying the `TPS Adjusted Reduction 
Amount' from Step #3 (C4) by the LEF from Step #4 (C5). The `Final TPS 
Adjusted Payment Amount' is an intermediary value used to calculate 
`Quality Adjusted Payment Rate'.
    Step #6 involves the calculation of the `Quality Adjusted Payment 
Rate' (C7 of Table 32) by dividing the `Final TPS Adjusted Payment 
Amount' from Step #5 by the `Prior Year Aggregate HHA Payment Amount' 
from Step #1. This is an intermediary step to determining the payment 
adjustment rate.
    Step #7 involves the calculation of the `Final Percent Payment 
Adjustment' (C8 of Table 32) by subtracting 5 percent from `Quality 
Adjusted Payment Rate'. The `Final Percent Payment Adjustment' would be 
applied to the HHA payments for the payment adjustment year. We propose 
that the payment adjustment percentage would be capped at no more than 
plus or minus 5 percent for the applicable performance year and the 
payment adjustment would occur on the final claim payment amount for 
the applicable payment year.
    We also propose to codify this payment methodology policy at Sec.  
484.370. We invite comments on this proposal.
[GRAPHIC] [TIFF OMITTED] TP07JY21.050

9. Performance Feedback Reports
    We propose to use two types of reports that would provide 
information on performance and payment adjustments under the expanded 
HHVBP Model. These reports would mirror those we have distributed to 
HHAs under the original Model.
a. Proposed Interim Performance Report
    The first report is the Interim Performance Report (IPR) that would 
be distributed to HHAs quarterly. The IPR would contain information on 
the interim quality measure performance based on the 12 most recent 
months of data available. The IPR would provide feedback to HHAs 
regarding performance relative to quality measure achievement 
thresholds and benchmarks and would provide competing HHAs the 
opportunity to assess and track their performance relative to their 
peers and their own past performance. HHAs would receive both a 
preliminary and final version of the IPR each quarter. The Final IPR 
would become available, as soon as administratively feasible, after the 
preliminary IPR is distributed and after recalculation requests are 
processed, in accordance with the process in section III.A.10. of this 
proposed rule (Appeal Processes).
    Beginning with the data collected during the first quarter of CY 
2022 (that is, data for the period January 1, 2022 to March 31, 2022), 
and for every quarter of the expanded HHVBP Model thereafter, we 
propose to provide each HHA with an IPR that contains information on 
its performance during the 12 most recent months of data available. We 
propose to provide the 12 most recent months of data because the

[[Page 35942]]

OASIS and claims data are available with different lag times and 
measures are reported in 12-month intervals on Care Compare. By using 
12 months of data, we are able to remove seasonality issues and help to 
ensure a sufficient number of cases to provide meaningful information 
to HHAs. By providing HHAs with the most recent 12 months of data, the 
IPRs provide as close to real-time performance information as possible. 
We expect to make the first IPR available in July 2022 and make IPRs 
for subsequent quarters available in October, January, and April. The 
July 2022 IPR would be the first IPR issued that includes CY 2022 
performance year data for the first quarter quality measure performance 
scores on the proposed OASIS-based measures and baseline data for the 
HHCAHPS survey and claims-based measures. We propose that the IPRs 
would include a competing HHA's expanded HHVBP Model-specific 
performance results with a comparison to other competing HHAs within 
its applicable nationwide cohort (larger- or smaller-volume). We 
propose that the IPRs would be made available to each HHA through a CMS 
data platform, such as the internet Quality Improvement and Evaluation 
System (iQIES), and would include each HHA's relative estimated ranking 
amongst its cohort along with measurement points and total performance 
score based on the 12 most recent months of data available. We note 
that the IPRs would likely differ from the final data used to assess 
performance during a given performance year because the time periods 
used to develop the IPR data (the 12 most recent months) would differ 
from the actual performance years under the expanded Model (for 
example, CY 2022 data used to determine CY 2024 payment adjustments).
    These performance results would complement quality data sources 
provided through the iQIES and other quality tracking systems possibly 
being employed by HHAs to help drive quality improvement. The iQIES-
generated reports would provide quality data earlier than the expanded 
HHVBP Model-specific performance reports (that is, IPR or Annual) 
because iQIES-generated reports are not limited by a quarterly run-out 
of data and a calculation of competing peer-rankings. The primary 
difference between iQIES-generated reports and expanded HHVBP Model-
specific performance reports is that the Model-specific performance 
report we propose would consolidate the applicable performance measures 
used in the expanded HHVBP Model, provide a peer-ranking to other 
competing HHAs within the same volume-based cohort, and provide the TPS 
based on the interim data. In addition, Model-specific performance 
reports would provide the competing HHAs with a Scorecard and TNC 
Change Reference. The TNC Change Reference data would help HHAs gauge 
their performance on the individual OASIS items included in the two 
composite measures. It would also tell HHAs the percentage of episodes 
in which there was no change, positive change, or negative change for 
each OASIS item. The Scorecard would help HHAs better understand how 
each individual measure contributes to the TPS. For more information on 
the accessibility and functionality of the iQIES, please reference the 
iQIES manuals.\34\ We note that all quality measures, except for the 
TNC Mobility and TNC Self-Care measures and the HHCAHPS survey measure, 
in the proposed measure set for the CY 2022 performance year of the 
expanded HHVBP Model are already made available in the iQIES. For the 
HHCAHPS survey measure, HHAs can access their Data Submission Reports 
on https://homehealthcahps.org under the ``For HHAs'' tab. We also 
suggest HHAs contact their survey vendor regarding data on the HHCAHPS 
survey measure.
---------------------------------------------------------------------------

    \34\ iQIES manuals are available at https://qtso.cms.gov/software/iqies/reference-manuals.
---------------------------------------------------------------------------

    We invite public comment on our proposals.
b. Proposed Annual TPS and Payment Adjustment Report
    We propose that the second report, the Annual TPS and Payment 
Adjustment Report (Annual Report), would be made available to each of 
the competing HHAs in approximately August of each year preceding the 
payment adjustment year, expected beginning in August 2023. We propose 
to make the report available via a CMS data platform, such as the 
iQIES. The Annual Report would focus primarily on the HHA's payment 
adjustment percentage for the upcoming CY and include an explanation of 
when the adjustment would be applied and how this adjustment was 
determined relative to the HHA's performance scores. Each competing HHA 
would receive its own confidential Annual Report viewable only to that 
HHA. We propose that the Annual Report would have three versions: A 
Preview Annual Report, a Preliminary Annual Report (if applicable), and 
a Final Annual Report. We would make available to each competing HHA 
the Preview Annual Report in approximately August of each year 
preceding the calendar year for which the payment adjustment would be 
applied. We propose that HHAs would have 15 days to review and request 
recalculations in accordance with the proposed process discussed in 
section III.A.10. of this proposed rule (Appeal Processes). For HHAs 
that request a recalculation, we would make available a Preliminary 
Annual Report as soon as administratively feasible after the 
recalculation request is processed. If we do not receive a 
recalculation request as a result of the Preview Annual Report, a 
Preliminary Annual Report would not be issued. We propose that HHAs 
that receive a Preliminary Annual Report would have 15 days to review 
and submit a reconsideration request in accordance with the proposed 
process discussed in section III.A.10. of this proposed rule (Appeal 
Processes). As under the original Model, we propose to make available 
the Final Annual Report after all reconsideration requests are 
processed and no later than 30 calendar days before the payment 
adjustment takes effect annually, both for those HHAs that requested a 
reconsideration and all other competing HHAs.
    Under this proposed approach, HHAs would be notified in advance of 
the first annual total performance score and payment adjustment being 
finalized for CY 2024. The total performance score and payment 
adjustment would be based on the CY 2022 performance year (January 1, 
2022 to December 31, 2022), with the first payment adjustment to be 
applied to each HH PPS final claim payment amount as calculated in 
accordance with HH PPS policies as codified at Sec.  484.205 for HHA 
services furnished January 1, 2024 through December 31, 2024.
    Subsequent payment adjustments would be calculated based on the 
applicable full calendar year of performance data from the final IPRs, 
with competing HHAs notified and payments adjusted, respectively, every 
year thereafter. As a sequential example, the second payment adjustment 
would apply for services furnished January 1, 2025 through December 31, 
2025, based on a full 12 months of the CY 2023 performance year. 
Notification of the second pending payment adjustment would occur in 
approximately August 2024 when the Preview Annual Report is issued, 
followed by the Preliminary (if applicable) and Final Annual Reports, 
as described previously.
    Data related to performance on quality measures would continue to 
be provided for the baseline year and all performance years of the 
expanded

[[Page 35943]]

Model via a CMS data platform, such as the iQIES (this platform would 
present and might archive the previously described IPR and Annual 
Reports). Table 33 is a sample timeline showing the availability of 
each expanded HHVBP Model-specific performance report and the data 
included for the CY 2022 performance year and CY 2024 payment year.
[GRAPHIC] [TIFF OMITTED] TP07JY21.051

    We seek public comment on our proposals related to the Interim 
Performance and Annual Reports.
10. Appeals Processes
    As codified at Sec.  484.335, the appeals process under the 
original HHVBP Model allows HHAs to submit recalculation requests for 
the IPRs and Annual TPS and Payment Adjustment Report. Under this 
process, an HHA may also make a reconsideration request if it disagrees 
with the results of a recalculation request for the Annual TPS and 
Payment Adjustment Report. We refer the reader to the CY 2017 HH PPS 
final rule for further discussion of the appeals process under the 
original HHVBP Model (81 FR 76747 through 76750).
    Under the expanded Model, we propose to use the same appeals 
process as the original Model. We propose that competing HHAs be 
provided the opportunity to appeal certain information provided in the 
IPRs and the Annual Report, as discussed in more detail in the 
following sections.
a. Proposed Recalculation Request Process
    Under the expanded HHVBP Model, we propose that HHAs be provided 
two separate opportunities to review scoring information and request 
recalculations.
    HHAs would have the opportunity to request a recalculation if a 
discrepancy is identified due to a CMS error in calculations after 
review of their: (1) Preliminary IPRs following each quarterly posting; 
or (2) Preview Annual Report. Specifically, we propose that an HHA 
would have 15 calendar days from the date either the Preliminary IPR or 
the Preview Annual Report is provided to request a recalculation of 
measure scores if it believes there is evidence of a discrepancy in the 
calculation of the measure. We propose that we would adjust the score 
if it is determined that the discrepancy in the calculated measure 
scores was the result of our failure to follow measurement calculation 
protocols. An HHA would also have the opportunity to request 
recalculation if it wishes to dispute the application of the formula to 
calculate the payment adjustment percentage.
    Under this proposal, for both the Preliminary IPRs and the Preview 
Annual Report, competing HHAs would only be permitted to request 
scoring recalculations or, for the Preview Annual Report, to dispute 
the application of the formula used to calculate the payment adjustment 
percentage, and must include a specific basis for the requested 
recalculation. Any changes to underlying measure data cannot be made. 
We would not provide HHAs with the underlying source data utilized to 
generate performance measure scores.
    We propose that HHAs that choose to request a recalculation would 
submit recalculation requests for both quarterly Preliminary IPRs and 
for the Preview Annual Reports via instructions provided on a CMS web 
page. We propose that the request form would be entered by the primary 
point of contact, a person who has authority to sign on behalf of the 
HHA.
    We propose that recalculation requests (quarterly Preliminary IPR 
or Preview Annual Report recalculations)

[[Page 35944]]

must contain all of the following information:
     The provider's name, address associated with the services 
delivered, and CMS Certification Number (CCN).
     The basis for requesting recalculation to include the 
specific data that the HHA believes is inaccurate or the calculation 
the HHA believes is incorrect.
     Contact information for a person at the HHA with whom CMS 
or its agent can communicate about this request, including name, email 
address, telephone number, and mailing address (must include physical 
address, not just a post office box).
     A copy of any supporting documentation the HHA wishes to 
submit in electronic form via the Model-specific web page.
    Following receipt of a recalculation request, we propose that CMS 
or its agent would--
     Provide an email acknowledgement, using the contact 
information provided in the recalculation request, to the HHA contact 
notifying the HHA that the request has been received;
     Review the request to determine validity, and determine 
whether the requested recalculation results in a score change altering 
performance measure scores or the HHA's TPS;
     If the recalculation request results in a performance 
measure score change, conduct a review of data and if an error is 
found, recalculate the TPS using the corrected performance data; and
     Provide a formal response to the HHA contact, using the 
contact information provided in the recalculation request, notifying 
the HHA of the outcome of the review and recalculation process. The 
Final IPR and Preliminary Annual Report would reflect any changes noted 
from recalculation process. As under the original Model, we anticipate 
providing this response as soon as administratively feasible following 
the submission of the request.
    We are also proposing to codify the proposed recalculation process 
at Sec.  484.375(a). We invite comment on our proposals.
b. Proposed Reconsideration Process
    Under the expanded Model, we propose that if we determine that the 
original calculation was correct and deny the recalculation request for 
the scores presented in the Preview Annual Report, or if the HHA 
otherwise disagrees with the results of a CMS recalculation as 
reflected in the Preliminary Annual Report, the HHA may submit a 
reconsideration request for the Preliminary Annual Report. We propose 
that an HHA may request reconsideration of the outcome of a 
recalculation request for its Preliminary Annual Report only. We 
believe that the ability to review the IPRs and submit recalculation 
requests on a quarterly basis provides competing HHAs with a mechanism 
to address potential errors in advance of receiving their Preview 
Annual Report. Therefore, we expect that in many cases, the 
reconsideration request process proposed would result in a mechanical 
review of the application of the formulas for the TPS and the LEF, 
which could result in the determination that a formula was not 
accurately applied.
    Under this proposal, the reconsideration request and supporting 
documentation would be required to be submitted via instructions 
provided on the CMS web page within 15 calendar days of CMS' 
notification to the HHA contact of the outcome of the recalculation 
request for the Preview Annual Report. This proposed timeframe would 
allow a decision on the reconsideration to be made prior to the 
generation of the final data files containing the payment adjustment 
percentage for each HHA and the submission of those data files to the 
Medicare Administrative Contractors (MACs) to update their provider 
files with the payment adjustment percentage. We believe that this 
would allow for finalization of the annual performance scores, TPS, and 
annual payment adjustment percentages in advance of the application of 
the payment adjustments for the applicable performance year. 
Reconsiderations would be conducted by a CMS designated official who 
was not involved with the original recalculation request.
    We propose that the final TPS and payment adjustment percentage be 
provided to competing HHAs in a Final Annual Report no later than 30 
calendar days in advance of the payment adjustment taking effect to 
account for unforeseen delays that could occur between the time the 
Annual Reports are posted and the appeals process is completed.
    We are also proposing to codify the proposed reconsideration 
process at Sec.  484.375(b).
    We are soliciting comments on these proposals.
11. Public Reporting Under the Expanded HHVBP Model
a. Background
    Consistent with our discussions on public reporting under the 
original Model in prior rulemaking, in the CY 2020 HH PPS final rule 
(84 FR 60552), we finalized a policy to publicly report on the CMS 
website the following two points of data from the final CY 2020 Annual 
Report for each participating HHA in the original Model that qualified 
for a payment adjustment for CY 2020: (1) The HHA's TPS from 
performance year 5; and (2) the HHA's corresponding performance year 5 
TPS Percentile Ranking. We stated that these data would be reported for 
each such competing HHA by agency name, city, State, and by the 
agency's CCN (84 FR 60552 through 60553). We refer readers to section 
III.B.3. of this proposed rule, where we are proposing to modify our 
public reporting policy for the original Model, given our proposal in 
section III.B.2. of this proposed rule to not use CY 2020 data to make 
payment adjustments for CY 2022.
    Publicly reporting performance data under the expanded Model would 
enhance the current home health public reporting processes, as it would 
better inform beneficiaries when choosing an HHA, while also 
incentivizing HHAs to improve performance. It would also be consistent 
with our practice of publicly reporting performance data under other 
value-based initiatives such as the SNF VBP and HVBP Programs (42 CFR 
413.338) (42 CFR 412.163). CMS publicly reports both facility-specific 
SNF VBP Program performance information (such as achievement scores, 
improvement scores, rankings, and incentive payment multipliers), as 
well as aggregate-level program performance information on the CMS 
website (42 CFR 413.338). Similarly, for the HVBP Program, CMS publicly 
reports quality measures, baseline and performance years used, domain 
scores, total performance scores, and aggregate payment adjustment 
amounts on the CMS website (42 CFR 412.163).
    Publicly reporting performance data for the expanded HHVBP Model 
would also be consistent with other agency efforts to ensure 
transparency and publicly report performance data. For example, the HH 
QRP requires HHAs to submit data in accordance with 42 CFR 
484.245(b)(1). Furthermore, section 1895(b)(3)(B)(v)(III) of the Act 
requires, in part, that the Secretary establish procedures for making 
certain HH QRP data available to the public. HHAs have been required to 
collect OASIS data since 1999 and to report HHCAHPS data since 2012 (64 
FR 3764 and 76 FR 68577). These data are available to providers, 
consumers, beneficiaries, and other stakeholders on the Care Compare 
Website.

[[Page 35945]]

b. Proposed Public Reporting for the Expanded Model
    We believe that publicly reporting performance data under the 
expanded HHVBP Model would be an important way of incentivizing HHAs to 
improve quality performance under the Model. Therefore, we are 
proposing to publicly report performance data for the expanded HHVBP 
Model beginning with the CY 2022 performance year/CY 2024 payment 
adjustment and for subsequent years. For all years of the expanded 
HHVBP Model, we propose to publicly report the following information:
     Applicable measure benchmarks and achievement thresholds 
for each small- and large-volume cohort.
     For each HHA that qualified for a payment adjustment based 
on the data for the applicable performance year--
     Applicable measure results and improvement thresholds;
     The HHA's Total Performance Score (TPS);
     The HHA's TPS Percentile Ranking; and
     The HHA's payment adjustment for a given year.
    We propose to report these data by State, CCN, and agency name 
through a CMS website. We note that quality measure results for many of 
the measures proposed to be included in the expanded HHVBP Model are 
already currently reported on Care Compare; however, we are proposing 
to also separately publicly report applicable measure results for such 
measures in the expanded HHVBP Model, because the public reporting 
periods for the Model would differ from those used for the HH QRP 
public reporting on Care Compare. We believe this would be clear and 
transparent for the public. In addition, to the extent that any new 
measures or measures that are otherwise not included in the HH QRP and 
are thus not already reported on Care Compare are included in the 
expanded HHVBP Model in the future, we propose to publicly report those 
measure results as well.
    We would also provide definitions for the TPS and the TPS 
Percentile Ranking methodology, as well as descriptions of the scoring 
and payment adjustment methodology, on the CMS website to ensure the 
public understands the relevance of these data points and how they were 
calculated. We note that this information would include a broader range 
of data elements than we previously finalized to publicly report for 
the original HHVBP Model. We are proposing a broader range of data 
elements for the expanded HHVBP Model for several reasons. First, this 
publicly reported information would align more closely with the SNF VBP 
and HVBP Programs, both of which publicly report a broad range of 
information, including measure results and payment adjustment 
percentages. Second, we note that measure results for those quality 
measures included in the HH QRP are already publicly reported on the 
Care Compare website. We believe that publicly reporting the 
corresponding benchmarks for all expanded Model measures (including 
those aligned with the HH QRP as well as measures that may not be), by 
cohort, and other quality performance information for the expanded 
HHVBP Model would further promote transparency and incentivize quality 
improvements under the expanded Model.
    We anticipate this information would be made available to the 
public on a CMS website on or after December 1, 2023, the date by which 
we would intend to complete the CY 2022 Annual Report appeals process 
and issuance of the Final Annual Report to each competing HHA. For each 
year thereafter, we anticipate following the same approximate timeline 
for publicly reporting the payment adjustment for the upcoming calendar 
year, as well as the related performance data as previously described.
    As the expanded Model's performance data would be supplemental to 
the Home Health Quality of Patient Care and Patient Survey Star 
Ratings, and does not form a part of these or other star ratings, we 
intend to also include a reference to the Home Health Star Ratings 
available on the CMS website.
    We also propose to codify these proposals at Sec.  484.355(c).
    We seek public comment on these proposals.
12. Extraordinary Circumstances Exception Policy
    The nation, its communities, and its health care providers, on 
certain occasions, are forced to confront extreme and uncontrollable 
circumstances outside of their control that impact their ability to 
operate in the ordinary course of business for short-term, or sometimes 
even extended periods. The United States is currently responding to an 
outbreak of respiratory disease caused by a novel coronavirus, referred 
to as COVID-19, which creates serious public health threats that have 
greatly impacted the U.S. health care system, presenting significant 
challenges for stakeholders across the health care delivery system and 
supply chain. Other extraordinary events may also occur in the future 
that have a disruptive impact. These events may include other public 
health emergencies, large-scale natural disasters (such as, but not 
limited to, hurricanes, tornadoes, and wildfires), or other extreme and 
uncontrollable circumstances. Such events may strain health care 
resources, and CMS understands that HHAs may have limited capacity to 
continue normal operations and fulfill expanded HHVBP Model 
participation requirements. In situations such as these, we believe CMS 
should make adjustments to the requirements of the expanded HHVBP Model 
to ensure the delivery of safe and efficient health care.
    Therefore, generally, we propose to adopt an extraordinary 
circumstances exception (ECE) policy for the expanded HHVBP Model that 
aligns, to the extent possible, with the existing HH QRP exceptions and 
extension requirements at 42 CFR 484.245(c). Section 484.245(c) permits 
HHAs to request and CMS to grant an exception or extension from the 
program's reporting requirements in the event of extraordinary 
circumstances beyond HHAs' control.
    Specifically, we are proposing that for the expanded HHVBP Model, 
CMS may grant an exception with respect to quality data reporting 
requirements in the event of extraordinary circumstances beyond the 
control of the HHA. We are proposing that CMS may grant an exception as 
follows:
     An HHA that wishes to request an exception with respect to 
quality data reporting requirements must submit its request to CMS 
within 90 days of the date that the extraordinary circumstances 
occurred. Specific requirements for submission of a request for an 
exception would be available on the CMS website (cms.gov).
     CMS may grant an exception to one or more HHAs that have 
not requested an exception if: CMS determines that a systemic problem 
with CMS data collection systems directly affected the ability of the 
HHA to submit data; or if CMS determines that an extraordinary 
circumstance has affected an entire region or locale.
    We would strive to provide our formal response notifying the HHA of 
our decision within 90 days of receipt of the HHA's ECE request, 
however, the number of requests we receive and the complexity of the 
information provided would impact the actual timeframe to make ECE 
determinations. When an ECE for HHAs in the nation, region or locale is 
granted, CMS would communicate the decision through routine channels to 
HHAs and vendors, including, but not

[[Page 35946]]

limited to, the PAC QRP listserv, Open Door Forum MLN Connects, and 
notices on the CMS Home Health Quality Reporting Spotlight webpage. 
Specific instructions for requesting exceptions or extensions would be 
provided on the CMS website.
    We also propose to codify our ECE policy at Sec.  484.355(d).
    We seek public comment on our proposals.

B. Provisions Under the Home Health Value-Based Purchasing (HHVBP) 
Original Model

1. Background
    The last year of data collection for the original Model ended on 
December 31, 2020 and the last payment adjustment year of the original 
Model would end on December 31, 2022. Payment adjustments are based on 
each HHA's TPS in a given performance year, which is comprised of 
performance on: (1) A set of measures already reported via the Outcome 
and Assessment Information Set (OASIS),\35\ completed Home Health 
Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) 
surveys, and select claims data elements; and (2) three New Measures 
for which points are achieved for reporting data. Payment adjustments 
for a given year are based on the TPS calculated for performance two 
years' prior. Under current policy for the original Model, the CY 2022 
payment adjustments would be based on CY 2020 (performance year 5) 
performance. The maximum payment adjustment for CY 2022 is upward or 
downward 8 percent.
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    \35\ OASIS is the instrument/data collection tool used to 
collect and report performance data by HHAs.
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    In the interim final rule with comment period that appeared in the 
May 8, 2020 Federal Register (May 2020 COVID-19 IFC) (85 FR 27553 
through 27554; 85 FR 70328 through 70330), in response to the COVID-19 
PHE to assist HHAs while they direct their resources toward caring for 
their patients and ensuring the health and safety of patients and 
staff, we adopted a policy to align the original Model data submission 
requirements with any exceptions or extensions granted for purposes of 
HH QRP during the COVID-19 PHE. We also established a policy for 
granting exceptions to the New Measures data reporting during the 
COVID-19 PHE, including the codification of these changes at Sec.  
484.315(b).
    The original Model utilizes some of the same quality measure data 
that are reported by HHAs for the HH QRP, including HHCAHPS survey 
data. The other measures used in the original Model are calculated 
using OASIS data; claims-based data; and New Measure data. In response 
to the COVID-19 PHE, on March 27, 2020, CMS issued public guidance 
(https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf) 
excepting HHAs from the requirement to report HH QRP data for Q4 2019 
and Q1-Q2 2020. Under our policy to align the original Model data 
submission requirements with any exceptions or extensions granted for 
purposes of the HH QRP during the COVID-19 PHE, HHAs in the nine 
original Model States were not required to separately report measure 
data for these quarters for purposes of the original Model. Specific to 
the original Model, we granted an exception for reporting New Measures 
data for the April 2020 (data collection period October 1, 2019-March 
31, 2020) and July 2020 (data collection period April 1, 2020-June 30, 
2020) New Measure submission periods. We further noted that HHAs may 
optionally submit part or all of these data by the applicable 
submission deadlines.
    We acknowledged that the exceptions to the HH QRP reporting 
requirements, as well as the modified submission deadlines for OASIS 
data and our exceptions for the New Measures reporting requirements, 
may impact the calculation of performance under the original Model for 
performance year 5 (CY 2020). We also noted that while we are able to 
extract the claims-based data from submitted Medicare FFS claims, we 
may need to assess the appropriateness of using the claims data 
submitted for the period of the COVID-19 PHE for purposes of 
performance calculations under the original Model. We further explained 
that we are evaluating possible changes to our payment methodologies 
for CY 2022 in light of this more limited data, such as whether we 
would be able to calculate payment adjustments for participating HHAs 
for CY 2022, including those that continue to report data during CY 
2020, if the overall data is not sufficient, as well as whether we may 
consider a different weighting methodology given that we may have 
sufficient data for some measures and not others. We stated that 
further, we are also evaluating possible changes to our public 
reporting of CY 2020 performance year data. We stated that we intend to 
address any such changes to our payment methodologies for CY 2022 or 
public reporting of data in future rulemaking.
2. Proposal on CY 2022 Payment Adjustments
    For the reasons discussed in this section, we are proposing not to 
use the CY 2020 (performance year 5) data for purposes of payment 
adjustments under the HHVBP Model and to instead end the original Model 
early, with the CY 2021 payment year. Specifically, we are proposing 
that we would not use the annual TPS calculated using the performance 
year 5 data to apply payment adjustments for CY 2022 and to instead end 
the original Model early, such that HHAs in the nine original Model 
States would not have their HH PPS claims payments adjusted by the 
current maximum payment adjustment factor of upward or downward 8 
percent in CY 2022.
    In light of the data reporting exceptions under the HHVBP Model for 
Q1 and Q2 2020 in response to the COVID-19 PHE, as discussed 
previously, we reviewed available quality data from Q1 and Q2 2020 as 
compared to Q1 and Q2 2019 for the nine original Model States to 
determine whether it may be appropriate to use data from the time 
period during which data reporting exceptions were in place (Q1 and Q2 
2020). The comparison showed a decrease of 8.9 percent in OASIS 
assessments. We could not directly compare HHCAHPS results from Q1 and 
Q2 because our data are calculated on a 12-month rolling basis. 
However, we also examined claims data during this same time period to 
determine whether volume and utilization patterns changed and observed 
a 20.2 percent decrease in claims-based home health stays in Q1 and Q2 
2020 as compared to Q1 and Q2 2019. The change in volume and 
utilization was observed across time (that is, the change was not 
limited to a certain point of time during the Q1 and Q2 2020 time 
period) and within and across States. We believe these changes could be 
the result of the impacts of the COVID-19 PHE, including patients 
avoiding care or dying, reduced discharges to the home, and increased 
use of telehealth in lieu of in-person home health care. We also 
observed a 10.5 percent decrease in New Measures data submissions for 
Q1 and Q2 2020 as compared to Q1 and Q2 2019, consistent with what we 
would expect given the New Measures reporting exceptions we issued for 
this time period.
    Based on the patterns we observed for the first two quarters of CY 
2020, we do not believe it would be appropriate to utilize data from 
that time period to calculate a TPS for CY 2020 that would

[[Page 35947]]

be used to make payment adjustments in CY 2022. The changes in volume 
and utilization could skew performance assessments on quality measures 
for HHAs, such that the calculated TPS may not accurately reflect the 
quality of care provided by the HHAs. Additionally, we are concerned 
that because the COVID-19 PHE has not impacted all HHAs equally, 
implementing payment adjustments based on the impacted data for the 
period of the COVID-19 PHE could unfairly penalize certain HHAs.
    We also considered whether to use only Q3 and Q4 CY 2020 quality 
measure data to calculate CY 2020 annual total performance scores for 
CY 2022 payment adjustments. However, we believe that using only two 
quarters of data may not be sufficiently representative of the care 
provided by the HHA during a given calendar year for purposes of 
calculating quality measure scores and determining payment adjustments 
under the Model, and could potentially disadvantage those HHAs in an 
area of a State more heavily affected by the pandemic in Q3 and Q4 of 
CY 2020. In addition, as HHAs in different States continued to be 
impacted by the COVID-19 PHE during the second half of CY 2020, we 
believe patterns of home health care may also have continued to be 
impacted during that timeframe, similar to the changes we observed for 
the Q1 and Q2 2020 time period. As more data become available from the 
latter half of CY 2020, we will continue to examine home health care 
patterns in the nine original Model States in order to determine 
whether the same patterns we observed in the Q1 and Q2 2020 data 
persisted into the latter half of the year, and to assess whether it 
would be appropriate to utilize such data for CY 2022 payment 
adjustments. Finally, we note that several commenters on the exceptions 
policies that we adopted in the May 2020 COVID-19 IFC requested that we 
not use any performance data from CY 2020 and terminate or suspend the 
original Model early (85 FR 70328 through 70330).
    After consideration of these issues, we are proposing to not apply 
any payment adjustments for CY 2022 of the original HHVBP Model based 
on data reported in CY 2020 and to instead end the original Model 
early, with the CY 2021 payment adjustment year. As noted, we will 
continue to examine data for CY 2020 as it becomes available in order 
to determine whether it would be appropriate to utilize such data for 
CY 2022 payment adjustments, in accordance with current Model policies. 
We will also continue to provide HHAs with the Interim Performance 
Reports with CY 2020 performance data and the Annual Report with the 
calculated TPS and payment adjustment amount based on the CY 2020 
performance data, consistent with our current policies. If we finalize 
our proposal, as previously discussed, we would not use the TPS 
calculated using the performance year 5 data to apply payment 
adjustments for CY 2022.
    We note that if we finalize this proposal to end the original Model 
early, the evaluation would include the period through CY 2019 
(performance year 4) and CY 2021 (payment year 4). As we are proposing 
to not use CY 2020 (performance year 5) data to calculate CY 2022 
(payment year 5) payment adjustments, these years would not be 
evaluated.
    We believe that our proposed policy to not use CY 2020 performance 
year data to determine payment adjustments under the HHVBP Model would 
be consistent with how other quality reporting and VBP programs are 
proposing to utilize data that has been significantly affected by 
circumstances caused by the COVID-19 PHE. In the FY 2022 Hospice 
proposed rule (86 FR 19755), we proposed to modify the HH QRP public 
display policy to display fewer quarters of data than what was 
previously finalized for certain HH QRP measures for the January 2022 
through July 2024 refreshes (86 FR 19755 through 19764). For the 
January 2022 refresh, data for OASIS-based and certain claims-based 
measures would include Q3 2020 through Q1 2021 data. For HHCAHPS, data 
would cover the four quarters Q3 2020 through Q2 2021. We note that Q1 
2020 and Q2 2020 data would not be included in the proposed Care 
Compare refresh schedule for any measures. The SNF VBP program proposed 
in the FY 2022 SNF PPS proposed rule (86 FR 19954) to suppress the use 
of the SNF readmission measure (SNFRM) for scoring and payment 
adjustment purposes for the FY 2022 program year. The HVBP program 
proposed in the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25469 
through 25496) to suppress the use of a number of measures for the FY 
2022 or FY 2023 program years for purposes of scoring and payment 
adjustments, along with proposals to revise the baseline periods for 
certain measures due to the extraordinary circumstances exception we 
granted in response to the COVID-19 PHE.
    We are proposing to amend at Sec.  484.305 the definition of 
``applicable percent'' by removing paragraph (5) of the definition ((5) 
For CY 2022, 8 percent) to reflect our proposal not to apply any 
payment adjustments for FY 2022 and to end the original Model early.
    We invite public comment on our proposal.
3. Public Reporting Under the Original Model
    In the CY 2020 HHS PPS final rule (84 FR 60551 through 60553), we 
finalized a policy to publicly report on the CMS website the following 
two points of data from the final CY 2020 performance year 5 Annual 
Report for each participating HHA in the Model that qualified for a 
payment adjustment for CY 2020: (1) The HHA's TPS from performance year 
5; and (2) the HHA's corresponding performance year 5 TPS Percentile 
Ranking. We stated that these data would be reported for each such 
competing HHA by agency name, city, State, and by the agency's CMS 
Certification Number (CCN). We expected that these data would be made 
public after December 1, 2021, the date by which we intended to 
complete the CY 2020 Annual Report appeals process and issuance of the 
final Annual Report to each HHA.
    For the reasons discussed in section III.B.2. of this proposed 
rule, we are proposing to not use CY 2020 data for CY 2022 payment 
adjustments under the HHVBP Model. Consistent with this proposal, we 
are also proposing to modify our existing policy and not publicly 
report performance data for the HHAs included in the original Model. We 
do not believe that it would be appropriate to publicly report 
performance data for a time period for which HHAs would not be held 
financially accountable for quality, nor do we believe that reporting 
data for this time period would assist beneficiaries and other public 
stakeholders in making informed choices about HHA selection, as the 
patterns of care during CY 2020 may not be representative of 
performance under the original Model as a whole due to the COVID-19 
PHE. However, as discussed in section III.A.11. of this proposed rule, 
we are proposing to begin public reporting for the expanded HHVBP Model 
with the CY 2022 performance year data, continuing for all performance 
years thereafter.
    We are proposing to amend Sec.  484.315 to reflect our proposal not 
to publicly report performance data from the CY 2020 performance year 
by removing paragraph (d). We seek comments on this proposal.

[[Page 35948]]

IV. Home Health Quality Reporting Program (HH QRP) and Other Home 
Health Related Provisions

A. Vaccinations for Home Health Agency Health Care Personnel

    Health Care Personnel (HCP) are at risk of carrying COVID-19 
infection to patients, experiencing illness or death as a result of 
COVID-19 themselves, and transmitting it to their families, friends, 
and the general public. We believe Home Health Agencies should educate 
and promote vaccination among their HCP as part of their efforts to 
assess and reduce the risk of transmission of COVID-19. HCP vaccination 
can potentially reduce illness that leads to work absence and limit 
disruptions to care. Centers for Disease Control and Prevention. 
Overview of Influenza Vaccination among Health Care Personnel (https://www.cdc.gov/flu/toolkit/long-term-care/why.htm). Data from influenza 
vaccination demonstrates that provider uptake of the vaccine is 
associated with that provider recommending vaccination to patients, 
Measure Application Committee Coordinating Committee Meeting 
Presentation (http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx). We believe HCP COVID-19 vaccination 
among Home Health staff could similarly increase uptake among that 
patient population.

B. Advancing Health Information Exchange

    The Department of Health and Human Services (HHS) has a number of 
initiatives designed to encourage and support the adoption of 
interoperable health information technology and to promote nationwide 
health information exchange to improve health care and patients' access 
to their health information. To further interoperability in post-acute 
care settings, CMS and the Office of the National Coordinator for 
Health Information Technology (ONC) participate in the Post-Acute Care 
Interoperability Workgroup (PACIO) (https://pacioproject.org/) to 
facilitate collaboration with industry stakeholders to develop Fast 
Healthcare Interoperability Resources (FHIR) standards. These standards 
could support the exchange and reuse of patient assessment data derived 
from the minimum data set (MDS), inpatient rehabilitation facility 
patient assessment instrument (IRF-PAI), long-term care hospital 
continuity assessment record and evaluation (LCDS), outcome and 
assessment information set (OASIS), and other sources, including the 
Hospice Outcome and Patient Evaluation Assessment (HOPE) if implemented 
in the Hospice Quality Reporting Program through future rulemaking. The 
PACIO Project has focused on FHIR implementation guides for functional 
status, cognitive status and new use cases on advance directives and 
speech, and language pathology. We encourage PAC provider and health IT 
vendor participation as these efforts advance.
    The CMS Data Element Library (DEL) continues to be updated and 
serves as the authoritative resource for PAC assessment data elements 
and their associated mappings to health IT standards such as Logical 
Observation Identifiers Names and Codes and Systematized Nomenclature 
of Medicine. The DEL furthers CMS' goal of data standardization and 
interoperability. These interoperable data elements can reduce provider 
burden by allowing the use and exchange of healthcare data; supporting 
provider exchange of electronic health information for care 
coordination, person-centered care; and supporting real-time, data 
driven, clinical decision-making. Standards in the Data Element Library 
(https://del.cms.gov/DELWeb/pubHome) can be referenced on the CMS 
website and in the ONC Interoperability Standards Advisory (ISA). The 
2021 ISA is available at https://www.healthit.gov/isa.
    The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted 
December 13, 2016) requires HHS to take new steps to enable the 
electronic sharing of health information ensuring interoperability for 
providers and settings across the care continuum. The Cures Act 
includes a trusted exchange framework and common agreement (TEFCA) 
provision \36\ that will enable the nationwide exchange of electronic 
health information across health information networks and provide an 
important way to enable bi-directional health information exchange in 
the future. For more information on current developments related to 
TEFCA, we refer readers to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement and 
https://rce.sequoiaproject.org/.
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    \36\ ONC, Draft 2 Trusted Exchange Framework and Common 
Agreement, https://www.healthit.gov/sites/default/files/page/2019-04/FINALTEFCAQTF41719508version.pdf.
---------------------------------------------------------------------------

    The ONC final rule entitled ``21st Century Cures Act: 
Interoperability, Information Blocking and the ONC Health IT 
Certification Program'' (85 FR 25642) published May 1, 2020, 
(hereinafter ``ONC Cures Act Final Rule'') implemented policies related 
to information blocking required under Section 4004 of the 21st Century 
Cures Act. Information blocking is generally defined as a practice by a 
health IT developer of certified health IT, health information network, 
health information exchange, or health care provider that, except as 
required by law or specified by the Secretary of HHS as a reasonable 
and necessary activity that does not constitute information blocking, 
is likely to interfere with, prevent, or materially discourage access, 
exchange, or use of electronic health information.\37\ For a healthcare 
provider (as defined in 45 CFR 171.102), specifies that the provider 
knows that the practice is unreasonable as well as likely to interfere 
with, prevent, or materially discourage access (see 45 CFR 171.103, 
exchange, or use of electronic health information. To deter information 
blocking, health IT developers of certified health IT, health 
information networks and health information exchanges whom the HHS 
Inspector General determines, following an investigation, have 
committed information blocking, are subject to civil monetary penalties 
of up to $1 million per violation. Appropriate disincentives for health 
care providers need to be established by the Secretary through 
rulemaking. Stakeholders can learn more about information blocking at 
https://www.healthit.gov/curesrule/final-rule-policy/information-blocking. ONC has posted information resources including fact sheets 
(https://www.healthit.gov/curesrule/resources/fact-sheets), frequently 
asked questions (https://www.healthit.gov/curesrule/resources/information-blocking-faqs), and recorded webinars (https://www.healthit.gov/curesrule/resources/webinars).
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    \37\ For other types of actors (health IT developers of 
certified health IT and health information network or health 
information exchange, as defined in 45 CFR 171.102), the definition 
of ``information blocking'' (see 45 CFR 171.103) specifies that the 
actor ``knows, or should know, that such practice is likely to 
interfere with access, exchange, or use of electronic health 
information.''
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    We invite providers to learn more about these important 
developments and how they could affect HHAs.

C. Home Health Quality Reporting Program (HH QRP)

1. Background and Statutory Authority
    The HH QRP is authorized by section 1895(b)(3)(B)(v) of the Act. 
Section 1895(b)(3)(B)(v)(II) of the Act requires that, for 2007 and 
subsequent years, each HHA submit to the Secretary in a form and 
manner, and at a time, specified by the Secretary, such data

[[Page 35949]]

that the Secretary determines are appropriate for the measurement of 
health care quality. To the extent that an HHA does not submit data in 
accordance with this clause, the Secretary shall reduce the home health 
market basket percentage increase applicable to the HHA for such year 
by 2 percentage points. As provided at section 1895(b)(3)(B)(vi) of the 
Act, depending on the market basket percentage increase applicable for 
a particular year, the reduction of that increase by 2 percentage 
points for failure to comply with the requirements of the HH QRP and 
further reduction of the increase by the productivity adjustment 
(except in 2018 and 2020) described in section 1886(b)(3)(B)(xi)(II) of 
the Act may result in the home health market basket percentage increase 
being less than 0.0 percent for a year, and may result in payment rates 
under the Home Health PPS for a year being less than payment rates for 
the preceding year.
    For more information on the policies we have adopted for the HH 
QRP, we refer readers to the following rules:
     CY 2007 HH PPS final rule (71 FR 65888 through 65891).
     CY 2008 HH PPS final rule (72 FR 49861 through 49864).
     CY 2009 HH PPS update notice (73 FR 65356).
     CY 2010 HH PPS final rule (74 FR 58096 through 58098).
     CY 2011 HH PPS final rule (75 FR 70400 through 70407).
     CY 2012 HH PPS final rule (76 FR 68574).
     CY 2013 HH PPS final rule (77 FR 67092).
     CY 2014 HH PPS final rule (78 FR 72297).
     CY 2015 HH PPS final rule (79 FR 66073 through 66074).
     CY 2016 HH PPS final rule (80 FR 68690 through 68695).
     CY 2017 HH PPS final rule (81 FR 76752).
     CY 2018 HH PPS final rule (82 FR 51711 through 51712).
     CY 2019 HH PPS final rule with comment period (83 FR 
56547).
     CY 2020 HH PPS final rule with comment period (84 FR 
60554).
     CY 2021 HH PPS final rule (85 FR 70326 through 70328).
2. General Considerations Used for the Selection of Quality Measures 
for the HH QRP
    For a detailed discussion of the considerations we historically use 
for measure selection for the HH QRP quality, resource use, and others 
measures, we refer readers to the CY 2016 HH PPS final rule (80 FR 
68695 through 68696). In the CY 2019 HH PPS final rule with comment (83 
FR 56548 through 56550) we also finalized the factors we consider for 
removing previously adopted HH QRP measures.
3. Quality Measures Currently Adopted for the CY 2022 HH QRP
    The HH QRP currently includes 20 measures for the CY 2022 program 
year, as outlined in Table 28 of the CY 2020 . HH PPS final rule (84 FR 
60555).38 39
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    \38\ The HHCAHPS has five component questions that together are 
used to represent one NQF-endorsed measure.
    \39\ Data collection delayed due to the COVID-19 public health 
emergency for the TOH-Patient and TOH-Provider.
    \40\ Data collection delayed due to the COVID-19 public health 
emergency for the TOH-Patient and TOH-Provider.
    \41\ Ibid.
    \42\ The HHCAHPS has five component questions that together are 
used to represent one NQF-endorsed measure.
[GRAPHIC] [TIFF OMITTED] TP07JY21.052


[[Page 35950]]


4. Proposed Changes for the HH QRP
a. Proposal To Remove the Drug Education on All Medications Provided to 
Patient/Caregiver Measure Beginning With the CY 2023 HH QRP
    The CMS Meaningful Measures framework seeks to identify the highest 
priorities for quality measurement and improvement and reduce where 
possible the burden on providers and clinicians.\43\ In line with our 
meaningful measures initiative, we are proposing to remove the Drug 
Education on All Medications Provided to Patient/Caregiver During All 
Episodes of Care measure from the HH QRP under measure removal factor 
1: Measure performance among HHAs is so high and unvarying that 
meaningful distinctions in improvements in performance can no longer be 
made.
---------------------------------------------------------------------------

    \43\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
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    In the CY 2010 HH PPS final rule (74 FR 58096), we adopted the Drug 
Education on all Medications Provided to Patient/Caregiver measure, an 
OASIS-based measure, beginning with the CY 2010 HH QRP. This process 
measure reports the percentage of home health quality episodes during 
which the patient/caregiver was instructed on how to monitor the 
effectiveness of drug therapy, how to recognize potential adverse 
effects, and how and when to report problems (at the time of or at any 
time since the most recent SOC/ROC assessment). This measure is 
calculated using data collected on OASIS Item M2016.\44\
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    \44\ Home Health Quality Reporting Program Measure Calculations 
and Reporting User's Manual https://www.cms.gov/files/document/hh-qrp-qm-users-manual-v1-addendum.pdf.
---------------------------------------------------------------------------

    The Drug Education on all Medications Provided to Patient/Caregiver 
measure has very high measure performance such that it meets our 
Meaningful Measure Removal Factor 1: Measure performance among HHAs is 
so high and unvarying that meaningful distinctions in improvements in 
performance can no longer be made. The mean and median agency 
performance scores for this measure, from January 1, 2019 to December 
31, 2019 were 97.1 percent and 99.2 percent, respectively. The mean and 
median agency performance score for this measure in 2010 were 85.4 
percent and 97.0 percent respectively. This indicates that an 
overwhelming majority of patients (or their caregivers) in an HHA 
received drug education on all medications and demonstrated improvement 
over time. In addition, during the same timeframe, the 75th percentile 
measure score (99.9 percent) and the 90th percentile measure score (100 
percent) were statistically indistinguishable from each other, meaning 
that measure scores do not meaningfully distinguish between HHAs.\45\ 
Further, the truncated coefficient of variation for this measure was 
0.03, suggesting that it is not useful to draw distinctions between 
individual agency performance scores for this measure.\46\
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    \45\ Analysis of Home Health OASIS episodes from 2010 to 2019.
    \46\ The truncated coefficient of variation (TCV) is the ratio 
of the standard deviation to the mean of the distribution of all 
scores, excluding the 5 percent most extreme scores. A small TCV 
(<=0.1) indicates that the distribution of individual scores is 
clustered tightly around the mean value, suggesting that it is not 
useful to draw distinctions between individual performance scores.
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    We note that the HH QRP also has another measure that we believe 
better addresses the Meaningful Measure area of medication management. 
The Improvement in Management of Oral Medications (#0176) measure is an 
NQF-endorsed outcome measure that assesses the percentage of home 
health quality episodes during which the patient improved in the 
ability to take their oral medications correctly. The OASIS item used 
for this measure (M2020) is currently collected at Start of Care, 
Resumption of Care and Discharge. The M2020 Management of Oral 
Medications assessment item asks about the patient's current ability to 
prepare and take all oral medications reliably and safely, including 
administration of the correct dosage at the appropriate times/
intervals. This measure focuses on improving medication management 
through medication education provided to the patient. The measure 
performance statistics demonstrate good variation among providers and 
room for improvement: From January 1, 2019 to December 31, 2019, the 
mean and median agency performance scores for this measure was 69.4 
percent and 71.9 percent, respectively; the 75th percentile measure 
score (79.7 percent); the 90th percentile measure score (87 percent); 
and the truncated coefficient of variation for this measure was 0.17. 
Thus, we believe this outcome measure The Improvement in Management of 
Oral Medications (NQF #0176) both better addresses quality issues of 
medication education and has better performance measure properties than 
the Drug Education on all Medications Provided to Patient/Caregiver 
process measure. Additionally, the Drug Education on All Medications 
Provided to Patient/Caregiver during All Episodes of Care measure was 
removed from the HH Quality of Patient Care Star Ratings in April 2019 
(now Care Compare) and replaced by the Improvement in Management of 
Oral Medications measure (NQF #0176). The removal of Drug Education on 
All Medications Provided to Patient/Caregiver process measure from the 
HH Quality of Patient Care Star Ratings in April 2019 and replacement 
with the Improvement in Management of Oral Medications ensured that 
there was not a gap in this important topic area.
    We propose to remove the Drug Education on all Medications Provided 
to Patient/Caregiver measure under measure removal factor 1: Measure 
performance among HHAs is so high and unvarying that meaningful 
distinctions in improvements in performance can no longer be made, 
beginning with the CY 2023 HH QRP.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Item M2016, Patient/Caregiver Drug Education Intervention 
for the purposes of this measure beginning January 1, 2023.\47\ If 
finalized as proposed, data for this measure would be publicly reported 
on Care Compare through October 1, 2023, after which it would be 
removed from the site.
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    \47\ The removal or addition of an item from the OASIS 
instrument is subject to public comment and approval from OMB. We 
cannot cease reporting of this measure any earlier given the need to 
extend OASIS-D and submit another PRA package in January 2022 for 
OMB approval for OASIS-E beginning January 1, 2023.
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    We invite public comments on the proposal to remove Drug Education 
on All Medications Provided to Patient/Caregiver During All Episodes of 
Care measure beginning with the CY 2023 HH QRP.
b. Proposal To Replace the Acute Care Hospitalization During the First 
60 Days of Home Health (NQF #0171) Measure and Emergency Department Use 
Without Hospitalization During the First 60 Days of Home Health (NQF 
#0173) Measure With the Home Health Within Stay Potentially Preventable 
Hospitalization Measure Beginning With the CY 2023 HH QRP
    In the CY 2017 HH PPS final rule, we finalized a policy for 
replacing quality measures in the HH QRP. Specifically, we defined 
``replace'' to mean adopting a different quality measure in place of a 
quality measure currently in the HH QRP based on one or more of the HH 
QRP's measure removal factors (81 FR 76754 through 76754). We are 
proposing to replace the Acute Care Hospital During the First 60 Days 
of Home Health (NQF #0171) measure and the

[[Page 35951]]

Emergency Department Use Without Hospitalization During the First 60 
Days of Home Health (NQF #0173) measure under measure removal factor 6: 
A measure that is more strongly associated with desired patient 
outcomes for the particular topic is available, with the Home Health 
Within Stay Potentially Preventable Hospitalization Measure beginning 
with the CY 2023 HH QRP.
    The proposed Home Health Within Stay Potentially Preventable 
Hospitalization (which we will refer to as the ``PPH'' measure) measure 
assesses the agency-level risk-adjusted rate of potentially preventable 
inpatient hospitalization or observation stays for Medicare fee-for-
service (FFS) beneficiaries that occur within a home health (HH) stay 
for all eligible stays for an agency. This proposed measure is claims-
based, requiring no additional data collection or submission burden for 
HHAs. Our approach for defining potentially preventable hospital 
admissions is described in more detail in this section of this rule in 
the Measure Calculations section. A HH stay is defined as a sequence of 
HH payment episodes that are within 2 days or fewer from an adjacent 
payment episode. Payment episodes separated from other HH payment 
episodes by greater than 2 days are considered separate stays. Full 
details of the PPH specifications may be found at ``Proposed PPH 
Measure Specifications for the CY 2022 HH QRP NPRM'' at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Measures.
(1) Background
    Hospitalizations among the Medicare population are common, costly, 
and often preventable.\48\ \49\ \50\ The Medicare Payment Advisory 
Commission (MedPAC) and a study by Jencks et al. estimated that 17-20 
percent of Medicare beneficiaries discharged from the hospital were 
readmitted within 30 days. Among these hospital readmissions, MedPAC 
has estimated that 76 percent were considered potentially avoidable and 
associated with $12 billion in Medicare expenditures.\51\ \52\ An 
analysis of data from a nationally representative sample of Medicare 
FFS beneficiaries receiving HH services in 2004 show that HH patients 
receive significant amounts of acute and post-acute services after 
discharge from HH care.\53\ Focusing on readmissions, Madigan and 
colleagues studied data on 74,580 Medicare HH patients and found that 
the 30-day rehospitalization rate was 26 percent, with the largest 
proportion related to a cardiac-related diagnosis (42 percent).\54\ A 
study of data on dually eligible Medicare and Medicaid beneficiaries 
hospitalizations from nursing home and home and community based 
services waiver programs found that 39 percent of admissions were 
potentially avoidable.\55\
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    \48\ Friedman, B. and J. Basu. The rate and cost of hospital 
readmissions for preventable conditions. Med Care Res Rev, 2004. 
61(2): p. 225-40.
    \49\ Moy, E., Chang, E., and Barret, M. Potentially Preventable 
Hospitalizations--United States, 2001-2009. MMWR, 2013, 62(03);139-
143.
    \50\ Jencks, S.F., M.V. Williams, and E.A. Coleman. 
Rehospitalizations among Patients in the Medicare Fee-for-Service 
Program. New England Journal of Medicine, 2009. 360(14): p. 1418-
1428.
    \51\ Ibid.
    \52\ MedPAC, Payment policy for inpatient readmissions, in 
Report to the Congress: Promoting Greater Efficiency in Medicare. 
2007: Washington DC p. 103-120.
    \53\ Wolff, J.L., Meadow, A., Weiss, C.O., Boyd, C.M., Leff, B. 
Medicare Home Health Patients' Transitions Through Acute And Post-
Acute Care Settings.'' Medicare Care 11(46) 2008; 1188-1193.
    \54\ Madigan, E.A., N.H. Gordon, et al. Rehospitalization in a 
national population of home health care patients with heart 
failure.'' Health Serv Res 47(6): 2013; 2316-2338.
    \55\ Walsh, E.G., J.M. Wiener, et al. (2012). ``Potentially 
avoidable hospitalizations of dually eligible Medicare and Medicaid 
beneficiaries from nursing facility and Home- and Community-Based 
Services waiver programs.'' J Am Geriatric Soc 60(5): 821-829.
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    Analysis of the home health patient population has revealed some 
key factors associated with hospitalizations from HH including 
functional disability, primary diagnoses of heart disease, and primary 
diagnosis of skin wounds.\56\ An additional beneficiary characteristic 
that is associated with a potential for hospitalization is the time 
since a beneficiary's most recent hospitalization \57\ and chronic 
conditions such as chronic obstructive pulmonary disease and congestive 
heart failure.\58\ How HHAs address these factors, including how HHAs 
address chronic conditions present before the HH stay, can determine 
whether beneficiaries can successfully avoid hospitalizations.\59\ 
Understanding these factors can help HHAs design strategies to address 
avoidable hospitalizations.
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    \56\ Lohman M.C., Cotton, B.P., Zagaria, A.B., Bao, Y., 
Greenberg, R.L., Fortuna, K.L., Bruce, M.L. Hospitalization Risk and 
Potentially Inappropriate Medications among Medicare Home Health 
Nursing Patients,(2017) J Gen Intern Med. 32(12):1301-1308.
    \57\ Hua M., Gong, M.N., Brady J., Wunsch, H. Early and late 
unplanned rehospitalizations for survivors of critical illness(2015) 
Critical Care Medicine;43(2):430-438.
    \58\ Dye C., Willoughby D., Aybar-Damali B., Grady C., Oran R., 
Knudson A. Improving Chronic Disease Self-Management by Older Home 
Health Patients through Community Health Coaching (2018). Int J 
Environ Res Public Health. 15(4): 660.
    \59\ Lohman M.C., Cotton, B.P., Zagaria, A.B., Bao, Y., 
Greenberg, R.L., Fortuna, K.L., Bruce, M.L. Hospitalization Risk and 
Potentially Inappropriate Medications among Medicare Home Health 
Nursing Patients, (2017) J Gen Intern Med. 32(12):1301-1308.
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    Observation stays are also increasing nationally and can have 
costly financial impacts, especially for patients.\60\ \61\ Patients 
admitted for an observation stay can often be treated in the same 
medical units and have similar medical needs as a patient admitted for 
inpatient care, but the service is billed as outpatient services and 
does not count as a referent patient stay in the calculations of 
readmissions.\62\ Limitation of observation stays should be a goal of 
HHAs along with efforts to limit inpatient hospitalizations.
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    \60\ Lind K.D., Noel-Miller C.M., Sangaralingham L.R., Shah 
N.D., Hess E.P., Morin P., Fernanda Bellolio M. Increasing Trends in 
the Use of Hospital Observation Services for Older Medicare 
Advantage and Privately Insured Patients. Med Care Res Rev. 2019. 
Apr;76(2):229-239.
    \61\ Feng Z., Wright B., Mor V. Sharp rise in Medicare enrollees 
being held in hospitals for observation raises concerns about causes 
and consequences. Health Aff (Millwood). 2012. Jun;31(6):1251-9.
    \62\ Sabbatini A.K., Wright B. Excluding Observation Stays from 
Readmission Rates--What Quality Measures Are Missing, New England 
Journal of Medicine, 31;378(22):2062-2065.
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    We have addressed emergency department use, hospitalizations, and 
readmissions with a number of home health measures. Measures including 
the Acute Care Hospitalization During the First 60 Days of Home Health 
(NQF #0171); Emergency Department Use without Hospitalization During 
the First 60 days of Home Health (NQF #0173); and the Potentially 
Preventable 30-Day Post-Discharge Readmission Measure for the HH QRP. 
The HH QRP has long sought to address hospitalization and emergency 
department use by home health patients since decreasing 
hospitalizations and use of the emergency department are important 
areas of quality to promote patient health outcomes and reduce 
unnecessary healthcare costs. Before the adoption of the Acute Care 
Hospitalization during the First 60 Days of Home Health (NQF #0171) and 
Emergency Department Use Without Hospitalization During the First 60 
days of Home Health (NQF #0173) measures, the HH QRP utilized OASIS-
based iterations of these measures. In the CY 2012 HH PPS Final Rule 
(76 FR 68526), CMS adopted the Emergency Department Use Without 
Hospitalization During the First 60 Days of Home Health claims-based 
measure to replace the OASIS-based Emergency Department Use Without 
Hospitalization measure since the claims data offered a more robust 
source of data for the measure. The M2300 item

[[Page 35952]]

used to calculate OASIS-based ED Use QM was deemed to be insufficiently 
reliable in capturing emergency department visits. In the CY 2013 HH 
PPS Final Rule (77 FR 67902), CMS adopted the Acute Care 
Hospitalization During the First 60 Days of Home Health claims-based 
measure to replace the OASIS-based Acute Care Hospitalization measure 
since it made the determination that claims data provided a more robust 
data source for accurately measuring acute care hospitalizations.
    The Acute Care Hospitalization During the First 60 Days of Home 
Health measure (NQF #0171) and Emergency Department Use Without 
Hospitalization During the First 60 days of Home Health (NQF #0173) 
measure are claims-based and were an improvement on addressing issues 
related to emergency department use and acute hospitalization but they 
also had limitations related to issues of attribution. In prior 
feedback from an NQF technical review panel on the Emergency Department 
Use Without Hospitalization During the First 60 days of Home Health 
(NQF #1073), concerns were raised regarding the HHAs' ability to 
prevent an emergency department visit, especially for visits that do 
not result in a hospitalization. While some evidence suggests that care 
coordination and HHA engagement can impact emergency department use by 
patients, experts raised concerns that there were several drivers of 
emergency department use outside the control of an HHA that could 
result in an emergency department visit.\63\
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    \63\ National Voluntary Consensus Standards for Care 
Coordination 2012 Draft Technical Report. Available from https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=70600.
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    Concerns related to attribution were also raised by reviewers of 
the Acute Care Hospitalization during the First 60 Days of Home Health 
when the measure was reviewed for NQF endorsement by the Steering 
Committee at the National Voluntary Consensus Standards for Care 
Coordination 2012 meetings. Reviewers acknowledged the difficulty in 
determining appropriate attribution for hospitalization between 
different providers and settings, especially when evaluating all cause 
hospitalization that does not require the reason for hospitalization to 
be related to the reason for home health care.\64\
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    \64\ Ibid.
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    The proposed PPH measure addresses the limitations of the Emergency 
Department Use Without Hospitalization During the First 60 Days of Home 
Health (NQF #0173) and Acute Care Hospitalization During the First 60 
Days of Home Health measures (NQF #0171). First, the PPH proposed 
measure assesses potentially preventable observation stays instead of 
just emergency department use. As noted previously, observation stays 
are costly clinical events that require a patient to be monitored by a 
medical team. Limiting the occurrence of avoidable observation stays 
would improve patient outcomes and reduce costs. The PPH measure is 
focused on the subset of observation stays that technical experts 
determined could be addressed by HHA intervention. Similarly, the PPH 
proposed measure focuses on the subset of inpatient hospitalizations 
that could be avoided by HHA intervention. We believe the proposed PPH 
measure will better provide an assessment on HH quality by focusing on 
observation stays and acute hospitalizations that could be prevented by 
HHA intervention.
    Several general methods have been developed to assess potentially 
avoidable or preventable hospitalizations and readmissions for the 
Medicare population. These include the Agency for Healthcare Research 
and Quality's (AHRQ's) Prevention Quality Indicators,\65\ approaches 
developed by MedPAC, and proprietary approaches, such as the 3MTM 
algorithm for potentially preventable hospitalizations.\66\ \67\ \68\ 
The existing literature addresses both hospital readmissions more 
broadly and potentially avoidable hospitalizations for specific 
settings like long-term care and highlights issues relevant to the 
development of potentially preventable hospitalization measures for a 
post-acute care setting such as home health.\69\ \70\
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    \65\ Prevention Quality Indicators Overview. Available at: 
https://www.qualityindicators.ahrq.gov/modules/pqi_resources.aspx.
    \66\ Goldfield, N.I., McCullough, E.C., Hughes, J.S., et al. 
Identifying potentially preventable readmissions. Health Care Finan. 
Rev. 30(1):75-91, 2008. Available from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195042/.
    \67\ National Quality Forum: Prevention Quality Indicators 
Overview. 2008.
    \68\ MedPAC: Online Appendix C: Medicare Ambulatory Care 
Indicators for the Elderly. pp. 1-12, prepared for Chapter 4, 2011. 
Available from http://www.medpac.gov/documents/reports/Mar11_Ch04_APPENDIX.pdf?sfvrsn=0.
    \69\ Gao, J., Moran, E., Li, Y.-F., et al. Predicting 
potentially avoidable hospitalizations. Med. Care 52(2):164-171, 
2014. doi:10.1097/MLR.0000000000000041.
    \70\ Walsh, E.G., Wiener, J.M., Haber, S., et al. Potentially 
avoidable hospitalizations of dually eligible Medicare and Medicaid 
beneficiaries from nursing facility and home[hyphen]and 
community[hyphen]based services waiver programs. J. Am. Geriatr. 
Soc. 60(5):821-829, 2012. doi:10.1111/j.1532-5415.2012.03920.
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(2) Stakeholder and Technical Expert Panel (TEP) Input
    A TEP convened by our measure contractor provided recommendations 
on the technical specifications of this proposed measure, including the 
development of an approach to define potentially preventable hospital 
admission and observation stays for HH. TEP meetings were held in 
April, June, and December 2018. The TEP supported the definition of 
potentially preventable developed by the measure development team for 
both inpatient admissions and observation stays. The TEP further 
provided extensive guidance in refining the list of primary conditions 
that lead to the inpatient admission or observation stay that could be 
reasonably deemed preventable by HHA intervention. Details from the TEP 
meetings, including TEP members' ratings of conditions proposed as 
being potentially preventable, are available in the TEP summary report 
available on the CMS website at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/Downloads/PPH-TEP-Summary-Report-Final-101019.pdf.
    We also solicited stakeholder feedback on the development of this 
measure through a public comment period held from November 18 through 
December 16, 2019. The major comment received focused on considering 
the implication of implementation of the Patient Diagnosis Group Model 
on the specifications of this measure. CMS has undertaken a review of 
the implications on the new payment model on this and other claims-
based QMs in the HH QRP and determined that the claims-based QMs are 
not adversely affected by the new model.
(3) Measure Application Partnership (MAP) Review
    Our pre-rulemaking process includes making publicly available a 
list of quality and efficiency measures, called the Measures under 
Consideration (MUC) List that the Secretary is considering adopting 
through the Federal rulemaking process for use in Medicare programs. 
This allows multi-stakeholder groups to provide recommendations to the 
Secretary on the measures included on the list. The PPH quality measure 
was published in the 2019 MUC list for the HH QRP.\71\
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    \71\ https://www.cms.gov/files/document/2019muc-listclearancerpt.pdf.
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    The PPH quality measure was presented to the 2019 NQF-convened 
Measure Application Process (MAP) Post-Acute Care/Long-Term Care (PAC-
LTC) workgroup and the MAP

[[Page 35953]]

recommended conditional support for rulemaking for a single measure 
under consideration for the HH QRP, MUC2019-34 PPH. The MAP 
conditionally supported MUC2019-34 PPH, pending NQF review and 
endorsement. CMS clarified that it intends to eventually replace 
related measures, NQF 0171 Acute Care Hospitalization during the First 
60 Days of Home Health and NQF 0173 Emergency Department Use (ED Use) 
Without Hospitalization During the First 60 days of Home Health with 
the PPH measure under consideration.
    The MAP agreed that the PPH measure adds value to the HH QRP's 
measure set by adding measurement of potentially preventable 
hospitalizations and observation stays that may occur at any point in 
the home health stay. No measure in the program currently provides this 
information.
    The MAP encouraged the consideration of including Medicare 
Advantage patients in future iterations of the measure. CMS is 
supportive of this suggestion when reliable Medicare Advantage data is 
available nationally. The MAP also encouraged the NQF All-Cause 
Admissions and Readmissions Standing Committee to consider the 
definition for preventable hospitalization to ensure HHAs can take 
adequate steps to improve these outcomes. The issue of what could be 
determined to be potentially preventable by HHAs was discussed 
extensively at multiple TEP meetings. The TEP adopted a listing of 
conditions that could be prevented by standard care HHAs are required 
to provide. The MAP encouraged CMS to provide detailed performance 
feedback to providers to help providers differentiate the causes of 
hospitalizations for quality improvement purposes. More information 
about the MAP's recommendations for this measure is available at 
https://www.qualityforum.org/Publications/2020/02/MAP_2020_Considerations_for_Implementing_Measures_Final_Report_-_PAC_LTC.aspx.
    At the time of the MAP, the initial risk-adjustment model tested 
measure validity and reliability as identified in the measure 
specifications document, as previously provided. Testing results were 
very strong and showed more robust results than outcome measures 
previously finalized through rulemaking including the Acute Care 
Hospitalization During the First 60 Days of Home Health (NQF # 0171) 
measure and the Emergency Department Use Without Hospitalization During 
the First 60 days of Home Health (NQF #0173) measure.
(4) Quality Measure Calculation
    We reviewed established scientific research, analyzed home health 
claims data, and obtained input from a technical expert panel (TEP) to 
develop a definition and list of conditions for which types of hospital 
admissions are potentially preventable. The defining of potentially 
preventable hospitalization relies on the previously developed 
conceptual framework that certain diagnoses, proper management, and 
care of the condition by the home health agency, combined with 
appropriate, clearly explained, and implemented discharge instructions 
and referrals, can potentially prevent a patient's admission to the 
hospital. On the basis of this framework, the team followed the working 
conceptual definition for potentially preventable hospitalizations for 
home health created during the development of the HH QRP measure 
Potentially Preventable 30-Day Post-Discharge Readmission Measure for 
HH Quality Reporting Program. Although not specific to PAC or 
hospitalizations, the team used AHRQ Prevention Quality Indicators 
(PQIs) and Ambulatory Care Sensitive Conditions (ACSCs) as a starting 
point for this work. The list of ACSCs consists of conditions for which 
hospitalization can potentially be prevented, given good outpatient 
care and early intervention.\72\
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    \72\ Agency for Healthcare Research and Quality: AHRQ Quality 
Indicators--Guide to Prevention Quality Indicators: Hospital 
Admission for Ambulatory Care Sensitive Conditions. AHRQ Pub. No. 
02-R0203. Rockville, MD. Agency for Healthcare Research and Quality, 
2001.
---------------------------------------------------------------------------

    We also performed analyses on Medicare claims data to identify the 
most frequent diagnoses associated with admissions among home health 
beneficiaries, and then applied the conceptual potentially preventable 
hospitalization definition to evaluate whether these common conditions 
for a hospitalization may be considered potentially preventable. This 
list of conditions identified from literature and claims analysis 
formed the preliminary potentially preventable hospitalization 
definition. We grouped these conditions based on clinical rationale, 
and the major groups are: (1) Inadequate management of chronic 
conditions; (2) Inadequate management of infections; (3) Inadequate 
management of other unplanned events; and (4) Inadequate injury 
prevention.
    Additional details regarding the definition for potentially 
preventable hospitalizations are available in the document titled 
``Proposed PPH Measure Specification for the CY 2022 HH QRP NPRM'' 
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Measures.
    This proposed PPH measure is focused on inpatient admissions or 
observation stays that are potentially preventable (PP) and unplanned. 
Thus, planned admissions are not counted in the numerator. Planned 
inpatient admissions and observation stays are defined largely by the 
definition used for the Hospital Wide Readmission \73\ and Potentially 
Preventable Within Stay Readmission Measure for Inpatient 
Rehabilitation Facilities \74\ measures.
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    \73\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
    \74\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
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    The process for classifying a planned inpatient admission or 
observation stay is determined based on the following parameters. If an 
inpatient or outpatient claim contains a code for a procedure that is 
frequently a planned procedure, then that inpatient admission or 
observation stay is designated a planned inpatient admission or 
observation stay and is not included in the numerator. Similarly, if an 
inpatient or outpatient claim contains a code for a diagnosis that is 
frequently associated with a planned admission, then that inpatient 
admission or observation stay is designated to be a planned inpatient 
admission or observation stay and also not included in the numerator. 
However, the planned inpatient admission or observation stay is 
reclassified as unplanned if the claim also contains a code indicating 
one or more acute diagnoses from a specified list that is included in 
the criteria material described in the next sentence. Full details on 
the planned admissions criteria used, including the CMS Planned 
Readmission Algorithm and additional procedures considered planned for 
post-acute care, can be found in the document titled ``Proposed PPH 
Measure Specification for the CY 2022 HH QRP NPRM'' at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Measures.
    The risk adjustment modeling estimates the effects of patient 
characteristics, comorbidities, and select health care variables on the 
probability of potentially preventable inpatient hospital admission or 
observation stay. More specifically, the risk-adjustment model for HHAs 
entails the following:

[[Page 35954]]

     Demographic characteristics (age, sex, original reason for 
Medicare entitlement).
     Care received during prior proximal hospitalization \75\ 
(if applicable) (including the length of the hospitalization and 
principal diagnoses during the prior proximal hospitalization).
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    \75\ Prior proximal hospitalizations for this measure are 
defined as inpatient stays within 30 days prior to home health 
admission.
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     Other care received within a year of stay (including 
number of prior acute discharges, number of outpatient emergency 
department visits, number of skilled nursing visits, number of 
inpatient rehabilitation facility visits, number of long term care 
hospital visits, and comorbidities from a prior proximal 
hospitalization [if applicable] or other visits in the last year).
    The proposed measure is calculated using a calendar year of 
Medicare FFS data. In addition, we propose a minimum of 20 eligible HH 
stays as defined in the introduction to this proposal for public 
reporting of the proposed measure. All HH stays during the year time 
window, except those that meet the exclusion criteria, would be 
included in the measure. The PPH observation window begins from the 
start of HH stay and spans to 1 day after discharge. Data from all HH 
stays beginning from 1/1/2016-12/31/2016 was used for the PPH measure 
development. For technical information about this proposed measure 
including information about the measure calculation, risk adjustment, 
and exclusions, we refer readers to our Proposed PPH Measure 
Specification for the CY 2022 HH QRP NPRM at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Measures.
    To meet the requirements of the CMS Meaningful Measures framework 
which seeks to identify the highest priorities for quality measurement 
and improvement and to reduce where possible the burden on providers 
and clinicians,\76\ we are proposing to remove the Acute Care 
Hospitalization During the First 60 Days of Home Health (NQF #0171) 
measure and the Emergency Department Use Without Hospitalization During 
the First 60 days of Home Health (NQF #0173) measure and replace them 
with the PPH measure. We are proposing to remove these two measures 
from the HH QRP beginning with the CY 2023 HH QRP under our measure 
removal Factor 6: A measure that is more strongly associated with 
desired patient outcomes for the particular topic is available.
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    \76\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
---------------------------------------------------------------------------

    The Acute Care Hospitalization During the First 60 Days of Home 
Health (NQF #0171) and Emergency Department Use Without Hospitalization 
During the First 60 days of Home Health (NQF #0173) measures are both 
claims-based and have some notable limitations related to appropriate 
attribution of the acute hospitalization or emergency department visit 
to an HHA. These measures focus on hospitalization regardless of 
whether a HHA could provide care that could prevent the visit whereas 
the proposed PPH measure addresses the limitations of these measures by 
focusing on inpatient admissions and observation stays that research 
establishes could be prevented by HHA care provided to patients they 
serve.
    We propose to remove the Acute Care Hospitalization during the 
First 60 Days of Home Health (NQF #0171) measure and Emergency 
Department Use Without Hospitalization During the First 60 days of Home 
Health (NQF #0173) measure and replace them with the Home Health 
Within-Stay Potentially Preventable Hospitalization claims-based 
measures beginning with the CY 2023 HH QRP.
    We invite public comments on this proposal.
c. Proposed Schedule for Publicly Reporting Quality Measures Beginning 
With the CY 2022 HH QRP
    Section 1899B(g)(1) of the Act requires, in part, that the 
Secretary provide for public reporting of PAC provider performance, 
including HHAs, on quality measures under section 1899B(c)(1) of the 
Act, including by establishing procedures for making available to the 
public information regarding the performance of individual PAC 
providers with respect to such measures. Section 1899B(g)(2) of the Act 
requires, in part, that CMS give HHAs opportunity to review and submit 
corrections to the data and information to be made public under section 
1899B(g)(1) of the Act prior to such data being made public. Section 
1899B(g)(3) of the Act requires that such procedures provide that the 
data and information with respect to a measure and PAC provider is made 
publicly available beginning not later than 2 years after the 
applicable specified application date applicable to such measure and 
provider.
    In the CY 2018 HH PPS final rule, we adopted the Percent of 
Residents Experiencing One or More Falls with Major Injury measure 
beginning with the CY 2020 HH QRP under section 1899B(c)(1)(D) of the 
Act (82 FR 51727 through 51730). Under section 
1899B(a)(2)(E)(i)(IV)(bb) of the Act, the specified application date 
for HH QRP measures adopted under section 1899B(c)(1)(D) of the Act is 
January 1, 2019; two years after this date is January 1, 2021.
    We also adopted in the CY 2018 HH PPS final rule the Application of 
Percent of Long-Term Care Hospital Patients with an Admission and 
Discharge Functional Assessment measure beginning with the CY 2020 HH 
QRP (82 FR 51722 through 51727) under section 1899B(c)(1)(A) of the 
Act. Under section 1899B(a)(2)(E)(i)(I)(cc) of the Act, the specified 
application date for HH QRP measures adopted under section 
1899B(c)(1)(A) of the Act is January 1, 2019; two years after this date 
is January 1, 2021.
    We propose to publicly report the Percent of Residents Experiencing 
One or More Major Falls with Injury measure and Application of Percent 
of Long-Term Care Hospital Patients with an Admission and Discharge 
Functional Assessment and a Care Plan that Addresses Function (NQF 
#2631) measure beginning in April 2022.
    As required by section 1899B(g)(2) of the Act, to date CMS has made 
these two measures available for review by HHAs on the HH confidential 
feedback reports. The Percent of Residents Experiencing One or More 
Major Falls with Injury measure was added to the HHA Review and Correct 
Report effective 04/01/2019, and the HHA Outcome Measures Report 
effective 01/01/2020. The measure Application of Percent of Long-Term 
Care Hospital Patients with an Admission and Discharge Functional 
Assessment and a Care Plan that Addresses Function (NQF #2631) was 
added to the HHA Review and Correct Report effective 04/01/2019, and 
the HHA Process Measures Report effective 01/01/2020. HHAs' HH QRP 
measure scores for these two measures would additionally be made 
available for review on the HH Provider Preview Report, which would be 
issued in January 2022, three months in advance of the inaugural 
display of these measures on Care Compare.
    We invite public comments on our proposed schedule to publicly 
display these measures.

[[Page 35955]]

d. Proposed Revised Compliance Date for Certain HH QRP Reporting 
Requirements
(1) Background
    In the May 8, 2020 Federal Register (85 FR 27550), we published an 
interim final rule with comment period titled ``Medicare and Medicaid 
Programs, Basic Health Program, and Exchanges; Additional Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency and Delay of Certain Reporting Requirements for the Skilled 
Nursing Facility Quality Reporting Program'' (which we will refer to as 
``IFC-2''). In IFC-2, we delayed the compliance date for certain 
reporting requirements under the HH QRP (85 FR 27595 through 27596). 
Specifically, we delayed the requirement for HHAs to begin reporting 
the Transfer of Health (TOH) Information to PAC and the TOH Information 
to Patient-PAC measures and the requirement for HHAs to begin reporting 
certain Standardized Patient Assessment Data Elements to January 1st of 
the year that is at least one full calendar year after the end of the 
COVID-19 Public Health Emergency (PHE). CMS also delayed the adoption 
of the updated version of the Outcome and Assessment Information Set 
(OASIS) assessment instrument (OASIS-E) for which HHAs would report the 
Transfer of Health (TOH) measures and certain Standardized Patient 
Assessment Data Elements.
    Under IFC-2, HHAs must use OASIS-E to begin collecting data on the 
two TOH Information measures beginning with discharges and transfers on 
January 1st of the year that is at least one full calendar year after 
the end of the COVID-19 PHE. HHAs must also begin collecting data on 
certain Standardized Patient Assessment Data Elements on the OASIS-E, 
beginning with the start of care, resumption of care, and discharges 
(except for the hearing, vision, race, and ethnicity Standardized 
Patient Assessment Data Elements, which would be collected at the start 
of care only) on January 1st of the year that is at least one full 
calendar year after the end of the COVID-19 PHE. The delay to begin 
collecting data for these measures was to provide relief to HHAs from 
the added burden of implementing an updated instrument during the 
COVID-19 PHE. We wanted to provide maximum flexibilities for HHAs to 
respond to the public health threats posed by the COVID-19 PHE, and to 
reduce the burden in administrative efforts associated with attending 
trainings, training their staff, and working with their vendors to 
incorporate the updated assessment instruments into their operations.
    At the time we finalized the policy in the IFC-2, we believed that 
the delay in collection of the TOH Information measures and 
Standardized Patient Assessment Data Elements would not have a 
significant impact on the HH QRP. However, the COVID-19 PHE showed the 
important need for these TOH Information measures and Standardized 
Patient Assessment Data Elements under the HH QRP. The PHE's 
disproportionate impact on minority populations demonstrates the 
importance of analyzing this impact and the needs for these populations 
to improve quality of care within HHAs, especially during a public 
health emergency.
(2) Current Assessment of HHAs
    To accommodate the COVID-19 PHE, CMS has provided additional 
guidance and as a result HHAs have adopted new processes as well as 
modified existing processes. For example, HHAs currently have the 
option to complete what was required to be a face-to-face encounter to 
qualify for home health via telehealth and the completion of aspects of 
required comprehensive assessments via telehealth.\77\ CMS also 
supported PAC providers, including HHAs, by providing requested 
flexibilities in the delivery of care in response to the PHE. In 
addition, we assisted providers by conducting sessions for HHAs to 
share best practices that agencies have identified to address many of 
the challenges posed by the PHE.
---------------------------------------------------------------------------

    \77\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
---------------------------------------------------------------------------

    Based upon other flexibilities such as the examples provided and 
the adoption of best practices, and since finalizing IFC-2, HHAs are in 
a better position to accommodate reporting of the TOH measures and 
certain Standardized Patient Assessment Data Elements. Also, recent 
reports (not available at the time CMS IFC-2 was finalized) suggest 
that HHAs have the capacity to begin reporting the TOH measures and 
certain Social Determinant of Health (SDOH) Standardized Patient 
Assessment Data Elements.\78\ Since IFC-2 was finalized, the industry 
has identified a growing demand for home health services and has noted 
their ability to meet this demand.\79\ \80\ \81\ \82\
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    \78\ https://www.healthaffairs.org/do/10.1377/hblog20201214.543463/full/.
    \79\ https://www.hartfordbusiness.com/article/demand-for-home-health-care-surges-amid-covid-19-shifting-industry-landscape.
    \80\ https://www.forbes.com/sites/sethjoseph/2020/08/05/home-health-care-is-a-bright-light-during-covid-19-with-an-even-brighter-future/?sh=2bfa2c513891.
    \81\ https://www.wsj.com/articles/demand-for-in-home-care-rises-during-coronavirus-11588003076.
    \82\ https://www.csbj.com/premier/businessnews/healthcare/covid-19-boosts-demand-for-home-health-care/article_c65d2b4e-3b17-11eb-a46e-97a2079b065f.html.
---------------------------------------------------------------------------

    In addition, after evaluating the impact of the compliance date 
under IFC-2, feasibility around data collection by HHAs, and the 
support needs of providers during the COVID-19 PHE, we have determined 
that HHAs now have the administrative capacity to attend trainings, 
train their staff, and work with their vendors to incorporate the 
updated assessment instrument, the OASIS-E into their operations.
    We now believe that based upon the processes adopted by HHAs, as 
previously described, the flexibilities afforded to HHAs since the 
beginning of the COVID-19 PHE, and the importance of the data to the HH 
QRP, it would be appropriate to modify the compliance date finalized in 
IFC-2. This may support future activities under Executive Order 13985, 
entitled ``Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government,'' issued January 20, 2021 
(https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government).
3. Proposal To Collect the Transfer of Health Information to Provider-
PAC Measure, the Transfer of Health Information to Patient-PAC Measure, 
and Certain Standardized Patient Assessment Data Elements Beginning 
January 1, 2023
    We are proposing to revise the compliance date from IFC-2 to 
January 1, 2023. This revised date would begin the collection of data 
on the Transfer of Health Information to Provider-PAC measure and 
Transfer of Health Information to Patient-PAC measure, and certain 
Standardized Patient Assessment Data Elements on the updated version of 
the OASIS assessment instrument referred to as OASIS-E. This revised 
date of January 1, 2023, which is a two-year delay from this original 
compliance date finalized in the CY 2020 HH PPS final rule (84 FR 60557 
through 60610), balances the support that HHAs needed during much of 
the COVID-19 PHE as CMS provided flexibilities to support HHAs along 
with the need to collect this important data.
    The need for the Standardized Patient Assessment Data Elements and 
Transfer of Health data have shown to be even more pressing with issues 
of inequities that the COVID-19 PHE laid bare. This

[[Page 35956]]

data that includes addressing SDOH provides information that is 
expected to improve quality of care for all. Consequently, we are 
proposing to revise the compliance date to reflect this balance and 
assure that this data collection begins on January 1, 2023.
    As stated in the CY 2020 HH PPS final rule, CMS will provide the 
training and education for HHAs to be prepared for this implementation 
(84 FR 60554). In addition, if CMS adopts a January 1, 2023 compliance 
date, CMS would release a draft of the updated version of the OASIS 
instrument, OASIS-E, in early 2022.
    Based upon our evaluation, we propose that HHAs would collect the 
Transfer of Health Information to Provider Post-Acute Care measure, the 
Transfer of Health Information to Patient-PAC measure, and certain 
Standardized Patient Assessment Data Elements beginning January 1, 
2023. We propose that, accordingly, HHAs would begin collecting data on 
the two TOH measures beginning with discharges and transfers on January 
1, 2023 on the OASIS-E. We also propose that HHAs would begin 
collecting data on the six categories of Standardized Patient 
Assessment Data Elements on the OASIS-E, with the start of care, 
resumption of care, and discharges (except for the hearing, vision, 
race, and ethnicity Standardized Patient Assessment Data Elements, 
which would be collected at the start of care only) beginning on 
January 1, 2023.
    We invite public comment on these proposals.

D. Proposed Changes to the Home Health Conditions of Participation

1. Background and Statutory Authority
    Since March, 2020, CMS has issued a number of regulatory waivers in 
response to the COVID-19 PHE under our statutory authority granted by 
section 1135 of the Act. That statute permits the Secretary to waive 
certain statutes and regulations during a public health emergency 
declared by the President, in order to expand healthcare system 
capacity while continuing to maintain public and patient safety, and to 
hold harmless providers and suppliers who may be unable to comply with 
existing regulations after a good faith effort. Specifically, the 
Secretary may temporarily waive or modify certain Medicare, Medicaid, 
and Children's Health Insurance Program (CHIP) requirements to ensure: 
Sufficient health care items and services are available to meet the 
needs of individuals enrolled in Medicare, Medicaid and CHIP in the 
emergency area during the emergency period. In such circumstances, 
providers can be reimbursed and exempted from sanctions under these 
programs (absent any determination of fraud or abuse).
    We issued a variety of regulatory waivers that pertained to most 
CMS-certified providers and suppliers during the COVID-19 PHE, 
including HHAs. Sections 1861(o) and 1891 of the Act authorize the 
Secretary to establish the requirements that an HHA must meet to 
participate in the Medicare Program, and these conditions of 
participation (CoPs) are set forth in regulations at 42 CFR part 484. 
We waived selected requirements for HHAs within part 484 for the 
duration of the PHE. While some of these waivers simply delay certain 
administrative deadlines, others directly impact the provision of 
patient care. We have identified waivers related to the requirements 
for the supervision of home health aides at Sec.  484.80(h)(1) and (2) 
that we believe would be appropriate as permanent policy. These 
proposed changes and their respective background information are 
discussed in detail.
    In addition, in order to implement section 115 of Division CC of 
the CAA 2021, we are proposing to modify the requirements for the home 
health initial assessment visit and comprehensive assessment. This 
statutorily-required modification allows an occupational therapist to 
complete the initial and comprehensive assessments for Medicare 
patients when occupational therapy is ordered with another 
rehabilitation therapy service (speech language pathology or physical 
therapy) that establishes program eligibility. This would only be 
permitted if skilled nursing services have not been ordered.
2. Provisions of the Proposed Regulations
    We propose the following revisions to the HHA CoPs.
a. Home Health Aide Supervision
    Home health aides deliver a significant portion of direct home 
health care. Ensuring that aide services are meeting the patient's 
needs is a critical part in maintaining safe, quality care. At Sec.  
484.80(h)(1) and (2), we differentiate aide supervision requirements 
based on the level of care required by the patient. Aides caring for a 
patient receiving skilled care from nurses or therapists must currently 
have an on-site supervisory visit every 14 days, while aides caring for 
a patient who is not receiving skilled care must have an on-site 
supervisory visit every 60 days.
    We believe the current 14-day on-site supervisory visit requirement 
when a patient is receiving skilled services is an important component 
to assessing the quality of care and services provided by the HHA aide, 
and to ensure that aide services are meeting the patient's needs. 
Currently, the regulations require that the 14-day supervisory 
assessment be conducted by the registered nurse (RN) or other 
appropriate skilled professional who is familiar with the patient, the 
patient's plan of care and the written care instructions as described 
in 484.80(g). However, we believe it is important to permit HHA's to 
complete this assessment virtually, in the rare circumstance that an 
onsite visit cannot be coordinated within the 14-day time period.
    We propose that HHAs be permitted to use interactive 
telecommunications systems for purposes of aide supervision, on 
occasion, not to exceed 2 virtual supervisory assessments per HHA in a 
60-day period. We are proposing to revise the language at Sec.  
484.80(h)(1)(i) to require that if a patient is receiving skilled care 
(that is, skilled nursing, physical or occupational therapy, or speech 
language pathology services), the home health aide supervisor (RN or 
other appropriate skilled professional) must complete a supervisory 
assessment of the aide services being provided, either onsite (that is, 
an in person visit) or by using interactive telecommunications systems 
to ensure aides are furnishing care in a safe and effective manner, no 
less frequently than every 14 days. The home health aide does not need 
to be present during this supervisory assessment. As outlined in 
regulation at Sec.  484.80(h)(4), the home health aide supervisory 
assessment is required to ensure that the aide is furnishing care in a 
safe and effective manner, such as: Following the patient's plan of 
care for completion of tasks assigned to the home health aide; 
maintaining an open communication process with the patient, 
representatives, caregivers, and family; demonstrating competency with 
assigned tasks; complying with infection prevention and control 
policies and procedures; reporting changes in the patient's condition; 
and honoring the patient's rights. We are proposing the define 
interactive telecommunications systems as multimedia communications 
equipment that includes, at a minimum, audio and video equipment 
permitting two-way, real-time interactive communication between the 
patient and distant site physician or practitioner. The use of 
interactive telecommunications systems for the aide supervisory 
assessment must not exceed 2 virtual supervisory

[[Page 35957]]

assessments per HHA in a 60-day period, regardless of the number of 
aides or patients associated with a given HHA. If the supervising 
individual notes an area of concern during the 14-day supervisory 
assessment, the supervising individual must make an on-site in-person 
visit to the location where the patient is receiving care while the 
aide is performing care, in order to observe and assess the aide as 
required at Sec.  484.80(h)(1)(ii) and (iii).
    While we are proposing to allow this flexibility, we expect that in 
most instances, the HHAs would plan to conduct the 14-day supervisory 
assessment during an on-site, in person visit, and that the HHA would 
use interactive telecommunications systems option only for unplanned 
occurrences that would otherwise interrupt scheduled in-person visits. 
Examples of circumstances in which a scheduled on-site in-person visit 
may not be able to be rescheduled timely within the 14-day window could 
include a severe weather occurrence, a patient requests to change the 
date of the scheduled visit, or unexpected staff illness or absence on 
the planned day for the visit.
    We are not proposing changes to the requirements for annual aide 
assessments at Sec.  484.80(h)(1)(iii). In addition to the regularly-
scheduled 14-day supervisory assessment and as-needed observation 
visits for aides providing care to patients receiving skilled services, 
HHAs are required to make an annual on-site, in person, visit to a 
patient's home to directly observe and assess each home health aide 
while he or she is performing patient care activities. The HHA is 
required to observe each home health aide annually with at least one 
patient.
    We are also proposing revisions to the supervisory assessment 
requirements for aides providing care to patients who are not receiving 
skilled care services. At Sec.  484.80(h)(2), we currently require that 
if home health aide services are provided to a patient who is not 
receiving skilled care, the RN must make an on-site visit to the 
location where the patient is receiving care from such aide. Such 
visits must occur at least once every 60 days in order to observe and 
assess each home health aide while he or she is providing care. This 
supervisory visit must be performed by a RN because these patients are 
not otherwise receiving HHA services from other professionals, such as 
therapists. We continue to receive feedback that this requirement is 
overly burdensome for the patient and the HHA if multiple home health 
aides provide care to the same patient. For instance, if a patient has 
three different home health aides providing care, the nurse is 
currently required to observe and assess each of the three home health 
aides while the aide is giving care to the patient. This circumstance 
would entail three separate nursing supervision visits on the same 
patient every 60 days. While we believe that the HHA's observation of 
an aide providing direct care to the patient is important to ensure 
quality, requiring a patient to receive three separate supervision 
visits every 60 days may be onerous on the patient and the HHA.
    We propose to maintain the first part of this requirement, that the 
registered nurse must make a visit in person every 60 days, but would 
remove the requirement that the RN must directly observe the aide in 
person during those visits. We would accomplish this by removing the 
language from 42 CFR 484.80(h)(2) that states, ``in order to observe 
and assess each home health aide while he or she is performing care,'' 
and replacing it with ``to assess the quality of care and services 
provided by the home health aide and to ensure that services meet the 
patient's needs''. In addition, we propose to further revise the 
requirement to state that the home health aide would not need to be 
present during this visit. We believe that these proposed revisions 
from an on-site (direct) observation of each aid while performing care 
to an indirect supervision visit to assess the adequacy of the aide 
care plan, the patient's perception of services provided, and hear any 
concerns from the patient; may better support the patients' needs by 
allowing for open communication between the nurse and patient. If a 
deficiency in the aide services are assessed, the agency must conduct 
and the home health aide must complete, retraining and a competency 
evaluation for the deficient and all related skills.
    In order to ensure appropriate RN supervision of HHA aides caring 
for patients who are not receiving skilled services, we propose to add 
a new requirement to 42 CFR 484.80(h)(2) that would require the RN to 
make a semi-annual on-site visit to the location where a patient is 
receiving care in order to directly observe and assess each home health 
aide while he or she is performing care. This semi-annual in-person 
assessment would occur twice yearly for each aide, regardless of the 
number of patients cared for by that aide.
    Supervisory visits allow professionals to evaluate whether aides 
are providing appropriate care as ordered by the patient's plan of 
care. When RNs or qualified professionals identify a deficiency in aide 
services, Sec.  484.80(h)(3) requires that the agency conduct, and the 
home health aide complete, retraining and a competency evaluation 
related to the deficient skill(s).
    We propose to maintain this requirement at 484.80(h)(3), but to 
modify it by adding ``and all related skills.'' We believe that when a 
deficient area(s) in the aide's care are assessed and verified by the 
RN, additional related competencies may reflect deficient practice 
areas that should be addressed. For example, if the patient informs the 
nurse that they almost fell when the aide was transferring them from 
bed to a chair, the nurse should assess the aide's technique for 
transferring a patient in other circumstances beyond transfer to a 
chair, such as transferring from a bed to bedside commode or to a 
shower chair.
    We request public comment on our proposed changes to allow virtual 
supervisory assessments of home health aides for patients receiving 
skilled care at Sec.  484.80(h)(1)(i), and for the proposed changes to 
supervision, competency assessment, and retraining for aides providing 
care to patients receiving all levels of HHA care. We especially 
welcome comments from patients and caregivers who have experienced 
virtual supervisory assessments of home health aides during the PHE.
b. Permitting Occupational Therapists To Conduct the Initial Assessment 
Visit and Complete the Comprehensive Assessment for Home Health 
Agencies Under the Medicare Program
    On December 27, 2020, the CAA, 2021 was signed into law. Division 
CC, section 115 of the CAA 2021 requires CMS to permit an occupational 
therapist to conduct the initial assessment visit and complete the 
comprehensive assessment under the Medicare program, but only when 
occupational therapy is on the home health plan of care with either 
physical therapy or speech therapy and skilled nursing services are not 
initially on the plan of care. We are proposing to conforming 
regulation text changes at Sec.  484.55(a)(2) and (b)(3), respectively 
to implement this provision.
    Currently, the requirement at Sec.  484.55(a)(2) states, ``When 
rehabilitation therapy service (speech language pathology, physical 
therapy, or occupational therapy) is the only service ordered by the 
physician or allowed practitioner who is responsible for the home 
health plan of care, and if the need for that service establishes 
program eligibility, the initial assessment visit may be made by the 
appropriate rehabilitation skilled

[[Page 35958]]

professional.'' We are proposing to add additional language that allows 
the occupational therapist to complete the initial assessment for 
Medicare patients when skilled nursing is not initially on the plan of 
care, but occupational therapy is ordered with another rehabilitation 
therapy service (speech language pathology or physical therapy) that 
establishes program eligibility as a need for occupational therapy 
alone would not initially establish program eligibility under the 
Medicare home health benefit (see section 1814(a)(2)(c) and 
1835(a)(2)(A) of the Act). Similarly, at Sec.  484.55(b)(3), we are 
proposing to modify our regulatory language to allow an occupational 
therapist to complete the comprehensive assessment for Medicare 
patients when ordered with another qualifying rehabilitation therapy 
service (speech language pathology or physical therapy) that 
establishes program eligibility and when skilled nursing is not 
initially part of the plan of care. It should be noted that the 
statutory requirements for establishing Medicare program eligibility 
have not changed. Therefore, only the need for skilled nursing, 
physical therapy or speech language pathology services can initially 
establish eligibility for Medicare home health care. However, 
occupational therapy can maintain eligibility for Medicare home health 
care after the need for skilled nursing, physical therapy, and speech 
language pathology services have ceased (see sections 1814(a)(2)(C) and 
1835(a)(2)(A) of the Act).
c. Adequacy of Aide Staffing
    As stated earlier, ensuring that aide services are meeting the 
patient's needs is a critical part in maintaining safe, quality care. 
However, in 2019 MedPAC reported that between 1998 and 2017 home health 
visits declined by 88 percent. CMS seeks information about the adequacy 
of aide staffing and requests comments on the following:
     Whether home health agencies employ or arrange for (under 
contract) home health aides to provide aide services;
     The number of home health aides per home health agency 
(both directly employed and under contract), and whether the number has 
increased or decreased over the past 5-10 years;
     The average number of aide hours per beneficiary with aide 
service ordered on the plan of care;
     The effect of the public health emergency on the ability 
of HHAs to employ home health aides or arrange for (under contract) the 
provision of home health aide services.

V. Home Infusion Therapy Services: Annual Payment Updates for CY 2022

A. Home Infusion Therapy Payment Categories

    Section 5012 of the 21st Century Cures Act (``the Cures Act'') 
(Pub. L. 114-255), which amended sections 1834(u), 1861(s)(2) and 
1861(iii) of the Act, established a new Medicare home infusion therapy 
services benefit, effective January 1, 2021. The Medicare home infusion 
therapy services benefit covers the professional services, including 
nursing services, furnished in accordance with the plan of care, 
patient training and education not otherwise covered under the durable 
medical equipment benefit, remote monitoring, and monitoring services 
for the provision of home infusion therapy furnished by a qualified 
home infusion therapy supplier.
    Section 50401 of the Bipartisan Budget Act (BBA) of 2018 amended 
section 1834(u) of the Act by adding a new paragraph (7) that 
established a home infusion therapy services temporary transitional 
payment for eligible home infusion suppliers for certain items and 
services furnished in coordination with the furnishing of transitional 
home infusion drugs beginning January 1, 2019. The temporary 
transitional payment began on January 1, 2019 and ended the day before 
the full implementation of the home infusion therapy services benefit 
on January 1, 2021.
    For the full implementation of the home infusion therapy services 
benefit on January 1, 2021, CMS established a unit of single payment 
for each infusion drug administration calendar day in the individual's 
home. In accordance with section 1834(u)(1)(A)(ii) of the Act, a unit 
of single payment must be established for different types of infusion 
therapy, taking into account variation in utilization of nursing 
services by therapy type. Furthermore, section 1834(u)(1)(B)(ii) of the 
Act required that the single payment amount reflect factors such as 
patient acuity and complexity of drug administration. In the CY 2020 HH 
PPS final rule with comment period (84 FR 60628), we finalized our 
proposal to maintain the three payment categories that were utilized 
under the temporary transitional payments for home infusion therapy 
services. The three payment categories group home infusion drugs by J-
code based on therapy type. The single payment amount for each payment 
category varies by utilization of nursing services and reflects patient 
acuity and complexity of drug administration, and; therefore, 
ultimately reflects variations in infusion drug administration 
services. Payment category 1 comprises certain intravenous infusion 
drugs for therapy, prophylaxis, or diagnosis, including antifungals and 
antivirals; inotropic and pulmonary hypertension drugs; pain management 
drugs; and chelation drugs. Payment category 2 comprises subcutaneous 
infusions for therapy or prophylaxis, including certain subcutaneous 
immunotherapy infusions. Payment category 3 comprises intravenous 
chemotherapy infusions and other highly complex intravenous infusions. 
We are not proposing to make any changes to the three payment 
categories in CY 2022.
    The categories and associated J-codes can be found in the MLN 
Matters article entitled ``Billing for Home Infusion Therapy Services 
On or After January 1, 2021'' (MM11880).\83\ This list will be updated 
as new drugs and biologicals are added to the DME LCD and determined to 
be ``home infusion drugs.'' The list of home infusion drugs and their 
respective payment categories do not need to be updated through 
rulemaking when a new drug is added to the DME LCD for External 
Infusion Pumps (L33794).\84\\.\ The payment category may be determined 
by the DME MAC for any subsequent home infusion drug additions to the 
DME LCD for External Infusion Pumps (L33794) \85\ as identified by the 
following NOC codes: J7799 (Not otherwise classified drugs, other than 
inhalation drugs, administered through DME) and J7999 (Compounded drug, 
not otherwise classified). Payment category 1 would include any 
appropriate subsequent intravenous infusion drug additions, payment 
category 2 would include any appropriate subsequent subcutaneous 
infusion drug additions, and payment category 3 would include any 
appropriate subsequent intravenous chemotherapy or other highly complex 
drug or biologic infusion additions.
---------------------------------------------------------------------------

    \83\ Billing for Home Infusion Therapy Services On or After 
January 1, 2021 (MM11880). https://www.cms.gov/files/document/mm11880.pdf.
    \84\ Local Coverage Determination (LCD): External Infusion Pumps 
(L33794). https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=33794.
    \85\ Local Coverage Determination (LCD): External Infusion Pumps 
(L33794). https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=33794.
---------------------------------------------------------------------------

    Section 1861(iii)(3)(C) of the Act defines a home infusion drug as 
a parenteral drug or biological administered intravenously or 
subcutaneously for an administration period of 15 minutes or more, in 
the home of an individual through a pump that is an item of DME. Such 
term does not include the following: (1) Insulin

[[Page 35959]]

pump systems; and (2) a self-administered drug or biological on a self-
administered drug (SAD) exclusion list. Division CC, section 117 of CAA 
2021 amended section 1861(iii)(3)(C) of the Act so that the previously 
detailed SAD exclusion in the definition of home infusion drug would 
not apply to a self-administered drug or biological on a SAD exclusion 
list if such drug or biological was included as a transitional home 
infusion drug under subparagraph (A)(iii) of section 1834(u)(7), and 
was identified by a HCPCS code described in subparagraph (C)(ii) of 
such section.
    In the CY 2021 HH PPS final rule (85 FR 70337), we stated that 
Hizentra[supreg], a subcutaneous immunoglobulin, was not included in 
the definition of ``home infusion drugs'' under the benefit beginning 
January 1, 2021, because it was listed on a SAD exclusion list 
maintained by the Medicare Administrative Contractors (MACs). We also 
stated that if it is removed from all the SAD exclusion lists, 
Hizentra[supreg] could be added to the home infusion drugs list in the 
future. After publication of the CY 2021 HH PPS Final Rule on November 
4, 2020, CAA 2021 was signed into law on December 27, 2020. Division 
CC, section 117 of CAA 2021 amended the definition of home infusion 
drugs in Section 1861(iii)(3)(C) of the Act as previously noted.
    Hizentra[supreg] was included as a transitional home infusion drug 
according to the definition of such drug in section 1834(u)(7)(A)(iii) 
of the Act, and was identified by a HCPCS code (J1559) described in 
subparagraph (C)(ii) of such section of the Act. Therefore, consistent 
with the statutorily amended definition of ``home infusion drug'', the 
home infusion therapy services related to the administration of 
Hizentra[supreg] are covered under payment category 2 under both the 
temporary transitional payment from 2019 to 2020, and the permanent 
benefit beginning January 1, 2021.
    It is important to note that the list of home infusion drugs is 
maintained by the DME MACs, and the drugs or their respective payment 
categories for purposes of the home infusion therapy services benefit 
do not need to be updated through rulemaking every time a new drug is 
added to the DME LCD for External Infusion Pumps (L33794). For these 
routine updates, CMS will implement such changes through the 
subregulatory change request process.

B. Payment Adjustments for CY 2022 Home Infusion Therapy Services

1. Home Infusion Therapy Geographic Wage Index Adjustment
    Section 1834(u)(1)(B)(i) of the Act requires that the single 
payment amount be adjusted to reflect a geographic wage index and other 
costs that may vary by region. In the CY 2020 HH PPS final rule with 
comment period (84 FR 60629) we finalized the use of the geographic 
adjustment factor (GAF) to adjust home infusion therapy payments for 
differences in geographic area wages rates based on the location of the 
beneficiary. We remind stakeholders that the GAFs are a weighted 
composite of each Physician Fee Schedule (PFS) localities work, 
practice expense (PE) and malpractice (MP) expense geographic practice 
cost indices (GPCIs) using the national GPCI cost share weights. The 
periodic review and adjustment of GPCIs is mandated by section 
1848(e)(1)(C) of the Act. At each update, the proposed GPCIs are 
published in the PFS proposed rule to provide an opportunity for public 
comment and further revisions in response to comments prior to 
implementation. The GPCIs and the GAFs are updated triennially with a 
2-year phase in and were last updated in the CY 2020 PFS final rule. 
The next full update to the GPCIs and the GAFs will be in the CY 2023 
PFS proposed rule. For CY 2022, there will be changes to the GAF values 
for the majority of localities located in California because CY 2022 is 
the last year of a 5-year incremental transition for the majority of 
the California localities implemented in 2017 in accordance with the 
Protecting Access to Medicare Act of 2014 (PAMA 2014). The CY 2022 PFS 
proposed GAFs will be available on the PFS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched.
    In the CY 2020 HH PPS final rule with comment period (84 FR 60629) 
we stated that the application of the GAF would be budget neutral so 
there is no overall cost impact by applying a budget-neutrality factor. 
We propose to continue this practice and apply the GAF budget-
neutrality factor to the home infusion therapy service payment rates 
whenever there are changes to the GAFs in order to eliminate the 
aggregate effect of variations in the GAFs. For CY 2022, the GAF 
standardization factor would equal the ratio of the estimated national 
spending total using the CY 2021 GAF to the estimated national spending 
total using the CY 2022 GAF. Estimates of national spending totals 
would use home infusion therapy benefit utilization data for CY 2020. 
The CY 2022 GAF was not available in time for this proposed rule. We 
will calculate the CY 2022 GAF standardization factor that will be used 
in updating the payment amounts for CY 2022 and we will include this 
information in a forthcoming change request that would be issued to 
implement the CY 2022 home infusion therapy services payment amounts. 
The CY 2022 GAF values will be posted as an addendum on the PFS website 
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched under the supporting documentation section of the CY 
2022 Medicare Physician Fee Schedule Final Rule and posted on the Home 
Infusion Therapy Billing and Rates web page.\86\
---------------------------------------------------------------------------

    \86\ Home Infusion Therapy Services Billing and Rates. https://www.cms.gov/medicare/home-infusion-therapy-services/billing-and-rates.
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2. Consumer Price Index
    Subparagraphs (A) and (B) of section 1834(u)(3) of the Act specify 
annual adjustments to the single payment amount that are required to be 
made beginning January 1, 2022. In accordance with these sections we 
are required to increase the single payment amount from the prior year 
(that is, CY 2021) by the percentage increase in the CPI-U for the 12-
month period ending with June of the preceding year, reduced by a 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act as the 10-year moving average of changes in annual economy-wide 
private nonfarm business multifactor productivity. Section 1834(u)(3) 
of the Act further states that the application of the productivity 
adjustment may result in a percentage being less than 0.0 for a year, 
and may result in payment being less than such payment rates for the 
preceding year.
    The CPI-U for the 12-month period ending with June of the preceding 
year is not available at the time of this proposed rulemaking. The CPI-
U for the 12-month period ending in June of 2021 and the corresponding 
productivity adjustment will be updated in the final rule.
3. Initial and Subsequent Visit Adjustment
    In the CY 2020 HH PPS final rule with comment period (84 FR 60627), 
we finalized our policy that the payment amounts for each of the three 
payment categories for the first home infusion therapy visit by the 
qualified home infusion therapy supplier in the patient's home will be 
increased by the average difference between the PFS

[[Page 35960]]

amounts for E/M existing patient visits and new patient visits for a 
given year, resulting in a small decrease to the payment amounts for 
the second and subsequent visits, using a budget neutrality factor. We 
remind stakeholders that effective January 1, 2021 there were changes 
to the office/outpatient E/M visit code set (CPT codes 99201 through 
99215) used to calculate the initial and subsequent visit payment 
amounts for home infusion therapy. These changes were adopted from the 
new coding, prefatory language, and interpretive guidance framework 
that has been issued by the AMA's CPT Editorial Panel (see https://www.ama-assn.org/practice-management/cpt/cpt-evaluation-and-management) 
and include the deletion of code 99201 (Level 1 office/outpatient 
visit, new patient), and new values for CPT codes 99202 through 99215. 
The initial visit percentage increase will still be calculated using 
the average difference between the PFS amounts for E/M existing patient 
visits and new patient visits for a given year; however, only new 
patient E/M codes 99202 through 99205 were used in the calculation, as 
the final policy indicates that the calculation is based on the 
relative difference between the average of the new and existing patient 
E/M codes. For CY 2021, the initial visit percentage increase was 
calculated using the average difference between the CY 2021 PFS amounts 
for office/outpatient E/M existing patient visits (99211 through 99215) 
and the CY 2021 PFS amounts for office/outpatient E/M new patient 
visits (99202 through 99205). In the CY 2021 HH PPS final rule (85 FR 
70340), we estimated a 19 percent increase in the first visit payment 
amount and a 1.18 percent decrease in subsequent visit amounts based on 
the average difference between the CY 2021 proposed PFS E/M codes 
amounts for new and existing patients. The percent increase remained 19 
percent for the first visit payment amount and the percent decrease 
remained 1.18 percent for subsequent visit amounts using the final PFS 
E/M rates for new and existing patients.
    However, Division N, section 101 of CAA 2021 added section 
1848(t)(1) of the Act, which applied a 3.75 percent increase in PFS 
payment amounts only for CY 2021.\87\ Division CC, section 113 of CAA 
2021 also delayed the implementation of an add-on E/M code G2211 until 
CY 2024. Because the PFS relative value units (RVUs) are budget 
neutral, this delay in the implementation of the add-on code changed 
the RVUs for all codes under the PFS, including the E/M codes used to 
calculate the home infusion therapy service payment initial visit 
percent increase. The updated RVUs and conversion factor after the 
changes implemented by the CAA 2021 were used to recalculate the CY 
2021 payment amounts for home infusion therapy services, and the 
percent difference used to calculate the initial visit percentage 
increase. As a result, the initial home infusion therapy service visits 
increase was updated to 20 percent and the decrease for subsequent 
visits was updated to 1.3310. We note that the change in the percent 
increase for initial visits was driven by the delay of the code G2211. 
While the updated payment amounts (after the changes implemented by the 
CAA 2021) for the office/outpatient E/M codes were used to recalculate 
the initial visit increase, removing the 3.75 percent does not impact 
the average difference between the office/outpatient E/M codes for new 
patient visits and existing patient because the increase was applied 
equally. Therefore, after removing the adjustment, the percent increase 
remains 20 percent for the initial visit payment amounts and a 1.3310 
percent decrease for all subsequent visit payment amounts.
---------------------------------------------------------------------------

    \87\ Medicare Learning Network Connects ``Special Edition: 
Physician Fee Schedule Update'' (Jan 7, 2021). https://www.cms.gov/files/document/2021-01-07-mlnc-se.pdf.
---------------------------------------------------------------------------

    In the CY 2021 final rule (85 FR 70298, 70339) we also stated that 
we would increase the payment amounts for each of the three payment 
categories for the first home infusion therapy visit by the qualified 
home infusion therapy supplier in the patient's home by the average 
difference between the PFS amounts for E/M existing patient visits and 
new patient visits for a given year. Section 1834 (u)(3) of the Act 
requires the rates from the previous year to be updated by the 
percentage increase in the CPI-U for the 12-month period ending in June 
of 2021 reduced by a productivity adjustment beginning in 2022. 
Therefore, CMS is to update the established payment rates for CY 2021 
by the percentage increase in the CPI-U reduced by the productivity 
adjustment without recalculating the percent difference each year using 
the updated values for the PFS E/M codes for CY 2022 payment purposes. 
For CY 2022, we are proposing to maintain the 20 percent increase 
calculated for the initial home infusion therapy service visits and the 
1.3310 percent decrease calculated for subsequent visits after 
implementation of the changes mandated by the CAA 2021, which we 
previously noted did not impact these percentages. Table 34 shows the 
updated E/M visit codes and the final unadjusted PFS payment amounts 
(without the 3.75 percent increase implemented by the CAA 2021) for CY 
2021, for both new and existing patients, used to determine the 
increased payment amount for the first visit. We invite comments on our 
proposal to maintain the percentages calculated for initial and 
subsequent home infusion therapy service visits calculated after 
implementing the changes mandated by the CAA 2021.

[[Page 35961]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.053

C. CY 2022 Payment Amounts for Home Infusion Therapy Services

    As noted previously, Division N, section 101 of CAA 2021 amended 
added section 1848(t)(1) of the Act, which applied and modified the CY 
2021 PFS rates by providing a 3.75 percent increase in PFS payment 
amounts only for CY 2021.\88\ For CY 2022, CMS will remove the 3.75 
percent increase from the PFS amounts used to establish the CY 2021 
home infusion therapy payment rates and use the unadjusted CY 2021 
rates for these CY 2022 payment amounts will be updated for CY 2022 in 
accordance with section 1834(u)(3) of the Act using the percentage 
increase in the CPI-U for the 12-month period ending in June of 2021 
reduced by the productivity adjustment, adjusted for MFP.
---------------------------------------------------------------------------

    \88\ Medicare Learning Network Connects ``Special Edition: 
Physician Fee Schedule Update'' (Jan 7, 2021). https://www.cms.gov/files/document/2021-01-07-mlnc-se.pdf.
---------------------------------------------------------------------------

    The final home infusion therapy 5-hour payment amounts will be 
released in a forthcoming change request CR and posted on the Home 
Infusion Therapy Billing and Rates web page.\89\ For more in-depth 
information regarding the finalized policies associated with the scope 
of the home infusion therapy services benefit and conditions for 
payment, we refer readers to the CY 2020 HH PPS final rule with comment 
period (84 FR 60544).
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    \89\ Home Infusion Therapy Services Billing and Rates. https://www.cms.gov/medicare/home-infusion-therapy-services/billing-and-rates.
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VI. Medicare Provider and Supplier Enrollment Changes

A. Background--Provider and Supplier Enrollment Process

1. General Discussion
    Section 1866(j)(1)(A) of the Act requires the Secretary to 
establish a process for the enrollment of providers and suppliers in 
the Medicare program. The overarching purpose of the enrollment process 
is to help confirm that providers and suppliers seeking to bill 
Medicare for services and items furnished to Medicare beneficiaries 
meet Federal and State requirements to do so. The process is, to an 
extent, a ``gatekeeper'' that helps prevent unqualified and potentially 
fraudulent individuals and entities from being able to enter and 
inappropriately bill Medicare. Since 2006, we have taken various steps 
via rulemaking to outline our enrollment procedures. These regulations 
are generally incorporated in 42 CFR part 424, subpart P (currently 
Sec. Sec.  424.500 through 424.570 and hereafter occasionally 
referenced as subpart P). They address, among other things, 
requirements that providers and suppliers must meet to obtain and 
maintain Medicare billing privileges.
    One such requirement (outlined in Sec.  424.510) is that the 
provider or supplier must complete, sign, and submit to its assigned 
Medicare Administrative Contractor (MAC) (hereafter occasionally 
referenced as ``Medicare contractor'' or simply ``contractor'') the 
appropriate enrollment application, typically the Form CMS-855 (OMB 
Control No. 0938-0685). The Form CMS-855, which can be submitted via 
paper or electronically through the internet-based Provider Enrollment, 
Chain, and Ownership System (PECOS) process (SORN: 09-70-0532, Provider 
Enrollment, Chain, and Ownership System) collects important information 
about the provider or supplier; such data includes, but is not limited 
to, general identifying information (for example, legal business name), 
licensure and/or certification data, and practice locations. After 
receiving the provider's or supplier's initial enrollment application, 
CMS or the MAC will review and confirm the information thereon and 
determine whether the provider or supplier meets all applicable 
Medicare requirements. We believe this screening process has greatly 
assisted CMS in executing its responsibility to prevent Medicare fraud, 
waste, and abuse.
    As already mentioned, over the years we have issued various final 
rules pertaining to provider and supplier enrollment. These were 
intended not only to clarify or strengthen certain components of the 
enrollment process but also to enable us to take further action against 
providers and suppliers: (1) Engaging (or potentially engaging) in 
fraudulent or abusive behavior; (2) presenting a risk of harm to 
Medicare beneficiaries or the Medicare Trust Funds; or (3) that are 
otherwise unqualified to furnish Medicare services or items. Consistent 
therewith, and as further discussed in section VI.B. of this proposed 
rule, we propose several changes to our existing provider enrollment 
regulations in this proposed rule.

[[Page 35962]]

2. Legal Authorities
    There are two principal sources of legal authority for our proposed 
provider enrollment provisions. Section 1866(j) of the Act provides 
specific authority with respect to the enrollment process for providers 
and suppliers. Sections 1102 and 1871 of the Act furnish general 
authority for the Secretary to prescribe regulations for the efficient 
administration of the Medicare program.

B. Proposed Provisions

1. Effective Dates
    We propose to codify in regulation certain effective date practices 
discussed in CMS Publication 100-08, Program Integrity Manual (PIM) (or 
in other subregulatory guidance). We believe that incorporating these 
topics into 42 CFR part 424 would furnish needed clarification and 
allow the provider community to furnish public comments thereon.
a. Effective Date of Billing Privileges
    Section 424.520 outlines the effective date of billing privileges 
for provider and supplier types that are eligible to enroll in 
Medicare. Paragraph (d) thereof sets forth the applicable effective 
date for physicians, non-physician practitioners (NPP), physician 
organizations, NPP organizations, ambulance suppliers, opioid treatment 
programs, and home infusion therapy suppliers. This effective date is 
the later of: (1) The date of filing of a Medicare enrollment 
application that a Medicare contractor subsequently approved; or (2) 
the date that the provider or supplier first began furnishing services 
at a new practice location. In a similar vein, Sec.  424.521(a) States 
that the seven previously mentioned provider and supplier types can 
retrospectively bill for services when they have met all program 
requirements (including State licensure requirements), and services 
were provided at the enrolled practice location for up to--
     Thirty days prior to their effective date if circumstances 
precluded enrollment in advance of providing services to Medicare 
beneficiaries; or
     Ninety days prior to their effective date if a 
Presidentially-declared disaster under the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (Pub. L. 100-707, enacted November 
23, 1988), 42 U.S.C. 5121-5206 (Stafford Act), precluded enrollment in 
advance of providing services to Medicare beneficiaries.
    In essence, these provisions afford the affected providers and 
suppliers a limited ability to ``back bill'' for services furnished 
before the contractor approves the provider's or supplier's 
application. This reflects CMS' recognition that circumstances can 
prevent a provider's or supplier's enrollment prior to the furnishing 
of Medicare services. With this in mind, CMS, under the applicable PIM 
guidance, had applied the effective date policies in Sec. Sec.  
424.520(d) and 424.521(a) to the following additional supplier types: 
(1) Part B hospital departments; (2) Clinical Laboratory Improvement 
Amendment labs; (3) intensive cardiac rehabilitation facilities; (4) 
mammography centers; (5) mass immunizers/pharmacies; (6) radiation 
therapy centers; (7) physical therapists; (8) occupational therapists; 
and (9) speech language pathologists.
    For the reasons previously discussed, we propose to add these nine 
supplier types to the scope of Sec. Sec.  424.520(d) and 424.521(a). 
The specific regulatory changes would be as follows.
    First, the title and opening paragraph of Sec.  424.520(d) 
currently reads: (d) Physicians, non-physician practitioners, physician 
and non-physician practitioner organizations, ambulance suppliers, 
opioid treatment programs, and home infusion therapy suppliers. The 
effective date for billing privileges for physicians, non-physician 
practitioners, physician and non-physician practitioner organizations, 
ambulance suppliers, opioid treatment programs, and home infusion 
therapy suppliers is the later of . . . . Rather than add the nine 
aforementioned supplier types to the seven provider and supplier types 
already listed within this language (thus making the latter 
unnecessarily long), we propose to shorten and simplify the language to 
state that the effective date of billing privileges for the provider 
and supplier types identified in paragraph (d)(2) of this section is 
the later of the following. Consistent with this proposed change, we 
would also do the following:
     Redesignate existing Sec.  424.520(d)(1) and (2) as, 
respectively, new Sec.  424.520(d)(1)(i) and (ii).
     List the 16 previously referenced provider and supplier 
types as new Sec.  424.520(d)(2)(i) through (xvi).
    Second, the title of Sec.  424.521 would be changed from ``Request 
for payment by physicians, non-physician practitioners, physician and 
non-physician organizations, ambulance suppliers, opioid treatment 
programs, and home infusion therapy suppliers'' to ``Request for 
payment by certain provider and supplier types.''
    Third, the opening language of current Sec.  424.521(a) reads 
``Physicians, non-physician practitioners, physician and non-physician 
practitioner organizations, ambulance suppliers, opioid treatment 
programs, and home infusion therapy suppliers may retrospectively bill 
for services when the physician, non-physician practitioner, physician 
or non-physician organization, ambulance supplier, opioid treatment 
program, or home infusion therapy supplier--.'' We propose to revise 
this language to state that the providers and suppliers identified in 
paragraph (a)(2) of this section may retrospectively bill for services 
when the provider or supplier.
    Fourth, we propose to--
     Redesignate existing Sec.  424.521(a)(1) and (2) as, 
respectively, new Sec.  424.521(a)(1)(i) and (ii); and
     List the 16 aforementioned provider and supplier types as 
new Sec.  424.521(a)(2)(i) through (xvi).
b. Effective Dates of Reassignments and Form CMS-855O Enrollments
(1) Reassignments
    A Form CMS-855R application (OMB Control No. 0938-0685) must be 
completed for any individual supplier (reassignor) who wishes to 
reassign his or her Part B benefits to an eligible entity or individual 
(reassignee) under Sec.  424.80. (This frequently occurs when, for 
example, a physician joins a group practice and, as a condition of her 
employment, reassigns the payments for the services she furnishes on 
behalf of the group practice to the latter.) If the reassignor is not 
enrolled in Medicare, he or she must complete a Form CMS-855I (OMB 
Control No. 0938-0685) application as well as a Form CMS-855R.
    Under the applicable PIM guidance, CMS applied the basic principles 
of Sec. Sec.  424.520(d) and 424.521(a) to Form CMS-855R reassignments 
when establishing the effective date of the latter. As with Sec. Sec.  
424.520(d) and 424.521(a), this subregulatory policy was intended to 
account for instances where the supplier may have been unable to submit 
a Form CMS-855R application earlier than what occurred. To codify this 
into regulation, we propose to add a new Sec.  424.522, the title of 
which would state: ``Additional effective dates.'' Paragraph (a) of 
Sec.  424.522 would specify that a reassignment of benefits under Sec.  
424.80 is effective beginning 30 days before the Form CMS-855R is 
submitted if all applicable requirements during that period were 
otherwise met.
(2) Practitioner Enrolling Solely To Order or Certify Via Form CMS-855O
    Under Sec.  424.507, a physician or other eligible professional (as 
that term is

[[Page 35963]]

defined in Sec.  424.506(a)) who orders or certifies covered--(1) 
Imaging services; (2) clinical laboratory services; (3) durable medical 
equipment, prosthetics, orthotics, and supplies; and/or (4) home health 
services must be enrolled in or validly opted-out of Medicare for the 
resulting claim to be eligible for payment. There are situations where 
the physician or other eligible professional indeed wishes to enroll to 
order and/or certify these services and/or items but is not seeking 
Medicare billing privileges. He or she will accordingly complete the 
Form CMS-855O (``Medicare Enrollment Application: Enrollment for 
Eligible Ordering, Certifying and Prescribing Physicians and Eligible 
Professionals; OMB Control #: 0935-1135). CMS or MAC approval of this 
application does not grant billing privileges but only permits the 
individual to order/certify the aforementioned services and/or items.
    Although the effective date provisions in Sec. Sec.  424.520(d) and 
424.521(a) do not (and indeed could not) apply to Form CMS-855O 
enrollments because no billing privileges or payments are involved, the 
PIM states that a Form CMS-855O enrollment effective date is the date 
on which the Medicare contractor received the application (as opposed 
to, for instance, the date the contractor approves the application). 
This permitted the individual to order/certify these services and items 
for a limited period prior to enrollment. To codify this in regulation, 
we propose to state the following in new Sec.  424.522(b): ``The 
effective date of a Form CMS-855O enrollment is the date on which the 
Medicare contractor received the Form CMS-855O application if all other 
requirements are met.''
    We are also proposing several effective date provisions relating to 
the provider enrollment concept of deactivation. These are addressed 
within the larger deactivation discussion in section VI.B.3. of this 
proposed rule.
2. Rejections and Returns
a. Background and Distinction
    Per Sec.  424.525(a), CMS may reject a provider's or supplier's 
enrollment application for any of the following reasons:
     The prospective provider or supplier fails to furnish 
complete information on the provider/supplier enrollment application 
within 30 calendar days from the date of the Medicare contractor's 
request for the missing information.
     The prospective provider or supplier fails to furnish all 
required supporting documentation within 30 calendar days of submitting 
the enrollment application.
     The prospective institutional provider (as defined in 
Sec.  424.502) does not submit the application fee (in accordance with 
Sec.  424.514) in the designated amount or a hardship waiver request 
with the Medicare enrollment application at the time of filing.
    The PIM outlines additional factual situations in which an 
application could have been rejected.
    The purpose of the rejection policy is to encourage the provider or 
supplier to: (1) Fully and completely submit all required information 
(and any required documentation) with their enrollment application; and 
(2) promptly respond to any contractor requests for clarification 
regarding the application. If a provider's or supplier's application is 
rejected (for example, because the provider or supplier did not correct 
an error on its application per the contractor's request), the 
contractor notifies the provider or supplier via letter accordingly. 
The letter outlines, among other things, the reason for the rejection 
under Sec.  424.525(a) and informs the provider or supplier that the 
latter must submit a new application.
    The PIM also discusses the return of provider enrollment 
applications. In general, an application has been returned when one of 
the return grounds outlined in the PIM applied. These grounds typically 
involve situations where the provider's or supplier's submission 
constitutes, in essence, a non-application. This is different from a 
rejected application in that the latter: (1) Does not automatically 
involve an invalid submission yet the application, for instance, failed 
to include certain information or documentation or contains erroneous 
data; and (2) can be remedied prior to any rejection via the provider's 
or supplier's submission of a corrected, revised, supplemented, or 
complete application.
    We recognize that there has been uncertainty within the provider 
community regarding the difference between application rejections and 
returns as well as the grounds for both actions. To clarify these 
issues, we propose to revise Sec.  424.525 and to add a new Sec.  
424.526.
b. Proposed Rejection and Return Policies
(1) Rejections
    The three previously mentioned reasons in Sec.  424.525(a) for 
rejecting an application are currently designated as, respectively, 
paragraphs (a)(1), (a)(2), and (a)(3). We propose to include the 
following ten rejection scenarios (almost all of which had been 
identified as reasons for rejection in the PIM) within the larger Sec.  
424.525(a)(1) category. This means that rejection in these ten 
situations would only occur if the provider or supplier failed to 
comply with the requirements of (a)(1) (for instance, furnishing 
correct and complete data) within the 30-day period stated therein. We 
believe that incorporating these situations within the scope of Sec.  
424.525(a)(1) would ease the burden on providers and suppliers because 
they would be given time to correct the application's deficiencies. (We 
note that, under the current and proposed versions of Sec.  424.525, 
CMS may reject an application but is not required to.)
    The scenarios in question would be designated as Sec.  
424.525(a)(1)(i) through (x) and are as follows:
     The application is missing data required by CMS or the 
Medicare contractor to process the application (such as, but not 
limited to, names, social security number, contact information, and 
practice location information).
     The application is unsigned or undated.
     The application contains a copied or stamped signature.
     The application is signed more than 120 days prior to the 
date on which the Medicare contractor received the application.
     The application is signed by a person unauthorized to do 
so under 42 CFR part 424, subpart P.
     For paper applications, the required certification 
statement is missing.
     The paper application is completed in pencil.
     The application is submitted via fax or email when the 
provider or supplier was not otherwise permitted to do so.
     The provider or supplier failed to submit all of the forms 
needed to process a Form CMS-855 reassignment package within 30 days of 
receipt. (For example, a newly enrolling physician who will be 
reassigning her benefits to a group practice submits a Form CMS-855R 
application but fails to submit an accompanying Form CMS-855I 
application.)
     The provider or supplier submitted the incorrect Form CMS-
855 application. (For example, the provider submitted a Form CMS-855B 
when a Form CMS-855A application (Medicare Enrollment Application; 
Institutional Providers; OMB # 0938-0685) was required.)
    We reiterate our belief, and it has been our experience, that these 
rejection

[[Page 35964]]

scenarios in proposed new Sec.  424.525(a)(1)(i) through (x) involve 
situations where the provider or supplier can remedy (and, in many 
cases, has remedied) their application submission fairly expeditiously. 
(For instance, an unsigned or improperly signed application can be 
corrected with the proper signature.) Grounds for application returns, 
on the other hand, involve situations that cannot be remedied without 
an entirely new application submission because the initial submission 
was invalid or otherwise could not be accepted and processed. With both 
rejections and returns, however, there are no appeal rights.
    Existing Sec.  424.525(b), (c), and (d) address various operational 
aspects of our rejection policy. We are not proposing to revise them. 
However, and to clarify the scope of Sec.  424.525, we propose in new 
Sec.  424.525(e) that Sec.  424.525 applies to all CMS provider 
enrollment application submissions, including: (1) Form CMS-855 initial 
applications, change of information requests, changes of ownership 
(CHOWs), revalidations, and reactivations; (2) Form CMS-588 (Electronic 
Funds Transfer (EFT) Authorization Agreement; OMB # 0938-0626) 
submissions; (3) Form CMS-20134 submissions; and (4) any electronic or 
successor versions of the forms identified in Sec.  424.525(e)(1) 
through (3). This is to help ensure that the provider or supplier 
furnishes a correct and complete submission regardless of the type of 
CMS enrollment form involved. Concomitant with this change, we propose 
to remove the word ``prospective'' from Sec. Sec.  424.525(a)(1), 
(a)(2), (a)(3), and (b). This will clarify that these three rejection 
grounds apply to enrolled providers and suppliers and not simply 
prospective enrollees.
(1) Returns
    For reasons already explained, we propose in new Sec.  424.526(a) 
that the following situations constitute grounds for CMS' or the 
contractor's return of the provider's or supplier's application to the 
provider or supplier. These grounds, which were discussed in the PIM, 
would be designated as Sec.  424.526(a)(1) through (13). The opening 
language of paragraph (a) would state, however, that CMS or the 
Medicare contractor ``may'' return the application in the following 
instances but is not required to:
     The provider or supplier sent its paper Form CMS-855, Form 
CMS-588, or Form CMS-20134 application to the incorrect Medicare 
contractor for processing. (For example, the application was sent to 
Contractor X instead of Contractor Y.)
     The Medicare contractor received the application more than 
60 days prior to the effective date listed on the application. (This 
does not apply to (1) providers and suppliers submitting a Form CMS-
855A application, (2) ambulatory surgical centers, or (3) portable x-
ray suppliers.
     The seller or buyer in a change of ownership submitted its 
Form CMS-855A or Form CMS-855B application more than 90 days prior to 
the anticipated date of the sale.
     The Medicare contractor received an initial application 
more than 180 days prior to the effective date listed on the 
application from (1) a provider or supplier submitting a Form CMS-855A 
application, (2) an ambulatory surgical center, or (3) a portable x-ray 
supplier.
     The Medicare contractor confirms that the provider or 
supplier submitted an initial enrollment application prior to the 
expiration of the time period in which it is entitled to appeal the 
denial of its previously submitted application.
     The provider or supplier submitted an initial enrollment 
application prior to the expiration of their existing reenrollment bar 
under Sec.  424.535 or reapplication bar under Sec.  424.530(f).
     The application is not needed for (or is inapplicable to) 
the transaction in question.
     The provider or supplier submitted a revalidation 
application more than 7 months prior to the provider's or supplier's 
revalidation due date.
     A Medicare Diabetes Prevention Program (MDPP) supplier 
submitted an application with a coach start date more than 30 days in 
the future. (That is, the application lists an MDPP coach who will 
commence his or her services beginning at least 31 days after the date 
the Medicare contractor receives the application.)
     The provider or supplier requests that their application 
be withdrawn prior to or during the Medicare contractor's processing 
thereof.
     The provider or supplier submits an application that is an 
exact duplicate of an application that (1) has already been processed 
or (2) is currently being processed or is pending processing.
     The provider or supplier submits a paper Form CMS-855 or 
Form CMS-20134 application that is outdated and/or has been superseded 
by a revised version.
     The provider or supplier submits a Form CMS-855A or Form 
CMS-855B initial enrollment application followed by a Form CMS-855A or 
Form CMS-855B CHOW application. If the Medicare contractor:
    ++ Has not yet made a recommendation for approval concerning the 
initial application, both applications may be returned in this 
scenario.
    ++ Has made a recommendation for approval concerning the initial 
application, the Medicare contractor may return the CHOW application. 
If, per the Medicare contractor's written request, the provider or 
supplier fails to submit a new initial Form CMS-855A or Form CMS-855B 
application containing the new owner's information within 30 days of 
the date of the letter, the Medicare contractor may return the 
originally submitted initial Form CMS-855A or Form CMS-855B 
application.
    We note that several of these return grounds involve situations 
where the application is submitted prematurely. CMS and its contractors 
had previously encountered numerous instances where, for instance, a 
Part B supplier would submit an enrollment application well over 9 
months before: (1) The practice location effective date that the 
supplier listed on their application; and/or (2) the date on which the 
supplier planned to begin furnishing services or otherwise commence 
operations. Just as frequently, providers and suppliers would submit 
initial enrollment applications well in advance of the expiration of 
their: (1) Appeal rights following the denial of their previous 
application submission; and/or (2) Medicare reenrollment bar following 
a revocation. This essentially required contractors to hold and track 
the submitted application for many months until the application could 
be processed at a time closer to the supplier's commencement date. To 
alleviate contractors of this burden, the PIM identified various dates 
before which the provider or supplier could not submit an application.
    We also propose in Sec.  424.526 to explain certain operational 
components of our return policy. First, we propose in Sec.  424.526(b) 
that a provider or supplier may not appeal a return of their enrollment 
application. (Section 424.525(d) contains a similar provision for 
rejections.) Since, as previously stated, we believe the situations 
outlined in proposed Sec.  424.526(a) essentially involve the 
submission of a non-application, we do not believe appeal rights would 
be appropriate. Second, we propose to effectively duplicate proposed 
Sec.  424.525(e) in new proposed Sec.  424.526(c). This would clarify 
the types of enrollment applications and transactions to which Sec.  
424.526 would apply.

[[Page 35965]]

3. Deactivation
(a) Background
    Regulatory policies regarding the provider enrollment concept of 
deactivation are addressed in Sec.  424.540. Deactivation means that 
the provider's or supplier's billing privileges are stopped but can be 
restored (or ``reactivated'') upon the submission of information 
required under Sec.  424.540. As stated in Sec.  424.540(c), 
deactivation is intended to protect the provider or supplier from the 
misuse of its billing number and to protect the Medicare Trust Funds 
from unnecessary overpayments.
    A deactivated provider or supplier is not revoked from Medicare and 
remains enrolled in the program; also, per Sec.  424.540(c), 
deactivation does not impact the provider's or supplier's existing 
provider or supplier agreement. However, the provider's or supplier's 
ability to bill Medicare is halted pending its compliance with Sec.  
424.540's requirements for reactivation. Deactivation, in short, is a 
less severe action than a revocation but one significant enough to 
encourage providers and suppliers to maintain compliance with 
enrollment requirements.
    There are currently three grounds for deactivation under Sec.  
424.540(a), listed as, respectively, paragraphs (a)(1), (a)(2), and 
(a)(3):
     The provider or supplier does not submit any Medicare 
claims for 12 consecutive calendar months.
     The provider or supplier does not report a change in its 
enrollment information within 90 calendar days of the change. (Changes 
in ownership or control must be reported within 30 calendar days.)
     The provider or supplier does not furnish complete and 
accurate information and all supporting documentation within 90 
calendar days of receipt of notification from CMS to submit a 
revalidation application in accordance with Sec.  424.515. (In 
addition, Sec.  424.550(b) permits deactivation if the prospective new 
owner in a CHOW fails to submit a new enrollment application containing 
information concerning the new owner within 30 days of the CHOW. CMS 
may also deactivate in a CHOW situation if: (1) An incomplete CHOW 
application is submitted containing material omissions; or (2) CMS has 
information that makes it question whether the provider agreement will 
be transferred to the new owner.)
    To reactivate one's billing privileges, Sec.  424.540(b) states 
that the provider or supplier must: (1) Recertify that their enrollment 
information currently on file with Medicare is correct and furnish any 
missing information as appropriate; or (2) submit a complete Form CMS-
855 application if required by CMS.
    We constantly examine the effectiveness of our deactivation 
processes from both a program integrity and a provider impact 
perspective. Based on this monitoring, we believe that several 
revisions to Sec.  424.540 are needed. In general, these changes are 
meant to, as applicable: (1) Clarify existing policies; (2) incorporate 
certain subregulatory discussions into Sec.  424.540 to afford 
stakeholders an opportunity for public comment; (3) give CMS greater 
flexibility in its payment safeguard activities; and (4) reduce 
provider and supplier burden.
(b) Grounds for Deactivation
    As already mentioned, deactivation is a CMS action that is more 
moderate than a revocation. Unlike the latter, a deactivation neither 
involves the imposition of a reenrollment bar nor is considered a final 
adverse action under Sec.  424.502. It constitutes, in a sense, a 
middle ground between CMS imposing a revocation that (under the 
circumstances) could be an overly harsh measure and CMS taking no 
action at all, thus potentially leaving a program integrity risk 
intact. In this manner, it enables us to avoid an ``all-or-nothing'' 
situation.
    We believe that expanding this flexibility to include additional 
grounds for deactivation would help CMS achieve a proper medium that 
protects the Medicare program without burdening providers and suppliers 
with an unwarranted revocation and the consequences thereof. It would, 
at CMS' discretion, allow for a third option (besides revocation and 
non-action) that might be the fairest and most appropriate given the 
facts involved. Accordingly, we propose a number of changes to Sec.  
424.540(a) and (b).
    First, existing paragraph (a) contains an opening clause followed 
by the three existing deactivation reasons, codified as paragraphs 
(a)(1), (a)(2), and (a)(3). We propose to add several new deactivation 
grounds as paragraphs (a)(4) through (a)(8); respectively, they would 
be as follows:
     The provider or supplier is not in compliance with all 
enrollment requirements in Title 42.
     The provider's or supplier's practice location is non-
operational or otherwise invalid.
     The provider or supplier is deceased.
     The provider or supplier is voluntarily withdrawing from 
Medicare.
     The provider is the seller in an HHA change of ownership 
under Sec.  424.550(b)(1).
    Proposed reasons (a)(4) and (a)(5) reflect existing bases for 
revocation. We propose including them within Sec.  424.540 because, 
depending on the specific circumstances in question, they sometimes 
involve relatively modest instances of non-compliance that the provider 
or supplier can correct. Reasons (a)(6), (a)(7), and (a)(8) are merely 
technical, non-substantive deactivation grounds referenced in 
subregulatory guidance; a deactivation in these situations had simply 
``closed'' the provider's or supplier's enrollment without the need for 
a revocation.
    Second, we propose to revise Sec.  424.540(b)(1) to state: ``In 
order for a deactivated provider or supplier to reactivate its Medicare 
billing privileges, the provider or supplier must recertify that its 
enrollment information currently on file with Medicare is correct, 
furnish any missing information as appropriate, and be in compliance 
with all applicable enrollment requirements in this title.'' The 
addition of the language concerning compliance is primarily meant to 
account for our addition of Sec.  424.540(a)(4) and (5). The 
recertification of enrollment data alone would not be enough for 
providers and suppliers deactivated under either of these grounds; they 
(or, as applicable, their practice location(s)) must also have resumed 
compliance. However, this change would also clarify that compliance 
with all enrollment requirements would be required for providers and 
suppliers deactivated under Sec.  424.540(a)(1), (a)(2), or (a)(3) to 
be reactivated. (We recognize that Sec.  424.540(b)(1) would be largely 
inapplicable to proposed deactivation grounds Sec.  424.540(a)(6), (7), 
and (8) because the provider or supplier has effectively departed the 
Medicare program.)
    In new paragraph (d)(1)(i), and consistent with existing policy, we 
propose to specify that except as provided in paragraph (d)(1)(ii) of 
this section, the effective date of a deactivation is the date on which 
the deactivation is imposed under this section. In paragraph 
(d)(1)(ii), we propose that CMS may apply a retroactive deactivation 
effective date--based on the date that the provider's or supplier's 
action or non-compliance occurred or commenced (as applicable)--in the 
following instances (which would include our proposed new deactivation 
grounds, discussed previously):
    ++ For deactivation reasons (a)(2), (3), and (4), the effective 
date would be

[[Page 35966]]

the date on which the provider or supplier became non-compliant (for 
example, the expiration of the period in which the provider was 
required to report a change in its enrollment information).
    ++ For deactivation reason (a)(5), the date on which the provider's 
or supplier's practice location became non-operational or otherwise 
invalid.
    ++ For deactivation reason (a)(6), the date of death of the 
provider or supplier.
    ++ For deactivation reason (a)(7), the date on which the provider 
or supplier voluntarily withdrew from Medicare.
    ++ For deactivation reason (a)(8), the date of the sale.
(c) Payment Prohibition
    We propose in new Sec.  424.540(e) that a provider or supplier may 
not receive payment for services or items furnished while deactivated 
under Sec.  424.540(a). We recognize that the PIM has permitted 
retroactive payment (once the provider or supplier is reactivated) for 
services furnished during the period of deactivation; current 
subregulatory guidance permits the provider or supplier to bill for 
services or items furnished up to 30 days prior to the effective date 
of the reactivation. After careful reflection, however, we believe that 
the most sensible approach from a program integrity perspective is to 
prohibit such payments altogether. In our view, a provider or supplier 
should not be effectively rewarded for its non-adherence to enrollment 
requirements (for example, failing to respond to a revalidation request 
or failing to timely report enrollment information changes) by 
receiving payment for services or items furnished while out of 
compliance; indeed, the prospect of a payment prohibition could well 
spur providers and suppliers to avoid such non-compliance. We believe 
proposed Sec.  424.540(e) would not only be an important payment 
safeguard in this regard but also would: (1) Clarify this important 
issue (which has created some confusion within the provider community); 
and (2) allow the public to furnish feedback on the topic.
(d) Additional Revisions
    We also propose three additional clarifications to the deactivation 
provisions in Sec.  424.540. First, the opening sentence of Sec.  
424.540(c) states that deactivation ``is considered an action to 
protect the provider or supplier from misuse of its billing number and 
to protect the Medicare Trust Funds from unnecessary overpayments.'' 
While this sentence is true, we previously mentioned other purposes of 
deactivation, such as encouraging providers and suppliers to remain 
compliant with Medicare requirements. Given the multiple rationales for 
the deactivation process, we believe the first sentence of Sec.  
424.540(c) is too restrictive and propose to remove it. (The existing 
second sentence of Sec.  424.540(c) would remain intact and comprise 
the whole of revised paragraph (c).)
    Second, and as alluded to previously, the concluding sentence of 
existing Sec.  424.540(a)(2) states that changes in ownership or 
control ``must be reported within 30 calendar days as specified in 
Sec. Sec.  424.520(b) and 424.550(b).'' We propose to clarify that our 
existing deactivation authority under Sec.  424.540(a)(2) applies to 
both the changes that must be reported within 90 days and those within 
30 days. Consequently, we would delete the existing version of this 
paragraph and state that deactivation is permitted if the provider or 
supplier does not report a change to the information supplied on the 
enrollment application within the applicable time period required under 
this title. Our use of the word ``title'' would account for provisions 
in Title 42 (such as those in Sec.  424.516) that require certain 
provider and supplier types to report such changes within the 
timeframes specified therein.
    Third, under the applicable PIM guidance, the effective date of a 
reactivation is generally the date on which the Medicare contractor 
received the application that was processed to completion. To clarify 
this policy in regulation, we propose to add it as new Sec.  
424.540(d)(2) with one modification, in that the word ``completion'' 
would be replaced with ``approval.'' This would make clear that the 
contractor would have to actually approve the application (rather than 
merely complete the processing thereof) in order for the reactivation 
to become effective.
6. HHA Capitalization
    Under Sec. Sec.  489.28(a) and 424.510(d)(9), an HHA entering the 
Medicare program--including a new HHA resulting from a change of 
ownership if the latter results in a new provider number being issued--
must have sufficient funds (known as initial reserve operating funds) 
available: (1) At the time of application submission; and (2) at all 
times during the enrollment process, to operate the HHA for the 3-month 
period after the Medicare contractor conveys billing privileges 
(exclusive of actual or projected accounts receivable from Medicare). 
This means that the HHA must also have available sufficient initial 
reserve operating funds during the 3-month period following the 
conveyance of Medicare billing privileges.
    To enable CMS or the Medicare contractor to verify compliance with 
the requirements of Sec. Sec.  489.28(a) and 424.510(d)(9), the HHA 
must submit adequate proof of the availability of initial reserve 
operating funds. Section 489.28(d) states that such proof must include, 
at a minimum, a copy of the statement(s) of the HHA's savings, 
checking, or other account(s) that contains the funds, ``accompanied by 
an attestation from an officer of the bank or other financial 
institution that the funds are in the account(s) and that the funds are 
immediately available to the HHA.'' With respect to borrowed funds, 
Sec.  489.28(e) states that if such funds are not in the same 
account(s) as the HHA's own non-borrowed funds, the HHA must provide 
proof that the borrowed funds are available for use in operating the 
HHA, by providing, at a minimum, a statement similar to the bank/
financial institution officer attestation referenced in Sec.  
489.28(d). CMS has recently learned that several national bank chains 
are no longer providing these attestation statements, thus hindering 
the ability of HHAs to comply with Sec.  489.28(d) or (e). To remedy 
this, we propose to insert the phrase ``(if the financial institution 
offers such attestations)'' after the term ``financial institution'' as 
used Sec.  489.28(d) and (e).
7. HHA Changes of Ownership
    Section 424.550(b) states that if there is a change in majority 
ownership of an HHA by sale within 36 months after the effective date 
of the HHA's initial enrollment in Medicare or within 36 months after 
the HHA's most recent change in majority ownership, the HHA's provider 
agreement and Medicare billing privileges do not convey to the new 
owner (hereafter occasionally referenced as the ``36-month rule''). 
Instead, the prospective provider/owner of the HHA must: (1) Enroll in 
Medicare as a new (initial) HHA; and (2) obtain a state survey or 
accreditation. We had seen situations where an HHA submitted an initial 
enrollment application, underwent a Sate survey, became Medicare-
enrolled, and then promptly sold (or ``flipped'') the HHA (via our 
change of ownership regulations in Sec.  489.18) to an unqualified 
party. This was problematic because the latter would not have to 
undergo a new State survey. By effectively imposing a 36-month 
``waiting period'' for HHA changes in majority ownership under Sec.  
424.550(b), we have been able to stem such instances of ``flipping'' 
or, if an HHA sale does occur within this timeframe,

[[Page 35967]]

fully scrutinize the new owner via a State survey and the initial 
provider enrollment process. This is particularly important given, as 
previously mentioned, the heightened program integrity risks that HHAs 
have historically presented.
    However, we recognize in Sec.  424.550(b) that there are instances 
where qualified HHAs change their ownership without any intent to 
circumvent a State survey or initial enrollment. Therefore, we created 
several exceptions in which the 36-month rule does not apply. One 
exception (identified in Sec.  424.550(b)(2)(i)) is that the HHA has 
submitted 2 consecutive years of full cost reports; we believe this 
circumstance indicates that the HHA has been legitimately and fully 
functioning for an extended period, thus negating to some extent our 
concern that the HHA may be engaged in ``flipping.'' There has been 
uncertainty within the provider community as to whether this particular 
exception applies only to the 2-year cost report period after initial 
enrollment or also to 2-year cost report periods after the HHA's 
previous change in majority ownership. In assessing whether an HHA has 
been operational and providing services for 2 consecutive years for 
purposes of the 36-month rule, we see no appreciable difference between 
a period following initial enrollment and one succeeding a change in 
majority ownership. We accordingly propose to revise the first sentence 
of Sec.  424.550(b)(2)(i) to specify that the HHA submitted 2 
consecutive years of full cost reports since initial enrollment or the 
last change in majority ownership, whichever is later. (The second 
sentence of Sec.  424.550(b)(2)(i), which clarifies that low 
utilization or no utilization cost reports do not qualify as full cost 
reports for purposes of Sec.  424.550(b)(2)(i), would remain intact.)

VII. Survey and Enforcement Requirements for Hospice Programs

A. Background

    Hospice care, as referenced in our regulations at Sec.  418.3, 
means a comprehensive set of services described in section 1861(dd)(1) 
of the Act. These services are identified and coordinated by an 
interdisciplinary group to provide for the physical, psychosocial, 
spiritual, and emotional needs of a terminally ill patient and/or 
family members, as delineated in a specific patient plan of care that 
is individualized and person-centered. 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 the relief of pain and symptom 
management. Medicare regulations at Sec.  418.3 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, 
emotional, social, and spiritual needs and facilitating patient 
autonomy, access to information, and choice. Palliative care that is 
patient-centered and individualized 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 program uses an 
interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through a 
collaboration of professionals and other caregivers, to make the 
beneficiary as physically and emotionally comfortable as possible.
    As referenced in hospice program regulations at Sec.  418.22(b)(1), 
to be eligible for Medicare hospice program services, the patient's 
attending physician (if any) and the hospice program 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. 
The individual has a medical prognosis that his or her life expectancy 
is 6 months or less if the illness runs its normal course. Under the 
Medicare hospice program benefit, the election of hospice program care 
is a patient choice and once a terminally ill patient elects to receive 
hospice care, a hospice interdisciplinary group (IDG) is essential in 
the seamless provision of primarily home-based services.
    Hospice programs must comply with applicable civil rights laws,\90\ 
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.
---------------------------------------------------------------------------

    \90\ 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.
---------------------------------------------------------------------------

1. Medicare Participation and Survey Activity
    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and the implementing regulations in 42 CFR part 418, establish 
eligibility requirements, payment standards, and procedures; define 
covered services; and delineate the conditions a hospice program must 
meet to be approved for participation as a provider in the Medicare 
program. Part 418, subpart G, provides for a per diem payment based on 
one of four prospectively-determined rate categories of hospice care 
(routine home care, continuous home care, inpatient respite care, and 
general inpatient care), based on each day a qualified Medicare 
beneficiary is under hospice care (once the individual has elected). 
This per diem payment is meant to cover all of the hospice services and 
items needed to manage the beneficiary's care, as required by section 
1861(dd)(1) of the Act.
    Section 1864(a) of the Act authorizes the State survey agencies 
(SAs) or other appropriate local agencies, under an agreement with CMS, 
to perform surveys of health care providers and suppliers to assess 
their compliance with the applicable Medicare conditions. There are 
several types of surveys conducted, including initial surveys (to 
receive initial certification), recertification surveys (to maintain 
certification), complaint surveys (to investigate complaints), and 
surveys for validation of the results of Accrediting Organization (AO) 
surveys. Only the SA or CMS may survey certain provider types because a 
CMS-approved AO option does not exist for their type, while others 
cannot be surveyed by SAs in accordance with the statute but can only 
be accredited by a CMS-approved AO (such as providers of the technical 
component of advanced diagnostic imaging). Based on the SA 
recommendations from survey findings, CMS determines whether the 
provider or supplier qualifies, or continues to qualify, for 
participation in the Medicare program.
2. CMS Requirements for AOs Approved To Deem Hospice Programs
    Section 1865(a) of the Act allows most health care facilities to 
demonstrate their compliance with the Medicare conditions through 
accreditation by a CMS-approved program of an AO,

[[Page 35968]]

instead of being surveyed by SAs for certification. Currently CMS-
approved accreditation programs for facilities under section 1865(a) of 
the Act include Ambulatory Surgical Centers (ASCs); Hospitals; Critical 
Access Hospitals (CAHs); Home Health Agencies (HHAs); Hospices; 
Outpatient Physical Therapy (OPT) facilities; End-Stage Renal Disease 
(ESRD) facilities; and Rural Health Clinics (RHCs). This is referred to 
as ``deeming'' accreditation. This is because CMS-approved AOs are 
recognized by the Secretary as having programs with accreditation 
standards that meet or exceed those of Medicare. Therefore, any 
provider or supplier that is accredited by an AO under a CMS-approved 
accreditation program is deemed by CMS to have also complied with the 
applicable Medicare conditions or requirements. Accreditation by an AO 
is generally voluntary on the part of the providers and suppliers, as 
they have the choice to seek accreditation from an approved AO or seek 
Medicare certification through the SA.
    CMS is responsible for--(1) providing continuous oversight of the 
AOs' accreditation programs to ensure that providers or suppliers 
accredited by the AOs meet the required Medicare conditions or 
requirements; (2) ensuring that the AOs have formalized procedures to 
determine whether the health care facilities deemed under their 
accreditation programs meet the AO's accreditation standards (which 
must meet or exceed the applicable Medicare program requirements); and 
(3) ensuring that the AO's accreditation standards and practices for 
surveying providers and suppliers meet or exceed the Medicare 
conditions and practices for approving.
    The current regulations at Sec.  488.4 set forth the general 
provisions for CMS-approved accreditation programs for providers and 
suppliers. The requirements at Sec.  488.5 set out application and re-
application procedures for national AOs that seek to obtain CMS 
approval of their accreditation programs, often called ``deeming 
authority.'' These regulations task CMS with the responsibilities of 
approval and oversight of the AOs' accreditation programs.
    As of March 2021, there are three AOs with CMS-approved hospice 
accreditation programs: Accreditation Commission for Health Care, Inc. 
(ACHC), Community Health Accreditation Partner (CHAP), and The Joint 
Commission (TJC). These three AOs survey approximately half of the over 
5,000 Medicare-certified hospice programs, while the SAs survey the 
remaining half.

B. Provisions of the Proposed Rule

1. Overview
    Division CC, section 407 of the CAA 2021, amended Part A of Title 
XVIII of Act to add a new section 1822 to the Act, and amended sections 
1864(a) and 1865(b) of the Act, establishing new hospice program survey 
and enforcement requirements. There are nine new survey and enforcement 
provisions. The law requires public reporting of hospice program 
surveys conducted by SAs and AOs, as well as enforcement actions taken 
as a result of these surveys, on CMS's website in a manner that is 
prominent, easily accessible, searchable and readily understandable 
format. It also removes the prohibition at section 1865(b) of the Act 
of public disclosure of hospice surveys performed by AOs, requiring 
that AOs use the same survey deficiency reports as SAs (Form CMS-2567, 
``Statement of Deficiencies'' or a successor form) to report survey 
findings. The law requires programs to measure and reduce inconsistency 
in the application of survey results among all surveyors. The law 
requires the Secretary to provide comprehensive training and testing of 
SA and AO hospice program surveyors, including training with respect to 
review of written plans of care. The statute prohibits SA surveyors 
from surveying hospice programs for which they have worked in the last 
2 years or in which they have a financial interest, requires hospice 
program SAs and AO to use a multidisciplinary team of individuals for 
surveys conducted with more than one surveyor (to include at least one 
registered nurse (RN)), and provides that each SA must establish a 
dedicated toll-free hotline to collect, maintain, and update 
information on hospice programs and to receive complaints. Finally, the 
law directs the Secretary to create a Special Focus Program (SFP) for 
poor-performing hospice programs, sets out authority for imposing 
enforcement remedies for noncompliant hospice programs, and requires 
the development and implementation of a range of remedies as well as 
procedures for appealing determinations regarding these remedies. These 
enforcement remedies can be imposed instead of, or in addition to, 
termination of the hospice program's participation in the Medicare 
program. These remedies include civil money penalties (CMPs), 
suspension of all or part of payments, and appointment of temporary 
management to oversee operations.
    The provision requiring a new hospice program hotline is effective 
1 year after the CAA 2021 enactment (that is, December 27, 2021). Most 
other provisions are effective on October 1, 2021, including the 
following--the requirement to use multidisciplinary survey teams, the 
prohibition of conflicts of interest, expanding CMS-based surveyor 
training to AOs, and the requirement for AOs with CMS-approved hospice 
accreditation programs to begin use of the Form CMS-2567 (or a 
successor form). The public disclosure of survey information and the 
requirement to develop and implement a range of enforcement remedies is 
effective no later than October 1, 2022. The other provisions in the 
legislation were effective upon enactment of the CAA 2021.
    In this proposed rule, we are proposing a comprehensive strategy to 
enhance the hospice program survey process, increase accountability for 
hospice programs, and provide increased transparency to the public. Our 
goals include: (1) Maintaining the public trust through addressing 
conflicts of interest and improving survey transparency; (2) addressing 
inconsistency within the survey process through training and survey 
team composition and use of common hospice program deficiency reporting 
mechanisms; and (3) ensuring hospice programs are held accountable for 
addressing identified health and safety issues. The statutory 
requirements outlined in the CAA 2021 will address CMS' goals and are 
in the best interest of patients who receive care in Medicare-
participating hospice programs.
    We propose to add new subparts M and N to 42 CFR part 488 to 
implement the CAA 2021 requirements. Subpart M would provide survey and 
certification processes while subpart N would provide the enforcement 
remedies for hospice programs with deficiencies that are not in 
compliance with Medicare participation requirements. The proposed 
enforcement remedies for hospice programs with deficiencies are similar 
to the alternative enforcement sanctions available for HHAs with 
deficiencies. We propose to amend Sec.  488.2 and Sec.  488.28, where 
appropriate, to include the reference to hospice program. In addition, 
we propose to amend terminations and appeals requirements in 42 CFR 
parts 489 and 498 based on the proposed enforcement remedies.
2. Subpart A--General Provisions
a. Statutory Basis (Sec. Sec.  488.2 and 498.1)
    The CAA 2021 amended Part A of title XVIII of the Act to add 
section 1822 of the Act on hospice program survey

[[Page 35969]]

and enforcement procedures. We propose to amend the requirement at 
Sec.  488.2 and at Sec.  498.1 to include this statutory reference to 
hospice program services.
b. Application and Re-Application Procedures for National Accrediting 
Organizations (Sec.  488.5)
    We propose at Sec.  488.5(a)(4)(x) to require the AOs, as part of a 
hospice program AO's application and reapplication process, to submit a 
statement acknowledging that the AO will include a statement of 
deficiencies (that is, the Form CMS-2567 or a successor form) to 
document findings of the hospice program Medicare CoPs under section 
1822(a)(2)(A)(ii) of the Act and will submit such in a manner specified 
by CMS.
    Currently, the regulations under Sec.  488.5 do not require AOs to 
utilize the same forms as SA surveyors when documenting survey findings 
of noncompliance. Specifically, Sec.  488.5(a)(4)(ii) in part states 
that AOs with CMS-approved programs must submit documentation 
demonstrating the comparability of the organization's survey process 
and surveyor guidance to those required for State survey agencies 
conducting Federal Medicare surveys for the same provider or supplier 
type. . . . Therefore, AOs are not required to and do not utilize the 
Form CMS-2567 to report their survey findings, nor do they use the same 
software system used by SAs to capture the information. Each of the 
three AOs with CMS-approved hospice program deeming authority, has a 
unique software system that is proprietary to the organization and 
develops a unique survey report for their deemed hospice organizations. 
These systems are platforms for AO/client communication as well as 
document storage and are unique to the AOs standards and process, which 
may meet or exceed those of CMS. The AO's survey reports, provided to 
hospice program clients, set out the deficiencies related to CMS 
requirements, as well as any additional AO standards combined into one 
report.
    The Form CMS-2567 Statement of Deficiencies and Plan of Correction 
\91\ is the legal, documentary basis for how SAs and CMS Federal 
surveyors note findings of compliance or noncompliance (deficiencies) 
resulting from an inspection of Medicare-participating providers and 
suppliers. Our regulations at Sec.  488.18 require that SAs document 
all deficiency findings on a statement of deficiencies, which is the 
Form CMS-2567.
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    \91\ CMS-2567 available at: https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS2567.pdf.
---------------------------------------------------------------------------

    Additionally, Sec. Sec.  488.26 and 488.28 further delineate how 
findings must be recorded and that CMS prescribed forms must be used. 
The Form CMS-2567 is used to state concisely and in a standard format, 
whether or not any deficiencies were identified during a survey, 
including the evidence to support each finding. Following the survey, 
the provider/supplier will use the form to document their plan for 
correcting the identified deficiencies.
    The completed Form CMS-2567 exists in PDF format and is also 
compiled by the CMS Automated Survey Processing Environment (ASPEN) 
survey software, which is the current national database, designed to 
help SAs collect and manage healthcare provider data. CMS is in the 
process of transitioning the ASPEN software system to a new, web-based 
internet Quality Improvement and Evaluation System (iQIES).\92\ In mid-
2021, CMS will begin transitioning to the new software system on a 
program-specific implementation schedule, starting with HHAs. It may 
take several years to fully transition all programs to the new 
technology platform, and CMS will continue to evaluate documentation 
needs, make necessary system adjustments with each program that 
transitions, and train surveyors on system use.
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    \92\ iQIES is available at: https://iqies.cms.gov/.
---------------------------------------------------------------------------

    Currently, AOs are able to access the online PDF version of the 
Form CMS-2567 but do not have access to the CMS ASPEN system, as this 
software was only designed and distributed for use by SAs and CMS 
employees. CMS and the AOs must therefore determine the systems process 
for the inclusion and subsequent collection of the Form CMS-2567 as 
part of all deemed hospice program surveys completed by AOs. CMS 
already requires all AO survey reports to identify the comparable 
Medicare CoPs for each finding of noncompliance with accreditation 
standards (Sec.  488.5(a)(4)(iv)). Therefore, in order to meet the new 
statutory requirement for hospice program AOs to also use the Form CMS-
2567 (or a successor form), each of the three CMS-approved hospice 
program AOs must now develop a way to incorporate this form into their 
data systems.
    As required by Sec.  488.5(a)(11)(ii), AOs submit their survey 
findings to CMS. The database, Accrediting Organization System for 
Storing User Recorded Experiences (ASSURE), is currently used by AOs to 
provide CMS with survey data from its deemed facilities. The ASSURE 
system requires the AO to match its specific survey findings and 
comparable AO standards to the Medicare conditions or requirements by 
uploading a spreadsheet text file, designed based on the data fields in 
the system, or by manually inputting the information. At this time, the 
ASSURE system does not and cannot develop a statement of deficiencies 
Form CMS-2567, as ASPEN does for SA surveyors, because ASSURE was 
designed to capture survey details and findings based on the 
requirements for AOs at Sec.  488.5.
    CMS is currently assessing the systems revisions needed for each of 
the three database options (ASPEN, ASSURE, and iQIES) to determine if 
one of the systems could be a future vehicle for hospice program AOs to 
document their survey findings in the same manner as SAs and 
subsequently have those forms easily captured by CMS for reporting 
purposes. Since ASPEN and ASSURE are nearing the end of their 
lifecycle, as CMS transitions to iQIES, it may not be prudent for CMS 
to invest resources and redistribute funding intended to update the 
future system to update legacy systems. At this time, it is most 
important for AOs to develop a way of incorporating the Form CMS-2567 
into their documentation systems. As their systems are proprietary, CMS 
is unable to tell the AOs exactly how to incorporate the Form CMS-2567, 
but we will work with the AOs to determine how their version can be 
submitted to CMS via electronic data exchange.
    Separately from the systems issues, the existing format of the Form 
CMS-2567 must be modified, as it does not currently have a place for 
the name of the AO that is performing the survey as this form was 
historically only used by SAs. Consequently, the form directions do not 
refer to AOs. Since this is a public document that is frequently used 
by consumers, advocacy groups, and the public as a source of 
information about quality of care and facility compliance, CMS must 
make updates to the form to include AO information so it is clear who 
performed the survey. CMS is in the process of seeking the Office of 
Management and Budget (OMB) approval of this revised form for 
information collection, in accordance with provisions of the Paperwork 
Reduction Act (PRA). For further discussion on PRA implications and 
timeline, see the collection of information requirements in section X. 
of this proposed rule.
    We seek public comment on how AOs can customize their proprietary 
systems to incorporate a version of the Form

[[Page 35970]]

CMS-2567 and then submit it to CMS via electronic data exchange.
c. Release and Use of Accreditation Surveys (Sec.  488.7)
    We propose to add a new Sec.  488.7(c), which would require the 
posting of the Form CMS-2567 in a manner that is prominent, easily 
accessible, readily understandable, and searchable for the general 
public and allows for timely updates. Prior to the CAA 2021, CMS did 
not have the authority to publish AO surveys for deemed hospice 
programs except to the extent that the AO survey and survey information 
are related to an enforcement action taken by CMS against the provider. 
However, CMS may post State agency complaint or validation survey 
results of deemed hospice providers; CMS utilizes the Quality, 
Oversight, and Certification Reports (QCOR) \93\ public website for 
this purpose.
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    \93\ Quality, Certification and Oversight Reports (QCOR).
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    As mentioned in section VII.B.1.b. of this proposed rule, CMS 
recognizes there are challenges related to the system implications for 
use of the Form CMS-2567 by the AOs. However, as directed by Congress, 
we are removing the prohibition that previously allowed AO hospice 
program survey reports to be considered confidential and proprietary. 
We are proposing to require that AOs release deficiency reports for 
hospice program surveys conducted under their respective deeming 
authority to increase transparency among the hospice beneficiary 
community.
    CMS will need to address various system integrations and updates to 
integrate AO survey results on the Form CMS-2567 as mentioned in 
section VII.B.2.b. of this proposed rule. Furthermore, CMS recognizes 
there are limitations and additional data system changes to consider 
for survey results from the Form CMS-2567 to be displayed in a 
meaningful and useful format.
    We seek public comments as to how data elements from the Form CMS-
2567 may be utilized and displayed, and other recommendations of 
relevant provider information, to assist the public in obtaining a more 
comprehensive understanding of a hospice program's overall performance. 
CAA 2021 requires that CMS publish survey information from the Form 
CMS-2567 in a way that is readily understandable and useable by the 
public in a meaningful way. We anticipate the need for us to develop 
some type of a standard framework that would identify salient survey 
findings in addition to other relevant data about the hospices' 
performance. We recognize that the implications of releasing national 
survey data will require collaboration with industry stakeholders to 
assure the development is fair and equitable across all hospice 
programs.
d. Providers or Suppliers, Other Than SNFs, NFs, HHAs, and Hospice 
Programs With Deficiencies (Sec.  488.28)
    Currently, the regulation at Sec.  488.28 states that if a provider 
or supplier is deficient in one or more of the standards set out in 
such provider's or supplier's CoPs, it must submit an acceptable plan 
of correction (POC) for achieving compliance. An acceptable POC must be 
received within a reasonable time acceptable to CMS to continue 
Medicare participation. If it is determined during a survey that a 
provider or supplier is not in compliance with one or more of the 
standards in the CoPs, it is granted a ``reasonable time'' to achieve 
compliance. The amount of time depends upon the nature of the 
deficiency and the SA's discretionary determination as to whether the 
facility can provide adequate and safe care. Ordinarily, a provider or 
supplier is expected to take the steps needed to achieve compliance 
within 60 days of being notified of the deficiencies. However, the SA 
may recommend additional time be granted based on individual situations 
if it is not reasonable to expect compliance within 60 days. The 
regulation exempts SNFs, NFs, and HHAs from this requirement; instead, 
similar provisions are set out in the regulations relating to those 
specific provider-types.
    Section 1822(c) of the Act authorizes the Secretary to take actions 
to ensure the removal and correction of condition-level deficiencies in 
a hospice program through an enforcement remedy or termination or both. 
The enforcement remedy requirements for hospice programs are outlined 
in the proposed new subpart N. Regardless of which remedy is applied, a 
non-compliant hospice program must still submit a POC for approval by 
the SA or CMS. The POC is a plan developed by the hospice program and 
approved by CMS that is the hospice program's written response to 
survey findings detailing corrective actions to cited deficiencies and 
the hospice program specifies the date by which those deficiencies will 
be corrected. We propose revising the heading for Sec.  488.28 to 
indicate that hospice programs with deficiencies would also be exempt 
from the enforcement requirements set out in that section of our rules.
3. Proposed New Subpart M--Survey and Certification of Hospice Programs
a. Basis and Scope (Sec.  488.1100)
    The proposed regulation at Sec.  488.1100 would specify the 
statutory authority and general scope of the hospice program. In 
general, this proposed rule is based on the rulemaking authority in 
section 1822 of the Act as well as specific statutory provisions 
identified in the preamble where appropriate.
b. Definitions (Sec.  488.1105)
    We propose to add definitions at Sec.  488.1105 for survey and 
enforcement terms for hospice programs. The definitions proposed for 
hospice programs include the following:
     Abbreviated standard survey would mean a focused survey 
other than a standard survey that gathers information on hospice 
program's compliance with specific standards or CoPs. An abbreviated 
standard survey may be based on complaints received or other indicators 
of specific concern. Examples of other indicators include media reports 
or findings of government oversight activities, such as OIG 
investigations.
     Complaint survey would mean a survey that is conducted to 
investigate substantial allegations of noncompliance as defined in 
Sec.  488.1.
     Condition-level deficiency would mean noncompliance as 
described in Sec.  488.24 of this part.
     Deficiency would mean a violation of the Act and 
regulations contained in 42 CFR part 418, subparts C and D, is 
determined as part of a survey, and can be either standard or 
condition-level.
     Noncompliance would mean any deficiency found at the 
condition-level or standard-level.
     Standard-level deficiency would mean noncompliance with 
one or more of the standards that make up each condition of 
participation for hospice programs.
     Standard survey would mean a survey conducted in which the 
surveyor reviews the hospice program's compliance with a select number 
of standards and/or CoPs to determine the quality of care and services 
furnished by a hospice program.
     Substantial compliance would mean compliance with all 
condition-level requirements, as determined by CMS or the State.
c. Hospice Program Surveys and Hospice Program Hotline (Sec.  488.1110)
    At proposed Sec.  488.1110(a), a standard survey would have to be 
conducted not

[[Page 35971]]

later than 36 months after the date of the previous standard survey, as 
specified in section 1822(a)(1) of the Act. A survey could be conducted 
more frequently than 36 months to assure that the delivery of quality 
hospice services complies with the CoPs and confirm that the hospice 
program corrected deficiencies that were previously cited. At proposed 
Sec.  488.1110(b)(1), a standard or abbreviated standard survey would 
have to be conducted when complaint allegations against the hospice 
program were reported to CMS, the State, or local agency. Additionally, 
we recognize that for AOs with hospice deeming programs, the proposed 
36-month surveys would mirror the requirements for AOs to describe the 
frequency of surveys as part of the AO application process at existing 
Sec.  488.5(a)(4)(i). That provision requires AOs to agree to survey 
and re-survey every accredited provider or supplier, through 
unannounced surveys, no later than 36 months after the prior 
accreditation effective date, or shorter if there is a statutorily 
mandated survey interval of fewer than 36 months.
    Prior to the amendments made by CAA 2021, section 1864(a) of the 
Act required that agreements between the Secretary and the State, under 
which SAs carry out the Medicare certification process, shall provide 
for the appropriate State or local agency to establish and maintain a 
toll-free hotline for HHAs. The CAA 2021 amended this requirement to 
include hospice programs. The provision now requires that a hotline 
must be maintained: (1) To collect, maintain, and continually update 
information on HHAs and hospice programs located in the State or 
locality that are certified to participate in the program established 
under this title; and (2) to receive complaints (and answer questions) 
with respect to HHAs and hospice programs in the State or locality. 
Section 1864(a) of the Act also provides that such agreements shall 
provide for the State or local agency to maintain a unit for 
investigating such complaints that possesses enforcement authority and 
has access to survey and certification reports, information gathered by 
any private accreditation agency utilized by the Secretary under 
section 1865 of the Act, and consumer medical records (but only with 
the consent of the consumer or his or her legal representative). We 
propose to build on these same requirements for hospice programs 
consistent with the amendments made to section 1864(a) of the Act by 
CAA 2021.
    Therefore, at Sec.  488.1110(b)(2) we propose that the State or 
local agency is responsible for establishing and maintaining a toll-
free hotline to receive complaints (and answer questions) with respect 
to hospice programs in the State or locality and for maintaining a unit 
to investigate such complaints. The requirement for the hotline will be 
described in the annual CMS Quality, Safety and Oversight Group's 
Mission and Priority Document (MPD) that serves as the scope of work 
which State Agencies are bound contractually via section 1864 of the 
Act (42 U.S.C. 1395aa).
    As we plan for the implementation of the hospice toll-free hotline 
to streamline and enhance the complaint process for hospice program 
beneficiaries, we seek public comment on current experiences with the 
HHA toll-free hotline as required by section 1864(a) of the Act. This 
information will inform CMS of future enhancements to the toll-free 
hotline. Specifically, what data elements and processes should be 
included to assure confidentiality and immediate communication with 
relevant SAs in order to permit them to respond promptly.
d. Surveyor Qualifications and Prohibition of Conflicts of Interest 
(Sec.  488.1115)
    Section 1822(a)(4)(C) of the Act requires the Secretary to provide 
training for State and Federal surveyors, and any surveyor employed by 
an AO, including a training and testing program approved by the 
Secretary, no later than October 1, 2021. Further, no surveyor can 
conduct hospice program surveys until they complete training and 
testing. Currently, AOs are required by Sec.  488.5(a)(8) to provide 
training to their surveyors. As the AO requirements outlined in Sec.  
488.5 also allow for standards and processes that exceed those of CMS, 
the AO's training may differ from what CMS provides to SA surveyors, 
thereby creating a potential disparity in overall survey performance. 
At Sec.  488.1115, we propose that all SA and AO hospice program 
surveyors would be required to take CMS-provided surveyor basic 
training currently available, and additional training as specified by 
CMS. As part of the AO application and reapplication process under 
Sec.  488.5(a)(8), the AO is required to submit a description of the 
content and frequency of the organization's in-service training it 
provides to survey personnel. Under proposed Sec.  488.1115, AO 
surveyors would be required to complete the online CMS hospice program 
basic training. CMS proposes that until the rule is finalized, that it 
accept the current AO training, that was previously reviewed and 
approved by CMS during the AO application process. State agency 
surveyors should already be in compliance with this requirement.
    AOs already have voluntary access to our Quality, Safety & 
Education Portal (QSEP), which contains the CMS training. Currently, 
the trainings are available free of charge through the QSEP website at 
https://qsep.cms.gov, to providers and all entities conducting surveys, 
including AOs, and the public at large. QSEP training is accessible on 
an individual, self-paced basis.
    The basic training online courses provide surveyors with the key 
knowledge and skills needed to survey the respective provider or 
supplier type for compliance with the Medicare conditions and assure an 
adequately trained, effective surveyor workforce. The online courses 
also help develop and refine surveying skills, promote critical 
thinking skills, and enhance surveyors' overall ability to conduct and 
document surveys. Users may access the online courses at any time. This 
allows surveyors to refresh knowledge regarding Medicare conditions and 
processes whenever necessary. The number of learners trained in online 
courses has steadily increased since the courses' inception.
    We are updating the hospice program basic training and including 
enhanced guidance for surveyors. The updated training will emphasize 
assessment of quality of care. Specifically, we would emphasize four 
``core'' hospice program CoPs in revisions to the CMS State Operations 
Manual (SOM) (Pub. 100-07). The four core CoPs (identified in the 
preamble of the final rule, Medicare and Medicaid Programs; Hospice 
Conditions of Participation (73 FR 32088, June 5, 2008)) are Sec.  
418.52 Condition of Participation: Patient's rights; Sec.  418.54 
Condition of Participation: Initial and comprehensive assessment of the 
patient; Sec.  418.56 Condition of Participation: Interdisciplinary 
group, care planning and coordination of care; and, Sec.  418.58 
Condition of Participation: Quality assessment and performance 
improvement. The revised training, which we expect to be implemented 
soon, emphasizes the requirements for establishing individualized 
written plans of care, which are integral to the delivery of high 
quality care, and regularly updating these plans with the full 
involvement of the interdisciplinary team, patients, and their 
families. Despite the emphasis placed on these core CoPs, hospice 
programs must comply with all CoPs to achieve successful certification.
    We invite commenters to review the trainings by signing up for a 
free

[[Page 35972]]

account on the homepage of the CMS website, or by choosing the ``Public 
Access'' button on the upper right-hand corner of the website homepage. 
We seek comments on the requirement for continued SA and AO surveyor 
training as CMS releases additional basic course updates.
    In addition to training requirements for surveyors, we propose to 
set out the circumstances that will disqualify a surveyor from 
surveying a particular hospice in accordance with section 1822(a)(4)(B) 
of the Act. While the statute specifically addresses SA surveyors, CMS 
takes prohibiting violations of public trust for those representing the 
Medicare program very seriously and therefore we are proposing to 
include hospice AO surveyors under this proposed requirement as well.
    In 2012, as part of an effort to mitigate conflicts of interest in 
the HHA survey process, CMS established requirements at Sec.  
488.735(b) to outline circumstances that disqualify a surveyor from 
performing HHA surveys. For example, if the surveyor currently serves, 
or within the previous 2 years has served, on the staff of or as a 
consultant to the HHA undergoing the survey, they would be disqualified 
for a conflict of interest.
    Chapter 4, Section 4008 of the SOM states, ``conflicts of interest 
may arise within the Medicare/Medicaid certification program when 
public employees utilize their position for private gain or to secure 
unfair advantages for outside associates. The gain involved may or may 
not be monetary. Abuses of privileged information, abuses of influence, 
and other abuses of trust are included, regardless of whether a 
monetary advantage is gained or sought.'' \94\
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    \94\ CMS State Operations Manual, Chapter 4 Medicare State 
Operations Manual (cms.gov) (internet Only Manual, Pub. 100-07)
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    Individual health care professionals, such as physicians or nurses, 
commonly have concurrent employment relationships with more than one 
health care setting. Many health care professionals, such as 
physicians, physician assistants, and nurse practitioners have multi-
setting practices or are employed at more than one health care 
facility. For example, a registered nurse (RN) may work on staff at a 
hospital but also work at other hospitals through a medical staffing 
agency. In addition, as employees of a health care facility, these 
health care professionals could gain a financial interest in the health 
care facility through means such as being a contributor to the 
construction costs of a new wing of the facility or buying stock in the 
facility or its parent corporation. Management employees could be 
awarded stock or stock options for the facility or its parent 
corporation as part of their compensation and benefits package.
    SAs and AOs often hire surveyors that are also employed at one or 
more outside health care settings because the professional 
associations, expertise, knowledge, and skills held by these health 
care practitioners make them an asset as a surveyor. Longstanding CMS 
policy noted in section 4008 of the SOM describes examples of scenarios 
that would be conflicts of interest for SA surveyors of any provider or 
supplier type, including surveyors who have an outside relationship 
with a facility that is surveyed by the SA. However, the SOM generally 
applies only to SA surveyors, not AO surveyors. Therefore, we propose 
to codify these long-standing policies for both SA and AO surveyors to 
ensure there is no conflict of interest between the organization and 
the surveyor.
    We propose that a surveyor would be prohibited from surveying a 
hospice program if the surveyor currently serves, or within the 
previous 2 years has served, on the staff of or as a consultant to the 
hospice program undergoing the survey. Specifically, the surveyor could 
not have been a direct employee, employment agency staff at the hospice 
program, or an officer, consultant, or agent for the surveyed hospice 
program regarding compliance with the CoPs. A surveyor would be 
prohibited from surveying a hospice program if he or she has a 
financial interest or an ownership interest in that hospice. The 
surveyor would also be disqualified if he or she has an immediate 
family member who has a financial interest or ownership interest with 
the hospice program to be surveyed or has an immediate family member 
who is a patient of the hospice program to be surveyed.
    In regards to the definition of ``immediate family member'' in the 
previous statement, we will utilize the definition of ``immediate 
family member'' located at Sec.  411.351, which was also used for the 
development of similar HHA regulations (see 77 FR 67140). This 
definition includes husband or wife; birth or adoptive parent, child, 
or sibling; stepparent, stepchild, stepbrother, or stepsister; father-
in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or 
sister-in-law; grandparent or grandchild; and spouse of a grandparent 
or grandchild.
e. Survey Teams (Sec.  488.1120)
    The CAA 2021, adding section 1822(a)(4)(A) of the Act, calls for 
the use of multidisciplinary survey teams when the survey team 
comprises more than one surveyor, with at least one person being a RN. 
Currently, the SOM, Appendix M--Guidance to Surveyors requires that 
each hospice program survey team include at least one RN, and, if the 
team is more than one surveyor, the additional surveyors should include 
other disciplines with the expertise to assess hospice program 
compliance with the conditions of participation. We propose at Sec.  
488.1120 under a new subpart M to require that all survey entities--SA 
or AOs--include diverse professional backgrounds among their surveyors 
to reflect the professional disciplines responsible for providing care 
to persons who have elected hospice care. Such multidisciplinary teams 
should include professions included in hospice core services at 42 CFR 
418.64, and may include physicians, nurses, medical social workers, 
pastoral or other counselors--bereavement, nutritional, and spiritual. 
To fulfill CAA 2021 requirements, SAs and AOs might need time to 
reconstruct their workforce to accommodate the new requirements for 
hospice program surveys to utilize multidisciplinary teams.--We 
recognize that SAs and AOs may incur additional costs, given the 
varying, and potentially higher rates of average pay for some 
disciplines. Surveying entities may need up to a year to hire and train 
surveyors from the needed disciplines, depending on the timing of the 
attrition of current staff and workforce availability of the 
appropriately experienced professionals. In addition, as we proceed 
with implementation of this provision, CMS seeks to better understand 
the current professional makeup of survey entities' workforces. In 
order to track compliance with this provision, we propose to establish 
a baseline knowledge by asking survey entities to tell us: (1) The 
extent to which their surveys are conducted by one professional, who by 
regulation must be a registered nurse; (2) the professional makeup of 
their current workforce; and (3) estimate a timeframe in which they 
could effectuate multidisciplinary teams if not already in place. We 
would provide additional guidance with instruction for the survey 
entities regarding the submission of this information to CMS.
    Our rules at Sec.  418.56 require that hospice programs use 
interdisciplinary teams or groups to determine a holistic plan of care 
for the hospice program

[[Page 35973]]

patient and family. The interdisciplinary group or IDG, must include, 
but not be limited to a physician, a registered nurse, a medical social 
worker, and pastoral or other counselor. Therefore, we propose that 
when the survey team comprises more than one surveyor, the additional 
slots would be filled by professionals from among these disciplines, 
and we are seeking comments on this approach. Similarly, section 
1819(g)(2)(E) of the Act and 42 CFR 488.314 require that long-term care 
facility surveys be conducted by a multidisciplinary team of 
professionals, at least one of whom must be a RN.
    Our certification guidance in Chapter 2 of the SOM provides details 
as to how the survey agency might select the appropriate disciplines 
for a survey team. SOM, Chapter 2 states that various professional 
disciplines should represent the expertise needed to determine 
compliance with the CoPs, standards, or requirements for that provider/
supplier group. In establishing multidisciplinary teams under new 
section 1822(a)(4)(A) of the Act, we would consider, as a model, our 
current CMS guidance for long-term care facilities, which uses 
specialty surveyors with expertise not typically included in a survey 
team (for example, a pharmacist, physician, or registered dietitian), 
who may not be needed for the entire survey, but must be onsite at some 
time during the survey.
f. Consistency of Survey Results (Sec.  488.1125)
    New section 1822(a)(3) of the Act requires that each State and the 
Secretary implement programs to measure and reduce inconsistency in the 
application of hospice program survey results among surveyors. In 
addition to ensuring consistency of hospice survey results across SAs, 
we believe that this also applies to reducing discrepancies between SA 
and AO surveys of hospice providers. Survey consistency has been a 
longstanding concern for CMS at multiple levels--interstate and 
intrastate, as well as Federal to state. While there are multiple 
strategies currently in place, as described in this section, to 
directly address the matters presented in the CAA 2021, we propose at 
Sec.  488.1125 to enhance the requirements of the State Performance 
Standards System (SPSS) to direct States to implement processes to 
measure the degree or extent to which surveyors' findings and 
determinations are aligned with federal regulatory compliance and with 
an SA supervisor's determinations. Given the variation among State 
agencies with respect to the number of surveyors deployed for a 
particular survey, or the distribution of surveyor professional 
backgrounds, CMS expects to promulgate objective measures of survey 
accuracy, and seeks public opinion on what measures would be feasible 
for States. We desire measures that are both specific and utilize 
currently collected data, if possible. Accuracy could include whether a 
survey finding aligns with the selected regulatory deficiency, as well 
as failing to cite such findings. When applied to survey findings, the 
measures should allow CMS to determine the need for corrective action 
or education for individual surveyors or for a group of surveyors. If 
systemic issues are found, CMS is prepared to enhance its training to 
address systemic issues found as a result of interstate analysis.
    CMS monitors the consistency of SA surveys through a review of an 
SA's Form CMS-2567s (the Statement of Deficiencies and Plan of 
Correction), which is conducted by its assigned CMS Survey Operations 
Group (SOG) Location, and consistency among AOs through validations 
surveys conducted by SAs. The SAs perform validation surveys on a 
sample of providers and suppliers (such as hospitals, CAHs, ASCs, 
Hospice Programs, and HHAs) accredited by the AOs. Validation surveys 
report disparate findings as the percentage of validation surveys that 
have conditions identified by the SA but missed by the AO survey team. 
This percentage is referred to as the ``disparity rate'' and is tracked 
by CMS as an indication of the quality of the surveys performed by the 
AO. This is reported annually in a report to Congress (QSO-19-17-AO/
CLIA). The most recent report can be found at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Administrative-Information-Memos-to-the-States-and-Regions-Items/AdminInfo-20-02-ALL.
    Using the disparity rate approach used with AOs, where surveys are 
reviewed for condition-level deficiencies the AO fails to identify, we 
propose to analyze trends in the disparity rate among States, as well 
as among AOs. State surveys results would be reviewed to identify 
findings that were potentially worthy of condition-level citation but 
were not cited.
    We believe that the disparate deficiency citations between AO 
surveyors and SA surveyors may, in part, be attributed to differences 
in surveyor training and education. This variation may be due to 
inconsistencies in AO training with the CMS-provided SA basic surveyor 
training. We believe that uniform surveyor training would increase the 
consistency between the results of the surveys performed by SAs and 
AOs, and have a positive impact on the high disparity rates. We also 
want to align our processes more closely to those CMS has found 
effective for other provider types. For instance, what we propose now, 
for hospice, is similar to what is done with nursing homes, where 
validation surveys are described at section 1819(g)(3)(A) of the Act as 
``. . . a representative sample of skilled nursing facilities in each 
State, within 2 months of the date of surveys conducted under paragraph 
(2) by the State, in a sufficient number to allow inferences about the 
adequacies of each State's surveys . . . (B) . . . each year concerning 
at least 5 percent of the number of skilled nursing facilities surveyed 
by the State in the year, but in no case less than 5 skilled nursing 
facilities. . . .'' Even though AOs are not currently included in the 
CMS SPSS, we expect that a similar methodology would be applied to all 
hospice surveying entities, including AOs with an approved hospice 
program. Just as CMS monitors disparate results across States in their 
adherence to Federal processes for determining deficiencies, 
investigating, and reporting complaints, it requires States to monitor 
the quality of its surveyors' survey activity and actions. Performance 
measures are applied to all surveying entities to assess consistency. 
If CMS finds that surveying entities--SAs and AOs--do not meet the 
performance standards, they must develop and implement a corrective 
action plan.
    The SPSS, established annually, provides for oversight of SA 
performance when conducting surveys to ensure that Medicare and 
Medicaid certified providers and suppliers are compliant with Federal 
CoPs, to improve and protect the health and safety of Americans. This 
oversight allows CMS to determine that surveyors are thorough, 
accurate, and consistent when they determine if a hospice program 
provider is complying with the Medicare CoPs. Survey findings with 
respect to a hospice program can include: (1) Standard level 
deficiency--where the hospice program is not complying fully with CoPs, 
which need corrective action; (2) condition-level deficiencies--which 
require remediation and could lead to termination of the hospice 
program; or, (3) immediate jeopardy (IJ) level--where beneficiaries are 
present in situations where significant harm could occur and which need 
to be addressed without delay. SA supervisors are responsible to

[[Page 35974]]

ensure that surveyors `findings (from observations, interviews, and 
document reviews) are consistent with their determination of IJ, and 
standard- or condition-level deficiency where a hospice program is not 
compliant with a condition of participation.
    To reduce inconsistencies in survey results among surveyors, CMS 
proposes to require agencies that review other entities' survey 
findings for missed condition-level deficiency citations (disparities) 
(SAs for AOs, and CMS SOG locations for SAs), to notify each survey 
entity of its disparity rate annually, and to require a formal 
corrective plan as part of the survey entity's (SA or AO) Quality 
Assurance program. A disparity rate above 10 percent in 2 consecutive 
cycles would trigger remedial activity such as implementing corrective 
action through education, mentoring, or other processes to align 
surveyors' actions, and determinations of deficiencies with regulatory 
requirements.
g. Special Focus Program (SFP) (Sec.  488.1130)
    Section 1822(b) of the Act requires the Secretary to conduct a 
Special Focus Program for hospice programs that the Secretary has 
identified as having substantially failed to meet applicable 
requirements of the Act. We propose at Sec.  488.1130 to develop a 
hospice Special Focus Program (SFP) to address issues that place 
hospice beneficiaries at risk for poor quality of care through 
increased oversight, and/or technical assistance. We propose that 
specific criteria would be used to determine whether a hospice program 
participates in the SFP. The proposed criteria are as follows: a 
history of condition-level deficiencies on two consecutive standard 
surveys, two consecutive substantiated complaint surveys, or two or 
more condition-level deficiencies on a single validation survey (the 
validation survey with condition-level deficiencies would be in 
addition to a previous recertification or complaint survey with 
condition-level deficiencies). A subset of hospice programs that meet 
the proposed criteria would be selected to be in the SFP, and those 
hospice programs would be surveyed every 6 months, which may result in 
additional enforcement remedies and/or termination. CMS uses a similar 
program with long-term care facilities and has outlined the following 
protocol for a hospice SFP:
     The SA and CMS SOG location would receive a list from CMS 
of all hospice programs that meet the established criteria at Sec.  
488.1130(b) for placement in the SFP (Candidate List). The SA would 
work with the CMS SOG location to select hospice programs from the list 
provided by CMS that would be selected for the SFP based on State 
priorities. In the event that no hospice programs in a State meet the 
established criteria, then the State SA would not have a hospice 
program in the SFP at that time.
     While a hospice program is in the SFP, the SA would survey 
the facility at least once every 6 months, as required by the CAA 2021, 
and may include progressively stronger enforcement actions in the event 
of a hospice program's continued failure to meet the requirements for 
participation with the Medicare and Medicaid programs.
     Once an SFP hospice program has completed 2 consecutive 6-
month SFP surveys with no condition-level deficiencies cited, the 
facility would graduate from the SFP. If the hospice program did not 
meet the requirements to graduate, it would be placed on a termination 
track.
    We seek public comment regarding the SFP, specifically the 
following issues:
     Should CMS utilize a similar criteria/process/frame work 
for the SFP as outlined in the current Long-Term Care Program. What if 
any differences should CMS considered to enhance the overall impact of 
the hospice SFP.
     Additional selection criteria that CMS should consider for 
the identification and participation in the SFP. This may include use 
of current or future data elements that could be incorporated into a 
more comprehensive algorithm.
     Utilization of a Technical Expert Panel (TEP) to enhance 
the SFP in terms of selection, enforcement and technical assistance 
criteria while in the program. Furthermore, a TEP may assist CMS by 
assisting in identifying contextual data and relevant information to 
assist the public in obtaining a more comprehensive understanding of 
the Form CMS-2567 survey data and the overall performance of a hospice 
provider, in addition to what data to include, how to make this 
information useful and meaningful on a CMS website.
4. Proposed New Subpart N--Enforcement Remedies for Hospice Programs 
With Deficiencies
a. Statutory Basis (Sec.  488.1200)
    We propose to set out the statutory basis for the proposed new 
subpart at Sec.  488.1200, which is new sections 1822(c)(1) through 
1822(c)(5) of the Act. The requirements under this new subpart would 
expand the Secretary's options to impose additional enforcement 
remedies for hospice programs failing to meet Federal requirements. 
These additional enforcement remedies may be used to encourage poor-
performing hospice programs to come into substantial compliance with 
CMS requirements before CMS is forced to terminate the hospice 
program's provider agreement. This process is currently afforded to 
HHAs at Sec.  488.745.
    Prior to the enactment of section 1822(c)(5)(A) of the Act, the 
only enforcement action available to CMS to address hospice programs 
that are determined to be out of compliance with Federal requirements 
was the termination of their Medicare provider agreement. In accordance 
with section 1866(b)(2) of the Act and Sec.  489.53(a)(3), CMS may 
terminate a hospice program provider agreement if that hospice program 
is not in substantial compliance with the Medicare requirements (that 
is, the failure to meet one or more CoPs is considered to be a lack of 
substantial compliance).
b. Definitions (Sec.  488.1205)
    We propose to add Sec.  488.1205 to define the terms ``directed 
plan of correction,'' ``immediate jeopardy,'' ``new admission,'' ``per 
instance,'' ``plan of correction,'' ``repeat deficiency,'' and 
``temporary management.'' Although section 1891 of the Act uses the 
term ``intermediate sanctions,'' with respect to HHA enforcement, and 
other rules use ``alternative sanctions,'' we propose to use 
``remedies'' or ``enforcement remedies,'' which we consider to have the 
same meaning and are closer to the language in section 1822 of the Act.
c. General Provisions (Sec.  488.1210)
    We propose at Sec.  488.1210 general rules pertaining to 
enforcement actions against a hospice program that is not in 
substantial compliance with the CoPs. Under section 1822(c)(1) of the 
Act, if CMS determines that a hospice program is not in compliance with 
the Medicare hospice programs CoPs and the deficiencies involved may 
immediately jeopardize the health and safety of the individual(s) to 
whom the hospice program furnishes items and services, then we may 
terminate the hospice program's provider agreement, impose the one or 
more enforcement remedies described in section 1822(c)(5)(B) of the 
Act, or both. Our decision to impose one or more remedies, including 
termination, will be based on the degree of noncompliance with the 
hospice program Federal requirements. With the proposed provisions, CMS 
would be able to impose one or more remedies for

[[Page 35975]]

each discrete condition-level deficiency constituting noncompliance.
    It is also important to note that hospice programs can acquire 
initial certification for participation in Medicare via an SA survey or 
via accreditation by a CMS-approved AO. Accreditation by a CMS-approved 
AO is voluntary and not necessary to participate in the Medicare 
program. If an AO finds deficiencies during an accreditation survey, it 
communicates any condition-level findings to the applicable CMS SOG 
location. Based on the survey findings, CMS makes any determinations 
regarding the imposition of Federal enforcement remedies. An AO cannot 
recommend or implement enforcement remedies. In accordance with SOM 
Chapter 2, section 2005B, CMS may temporarily remove deemed status of 
an accredited hospice program due to condition-level findings found by 
the SA or Federal survey team during a complaint or validation survey. 
If the deficiencies remain uncorrected, oversight of that hospice 
program is transferred to CMS, through the SA, until the hospice 
program either demonstrates substantial compliance or CMS terminates 
its Medicare participation. In such a case where ``deemed status'' is 
removed, CMS will follow the usual procedures for oversight, as 
indicated in sections 3254 and 5100 of the SOM. Once an enforcement 
remedy is imposed on a formerly accredited hospice program and deemed 
status is removed, oversight and enforcement of that hospice program 
will be performed by the SA until the hospice program achieves 
compliance and the condition(s) causing the noncompliance are removed 
or until the hospice program is terminated from the Medicare program.
    At proposed Sec.  488.1210(e), a hospice program would be required 
to submit an acceptable POC to the SA or CMS within 10 calendar days 
from receipt of the statement of deficiencies. This plan is the hospice 
program's written response to survey findings detailing corrective 
actions to cited deficiencies and the date by which those deficiencies 
will be corrected. CMS would determine if the POC was acceptable based 
on the information presented.
    At proposed Sec.  488.1210(e), we propose the notification 
requirements for enforcement remedies for hospice programs that will be 
issued by CMS. CMS will provide a notice of intent to the hospice 
program that would include the intent to impose a remedy, the statutory 
basis for the remedy, the nature of the noncompliance, the intent to 
impose a payment suspension and which payments would be suspended (if 
applicable), the intent to propose a CMP and the amount being imposed 
(if applicable), the proposed effective date of the sanction, and 
appeal rights.
    We propose that for all remedies imposed, except for CMPs, when 
there is IJ the notice period is at least 2 calendar days before the 
effective date of the enforcement action and when there is no IJ, that 
the notice period is at least 15 calendar days before the effective 
date of the enforcement action. As discussed later in this section, we 
propose to codify these proposals at Sec. Sec.  488.1225(b) and 
488.1230(b), respectively.
    With respect to CMPs, we propose that once the administrative 
determination to impose the CMP is final, CMS would send a final notice 
to the hospice program with the amount of the penalty assessed, the 
total number of days of noncompliance (for CMPs imposed per day), the 
total amount due, the due date of the penalty, and the rate of interest 
to be charged on unpaid balances. We propose to codify these proposals 
at Sec.  488.1245(e).
    We propose that the hospice program could appeal the determination 
of noncompliance leading to the imposition of a remedy under the 
provisions of 42 CFR part 498. A pending hearing would not delay the 
effective date of the remedy against the hospice program and remedies 
will be in effect regardless of any pending appeals proceedings. Civil 
money penalties would accrue during the pendency of an appeal, but 
would not be collected until the administrative determination is final, 
as we note in proposed Sec.  488.1245(f).
d. Factors To Be Considered in Selecting Remedies (Sec.  488.1215)
    Section 1822(c) of the Act provides that if a hospice program is 
found to be out of compliance with the requirements specified in 
section 1861(dd) of the Act, CMS may impose one or more specified 
enforcement remedies. In this proposed rule, we have proposed to 
establish requirements for enforcement remedies that may be imposed 
when hospice programs are out of compliance with Federal requirements. 
At CMS' discretion, these enforcement remedies can be imposed instead 
of, or in addition to, termination of the hospice program's 
participation in the Medicare program, for a period not to exceed 6 
months. The choice of any enforcement remedy or termination would 
reflect the impact on patient care and the seriousness of the hospice 
program's patterns of noncompliance and would be based on the factors 
proposed in Sec.  488.1215. CMS may impose termination of the provider 
agreement (that is, begin termination proceedings that would become 
effective at a future date, but no later than 6 months from the 
determination of noncompliance), and impose one or more remedies for 
hospice programs with the most egregious deficiencies, on a hospice 
program that was unwilling or unable to achieve compliance within the 
maximum timeframe of 6 months, whether or not the violations 
constituted an IJ situation. We propose at Sec.  488.1215, consistent 
with section 1822(5)(B)(i) of the Act, to establish procedures for 
selecting the appropriate enforcement remedy, including the amount of 
any CMP and the severity of each remedy, which have been designed to 
minimize the time between the identification of deficiencies and the 
final imposition of remedies, as required under section 
1822(c)(5)(A)(ii) of the Act. To determine which remedy or remedies to 
apply, CMS proposes to consider the following factors that are 
consistent with the factors for HHA alternative sanctions:
     The extent to which the deficiencies pose IJ to patient 
health and safety.
     The nature, incidence, manner, degree, and duration of the 
deficiencies or noncompliance.
     The presence of repeat deficiencies (defined as condition-
level), the hospice program's compliance history in general, and 
specifically concerning the cited deficiencies, and any history of 
repeat deficiencies at any of the hospice program's additional 
locations.
     The extent to which the deficiencies are directly related 
to a failure to provide quality patient care.
     The extent to which the hospice program is part of a 
larger organization with documented performance problems.
     Whether the deficiencies indicate a system-wide failure of 
providing quality care.
e. Available Remedies (Sec.  488.1220)
    Section 1822(c)(5)(A)(ii) of the Act provides that CMS ``shall 
develop and implement specific procedures for the conditions under 
which each of the remedies developed under clause (i) is to be applied, 
including the amount of any fines and the severity of each of these 
remedies.'' Section 1822(c)(5)(B) of the Act explicitly provides for 
the following enforcement remedies to be included in the range of 
remedies: (1) CMPs in an amount not to exceed $10,000 for each day of 
noncompliance by a hospice program with the requirements specified in 
section

[[Page 35976]]

1861(dd) of the Act; (2) suspension of all or part of the payments to 
which a hospice program would otherwise be entitled under this title 
for items and services furnished by a hospice program, on or after the 
date on which the Secretary determines that remedies should be imposed; 
and (3) appointment of temporary management to oversee the operation of 
the hospice program and to protect and assure the health and safety of 
the individuals under the care of the program while improvements are 
made to bring the program into compliance with all such requirements. 
In addition to those specified in the statute, we propose to add a 
directed POC and directed in-service training as additional enforcement 
remedies at Sec.  488.1220.
f. Action When Deficiencies Pose Immediate Jeopardy (Sec.  488.1225) 
and Termination (Sec.  489.53)
    For situations involving IJ, if CMS determines based on a standard 
survey or otherwise that a hospice program's deficiencies involve IJ to 
the health and safety of the individuals to whom the program furnishes 
items and services, it shall take immediate action to ensure the 
removal of the IJ and to correct the deficiencies or terminate the 
certification of the program. We are proposing at Sec.  488.1225(a) to 
implement the statutory requirement of 1822(c)(1) of the Act by 
specifying that if the IJ situation is not addressed and resolved 
within 23 days from the last day of the survey because the hospice 
program is unable or unwilling to correct the deficiencies, CMS will 
terminate the hospice program's provider agreement. In addition, CMS 
could impose one or more enforcement remedies including a CMP, 
temporary management, and/or suspension of all or part of Medicare 
payments before the effective date of termination.
    We propose Sec.  488.1225(b), that for a deficiency or deficiencies 
that pose IJ, CMS would provide the hospice program with at least 2 
days advance notice of any proposed remedies, except CMPs (discussed at 
proposed Sec.  488.1245). The requirements for a notice of intent are 
set forth at proposed Sec.  488.1210(e). Under our existing survey 
process, providers are informed of any IJ findings upon discovery of 
the IJ situation during the survey or as part of the exit conference at 
the end of the survey. This would give a hospice program time to remove 
the IJ and correct the deficiencies that gave rise to the IJ finding. 
To assure a hospice program achieves prompt compliance, we expect that 
CMS will give hospice programs written notice of an impending 
enforcement actions against them as quickly as possible following the 
completion of a survey of any kind.
    For terminations, CMS will give notice of the termination within 2 
days before the effective date of the termination, to hospice programs 
consistent with the requirement for HHAs. We also propose to amend 
Sec.  489.53(a)(17) to indicate that we will terminate a hospice 
program's (as well as an HHA's) provider agreement if the hospice 
program failed to correct a deficiency or deficiencies within the 
required time frame.
    Finally, at proposed Sec.  488.1225(c), we propose to require a 
hospice program whose provider agreement is terminated to appropriately 
and safely transfer its patients to another local hospice program 
within 30 days of termination, unless a patient or caregiver chooses to 
remain with the hospice program as a self-pay or with another form of 
insurance (for example, private insurance). In addition, the hospice 
program would be responsible for providing information, assistance, and 
any arrangements necessary for the safe and orderly transfer of its 
patients.
g. Action When Deficiencies Are at the Condition-Level But Do Not Pose 
Immediate Jeopardy (Sec.  488.1230)
    In section 1822(c)(2) of the Act, if the Secretary determines based 
on a survey or otherwise that a hospice program is no longer in 
compliance with the requirements specified in section 1861(dd) of the 
Act and determines that the deficiencies involved do not immediately 
jeopardize the health and safety of the individuals to whom the program 
furnishes items and services, the Secretary may (for a period not to 
exceed 6 months) impose remedies developed under section 1822(c)(5)(A) 
of the Act, in lieu of terminating hospice program's participation in 
the Medicare program. If, after such a period of remedies, the program 
is still not in compliance with all requirements, the Secretary shall 
terminate the hospice program's participation in the Medicare program.
    In this proposed rule, enforcement remedies, such as those proposed 
in Sec.  488.1220, would be imposed before the termination becomes 
effective, but cannot continue for a period that exceeded 6 months. In 
addition, to protect the health and safety of individuals receiving 
services from the hospice program, enforcement remedies would continue 
in effect until the hospice program achieves compliance or has its 
Medicare participation terminated, whichever occurs earlier. For 
example, the suspension of payment remedy will end when the hospice 
program corrects all condition-level deficiencies or is terminated from 
the Medicare program.
    We propose at Sec.  488.1230, that for a deficiency or deficiencies 
that do not pose IJ, CMS will provide the hospice program at least 15 
days advance notice of any proposed remedies, except for CMPs 
(discussed at proposed Sec.  488.1245). Such remedies would remain in 
effect until the effective date of an impending termination (at 6 
months) or until the hospice program achieves compliance with CoPs, 
whichever is earlier. This 15-day period is consistent with the general 
rule for providers and suppliers in Sec.  489.53(d)(1).
h. Temporary Management (Sec.  488.1235)
    Section 1822(c)(5)(B)(iii) of the Act specifies the use of 
appointment of temporary management, as an enforcement remedy, to 
oversee the operation of the hospice program and to protect and assure 
the health and safety of the individuals under the care of the program 
while improvements are made in order to bring the program into 
compliance with all such requirements. As we propose at Sec.  488.1205, 
``temporary management'' means the temporary appointment by CMS or a 
CMS authorized agent, of a substitute manager or administrator, who 
would be under the direction of the hospice program's governing body 
and who would have authority to hire, terminate or reassign staff, 
obligate hospice program funds, alter hospice program procedures, and 
manage the hospice program to correct deficiencies identified in the 
hospice program's operation. The substitute manager or administrator 
would be appointed based on qualifications described in Sec.  418.100 
and Sec.  418.114 and would be under the direction of the hospice 
program's governing body.
    We propose at Sec.  488.1235 to set out the circumstances under 
which we would utilize our authority under section 1822(c)(5)(C)(iii) 
of the Act to place a hospice program under temporary management. We 
propose to specify the duration and effect of this enforcement remedy, 
and the payment procedures for temporary managers' salaries and other 
additional costs. CMS would provide the hospice program with written 
notice of our intent to impose a temporary management remedy in 
accordance with proposed Sec.  488.1210(e).
    At Sec.  488.1235(a), we propose that temporary management would be 
imposed when a hospice program is determined to have condition-level 
deficiencies and that the deficiencies or

[[Page 35977]]

the management limitations of the hospice program are likely to impair 
the hospice program's ability to correct the deficiencies and return 
the hospice program to compliance with all of the CoPs within the 
required timeframe. We propose at Sec.  488.1235(c) to impose temporary 
management to bring a hospice program into compliance with program 
requirements within 6 months of the date of the survey identifying 
noncompliance.
    We propose at Sec.  488.1235(b) if the hospice program refuses to 
relinquish authority and control to the temporary manager, CMS will 
terminate the hospice program's provider agreement. If a temporary 
manager was appointed, but the hospice program failed to correct the 
condition-level deficiencies within 6 months from the last day of the 
survey, the hospice program's Medicare participation would be 
terminated. Additionally, if the hospice program resumes management 
control without CMS's approval, we would impose termination and could 
impose additional enforcement remedies. The appointment of a temporary 
manager would not relieve the hospice program of its responsibility to 
achieve and maintain compliance with the participation requirements. We 
propose at Sec.  488.1235 that temporary management would end when--
     We determine that the hospice program has achieved 
substantial compliance and has the management capability to remain in 
compliance;
     The hospice program provider agreement is terminated; or
     The hospice program resumes management control without CMS 
approval.
     Temporary management will not exceed a period of 6 months 
from the date of the survey identifying noncompliance.
    At Sec.  488.1235, we propose that temporary management would be 
required to be provided at the hospice program's expense. Before the 
temporary manager was installed, the hospice program would have to 
agree to pay his/her salary directly for the duration of the 
appointment. We believe that the responsibility for the hospice program 
to pay the expenses of the temporary manager is an inherent management 
responsibility of the hospice agency for which Medicare regularly 
reimburses the hospice program and through such temporary outside 
management might be necessary in some cases to bring the hospice 
program back into compliance with the CoPs. We are proposing that the 
salary for the temporary manager would not be less than the amount 
equivalent to the prevailing salary paid by providers in the geographic 
area for positions of this type, based on the Bureau of Labor 
Statistics, National Occupational Employment and Wage Estimates. In 
addition, the hospice program would have to pay for any additional 
costs that the hospice program may have incurred if such person had 
been in an employment relationship, and any other costs incurred by 
such a person in furnishing services under such an arrangement or as 
otherwise set by the State. CMS would consider a hospice program's 
failure to pay the salary of the temporary manager to be a failure to 
relinquish authority and control to temporary management.
i. Suspension of Payment for All or Part of the Payments (Sec.  
488.1240)
    We propose in Sec.  488.1240 provisions describing when and how we 
would apply a suspension of payment of all or part of the payments for 
items and services furnished by a hospice program on or after the date 
on which the Secretary determines that remedies should be imposed under 
Sec.  488.1225 or Sec.  488.1230. If a hospice program has a condition-
level deficiency or deficiencies (regardless of whether or not an IJ 
exists), we may suspend payments for all or part of the payments to 
which a hospice program would otherwise be entitled for items and 
services furnished by a hospice program on or after the effective date 
of the enforcement remedy. CMS will determine whether to impose a 
suspension of all or part of the payments based on the factors outlined 
in proposed Sec.  488.1215 that are considered when selecting remedies. 
The suspension of payment is proposed at Sec.  488.1240 to be for a 
period not exceed 6 months and would end when the hospice program 
either achieved substantial compliance or was terminated. CMS would 
provide the hospice program with written notice of our intent to impose 
a payment suspension remedy at least 2 calendar days before the 
effective date of the remedy in IJ situations, per proposed Sec.  
488.1225(b), or 15 calendar days before the effective date of the 
remedy in non-IJ situations, per proposed Sec.  488.1230(b). The 
proposed notice of intent for all remedies, described at Sec.  
488.1210(e), would be used to notify a hospice program of a suspension 
of payment of all or part of the payments to which the hospice program 
would otherwise be entitled.
    Additionally, section 1822(c)(5)(C)(ii) of the Act provides that a 
suspension of payment remedy shall terminate when CMS finds that the 
hospice program is in substantial compliance with the requirements 
specified in, or developed in accordance with, section 1861(dd) of the 
Act. That is, the suspension of payment remedy will end when the 
hospice program is determined to have corrected all condition-level 
deficiencies, or upon termination, whichever is earlier. We propose to 
codify that duration of the remedy at 488.1240(c).
j. CMPs (Sec.  488.1245)
    We propose at Sec.  488.1245 requirements for the imposition of 
CMPs. Section 1822(c)(5)(C) of the Act outlines the requirements for 
CMP procedures. Additionally, section 1822(c)(5)(C)(i)(I) of the Act 
requires that the CMP provisions under section 1128A (other than 
subsections (a) and (b) of the Act shall be applied to the hospice 
CMPs, which also must be considered when establishing the amount. CMS 
proposes to impose a CMP against a hospice program that is determined 
to be out of compliance with one or more CoPs, regardless of whether 
the hospice program's deficiencies pose IJ to patient health and 
safety. CMS could also impose a CMP for the number of days of IJ. Under 
section 1822(c)(5)(B)(i) of the Act, the CMP amount cannot exceed 
$10,000 for each day of noncompliance. Our proposals align with the 
imposition of CMPs authorized by section 1891(f) of the Act as set out 
for HHAs at Sec.  488.845, which CMS may impose against an HHA that is 
determined to be out of compliance with one or more CoPs, regardless of 
whether the HHA's deficiencies pose IJ to patient health and safety.
    In this section, we are proposing both ``per day'' and ``per 
instance'' CMPs at Sec.  488.1245(a). The per day CMPs would be imposed 
for each day of noncompliance with the CoPs. Additionally, should a 
survey identify a particular instance or instances of noncompliance 
during a survey, we propose to impose a CMP for that instance or those 
individual instances of noncompliance. We propose to define ``per 
instance'' in Sec.  488.1205 as a single event of noncompliance 
identified and corrected during a survey, for which the statute 
authorizes CMS to impose a remedy.
    While there may be a single event that leads to noncompliance, 
there can also be more than one instance of noncompliance identified 
and more than one CMP imposed during a survey. For penalties imposed 
per instance of noncompliance, we are proposing penalties from $1,000 
to $10,000 per instance. Such penalties would be

[[Page 35978]]

assessed for one or more singular events of condition-level 
noncompliance that were identified at the survey and where the 
noncompliance was corrected during the onsite survey.
    Since the range of possible deficiencies is great and depends upon 
the specific circumstances at a particular time, it would be impossible 
to assign a specific monetary amount for each type of noncompliance 
that could be found. Thus, we believe that each deficiency would fit 
into a range of CMP amounts.
    We are proposing that, in addition to those factors that we would 
consider when choosing a type of remedy proposed in Sec.  488.1215, we 
would consider the following factors when determining a CMP amount:
     The size of the hospice program and its resources.
     Evidence that the hospice program has a built-in, self-
regulating quality assessment and performance improvement system to 
provide proper care, prevent poor outcomes, control patient injury, 
enhance quality, promote safety, and avoid risks to patients on a 
sustainable basis that indicates the ability to meet the CoPs and to 
ensure patient health and safety. When several instances of 
noncompliance would be identified at a survey, more than one per-day or 
per instance CMP could be imposed as long as the total CMP did not 
exceed $10,000 per day. In addition, a per-day and a per-instance CMP 
would not be imposed simultaneously for the same deficiency in 
conjunction with a survey.
    At proposed Sec.  488.1245, CMS would have the discretion to 
increase or reduce the amount of the CMP during the period of 
noncompliance, depending on whether the level of noncompliance had 
changed at the time of a revisit survey. However, section 
1822(c)(5)(B)(i) of the Act specifies that the remedies shall include a 
CMP in an amount not to exceed $10,000 for each day of noncompliance. 
Therefore, we are proposing at Sec.  488.1245(b)(2)(iii) that no CMP 
assessment could exceed $10,000 per day of noncompliance. To comply 
with sections 1822(c)(5)(B)(i) and 1822(c)(5)(C)(i) of the Act, we 
propose to establish a three-tier system with subcategories that would 
establish the amount of a CMP.
    In proposed Sec.  488.1245(b)(3), (b)(4), and (b)(5), we propose 
ranges of CMP amounts based on three levels of seriousness--upper, 
middle, and lower:
     Upper range--For a deficiency that poses IJ to patient 
health and safety, we would assess a penalty within the range of $8,500 
to $10,000 per day of condition-level noncompliance.
     Middle range--For repeat and/or a condition-level 
deficiency that did not pose IJ, but is directly related to poor 
quality patient care outcomes, we would assess a penalty within the 
range of $1,500 up to $8,500 per day of noncompliance with the CoPs.
     Lower range--For repeated and/or condition-level 
deficiencies that did not constitute IJ and were deficiencies in 
structures or processes that did not directly relate to poor quality 
patient care, we would assess a penalty within the range of $500 to 
$4,000 per day of noncompliance.
    The proposed CMP amounts would be subject to annual adjustments for 
inflation in accordance with the Federal Civil Monetary Penalty 
Inflation Adjustment Act of 1990 (Pub. L. 101-140), as amended by the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015 (section 701 of Pub. L. 114-74). Annually adjusted amounts are 
published at 45 CFR part 102.
    Under the proposed provisions, if CMS imposed a CMP, CMS would send 
the hospice program written notification of the intent to impose it, 
including the amount of the CMP being imposed and the proposed 
effective date of the sanction, under proposed Sec. Sec.  488.1210(e) 
and 488.1245(c). Once the administrative determination is final, we 
propose to send a final notice to the hospice program with the amount 
of the penalty that was assessed; the total number of days of 
noncompliance (for per day CMPs); the total amount due; the due date of 
the penalty; and the rate of interest to be charged on unpaid balances.
    Whether per instance or per day CMPs are imposed, once the hospice 
program has received the notice of intent to impose the CMP, it would 
have 60 calendar days from the receipt of the written notice of intent 
to either request an administrative hearing in accordance with Sec.  
498.40 or to provide notice to CMS of its intent to waive its right to 
an administrative hearing, in accordance to the procedures specified in 
proposed Sec.  488.1245(c)(2), to receive a 35 percent reduction in the 
CMP amount. The CMP would be due within 15 calendar days of hospice 
programs' written request for waiver. If the hospice program did not 
respond to the notice of intent to impose a CMP within 60 calendar days 
of receipt, it would waive its right to a hearing. In such cases, the 
CMP would not be reduced by 35 percent because a hospice program must 
follow the procedures specified at proposed Sec.  488.1245(c)(2) to 
receive the reduction.
    A per-day CMP would begin to accrue as early as the beginning of 
the last day of the survey that determines that the hospice program was 
out of compliance and would end on the date of correction of all 
deficiencies, or the date of termination. We propose at Sec.  
488.1245(d) that in IJ cases, if the IJ is not removed, the CMP would 
continue to accrue until CMS terminated the provider agreement (within 
23 calendar days after the last day of the survey which first 
identified the IJ). Under proposed Sec.  488.1245(d)(4), if IJ did not 
exist, the CMP would continue to accrue until the hospice program 
achieved substantial compliance or until CMS terminated the provider 
agreement.
    As noted elsewhere, in no instance would a period of noncompliance 
be allowed to extend beyond 6 months from the last day of the survey 
that initially determined noncompliance. If the hospice program has not 
achieved compliance with the CoPs within those 6 months, we would 
terminate the hospice program. The accrual of per-day CMPs would stop 
on the day the hospice program provider agreement was terminated or the 
hospice program achieved substantial compliance, whichever was earlier. 
The total CMP amounts would be computed and collected after an 
administrative determination is final and a final notice sent to the 
hospice program as described in Sec.  488.1245(e).
    We also propose that for a hospice program being involuntarily 
terminated and for which a civil money penalty had been imposed and was 
still due, we would include the final notice, also known as a due and 
payable notice, as part of the termination notice. In other words, the 
information in a final notice, as described in Sec.  488.1245(e), would 
be included in the termination notice.
    At proposed Sec.  488.1245(f), a CMP would become due and payable 
15 calendar days from--
     The time to appeal had expired without the hospice program 
appealing its initial determination;
     CMS received a request from the hospice program waiving 
its right to appeal the initial determination;
     A final decision of an Administrative Law Judge or 
Appellate Board of the Departmental Appeals Board upheld CMS's 
determinations; or
     The hospice program was terminated from the program and no 
appeal request was received.
    A request for a hearing would not delay the imposition of the CMP, 
but would only affect the collection of any final amounts due to CMS.

[[Page 35979]]

k. Directed Plan of Correction (Sec.  488.1250)
    We propose at Sec.  488.1250 to include a directed plan of 
correction as an available remedy. This remedy is a part of the current 
HHA and nursing home alternative sanction procedures and has been an 
effective tool to encourage correction of deficient practices. 
Specifically, we propose that CMS may impose a directed POC on a 
hospice program that is out of compliance with the CoPs. A directed POC 
remedy would require the hospice program to take specific actions to 
bring the hospice program back into compliance and correct the 
deficient practice(s). As indicated in Sec.  488.1250(b)(2) a hospice 
program's directed POC would be developed by CMS or by the temporary 
manager, with CMS approval. The directed POC would set forth the 
outcomes to be achieved, the corrective action necessary to achieve 
these outcomes and the specific date the hospice program would be 
expected to achieve such outcomes. The hospice program would be 
responsible for achieving compliance. If the hospice program failed to 
achieve compliance within the timeframes specified in the directed POC, 
CMS could impose one or more additional enforcement remedies until the 
hospice program achieved compliance or was terminated from the Medicare 
program. Before imposing this remedy, CMS would provide appropriate 
notice to the hospice program under Sec.  488.1210(e).
l. Directed In-Service Training (Sec.  488.1255)
    We propose at Sec.  488.1255, to outline the requirements for 
conducting directed in-service training for hospice programs with 
condition-level deficiencies. At proposed Sec.  488.1255(a), directed 
in-service training would be required where staff performance resulted 
in noncompliance and it was determined that a directed in-service 
training program would correct this deficient practice through 
retraining the staff in the use of clinically and professionally sound 
methods to produce quality outcomes.
    At Sec.  488.1255(a)(3), we are proposing that hospice programs use 
in-service programs conducted by instructors with an in-depth knowledge 
of the area(s) that would require specific training, so that positive 
changes would be achieved and maintained. Hospice programs would be 
required to participate in programs developed by well-established 
education and training services. These programs would include, but not 
be limited to, schools of medicine or nursing, area health education 
centers, and centers for aging. CMS will only recommend possible 
training locations to a hospice program and not require that the 
hospice program utilize a specific school/center/provider. In 
circumstances where the hospice is subject to the SFP, additional 
technical assistance and/or resources could be made available. The 
hospice program would be responsible for payment for the directed in-
service training for its staff. At proposed Sec.  488.1255(b), if the 
hospice program did not achieve substantial compliance after such 
training, CMS could impose one or more additional remedies. Before 
imposing this remedy, CMS would provide appropriate notice to the 
hospice program under proposed Sec.  488.1210(e).
m. Continuation of Payments to a Hospice Program With Deficiencies 
(Sec.  488.1260)
    We propose at Sec.  488.1260, the continuation of Medicare payments 
to hospice programs not in compliance with the requirements specified 
in section 1861(dd) of the Act over a period of no longer than 6 months 
in accordance with section 1822(c)(4) of the Act. The continuation of 
Medicare payments will continue for 6 months if--
     An enforcement remedy or remedies (with the exception of 
suspension of all payments) have been imposed on the hospice program 
and termination has not been imposed;
     The hospice program has submitted a POC which has been 
approved by CMS; and
     The hospice program agrees to repay the Federal government 
the payments received under this arrangement should the hospice program 
fail to take the corrective action as outlined in its approved POC in 
accordance with the approved plan and timetable for corrective action.
    We propose these three criteria at Sec.  488.1260(a). If any of 
these three requirements outlined in the Act were not met, a hospice 
program would not receive any Federal payments from the time that 
deficiencies were initially identified. CMS would also terminate the 
agreement before the end of the 6-month correction period, which begins 
on the last day of the survey, in accordance with Sec.  488.1265 if the 
requirements at Sec.  488.1260(a)(1) were not met. If any remedies were 
also imposed, they would stop accruing or end when the hospice program 
achieved compliance with all requirements, or when the hospice 
program's provider agreement was terminated, whichever was earlier.
    Finally, if a hospice program provided an acceptable POC but could 
not achieve compliance with the CoPs upon resurvey within 6 months of 
the last day of the survey, we propose at Sec.  488.1230(d) that we 
would terminate the provider agreement.
n. Termination of Provider Agreement (Sec.  488.1265)
    At Sec.  488.1265(a), we propose to address the termination of a 
hospice program's Medicare provider agreement, as well as the effect of 
such termination. Termination of the provider agreement would end all 
payments to the hospice program, including any payments that were 
continued at the proposed Sec.  488.1260. Termination would also end 
enforcement remedies imposed against the hospice program, regardless of 
any proposed timeframes for the remedies originally specified. At 
proposed Sec.  488.1265(b), CMS would terminate the provider agreement 
if--(1) the hospice program failed to correct condition-level 
deficiencies within 6 months unless the deficiencies constitute IJ; (2) 
the hospice program failed to submit an acceptable POC; (3) the hospice 
program failed to relinquish control of the temporary manager (if that 
remedy is imposed); or (4) the hospice program failed to meet the 
eligibility criteria for continuation of payments. At Sec.  488.1265(d) 
we propose using the procedures for terminating a hospice program at 
Sec.  489.53 and providing appeal rights in accordance with 42 CFR part 
489. Additionally, we propose using the procedures for payments 30 days 
post termination for hospice programs at Sec.  489.55. Payment is 
available for up to 30 days after the effective date of termination for 
hospice care furnished under a plan established before the effective 
date of termination (Sec.  489.55(a)(2)).

VIII. Requests for Information

A. Fast Healthcare Interoperability Resources (FHIR) in Support of 
Digital Quality Measurement in Post-Acute Care Quality Reporting 
Programs--Request for Information

1. Background
    A goal of the HH QRP is to improve the quality of health care for 
beneficiaries through measurement, transparency, and public reporting 
of data. The HH QRP contributes to improvements in health care, 
enhancing patient outcomes, and informing consumer choice. In October 
2017, we launched the Meaningful Measures Framework. This framework 
captures our vision to address health care quality priorities and gaps, 
including emphasizing digital quality

[[Page 35980]]

measurement (dQM), reducing measurement burden, and promoting patient 
perspectives, while also focusing on modernization and innovation. The 
scope of the Meaningful Measures Framework has evolved to Meaningful 
Measure 2.0 to accommodate the changes in the health care environment, 
initially focusing on measure and burden reduction to include the 
promotion of innovation and modernization of all aspects of quality, t 
is a need to streamline our approach to data collection, calculation, 
and reporting to fully leverage clinical and patient-centered 
information for measurement, improvement, and learning.
    In alignment with the Meaningful Measures 2.0, we are seeking 
feedback on our future plans to define digital quality measures for the 
HH QRP. We also are seeking feedback on the potential use of Fast 
Healthcare Interoperable Resources (FHIR) for dQMs within the HH QRP 
aligning where possible with other quality programs. FHIR is an open 
source standards framework (in both commercial and government settings) 
created by Health Level Seven International (HL7[supreg]) that 
establishes a common language and process for all health information 
technology.
2. Definition of Digital Quality Measures
    We are considering adopting a standardized definition of dQMs in 
alignment across the QRPs including the HH QRP. We are considering in 
the future to propose the adoption within the HH QRP the following 
definition: ``Digital Quality Measures'' (dQMs) are quality measures 
that use one or more sources of health information that are captured 
and can be transmitted electronically via interoperable systems.\95\ A 
dQM includes a calculation that processes digital data to produce a 
measure score or measure scores. Data sources for dQMs may include 
administrative systems, electronically submitted clinical assessment 
data, case management systems, electronic health records (EHRs), 
instruments (for example, medical devices and wearable devices), 
patient portals or applications (for example, for collection of 
patient-generated health data), health information exchanges (HIEs) or 
registries, and other sources. As an example, the quality measures 
calculated from patient assessment data submitted electronically to CMS 
would be considered digital quality measures.
---------------------------------------------------------------------------

    \95\ Definition taken from the CMS Quality Conference 2021.
---------------------------------------------------------------------------

3. Use of FHIR for Future dQMs in the HH QRP
    Over the past years in other quality programs, we have focused on 
opportunities to streamline and modernize quality data collection and 
reporting processes, such as exploring HL7[supreg] FHIR[supreg] (http://hl7.org/fhir) for other quality programs. One of the first areas CMS 
has identified relative to improving our digital strategy is through 
the use of FHIR-based standards to exchange clinical information 
through application programming interfaces (APIs), allowing clinicians 
to digitally submit quality information one time that can then be used 
in many ways. We believe that in the future proposing such a standard 
within the HH QRP could potentially enable collaboration and 
information sharing, which is essential for delivering high-quality 
care and better outcomes at a lower cost.
    We are currently evaluating the use of FHIR based APIs to access 
assessment data collected and maintained through the Quality 
Improvement and Evaluation System (QIES) and internet QIES (iQIES) 
health information systems and are working with healthcare standards 
organizations to assure that their evolving standards fully support our 
assessment instrument content. Further, as more Post-Acute Care 
providers, including HHAs, are adopting EHRs, we are evaluating using 
the FHIR interfaces for accessing patient data (including standard 
assessments) directly from HHA EHRs. Accessing data in this manner 
could also enable the exchange of data for purposes beyond data 
reporting to CMS, such as care coordination further increasing the 
value of EHR investments across the healthcare continuum. Once 
providers map their EHR data to a FHIR API in standard FHIR formats it 
could be possible to send and receive the data needed for measures and 
other uses from their EHRs through FHIR APIs.
4. Future Alignment of Measures Across Reporting Programs, Federal and 
State Agencies, and the Private Sector
    We are committed to using policy levers and working with 
stakeholders to achieve interoperable data exchange and to transition 
to full digital quality measurement in our quality reporting programs. 
We are considering the future potential development and staged 
implementation of a cohesive portfolio of dQMs across our regulated 
programs, including HHQRP, agencies, and private payers. This cohesive 
portfolio would require, where possible, alignment of: (1) Measure 
concepts and specifications including narrative statements, measure 
logic, and value sets, and (2) the individual data elements used to 
build these measure specifications and calculate the measures. Further, 
the required data elements would be limited to standardized, 
interoperable elements to the fullest extent possible; hence, part of 
the alignment strategy will be the consideration and advancement of 
data standards and implementation guides for key data elements. We 
would coordinate closely with quality measure developers, Federal and 
State agencies, and private payers to develop and maintain a cohesive 
dQM portfolio that meets our programmatic requirements and that fully 
aligns across Federal and State agencies and payers to the extent 
possible.
    We intend this coordination to be ongoing and allow for continuous 
refinement to ensure quality measures remain aligned with evolving 
healthcare practices and priorities (for example, patient reported 
outcomes (PROs), disparities, care coordination), and track with the 
transformation of data collection. This includes conformance with 
standards and health IT module updates, future adoption of technologies 
incorporated within the ONC Health IT Certification Program and may 
also include standards adopted by ONC (for example, standards-based 
APIs). The coordination would build on the principles outlined in HHS' 
National Health Quality Roadmap.\96\
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    \96\ Department of Health and Human Services. National Health 
Quality Roadmap. May 15, 2020. Available at: https://www.hhs.gov/sites/default/files/national-health-quality-roadmap.pdf.
---------------------------------------------------------------------------

    It would focus on the quality domains of safety, timeliness, 
efficiency, effectiveness, equitability, and patient-centeredness. It 
would leverage several existing Federal and public-private efforts 
including our Meaningful Measures 2.0 Framework; the Federal Electronic 
Health Record Modernization (DoD/VA); the Core Quality Measure 
Collaborative, which convenes stakeholders from America's Health 
Insurance Plans (AHIP), CMS, the Consensus-Based Entity under section 
1890 of the Act, provider organizations, private payers, and consumers 
and develops consensus on quality measures for provider specialties; 
and the NQF-convened Measure Applications Partnership (MAP) which 
reviews measures submitted to the Measures Under Consideration (MUC) 
list and makes recommendations on whether or not to use them in 
Medicare programs.'' We would coordinate with HL7's ongoing work to 
advance FHIR

[[Page 35981]]

resources in critical areas to support patient care and measurement 
such as social determinants of health. Through this coordination, we 
would identify which existing measures could be used or evolved to be 
used as dQMs, in recognition of current healthcare practice and 
priorities.
    This multi-stakeholder, joint Federal, State, and industry effort, 
made possible and enabled by the pending advances towards 
interoperability, would yield a significantly improved quality 
measurement enterprise. The success of the dQM portfolio would be 
enhanced by the degree to which the measures achieve our programmatic 
requirements as well as the requirements of other agencies and payers.
5. Solicitation of Comments
    We seek input on the following steps that would enable 
transformation of CMS' quality measurement enterprise to be fully 
digital:
     What EHR/IT systems do you use and do you participate in a 
health information exchange (HIE)?
     How do you currently share information with other 
providers and are there specific industry best practices for 
integrating SDOH screening into EHRs?
     What ways could we incentivize or reward innovative uses 
of health information technology (IT) that could reduce burden for 
post-acute care settings, including but not limited to HHAs?
     What additional resources or tools would post-acute care 
settings, including but not limited to HHAs, and health IT vendors find 
helpful to support testing, implementation, collection, and reporting 
of all measures using FHIR standards via secure APIs to reinforce the 
sharing of patient health information between care settings?
     Would vendors, including those that service post-acute 
care settings, including but not limited to HHAs, be interested in or 
willing to participate in pilots or models of alternative approaches to 
quality measurement that would align standards for quality measure data 
collection across care settings to improve care coordination, such as 
sharing patient data via secure FHIR API as the basis for calculating 
and reporting digital measures?
    We plan to continue working with other agencies and stakeholders to 
coordinate and to inform our transformation to dQMs leveraging health 
IT standards. While we will not be responding to specific comments 
submitted in response to this Request for Information in the CY 2022 
Home Health PPS final rule, we will actively consider all input as we 
develop future regulatory proposals or future subregulatory policy 
guidance. Any updates to specific program requirements related to 
quality measurement and reporting provisions would be addressed through 
separate and future notice- and-comment rulemaking, as necessary.

B. Closing the Health Equity Gap in Post-Acute Care Quality Reporting 
Programs--Request for Information

1. Background
    Significant and persistent inequities in health outcomes exist in 
the United States. In recognition of persistent health disparities and 
the importance of closing the health equity gap, we request information 
on expanding several related CMS programs to make reporting of health 
disparities based on social risk factors and race and ethnicity more 
comprehensive and actionable for providers and patients. Belonging to a 
racial or ethnic minority group; living with a disability; being a 
member of the lesbian, gay, bisexual, transgender, and queer (LGBTQ+) 
community; or being near or below the poverty level, is often 
associated with worse health 
outcomes.97 98 99 100 101 102 103 104 Such disparities in 
health outcomes are the result of number of factors, but importantly 
for CMS programs, although not the sole determinant, poor access and 
provision of lower quality health care contribute to health 
disparities. For instance, numerous studies have shown that among 
Medicare beneficiaries, racial and ethnic minority individuals often 
receive lower quality of care, report lower experiences of care, and 
experience more frequent hospital readmissions and operative 
complications.105 106 107 108 109 110 Readmission rates for 
common conditions in the Hospital Readmissions Reduction Program are 
higher for black Medicare beneficiaries and higher for Hispanic 
Medicare beneficiaries with Congestive Heart Failure and Acute 
Myocardial Infarction.111 112 113 114 115 Studies have also 
shown that African Americans are significantly more likely than white 
Americans to die prematurely from heart disease and stroke.\116\ The 
COVID-19 pandemic has further illustrated many of these longstanding 
health inequities with higher rates of infection, hospitalization, and 
mortality among black, Hispanic, and Indigenous and Native American 
persons relative to white persons.117 118

[[Page 35982]]

As noted by the Centers for Disease Control ``long-standing systemic 
health and social inequities have put many people from racial and 
ethnic minority groups at increased risk of getting sick and dying from 
COVID-19''.\119\ One important strategy for addressing these important 
inequities is by improving data collection to allow for better 
measurement and reporting on equity across our programs and policies.
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    \97\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 2011; 
305(7):675-681.
    \98\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income 
Inequality and 30 Day Outcomes After Acute Myocardial Infarction, 
Heart Failure, and Pneumonia: Retrospective Cohort Study. British 
Medical Journal. 2013; 346.
    \99\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity 
of Care in U.S. Hospitals. New England Journal of Medicine. 2014; 
371(24):2298-2308.
    \100\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
    \101\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018.
    \102\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \103\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \104\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19 
Vulnerability of Transgender Women With and Without HIV Infection in 
the Eastern and Southern U.S. Preprint. medRxiv. 
2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
2020.07.21.20159327.
    \105\ Martino, SC, Elliott, MN, Dembosky, JW, Hambarsoomian, K, 
Burkhart, Q, Klein, DJ, Gildner, J, and Haviland, AM. Racial, 
Ethnic, and Gender Disparities in Health Care in Medicare Advantage. 
Baltimore, MD: CMS Office of Minority Health. 2020.
    \106\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \107\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. Racial 
disparities in knee and hip total joint arthroplasty: An 18-year 
analysis of national Medicare data. Ann Rheum Dis. 2014 
Dec;73(12):2107-15.
    \108\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. Racial 
Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
1679.
    \109\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \110\ Tsai TC, Orav EJ, Joynt KE. Disparities in surgical 30-day 
readmission rates for Medicare beneficiaries by race and site of 
care. Ann Surg. Jun 2014;259(6):1086-1090.
    \111\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. 
Readmission rates for Hispanic Medicare beneficiaries with heart 
failure and acute myocardial infarction. Am Heart J. Aug 
2011;162(2):254-261 e253.
    \112\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \113\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \114\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. 
Chronic obstructive pulmonary disease readmissions at minority-
serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
    \115\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \116\ HHS. Heart disease and African Americans. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \117\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \118\ Ochieng N, Cubanski J, Neuman T, Artiga S, and Damico A. 
Racial and Ethnic Health Inequities and Medicare. Kaiser Family 
Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \119\ https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
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    We are committed to achieving equity in health care outcomes for 
our beneficiaries by supporting providers in quality improvement 
activities to reduce health inequities, enabling beneficiaries to make 
more informed decisions, and promoting provider accountability for 
health care disparities.120 121 For the purposes of this 
rule, we are using a definition of equity established in Executive 
Order 13985, as ``the consistent and systematic fair, just, and 
impartial treatment of all individuals, including individuals who 
belong to underserved communities that have been denied such treatment, 
such as Black, Latino, and Indigenous and Native American persons, 
Asian Americans and Pacific Islanders and other persons of color; 
members of religious minorities; lesbian, gay, bisexual, transgender, 
and queer (LGBTQ+) persons; persons with disabilities; persons who live 
in rural areas; and persons otherwise adversely affected by persistent 
poverty or inequality.'' \122\ We note that this definition was 
recently established by the current administration, and provides a 
useful, common definition for equity across different areas of 
government, although numerous other definitions of equity exist.
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    \120\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \121\ Report to Congress: Improving Medicare Post-Acute Care 
Transformation (IMPACT) Act of 2014 Strategic Plan for Accessing 
Race and Ethnicity Data. January 5, 2017. Available at https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Research-Reports-2017-Report-to-Congress-IMPACT-ACT-of-2014.pdf.
    \122\ https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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    Our ongoing commitment to closing the equity gap in CMS quality 
programs is demonstrated by a portfolio of programs aimed at making 
information on the quality of health care providers and services, 
including disparities, more transparent to consumers and providers. The 
CMS Equity Plan for Improving Quality in Medicare aims to support 
Quality Improvement Networks and Quality Improvement Organizations 
(QIN-QIOs); Federal, State, local, and tribal organizations; providers; 
researchers; policymakers; beneficiaries and their families; and other 
stakeholders in activities to achieve health equity. The CMS Equity 
Plan includes three core elements: (1) Increasing understanding and 
awareness of disparities; (2) developing and disseminating solutions to 
achieve health equity; and (3) implementing sustainable actions to 
achieve health equity.\123\ The CMS Quality Strategy and Meaningful 
Measures Framework \124\ include elimination of racial and ethnic 
disparities as a fundamental principle. Our ongoing commitment to 
closing the health equity gap in the HH QRP is demonstrated by seeking 
to adopt through future rulemaking Standardized Patient Assessment Data 
Elements under the HH QRP which include several social determinants of 
health (SDOH).
---------------------------------------------------------------------------

    \123\ Centers for Medicare & Medicaid Services Office of 
Minority Health. The CMS Equity Plan for Improving Quality in 
Medicare. https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
    \124\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.
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    We continue to work with Federal and private partners to better 
collect and leverage data on social risk to improve our understanding 
of how these factors can be better measured in order to close the 
health equity gap. Among other things, we have developed an Inventory 
of Resources for Standardized Demographic and Language Data Collection 
\125\ and supported collection of specialized International 
Classification of Disease, 10th Edition, Clinical Modification (ICD-10-
CM) codes for describing the socioeconomic, cultural, and environmental 
determinants of health. We continue to work to improve our 
understanding of this important issue and to identify policy solutions 
that achieve the goals of attaining health equity for all patients.
---------------------------------------------------------------------------

    \125\ Centers for Medicare and Medicaid Services. Building an 
Organizational Response to Health Disparities Inventory of Resources 
for Standardized Demographic and Language Data Collection. 2020. 
https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Collection-Resources.pdf.
---------------------------------------------------------------------------

2. Solicitation of Public Comment
    Under authority of the IMPACT Act and section 1895(b)(3)(B)(v) of 
the Act, we are seeking comment on the possibility of expanding measure 
development, and the collection of other Standardized Patient 
Assessment Data Elements that address gaps in health equity in the HH 
QRP. Any potential SPADE or measure reporting related to health equity 
data under the HH QRP that might result from public comments received 
in response to this solicitation would be addressed through a separate 
notice- and-comment rulemaking in the future.
    Specifically, we are inviting public comment on the following:
     As finalized in the CY 2020 HH PPS final rule (84 FR 60597 
through 60608), HHAs will be required to report Standardized Patient 
Assessment Data Elements on certain SDOH, including, ethnicity, 
preferred language, interpreter services, health literacy, 
transportation and social isolation.\126\ CMS is seeking guidance on 
any additional Standardized Patient Assessment Data Elements that could 
be used to assess health equity in the care of HHA patients, for use in 
the HH QRP.
---------------------------------------------------------------------------

    \126\ In response to the COVID-19 PHE, CMS released an May 8, 
2020 interim final rule with comment period (85 FR 27595 through 
27597) which delayed the compliance date for the collection and 
reporting of the SDOH for at least 2 full fiscal years after the end 
of the PHE.
---------------------------------------------------------------------------

     Recommendations for how CMS can promote health equity in 
outcomes among HHA patients. We are also interested in feedback 
regarding whether including HHA-level quality measure results 
stratified by social risk factors and social determinants of health 
(for example, dual eligibility for Medicare and Medicaid, race) in 
confidential feedback reports could allow HHAs to identify gaps in the 
quality of care they provide (for example, methods similar or analogous 
to the CMS Disparity Methods \127\ which provide hospital-level 
confidential results stratified by dual eligibility for condition-
specific readmission measures currently included in the Hospital 
Readmission Reduction Program (84 FR 42496 through 42500).
---------------------------------------------------------------------------

    \127\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
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     Methods that commenters or their organizations use in 
employing data to reduce disparities and improve patient outcomes, 
including the source(s) of data used, as appropriate.
     Given the importance of structured data and health IT 
standards for the capture, use, and exchange of relevant health data 
for improving health equity, the existing challenges HHAs encounter for 
effective capture, use, and exchange of health information include data 
on ethnicity and other social determinants

[[Page 35983]]

of health to support care delivery and decision-making.
    While we will not be responding to specific comments submitted in 
response to this Request for Information in the CY 2022 HH PPS final 
rule, we intend to use this input to inform future policy development. 
We look forward to receiving feedback on these topics, and note for 
readers that responses to the RFI should focus on how they could be 
applied to the HH QRP requirements. Please note that any responses 
provided will not impact payment decisions.

IX. Revised Compliance Date for Certain Reporting Requirements Adopted 
for Inpatient Rehabilitation Facility (IRF) QRP and Long-Term Care 
Hospital (LTCH) QRP

A. Proposed Revised Compliance Date for Certain Inpatient 
Rehabilitation Facility (IRF) QRP Reporting Requirements

1. Background
    In IFC-2 (85 FR 27550), we delayed the compliance date for certain 
reporting requirements under the IRF QRP (85 FR 27595 through 27596). 
Specifically, we delayed the requirement for IRFs to begin reporting 
the Transfer of Health (TOH) Information to Provider-PAC and the TOH 
Information to Patient-PAC measures and the requirement for IRFs to 
begin reporting certain Standardized Patient Assessment Data Elements 
from October 1, 2020 to October 1st of the year that is at least one 
full fiscal year after the end of the COVID-19 PHE. CMS also delayed 
the adoption of the updated version of the IRF Patient Assessment 
Instrument (PAI) V4.0 with which IRFs would have used to report the TOH 
measures and certain Standardized Patient Assessment Data Elements.
    Under IFC-2, IRFs must use the IRF-PAI V4.0 to begin collecting 
data on the two TOH Information measures beginning with discharges on 
October 1st of the year that is at least one full fiscal year after the 
end of the COVID-19 PHE. IRFs must also begin collecting data on 
certain Standardized Patient Assessment Data Elements on the IRF-PAI 
V4.0, beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1st of 
the year that is at least one full fiscal year after the end of the 
COVID-19 PHE. The delay to begin collecting data for these measures was 
intended to provide relief to IRFs from the added burden of 
implementing an updated instrument during the COVID-19 PHE. We wanted 
to provide maximum flexibilities for IRFs to respond to the public 
health threats posed by the COVID-19 PHE, and to reduce the burden in 
administrative efforts associated with attending trainings, training 
their staff, and working with their vendors to incorporate the updated 
assessment instruments into their operations.
    At the time we finalized the policy in the IFC-2, we believed that 
the delay in collection of the TOH Information measures and 
Standardized Patient Assessment Data Elements would not have a 
significant impact on the IRF QRP. However, the COVID-19 PHE showed the 
important need for theses TOH Information measures and Standardized 
Patient Assessment Data Elements under the HH QRP. The PHE's 
disproportionate impact demonstrates the importance of analyzing this 
impact and the needs for these populations in order to improve quality 
of care within IRFs especially during a public health emergency.
2. Current Assessment of IRFs
    To accommodate the COVID-19 PHE, CMS has provided additional 
guidance and flexibilities, and as a result IRFs have had the 
opportunity to adopt new processes and modify existing processes to 
accommodate the significant health crisis presented by the COVID-19 
PHE. For example, CMS held regular ``Office Hours'' conference calls to 
provide IRFs regular updates on the availability of supplies, as well 
as answer questions about delivery of care, reporting and billing. CMS 
also supported PAC providers, including IRFs, by providing 
flexibilities in the delivery of care in response to the PHE, such as 
modifying the required face-to-face visits in IRF to be completed by 
telehealth (42 CFR 412.622(a)(3)(iv) and 412.29(e)) during the PHE for 
COVID-19, and waiving the post-admission physician evaluation 
requirement at Sec.  412.622(a)(4)(ii). In the FY 2021 IRF PPS final 
rule (86 FR 48445 through 48447), CMS removed the post-admission 
physician evaluation requirement permanently beginning October 1, 2021. 
In addition, as of June 9, 2021, 63.8 percent of the adult population 
has received at least one vaccination, and COVID-19 cases and deaths 
have steadily declined over the last 30 days.\128\ We also believe that 
much more is known about COVID-19 than at the time CMS finalized IFC-
2.129 130 131 132
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    \128\ CDC COVID Data Tracker. Retrieved from: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \129\ Here's Exactly Where We are with Vaccine and Treatments 
for COVID-19. Healthline. May 11, 2021. Retrieved from: https://www.healthline.com/health-news/heres-exactly-where-were-at-with-vaccines-and-treatments-for-covid-19.
    \130\ COVID research: A year of scientific milestones. Nature. 
May 5, 2021. Retrieved from: https://www.nature.com/articles/d41586-020-00502-w.
    \131\ Clinical trial of therapeutics for severely ill 
hospitalized COVID-19 patients begins. National Institutes of Health 
News Releases. April 22, 2021. Retrieved from: https://www.nih.gov/news-events/news-releases/clinical-trial-therapeutics-severely-ill-hospitalized-covid-19-patients-begins.
    \132\ COVID-19 Treatment Guidelines. National Institutes of 
Health. Updated April 21, 2021. Retrieved from: https://www.covid19treatmentguidelines.nih.gov/whats-new/.
---------------------------------------------------------------------------

    Based upon other flexibilities such as the previous examples, the 
increase in knowledge IRF providers have about treating patients with 
COVID-19 \133\ since finalizing IFC-2, and the trending data on COVID-
19, IRFs are in a better position to accommodate reporting of the TOH 
measures and certain (Social Determination of Health) Standardized 
Patient Assessment Data Elements. Also, recent reports (not available 
at the time CMS IFC-2 was finalized) suggest that IRFs have the 
capacity to begin reporting the TOH measures and certain Social 
Determinant of Health (SDOH) Standardized Patient Assessment Data 
Elements.\134\
---------------------------------------------------------------------------

    \133\ Ehsanian R, Workman J, Jones D, et al. Free-standing acute 
inpatient rehabilitation hospital enhanced practices and policies in 
response to the COVID-19 outbreak. Future Sci OA. 2021 Fe; 7(2): 
FSO667. Retrieved from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7745654/.
    \134\ https://www.healthaffairs.org/do/10.1377/hblog20201214.543463/full/.
---------------------------------------------------------------------------

    After evaluating the impact of the revised compliance date under 
IFC-2, feasibility around data collection by IRFs, and support needs of 
providers during the COVID-19 PHE, we have determined that IRFs now 
have the administrative capacity to attend training, train their staff, 
and work with their vendors to incorporate the updated assessment 
instruments, the IRF-PAI V4.0 into their operations.
    We now believe that based upon the advancement of information 
available about COVID-19 vaccination and treatments described 
previously, and the importance of the data in the IRF QRP, it would be 
appropriate to modify the compliance date finalized in IFC-2. This may 
support future activities under Executive Order 13985, entitled 
``Advancing Racial Equity and Support for Underserved Communities 
Throughout the Federal Government,'' issued January 20, 2021(https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government).

[[Page 35984]]

3. Proposal To Collect the Transfer of Health Information to Provider-
PAC Measure, the Transfer of Health Information to Patient-PAC Measure, 
and Certain Standardized Patient Assessment Data Elements Beginning 
October 1, 2022
    We are proposing to revise the compliance date from IFC-2 to 
October 1, 2022. This revised date would begin the collection of data 
on the Transfer of Health Information to Provider-PAC measure and 
Transfer of Health Information to Patient-PAC measure, and certain 
Standardized Patient Assessment Data Elements on the updated version of 
the IRF-PAI assessment instrument referred to as IRF-PAI V4.0. This 
revised date of October 1, 2022, which is a 2-year delay from the 
original compliance date finalized in the FY 2020 IRF PPS final rule 
(84 FR 39054 through 39173), balances the support that IRFs needed 
during much of the COVID-19 PHE as CMS provided flexibilities to 
support IRFs along with the need to collect this important data.
    The need for the Standardized Patient Assessment Data Elements and 
TOH Information measures have been shown to be even more pressing with 
issues of inequities the COVID-19 PHE laid bare. This data that 
includes addressing SDOH provides information expected to improve 
quality of care for all. Consequently, we are proposing to revise the 
compliance date to reflect this balance and assure that data collection 
begins on October 1, 2022.
    As stated in the FY 2020 IRF PPS final rule, CMS will provide the 
training and education for IRFs to be prepared for this implementation 
(84 FR 39119 through 39147). In addition, if CMS adopts an October 1, 
2022 compliance date, CMS would release a draft of the updated version 
of the IRF-PAI, IRF-PAI V4.0, in early 2022.
    Based upon our evaluation, we propose that IRFs would collect the 
Transfer of Health Information to Provider-PAC measure, the TOH 
Information to the Patient-PAC measure, and certain Standardized 
Patient Assessment Data Elements beginning October 1, 2022. 
Accordingly, we propose that IRFs would begin collecting data on the 
two TOH measures beginning with discharges on October 1, 2022. We also 
propose that IRFs would begin collecting data on the six categories of 
Standardized Patient Assessment Data Elements on the IRF-PAI V4.0, 
beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1, 
2022.
    We invite public comment on these proposals.

B. Proposed Revised Compliance Date for Certain Long-Term Care Hospital 
(LTCH) QRP Reporting Requirements

1. Background
    In IFC-2 (85 FR 27550), we delayed the compliance date for certain 
reporting requirements under the LTCH QRP (85 FR 27595 through 27596). 
Specifically, we delayed the requirement for LTCHs to begin reporting 
the TOH Information to Provider-PAC measure and the TOH Information to 
Patient-PAC measure and the requirement for LTCHs to begin reporting 
certain Standardized Patient Assessment Data Elements from October 1, 
2020 to October 1st of the year that is at least one full fiscal year 
after the end of the COVID-19 PHE. CMS also delayed the adoption of the 
updated version of the LTCH Continuity Assessment and Record of 
Evaluation (CARE) Data Set (LCDS) V5.0 with which LTCHs would have used 
to report the TOH measures and certain Standardized Patient Assessment 
Data Elements.
    Under IFC-2, LTCHs must use the LCDS V5.0 to begin collecting data 
on the two TOH Information measures beginning with discharges on 
October 1st of the year that is at least one full fiscal year after the 
end of the COVID-19 PHE. LTCHs must also begin collecting data on 
certain Standardized Patient Assessment Data Elements on the LCDS V5.0, 
beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1st of 
the year that is at least one full fiscal year after the end of the 
COVID-19 PHE. The delay to begin collecting data for these measures was 
intended to provide relief to LTCHs from the associated burden of 
implementing an updated instrument during the COVID-19 PHE. We wanted 
to provide maximum flexibilities for LTCHs to respond to the public 
health threats posed by the COVID-19 PHE, and to reduce the burden in 
administrative efforts associated with attending trainings, training 
their staff, and working with their vendors to incorporate the updated 
assessment instruments into their operations.
    At the time we finalized the policy in the IFC-2, we believed that 
the delay in collection of the TOH Information measures, and 
Standardized Patient Assessment Data Elements would not have a 
significant impact on the LTCH QRP. However, the COVID-19 PHE showed 
the important need for theses TOH Information measures and Standardized 
Patient Assessment Data Elements under the LTCH QRP. The PHE's 
disproportionate impact on minority populations demonstrates the 
importance of analyzing this impact and the needs for these populations 
in order to improve quality of care within LTCHs especially during a 
public health emergency.
2. Current Assessment of LTCHs
    To accommodate the COVID-19 PHE, CMS has provided additional 
guidance and flexibilities, and as a result LTCHs have had the 
opportunity to adopt new processes and modify existing processes to 
accommodate the significant health crisis presented by the COVID-19 
PHE. For example, CMS held regular ``Office Hours'' conference calls to 
provide LTCHs regular updates on the availability of supplies, as well 
as answer questions about delivery of care, reporting and billing. CMS 
also supported PAC providers, including LTCHs, by providing 
flexibilities in the delivery of care in response to the PHE, such as 
waiving requirement at 42 CFR 482.43(a)(8), 482.61(e), and 
485.642(a)(8) to provide detailed information regarding discharge 
planning. To address workforce concerns related to COVID-19, CMS waived 
requirements under 42 CFR 482.22(a)(1) through (4) to allow for 
physicians whose privileges would expire to continue practicing at the 
hospital and for new physicians to be able to practice before full 
medical staff/governing body review and approval. In addition, as of 
June 9, 2021, 63.8 percent of all the adult population has received at 
least one vaccination, and COVID-19 cases and deaths have steadily 
declined over the last 60 days.\135\ We also believe that much more is 
known about COVID-19 than at the time CMS finalized IFC-
2.136 137 138 139
---------------------------------------------------------------------------

    \135\ CDC COVID Data Tracker. Retrieved from: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \136\ Here's Exactly Where We are with Vaccine and Treatments 
for COVID-19. Healthline. May 11, 2021. Retrieved from: https://www.healthline.com/health-news/heres-exactly-where-were-at-with-vaccines-and-treatments-for-covid-19.
    \137\ COVID research: A year of scientific milestones. Nature. 
May 5, 2021. Retrieved from: https://www.nature.com/articles/d41586-020-00502-w.
    \138\ Clinical trial of therapeutics for severely ill 
hospitalized COVID-19 patients begins. National Institutes of Health 
News Releases. April 22, 2021. Retrieved from: https://www.nih.gov/news-events/news-releases/clinical-trial-therapeutics-severely-ill-hospitalized-covid-19-patients-begins.
    \139\ COVID-19 Treatment Guidelines. National Institutes of 
Health. Updated April 21, 2021. Retrieved from: https://www.covid19treatmentguidelines.nih.gov/whats-new/.

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[[Page 35985]]

    Based upon other flexibilities such as the previous examples, the 
increase in knowledge LTCH providers have about treating patients with 
COVID-19 \140\ since finalizing IFC-2, and the trending data on COVID-
19, LTCHs are now in a better position to accommodate reporting of the 
TOH measures and certain Standardized Patient Assessment Data 
Elements.\141\
---------------------------------------------------------------------------

    \140\ Ehsanian R, Workman J, Jones D, et al. Free-standing acute 
inpatient rehabilitation hospital enhanced practices and policies in 
response to the COVID-19 outbreak. Future Sci OA. 2021 Fe; 7(2): 
FSO667. Retrieved from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7745654/.
    \141\ https://www.healthaffairs.org/do/10.1377/hblog20201214.543463/full/.
---------------------------------------------------------------------------

    After evaluating the impact of the revised compliance date under 
IFC-2, feasibility around data collection in LTCHs, and support needs 
of providers during the COVID-19 PHE, we have determined that LTCHs now 
have the administrative capacity to attend trainings, train their 
staff, and work with their vendors to incorporate the updated 
assessment instrument, the LCDS V5.0 into their operations.
    We now believe that based upon the advancement of information 
available about COVID-19 vaccination and treatments described 
previously, and the importance of the data to the LTCH QRP it would be 
appropriate to modify the compliance date finalized in IFC-2. This may 
support future activities under Executive Order 13985, entitled 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government,'' issued January 20, 2021 (https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government).
3. Proposal To Collect the Transfer of Health Information to Provider-
PAC Measure, the Transfer of Health Information to Patient-PAC Measure, 
and Certain Standardized Patient Assessment Data Elements Beginning 
October 1, 2022
    We are proposing to revise the compliance date from IFC-2 to 
October 1, 2022. This revised date would begin the collection of data 
on the Transfer of Health Information to Provider-PAC measure and 
Transfer of Health Information to Patient-PAC measure, and certain 
Standardized Patient Assessment Data Elements on the updated version of 
the LCDS V5.0. This revised date of October 1, 2022, which is a two-
year delay from this original compliance date finalized in the FY 2020 
IPPS/LTCH PPS final rule (84 FR 42044 through 42701), balances the 
support that LTCHs needed during much of the COVID-19 PHE as CMS 
provided flexibilities to support LTCHs along with the need to collect 
this important data.
    The need for the Standardized Patient Assessment Data Elements and 
TOH Information measures have been shown to be even more pressing with 
issues of inequities the COVID-19 PHE laid bare. This data that 
includes addressing SDOH provides information expected to improve 
quality of care for all. Consequently, we are proposing to revise the 
compliance date to reflect this balance and assure that data reporting 
begins on October 1, 2022.
    As stated in the FY 2020 IPPS/LTCH PPS final rule, CMS will provide 
the training and education for LTCHs to be prepared for this 
implementation (84 FR 42540 through 42560). In addition, if CMS adopts 
an October 1, 2022 compliance date, CMS would release a draft of the 
updated version of the LCDS, LCDS V5.0, in early 2022.
    Based upon our evaluation, we propose that LTCHs would collect the 
Transfer of Health Information to Provider-PAC measure, the Transfer of 
Health Information to the Patient-PAC measure, and certain Standardized 
Patient Assessment Data Elements, beginning on October 1, 2022. We 
propose that accordingly, LTCHs would begin collecting data on the two 
TOH measures beginning with discharges on October 1, 2022. We also 
propose that LTCHs would begin collecting data on the six categories of 
Standardized Patient Assessment Data Elements on the LCDS V5.0, 
beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1, 
2022.
    We invite public comment on these proposals.

X. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

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

B. Collection of Information Requirements

1. HH QRP
    In section IV.C. of this propose rule, we propose changes and 
updates to the HH QRP. We believe that the burden associated with the 
HH QRP proposals is the time and effort associated with data quality 
and reporting. As of March 1, 2021, there are approximately 11,400 HHAs 
reporting quality data to CMS under the HH QRP. For the purposes of 
calculating the costs associated with the information collection 
requirements, we obtained mean hourly wages for these from the U.S. 
Bureau of Labor Statistics' May 2020 National Occupational Employment 
and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm). To 
account for overhead and fringe benefits (100 percent), we have doubled 
the hourly wage. These amounts are detailed in Table 35.

[[Page 35986]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.054

    In section IV.C.4.a. of the proposed rule, we are proposing to 
remove the Drug Education on All Medications Provided to Patient/
Caregiver during All Episodes of Care measure under removal factor 1, 
measure performance among HHAs is so high and unvarying that meaningful 
distinctions in improvements in performance can no longer be made. 
Additionally, we are proposing to remove the OASIS item M2016 used to 
calculate this measure. This item removal will result in a decrease in 
overall burden.
    In sections IV.C.4.b. and c. of the proposed rule, we are proposing 
to adopt the Home Health Within Stay Potentially Preventable 
Hospitalization claims-based measure. We are proposing to replace the 
Acute Care Hospitalization During the First 60 Days of HH (NQF #0171) 
measure and the Emergency Department Use without Hospitalization During 
the First 60 Days of HH (NQF #0173) measure with the Within Stay 
Potentially Hospitalization measure beginning with the CY 2023 HH QRP 
under our measure removal factor 6: A measure that is more strongly 
associated with desired patient outcomes for the particular topic is 
available. Because the measures are claims-based, the replacement/
removal will not impact collection of information.
    Therefore, we are proposing a net reduction of 1 data element at 
the Discharge from Agency time point and 1 data element at the Transfer 
of Care time point associated with OASIS item (M2016) collection as a 
result of the measure removal. We assume that each data element 
requires 0.3 minutes of clinician time to complete. Therefore, we 
estimate that there would be a reduction in clinician burden per OASIS 
assessment of 0.3 minutes at Discharge from Agency and 0.3 minutes at 
Transfer of Care.
    The OASIS is completed by RNs or PTs, or very occasionally by 
occupational therapists (OTs) or speech language pathologists (SLT/SP). 
Data from 2020 show that the OASIS is completed by RNs (approximately 
76.5 percent of the time), PTs (approximately 20.78 percent of the 
time) and other therapists including OTs and SLP/STs (approximately 
2.72 percent of the time). Based on this analysis, we estimated a 
weighted estimated clinician average hourly wage of $79.41, inclusive 
of fringe benefits using the wage data from Table 35. Individual 
providers determine the staffing necessary.
    Table 36 shows the total number of assessments submitted in CY 2020 
and estimated costs at each time point.
[GRAPHIC] [TIFF OMITTED] TP07JY21.055

    Based on the data in Table 35 and Table 36 for the 11,400 active 
Medicare-certified HHAs, we estimate the total decrease in costs 
associated with the changes in the HH QRP at approximately $242 per HHA 
annually or $2,762,277 for all HHAs. This corresponds to an estimated 
decrease in clinician burden associated proposed changes to the HH QRP 
of approximately 3.1 hours per HHA or approximately 34,785 hours for 
all HHAs. This decrease in burden would be accounted for in the 
information collection under OMB control number 0938-1279 (Expiration 
date: 12/31/2021).
    In section IV.C. of this proposed rule, we propose a revised 
compliance date for certain reporting requirements adopted for the HH 
QRP. The burden for the proposed revision to the HH QRP requirements as 
adopted in the CY 2020 HH PPS final rule (84 FR 60632 through 60642) 
has been accounted for in OMB control number 0938-1279. Therefore, this 
proposal would not affect the information collection burden already 
established.

[[Page 35987]]

2. ICRs Regarding Revised Compliance Dates for Certain Reporting 
Requirements
a. IRF QRP Requirements
    In section VIII.A. of this proposed rule, we propose to revise the 
compliance date for certain reporting requirements adopted for the IRF 
QRP. We believe that the burden associated with the IRF QRP proposal is 
the time and effort associated with reporting quality data. As of April 
4, 2021, there are approximately 1,109 IRFs reporting quality data to 
CMS. The burden for the proposed revision to the IRF QRP requirements 
as adopted in the FY 2020 IRF PPS final rule (84 FR 39165 through 
39172) has been accounted for in OMB control number 0938-0842 
(Expiration date: 12/31/2022). Therefore, this proposal would not 
affect the information collection burden for the IRF QRP.
b. LTCH QRP Requirements
    In section VIII.B. of this proposed rule, we propose a revised 
compliance date for certain reporting requirements adopted for the LTCH 
QRP. We believe that the burden associated with the LTCH QRP proposal 
is the time and effort associated with reporting quality data. As of 
April 21, 2021, there are approximately 363 LTCHs reporting quality 
data to CMS. The burden for the proposed revision to the LTCH QRP 
requirements as adopted in the FY 2020 IPPS/LTCH PPS final rule (84 FR 
42602 through 42656) has been accounted for in OMB control number 0938-
1163 (expiration12/31/2022). Therefore, this proposal would not affect 
the information collection burden for the LTCH QRP.
3. ICRs Related to the Changes in the Home Health CoPs
a. ICRs Related to the Virtual Supervision of HHA Aides
    In section IV.D. of this propose rule, we would revise Sec.  
484.80(h)(1) to specify that if a patient is receiving skilled care 
(patient who is receiving skilled nursing, physical or occupational 
therapy, or speech language pathology services), the home health aide 
supervisor (RN or therapist) must complete a supervisory assessment of 
the aide services being provided, either onsite (that is, an in person 
visit) or using interactive telecommunications systems no less 
frequently than every 14 days. The home health aide would not have to 
be present during the supervisory assessment. The use of interactive 
telecommunications systems for the aide supervisory assessment must not 
exceed 2 times per HHA in a 60-day period. We propose to revise Sec.  
484.80(h)(2) to specify that, if a patient is not receiving skilled 
care, the RN must make an in-person supervisory visit to the location 
where the patient is receiving care, once every 60 days to assess the 
quality of care and services provided by the home health aide and to 
ensure that services meet the patient's needs. The home health aide 
does not need to be present during this visit. We are also proposing 
that the RN would make a semi-annual on-site (in-person) visit to the 
location where a patient is receiving care in order to observe and 
assess the home health aide while he or she was performing care. This 
semi-annual supervisory visit of the aide performing care would replace 
the current every 60-day requirement of direct supervision of the aide 
performing care. Section 484.80(h) also requires HHAs to document the 
supervision of home health aides in accordance with specified 
timeframes. In addition, we believe the modification proposed at Sec.  
484.80(h)(3) includes retraining and competency evaluations related to 
both the skills verified as deficient and to any related skills will 
not add any information collection burden and will enhance the 
provisions of safe, quality home health services. In accordance with 
the implementing regulation of the PRA at 5 CFR 1320.3(b)(2), we 
believe that both the existing requirements and the proposed revisions 
to the requirements at 484.80(h) are exempt from the PRA. We believe 
competency evaluations are a usual and customary business practice and 
we state as such in the information collection request associated with 
the Home Health CoPs (OMB control number: 0938-1299/Expiration: 06/30/
2021). Therefore, we are not proposing to seek PRA approval for any 
information collection or recordkeeping activities that may be 
conducted in connection with the proposed revisions to Sec.  484.80(h), 
but we request public comment on our determination that the time and 
effort necessary to comply with these evaluation requirements is usual 
and customary, and would be incurred by home health staff even absent 
this regulatory requirement.
b. ICRs Related to Permitting Occupational Therapist To Complete the 
Initial and Comprehensive Assessments for Home Health Agencies
    In section IV.D. of this proposed rule, we would implement Division 
CC, section 115 of CAA 2021 by proposing conforming regulations text 
changes at Sec.  484.55(a)(2) and (b)(3) permitting the occupational 
therapist to complete the initial and comprehensive assessments for 
Medicare patients when ordered with another rehabilitation therapy 
service (speech language pathology or physical therapy) that 
establishes program eligibility, in the case where skilled nursing 
services are also not initially on the home health plan of care. These 
changes permit occupational therapists to complete these assessments 
even though the need for occupational therapy would not establish the 
patient's eligibility for the Medicare home health benefit. In 
accordance with the implementing regulations of the PRA at 5 CFR 
1320.3(b)(2), we believe that both the existing requirements and the 
proposed revisions to the requirements at Sec.  484.55(a)(2) and (b)(3) 
are exempt from the PRA. We believe patient assessment are a usual and 
customary business practice and we state such in the information 
collection request associated with the OASIS data set, which comprises 
the core of the patient assessment and is currently approved under OMB 
control number: 0938-1279 (Expiration date: 06/30/2024). Therefore, we 
are not proposing to seek PRA approval for any information collection 
or recordkeeping activities that may be conducted in connection with 
the proposed revisions to Sec.  484.55(a)(2) and (b)(3), but we request 
public comment on our determination that the time and effort necessary 
to comply with these evaluation requirements is usual and customary and 
would be incurred by home health staff even absent this regulatory 
requirement.
4. ICRs Regarding Medicare Provider and Supplier Enrollment Provisions
    We do not anticipate any information collection burden associated 
with our provider and supplier enrollment proposals. Since most of 
these proposals have been in subregulatory guidance for a number of 
years and we are simply incorporating them into regulation, there would 
not be any change in burden on the provider community. Those provisions 
that are not in subregulatory guidance do not implicate information 
collection requirements.
5. ICRs Regarding Survey and Enforcement Requirements for Hospices
a. Wage Data
    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2020 National Occupational Employment and Wage 
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 37 presents the mean hourly wage, 
the cost of fringe benefits and

[[Page 35988]]

overhead (calculated at 100 percent of salary), and the adjusted hourly 
wage.
[GRAPHIC] [TIFF OMITTED] TP07JY21.056

b. Application and Re-Application Procedures for National Accrediting 
Organizations (Sec.  488.5)
    We proposed at Sec.  488.5(a)(4)(x) to require AOs with CMS-
approved hospice programs to include a statement of deficiencies, (that 
is, the Form CMS-2567 or a successor form) to document findings of the 
hospice Medicare CoPs and to submit such in a manner specified by CMS. 
The current information collection request for the form CMS-2567, 
titled ``Statement Of Deficiencies And Plan Of Correction'' (OMB 
control number 0938-0391/Expiration date: 6/30/2021) does not account 
for any information collection related burden associated with AO use. 
As discussed in the preamble of this proposed rule, in section 
VII.B.2.b. of this proposed rule, we note that the currently approved 
Form CMS-2567 does not include a place for the name of the AO 
completing the survey and AOs are not addressed in the instructions. 
These are minor revisions to the form but we will submit the revised 
information collection request to OMB for approval.
    We discussed in the preamble section VII.B.2.b. of this proposed 
rule, how AOs conduct hospice program surveys and gather deficiency 
findings into a report that is provided to the surveyed hospice. CMS 
believes the statutory requirement and subsequent proposed rule for the 
inclusion of Form CMS-2567 would not add significant burden to AOs as 
they already develop deficiency finding reports as part of their 
existing process just in a different format. We note that AOs would 
need to make a one-time update to their existing proprietary electronic 
documentation systems to include the Form CMS-2567. We estimate that 
this task would be performed by a computer and information analyst. 
According to the U.S Bureau of Labor statistics, the mean hourly wages 
for a computer and information analyst is $48.40. This wage adjusted 
for the employer's fringe benefits and overhead would be $96.80.
    We estimate that it would take at least two persons working on a 
full-time basis for 3 days for the AO staff to revise their system to 
add the required Form CMS-2567. Therefore, we estimate that the total 
time required for the two team members to perform this task would be 48 
hours. As of March 2021, there are three AOs that accredit Medicare 
certified hospice programs. The total time burden across these three 
AOs would be 144 hours.
    We estimate that the cost burden related to the work performed by 
two computer and information analysts would be $4,646.50 (24 hours x 
$193.60 ($96.80 x 2)). The total cost across the three AOs would be 
$13,939.50 (3 AOs x $4,646.50). The burden associated with this 
requirement will be submitted to OMB under OMB control number 0938-NEW 
(Expiration date: pending). We seek comments that would help us to 
develop an accurate estimate of the cost and time burden that would 
result from this collection of information.
    These are minor revisions to the form; however, as required under 
the PRA we will be seeking OMB approval for a revised version of the 
form. Please note, we will be seeking OMB approval via the required 
notice and comment periods but they will be separate from this proposed 
rulemaking. The revised information collection request will be 
announced in the Federal Register and the public will have the 
opportunity to review and comment as necessary.
c. Surveyor Qualifications and Prohibition of Conflicts of Interest 
(Sec.  488.1115)
    We proposed at Sec.  488.1115, to require AO surveyors to complete 
the online hospice basic training. As discussed in the preamble section 
VII.B.2.d. of this proposed rule, we note there are multiple online 
training programs available to SA surveyors on the CMS QSEP website. 
These courses are self-paced, slide based presentations and the person 
taking the course can take the courses over a period of time. The 
amount of time required to complete each of these training courses 
varies depending on the pace at which the surveyor is able to read 
through or listen to the presentation and complete the training. 
Duration time is based on the estimate that it takes learners 
approximately 2 minutes per slide. This information is publicly 
available on https://qsep.cms.gov/welcome.aspx. We proposed that each 
AO hospice program surveyor take the hospice basic training course that 
has an average completion time of 24 hours. Completion time could be 
more or less depending upon the learner's familiarity with the content 
and overall learning style. Therefore, a hospice program AO surveyor 
would incur a time burden of approximately 24 hours for the completion 
of this CMS surveyor training course.
    The AOs that accredit Medicare certified hospice programs would 
incur a cost burden for the wages of their surveyors for the time they 
spend taking these online surveyor training courses. Most surveyors are 
clinicians such as RNs.
    As noted, we estimated that it would take approximately 24 hours 
for each AO surveyor to complete the hospice basic training online 
surveyor course. Therefore, the AO would incur wages in the amount of 
$1,846.56 per each surveyor that completes the CMS online surveyor 
training (24 hours x $76.94).
    We are not able to precisely estimate total time and cost burden to 
each AO for the wages incurred for the time spent by all surveyors from 
each of the three hospice program AOs to take the CMS online surveyor 
training course, because each AO varies greatly in organization

[[Page 35989]]

size, number of accreditation programs approved by CMS, and total 
surveyor cadre numbers. There are no regulatory requirements for AOs to 
report to CMS on the number of surveyors within their organization nor 
information on how many of those surveyors survey each type of program 
approved by CMS. CMS notes there is a wide variety of total surveyor 
cadre numbers across all three AOs, based on information CMS has 
gathered from confidential numbers, voluntarily provided by some of the 
AOs to CMS, as part of their deeming authority application documents as 
well as information found online via a search of each AOs public 
website. Variation is generally based on the associated number of CMS-
approved accreditation programs the AO possesses. For example, AOs who 
accredit only one provider or supplier type generally have about 25 
surveyors while AOs with multiple programs have surveyor numbers well 
over 300 thereby skewing the ability to estimate an accurate time 
burden that represents the overall group. Because of this wide range 
CMS is estimating near the middle, using 100 total surveyors per AO. If 
we estimate that each AO has approximately 100 total surveyors, the 
estimated time burden to each AO associated with this requirement would 
be 2,400 hours (24 hours x 100 surveyors).
    The estimated cost burden to each AO (that accredits Medicare-
certified hospice programs) associated with this requirement would be 
$184,656 (2,400 hours x $76.94 per hour). The burden associated with 
this requirement will be submitted to OMB under OMB control number 
0938-NEW (Expiration date: pending).
    As of March 2021, there are three AOs that accredit Medicare-
certified hospice programs. We estimate that the time burden across all 
of these AOs associated with the requirement that their surveyors take 
the CMS online surveyor training would be 7,200 hours (2,400 hours x 3 
AOs).
    The estimated cost across all AOs (that accredit Medicare-certified 
hospice programs) would be $553,968 ($184,656 x 3 AOs). We request 
feedback on the total number of AO hospice program surveyors we should 
consider, especially if our estimate of 100 is grossly under or over 
estimated.
6. HHVBP Expanded Model
    In section III. of this proposed rule, we propose policies 
necessary to implement the expanded Home Health Value-Based Purchasing 
Model (see proposed Sec. Sec.  484.340 through 484.375), which is aimed 
at increasing quality and reducing spending through payment adjustments 
based on quality performance for HHAs nationwide. Section 1115A(d)(3) 
of the Act exempts Innovation Center model tests and expansions, which 
include the HHVBP expanded model, from the provisions of the PRA. 
Specifically, this section provides that the provisions of the PRA does 
not apply to the testing and evaluation of Innovation Center models or 
to the expansion of such models.

C. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. The requirements are not effective until they have been 
approved by OMB.
    We invite public comments on these information collection 
requirements. If you wish to comment, please identify the rule (CMS-
1747-P) and, where applicable, the preamble section, and the ICR 
section. See this rule's DATES and ADDRESSES sections for the comment 
due date and for additional instructions.

XI. Regulatory Impact Analysis

A. Statement of Need

1. HH PPS
    Section 1895(b)(1) of the Act requires the Secretary to establish a 
HH PPS for all costs of home health services paid under Medicare. In 
addition, section 1895(b) of the Act requires: (1) The computation of a 
standard prospective payment amount include all costs for home health 
services covered and paid for on a reasonable cost basis and that such 
amounts be initially based on the most recent audited cost report data 
available to the Secretary; (2) the prospective payment amount under 
the HH PPS to be an appropriate unit of service based on the number, 
type, and duration of visits provided within that unit; and (3) the 
standardized prospective payment amount be adjusted to account for the 
effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) 
of the Act addresses the annual update to the standard prospective 
payment amounts by the home health applicable percentage increase. 
Section 1895(b)(4) of the Act governs the payment computation. Sections 
1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act requires the standard 
prospective payment amount to be adjusted for case-mix and geographic 
differences in wage levels. Section 1895(b)(4)(B) of the Act requires 
the establishment of appropriate case-mix adjustment factors for 
significant variation in costs among different units of services. 
Lastly, section 1895(b)(4)(C) of the Act requires the establishment of 
wage adjustment factors that reflect the relative level of wages, and 
wage-related costs applicable to home health services furnished in a 
geographic area compared to the applicable national average level. 
Section 1895(b)(3)(B)(iv) of the Act provides the Secretary with the 
authority to implement adjustments to the standard prospective payment 
amount (or amounts) for subsequent years to eliminate the effect of 
changes in aggregate payments during a previous year or years that were 
the result of changes in the coding or classification of different 
units of services that do not reflect real changes in case-mix. Section 
1895(b)(5) of the Act provides the Secretary with the option to make 
changes to the payment amount otherwise paid in the case of outliers 
because of unusual variations in the type or amount of medically 
necessary care. Section 1895(b)(3)(B)(v) of the Act requires HHAs to 
submit data for purposes of measuring health care quality, and links 
the quality data submission to the annual applicable percentage 
increase. Section 50208 of the BBA of 2018 (Pub. L. 115-123) requires 
the Secretary to implement a new methodology used to determine rural 
add-on payments for CYs 2019 through 2022.
    Sections 1895(b)(2) and 1895(b)(3)(A) of the Act, as amended by 
section 51001(a)(1) and 51001(a)(2) of the BBA of 2018 respectively, 
required the Secretary to implement a 30-day unit of service, for 30-
day periods beginning on and after January 1, 2020. The HH PPS wage 
index utilizes the wage adjustment factors used by the Secretary for 
purposes of Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act for 
hospital wage adjustments.
2. HHVBP Model
    Section 1115A(c) of the Act provides the Secretary with the 
authority to expand (including implementation on a nationwide basis), 
through notice and comment rulemaking, the duration and scope of a 
model that is being tested under section 1115A(b) of the Act if the 
following findings are made, taking into account the evaluation of the 
model under section 1115A(b)(4) of the Act: (1) The Secretary 
determines that the expansion is expected to either reduce spending 
without reducing quality of care or improve the quality of patient care 
without increasing spending; (2) the CMS Chief Actuary certifies that 
the expansion would reduce (or would not result in any increase in) net 
program spending; and (3) the Secretary determines that the expansion 
would

[[Page 35990]]

not deny or limit the coverage or provision of benefits. On January 8, 
2021, we announced that the HHVBP Model (the original Model) had been 
certified for expansion nationwide,\142\ as well as our intent to 
expand the Model through notice and comment rulemaking beginning no 
sooner than CY 2022. The original Model has resulted in an average 4.6 
percent improvement in home health agencies' quality scores as well as 
average annual savings of $141 million to Medicare. The CMS Chief 
Actuary has determined that HHVBP Model would reduce Medicare 
expenditures if expanded to all States.
---------------------------------------------------------------------------

    \142\ https://www.cms.gov/files/document/certification-home-health-value-based-purchasing-hhvbp-model.pdf.
---------------------------------------------------------------------------

    If finalized, all Medicare-certified HHAs in the 50 States, 
District of Columbia and the territories would be required to 
participate in the expanded HHVBP Model beginning January 1, 2022. 
These HHAs would compete on value based on an array of quality measures 
that capture the services provided by HHAs. The savings impacts related 
to the HHVBP Model expansion are estimated at a total projected 5-year 
gross FFS savings, CYs 2022 through 2026, of $3,154,000,000. The 
savings under the original Model are already assumed in the baseline 
and therefore are not included in the 5-year gross estimated savings 
under HHVBP Model expansion. As previously mentioned in section 
III.A.3.b. of this proposed rule, under the expanded duration and scope 
of this Model, we would continue to examine whether the proposed 
adjustments to the Medicare payment amounts that would otherwise be 
made to competing HHAs would result in statistically significant 
improvements in the quality of care being delivered to Medicare 
beneficiaries, as well as reductions in Medicare spending.
3. HH QRP
    Section 1895(b)(3)(B)(v) of the Act requires HHAs to submit data in 
accordance with the requirements of the HH QRP and requires HHAs to 
submit data for purposes of measuring health care quality, and links 
the quality data submission to the annual applicable percentage 
increase.
4. Effects of the Changes to the Home Health CoPs
a. Virtual Supervision of HHA Aides
    In section IV.D. of this rule, we propose to revise the CoPs for 
home health agencies. Specifically, in section IV.D. of this rule, we 
propose to revise the home health aide supervision requirements to 
allow for virtual supervision. The burden may be reduced for providers 
by improving the efficiency of the training and supervision of home 
health aides. We are also adding the requirement that the skills 
related to any deficient skills be addressed. We believe the burden 
associated with addressing skills related to those identified as 
deficient skills is minimal. Moreover, supervising employees to ensure 
the safe and effective provision of patient care is standard business 
practice throughout the health care community. Likewise, documenting 
that this supervision has occurred for internal personnel, 
accreditation, and State and Federal compliance purposes constitutes a 
usual and customary business practice. Therefore, the regulatory impact 
is negligible.
b. Permitting Occupational Therapists To Conduct the Initial Assessment 
Visit and Complete the Comprehensive Assessment for Home Health 
Agencies Under the Medicare Program
    In accordance with Division CC, section 115 of CAA 2021, we are 
proposing conforming regulations text changes to permit the 
occupational therapist to complete the initial and comprehensive 
assessments for Medicare patients when ordered with another 
rehabilitation therapy service (speech language pathology or physical 
therapy) that establishes program eligibility, in the case where 
skilled nursing services are also not ordered. We do not expect any 
increase in burden for any of these modifications. In fact, for home 
health agencies, burden may be reduced by expanding the type of therapy 
discipline able to complete the initial and comprehensive assessments, 
in some circumstances, for Medicare patients. We do not expect the 
changes for these provisions will cause any appreciable amount of 
expense or anticipated saving and we do not believe this standard would 
impose any additional regulatory burden.
5. Medicare Coverage of Home Infusion Therapy
    Section 1834(u)(1) of the Act, as added by section 5012 of the 21st 
Century Cures Act, requires the Secretary to establish a home infusion 
therapy services payment system under Medicare. This payment system 
requires a single payment to be made to a qualified home infusion 
therapy supplier for items and services furnished by a qualified home 
infusion therapy supplier in coordination with the furnishing of home 
infusion drugs. Section 1834(u)(1)(A)(ii) of the Act states that a unit 
of single payment is for each infusion drug administration calendar day 
in the individual's home. The Secretary shall, as appropriate, 
establish single payment amounts for types of infusion therapy, 
including to take into account variation in utilization of nursing 
services by therapy type. Section 1834(u)(1)(A)(iii) of the Act 
provides a limitation to the single payment amount, requiring that it 
shall not exceed the amount determined under the Physician Fee Schedule 
(under section 1848 of the Act) for infusion therapy services furnished 
in a calendar day if furnished in a physician office setting, except 
such single payment shall not reflect more than 5 hours of infusion for 
a particular therapy in a calendar day. Section 1834(u)(1)(B)(i) of the 
Act requires that the single payment amount be adjusted by a geographic 
wage index. Finally, section 1834(u)(1)(C) of the Act allows for 
discretionary adjustments which may include outlier payments and other 
factors as deemed appropriate by the Secretary, and are required to be 
made in a budget neutral manner. Section 1834(u)(3) of the Act 
specifies that annual updates to the single payment are required to be 
made beginning January 1, 2022, by increasing the single payment amount 
by the percentage increase in the CPI-U for all urban consumers for the 
12-month period ending with June of the preceding year, reduced by the 
productivity adjustment. The unit of single payment for each infusion 
drug administration calendar day, including the required adjustments 
and the annual update, cannot exceed the amount determined under the 
fee schedule under section 1848 of the Act for infusion therapy 
services if furnished in a physician's office, and the single payment 
amount cannot reflect more than 5 hours of infusion for a particular 
therapy per calendar day. Finally, Division N, section 101 of CAA 2021 
amended section 1848(t)(1) of the Act and modified the CY 2021 PFS 
rates by providing a 3.75 percent increase in PFS payments only for CY 
2021.
6. Medicare Provider and Supplier Enrollment Provisions
    Our proposals concerning Medicare provider and supplier enrollment 
are needed to (1) incorporate various subregulatory policies into 42 
CFR part 424, subpart P, and (2) clarify several policy issues. We 
believe these proposals would increase transparency by allowing the 
provider community to furnish public comments on them while eliminating 
uncertainty regarding the scope and applicability of the provisions in 
question.

[[Page 35991]]

7. Survey and Enforcement Requirements for Hospice Providers
    In accordance with section 407 of the CAA 2021, we propose 
conforming regulations which establish new hospice program survey and 
enforcement requirements. We believe these proposals not only meet the 
statutory requirements but would increase public transparency by 
encouraging a consistent survey and enforcement process and providing 
the public with information necessary to make an informed decision 
regarding where they seek high quality, safe care hospice program 
organizations for themselves or loved ones.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 801(a)(1)(B)(i)).
    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. Therefore, we estimate 
that this rule is ``economically significant'' as measured by the $100 
million threshold, and hence also a major rule under the Congressional 
Review Act. Accordingly, we have prepared a Regulatory Impact Analysis 
that presents our best estimate of the costs and benefits of this rule.
    The following summary provides the economic impact estimates 
associated with the provisions of this proposed rule:
1. Overall Impacts--HH PPS
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). The net transfer impact related to the changes in payments under 
the HH PPS for CY 2022 is estimated to be $310 million (1.7 percent).
2. Overall Impacts--Home Health Value Based Purchasing Model Expansion
    Beginning in CY 2024 and in each succeeding payment year under the 
expanded HHVBP Model, we would adjust the final claim payment amount 
for a home health agency for a date of service in the calendar year by 
an amount up to the maximum applicable percent. For purposes of this 
proposed rule, we have limited our analysis of the economic impacts to 
the value-based incentive payment adjustments. Under the expanded Model 
design, the incentive payment adjustments would be limited to the total 
payment reductions to home health agencies included in the expanded 
Model, such that in aggregate, payment reductions to lower-performing 
HHAs would approximate the aggregate payment increases to higher-
performing HHAs. Overall, the impact of this rule is estimated at 
$3,154,000,000 for CYs 2022 to 2026, though these savings result 
primarily from reductions in utilization of services, including acute 
hospital admissions and skilled nursing facility (SNF) visits. The 
expanded Model would test the effect on quality and costs of care by 
applying payment adjustments based on HHAs' performance on quality 
measures.

C. Detailed Economic Analysis

1. HH PPS
    This rule proposes updates to Medicare payments under the HH PPS 
for CY 2022. The impact analysis of this proposed rule presents the 
estimated expenditure effects of policy changes proposed in this rule. 
We use the latest data and best analysis available, but we do not make 
adjustments for future changes in such variables as number of visits or 
case mix. This analysis incorporates the latest estimates of growth in 
service use and payments under the Medicare home health benefit, based 
primarily on Medicare claims data for periods ending on or before 
December 31, 2020. We note that certain events may combine to limit the 
scope or accuracy of our impact analysis, because such an analysis is 
future-oriented and, thus, susceptible to errors resulting from other 
changes in the impact time period assessed. Some examples of such 
possible events are newly-legislated general Medicare program funding 
changes made by the Congress, or changes specifically related to HHAs. 
In addition, changes to the Medicare program may continue to be made as 
a result of the Affordable Care Act, or new statutory provisions. 
Although these changes may not be specific to the HH PPS, the nature of 
the Medicare program is such that the changes may interact, and the 
complexity of the interaction of these changes could make it difficult 
to predict accurately the full scope of the impact upon HHAs.
    Table 38 represents how HHA revenues are likely to be affected by 
the policy changes proposed in this rule for CY 2022. For this 
analysis, we used an analytic file with linked CY 2020 OASIS 
assessments and home health claims data for dates of service that ended 
on or before December 31, 2020. The first column of Table 38 classifies 
HHAs according to a number of characteristics including provider type, 
geographic region, and urban and rural locations. The second column 
shows the number of facilities in the impact analysis. The third column 
shows the payment effects of the Case-Mix Weights Recalibration 
Neutrality Factor.
    The fourth column shows the payment effects of updating to the CY 
2022 wage index. The fifth column shows the payment effects of the CY 
2022 rural add-on payment provision in statute. The sixth column shows 
the payment effects of the proposed CY 2022 home health payment update 
percentage and the last column shows the combined effects of all the 
proposals in this rule.
    Overall, it is projected that aggregate payments in CY 2022 would 
increase by 1.7 percent. As illustrated in Table 38, the combined 
effects of all of the changes vary by specific types of providers and 
by location. We note that some individual HHAs within the same group 
may experience different impacts on payments than others due to the 
distributional impact of the CY 2022 wage index, the percentage of 
total HH PPS payments that were subject to the

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LUPA or paid as outlier payments, and the degree of Medicare 
utilization.
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2. Impacts for the Expanded HHVBP Model
    Based on proposals discussed in section III.A. of this proposed 
rule, Tables G6 and G7 display our analysis of the distribution of 
possible payment adjustments using 2019 data as the performance year, 
while Table 39 provides information on the estimated impact of this 
proposed expansion. We note that this impact analysis is based on the 
aggregate value of savings associated with all Medicare-certified HHAs 
in each State, territory, and the District of Columbia.
    Value-based incentive payment adjustments for the estimated 7,500-
plus HHAs that would qualify to compete in the proposed HHVBP Model 
expansion based on the CY 2019 data stratified by size, as defined in 
section III.F. of this proposed rule. For example, Table 40 shows 
California has 69 HHAs that do not provide services to enough 
beneficiaries to be required to complete HHCAHPS surveys, and 
therefore, would be considered to be in the smaller-volume cohort under 
the proposed Model expansion. Using 2019 performance year data and the 
proposed payment adjustment of 5-percent, based on 8 outcome measures, 
the smaller-volume HHAs in California would have a mean payment 
adjustment of positive 0.042 percent. Only 10-percent of home health 
agencies would be subject to downward payment adjustments of more than 
minus 3.139 percent (-3.139 percent). The next columns provide the 
distribution of scores by percentile. We see that the value-based 
incentive percentage payments for smaller-volume home health agencies 
in California range from -3.139 percent at the 10th percentile to 
+3.899 percent at the 90th percentile, while the value-based incentive 
payment at the 50th percentile is -0.607 percent. The smaller-volume 
HHA cohort table identifies that some locations do not have any 
qualifying HHAs in the smaller-volume cohort, including Connecticut, 
the District of Columbia, and Delaware.
    The next columns provide the distribution of scores by percentile. 
We see that the value-based incentive percentage payments for smaller-
volume home health agencies in California range from -3.139 percent at 
the 10th percentile to +3.899 percent at the 90th percentile, while the 
value-based incentive payment at the 50th percentile is -0.607 percent.
    The smaller-volume HHA cohort table identifies that some locations 
do not have any qualifying HHAs in the smaller-volume cohort, including 
Connecticut, the District of Columbia, and Delaware.
    Table 41 provides the payment adjustment distribution based on 
proportion of dual eligible beneficiaries, average case mix (using HCC 
scores), proportion that reside in rural areas, as well as HHA 
organizational status. To define cutoffs for the ``percentage of dual 
eligible beneficiaries,'' low, medium, or high percentage dual-eligible 
are based on less than the 25th percentile, between the 25th and 75th 
percentiles, and greater than the 75th percentile of percent dual 
eligible beneficiaries, respectively, across HHAs in CY 2019. To define 
case mix cutoffs, low, medium, or high acuity are also based on less 
than the 25th percentile, between the 25th and 75th percentiles, and 
greater than the 75th percentile of average HCC scores, respectively, 
across HHAs in CY 2019. To define cutoffs for percentage of rural 
beneficiaries, all non-rural, up to 50 percent rural, and over 50 
percent rural are based on the home health beneficiaries' core-based 
statistical area (CBSA) urban versus rural designation. We would note 
that, based on 2019 data, a higher proportion of dually-eligible 
beneficiaries served is associated with better performance.

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BILLING CODE 4120-01-C
3. Impacts for the HH QRP for CY 2022
    Estimated impacts for the HH QRP are based on analysis discussed in 
section X.B. of this proposed rule. The proposed HH QRP requirements 
would reduce burden to the active collection under OMB control number 
#0938-1279 (CMS-10545; expiration 12/31/21).
    Failure to submit data required under section 1895(b)(3)(B)(v) of 
the Act with respect to a calendar year will result in the reduction of 
the annual home health market basket percentage increase otherwise 
applicable to an HHA or that calendar year by 2 percentage points. For 
the CY 2021, 527 of the 11,196 active Medicare-certified HHAs, or 
approximately 4.7 percent, did not receive the full annual percentage 
increase (the methodology accommodated the COVID-19 PHE exception). 
These 527 HHAs represented $253 million in home health claims payment 
dollars during the reporting period compared out of a total $16.7B for 
all HHAs.
    As discussed in section IV.C. of this proposed rule, we are 
proposing to remove one OASIS-based measure beginning with the CY 2023 
HH QRP. The assessment-based measure we are proposing to remove is: (1) 
Drug Education on All Medications Provided to Patient/Caregiver during 
All Episodes of Care. We are also proposing to replace the Acute Care 
Hospitalization During the First 60 Days of Home Health (NQF #0171) 
measure and Emergency Department Use Without Hospitalization During the 
First 60 Days

[[Page 35997]]

of Home Health (NQF #0173) measure with the Home Health Within Stay 
Potentially Preventable Hospitalization measure beginning with the CY 
2023 HH QRP under our measure removal Factor 6: A measure that is more 
strongly associated with desired patient outcomes for the particular 
topic is available. Because these three measures are claims-based, 
there will be no impact to our collection of information.
    Section X.B. of this proposed rule provides a detailed description 
of the net decrease in burden associated with these proposed changes. 
The associated burden is for CY 2023 because HHAs will be able to 
submit data beginning CY 2023. The cost impact related to OASIS item 
collection as a result of the changes to the HH QRP is estimated to be 
a net decrease of $2,762,277 in annualized cost to HHAs, discounted at 
7 percent relative to year 2020, over a perpetual time horizon 
beginning in CY 2023.
    We describe the estimated burden and cost reductions for these 
measures in section X.B of this rule.
    In summary, the proposed HH QRP measure removals would result in a 
burden reduction of $242 per HHA annually, or $2,762,277 for all HHAs 
annually. We have described the burden costs savings in Table 42:
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4. Changes to the Home Health CoPs
a. Virtual Supervision of HHA Aides
    In section IV.D. of this rule, we propose to revise the CoPs for 
home health agencies. Specifically, in section IV.D. of this rule, we 
propose to revise the home health aide supervision requirements to 
allow for virtual supervision. The burden may be reduced for providers 
by improving the efficiency of the training and supervision of home 
health aides. We are also adding the requirement that the skills 
related to any deficient skills be addressed. We believe the burden 
associated with addressing skills related to those identified as 
deficient skills is minimal. Moreover, supervising employees to ensure 
the safe and effective provision of patient care is standard business 
practice throughout the health care community. Likewise, documenting 
that this supervision has occurred for internal personnel, 
accreditation, and State and Federal compliance purposes constitutes a 
usual and customary business practice. Therefore, the regulatory impact 
is negligible.
b. Permitting Occupational Therapists To Conduct the Initial Assessment 
Visit and Complete the Comprehensive Assessment for Home Health 
Agencies Under the Medicare Program
    In accordance with Division CC, section 115 of CAA 2021, we are 
proposing conforming regulations text changes to permit the 
occupational therapist to complete the initial and comprehensive 
assessments for Medicare patients when ordered with another 
rehabilitation therapy service (speech language pathology or physical 
therapy) that establishes program eligibility, in the case where 
skilled nursing services are also not ordered. We do not expect any 
increase in burden for any of these modifications. In fact, for home 
health agencies, burden may be reduced by expanding the type of therapy 
discipline able to complete the initial and comprehensive assessments, 
in some circumstances, for Medicare patients. We do not expect the 
changes for these provisions will cause any appreciable amount of 
expense or anticipated saving and we do not believe this standard would 
impose any additional regulatory burden.
5. Payment for Home Infusion Therapy Services
    There are two new proposals in this rule related to payments for 
home infusion therapy services in CY 2022: The proposal to maintain the 
CY 2021 percentages for the initial subsequent policy and the proposal 
to wage adjust HIT service payments using the CY 2022 GAFs Adjustments 
to the home infusion therapy payment rates will be made when the CY 
2022 final GAF values become available and will be budget neutral using 
the GAF standardization factor. The CY 2021 home infusion therapy 
service payments will also be updated by the CPI-U reduced by the 
productivity adjustment. The CY 2022 final GAF values (and the CPI-U as 
of June 2021) were not available at the time of rulemaking, therefore, 
we are unable to estimate the impact of these adjustments on the CY 
2022 HIT service payment amounts compared to the CY 2021 HIT service 
payment amounts. We will outline the home infusion therapy payment 
impacts in the CY 2022 HH PPS final rule.
6. Medicare Provider and Supplier Enrollment Provisions
a. General Impact
    Similar to our position regarding information collection 
requirements, and except as stated in section XI.C.6.b. of this 
proposed rule, we do not anticipate any costs, savings, or transfers 
associated with our provider and supplier enrollment proposals. Most of 
these proposals have been in subregulatory guidance for a number of 
years, and we are merely incorporating them into regulation; those 
proposed provisions that are not in subregulatory guidance do not 
involve any costs, savings, or transfers.
b. Deactivation of Billing Privileges--Payment Prohibition
    As explained in section VI.B of this proposed rule, we are 
proposing in new Sec.  424.540(e) that a provider or supplier may not 
receive payment for services or items furnished while deactivated under 
Sec.  424.540(a). Existing subregulatory guidance permits the provider 
or supplier to bill for services or items furnished up to 30 days prior 
to the effective date of the reactivation of the provider's or 
supplier's billing privileges. Our proposal would reverse this policy 
for the reasons stated in section VI.B. of this proposed rule.
    Although the figure varies widely by individual provider or 
supplier, internal CMS data suggests that the average provider/supplier 
impacted by this proposal receives roughly $50,000 in Medicare payments 
each year. (We used a similar $50,000 annual payment estimate for our 
provider enrollment provisions in a CMS final rule published in the 
Federal Register on November 15, 2019 titled, ``CY 2020 Revisions to 
Payment Policies under the Physician Fee Schedule and Other Changes to 
Part B Payment Policies'') (84 FR 62568). As with annual payment 
amounts, the number of deactivations vary per year. Nonetheless, and 
based on internal CMS data, we estimate 13,000 deactivations annually. 
This results in an approximate burden of $54,145,000 per year (13,000 x 
50,000 x 0.0833). (The 0.0833 figure represents

[[Page 35998]]

30 days, or 1/12 of a year.) The following table reflects the estimated 
transfers associated with our proposed addition of new Sec.  424.540(e) 
concerning payments for services and items furnished by deactivated 
providers and suppliers:
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7. Survey and Enforcement Requirements for Hospice Providers
    Estimated impacts for the Survey and Certification Requirements for 
Hospice Program Providers are based on analysis discussed in section 
VII. of this proposed rule.
a. Application and Re-Application Procedures for National Accrediting 
Organizations (Sec.  488.5)
    We proposed at Sec.  488.5(a)(4)(x) to require AOs with CMS-
approved hospice programs to include a statement of deficiencies, (that 
is, the Form CMS-2567 or a successor form) to document survey findings 
of the hospice Medicare CoPs and to submit such in a manner specified 
by CMS. This implements new section 1822(a)(2)(A)(ii) of the Act. We 
anticipate effects on AO administrative expenses but are not able to 
provide an accurate estimate of how much cost and time will result from 
including the Form CMS-2567 into their proprietary IT systems and 
subsequently submitting the information to CMS. Currently, there are 
three AOs with CMS-approved hospice programs affected by this proposal. 
We seek comments that would help us to develop an accurate estimate of 
the cost and time burden that would result from this collection of 
information.
b. Release and Use of Accreditation Surveys (Sec.  488.7)
    CAA 2021 adds section 1822(a)(2)(B) of the Act which requires that 
CMS publish hospice survey information from the Form CMS-2567 in a way 
that is readily understandable and useable by the public in a 
meaningful way. We anticipate the need for CMS to develop some type of 
a standard framework that would identify salient survey findings in 
addition to other relevant data about the hospices' performance. CMS 
recognizes that the implications of releasing national survey data will 
require collaboration with industry stakeholders to assure the 
development is fair and equitable across all hospice programs.
c. Hospice Hotline (Sec.  488.1110)
    Section 1864(a) of the Act was amended by inserting ``hospice 
programs'' after information on the home health toll-free hotline. The 
infrastructure for a State or local agency toll-free hotline is already 
in place for HHAs to collect and maintain complaint information related 
to HHAs. The requirement allows the existing hotline to collect 
complaint information on hospices. We do not expect the changes for 
this provision will cause any appreciable amount of expense or 
anticipated saving and we do not believe this standard would impose any 
additional regulatory burden.
d. Surveyor Qualifications and Prohibition of Conflicts of Interest 
(Sec.  488.1115)
    We propose at Sec.  488.1115, to require AO hospice program 
surveyors to complete the CMS hospice basic training currently 
available online. The hospice basic training course has an average 
completion time of 24 hours. Completion time could be more or less 
depending upon the learner's familiarity with the content and overall 
learning style. We are not able to estimate precisely total time and 
cost burden to each AO for the wages incurred for the time spent by all 
surveyors from each of the three hospice program AOs to take the CMS 
online surveyor training course, because each AO varies greatly in 
organization size, number of accreditation programs approved by CMS, 
and total surveyor cadre numbers. There are no regulatory requirements 
for AOs to report to CMS on the number of surveyors within their 
organization nor information on how many of those surveyors survey each 
type of program approved by CMS. CMS notes there is a wide variety of 
total surveyor cadre numbers across all three AOs, based on information 
CMS has gathered from confidential numbers, voluntarily provided by 
some of the AOs to CMS, as part of their deeming authority application 
documents as well as information found online via a search of each AOs 
public website. Variation is generally based on the associated number 
of CMS-approved accreditation programs the AO possesses. For example, 
AOs who accredit only one provider or supplier type generally have 
about 25 surveyors while AOs with multiple programs have surveyor 
numbers well over 300 thereby skewing the ability to estimate an 
accurate time burden that represents the overall group. Because of this 
wide range CMS is estimating near the middle, using the range of 100 
total surveyors per AO. If we estimate that each AO has approximately 
100 total surveyors, the estimated time burden to each AO associated 
with this requirement would be 2,400 hours (24 hours x 100 surveyors).
    The estimated cost burden to each AO with CMS-approved hospice 
programs associated with this requirement would be $184,656 (2,400 
hours x $76.94 per hour (based on the salary of a registered nurse. See 
Table 37)).
    As of March 2021, there are three AOs that accredit Medicare-
certified hospice programs. We estimate that the time burden across all 
of these AOs associated with the requirement that their surveyors take 
the CMS online surveyor training would be 7,200 hours (2,400 hours x 3 
AOs). The estimated cost across all AOs (that accredit Medicare-
certified hospice programs) would be $553,968 ($184,656 x 3 AOs). We 
also proposed to set out the circumstances that will disqualify a 
surveyor from surveying a particular hospice in accordance with new 
section 1822(a)(4)(B) of the Act). We do not expect these proposed 
changes will cause any appreciable amount of expense or anticipated 
saving because the provisions codify longstanding policies and basic 
principles to ensure there is no conflict of interest between 
organizations and surveyors.
e. Survey Teams (Sec.  488.1120)
    We propose at Sec.  488.1120 that when the survey team comprises 
more than one surveyor, the additional slots would be filled by 
multidisciplinary professionals such as physicians, nurses, medical 
social workers, pastoral or other counselors--bereavement, nutritional, 
and spiritual. At this time, we do not have specific information 
related to current survey team compositions but we do know there are 
approximately 977 hospice surveys per year, with at least one member of 
the survey team being a registered nurse.

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The proposed inclusion of multidisciplinary survey team members could 
potentially increase the overall cost of surveys if SA and AOs were not 
already using a mixed team.
    The 2020 Bureau of Labor Statistics estimates RN adjusted hourly 
wages at $76.94 (including fringe benefits and overhead). Other 
potential disciplines fall below and above the RN adjusted hourly wage, 
for example: Social workers--$50.12 per hour, pharmacists--$120.64 per 
hour, and psychologists--$108.36 per hour. A survey team of all nurses 
(assuming a two-person team) costs $153.88 ($76.94 x 2) per hour. 
However, CMS believes the most common multidisciplinary team for 
hospice program surveys may include a nurse and a social worker. Using 
this assumption, we calculate it will cost $127.06 ($76.94 + $50.12) 
per hour for this multidisciplinary 2-person survey team composition. 
Therefore, a two-person multidisciplinary team at $127.06 per hour, 
assuming a 5-day survey (8 hours per day x 5 days = 40 hours), would 
cost $5,082.40 per survey, times 960 surveys per year, or $4,879,104 
per year. We seek comments on the current professional makeup of the AO 
and SA survey teams, and providers' estimates of the time needed to 
effectuate multidisciplinary teams where they do not currently exist.
f. Consistency of Survey Results (Sec.  488.1125)
    Actions to improve consistency of survey results are discussed 
elsewhere in terms of implementing the use of the Form CMS-2567 across 
surveying entities and utilizing a common training platform. We do not 
anticipate additional costs or burdens to surveying entities. Some cost 
will be incurred by CMS to develop the system (technical and personnel) 
to analyze and apply correction where needed.
g. Special Focus Program (Sec.  488.1130)
    There may be an additional SA burden in terms of the need for 
enhanced survey and enforcement activities which is in part why a more 
methodical and targeted approach to the implementation of this program 
should be considered given the allocation of $10 million to support 
this and the other provisions that would not begin until FY 2022.
h. Enforcement Remedies (Sec. Sec.  488.1200 Through Sec.  488.1265)
    We propose enforcement remedies for hospices consistent with the 
established alternative sanctions for HHAs. In CY 2019, out of 11,738 
deemed and non-deemed HHAs enrolled in the Medicare program, 749 HHA 
providers had the potential to be sanctioned based on repeat 
deficiencies during two consecutive standard or complaint surveys. This 
was approximately 15 percent of the HHAs, which is less than 37.5 
percent of the total HHAs surveyed. Of all the alternative sanctions 
available for implementation, very few HHA enforcement actions were 
imposed. In CY 2019, less than 10 percent of all HHAs with surveys 
identifying an immediate jeopardy level deficiency citation received an 
alternative sanction.
    The probability of impact for alternative enforcement remedies 
imposed against hospices is based on CY 2019 data for 5,065 deemed and 
non-deemed hospices enrolled in the Medicare program. This data was 
examined using the survey data for the CY 2019 in the CMS QCOR system. 
Of the total number of CMS-certified hospices, 4,399 received an 
unannounced standard and/or complaint survey and 236 were cited for 
noncompliance with one or more condition-level deficiencies. Therefore, 
approximately 5 percent of the total hospices surveyed had the 
potential to receive an enforcement remedy based on noncompliance with 
one or more CoPs.
    The enforcement remedy provisions in this proposed rule mirror the 
alternative sanctions used in HHAs that have already been incorporated 
into CMS policy. Therefore, in terms of the administrative expenses to 
design and manage these types of remedies, the infrastructure is 
already in place. In terms of training for Federal and State surveyors, 
it is common for surveyors that survey HHAs to be cross-trained to 
survey hospices. Since the enforcement remedies for hospice are similar 
to those for HHAs, we expect that there will be a minimal burden on 
seasoned surveyors to become familiar with these provisions. 
Additionally, the data analysis described previously for hospices in CY 
2019 reflects the probability of a low impact for civil monetary 
penalties to be imposed on hospice providers.
8. Certain Compliance Date Changes for the IRF QRP and LTCH QRP
a. Impacts for the Inpatient Rehabilitation Facility Quality Reporting 
Program for FY 2023
    This proposed rule would not impose any new information collection 
requirements. However, this proposed rule does reference associated 
information collections that are not discussed in the regulation text 
contained in this document. The following is a discussion of this 
information collection, which have already received OMB approval.
    In accordance with section 1886(j)(7)(A) of the Act, the Secretary 
must reduce by 2 percentage points the annual market basket increase 
factor otherwise applicable to an IRF for a fiscal year if the IRF does 
not comply with the requirements of the IRF QRP for that fiscal year. 
As stated in section VIII.A. of this proposed rule for purposes of 
calculating the FY 2023 Annual Increase Factor (AIF), we propose that 
IRFs would begin using the IRF-PAI V4.0 to collect data on the TOH 
Information to Provider-PAC and the TOH Information to Patient-PAC 
measures beginning with admissions and discharges on October 1, 2022. 
We also proposed that IRFs would begin to use the IRF-PAI V4.0 to 
collect data on certain Standardized Patient Assessment Data Elements, 
beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1, 
2022.
    The proposed IRF QRP requirements would add no additional burden or 
cost to the active collection under OMB control number 0938-0842 
(expiration 12/31/2022).
b. Impacts for the Long-Term Care Hospital Quality Reporting Program 
for FY 2023
    This proposed rule not impose any new information collection 
requirements. However, this proposed rule does reference associated 
information collections that are not discussed in the regulation text 
contained in this document. The following is a discussion of this 
information collection discussed later in this section, which have 
already received OMB approval.
    In accordance with section 1886(m)(5) of the Act, the Secretary 
must reduce by 2 percentage points the annual market basket payment 
update otherwise applicable to a LTCH for a fiscal year if the LTCH 
does not comply with the requirements of the LTCH QRP for that fiscal 
year. As stated in section VIII.B. of this proposed rule for purposes 
of calculating the FY 2023 Annual Payment Update (APU), we propose that 
LTCHs would begin using the LTCH Continuity Assessment Record and 
Evaluation (CARE) Data Set (LCDS) V5.0 to collect data on the TOH 
Information to Provider-PAC and the TOH Information to Patient-PAC 
measures beginning with admissions and discharges on October 1, 2022. 
We also

[[Page 36000]]

proposed that LTCHs would begin to use the LTCH LCDS V5.0 to collect 
data on certain Standardized Patient Assessment Data Elements, 
beginning with admissions and discharges (except for the hearing, 
vision, race, and ethnicity Standardized Patient Assessment Data 
Elements, which would be collected at admission only) on October 1, 
2022.
    The proposed LTCH QRP requirements would add no additional burden 
or cost to the active collection under OMB control number 0938-1163 
(expiration 12/31/2022).

D. Limitations of Our Analysis

    Our estimates of the effects of this proposed rule are subject to 
significant uncertainty. It is difficult to estimate the burden and 
savings from the proposed changes because they depend on several 
factors previously described. We appreciate that our assumptions are 
simplified and that actual results could be considerably higher or 
lower. Although there is uncertainty concerning the magnitude of all of 
our estimates, we do not have the data to provide specific estimates 
for each proposal, as to the range of possibilities, or to estimate all 
categories of possible benefits. We seek comments on all aspects of 
this analysis.

E. Regulatory Review Cost Estimation

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
must estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that would review the rule, we assume that the total number of unique 
reviewers of this year's proposed rule would be the similar to the 
number of commenters on last year's proposed rule. We acknowledge that 
this assumption may understate or overstate the costs of reviewing this 
rule. It is possible that not all commenters reviewed this year's rule 
in detail, and it is also possible that some reviewers chose not to 
comment on the proposed rule. For these reasons we believe that the 
number of past commenters would be a fair estimate of the number of 
reviewers of this rule. We welcome any comments on the approach in 
estimating the number of entities which would review this proposed 
rule. We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $114.24 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. This proposed rule 
consists of approximately 121,000 words. Assuming an average reading 
speed of 250 words per minute, we estimate that it would take 
approximately 4.03 hours for the staff to review half of this rule. For 
each entity that reviews the rule (we estimate that there are 165 
reviewers), the estimated cost is $574 (4.03 hours x $114.24). 
Therefore, we estimate that the total cost of reviewing this proposed 
rule is $75,964.35 ($460.39 x 165 reviewers).

F. Alternatives Considered

1. Alternatives Considered to the HH PPS Policy Proposals
    For the CY 2022 HH PPS proposed rule, we considered alternatives to 
the proposals articulated in section II. of this proposed rule. We 
considered using CY 2019 data for ratesetting. However, our analysis 
showed there were only small differences in the payment rates and 
impacts in the aggregate when using CY 2019 data compared to CY 2020 
data. These differences in payment rates reflect small differences in 
the wage index budget neutrality factors calculated using CY 2020 data 
compared to using CY 2019 claims data. We note, we would not have 
recalibrated the case-mix weights using CY 2019 data because CY 2019 
data would use simulated 30-day periods from 60-episodes as CY 2020 is 
the first year of actual PDGM data. Therefore, no case-mix weight 
budget neutrality factor using CY 2019 utilization data would be 
applied. We believe it is best to continue with our established policy 
of using the most recent, complete data at the time of rulemaking for 
CY 2022 ratesetting, which would be CY 2020 claims data. Additionally, 
we considered alternatives to our case-mix recalibration proposal. 
These alternatives included an option do a full recalibration of the 
case-mix weights, including the functional impairment levels, 
comorbidity subgroups as proposed, but also updating the LUPA 
thresholds, as well as an option to not recalibrate the case-mix 
weights, functional impairment levels, comorbidity subgroups and LUPA 
thresholds. However, we believe that recalibrating the PDGM case-mix 
weights, functional levels, and comorbidity adjustment subgroups while 
maintaining the LUPA thresholds for CY 2022 would more accurately 
adjust home health payments because the data would reflect 30-day 
periods under the new PDGM system based on actual data rather than data 
that simulated 30-day episodes under the old system. The recalibrated 
case-mix weights would also more accurately reflect the types of 
patients currently receiving home health services while mitigating 
instability by maintaining the LUPA thresholds. As stated previously 
the LUPA thresholds are based on the number of overall visits in a 
particular case-mix group (the threshold is the 10th percentile of 
visits or 2 visits, whichever is greater) instead of a relative value 
(as is used to generate the case-mix weight) that would control for the 
impacts of the PHE. We note that visit patterns and some of the 
decrease in overall visits in CY 2020 may not be representative of 
visit patterns in CY 2022. Also, our analysis shows that there is more 
variation in the case-mix weights with the full recalibration 
(including updates to the LUPA thresholds) than the recalibration with 
the case-mix weights maintained. Maintaining the LUPA thresholds 
creates more stability in the weights. The recalibrated case-mix 
weights using the current LUPA thresholds are more similar to the CY 
2020 weights than the recalibrated case-mix weights with the updated 
LUPA thresholds. For these reasons, we believe it is best to maintain 
the LUPA thresholds for CY 2022 instead of the alternative full 
recalibration including updates to the LUPA thresholds.
2. Alternatives Considered to the HHVBP Policy Proposals
    We considered alternatives to the proposed policies in sections 
III.A. and III.B. of this proposed rule. Specifically, we considered 
not expanding the HHVBP Model at this point in time, and waiting until 
we have final evaluation results from the original HHVBP Model before 
pursuing a national expansion. However, we considered that we have 
evaluation results from multiple years of the original HHVBP Model, 
showing significant reductions in spending and improvements in quality. 
We believe this evidence is sufficient for a national expansion of the 
Model, and note that we will continue to review evaluation results as 
they come in for the later years of the original HHVBP Model.
    For the expanded HHVBP Model, we also considered utilizing the same 
state- and volume-based cohorts as the original HHVBP Model in lieu of 
the national volume-based cohorts we are proposing. However, this 
approach

[[Page 36001]]

could require grouping together of certain States, territories, and the 
District of Columbia that have an insufficient number of HHAs at the 
end of the performance year, based solely on their lower HHA counts. 
This would also preclude providing benchmarks and achievement 
thresholds prospectively. An analysis of the State-level impacts of 
using the revised cohorts, including our proposed option, nationwide 
with volume-based cohorts, and our alternative, State-level without 
volume-based cohorts, demonstrates minimal impacts at the State-level. 
Using CY 2019 data to simulate the payment adjustments, the mean 
payment adjustments at the State-level are within +/- 1.0 percent for 
both cohort options. Relative to the State- and volume-based cohorts, 
the national volume-based cohorts resulted in the largest increases in 
overall payment amounts to Alabama (+1.8 percent), Mississippi (+1.8 
percent), and TN (+1.4 percent). The largest decreases in overall 
payment amounts are from Minnesota (-1.7 percent), Connecticut (-1.6 
percent), and the Marianas Islands (-1.6 percent). We do not see any 
obvious correlation of the impacts within States that are currently in 
the original Model versus those that will be new to the expanded Model.
    For the reasons described in section III.B.2. of this proposed 
rule, we are proposing to not apply any payment adjustments for CY 2022 
of the original HHVBP Model based on data reported in CY 2020 and to 
instead end the original Model early, with the CY 2021 payment 
adjustment year. As previously noted, we will continue to examine data 
for CY 2020 as it becomes available in order to determine whether it 
would be appropriate to utilize such data for CY 2022 payment 
adjustments, in accordance with current Model policies.
3. Alternatives Considered Concerning Deactivation Payment Prohibition
    As discussed in section VI.B. of this proposed rule, we are 
proposing in new Sec.  424.540(e) that a provider or supplier may not 
receive payment for services or items furnished while deactivated under 
Sec.  424.540(a). Current subregulatory guidance permits the provider 
or supplier to bill for services or items furnished up to 30 days prior 
to the effective date of the reactivation of the provider's or 
supplier's billing privileges. We considered the alternative of 
retaining this 30-day retroactive period. After careful consideration, 
however, we concluded that prohibiting such retroactive payments would 
be the best approach from a program integrity perspective. As we stated 
in section VI.B. of this proposed rule, we do not believe a provider or 
supplier should be effectively rewarded for its non-adherence to 
enrollment requirements by receiving retroactive payment for services 
or items furnished while out of compliance. Moreover, the prospect of a 
payment prohibition could well spur providers and suppliers to avoid 
such non-compliance.

G. Accounting Statement and Tables

1. HH PPS
    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 43, we have prepared an accounting statement showing 
the classification of the transfers and benefits associated with the CY 
2022 HH PPS provisions of this rule.
[GRAPHIC] [TIFF OMITTED] TP07JY21.065

2. HHVBP Model Expansion
    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 44, we have prepared an accounting statement showing 
the classification of the expenditures associated with this proposed 
rule as they relate to hospitals and SNFs. Table 44 provides our best 
estimate of the decrease in Medicare payments under the proposed 
expanded HHVBP Model.
[GRAPHIC] [TIFF OMITTED] TP07JY21.066

3. HHQRP
    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 45, we have prepared an accounting statement showing 
the classification of the expenditures associated with this proposed 
rule as they relate to HHAs. Table 45 provides our best estimate of the 
decrease in Medicare payments.

[[Page 36002]]

[GRAPHIC] [TIFF OMITTED] TP07JY21.067

H. Regulatory Flexibility Act (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. In addition, HHAs and home infusion therapy 
suppliers are small entities, as that is the term used in the RFA. 
Individuals and States are not included in the definition of a small 
entity.
    The North American Industry Classification System (NAICS) was 
adopted in 1997 and is the current standard used by the Federal 
statistical agencies related to the U.S. business economy. We utilized 
the NAICS U.S. industry title ``Home Health Care Services'' and 
corresponding NAICS code 621610 in determining impacts for small 
entities. The NAICS code 621610 has a size standard of $16.5 million 
\143\ and approximately 96 percent of HHAs and home infusion therapy 
suppliers are considered small entities. Table 46 shows the number of 
firms, revenue, and estimated impact per home health care service 
category.
---------------------------------------------------------------------------

    \143\ https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
[GRAPHIC] [TIFF OMITTED] TP07JY21.068

    The economic impact assessment is based on estimated Medicare 
payments (revenues) and HHS's practice in interpreting the RFA is to 
consider effects economically ``significant'' only if greater than 5 
percent of providers reach a threshold of 3 to 5 percent or more of 
total revenue or total costs. The majority of HHAs' visits are Medicare 
paid visits and therefore the majority of HHAs' revenue consists of 
Medicare payments. Based on our analysis, we conclude that the policies 
proposed in this rule would not result in an estimated total impact of 
3 to 5 percent or more on Medicare revenue for greater than 5 percent 
of HHAs. We note also, and as discussed in section XI.C.6. of this 
proposed rule, our proposal to prohibit payments for services and items 
furnished by deactivated providers and suppliers would affect only a 
very limited number of Medicare providers and suppliers. Therefore, the 
Secretary has determined that this HH PPS proposed rule would not have 
significant economic impact on a substantial number of small entities.
    Guidance issued by the Department of Health and Human Services 
interpreting the Regulatory Flexibility Act considers the 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. Among the over 7,500 HHAs that are estimated to qualify to 
compete in the expanded HHVBP Model, we estimate that the percent 
payment adjustment resulting from this rule would be larger than 3 
percent, in magnitude, for about 28 percent of competing HHAs 
(estimated by applying the proposed 5-percent maximum payment 
adjustment under the expanded Model to CY 2019 data). As a result, more 
than the RFA threshold of 5-percent of HHA providers nationally would 
be significantly impacted. We refer readers to Tables G6 and G7 of this 
proposed rule for our analysis of

[[Page 36003]]

payment adjustment distributions by State, HHA characteristics, HHA 
size and percentiles.
    Thus, the Secretary has determined that this proposed rule would 
have a significant economic impact on a substantial number of small 
entities. Though the RFA requires consideration of alternatives to 
avoid economic impacts on small entities, the intent of the rule, 
itself, is to encourage quality improvement by HHAs through the use of 
economic incentives. As a result, alternatives to mitigate the payment 
reductions would be contrary to the intent of the rule, which is to 
test the effect on quality and costs of care of applying payment 
adjustments based on HHAs' performance on quality measures.

I. Unfunded Mandates Reform Act (UMRA)

    Section 202 of UMRA of 1995 UMRA also requires that agencies assess 
anticipated costs and benefits before issuing any rule whose mandates 
require spending in any 1 year of $100 million in 1995 dollars, updated 
annually for inflation. In 2021, that threshold is approximately $158 
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 $158 million or more.

J. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. We have reviewed this proposed rule under these criteria 
of Executive Order 13132, and have determined that it will not impose 
substantial direct costs on State or local governments.

K. Conclusion

    In conclusion, we estimate that the provisions in this proposed 
rule would result in an estimated net increase in home health payments 
of 1.7 percent for CY 2022 ($310 million). The $310 million increase in 
estimated payments for CY 2022 reflects the effects of the CY 2022 home 
health payment update percentage of 1.8 percent ($330 million increase) 
and an estimated 0.1 percent decrease in payments due to the rural add-
on percentages mandated by the Bipartisan Budget Act of 2018 for CY 
2022 ($20 million decrease).

L. Executive Order 12866

    In accordance with the provisions of Executive Order 12866, the 
Office of Management and Budget reviewed this proposed rule.

    I, Chiquita Brooks-LaSure, Administrator of the Centers for 
Medicare & Medicaid Services, approved this document on June 16, 2021.

List of Subjects

42 CFR Part 409

    Health facilities, Medicare.

42 CFR Part 424

    Emergency medical centers, Health facilities, Health professions, 
Medicare, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 484

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

42 CFR Part 488

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 489

    Health facilities, Medicare Reporting and recordkeeping 
requirements.

42 CFR Part 498

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

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

PART 409--HOSPITAL INSURANCE BENEFITS

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

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

0
2. Section 409.43 is amended--
0
a. By revising the paragraph (b) subject heading;
0
b. In paragraph (c)(1)(i)(C) by removing the phrase ``physician's 
orders'' and adding in its place the phrase ``physician's or allowed 
practitioner's orders'';
0
c. In paragraphs (c)(1)(i)(D), (c)(2)(i), and (c)(3) by removing the 
term ``physician'' and adding in its place the phrase ``physician or 
allowed practitioner''; and
0
d. In paragraph (d) by removing the phrase '' based on a physician's 
oral orders'' and adding in its place the phrase ``based on a 
physician's or allowed practitioner's oral orders''.
    The revision reads as follows:


Sec.  409.43   Plan of care requirements.

* * * * *
    (b) Physician's or allowed practitioner's orders. * * *
* * * * *

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
3. The authority for part 424 continues to read as follows:

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

0
4. Section 424.520 is amended by revising paragraph (d) to read as 
follows:


Sec.  424.520   Effective date of billing privileges.

* * * * *
    (d) Additional provider and supplier types. (1) The effective date 
of billing privileges for the provider and supplier types identified in 
paragraph (d)(2) of this section is the later of--
    (i) The date of filing of a Medicare enrollment application that 
was subsequently approved by a Medicare contractor; or
    (ii) The date that the provider or supplier first began furnishing 
services at a new practice location.
    (2) The provider and supplier types to which paragraph (d)(1) of 
this section applies are as follows:
    (i) Physicians.
    (ii) Non-physician practitioners.
    (iii) Physician organizations.
    (iv) Non-physician practitioner organizations.
    (v) Ambulance suppliers.
    (vi) Opioid treatment programs.
    (vii) Part B hospital departments.
    (viii) Clinical Laboratory Improvement Amendment labs.
    (ix) Intensive cardiac rehabilitation facilities.
    (x) Mammography centers.
    (xi) Mass immunizers/pharmacies.
    (xii) Radiation therapy centers.
    (xiii) Home infusion therapy suppliers.
    (xiv) Physical therapists.
    (xv) Occupational therapists.
    (xvi) Speech language pathologists.
0
5. Section 424.521 is amended by revising the section heading and 
paragraph (a) to read as follows:


Sec.  424.521   Request for payment by certain provider and supplier 
types.

    (a) Request for payment by certain provider and supplier types. (1) 
The providers and suppliers identified in paragraph (a)(2) of this 
section may retrospectively bill for services when

[[Page 36004]]

the provider or supplier has met all program requirements (including 
State licensure requirements), and services were provided at the 
enrolled practice location for up to--
    (i) Thirty days prior to their effective date if circumstances 
precluded enrollment in advance of providing services to Medicare 
beneficiaries; or
    (ii) Ninety days prior to their effective date if a Presidentially-
declared disaster under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act) precluded 
enrollment in advance of providing services to Medicare beneficiaries.
    (2) The provider and supplier types to which paragraph (a) applies 
are as follows:
    (i) Physicians.
    (ii) Non-physician practitioners.
    (iii) Physician organizations.
    (iv) Non-physician practitioner organizations.
    (v) Ambulance suppliers.
    (vi) Opioid treatment programs.
    (vii) Part B hospital departments.
    (viii) Clinical Laboratory Improvement Amendment labs.
    (ix) Intensive cardiac rehabilitation facilities.
    (x) Mammography centers.
    (xi) Mass immunizers/pharmacies.
    (xii) Radiation therapy centers.
    (xiii) Home infusion therapy suppliers.
    (xiv) Physical therapists.
    (xv) Occupational therapists.
    (xvi) Speech language pathologists.
* * * * *
0
6. Section 424.522 is added to read as follows:


Sec.  424.522   Additional effective dates.

    (a) Reassignments. A reassignment of benefits under Sec.  424.80 is 
effective beginning 30 days before the Form CMS-855R is submitted if 
all applicable requirements during that period were otherwise met.
    (b) Form CMS-855O enrollment. The effective date of a Form CMS-855O 
enrollment is the date on which the Medicare contractor received the 
Form CMS-855O application if all other requirements are met.
0
7. Section 424.525 is amended--
0
a. By revising paragraph (a)(1);
0
b. In paragraphs (a)(2), (a)(3), and (b) by removing the phrase 
``prospective provider'' and adding the word ``provider'' each time it 
appears; and
0
c. By adding paragraph (e).
    The revision and addition read as follows:


Sec.  424.525   Rejection of a provider's or supplier's application for 
Medicare enrollment.

    (a) * * *
    (1) The provider or supplier fails to furnish complete information 
on the provider/supplier enrollment application within 30 calendar days 
from the date of the Medicare contractor's request for the missing 
information. This includes the following situations:
    (i) The application is missing data required by CMS or the Medicare 
contractor to process the application (such as, but not limited to, 
names, Social Security Number, contact information, and practice 
location information).
    (ii) The application is unsigned or undated.
    (iii) The application contains a copied or stamped signature.
    (iv) The application is signed more than 120 days prior to the date 
on which the Medicare contractor received the application.
    (v) The application is signed by a person unauthorized to do so 
under this subpart.
    (vi) For paper applications, the required certification statement 
is missing.
    (vii) The paper application is completed in pencil.
    (viii) The application is submitted via fax or email when the 
provider or supplier was not otherwise permitted to do so.
    (ix) The provider or supplier failed to submit all of the forms 
needed to process a Form CMS-855 reassignment package within 30 days of 
receipt.
    (x) The provider or supplier submitted the incorrect Form CMS-855 
application.
* * * * *
    (e) Applicability. Except as otherwise specified in the applicable 
reason for rejection under paragraph (a) of this section, this section 
applies to all CMS Medicare provider enrollment application 
submissions, including, but not limited to, the following:
    (1) Form CMS-855 initial applications, change of information 
requests, changes of ownership, revalidations, and reactivations.
    (2) Form CMS-588 (Electronic Funds Transfer (EFT) Authorization 
Agreement) submissions.
    (3) Form CMS-20134 (Medicare Enrollment Application; Medicare 
Diabetes Prevention Program (MDPP) Suppliers) submissions.
    (4) Any electronic or successor versions of the forms identified in 
paragraphs (e)(1) through (3) of this section.
0
8. Section 424.526 is added to read as follows:


Sec.  424.526   Return of a provider's or supplier's enrollment 
application.

    (a) Reasons for return. CMS may return a provider's or supplier's 
enrollment application for any of the following reasons:
    (1) The provider or supplier sent its paper Form CMS-855, Form CMS-
588, or Form CMS-20134 application to the incorrect Medicare contractor 
for processing.
    (2) The Medicare contractor received the application more than 60 
days prior to the effective date listed on the application. (This does 
not apply to providers and suppliers submitting a Form CMS-855A 
application, ambulatory surgical centers, or portable x-ray suppliers.)
    (3) The seller or buyer in a change of ownership submitted its Form 
CMS-855A or Form CMS-855B application more than 90 days prior to the 
anticipated date of the sale.
    (4) The Medicare contractor received an initial application more 
than 180 days prior to the effective date listed on the application 
from a provider or supplier submitting a Form CMS-855A application, an 
ambulatory surgical center, or a portable x-ray supplier.
    (5) The Medicare contractor confirms that the provider or supplier 
submitted an initial enrollment application prior to the expiration of 
the time period in which it is entitled to appeal the denial of its 
previously submitted application.
    (6) The provider or supplier submitted an initial enrollment 
application prior to the expiration of their existing re-enrollment bar 
under Sec.  424.535 or reapplication bar under Sec.  424.530(f).
    (7) The application is not needed for (or is inapplicable to) the 
transaction in question.
    (8) The provider or supplier submitted a revalidation application 
more than 7 months prior to the provider's or supplier's revalidation 
due date.
    (9) A Medicare Diabetes Prevention Program supplier submitted an 
application with a coach start date more than 30 days in the future.
    (10) The provider or supplier requests that their application be 
withdrawn prior to or during the Medicare contractor's processing 
thereof.
    (11) The provider or supplier submits an application that is an 
exact duplicate of an application that has already been processed or is 
currently being processed or is pending processing.
    (12) The provider or supplier submits a paper Form CMS-855 or Form 
CMS-20134 enrollment application that is outdated or has been 
superseded by a revised version.

[[Page 36005]]

    (13) The provider or supplier submits a Form CMS-855A or Form CMS-
855B initial application followed by a Form CMS-855A or Form CMS-855B 
change of ownership application. If the Medicare contractor--
    (i) Has not yet made a recommendation for approval concerning the 
initial application, both applications may be returned.
    (ii) Has made a recommendation for approval concerning the initial 
application, the Medicare contractor may return the change of ownership 
application. If, per the Medicare contractor's written request, the 
provider or supplier fails to submit a new initial Form CMS-855A or 
Form CMS-855B application containing the new owner's information within 
30 days of the date of the letter, the Medicare contractor may return 
the originally submitted initial Form CMS-855A or Form CMS-855B 
application.
    (b) Appeals. A provider or supplier is not afforded appeal rights 
if their application is returned under this section.
    (c) Applicability. Except as otherwise specified in the applicable 
return reason under paragraph (a) of this section, this section applies 
to all CMS Medicare provider enrollment application submissions 
including, but not limited to, the following:
    (1) Form CMS-855 initial applications, change of information 
requests, changes of ownership, revalidations, and reactivations.
    (2) Form CMS-588 submissions.
    (3) Form CMS-20134 submissions.
    (4) Any electronic or successor versions of the forms identified in 
paragraphs (c)(1) through (3) of this section.
0
9. Section 424.540 is amended--
0
a. By revising paragraph (a)(2);
0
b. By adding paragraphs (a)(4) through (8);
0
c. By revising paragraphs (b)(1) and (c); and
0
d. By adding paragraphs (d) and (e).
    The revisions and additions read as follows:


Sec.  424.540   Deactivation of Medicare billing privileges.

    (a) * * *
    (2) The provider or supplier does not report a change to the 
information supplied on the enrollment application within the 
applicable time period required under this title.
* * * * *
    (4) The provider or supplier is not in compliance with all 
enrollment requirements in this title.
    (5) The provider's or supplier's practice location is non-
operational or otherwise invalid.
    (6) The provider or supplier is deceased.
    (7) The provider or supplier is voluntarily withdrawing from 
Medicare.
    (8) The provider is the seller in an HHA change of ownership under 
Sec.  424.550(b)(1).
    (b) * * *
    (1) In order for a deactivated provider or supplier to reactivate 
its Medicare billing privileges, the provider or supplier must 
recertify that its enrollment information currently on file with 
Medicare is correct, furnish any missing information as appropriate, 
and be in compliance with all applicable enrollment requirements in 
this title.
* * * * *
    (c) Effect of deactivation. The deactivation of Medicare billing 
privileges does not have any effect on a provider's or supplier's 
participation agreement or any conditions of participation.
    (d) Effective dates. (1)(i) Except as provided in paragraph 
(d)(1)(ii) of this section, the effective date of a deactivation is the 
date on which the deactivation is imposed under this section.
    (ii) A retroactive deactivation effective date (based on the date 
that the provider's or supplier's action or non-compliance occurred or 
commenced (as applicable)) may be imposed in the following instances:
    (A) For the deactivation reasons in paragraphs (a)(2) through (4) 
of this section, the effective date is the date on which the provider 
or supplier became non-compliant.
    (B) For the deactivation reason in paragraph (a)(5) of this 
section, the effective date is the date on which the provider's or 
supplier's practice location became non-operational or otherwise 
invalid.
    (C) For the deactivation reason in paragraph (a)(6) of this 
section, the effective date is the date of death of the provider or 
supplier.
    (D) For the deactivation reason in paragraph (a)(7) of this 
section, the effective date is the date on which the provider or 
supplier voluntarily withdrew from Medicare.
    (E) For the deactivation reason in paragraph (a)(8) of this 
section, the effective date is the date of the sale.
    (2) The effective date of a reactivation of billing privileges 
under this section is the date on which the Medicare contractor 
received the provider's or supplier's reactivation submission that was 
processed to approval by the Medicare contractor.
    (e) Payment prohibition. A provider or supplier may not receive 
payment for services or items furnished while deactivated under this 
section.
0
10. Section 424.550 is amended by revising paragraph (b)(2)(i) to read 
as follows:


Sec.  424.550   Prohibitions on the sale or transfer of billing 
privileges.

* * * * *
    (b) * * *
    (2)(i) The HHA submitted two consecutive years of full cost reports 
since initial enrollment or the last change in majority ownership, 
whichever is later. For purposes of this exception, low utilization or 
no utilization cost reports do not qualify as full cost reports.
* * * * *

PART 484--HOME HEALTH SERVICES

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

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

0
12. Section 484.55 is amended by revising paragraphs (a)(2) and (b)(3) 
to read as follows:


Sec.  484.55  Condition of participation: Comprehensive assessment of 
patients.

* * * * *
    (a) * * *
    (2) When rehabilitation therapy service (speech language pathology, 
physical therapy, or occupational therapy) is the only service ordered 
by the physician or allowed practitioner who is responsible for the 
home health plan of care, the initial assessment visit may be made by 
the appropriate rehabilitation skilled professional. For Medicare 
patients, an occupational therapist may complete the initial assessment 
when occupational therapy is ordered with another qualifying 
rehabilitation therapy service (speech-language pathology or physical 
therapy) that establishes program eligibility.
    (b) * * *
    (3) When physical therapy, speech-language pathology, or 
occupational therapy is the only service ordered by the physician or 
allowed practitioner, a physical therapist, speech-language 
pathologist, or occupational therapist may complete the comprehensive 
assessment, and for Medicare patients, determine eligibility for the 
Medicare home health benefit, including homebound status. For Medicare 
patients, the occupational therapist may complete the comprehensive 
assessment when occupational therapy is ordered with another qualifying 
rehabilitation therapy service (speech-language pathology or physical 
therapy) that establishes program eligibility.
* * * * *

[[Page 36006]]

0
13. Section 484.80 is amended by
0
a. Revising paragraph (h)(1)(i);
0
b. Redesignating paragraphs (h)(1)(ii) and (iii) as (h)(1)(iii) and 
(iv), respectively;
0
c. Adding a new paragraph (h)(1)(ii); and
0
d. Revising paragraphs (h)(2) and (3).
    The revisions and addition read as follows:


Sec.  484.80  Condition of participation: Home health aide services.

* * * * *
    (h) * * *
    (1)(i) If home health aide services are provided to a patient who 
is receiving skilled nursing, physical or occupational therapy, or 
speech language pathology services--
    (A) A registered nurse or other appropriate skilled professional 
who is familiar with the patient, the patient's plan of care, and the 
written patient care instructions described in paragraph (g) of this 
section, must complete a supervisory assessment of the aide services 
being provided no less frequently than every 14 days; and
    (B) The home health aide does not need to be present during the 
supervisory assessment described in paragraph (h)(1)(i)(A) of this 
section.
    (ii) The supervisory assessment must be completed onsite (that is, 
an in person visit), or by using two-way audio-video telecommunications 
technology that allows for real-time interaction between the registered 
nurse (or other appropriate skilled professional) and the patient, not 
to exceed 2 virtual supervisory assessments per HHA in a 60-day period.
* * * * *
    (2)(i) If home health aide services are provided to a patient who 
is not receiving skilled nursing care, physical or occupational 
therapy, or speech language pathology services--
    (A) The registered nurse must make an onsite, in person visit every 
60 days to assess the quality of care and services provided by the home 
health aide and to ensure that services meet the patient's needs; and
    (B) The home health aide does not need to be present during this 
visit.
    (ii) Semi-annually the registered nurse must make an on-site visit 
to the location where a patient is receiving care in order to observe 
and assess each home health aide while he or she is performing non-
skilled care.
    (3) If a deficiency in aide services is verified by the registered 
nurse or other appropriate skilled professional during an on-site 
visit, then the agency must conduct, and the home health aide must 
complete, retraining and a competency evaluation for the deficient and 
all related skills.
* * * * *

Subpart F--Home Health Value-Based Purchasing (HHVBP) Models

0
14. The heading for subpart F is revised to read as set forth above.
0
15. Subpart F is amended by adding an undesignated center heading 
before Sec.  484.300 to read as follows:

HHVBP Model Components for Competing Home Health Agencies Within State 
Boundaries for the Original HHVBP Model

0
16. Section 484.305 is amended by revising the definition of 
``Applicable percent'' to read as follows:


Sec.  484.305  Definitions.

* * * * *
    Applicable percent means a maximum upward or downward adjustment 
for a given performance year, not to exceed the following:
    (1) For CY 2018, 3-percent.
    (2) For CY 2019, 5-percent.
    (3) For CY 2020, 6-percent.
    (4) For CY 2021, 7-percent.
* * * * *


Sec.  484.315  [Amended]

0
17. Section 484.315 is amended by removing paragraph (d).
0
18. Subpart F is amended by adding an undesignated center heading and 
Sec. Sec.  484.340 through 484.375 to read as follows:
* * * * *

HHVBP Model Components for Competing Home Health Agencies (HHAs) for 
HHVBP Model Expansion--Effective January 1, 2022

Sec.
484.340 Basis and scope of subpart.
484.345 Definitions.
484.350 Applicability of the Expanded Home Health Value-Based 
Purchasing (HHVBP) Model.
484.355 Data reporting for measures and evaluation and the public 
reporting of model data under the expanded Home Health Value-Based 
Purchasing (HHVBP) Model.
484.360 Calculation of the Total Performance Score.
484.365 Payments for home health services under the Expanded Home 
Health Value-Based Purchasing (HHVBP) Model.
484.370 Process for determining and applying the value-based payment 
adjustment under the Expanded Home Health Value-Based Purchasing 
(HHVBP) Model.
484.375 Appeals process for the Expanded Home Health Value-Based 
Purchasing (HHVBP) Model.

HHVBP Model Components for Competing Home Health Agencies (HHAs) for 
HHVBP Model Expansion--Effective January 1, 2022


Sec.  484.340  Basis and scope of subpart.

    This subpart is established under sections 1102, 1115A, and 1871 of 
the Act (42 U.S.C. 1315a), which authorizes the Secretary to issue 
regulations to operate the Medicare program and test innovative payment 
and service delivery models to reduce program expenditures while 
preserving or enhancing the quality of care furnished to individuals 
under Titles XVIII and XIX.


Sec.  484.345  Definitions.

    As used in this subpart--
    Achievement threshold means the median (50th percentile) of home 
health agency performance on a measure during a baseline year, 
calculated separately for the larger- and smaller-volume cohorts.
    Applicable measure means a measure (OASIS- and claims-based 
measures) or a measure component (HHCAHPS survey measure) for which a 
competing HHA has provided a minimum of one of the following:
    (1) Twenty home health episodes of care per year for each of the 
OASIS-based measures.
    (2) Twenty home health episodes of care per year for each of the 
claims-based measures.
    (3) Forty completed surveys for each component included in the 
HHCAHPS Survey measure.
    Applicable percent means a maximum upward or downward adjustment 
for a given payment year based on the applicable performance year, not 
to exceed 5 percent.
    Baseline year means the year against which measure performance in a 
performance year will be compared.
    Benchmark refers to the mean of the top decile of Medicare-
certified HHA performance on the specified quality measure during the 
baseline year, calculated separately for the larger- and smaller-volume 
cohorts.
    Competing home health agency or agencies (HHA or HHAs) means an 
agency or agencies that meet the following:
    (1) Has or have a current Medicare certification; and
    (2) Is or are being paid by CMS for home health care services.
    Home health prospective payment system (HH PPS) refers to the basis 
of payment for HHAs as set forth in Sec. Sec.  484.200 through 484.245.
    Improvement threshold means an individual competing HHA's

[[Page 36007]]

performance level on a measure during the baseline year.
    Larger-volume cohort means the group of competing HHAs that are 
participating in the HHCAHPS survey in accordance with Sec.  484.245.
    Linear exchange function is the means to translate a competing 
HHA's Total Performance Score into a value-based payment adjustment 
percentage.
    Nationwide means the 50 States and the US territories, including 
the District of Columbia.
    Payment adjustment means the amount by which a competing HHA's 
final claim payment amount under the HH PPS is changed in accordance 
with the methodology described in Sec.  484.370.
    Payment year means the calendar year in which the applicable 
percent, a maximum upward or downward adjustment, applies.
    Performance year means the calendar year during which data are 
collected for the purpose of calculating a competing HHA's performance 
on measures.
    Smaller-volume cohort means the group of competing HHAs that are 
exempt from participation in the HHCAHPS survey in accordance with 
Sec.  484.245.
    Total Performance Score (TPS) means the numeric score ranging from 
0 to 100 awarded to each competing HHA based on its performance under 
the expanded HHVBP Model.


Sec.  484.350  Applicability of the Expanded Home Health Value-Based 
Purchasing (HHVBP) Model.

    (a) General rule. The expanded HHVBP Model applies to all Medicare-
certified HHAs nationwide.
    (b) New HHAs. For an HHA that is certified by Medicare on or after 
January 1, 2019, the baseline year is the first full calendar year of 
services beginning after the date of Medicare certification, with the 
exception of HHAs certified on January 1, 2019 through December 31, 
2019, for which the baseline year is CY 2021, and the first performance 
year is the first full calendar year following the baseline year.


Sec.  484.355  Data reporting for measures and evaluation and the 
public reporting of model data under the expanded Home Health Value-
Based Purchasing (HHVBP) Model.

    (a) Competing home health agencies will be evaluated using a set of 
quality measures.
    (1) Data submission. Except as provided in paragraph (d) of this 
section, and for a performance year, an HHA must submit all of the 
following to CMS in the form and manner, and at a time, specified by 
CMS:
    (i) Data on measures specified under the expanded HHVBP model.
    (ii) HHCAHPS Survey data. For purposes of HHCAHPS Survey data 
submission, the following additional requirements apply:
    (A) Survey requirements. An HHA must contract with an approved, 
independent HHCAHPS survey vendor to administer the HHCAHPS survey on 
its behalf.
    (B) CMS approval. CMS approves an HHCAHPS survey vendor if the 
applicant has been in business for a minimum of 3 years and has 
conducted surveys of individuals and samples for at least 2 years.
    (C) Definition of survey of individuals. For the HHCAHPS survey, a 
``survey of individuals'' is defined as the collection of data from at 
least 600 individuals selected by statistical sampling methods and the 
data collected are used for statistical purposes.
    (D) Administration of the HHCAHPS survey. No organization, firm, or 
business that owns, operates, or provides staffing for an HHA is 
permitted to administer its own HHCAHPS Survey or administer the survey 
on behalf of any other HHA in the capacity as an HHCAHPS survey vendor. 
Such organizations are not approved by CMS as HHCAHPS survey vendors.
    (E) Compliance by HHCAHPS survey vendors. Approved HHCAHPS survey 
vendors must fully comply with all HHCAHPS survey oversight activities, 
including allowing CMS and its HHCAHPS survey team to perform site 
visits at the vendors' company locations.
    (F) Patient count exemption. An HHA that has less than 60 eligible 
unique HHCAHPS survey patients must annually submit to CMS its total 
HHCAHPS survey patient count to be exempt from the HHCAHPS survey 
reporting requirements for a calendar year.
    (2) [Reserved]
    (b) Competing home health agencies are required to collect and 
report such information as the Secretary determines is necessary for 
purposes of monitoring and evaluating the expanded HHVBP Model under 
section 1115A(b)(4) of the Act (42 U.S.C. 1315a).
    (c) For each performance year of the expanded HHVBP Model, CMS 
publicly reports applicable measure benchmarks and achievement 
thresholds for each cohort as well as all of the following for each 
competing HHA that qualified for a payment adjustment for the 
applicable performance year on a CMS website:
    (1) The Total Performance Score.
    (2) The percentile ranking of the Total Performance Score.
    (3) The payment adjustment percentage.
    (4) Applicable measure results and improvement thresholds.
    (d) CMS may grant an exception with respect to quality data 
reporting requirements in the event of extraordinary circumstances 
beyond the control of the HHA. CMS may grant an exception as follows:
    (1) A competing HHA that wishes to request an exception with 
respect to quality data reporting requirements must submit its request 
to CMS within 90 days of the date that the extraordinary circumstances 
occurred. Specific requirements for submission of a request for an 
exception are available on the CMS website.
    (2) CMS may grant an exception to one or more HHAs that have not 
requested an exception if CMS determines either of the following:
    (i) That a systemic problem with CMS data collection systems 
directly affected the ability of the HHA to submit data.
    (ii) That an extraordinary circumstance has affected an entire 
region or locale.


Sec.  484.360  Calculation of the Total Performance Score.

    A competing HHA's Total Performance Score for a performance year is 
calculated as follows:
    (a) CMS awards points to the competing home health agency for 
performance on each of the applicable measures.
    (1) CMS awards greater than or equal to 0 points and less than 10 
points for achievement to each competing home health agency whose 
performance on a measure during the applicable performance year meets 
or exceeds the applicable cohort's achievement threshold but is less 
than the applicable cohort's benchmark for that measure.
    (2) CMS awards greater than 0 but less than 9 points for 
improvement to each competing home health agency whose performance on a 
measure during the applicable performance year exceeds the improvement 
threshold but is less than the applicable cohort's benchmark for that 
measure.
    (3) CMS awards 10 points to a competing home health agency whose 
performance on a measure during the applicable performance year meets 
or exceeds the applicable cohort's benchmark for that measure.
    (b) For all performance years, CMS calculates the weighted sum of 
points awarded for each applicable measure within each category of 
measures (OASIS-based, claims-based, and

[[Page 36008]]

HHCAHPS Survey-based) weighted at 35 percent for the OASIS-based 
measure category, 35 percent for the claims-based measure category, and 
30 percent for the HHCAHPS Survey measure category when all three 
measure categories are reported, to calculate a value worth 100 percent 
of the Total Performance Score.
    (1) Where a single measure category is not included in the 
calculation of the Total Performance Score for an individual HHA, due 
to insufficient volume for all of the measures in the category, the 
remaining measure categories are reweighted such that the proportional 
contribution of each remaining measure category is consistent with the 
weights assigned when all three measure categories are available. Where 
two measure categories are not included in the calculation of the Total 
Performance Score for an individual HHA, due to insufficient volume for 
all measures in those measure categories, the remaining measure 
category is weighted at 100 percent of the Total Performance Score.
    (2) When one or more, but not all, of the measures in a measure 
category are not included in the calculation of the Total Performance 
Score for an individual HHA, due to insufficient volume for at least 
one measure in the category, the remaining measures in the category are 
reweighted such that the proportional contribution of each remaining 
measure is consistent with the weights assigned when all measures 
within the category are available.
    (c) The sum of the weight-adjusted points awarded to a competing 
HHA for each applicable measure is the competing HHA's Total 
Performance Score for the calendar year. A competing HHA must have a 
minimum of five applicable measures to receive a Total Performance 
Score.


Sec.  484.365  Payments for home health services under the Expanded 
Home Health Value-Based Purchasing (HHVBP) Model.

    CMS determines a payment adjustment up to the applicable percent, 
upward or downward, under the expanded HHVBP Model for each competing 
HHA based on the agency's Total Performance Score using a linear 
exchange function that includes all other HHAs in its cohort that 
received a Total Performance Score for the applicable performance year. 
Payment adjustments made under the expanded HHVBP Model are calculated 
as a percentage of otherwise-applicable payments for home health 
services provided under section 1895 of the Act (42 U.S.C. 1395fff).


Sec.  484.370  Process for determining and applying the value-based 
payment adjustment under the Expanded Home Health Value-Based 
Purchasing (HHVBP) Model.

    (a) General. Competing home health agencies are ranked within the 
larger-volume and smaller-volume cohorts nationwide based on the 
performance standards that apply to the expanded HHVBP Model for the 
baseline year, and CMS makes value-based payment adjustments to the 
competing HHAs as specified in this section.
    (b) Calculation of the value-based payment adjustment amount. The 
value-based payment adjustment amount is calculated by multiplying the 
Home Health Prospective Payment final claim payment amount as 
calculated in accordance with Sec.  484.205 by the payment adjustment 
percentage.
    (c) Calculation of the payment adjustment percentage. The payment 
adjustment percentage is calculated as the product of all of the 
following:
    (1) The applicable percent as defined in Sec.  484.345.
    (2) The competing HHA's Total Performance Score divided by 100.
    (3) The linear exchange function slope.


Sec.  484.375  Appeals process for the Expanded Home Health Value-Based 
Purchasing (HHVBP) Model.

    (a) Requests for recalculation--(1) Matters for recalculation. 
Subject to the limitations on judicial and administrative review under 
section 1115A of the Act, a HHA may submit a request for recalculation 
under this section if it wishes to dispute the calculation of the 
following:
    (i) Interim performance scores.
    (ii) Annual total performance scores.
    (iii) Application of the formula to calculate annual payment 
adjustment percentages.
    (2) Time for filing a request for recalculation. A recalculation 
request must be submitted in writing within 15 calendar days after CMS 
posts the HHA-specific information on the CMS website, in a time and 
manner specified by CMS.
    (3) Content of request. (i) The provider's name, address associated 
with the services delivered, and CMS Certification Number (CCN).
    (ii) The basis for requesting recalculation to include the specific 
data that the HHA believes is inaccurate or the calculation the HHA 
believes is incorrect.
    (iii) Contact information for a person at the HHA with whom CMS or 
its agent can communicate about this request, including name, email 
address, telephone number, and mailing address (must include physical 
address, not just a post office box).
    (iv) The HHA may include in the request for recalculation 
additional documentary evidence that CMS should consider. Such 
documents may not include data that was to have been filed by the 
applicable data submission deadline, but may include evidence of timely 
submission.
    (4) Scope of review for recalculation. In conducting the 
recalculation, CMS reviews the applicable measures and performance 
scores, the evidence and findings upon which the determination was 
based, and any additional documentary evidence submitted by the HHA. 
CMS may also review any other evidence it believes to be relevant to 
the recalculation.
    (5) Recalculation decision. CMS issues a written notification of 
findings. A recalculation decision is subject to the request for 
reconsideration process in accordance with paragraph (b) of this 
section.
    (b) Requests for reconsideration--(1) Matters for reconsideration. 
A home health agency may request reconsideration of the recalculation 
of its annual total performance score and payment adjustment percentage 
following a decision on the HHA's recalculation request submitted under 
paragraph (a) of this section, or the decision to deny the 
recalculation request submitted under paragraph (a).
    (2) Time for filing a request for reconsideration. The request for 
reconsideration must be submitted via the CMS website within 15 
calendar days from CMS' notification to the HHA contact of the outcome 
of the recalculation process.
    (3) Content of request. (i) The name of the HHA, address associated 
with the services delivered, and CMS Certification Number (CCN).
    (ii) The basis for requesting reconsideration to include the 
specific data that the HHA believes is inaccurate or the calculation 
the HHA believes is incorrect.
    (iii) Contact information for a person at the HHA with whom CMS or 
its agent can communicate about this request, including name, email 
address, telephone number, and mailing address (must include physical 
address, not just a post office box).
    (iv) The HHA may include in the request for reconsideration 
additional documentary evidence that CMS should consider. The documents 
may not include data that was to have been filed by the applicable data 
submission deadline, but may include evidence of timely submission.

[[Page 36009]]

    (4) Scope of review for reconsideration. In conducting the 
reconsideration review, CMS reviews the applicable measures and 
performance scores, the evidence and findings upon which the 
determination was based, and any additional documentary evidence 
submitted by the HHA. CMS may also review any other evidence it 
believes to be relevant to the reconsideration. The HHA must prove its 
case by a preponderance of the evidence with respect to issues of fact.
    (5) Reconsideration decision. CMS reconsideration officials issue a 
written final determination.

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
19. The authority citation for part 488 continues to read as follows:

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

0
20. Section 488.2 is amended by adding provision ``1822'' in numerical 
order to read as follows:


Sec.  488.2  Statutory basis.

* * * * *
    1822--Hospice Program survey and enforcement procedures.
* * * * *
0
21. Section 488.5 is amended by adding paragraph (a)(4)(x) to read as 
follows:


Sec.  488.5  Application and re-application procedures for national 
accrediting organizations.

* * * * *
    (a) * * *
    (4) * * *
    (x) For accrediting organizations applying for approval or re-
approval of CMS-approved hospice programs, a statement acknowledging 
that the AO will include a statement of deficiencies (that is, the Form 
CMS-2567 or a successor form) to document findings of the hospice 
Medicare conditions of participation in accordance with section 
1822(a)(2)(A)(ii) of the Act and will submit such in a manner specified 
by CMS.
* * * * *
0
22. Section 488.7 is amended by revising paragraph (b) by adding 
paragraph (c) to read as follows.


Sec.  488.7  Release and use of accreditation surveys.

* * * * *
    (b) With the exception of home health agency and hospice program 
surveys, general disclosure of an accrediting organization's survey 
information is prohibited under section 1865(b) of the Act. CMS may 
publicly disclose an accreditation survey and information related to 
the survey, upon written request, to the extent that the accreditation 
survey and survey information are related to an enforcement action 
taken by CMS.
    (c) CMS posts inspection reports from a State or local survey 
agency or accreditation organization conducted on or after October 1, 
2022, for hospice programs, including copies of a hospice program's 
survey deficiencies, and enforcement actions (for example, involuntary 
terminations) taken as a result of such surveys, on its public website 
in a manner that is prominent, easily accessible, readily 
understandable, and searchable for the general public and allows for 
timely updates.
0
23. Section 488.28 is amended by revising the section heading to read 
as follows:


Sec.  488.28  Providers or suppliers, other than SNFs, NFs, HHAs, and 
Hospice programs with deficiencies.

* * * * *
0
24. Add subparts M and N to read as follows:

Subpart M--Survey and Certification of Hospice Programs

Sec.
488.1100 Basis and scope.
488.1105 Definitions.
488.1110 Hospice program: surveys and hotline.
488.1115 Surveyor qualifications and prohibition of conflicts of 
interest.
488.1120 Survey teams.
488.1125 Consistency of survey results.
488.1130 Special focus program.
Subpart N--Enforcement Remedies for Hospice Programs with Deficiencies
Sec.
488.1200 Statutory basis.
488.1205 Definitions.
488.1210 General provisions.
488.1215 Factors to be considered in selecting remedies.
488.1220 Available remedies.
488.1225 Action when deficiencies pose immediate jeopardy.
488.1230 Action when deficiencies are at the condition-level but do 
not pose immediate jeopardy.
488.1235 Temporary management.
488.1240 Suspension of all or part of the payments.
488.1245 Civil money penalties.
488.1250 Directed plan of correction.
488.1255 Directed in-service training.
488.1260 Continuation of payments to a hospice program with 
deficiencies.
488.1265 Termination of provider agreement.

Subpart M--Survey and Certification of Hospice Programs


Sec.  488.1100  Basis and scope.

    Sections 1812, 1814, 1822, 1861, 1864, and 1865 of the Act 
establish requirements for Hospice programs and to authorize surveys to 
determine whether they meet the Medicare conditions of participation.


Sec.  488.1105  Definitions.

    As used in this subpart--
    Abbreviated standard survey means a focused survey other than a 
standard survey that gathers information on hospice program's 
compliance with specific standards or conditions of participation. An 
abbreviated standard survey may be based on complaints received or 
other indicators of specific concern.
    Complaint survey means a survey that is conducted to investigate 
substantial allegations of noncompliance as defined in Sec.  488.1.
    Condition-level deficiency means noncompliance as described in 
Sec.  488.24.
    Deficiency is a violation of the Act and regulations contained in 
part 418, subparts C and D of this chapter, is determined as part of a 
survey, and can be either standard or condition-level.
    Noncompliance means any deficiency found at the condition-level or 
standard-level.
    Standard-level deficiency means noncompliance with one or more of 
the standards that make up each condition of participation for hospice 
programs.
    Standard survey means a survey conducted in which the surveyor 
reviews the hospice program's compliance with a select number of 
standards or conditions of participation or both to determine the 
quality of care and services furnished by a hospice program.
    Substantial compliance means compliance with all condition-level 
requirements, as determined by CMS or the State.


Sec.  488.1110   Hospice program: surveys and hotline.

    (a) Basic period. Each hospice program as defined in section 
1861(dd) of the Act is subject to a standard survey by an appropriate 
State or local survey agency, or an approved accreditation agency, as 
determined by the Secretary, not less frequently than once every 36 
months. Additionally, a survey may be conducted as frequently as 
necessary to--
    (1) Assure the delivery of quality hospice program services by 
determining whether a hospice program complies with the Act and 
conditions of participation; and

[[Page 36010]]

    (2) Confirm that the hospice program has corrected deficiencies 
that were previously cited.
    (b) Complaints. A standard survey, or abbreviated standard survey--
    (1) Must be conducted of a hospice program when complaints against 
the hospice program are reported to CMS, the State, or local agency.
    (2) The State, or local agency is responsible for maintaining a 
toll-free hotline to collect, maintain, and continually update 
information on Medicare-participating hospice programs including 
significant deficiencies found regarding patient care, corrective 
actions, and remedy activity during its most recent survey, and to 
receive complaints and answer questions about hospice programs. The 
State or local agency is also responsible for maintaining a unit for 
investigating such complaints.


Sec.  488.1115   Surveyor qualifications and prohibition of conflicts 
of interest.

    (a) Minimum qualifications: Surveyors must meet minimum 
qualifications prescribed by CMS. Before any accrediting organization, 
State or Federal surveyor may serve on a hospice survey team (except as 
a trainee), he/she must have successfully completed the relevant CMS-
sponsored Basic Hospice Surveyor Training Course, and additional 
training as specified by CMS.
    (b) Disqualifications. Any of the following circumstances 
disqualifies a surveyor from surveying a particular hospice program:
    (1) The surveyor currently serves, or, within the previous 2 years 
has served, with the hospice program to be surveyed as one of the 
following:
    (i) A direct employee.
    (ii) An employment agency staff at the hospice program.
    (iii) An officer, consultant, or agent for the hospice program to 
be surveyed concerning compliance with conditions of participation 
specified in or in accordance with sections 1861(dd) of the Act.
    (2) The surveyor has a financial interest or an ownership interest 
in the hospice program to be surveyed.
    (3) The surveyor has an immediate family member, as defined at. 
Sec.  411.351 of this chapter, who has a financial interest or an 
ownership interest with the hospice program to be surveyed.
    (4) The surveyor has an immediate family member, as defined at 
Sec.  411.351 of this chapter, who is a patient of the hospice program 
to be surveyed.


Sec.  488.1120   Survey teams.

    Standard surveys conducted by more than one surveyor must be 
conducted by a multidisciplinary team of professionals typically 
involved in hospice care and identified as professionals providing 
hospice core services at Sec.  418.64 of this chapter. The 
multidisciplinary team must include a registered nurse. Surveys 
conducted by a single surveyor, must be conducted by a registered 
nurse.


Sec.  488.1125   Consistency of survey results.

    A survey agency or accrediting organization must provide a 
corrective action plan to CMS for any disparity rates that are greater 
than the threshold established by CMS.


Sec.  488.1130   Special focus program.

    (a) In general.--The Secretary must conduct a special focus program 
for the enforcement of conditions of participation for hospice programs 
that the Secretary has identified as having substantially failed to 
meet applicable requirements for Medicare participation.
    (b) Criteria for inclusion in the hospice special focus program. 
(1) A hospice program may be required to participate in a special focus 
program if any one of the following criteria exists:
    (i) The hospice program is found to be deficient with condition-
level findings during two consecutive standard surveys.
    (ii) The hospice program is found to be deficient with condition-
level findings during two consecutive complaint surveys.
    (iii) The hospice program is found to be deficient with two or more 
condition-level findings during a validation survey.
    (2) CMS provides the State survey agencies with a list of hospice 
programs identified as meeting the criteria for inclusion in the 
special focus program. A program that meets the criteria will be placed 
on the special focus program candidate list and selected for the 
program as specified by CMS.
    (c) Periodic surveys. The State Survey Agency, on CMS's behalf, 
conducts an onsite survey of each hospice in the program not less than 
once every 6 months to examine all the Medicare hospice program 
conditions of participation and recommend progressive enforcement in 
accordance with an enforcement remedy or remedies until the hospice 
program either of the following:
    (1) Graduates from the special focus program by coming back into 
full compliance with the hospice conditions of participation on two 
consecutive 6-month surveys.
    (2) Is terminated from the Medicare or Medicaid or both programs.

Subpart N--Enforcement Remedies for Hospice Programs with 
Deficiencies


Sec.  488.1200   Statutory basis.

    Section 1822 of the Act authorizes the Secretary to take actions to 
remove and correct deficiencies in a hospice program through an 
enforcement remedy or termination or both. This section specifies that 
these remedies are in addition to any others available under State or 
Federal law, and, except for the final determination of civil money 
penalties, are imposed prior to the conduct of a hearing.


Sec.  488.1205   Definitions.

    As used in this subpart--
    Directed plan of correction means CMS or the temporary manager 
(with CMS/SA approval) may direct the hospice program to take specific 
corrective action to achieve specific outcomes within specific 
timeframes.
    Immediate jeopardy means a situation in which the provider's 
noncompliance with one or more requirements of participation has 
caused, or is likely to cause, serious injury, harm, impairment, or 
death to a patient(s).
    New admission means an individual who becomes a patient or is 
readmitted to the hospice program on or after the effective date of a 
suspension of payment remedy.
    Per instance means a single event of noncompliance identified and 
corrected during a survey, for which the statute authorizes CMS to 
impose a remedy.
    Plan of correction means a plan developed by the hospice program 
and approved by CMS that is the hospice program's written response to 
survey findings detailing corrective actions to cited deficiencies and 
specifies the date by which those deficiencies will be corrected.
    Repeat deficiency means a condition-level deficiency that is cited 
on the current survey and is substantially the same as or similar to, a 
finding of a standard-level or condition-level deficiency cited on the 
most recent previous standard survey or on any intervening survey since 
the most recent standard survey. Repeated non-compliance is not on the 
basis that the exact regulation (that is, tag number) for the 
deficiency was repeated.
    Temporary management means the temporary appointment by CMS or by a 
CMS authorized agent, of a substitute manager or administrator. The 
hospice program's governing body must ensure that the temporary manager 
has authority to hire, terminate or reassign staff, obligate funds, 
alter procedures, and manage the hospice program to

[[Page 36011]]

correct deficiencies identified in the hospice program's operation.


Sec.  488.1210   General provisions.

    (a) Purpose of remedies. The purpose of remedies is to ensure 
prompt compliance with program requirements in order to protect the 
health and safety of individuals under the care of a hospice program.
    (b) Basis for imposition of remedies. When CMS chooses to apply one 
or more remedies specified in Sec.  488.1220, the remedies are applied 
on the basis of noncompliance with one or more conditions of 
participation and may be based on failure to correct previous 
deficiency findings as evidenced by repeat condition-level 
deficiencies.
    (c) Number of remedies. CMS may impose one or more remedies 
specified in Sec.  488.1220 of this part for each condition-level 
deficiency constituting noncompliance.
    (d) Plan of correction requirement. Regardless of which remedy is 
applied, a non-compliant hospice program must submit a plan of 
correction for approval by CMS or the State Survey Agency.
    (e) Notification requirements--(1) Notice of intent. CMS provides 
written notification to the hospice program of the intent to impose the 
remedy, the statutory basis for the remedy, the nature of the 
noncompliance, the proposed effective date of the sanction, and the 
appeal rights. For payment suspensions, the notice of intent would also 
identify which payments are being suspended, and for civil money 
penalties, the notice of intent would also include the amount being 
imposed.
    (2) Final notice. With respect to civil money penalties, CMS 
provides a written final notice to the hospice program, as set forth in 
Sec.  488.1245(e), once the administrative determination is final.
    (3) Date of enforcement action. The notice periods specified in 
Sec.  488.1225(b) and Sec.  488.1230(b) begin the day after the hospice 
receives the notice of intent.
    (f) Appeals. (1) The hospice program may request a hearing on a 
determination of noncompliance leading to the imposition of a remedy, 
including termination of the provider agreement, under the provisions 
of part 498 of this chapter.
    (2) A pending hearing does not delay the effective date of a 
remedy, including termination, against a hospice program. Remedies 
continue to be in effect regardless of the timing of any appeals 
proceedings.


Sec.  488.1215   Factors to be considered in selecting remedies.

    CMS bases its choice of remedy or remedies on consideration of one 
or more factors that include, but are not limited to, the following:
    (a) The extent to which the deficiencies pose immediate jeopardy to 
patient health and safety.
    (b) The nature, incidence, manner, degree, and duration of the 
deficiencies or noncompliance.
    (c) The presence of repeat deficiencies, the hospice program's 
overall compliance history and any history of repeat deficiencies at 
either the parent hospice program or any of its multiple locations.
    (d) The extent to which the deficiencies are directly related to a 
failure to provide quality patient care.
    (e) The extent to which the hospice program is part of a larger 
organization with performance problems.
    (f) An indication of any system-wide failure to provide quality 
care.


Sec.  488.1220   Available remedies.

    The following enforcement remedies are available instead of, or in 
addition to, termination of the hospice program's provider agreement 
under Sec.  489.53, for a period not to exceed 6 months:
    (a) Civil money penalties.
    (b) Suspension of payment for all or part of the payments.
    (c) Temporary management of the hospice program.
    (d) Directed plan of correction.
    (e) Directed in-service training.


Sec.  488.1225  Action when deficiencies pose immediate jeopardy.

    (a) Immediate jeopardy. If there is immediate jeopardy to the 
hospice program's patient health or safety, the following rules apply:
    (1) CMS immediately terminates the hospice program provider 
agreement in accordance with Sec.  489.53 of this chapter.
    (2) CMS terminates the hospice program provider agreement no later 
than 23 calendar days from the last day of the survey, if the immediate 
jeopardy has not been removed by the hospice program.
    (3) In addition to a termination, CMS may impose one or more 
enforcement remedies, as appropriate.
    (b) 2-day notice. Except for civil money penalties, for all 
remedies specified in Sec.  488.1220 imposed when there is immediate 
jeopardy, notice must be given at least 2 calendar days before the 
effective date of the enforcement action. The requirements of the 
notice are set forth in Sec.  488.1225(e).
    (c) Transfer of care. A hospice program, if its provider agreement 
is terminated, is responsible for providing information, assistance, 
and arrangements necessary for the proper and safe transfer of patients 
to another local hospice program within 30 calendar days of 
termination.


Sec.  488.1230   Action when deficiencies are at the condition-level 
but do not pose immediate jeopardy.

    (a) Noncompliance with conditions of participation. If the hospice 
program is no longer in compliance with the conditions of 
participation, either because the condition-level deficiency or 
deficiencies substantially limit the provider's capacity to furnish 
adequate care but do not pose immediate jeopardy, or the hospice 
program has repeat condition-level deficiencies based on the hospice 
program's failure to correct and sustain compliance, CMS does either of 
the following.
    (1) Terminates the hospice program's provider agreement.
    (2) Imposes one or more enforcement remedies set forth in Sec.  
488.1220(a) through (e) in lieu of termination, for a period not to 
exceed 6 months.
    (b) 15-day notice. Except for civil money penalties, for all 
remedies specified in Sec.  488.1220 imposed when there is no immediate 
jeopardy, notice must be given at least 15 calendar days before the 
effective date of the enforcement action. The requirements of the 
notice are set forth in Sec.  488.1210(e).
    (c) Not meeting criteria for continuation of payment. If a hospice 
program does not meet the criteria for continuation of payment under 
Sec.  488.1260(a), CMS terminates the hospice program's provider 
agreement in accordance with Sec.  488.1265.
    (d) Termination timeframe when there is no immediate jeopardy. CMS 
terminates a hospice program within 6 months of the last day of the 
survey, if the hospice program is not in compliance with the conditions 
of participation, and the terms of the plan of correction have not been 
met.
    (e) Transfer of care. A hospice program, if its provider agreement 
terminated, is responsible for providing information, assistance, and 
arrangements necessary for the proper and safe transfer of patients to 
another local hospice program within 30 calendar days of termination. 
The State must assist the hospice program in the safe and orderly 
transfer of care and services for the patients to another local hospice 
program.


Sec.  488.1235   Temporary management.

    (a) Application. (1) CMS may impose temporary management of a 
hospice program if it determines that a hospice program has a 
condition-level deficiency and CMS determines that management 
limitations or the

[[Page 36012]]

deficiencies are likely to impair the hospice program's ability to 
correct the noncompliance and return the hospice program to compliance 
with all of the conditions of participation within the timeframe 
required.
    (b) Procedures--(1) Notice of intent. Before imposing this remedy, 
CMS notifies the hospice program in accordance with Sec.  488.1210(e) 
that a temporary manager is being appointed.
    (2) Termination. If the hospice program fails to relinquish 
authority and control to the temporary manager, CMS terminates the 
hospice program's provider agreement in accordance with Sec.  488.1265.
    (c) Duration and effect of remedy. Temporary management continues 
until one of the following occur:
    (1) CMS determines that the hospice program has achieved 
substantial compliance and has the management capability to ensure 
continued compliance with all the conditions of participation.
    (2) CMS terminates the provider agreement.
    (3) The hospice program resumes management control without CMS 
approval. In this case, CMS initiates termination of the provider 
agreement and may impose additional remedies.
    (4) Temporary management will not exceed a period of 6 months from 
the date of the survey identifying noncompliance.
    (d) Payment of salary. (1) The temporary manager's salary must meet 
the following:
    (i) Is paid directly by the hospice program while the temporary 
manager is assigned to that hospice program.
    (ii) Must be at least equivalent to the sum of the following:
    (A) The prevailing salary paid by providers for positions of this 
type in what the State considers to be the hospice program's geographic 
area (prevailing salary based on the Bureau of Labor Statistics, 
National Occupational Employment and Wage Estimates)).
    (B) Any additional costs that would have reasonably been incurred 
by the hospice program if such person had been in an employment 
relationship.
    (C) Any other costs incurred by such a person in furnishing 
services under such an arrangement or as otherwise set by the State.
    (2) A hospice program's failure to pay the salary and other costs 
of the temporary manager described in paragraph (d)(1) of this section 
is considered a failure to relinquish authority and control to 
temporary management.


Sec.  488.1240   Suspension of all or part of the payments.

    (a) Application. (1) CMS may suspend all or part of the payments to 
which a hospice program would otherwise be entitled with respect to 
items and services furnished by a hospice program on or after the date 
on which the Secretary determines that remedies should be imposed.
    (2) CMS considers this remedy for any deficiency related to poor 
patient care outcomes, regardless of whether the deficiency poses 
immediate jeopardy.
    (b) Procedures--(1) Notice of intent. (i) Before suspending 
payments, CMS provides the hospice program notice of the suspension of 
payment in accordance with Sec.  488.1210(e).
    (ii) The hospice program may not charge a newly admitted hospice 
patient who is a Medicare beneficiary for services for which Medicare 
payment is suspended unless the hospice program can show that, before 
initiating care, it gave the patient or his or her representative oral 
and written notice of the suspension of Medicare payment in a language 
and manner that the beneficiary or representative can understand.
    (2) Restriction. (i) Suspension of payment remedy may be imposed 
anytime a hospice program is found to be out of substantial compliance 
with the conditions of participation.
    (ii) Suspension of payment remains in place until CMS determines 
that the hospice program has achieved substantial compliance with the 
conditions of participation or is terminated, as determined by CMS.
    (3) Resumption of payments. Payments to the hospice program resume 
prospectively on the date that CMS determines that the hospice program 
has achieved substantial compliance with the conditions of 
participation.
    (c) Duration and effect of remedy. This remedy ends when any of the 
following occur:
    (1) CMS determines that the hospice program has achieved 
substantial compliance with all of the conditions of participation.
    (2) When the hospice program is terminated or CMS determines that 
the hospice program is not in compliance with the conditions of 
participation at a maximum of 6 months from the date of the survey 
identifying the noncompliance.


Sec.  488.1245   Civil money penalties.

    (a) Application. (1) CMS may impose a civil money penalty against a 
hospice program for either the number of days the hospice program is 
not in compliance with one or more conditions of participation or for 
each instance that a hospice program is not in compliance, regardless 
of whether the hospice program's deficiencies pose immediate jeopardy.
    (2) CMS may impose a civil money penalty for the number of days of 
immediate jeopardy.
    (3) A per-day and a per-instance CMP may not be imposed 
simultaneously for the same deficiency in conjunction with a survey.
    (4) CMS may impose a civil money penalty for the number of days of 
noncompliance since the last standard survey, including the number of 
days of immediate jeopardy.
    (b) Amount of penalty--(1) Factors considered. CMS takes into 
account the following factors in determining the amount of the penalty:
    (i) The factors set out at Sec.  488.1215.
    (ii) The size of a hospice program and its resources.
    (iii) Evidence that the hospice program has a built-in, self-
regulating quality assessment and performance improvement system to 
provide proper care, prevent poor outcomes, control patient injury, 
enhance quality, promote safety, and avoid risks to patients on a 
sustainable basis that indicates the ability to meet the conditions of 
participation and to ensure patient health and safety.
    (2) Adjustments to penalties. Based on revisit survey findings, 
adjustments to penalties may be made after a review of the provider's 
attempted correction of deficiencies.
    (i) CMS may increase a CMP in increments based on a hospice 
program's inability or failure to correct deficiencies, the presence of 
a system-wide failure in the provision of quality care, or a 
determination of immediate jeopardy with actual harm versus immediate 
jeopardy with potential for harm.
    (ii) CMS may also decrease a CMP in increments to the extent that 
it finds, in accordance with a revisit, that substantial and 
sustainable improvements have been implemented even though the hospice 
program is not yet in compliance with the conditions of participation.
    (iii) No penalty assessment exceeds $10,000, as adjusted annually 
under 45 CFR part 102, for each day a hospice program is not in 
substantial compliance with one or more conditions of participation.
    (3) Upper range of penalty. Penalties in the upper range of $8,500 
to $10,000 per day, as adjusted annually under 45 CFR part 102, are 
imposed for a condition-level deficiency that is

[[Page 36013]]

immediate jeopardy. The penalty in this range continues until 
substantial compliance can be determined based on a revisit survey.
    (i) $10,000, as adjusted annually under 45 CFR part 102, per day 
for a deficiency or deficiencies that are immediate jeopardy and that 
result in actual harm.
    (ii) $9,000, as adjusted annually under 45 CFR part 102, per day 
for a deficiency or deficiencies that are immediate jeopardy and that 
result in a potential for harm.
    (iii) $8,500, as adjusted annually under 45 CFR part 102, per day 
for a deficiency based on an isolated incident in violation of 
established hospice policy.
    (4) Middle range of penalty. Penalties in the range of $1,500 up to 
$8,500, as adjusted annually under 45 CFR part 102, per day of 
noncompliance are imposed for a repeat or condition-level deficiency or 
both that does not constitute immediate jeopardy but is directly 
related to poor quality patient care outcomes.
    (5) Lower range of penalty. Penalties in this range of $500 to 
$4,000, as adjusted annually under 45 CFR part 102, are imposed for a 
repeat or condition-level deficiency or both that does not constitute 
immediate jeopardy and that are related predominately to structure or 
process-oriented conditions rather than directly related to patient 
care outcomes.
    (6) Per instance penalty. Penalty imposed per instance of 
noncompliance may be assessed for one or more singular events of 
condition-level deficiency that are identified and where the 
noncompliance was corrected during the onsite survey. When penalties 
are imposed for per instance of noncompliance, or more than one per 
instance of noncompliance, the penalties will be in the range of $1,000 
to $10,000 per instance, not to exceed $10,000 each day of 
noncompliance, as adjusted annually under 45 CFR part 102.
    (7) Decreased penalty amounts. If the immediate jeopardy situation 
is removed, but a condition-level deficiency exists, CMS shifts the 
penalty amount imposed per day from the upper range to the middle or 
lower range. An earnest effort to correct any systemic causes of 
deficiencies and sustain improvement must be evident.
    (8) Increased penalty amounts. (i) In accordance with paragraph 
(b)(2) of this section, CMS increases the per day penalty amount for 
any condition-level deficiency or deficiencies which, after imposition 
of a lower-level penalty amount, become sufficiently serious to pose 
potential harm or immediate jeopardy.
    (ii) CMS increases the per day penalty amount for deficiencies that 
are not corrected and found again at the time of revisit survey(s) for 
which a lower-level penalty amount was previously imposed.
    (iii) CMS may impose a more severe amount of penalties for repeated 
noncompliance with the same condition-level deficiency or uncorrected 
deficiencies from a prior survey.
    (c) Procedures--(1) Notice of intent. CMS provides the hospice 
program with written notice of the intent to impose a civil money 
penalty in accordance with Sec.  488.1210(e).
    (2) Appeals--(i) Appeals procedures. A hospice program may request 
a hearing on the determination of the noncompliance that is the basis 
for imposition of the civil money penalty. The request must meet the 
requirements in Sec.  498.40 of this chapter.
    (ii) Waiver of a hearing. A hospice program may waive the right to 
a hearing, in writing, within 60 calendar days from the date of the 
notice imposing the civil money penalty. If a hospice program timely 
waives its right to a hearing, CMS reduces the penalty amount by 35 
percent, and the amount is due within 15 calendar days of the hospice 
program agreeing in writing to waive the hearing. If the hospice 
program does not waive its right to a hearing in accordance to the 
procedures specified in this section, the civil money penalty is not 
reduced by 35 percent.
    (d) Accrual and duration of penalty--(1) Accural of per day 
penalty. (i) The per day civil money penalty may start accruing as 
early as the beginning of the last day of the survey that determines 
that the hospice program was out of compliance, as determined by CMS.
    (ii) A civil money penalty for each per instance of noncompliance 
is imposed in a specific amount for that particular deficiency, with a 
maximum of $10,000 per day per hospice program.
    (2) Duration of per day penalty when there is immediate jeopardy. 
(i) In the case of noncompliance that poses immediate jeopardy, CMS 
must terminate the provider agreement within 23 calendar days after the 
last day of the survey if the immediate jeopardy is not removed.
    (ii) A penalty imposed per day of noncompliance will stop accruing 
on the day the provider agreement is terminated or the hospice program 
achieves substantial compliance, whichever occurs first.
    (3) Duration of penalty when there is no immediate jeopardy. (i) In 
the case of noncompliance that does not pose immediate jeopardy, the 
daily accrual of per day civil money penalties is imposed for the days 
of noncompliance prior to the notice of intent specified in paragraph 
(c)(1) of this section and an additional period of no longer than 6 
months following the last day of the survey.
    (ii) If the hospice program has not achieved compliance with the 
conditions of participation within 6 months following the last day of 
the survey, CMS terminates the provider agreement. The accrual of civil 
money penalty stops on the day the hospice program agreement is 
terminated or the hospice program achieves substantial compliance, 
whichever is earlier.
    (e) Computation and notice of total penalty amount. (1) When a 
civil money penalty is imposed on a per day basis and the hospice 
program achieves compliance with the conditions of participation as 
determined by a revisit survey, once the administrative determination 
is final, CMS sends a final notice to the hospice program containing of 
the following information:
    (i) The amount of penalty assessed per day.
    (ii) The total number of days of noncompliance.
    (iii) The total amount due.
    (iv) The due date of the penalty.
    (v) The rate of interest to be assessed on any unpaid balance 
beginning on the due date, as provided in paragraph (f)(6) of this 
section.
    (2) When a civil money penalty is imposed per instance of 
noncompliance, once the administrative determination is final, CMS 
sends a final notice to the hospice program containing all of the 
following information:
    (i) The amount of the penalty that was assessed.
    (ii) The total amount due.
    (iii) The due date of the penalty.
    (iv) The rate of interest to be assessed on any unpaid balance 
beginning on the due date, as provided in paragraph (f)(6) of this 
section.
    (3) In the case of a hospice program for which the provider 
agreement has been involuntarily terminated, CMS sends the final notice 
after one of the following actions has occurred:
    (i) The administrative determination is final.
    (ii) The hospice program has waived its right to a hearing in 
accordance with paragraph (c)(2)(ii) of this section.
    (iii) Time for requesting a hearing has expired and the hospice 
program has not requested a hearing.
    (f) Due date for payment of penalty. A penalty is due and payable 
15 calendar days from notice of the final administrative decision.

[[Page 36014]]

    (1) Payments are due for all civil money penalties within 15 
calendar days of any of the following:
    (i) After a final administrative decision when the hospice program 
achieves substantial compliance before the final decision or the 
effective date of termination occurs before the final decision.
    (ii) After the time to appeal has expired and the hospice program 
does not appeal or fails to timely appeal the initial determination.
    (iii) After CMS receives a written request from the hospice program 
requesting to waive its right to appeal the determinations that led to 
the imposition of a remedy.
    (iv) After the effective date of termination.
    (2) A request for hearing does not delay the imposition of any 
penalty; it only potentially delays the collection of the final penalty 
amount.
    (3) If a hospice program waives its right to a hearing according to 
paragraph (c)(2)(ii) of this section, CMS applies a 35 percent 
reduction to the CMP amount for any of the following:
    (i) The hospice program achieved compliance with the conditions of 
participation before CMS received the written waiver of hearing.
    (ii) The effective date of termination occurs before CMS received 
the written waiver of hearing.
    (4) The period of noncompliance may not extend beyond 6 months from 
the last day of the survey.
    (5) The amount of the penalty, when determined, may be deducted 
(offset) from any sum then or later owing by CMS or State Medicaid to 
the hospice program.
    (6) Interest is assessed and accrues on the unpaid balance of a 
penalty, beginning on the due date. Interest is computed at the rate 
specified in Sec.  405.378(d) of this chapter.
    (g) Review of the penalty. When an administrative law judge finds 
that the basis for imposing a civil monetary penalty exists, as 
specified in this part, the administrative law judge, may not do any of 
the following:
    (1) Set a penalty of zero or reduce a penalty to zero.
    (2) Review the exercise of discretion by CMS to impose a civil 
monetary penalty.
    (3) Consider any factors in reviewing the amount of the penalty 
other than those specified in paragraph (b) of this section.


Sec.  488.1250   Directed plan of correction.

    (a) Application. CMS may impose a directed plan of correction when 
a hospice program--
    (1) Has one or more condition-level deficiencies that warrant 
directing the hospice program to take specific actions; or
    (2) Fails to submit an acceptable plan of correction.
    (b) Procedures. (1) Before imposing this remedy, CMS notifies the 
hospice program in accordance with Sec.  488.1210(e).
    (2) CMS or the temporary manager (with CMS approval) may direct the 
hospice program to take corrective action to achieve specific outcomes 
within specific timeframes.
    (c) Duration and effect of remedy. If the hospice program fails to 
achieve compliance with the conditions of participation within the 
timeframes specified in the directed plan of correction, which may not 
to exceed 6 months, CMS does one of the following:
    (1) May impose one or more other remedies set forth in Sec.  
488.1220.
    (2) Terminates the provider agreement.


Sec.  488.1255  Directed in-service training.

    (a) Application. CMS may require the staff of a hospice program to 
attend in-service training program(s) if CMS determines all of the 
following:
    (1) The hospice program has condition-level deficiencies.
    (2) Education is likely to correct the deficiencies.
    (3) The programs are conducted by established centers of health 
education and training or consultants with background in education and 
training with Medicare hospice providers, or as deemed acceptable by 
CMS or the State (by review of a copy of curriculum vitas or resumes 
and references to determine the educator's qualifications).
    (b) Procedures--(1) Notice of intent. Before imposing this remedy, 
CMS notifies the hospice program in accordance with Sec.  488.1210(e).
    (2) Action following training. After the hospice program staff has 
received in-service training, if the hospice program has not achieved 
substantial compliance, CMS may impose one or more other remedies 
specified in Sec.  488.1220.
    (3) Payment. The hospice program pays for the directed in-service 
training for its staff.


Sec.  488.1260   Continuation of payments to a hospice program with 
deficiencies.

    (a) Continued payments. CMS may continue payments to a hospice 
program with condition-level deficiencies that do not constitute 
immediate jeopardy for up to 6 months from the last day of the survey 
if the criteria in paragraph (a)(1) of this section are met.
    (1) Criteria. CMS may continue payments to a hospice program not in 
compliance with the conditions of participation for the period 
specified in paragraph (a) of this section if all of the following 
criteria are met:
    (i) An enforcement remedy, or remedies, (with the exception of 
suspension of all payment) has been imposed on the hospice program and 
termination has not been imposed.
    (ii) The hospice program has submitted a plan of correction 
approved by CMS.
    (iii) The hospice program agrees to repay the Federal government 
payments received under this provision if corrective action is not 
taken in accordance with the approved plan and timetable for corrective 
action.
    (2) Termination. CMS may terminate the hospice program's provider 
agreement any time if the criteria in paragraph (a)(1) of this section 
are not met.
    (b) Cessation of payments for new admissions. If termination is 
imposed, either on its own or in addition to an enforcement remedy or 
remedies, or if any of the criteria set forth in paragraph (a)(1) of 
this section are not met, the hospice program will receive no Medicare 
payments, as applicable, for new admissions following the last day of 
the survey.
    (c) Failure to achieve compliance with the conditions of 
participation. If the hospice program does not achieve compliance with 
the conditions of participation by the end of the period specified in 
paragraph (a) of this section, CMS terminates the provider agreement of 
the hospice program in accordance with Sec.  488.1265.


Sec.  488.1265   Termination of provider agreement.

    (a) Effect of termination by CMS. Termination of the provider 
agreement ends--
    (1) Payment to the hospice program; and
    (2) Any enforcement remedy.
    (b) Basis for termination. CMS terminates a hospice program's 
provider agreement under any one of the following conditions:
    (1) The hospice program is not in compliance with the conditions of 
participation.
    (2) The hospice program fails to submit an acceptable plan of 
correction within the timeframe specified by CMS.
    (3) The hospice program fails to relinquish control to the 
temporary manager, if that remedy is imposed by CMS.
    (4) The hospice program fails to meet the eligibility criteria for 
continuation of payment as set forth in Sec.  488.1260(a)(1).

[[Page 36015]]

    (c) Notice. CMS notifies the hospice program and the public of the 
termination, in accordance with procedures set forth in Sec.  489.53 of 
this chapter.
    (d) Procedures for termination. CMS terminates the provider 
agreement in accordance with procedures set forth in Sec.  489.53 of 
this chapter.
    (e) Payment post termination. Payment is available for up to 30 
calendar days after the effective date of termination for hospice care 
furnished under a plan established before the effective date of 
termination as set forth in Sec.  489.55 of this chapter.
    (f) Appeal. A hospice program may appeal the termination of its 
provider agreement by CMS in accordance with part 498 of this chapter.

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
25. The authority citation for part 489 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 
1395ff, and 1395(hh).

0
26. Section 489.28 is amended by revising paragraphs (d) and (e) to 
read as follows:


Sec.  489.28   Special capitalization requirements for HHAs

* * * * *
    (d) Required proof of availability of initial reserve operating 
funds. The HHA must provide CMS with adequate proof of the availability 
of initial reserve operating funds. Such proof, at a minimum, will 
include a copy of the statement(s) of the HHA's savings, checking, or 
other account(s) that contains the funds, accompanied by an attestation 
from an officer of the bank or other financial institution (if the 
financial institution offers such attestations) that the funds are in 
the account(s) and that the funds are immediately available to the HHA. 
In some cases, an HHA may have all or part of the initial reserve 
operating funds in cash equivalents. For the purpose of this section, 
cash equivalents are short-term, highly liquid investments that are 
readily convertible to known amounts of cash and that present 
insignificant risk of changes in value. A cash equivalent that is not 
readily convertible to a known amount of cash as needed during the 
initial 3-month period for which the initial reserve operating funds 
are required does not qualify in meeting the initial reserve operating 
funds requirement. Examples of cash equivalents for the purpose of this 
section are Treasury bills, commercial paper, and money market funds. 
As with funds in a checking, savings, or other account, the HHA also 
must be able to document the availability of any cash equivalents. CMS 
later may require the HHA to furnish another attestation from the 
financial institution that the funds remain available, or, if 
applicable, documentation from the HHA that any cash equivalents remain 
available, until a date when the HHA will have been surveyed by the 
State agency or by an approved accrediting organization. The officer of 
the HHA who will be certifying the accuracy of the information on the 
HHA's cost report must certify what portion of the required initial 
reserve operating funds is non-borrowed funds, including funds invested 
in the business by the owner. That amount must be at least 50 percent 
of the required initial reserve operating funds. The remainder of the 
reserve operating funds may be secured through borrowing or line of 
credit from an unrelated lender.
    (e) Borrowed funds. If borrowed funds are not in the same 
account(s) as the HHA's own non-borrowed funds, the HHA also must 
provide proof that the borrowed funds are available for use in 
operating the HHA, by providing, at a minimum, a copy of the 
statement(s) of the HHA's savings, checking, or other account(s) 
containing the borrowed funds, accompanied by an attestation from an 
officer of the bank or other financial institution (if the financial 
institution offers such attestations) that the funds are in the 
account(s) and are immediately available to the HHA. As with the HHA's 
own (that is, non-borrowed) funds, CMS later may require the HHA to 
establish the current availability of such borrowed funds, including 
furnishing an attestation from a financial institution or other source, 
as may be appropriate, and to establish that such funds will remain 
available until a date when the HHA will have been surveyed by the 
State agency or by an approved accrediting organization.
* * * * *


Sec.  489.53   [Amended]

0
27. Section 489.53 is amended in paragraph (a)(17) by removing the 
phrase ``an HHA,'' and adding in its place the phrase ``an HHA or 
hospice program,''.

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT 
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT 
AFFECT THE PARTICIPATION OF ICFS/IID AND CERTAIN NFs IN THE 
MEDICAID PROGRAM

0
28. The authority citation for part 498 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1320a-7j, and 1395hh.

0
29. Section 498.1 is amended by adding paragraph (l) to read as 
follows:


Sec.  498.1   Statutory basis.

* * * * *
    (l) Section 1822 of the Act provides that for hospice programs that 
are no longer in compliance with the conditions of participation, the 
Secretary may develop remedies to be imposed instead of, or in addition 
to, termination of the hospice program's Medicare provider agreement.
0
30. Section 498.3 is amended--
0
a. By revising paragraph (b)(13);
0
b. In paragraph (b)(14) introductory text, by removing the phrase ``NF 
or HHA but only'' and adding in its place the phrase ``NF, HHA or 
hospice program, but only'';
0
c. By revising paragraph (b)(14)(i); and
0
d. In paragraph (d)(10) introductory text, by removing the phrase ``NF 
or HHA--'' and adding in its place the phrase ``NF, HHA or hospice 
program--``.
    The revisions read as follows:


Sec.  498.3   Scope and applicability.

* * * * *
    (b) * * *
    (13) Except as provided at paragraph (d)(12) of this section for 
SNFs, NFs, HHAs, and hospice programs, the finding of noncompliance 
leading to the imposition of enforcement actions specified in Sec.  
488.406, Sec.  488.820, or Sec.  488.1170 of this chapter, but not the 
determination as to which sanction or remedy was imposed. The scope of 
review on the imposition of a civil money penalty is specified in Sec.  
488.438(e), Sec.  488.845(h), or Sec.  488.1195(h) of this chapter.
    (14) * * *
    (i) The range of civil money penalty amounts that CMS could collect 
(for SNFs or NFs, the scope of review during a hearing on imposition of 
a civil money penalty is set forth in Sec.  488.438(e) of this chapter 
and for HHAs and hospice programs, the scope of review during a hearing 
on the imposition of a civil money penalty is set forth in

[[Page 36016]]

Sec. Sec.  488.845(h) and 488.1195(h) of this chapter); or
* * * * *


Sec.  498.60   [Amended]

0
31. Section 498.60 is amended--
0
a. In paragraph (c)(1) by removing the reference ``Sec. Sec.  
488.438(e) and 488.845(h)'' and adding in its place the reference 
``Sec. Sec.  488.438(e), 488.845(h), and 488.1195(g)''.
0
b. In paragraph (c)(2) by removing the phrase ``or HHA'' and adding in 
its place the phrase ``HHA or hospice program''.

    Dated: June 23, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-13763 Filed 6-28-21; 4:15 pm]
BILLING CODE 4120-01-P