[Federal Register Volume 86, Number 214 (Tuesday, November 9, 2021)]
[Rules and Regulations]
[Pages 62240-62431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23993]



[[Page 62239]]

Vol. 86

Tuesday,

No. 214

November 9, 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, 483, et al.





Medicare and Medicaid Programs; CY 2022 Home Health Prospective Payment 
System Rate Update; Home Health Value-Based Purchasing Model 
Requirements and Model Expansion; Home Health and Other Quality 
Reporting Program Requirements; Home Infusion Therapy Services 
Requirements; Survey and Enforcement Requirements for Hospice Programs; 
Medicare Provider Enrollment Requirements; and COVID-19 Reporting 
Requirements for Long-Term Care Facilities; Final Rule

  Federal Register / Vol. 86 , No. 214 / Tuesday, November 9, 2021 / 
Rules and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409, 424, 483, 484, 488, 489 and 498

[CMS-1747-F and CMS-5531-F]
RIN 0938-AU37 and 0938-AU32


Medicare and Medicaid Programs; CY 2022 Home Health Prospective 
Payment System Rate Update; Home Health Value-Based Purchasing Model 
Requirements and Model Expansion; Home Health and Other Quality 
Reporting Program Requirements; Home Infusion Therapy Services 
Requirements; Survey and Enforcement Requirements for Hospice Programs; 
Medicare Provider Enrollment Requirements; and COVID-19 Reporting 
Requirements for Long-Term Care Facilities

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule updates 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 finalizes recalibration of the case-mix weights and updates 
the functional impairment levels, and comorbidity adjustment subgroups 
while maintaining the current low utilization payment adjustment (LUPA) 
thresholds for CY 2022. Additionally, this rule finalizes a policy 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 makes conforming regulations text changes to reflect that allowed 
practitioners are able to establish and review the plan of care. It 
also finalizes proposed changes to the Home Health Quality Reporting 
Program (QRP) including finalizing proposed measure removals and 
adoptions, public reporting, and modification of effective dates. It 
also finalizes proposed modifications to the effective date for the 
reporting of measures and certain standardized patient assessment data 
in the Inpatient Rehabilitation Facility (IRF) QRP and Long-Term Care 
Hospital (LTCH) QRP. In addition, this final rule codifies certain 
Medicare provider and supplier enrollment policies. It also makes 
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 updates 
the home health conditions of participation regarding occupational 
therapists assessment completion to implement provisions of the 
Consolidated Appropriations Act, 2021 (CAA 2021). This final rule also 
finalizes proposals to expand the Home Health Value-Based Purchasing 
(HHVBP) Model and to end the original HHVBP Model one year early. 
Lastly, it establishes survey and enforcement requirements for hospice 
programs as set forth in the CAA 2021; and finalizes revisions to the 
infection control requirements for long-term care (LTC) facilities 
(Medicaid nursing facilities and Medicare skilled nursing facilities, 
also collectively known as ``nursing homes'') that will extend the 
mandatory COVID-19 reporting requirements beyond the current COVID-19 
PHE until December 31, 2024.

DATES: These regulations are effective on January 1, 2022.

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, https://share.cms.gov/center/CCSQ/CSG/DIQS/LTC/LTCCOVIDReportingfinalrule/ please visit the HHVBP Model Expansion 
webpage at https://innovation.cms.gov/innovation-models/home-health-value-based-purchasing-model.
    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.
    For information about the survey and enforcement requirements for 
hospice programs, send your inquiry via email to 
[email protected].
    For information about the LTC facility requirements for 
participation, contact Molly Anderson at: [email protected], 
Diane Corning at [email protected], Kim Roche at 
[email protected], or Alpha-Banu Wilson at 
[email protected].

SUPPLEMENTARY INFORMATION: 

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. Provisions for Payment Under the HH PPS
III. Home Health Value-Based Purchasing (HHVBP) Model
    A. Expansion of the HHVBP Model Nationwide
    B. 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. 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. Provisions
VII. Survey and Enforcement Requirements for Hospice Programs
    A. Background
    B. Provisions
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. Revised Compliance Date for Certain Inpatient Rehabilitation 
Facility (IRF) QRP Reporting Requirements
    B. Revised Compliance Date for Certain Long-Term Care Hospital 
(LTCH) QRP Reporting Requirements
X. COVID-19 Reporting Requirements for Long Term Care Facilities
    A. Background

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    B. Statutory Authority and Regulatory Background
    C. Provisions of the Final Rule and Responses to Public Comments
XI. Collection of Information Requirements and Waiver of Proposed 
Rulemaking
    A. Statutory Requirement for Solicitation of Comments
    B. Collection of Information Requirements
    C. Submission of PRA-Related Comments
    D. Waiver of Proposed Rulemaking
XII. 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

I. Executive Summary

A. Purpose

1. Home Health Prospective Payment System (HH PPS)
    This final rule updates the payment rates for home health agencies 
(HHAs) for CY 2022, as required under section 1895(b) of the Social 
Security Act (the Act). This rule also finalizes recalibration of the 
case-mix weights under sections 1895(b)(4)(A)(i) and 1895(b)(4)(B) of 
the Act for 30-day periods of care in CY 2022 while maintaining the CY 
2021 LUPA thresholds. This final rule updates 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 uses the 
physical therapy (PT) add-on factor to establish the occupational 
therapy (OT) LUPA add-on factor and finalizes 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 rule, we expand the Home Health Value-Based Purchasing 
(HHVBP) Model to all Medicare-certified HHAs in the 50 States, 
Territories, and the District of Columbia beginning January 1, 2022 
with CY 2022 as a pre-implementation year. We are finalizing that CY 
2023 will be the first performance year and CY 2025 the first payment 
year, based on HHA performance in CY 2023. We are also finalizing our 
proposal to end the original HHVBP Model one 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 rule finalizes proposals under the HH QRP, including removal 
of an Outcome and Assessment Information Set (OASIS)-based measure, the 
Drug Education on All Medications Provided to Patient/Caregiver During 
All Episodes of Care 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. This 
rule also finalizes our 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 measure, and also finalizes our 
proposal to begin public reporting of 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 rule finalizes proposed revisions to certain HH QRP 
reporting requirements.
    This rule also finalizes similar compliance dates for certain IRF 
QRP and LTCH QRP requirements.
4. Changes to the Home Health Conditions of Participation
    In this rule, we are finalizing our proposed changes to make 
permanent selected regulatory blanket waivers related to home health 
aide supervision that we extended to Medicare participating home health 
agencies during the COVID-19 PHE. Blanket waivers to Medicare 
requirements were issued to provide flexibilities to make sure 
beneficiaries continue to have access to the health care they need 
while reducing burden to HHAs. In addition, Division CC, section 115 of 
CAA 2021 requires the Secretary of Health and Human Services (the 
Secretary) 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. 
Therefore, we are finalizing our proposed changes: (1) To the home 
health aide supervision requirements; and (2) that allow occupational 
therapists to complete the initial and comprehensive assessments for 
patients.
5. Medicare Coverage of Home Infusion Therapy
    This final rule updates 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 this final rule, we address a number of provisions regarding 
Medicare provider and supplier enrollment. Most of these provisions 
involve the finalization of the proposed codification of certain 
subregulatory policies. These 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. We are also finalizing two 
regulatory clarifications related to HHA changes of ownership and HHA 
capitalization requirements.
7. Survey and Enforcement Requirements for Hospice Programs
    In this final rule, we are finalizing changes 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. We continue 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.
8. COVID-19 Reporting Requirements for Long Term Care Facilities
    This final rule revises the infection control requirements that LTC 
facilities must meet to participate in the Medicare and Medicaid 
programs. By doing so, LTC facilities will be required to continue the 
COVID-19 reporting requirements published in the Additional Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency interim final rule with comment period, published on May 8, 
2020 (85 FR 27550) and the interim final rule, COVID-19 Vaccine 
Requirements for Long-Term Care (LTC) Facilities and Intermediate Care 
Facilities for Individuals With

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Intellectual Disabilities (ICFs-IID) Residents, Clients, published on 
May 13, 2021 (86 FR 26306). LTC facilities will be required to continue 
to report on a weekly basis to the Centers for Disease Control and 
Prevention (CDC) National Healthcare Safety Network (NHSN), suspected 
and confirmed COVID-19 infections, total deaths and COVID-19 deaths, 
personal protective equipment (PPE) and hand hygiene supplies, 
ventilator capacity and supplies, resident beds and census, access to 
COVID-19 testing, staffing shortages, therapeutics administered to 
residents for the treatment of COVID-19 requirements until December 31, 
2024, with the possibility of reduced frequency of reporting and 
modified or limited data elements that are required in the future at 
the discretion of the Secretary. They will also be required to report 
the COVID-19 vaccination status of residents and staff, including total 
numbers of residents and staff, numbers of residents and staff 
vaccinated, numbers of each dose of COVID-19 vaccine received, and 
COVID-19 vaccination adverse events.

B. Summary of the Provisions of This Rule

1. Home Health Prospective Payment System (HH PPS)
    In the CY 2022 proposed rule (86 FR 35874) we included discussions 
of preliminary Patient-Driven Groupings Model (PDGM) monitoring data 
and analyses on home health utilization; LUPAs; the distribution of the 
case-mix methodology as determined by clinical groupings, admission 
source and timing, functional status, and comorbidities; and therapy 
visits. Additionally, we provided preliminary analysis on HHA 
expenditures as reported on 2019 cost reports to estimate the 
difference between Medicare payments and HHAs' costs. We also provided 
a description and solicited comments on a potential repricing 
methodology for determining the difference between assumed versus 
actual behavior change on estimated aggregate expenditures for home 
health payments. In section II.B.1. and 2. of this final rule, we 
provide a summary of comments on these topics.
    In section II.B.3. of this rule, we are finalizing the 
recalibration of the PDGM case-mix weights, functional levels, and 
comorbidity adjustment subgroups while maintaining the CY 2021 LUPA 
thresholds for CY 2022.
    In section II.B.4. of this rule, we update the home health wage 
index, and we also update the CY 2022 national, standardized 30-day 
period payment rates 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 2.6 percent. Additionally, this rule 
finalizes the FDL ratio at 0.40 for CY 2022, in order to ensure that 
aggregate outlier payments do not exceed 2.5 percent of the total 
aggregate payments, as required by section 1895(b)(5)(A) of the Act.
    In section II.B.4.c.(5). of this final rule, we finalize changes to 
utilize the physical therapy (PT) LUPA add-on factor to establish the 
OT add-on factor for the LUPA add-on payment amounts with respect to 
the initial patient assessments newly permitted under Division CC, 
section 115 of CAA 2021 that revised Sec.  484.55(a)(2) and (b)(3).
    Section II.B.6. of this final rule finalizes conforming regulations 
text changes at Sec.  409.43 to reflect new statutory provisions that 
allow practitioners in addition to physicians to establish and 
periodically review the home health plan of care. These changes are 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 final rule, we are finalizing our 
proposal to expand the HHVBP Model to all Medicare-certified HHAs in 
the 50 States, territories, and District of Columbia beginning January 
1, 2022. However, we are designating CY 2022 as a pre-implementation 
year in response to a number of comments we received. CY 2023 will be 
the first performance year and CY 2025 the first payment year, with a 
maximum payment adjustment, upward or downward, of 5 percent. We are 
finalizing 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, 
2022, would be required to participate and would be eligible to receive 
an annual Total Performance Score based on their CY 2023 performance. 
We are finalizing 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, Home Health Consumer Assessment 
of Healthcare Providers and Systems (HHCAHPS) survey-based, and claims-
based measures submission in the applicable measure set beginning CY 
2022 and subsequent years. We are also finalizing our 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 final rule, we are finalizing our 
proposal to end the original HHVBP Model one year early. We are 
finalizing that we will 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 are finalizing that we will 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 final rule, we are finalizing the proposed 
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 requirements for certain HH QRP 
reporting requirements; and summarizing comments received on our 
requests for information regarding digital quality measures and health 
equity.
4. Changes to the Home Health Conditions of Participation
    In this section IV.D. of this rule, we finalize our proposal to 
make permanent selected regulatory blanket waivers related to home 
health aide supervision that we extended to Medicare-participating home 
health agencies during the COVID-19 PHE. In addition, we are revising 
our regulations to reflect Division CC, section 115 of CAA 2021. This 
provision 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 finalizing proposed changes to the home health aide 
supervision requirements at Sec.  484.80(h)(1) and (2) and conforming 
regulation text changes at Sec.  484.55(a)(2) and (b)(3), respectively,

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to allow occupational therapists to complete the initial and 
comprehensive assessments for patients in accordance with changes in 
the law.
    We are also making a technical correction at Sec.  484.50(d)(5).
5. Medicare Coverage of Home Infusion Therapy
    In section V. of this final 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). 
Additionally, we discuss the home infusion therapy services payment 
adjustments including finalizing the proposal to update the geographic 
adjustment factors (GAFs) used for wage adjustment and finalizing the 
proposal to maintain the percentages finalized for the initial and 
subsequent visit policy. In this section we also 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 final rule, we addressed 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 sub-regulatory policies. These are addressed in 
section VI.B. of this final rule and include, for example, policies 
related to: (1) The effective date of billing privileges for certain 
provider and supplier types and the effective date of certain provider 
enrollment transactions; and (2) the deactivation of a provider's or 
supplier's billing privileges.
    In addition, we finalized in section VI.C. of this final 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 final rule, there are a number of 
provisions related to Division CC, section 407 of CAA 2021. These 
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, we are 
finalizing our proposed provisions to establish a hospice program 
complaint hotline. Lastly, the finalized provisions create 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. The Special Focus Program will be considered in future 
rulemaking.
    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. When a CMS-approved AO program accredits a 
provider, CMS ``deems'' the provider to have complied with applicable 
Medicare conditions or requirements. The CAA 2021 provisions expanding 
requirements for AOs will apply to AOs with CMS-approved accreditation 
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 described and solicited comments on all aspects of the proposed 
survey and enforcement provisions for hospice programs.
8. Inpatient Rehabilitation Facility (IRF) Quality Reporting Program
    In section IX.A. of this final rule, we are finalizing our proposal 
to modify the compliance date for certain reporting requirements in the 
IRF QRP.
9. Long Term Care Hospital (LTCH) Quality Reporting Program
    In section IX.B. of this final rule, we are finalizing our proposal 
to modify the compliance date for certain reporting requirements in the 
LTCH QRP.
10. COVID-19 Reporting Requirements for Long-Term Care (LTC) Facilities
    In section X.C of this final rule, we finalize our COVID-19 
reporting requirements with the following modifications:
     Reporting frequency is modified to no more than weekly, 
and may be reduced, at the discretion of the Secretary;
     The possibility of modified or limited data elements that 
are required in the future, contingent on the state of the pandemic and 
at the discretion of the Secretary.
     The addition of a sunset date of December 31, 2024, for 
all reporting requirements, with the exclusion of the reporting 
requirements at Sec.  [thinsp]483.80(g)(1)(viii).

C. Summary of Costs, Transfers, and Benefits

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[GRAPHIC] [TIFF OMITTED] TR09NO21.000

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, 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, 41214).
    Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L.

[[Page 62245]]

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, section 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 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

[[Page 62246]]

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, 70305).
[GRAPHIC] [TIFF OMITTED] TR09NO21.075

B. Provisions of the Final Rule

1. PDGM Monitoring
    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 
2022 HH PPS proposed rule (86 FR 35880), we provided preliminary data 
analyses on the PDGM including: Overall home health utilization, 
clinical groupings and comorbidities, admission source and timing, 
functional impairment levels, and therapy visits. We also provided data 
analysis on the 2019 HHA Medicare cost reports. We solicited comments 
on the preliminary PDGM data and cost analyses, along with other 
factors CMS should be monitoring. These comments and our responses are 
summarized in this section of the rule.
    Comment: Many commenters viewed the overall decrease in utilization 
as more likely related to the COVID-19 PHE, rather than the 
implementation of the PDGM. One industry association stated that the 
COVID-19 PHE brought extensive changes in patient mix, home health 
patient census, significant practice changes and changes in admission 
source referrals. Commenters also stated because of the COVID-19 PHE, 
patients were often unwilling to allow home health clinicians into 
their

[[Page 62247]]

homes to receive needed care. Commenters also indicated that half of 
HHAs provided services to actively infected COVID-19 patients. We 
received several comments regarding the increase of LUPAs in CY 2020. 
Commenters remarked that the increase of LUPAs is more attributable to 
pandemic-related factors rather than HHAs taking advantage of the PDGM. 
Commenters also stated that the use of telehealth for the provision of 
home health visits contributed to the increase in LUPAs in CY 2020 
because of safety concerns and patient refusal to allow for in-person 
visits. Other commenters stated because telehealth services are not 
reported as home health visits, utilization of home health services is 
not fully captured. Additionally, several commenters recommended that 
CMS examine CY 2020 data at a more granular level due to the COVID-19 
PHE, including, but not limited to, geographical differences and 
seasonal trends.
    Response: CMS appreciates all of the comments received regarding CY 
2020 utilization trends and the impact of the COVID-19 PHE on the 
provision of home health services. We acknowledge commenter statements 
and concerns as to how the COVID-19 PHE affected the types of home 
health patients served and how HHAs had to adjust care practices in 
response. We also understand that the COVID-19 PHE has presented unique 
challenges for all providers who have had to develop and institute new 
protocols and processes to ensure the health and safety of home health 
staff and beneficiaries. CMS instituted maximum flexibilities and 
implemented waivers to assist providers in navigating the COVID-19 PHE 
and to safeguard the continued provision of Medicare home health 
services.\1\
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    \1\ Coronavirus waivers & flexibilities. https://www.cms.gov/about-cms/emergency-preparedness-response-operations/current-emergencies/coronavirus-waivers.
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    In the CY 2021 HH PPS final rule (85 FR 70298), CMS finalized 
changes to Sec.  409.43(a) as implemented in the March, 2020 COVID-19 
interim final rule with comment (IFC) (85 FR 19230), to allow the use 
of telecommunications technology more broadly, even outside of the 
COVID-19 PHE. If HHAs use telecommunications technology in the 
provision of home health care, the regulations state that the plan of 
care must include any provision of remote patient monitoring or other 
services furnished via a telecommunications system and that these 
services cannot substitute for a home visit ordered as part of the plan 
of care and cannot be considered a home visit for the purposes of 
patient eligibility or payment, in accordance with section 
1895(e)(1)(A) of the Act. Such changes were made to provide flexibility 
in the provision of care during the COVID-19 PHE and beyond as we 
recognize telecommunication services, at times, may be in the best 
interest of the patient and support the overall care of beneficiaries. 
However, since the law does not consider services furnished via a 
telecommunications system a home visit, these encounters, while 
allowed, are not included in utilization analysis.
    We also understand the interest in monitoring the impact of the 
COVID-19 PHE on home health services. While we continue to conduct 
analyses on home health utilization and other metrics, including the 
effects of COVID-19, we note that the PHE is ongoing and as such, 
patterns and trends may change over time. We will continue to examine 
the effects of the ongoing COVID-19 PHE on home health utilization and 
will determine when and how best to provide this information. We note 
that CMS does publish COVID-19 data and statistics, which provides 
information on how the COVID-19 PHE is affecting the Medicare 
population and aims to better inform individual and public policy 
healthcare decisions to address the impact of COVID-19.\2\
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    \2\ Preliminary Medicare COVID-19 Data Snapshot. https://www.cms.gov/research-statistics-data-systems/preliminary-medicare-covid-19-data-snapshot.
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    Comment: Several commenters requested additional detailed analyses 
of the impact of the PDGM on home health utilization. Some examples of 
suggested additional analyses included demographic data, social 
determinants of health, Program for Evaluating Payment Patterns 
Electronic Report (PEPPER reports), and HHA provider types, such as 
profit versus non-profit. A commenter recommended that CMS should 
supplement its analysis of utilization data with additional data and 
monitoring tools, such as survey data. Another commenter supports CMS' 
plans to assess the relationship of the OASIS GG items to resource use 
and their correlation to the current OASIS M1800-1860 items that 
address functional status. We received several comments stating that 
the level of data provided in the proposed rule did not reflect whether 
the home health services furnished were appropriate. Commenters also 
suggested that CMS examine patient outcomes and patient experiences in 
future rulemaking. Other commenters raised concerns about HHA admission 
practices. Commenters expressed concern that some HHAs exclude eligible 
beneficiaries with longer-term, chronic conditions, prematurely 
discharge patients, ``cherry-pick'' patients to admit to home health, 
and decrease necessary home health aide services. Several commenters 
requested that CMS continue to closely review and monitor therapy 
utilization data under the PDGM to evaluate for unintended 
consequences, and if, appropriate implement safeguards as needed. 
Specifically, commenters stated that the removal of therapy thresholds 
for payment have resulted in decreases in therapy utilization, 
termination of therapy staff, and increased use of algorithms, rather 
than clinical judgment, to determine the appropriate number of therapy 
visits.
    Response: We thank commenters for the additional suggestions for 
more detailed analyses on home health utilization and other relevant 
trends and will consider such suggestions for future analyses. We 
appreciate the concerns by commenters regarding potential aberrant 
practices and quality of care issues. As we continue to analyze home 
health utilization, we will monitor for any emerging trends that may 
warrant any program integrity actions.
    Regarding the concerns related to the removal of therapy 
thresholds, beginning in CY 2020, section 1895(b)(4)(B)(ii) of the Act, 
as added by section 51001 of the Bipartisan Budget Act of 2018 (BBA 
2018) eliminated the use of therapy thresholds in calculating payments 
for CY 2020 and subsequent years. However, as with analysis of overall 
home health utilization, we will continue to monitor the provision of 
therapy visits, including by subspecialty. We remind commenters that 
all home health services, including therapy, must be provided in 
accordance with the Conditions of Participation at 42 CFR 484.60. 
Specifically, the individualized plan of care must specify the care and 
services necessary to meet the patient-specific needs as identified in 
the comprehensive assessment, including identification of the 
responsible discipline(s), and the measurable outcomes that the HHA 
anticipates will occur as a result of implementing and coordinating the 
plan of care. The individualized plan of care must also specify the 
patient and caregiver education and training. Services must be 
furnished in accordance with accepted standards of practice.
    Comment: We received several comments regarding our analysis on the 
CY 2019 Medicare home health cost reports. Specifically, commenters 
expressed concerns over the accuracy of

[[Page 62248]]

cost report data. Commenters stated that the home health agency cost 
report data may not adequately reflect the home health industries' 
costs as providers vary in complexity, sophistication, size and 
resources.
    Response: We appreciate the commenters' feedback on the CY 2019 
cost report analysis provided in the proposed rule. We recognize that 
with the COVID-19 PHE, the CY 2019 data on the Medicare cost reports 
may not reflect the most recent changes such as increased 
telecommunications technology costs, increased PPE costs, and hazard 
pay. As we stated in the CY 2022 HH PPS proposed rule (86 FR 35884), 
when the CY 2020 cost reports become available, we will update the 
estimated 30-day period of care costs in CY 2020 in future rulemaking.
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
    In the CY 2019 HH PPS final rule with comment period (83 FR 56455), 
we finalized the use of three behavior assumptions in order to 
calculate a 30-day budget-neutral payment amount for CY 2020 as 
required by section 1895(b)(3)(A)(iv) of the Act. These included the 
clinical coding, the comorbidity, and the LUPA behavior assumptions. 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, assuming 
that these behaviors would happen half as frequently during the first 
year of implementation of the PDGM and 30-day unit of payment. 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 with comment 
period (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. In the CY 2022 proposed rule (86 FR 35889), we solicited 
comments on a possible methodology where we would use actual CY 2020 
30-day period claims data to simulate 60-day episodes to determine what 
CY 2020 payments would have been under the 153-group case-mix system 
and 60-day unit of payment. We also solicited comments on any potential 
alternative methods for determining the difference between assumed and 
actual behavior changes on estimated aggregate expenditures. We 
received comments on the methodology described in the proposed rule, 
comments regarding potential alternative methods, and comments on the 
previously finalized behavior assumptions which are summarized in this 
section of the rule.
    Comment: We received several comments stating that an independent 
analysis of the actual versus assumed behavior changes show that CMS' 
assumptions on two of the three previously finalized behavior 
assumptions were inaccurate. These commenters stated that CMS 
overestimated the clinical group assumption and the LUPA assumption. 
These commenters stated that the magnitude of coding the highest paying 
clinical diagnosis was overstated and the actual change in coding 
practices did not manifest as CMS assumed. Commenters also stated that 
there was a significant increase in the frequency of LUPA periods of 
care, indicating that the LUPA assumption also was overestimated. That 
is, commenters stated that HHAs did not make 1-2 extra visits to meet 
or exceed the LUPA threshold to receive a full, case-mix adjusted 30-
day period payment. Commenters recommended that we remove these 
behavior assumptions and the -4.36 percent payment adjustment for rate 
setting in CY 2022. Other comments stated that not only should the -
4.36 percent adjustment be removed, but that we should further increase 
the 30-day payment in CY 2022.
    A few commenters stated CMS does not have the authority to 
institute budget neutrality adjustments beyond those related to 
behavior changes. In addition, a few commenters stated we must utilize 
a PDGM budget neutrality methodology that is solely focused on assumed 
behavior changes that were incorporated into the original 2020 rate 
setting.
    Many commenters noted, as projected, the reported comorbidity 
levels have increased. Some commenters state this change may be because 
HHAs are now comprehensively recording these secondary diagnoses on 
home health claims, thereby more accurately reflecting patient acuity. 
However, other commenters disagreed and believe there is a change in 
aggregate patient acuity due to the COVID-19 PHE. Several commenters 
stated that there have been noted increases in the functional 
impairment level. Many stated that an increase of patients into the 
high functional impairment category and a decrease in the low 
functional impairment category could be a direct result of the COVID-19 
PHE, because HHAs had to accept higher acuity and more functionally 
impaired patients while elective surgeries were canceled and decreased 
the utilization in patients with lower functional impairment scores. 
The majority of commenters were supportive of foregoing any payment 
adjustment in CY 2022 based on the difference between assumed versus 
actual behavior change.
    Response: We appreciate the commenters feedback and would like to 
remind commenters that section 1895(b)(3)(a)(iv) of the Act required 
CMS to make behavioral assumptions when calculating the budget-neutral 
30-day payment rate. Section 1895(b)(3)(D) of the Act also requires CMS 
to annually determine the impact of differences between assumed 
behavior changes and actual behavior changes on estimated aggregate 
expenditures beginning with CY 2020 and ending with CY 2026. Therefore, 
we cannot simply remove a behavior change assumption; rather, we are 
required by law to annually determine the effects of behavior change on 
estimated aggregate expenditures. Furthermore, we stated in the CY 2019 
HH PPS final rule with comment period (53 FR 56455), the CY 2020 HH PPS 
final rule with comment period (84 FR 60513), and the CY 2022 HH PPS 
proposed rule (86 FR 35890), 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 amount for CY 2020 was 
determined.
    The law gives CMS the discretion to make temporary and permanent 
payment adjustments at a time and in a manner determined, by the 
Secretary, to be appropriate. As such, we did not propose any 
adjustment to the national, standardized 30-day payment rate in the CY 
2022 HH PPS proposed rule based on any behavior assumptions. The law 
requires that we make any temporary and permanent payment adjustment 
based on the difference between assumed versus actual behavior change 
on estimated aggregate expenditures through notice and comment 
rulemaking.
    Given some of the comments stating that CMS overestimated the 
behavior change, we wish to remind commenters that the CYs 2020 and 
2021 LDS files

[[Page 62249]]

included two separate datasets; one uses claims with a ``full'' 
behavior assumption applied, using the initial proposed -8.389 percent 
adjustment, and the other uses claims with a ``no'' behavior assumption 
applied (no adjustment for changes in behavior). As stated previously 
in the CY 2020 HH PPS final rule with comment period (84 FR 60512), CMS 
applied the three behavioral assumptions to only half of the 30-day 
periods of care, randomly selected. The -4.36 percent behavior 
adjustment is not included in the CYs 2020 and 2021 LDS files given the 
30-day periods to which the assumptions were applied were done so 
randomly. Therefore, any independent analysis conducted would need to 
include application of the behavior assumptions to only half of the 30-
day periods in the LDS files.
    Comment: The majority of commenters disagreed with the methodology 
set out in the proposed rule. Their concerns related to: The exclusions 
we applied to the data when simulating 60-day episodes claims from 30-
day periods; the impact of the COVID-19 PHE; the lack of comparability 
between case-mix models (for example, the assertion that a case-mix of 
1.0 is not the same across two systems); and the removal of payment 
incentives for therapy visits leading to a decline in therapy services 
furnished in CY 2020. Many commenters offered an alternative approach 
to compare CY 2018 60-day episodes converted to 30-day periods used for 
CY 2020 rate setting to actual CY 2020 30-day periods. Commenters 
stated such approach would more accurately determine the differences 
between assumed versus actual behavior changes on estimated aggregate 
expenditures, would be less biased, would eliminate the need to model 
other changes that occurred due to the implementation of the PDGM, and 
would avoid the impact of the COVID-19 PHE on therapy utilization. A 
few commenters also recommended to incorporate some analysis of 
evaluating ``real'' and ``nominal'' changes in the average case-mix 
weight.
    However, MedPAC supported the method presented in the proposed rule 
for computing the budget-neutral amount stating the method was 
reasonable and would satisfy the requirement to reconcile payments 
based on the differences between assumed versus actual behavior change 
on estimated aggregate expenditures, as required by section 
1895(a)(3)(D) of the Act.
    Response: We appreciate the commenters' comprehensive review of the 
methodology described in the CY 2022 HH PPS proposed rule. We will 
consider all alternative approaches as we continue to develop and 
refine a methodology for annually determining the difference between 
assumed versus actual behavior changes on estimated aggregate 
expenditures. As stated previously, the methodology and any associated 
payment adjustment based on the difference between assumed versus 
actual behavior change on estimated aggregate expenditures will be made 
through future notice and comment rulemaking.
3. CY 2022 PDGM LUPA Thresholds and PDGM Case-Mix Weights
a. 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 with comment period (83 FR 56492), we finalized 
our policy 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 is 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 final 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, we proposed to update the case-mix weights for CY 2022 using 
CY 2020 data as 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 
COVID-19 PHE would have impacted utilization within all case-mix groups 
similarly. Therefore, the impact of any reduction in resource use 
caused by the COVID-19 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 COVID-19 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 had 
proposed to set the LUPA thresholds 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 proposed 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 
was 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 COVID-19 PHE. The public comments on 
our proposal to maintain the CY 2021 LUPA thresholds for CY 2022 
payment purposes and our responses are summarized in this section of 
the rule.

[[Page 62250]]

    Comment: Some commenters expressed their support for the policy to 
maintain the CY 2020 LUPA thresholds for CY 2022 in order to mitigate 
potential fluctuations in the thresholds caused by changing visit 
patterns in CY 2020 potentially due to the COVID-19 PHE. One commenter 
recommended that CMS allow telehealth visits to be counted toward 
meeting LUPA thresholds. This commenter stated that in situations where 
virtual care visits can be equally as efficacious as an in-person 
meeting, and CMS should allow these visits to count within this payment 
framework.
    Response: We thank the commenters for their support. As noted 
previously, the goal of maintaining the LUPA thresholds for CY 2022 is 
to mitigate any potential fluctuations in the thresholds resulting from 
any changes in visit patterns resulting from the COVID-19 PHE. While we 
understand that there are ways in which technology can be further 
utilized to improve patient care, better leverage advanced practice 
clinicians, and improve outcomes while potentially making the provision 
of home health care more efficient, we remind stakeholders that under 
current law, services furnished via a telecommunications system cannot 
be considered a home health visit for purposes of eligibility or 
payment. Section 1895(e)(1)(A) of the Act prohibits payment for 
services furnished via a telecommunications system if such services 
substitute for in-person home health services ordered as part of a plan 
of care.
    Final Decision: We are finalizing the proposal to maintain the LUPA 
thresholds for CY 2022. The LUPA thresholds for CY 2022 are located on 
the HHA Center webpage.\3\
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    \3\ Home Health Agency Center webpage. https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
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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 \1/3\ of home health periods from each of the 
clinical groups fall within each level. 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 proposed 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 Home Health 
Groupings Model (HHGM) technical report from December 2016 \4\ provide 
a more detailed explanation as to the construction of these functional 
impairment levels using the OASIS items. We proposed 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 functional impairment levels by clinical group for CY 2022 are 
listed in Tables 2 and 3, respectively.
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    \4\ Overview of the Home Health Groupings Model Technical 
Report. November 2016. https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
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BILLING CODE P

[[Page 62251]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.001


[[Page 62252]]


[GRAPHIC] [TIFF OMITTED] TR09NO21.002

BILLING CODE C

[[Page 62253]]

    The following is a summary of the comments received and our 
responses to comments on the proposal to update the functional points 
and the functional impairment levels by clinical group.
    Comment: MedPAC was supportive of the proposal to update the 
functional points and functional impairment levels for CY 2022 and 
recommended that CMS to continue to update the functional categories in 
this manner in future payment years. MedPAC stated that the re-
weighting CMS proposed for CY 2022 would reset the payment categories 
based on 2020 data, so that periods will again be evenly distributed 
across the three functional payment categories. MedPAC believes that 
maintaining this distribution helps to ensure the accuracy of Medicare 
payments.
    Response: We thank the Commission for its support.
    Final Decision: We are finalizing the proposal to update the 
functional points and functional impairment levels for CY 2022.
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 diagnosis 
subgroups 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 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 so that payments align with the actual costs of 
providing care. For CY 2022, we proposed 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 proposed to update the comorbidity subgroups to 
include 20 low comorbidity adjustment subgroups and 85 high comorbidity 
adjustment interaction subgroups. To generate the final comorbidity 
subgroups, we used CY 2020 home health claims data with linked OASIS 
data (as of July 12, 2021). The tables later in this section have been 
revised to reflect the results using the updated data. The final 
comorbidity subgroups include 20 low comorbidity adjustment subgroups 
as identified in Table 4 and 87 high comorbidity subgroups as 
identified in Table 5.
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    In this section of the rule is a summary of the comments received 
and our response to those comments on the proposed updates to the low 
comorbidity adjustment subgroups and the high comorbidity adjustment 
subgroups for CY 2022.
    Comment: A commenter requested that CMS reassign diseases and 
disorders, as well as specific ICD-10 CM diagnosis codes, to different 
clinical groups or comorbidity subgroups to align with codes 
representing either similar conditions or similar clinical 
manifestations. The commenter requested the following reassignments:

    (1) Reassign dementia codes currently listed in the Behavioral 
Health clinical group to the Neuro Rehabilitation clinical group, 
due to the clinical similarities of Alzheimer's Disease and 
dementia, and to mirror the current classification of dementia 
within the neurological comorbidity subgroup
    (2) Add musculoskeletal pain, M25.5XX codes to the 
Musculoskeletal Rehabilitation (MS-Rehab) clinical group when listed 
as a primary diagnosis, as 14 of 17 M25.5XX codes are included in 
the Musculoskeletal 3 comorbidity subgroup;
    (3) Add the ``specified by organism'' sepsis codes A40.0 through 
A40.9 and A41.01 through A41.89 to the Infectious 1 comorbidity 
subgroup to align with current coding practices including A41.9 
sepsis unspecified;
    (4) Assign leukemia in relapse diagnosis subgroup codes, C92.4X, 
C92.5X, C92.6X, C92.AX to the Neoplasm 22 comorbidity subgroup, 
consistent with similar leukemia codes included in this comorbidity 
subgroup;
    (5) Reassign the diagnosis subgroup diabetes with mononeuropathy 
codes, EXX.41, and the diagnosis subgroup diabetes with autonomic 
(poly)neuropathy, EXX.43, codes to the Neurological 10 comorbidity 
subgroup, as neuropathy is a neurological condition and the 
Neurological 10 comorbidity subgroup already contains diabetic 
polyneuropathy codes;
    (6) Review the Neurological 11 comorbidity subgroup for a 
potential error since almost all the codes are related to vision 
issues except for the neuropathy diagnosis subgroup G62 codes. In 
addition, the commenter noted other types of hereditary and 
idiopathic neuropathy diagnosis subgroup G60 codes and inflammatory 
neuropathy diagnosis subgroup G61 codes are not assigned to a 
comorbidity subgroup when listed as a secondary diagnosis. The 
commenter requested reassigning the neuropathy diagnosis subgroup 
codes G60, G61, and G62 to the Neurological 10 comorbidity subgroup, 
which currently includes diabetic neuropathy;
    (7) Assign rheumatic tricuspid valve disease diagnosis codes I08 
to the Heart 9 comorbidity subgroup to align with other nonrheumatic 
valve disorders.

    Response: We appreciate the commenter's review of these codes and 
suggested reassignments. As we stated in the CY 2020 final rule with 
comment period (84 FR 60510), and as described in the technical report 
``Overview of the Home Health Groupings Model'',\5\ the home health-
specific comorbidity list is based on the principles of patient 
assessment by body systems and their associated diseases, conditions, 
and injuries. We used this process to develop categories of conditions 
that identify clinically relevant relationships associated with 
increased resource use. We understand the magnitude of clinical 
conditions and comorbidities, and the interactions that exist between 
them, in the Medicare home health population; however, we remind 
commenters that only those subgroups of diagnoses that represent more 
than 0.1 percent of periods of care and that have at least as high as 
the median resource use will receive a low comorbidity adjustment. We 
describe this method for determining statistical significance in the CY 
2020 final rule with comment period (84 FR 60510). This is based on the 
knowledge that the average number of comorbidities in the aggregate 
becomes the standard within that population for the purpose of payment. 
However, because we still expect HHAs to report all secondary diagnoses 
that affect care planning, there will be comorbidity subgroups included 
in the home health-specific list that don't meet the criteria to 
receive an adjustment.
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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.
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    We reviewed each of the requested coding changes to determine if 
the reassignment to a certain clinical group or comorbidity subgroup 
was warranted.
1. Request for Dementia Codes To Be Reassigned From the Behavioral 
Health Clinical Group to the Neuro Rehabilitation Clinical Group
    We determined there are only two dementia codes listed in the 
Behavioral Health clinical group with a Neurological 3 comorbidity 
subgroup; both of which are unspecified dementia codes. Because the 
commenter stated that reclassifying the dementia codes to a different 
clinical group would align with the current comorbidity subgroup 
Neurological 3, we expanded our review to include all ICD-10 CM 
diagnosis codes in the Neurological 3 comorbidity subgroup. Table 6 
lists these codes, their

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description, their current assigned clinical group, and current 
assigned comorbidity subgroup.
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    Our clinical advisors determined that because the two dementia 
codes (F03.90 and F03.91) listed in the Behavioral Health clinical 
group are unspecified and the etiology is unknown, they are clinically 
appropriate to be in the Behavioral Health clinical group and would not 
warrant a change in clinical group assignment. Upon review of the 
comorbidity subgroup codes in Table 6, we determined that these codes 
are more appropriate in a behavioral health comorbidity subgroup. 
Additionally, assigning these codes to the Behavioral 4 comorbidity 
subgroup does not result in a change in the comorbidity adjustment for 
these codes.
2. Request for Musculoskeletal Pain Diagnosis Subgroup, M25.5X Codes To 
Be Reassigned to Musculoskeletal Rehab Clinical Group
    We reviewed the ICD-10 CM diagnoses codes M25.5XX indicating 
musculoskeletal pain. Table 7 lists these codes, their description, 
their current assigned clinical group and current assigned comorbidity 
subgroup.
[GRAPHIC] [TIFF OMITTED] TR09NO21.010

    Our clinical advisors reviewed the ICD-10 CM diagnoses codes 
M25.5XX for musculoskeletal pain and have determined that these codes 
lack the specificity to clearly support a rationale for skilled 
services. In the CY 2019 HH

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PPS final rule with comment period (83 FR 56473), we stated that many 
of the codes that indicate pain or contractures as the primary 
diagnosis, for example M54.5 (low back pain) or M62.422 (contracture of 
muscle, right hand), although site specific, do not indicate the cause 
of the pain or contracture. We stated that we would expect a more 
definitive diagnosis indicating the cause of the pain or contracture, 
as the reason for the skilled care, in order to appropriately group the 
home health period. While we believe that codes that describe signs and 
symptoms (as opposed to diagnoses) are not appropriate as principal 
diagnosis codes for grouping home health periods into clinical groups, 
we recognize that pain can significantly impact the patient's recovery 
and plan of care. Therefore, when musculoskeletal pain with a specific 
location is indicated as a secondary diagnosis, we believe these codes 
are appropriate to remain in the Musculoskeletal 3 comorbidity 
subgroup. We disagree with the comment that the ICD-10 CM diagnoses 
codes M25.5XX should be reassigned to the MS-Rehab clinical group.
3. Request for Sepsis, Specified by Organism Codes To Be Assigned to 
the Infectious 1 Comorbidity Subgroup
    We reviewed sepsis, specified by organism, codes A40.0 through 
A40.9 and A41.01 through A41.89. Table 8 lists these codes, their 
description, their current assigned clinical group, and current 
assigned comorbidity subgroup.
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    Our clinical advisors reviewed the ICD-10-CM codes A40.0 through 
A40.9 and A41.01 through A41.89 and concur that clinically these codes 
are appropriate for inclusion in the Infectious 1 comorbidity subgroup 
when listed as a secondary diagnosis. We remind readers that ICD-10 CM 
codes A40.0 through A40.9 and A41.01 through A41.89 require the 
etiology code to be coded as primary, when applicable. When we 
reassigned the codes listed in Table 8 to Infectious 1, there was no 
change to the comorbidity adjustment for these codes (for example, no 
change in payment).

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5. Request for Leukemia in Relapse Codes To Be Reassigned to the 
Neoplasm 22 Comorbidity Subgroup
    We reviewed the ICD-10 CM codes indicating leukemia or 
histiocytosis with no comorbidity subgroup when listed as a secondary 
diagnosis. Table 9 lists these codes, their description, their current 
assigned clinical group, and current assigned comorbidity subgroup.
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    Our clinical advisors reviewed the leukemia and histiocytosis codes 
listed in Table 9 and concur that these codes are appropriate for 
inclusion in the Neoplasm 22 comorbidity subgroup when listed as a 
secondary diagnosis code. When we reassigned the codes listed in Table 
9 to Neoplasm 22, there was no change to the comorbidity adjustment for 
these codes (for example, no change in payment).
5. Request for Subgroup of Diabetes With Mononeuropathy and Autonomic 
(Poly) Neuropathy Be Reassigned to the Neurological 10 Comorbidity 
Subgroup
    We reviewed the ICD-10 CM diagnosis codes, diabetes with 
mononeuropathy, EXX.41, and diabetes with autonomic (poly)neuropathy, 
EXX.43. Table 10 lists these codes, their description, their current 
assigned clinical group, and current assigned comorbidity subgroup.

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    Our clinical advisors first reviewed all of the current ICD-10 CM 
diagnoses currently listed in the Neurological 10 comorbidity subgroup. 
We determined that all of the codes listed in the Neurological 10 
comorbidity subgroup are specific to diabetic unspecified neuropathy or 
diabetic polyneuropathy. The ICD-10 CM diagnosis codes EXX.41, diabetes 
with mononeuropathy, are different from diabetes with unspecified 
neuropathy or diabetic polyneuropathy in terms of clinical effects on 
the body system as a whole. Therefore, we disagree that the ICD-10 CM 
diagnosis codes EXX.41 should be reassigned to the Neurological 10 
comorbidity subgroup. However, our clinical advisors agree that ICD-10 
CM diagnosis subgroup EXX.43, diabetes with autonomic (poly)neuropathy, 
should be reassigned to the Neurological 10 comorbidity subgroup. The 
Endocrine 2 and Endocrine 3 comorbidity subgroups currently receive no 
comorbidity adjustment; whereas the Neurological 10 comorbidity 
subgroup currently receives a low comorbidity adjustment. Reassignment 
of the ICD-10 CM diagnosis subgroup EXX.43, diabetes with autonomic 
(poly)neuropathy, to Neurological 10 results in these codes receiving a 
low comorbidity adjustment when listed as a secondary diagnosis.
6. Request for Neuropathy Diagnosis Subgroup G60, G61, and G62 Codes To 
Be Reassigned to the Neurological 10 Comorbidity Subgroup
    We reviewed the Neurological 11 comorbidity subgroup and concur 
with the commenter that almost all of the ICD-10 CM diagnosis codes 
listed are primarily related to eye diseases and disorders (for 
example, retinopathy and macular degeneration). As the commenter also 
noted that there are other types of hereditary, idiopathic, and 
inflammatory neuropathies with no neurological comorbidity subgroup 
assigned, we reviewed the diagnosis subgroup G codes indicating a 
specified neuropathy (mono or poly) or unspecified polyneuropathy. 
Table 11 lists these codes, their description, their current assigned 
clinical group, and comorbidity subgroup.

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    We determined that all of the codes listed in the Neurological 10 
comorbidity subgroup are specific to diabetic unspecified neuropathy or 
diabetic polyneuropathy and therefore disagree that the neuropathy 
diagnosis subgroup G60, G61, and G62 codes should be reassigned. Our 
clinical advisors reviewed all the current neurological comorbidity 
subgroups and determined that the Neurological 11 comorbidity subgroup 
clinically remains the most appropriate comorbidity subgroup for codes 
G60, G61, and G62. However, we may consider additional neurological 
comorbidity subgroups in the future and, if appropriate, will reassign 
ICD-10 CM diagnosis codes if needed.
7. Request for Rheumatic Tricuspid Valve Disease Diagnoses Subgroup, 
I08.- Codes To Be Assigned to the Heart 9 Comorbidity Subgroup
    We reviewed the ICD-10 CM diagnosis subgroup I08.X, related to 
rheumatic disorders involving valves. Table 12 lists these codes, their 
description, their current assigned clinical group, and comorbidity 
subgroup.
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    Our clinical advisors agree that these codes are clinically 
appropriate for inclusion in the Heart 9 comorbidity subgroup when 
listed as a secondary diagnosis. When we reassigned the codes listed in 
Table 12 to Heart 9, there was no change to the comorbidity adjustment 
for these codes (for example, no change in payment).
    Final Decision: After reviewing the requested diseases and 
disorders for a clinical group or comorbidity subgroup reassignment, we 
are finalizing the reassignments of the following ICD-10 CM diagnosis 
codes: The ICD-10 CM diagnosis codes in the Neurological 3 comorbidity 
subgroup will be reassigned to the Behavioral 4 comorbidity subgroup; 
Sepsis, specified by organism, ICD-10 CM codes A40.0 through A40.9 and 
A41.01 through A41.89 will be assigned to the Infectious 1 comorbidity 
subgroup (note that while these codes will now be a part of the 
Infectious 1 comorbidity subgroup, we remind stakeholders that category 
A40 ``streptococcal sepsis'' and category A41 ``other sepsis'' have a 
code first note. If both the principal and secondary

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diagnoses are from category A40 and A41, there will not be a 
comorbidity adjustment, as both are listed from the same diagnosis 
subchapter); Leukemia in relapse and histiocytosis ICD-10 CM diagnosis 
codes will be assigned to the Neoplasm 22 comorbidity subgroup; The 
EXX.43 ICD-10 CM diagnosis codes will be reassigned to the Neurological 
10 comorbidity subgroup; The I08.X ICD-10 CM diagnosis codes will be 
assigned to the Heart 9 comorbidity subgroup. Table 13 in this section 
of the rule shows the final ICD-10 CM diagnosis code comorbidity 
subgroup reassignments. We did not reassign any clinical group for any 
ICD-10 CM diagnosis code. The final CY 2022 Clinical Group and 
Comorbidity Adjustment Diagnosis List is posted on the HHA Center 
webpage.\6\
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    \6\ HHA Center webpage: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
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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). In the CY 2019 HH PPS final rule 
with comment period (83 FR 56515), we finalized a policy 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). To generate the final recalibrated CY 2022 case-mix weights, we 
used CY 2020 home health claims data with linked OASIS data (as of July 
12, 2021). These data are the most current and complete data available 
at this time. The tables later in this section have been revised to 
reflect the results using the updated data.
    In the CY 2022 HH PPS proposed rule (86 FR 35874), we stated that 
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 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 13 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 HHA 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

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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 the 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 14 shows the coefficients 
of the payment regression used to generate the weights, and the 
coefficients divided by average resource use.
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    The case-mix weights finalized for CY 2022 are listed in Table 15 
and is posted on the HHA Center webpage.\7\
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    \7\ HHA Center Webpage: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.

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    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 noted that CY 2020 is the first year of actual 
PDGM utilization data, therefore, if we were to use CY 2019 data due to 
the COVID-19 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 
(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 1.0396. 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 invited comments on the CY 2022 proposed case-mix weights and 
proposed case-mix weight budget neutrality factor and comments are 
summarized later in this section.
    Comment: MedPAC supports CMS' proposal to use CY 2020 data to 
recalibrate the PDGM case-mix weights for CY 2022.
    Response: We thank MedPAC for its support.
    Comment: Many commenters were generally opposed to the proposal to 
recalibrate the PDGM case-mix weights for CY 2022. These commenters 
expressed concerns about the influence of the COVID-19 PHE on the types 
of patients receiving home health care, and the use of CY 2020 data. 
These commenters believe that CY 2020 utilization will likely not be 
representative of utilization patterns in CY 2022. One commenter stated 
that the trends seen in 2020 and 2021 will not hold permanently, and 
therefore data from these periods would be skewed if used in modifying 
the PDGM rate structure or case-mix weight recalibration. Another 
commenter cautioned against the use of CY 2020 data for recalibration 
and stated that the COVID-19 PHE directly led to shifts in referral 
sources, and increases in the severity of cases. One commenter 
expressed concern by what they describe as ``the inconsistency in the 
usage of CY 2020 data, when both case-mix weights and LUPAs rates are 
dependent upon utilization and care patterns.'' Another commenter 
stated that while annual recalibration of case-mix weights is generally 
appropriate to ensure that that case-mix weights reflect recent trends 
in utilization and resource, the COVID-19 PHE has had significant 
effects on home health utilization and overall case-mix severity in CY 
2020. Several commenters recommended that CMS maintain the structure 
and design of the PDGM for CY 2022.
    Response: We acknowledge commenter statements and concerns as to 
how the COVID-19 PHE affected home health utilization in CY 2020 as 
well as potential impact to CY 2021 utilization. However, we continue 
to believe that it is important to base the PDGM case-mix weights on 
actual PDGM utilization data and patient resource and shift away from 
the use of data prior to the implementation of the PDGM, where 
utilization was influenced by different incentives, such as the therapy 
thresholds used in case-mix adjustment prior to the PDGM. As stated in 
the CY 2022 HH PPS proposed rule (86 FR 35892), 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 COVID-19 PHE would have 
impacted utilization within all case-mix groups similarly. Therefore, 
the impact of any reduction in resource use caused by the COVID-19 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, 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). Finally, we note that if we 
chose not to recalibrate for CY 2022, it would be the third calendar 
year without an update to the case-mix weights. We believe that 
prolonging recalibration could lead to more significant variation in 
the case-mix weights than what is observed using CY 2020 utilization 
data.
    Comment: One commenter expressed concern with the frequency of 
case-mix weight recalibration. This commenter

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believes that CMS should not recalibrate the case-mix weights for CY 
2022 because annual changes are too frequent. This commenter 
recommended that CMS change the frequency of recalibration from 
annually to no more often than every three years.
    Response: We thank the commenter for the recommendation. In the CY 
2019 HH PPS final rule, we finalized our proposal to annually 
recalibrate the PDGM case-mix weights (83 FR 56515) to reflect the most 
recent utilization data available at the time of rulemaking. We stated 
that annual recalibration of the HH PPS case-mix weights ensures that 
the case-mix weights reflect, as accurately as possible, current home 
health resource use and changes in utilization patterns. Any changes to 
the frequency of the recalibration of the case-mix weights would need 
to be proposed through notice and comment rulemaking.
    Final Decision: We are finalizing the recalibration of the HH PPS 
case-mix weights as proposed for CY 2022. We are also finalizing the 
proposal to implement the changes to the PDGM case-mix weights in a 
budget neutral manner by applying a case-mix budget neutrality factor 
to the CY 2022 national, standardized 30-day period payment rate. As 
stated previously, the final case-mix budget neutrality factor for CY 
2022 will be 1.0396.
4. CY 2022 Home Health Payment Rate Updates
a. 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 our policy 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, 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 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. In the CY 2022 HH PPS proposed rule, we 
proposed a market basket update of 2.4 percent (based on IHS Global 
Inc.'s first-quarter 2021 forecast with historical data through fourth-
quarter 2020) (86 FR 35909). The CY 2022 proposed home health market 
basket update of 2.4 percent was 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), of 
0.6 percentage point for CY 2022. In effect, the proposed home health 
payment update percentage for CY 2022 was 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 proposed home health 
payment update was -0.2 percent (1.8 percent minus 2 percentage 
points). We also proposed that if more recent data became available 
after the publication of the 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 (86 FR 35909).
    Comment: Several commenters had concerns with the market basket 
update factor. The commenters noted that the HH PPS market basket 
update factor has recently declined from 3.0 percent in CY 2019 to 2.4 
percent in CY 2022. They stated this is likely because the market 
basket price indices do not reflect the pandemic-driven inflation in 
large part because the market basket composite index is determined on a 
4-quarter rolling average basis and reflect general cost changes across 
the healthcare industry--failing to account for home health specific 
price changes on a real-time and industry specific basis.
    They also stated that the COVID-19 PHE in CY 2020 has in some part 
affected the supply of and demand for certain inputs, including home 
health labor leading to a general increase in labor and other input 
prices. For example, the pandemic intensified staffing shortages for 
HHAs as home health workers left their jobs due to fear of exposure to 
the virus. As such, HHAs had to raise wages to attract adequate staff. 
Additionally, the commenters stated that the CMS HH PPS market basket 
price indexes and cost weight categories may not capture increased 
telehealth and personal protective equipment (PPE) costs that HHAs 
faced as a result of the pandemic. The commenters provided an example 
of data from a Partnership for Quality Home Healthcare (PQHH) member 
HHA that suggested that in March and April of CY 2020, average pricing 
for masks and gowns approximately increased 8 and 6 times, 
respectively.
    The commenters also noted that in CY 2020, some portion of home 
health visits were shifted to telehealth during the COVID-19 PHE. The 
commenters stated that HHAs can report costs of telehealth on the HHA 
cost report, but incompletely, which implies that cost weights and 
price proxies in CY 2020 and future years fail to accurately account 
for telehealth use.
    One commenter also constructed an estimated market basket index 
using results from the 2021 PQHH Labor Cost Survey related to the three 
largest components of the market basket index (wages and salaries, 
benefits, and administrative and general expenses). Based on this 
analysis, the commenter determined that the home health specific market 
basket update factor should have increased by approximately 1.1 
percentage points between CY 2019 and CY 2020 and by approximately 1.2 
percentage points between CY 2020 and CY 2021. The commenter noted that 
these results were in stark contrast to CMS HH PPS market basket update 
factors that decreased by 0.1 percentage point between CY 2019 and CY 
2020, and further by 0.6 percentage point between CY 2020 to CY 2021.

[[Page 62282]]

    The commenter noted that CMS' indicated in the CY 2021 final rule 
that the lower update (2.3 percent) for CY 2021 was ``primarily driven 
by slower anticipated compensation growth for both health-related and 
other occupations as labor markets were expected to be significantly 
impacted during the recession that started in February 2020 and 
throughout the anticipated recovery.'' In contrast, their results 
showed that HHA wages grew at a slightly higher rate between 2019 and 
2021, although underlying data shows that therapy professions primarily 
those in urban areas experienced a decline in wage growth in 2020. In 
addition, the commenter stated that the significant increase in 
benefits costs and administrative, general, and other costs seem to 
influence a large part of their increase in the estimated market basket 
constructed from the survey data. The commenter noted that these 
results reflect that the COVID-19 pandemic in 2020 likely resulted in 
price inflation for most HHA inputs as opposed to a recession and 
highlight the need for CMS to consider using price proxies that 
accurately reflect trends in the home health industry.
    Response: We appreciate the comment and the commenter's analysis of 
home health agency costs. The 2016-based home health market basket is a 
fixed-weight, Laspeyres-type price index that measures the change in 
price, over time, of the same mix of goods and services purchased in 
the base period. The effects on total costs resulting from changes in 
the mix of goods and services purchased subsequent to the base period 
are not measured.
    Any increase in costs as a result of the COVID-19 PHE (to the 
extent they differ from the price increase of the 2016-based home 
health market basket) would not be reflected in the market basket 
update factor. Changes in costs would be reflected when the market 
basket cost weights are updated to incorporate more recent home health 
agency cost data.
    The current HHA market basket cost weights are based on Medicare 
cost report data from 2016. Typically, a market basket is rebased every 
four to five years. However, we continually monitor the cost weights in 
the market baskets to ensure they are reflecting the mix of inputs used 
in providing services. We do not yet have cost report data available to 
determine the impact of the COVID-19 PHE on HHA cost structures. When 
the data becomes available, we will review the 2020 Medicare cost 
report data to evaluate the impact of the COVID-19 PHE as well as 
implementation of the PDGM and determine whether a rebasing of the 
market basket cost weights is appropriate. Any future rebasing or 
revising of the HHA market basket will be proposed and subject to 
public comments in future rulemaking.
    We disagree with the commenter that the price proxies used in the 
HHA market basket do not accurately reflect trends in the home health 
industry. The price proxies used in the market basket represent the 
price indices that correspond with the relevant cost categories (which 
were determined using HHA Medicare cost report data and Bureau of 
Economic Analysis Benchmark Input-Output data for NAICS 621600, Home 
Health Care Services), capturing the overall inflation of these 
products or services. Specifically, the aggregate compensation price 
proxy reflects the occupational composition of the home health industry 
(healthcare and nonhealthcare) published by the BLS Office of 
Occupational Employment Statistics. About 25 percent of the home health 
market basket is proxied by the Employment Cost Index (ECI) for Wages 
and Salaries and ECI for Benefits for civilian hospital workers, 
reflecting the price increases for compensation for skilled healthcare 
workers that are also employed by HHAs. Another 27 percent of the home 
health market basket is proxied by the ECI for Wages and Salaries and 
ECI for Benefits for healthcare social assistance workers, reflecting 
the price increases for compensation for overall healthcare workers 
such as home health aides and nursing aides. A description of the 
detailed methodology used to develop the 2016-based HHA market basket 
can be found in the CY 2019 final rule (83 FR 56427).
    For this final rule, based on IHS Global Inc.'s (IGI's) third 
quarter 2021 forecast, the CY 2022 increase in the 2016-based home 
health market basket is 3.1 percent (compared to the proposed rule of 
2.4 percent), which is primarily due to forecasted higher compensation 
prices. The revised higher forecast for compensation prices for CY 2022 
reflects the recent faster historical trends, lower projected labor-
force participation, and higher anticipated overall inflation as 
compared to IGI's first quarter 2021 forecast.
    We understand the commenter's concern for adequate price increase 
and payment for Medicare services. As noted in the previous comment by 
the Medicare Payment Advisory Commission, Medicare margins are 
estimated to be roughly 15 percent in 2019. In addition, we would note 
that the increase in the home health market basket used for the HHS PPS 
(that is based on a forecast) over the CY 2010 to CY 2020 time period 
has exceeded the resulting actual increase in the home health market 
basket by an average of 0.5 percentage point each year.
    Comment: Several commenters supported CMS' proposal to increase 
aggregate payments in CY 2022 by 1.8 percent; however, they stated that 
due to the increased demand on the home health industry as a result of 
the COVID-19 PHE as well as the lack of coverage for home health 
services delivered remotely, they strongly encouraged CMS to implement 
a larger increase.
    The commenters stated that annual increases to the home health 
payment rates have not kept pace with recent increases in home health 
providers' staffing and other costs, and that CMS should consider 
rising labor costs in particular when finalizing rates for CY 2022. 
They noted that patients are safest at home during a pandemic, and home 
health providers risk their own safety to ensure that these patients 
continue to receive quality care with minimum exposure. Therefore, they 
believed HHAs should be adequately reimbursed.
    Several commenters recommended that CMS establish a process and 
methodology to modify home health agency payment systems and rates 
during a PHE to address new costs triggered by the COVID-19 PHE or 
unpredicted limitations in payment models. They stated that CMS 
modified both the market basket increase and productivity adjustment in 
other sectors in final rules that take effect on October 1, 2021; 
however, they believe neither those changes in other sectors, nor the 
proposed 2022 rate adjustment in home health services adequately 
accounts for the increased costs of care in 2021 that are highly likely 
to continue in 2022.
    The commenters stated that foremost among the cost increases not 
adequately represented in the market basket increase are personal 
protective equipment and other infection control costs. They stated 
that the market basket index reflects increases in the cost of goods 
and labor, but it does not address new costs or volume increases in the 
use of such items as PPE. While the end of the COVID-19 PHE is 
unfortunately not known, commenters stated that they believe it is 
reasonable and fair to conclude that the use of PPE will be maintained 
at levels comparable to 2020 throughout 2021 and into 2022. As such, 
the commenters stated that the increased cost of care, as experienced 
in 2020-2021, as it relates to PPE will continue in 2022. They stated 
that CMS could include a PPE cost add-on to the

[[Page 62283]]

2022 payment episodic and per visit payment rates. The commenters 
stated that conceptually, an add-on has been used in Medicare home 
health services previously to reflect the administrative costs of OASIS 
and other administrative activities for LUPA-only patient care.
    Response: We appreciate the commenters' support for the use of the 
productivity-adjusted market basket to annually update HH PPS payments. 
As proposed, we are using the latest available data to determine the CY 
2022 home health market basket update and productivity adjustment for 
this final rule.
    We recognize the unique challenges and market conditions as a 
result of the COVID-19 PHE, but based on the data available we continue 
to believe that the home health market basket adequately captures 
changes in prices associated with providing home health services. As 
described in the CY 2019 Home Health PPS final rule with comment period 
(83 FR 56427), the cost weights were calculated using the 2016 Medicare 
cost report data, which is provided directly by freestanding home 
health agencies. The price proxies used in the market basket reflect a 
projection of the expected price pressures for each category of 
expenses.
    We contract with IHS Global Inc. (IGI) to purchase their quarterly 
forecasts of the price proxies that are used in the market baskets and 
multifactor productivity (MFP) that is used to determine the 
productivity adjustment, to ensure independence of the projections. 
Consistent with our proposal to use more recent data as they become 
available, for this final rule we have incorporated more current 
historical data and revised forecasts provided by IGI that factor in 
expected price and wage pressures. By incorporating the most recent 
estimates available of the market basket update and productivity 
adjustment, we believe these data reflect the best available projection 
of input price inflation faced by HHAs for CY 2022, adjusted for 
economy-wide productivity, which is required by statute.
    We understand the commenters' concerns that the COVID-19 PHE had 
unexpected effects on operating costs for healthcare providers, 
including additional expenses related to PPE costs and services 
furnished remotely, for which HHAs are not paid directly. Section 
1895(e)(1)(A) of the Act prohibits payment for home health services 
furnished via a telecommunications system, if such services substitute 
for in-person home health services ordered as part of a plan of care. 
These remote services also cannot be considered a home health visit for 
purposes of eligibility or payment; however, we do acknowledge the 
importance of these services during a PHE and beyond. In the CY 2021 
final rule (85 FR 70323), we modified the language at Sec.  409.46(e) 
allowing a broader use of telecommunications technology to be reported 
as allowable administrative costs on the home health cost report, 
recognizing that these services have the potential to improve 
efficiencies, expand the reach of healthcare providers, allow more 
specialized care in the home, and allow HHAs to see more patients or to 
communicate with patients more often.
    We disagree that the market basket methodology should be modified 
from the current methodology to account for the incorporation of costs 
during this or future PHEs. The market baskets account for changes in 
provider input expenses in two ways: (1) Through the base year cost 
weights; and (2) through the projected price pressures for each cost 
category as measured by each of the price proxies.
    As previously explained, the CMS market baskets are Laspeyres-type 
price indexes where relative cost weights are established for a base 
year. The major cost weights for the home health market basket are 
currently based on the reported expenses for the universe of home 
health agencies for 2016 on the Medicare Cost Report, and we 
periodically rebase the cost weights for each of the CMS market baskets 
to update the relative cost shares. Generally, these base year weights 
are updated within a five-year timeframe during a rebasing and revising 
of the market basket; this allows for the market baskets to reflect 
changes in the spending patterns of providers across the various cost 
categories. We have found that these cost weights typically do not 
change substantially from year to year. The Medicare Cost Report data 
are available with a time lag (for example, the most recent complete 
data available for home health agencies would reflect 2019 experience). 
We did not propose to rebase or revise the HHA market basket for CY 
2022; however, as stated previously, we plan to review the 2020 
Medicare cost report data when they become available to determine 
whether the distribution of costs faced by HHAs is different when 
compare to prior years. Any future rebasing or revising of the HHA 
market basket will be proposed and subject to public comments in future 
rulemaking.
    Consistent with our proposal to use more recent data, the HHA CY 
2022 market basket increase factor is 2.6 percent (3.1 percent market 
basket update reduced by 0.5 percentage point productivity adjustment) 
reflecting IGI's 2021 third quarter forecast. The proposed HHA CY 2022 
market basket increase factor based on IGI's 2021 first quarter 
forecast was 1.8 percent.
    Comment: MedPAC recognized that CMS must provide the statutorily 
mandated payment update, but they stated that this increase is not 
warranted based on their analysis of payment adequacy. In their March 
2021 report to the Congress, the Commission found positive access, 
quality, and financial indicators for the sector, with margins of 15.8 
percent for freestanding HHAs in 2019. Though consistent with statute, 
they believe that a payment update of 1.8 percent will keep payments 
higher than necessary for adequate access to quality care. They noted 
that the Commission recommended that the Congress reduce the 2021 
Medicare base payment rate for HHAs by 5 percent for the 2021 payment 
year.
    Response: We appreciate MedPAC's concern regarding the payment 
increase for HHAs; however, we do not have the statutory authority to 
implement its recommendation.
    Final Decision: As proposed, we are finalizing our policy to use 
more recent data to determine the home health payment update percentage 
for CY 2022 in this final rule. Based on IHS Global Inc.'s third-
quarter 2021 forecast with historical data through second-quarter 2021, 
the home health market basket update is 3.1 percent. The CY 2022 home 
health market basket update of 3.1 percent is then reduced by a 
productivity adjustment of 0.5 percentage point for CY 2022. For HHAs 
that submit the required quality data for CY 2022, the home health 
payment update is a 2.6 percent increase. For HHAs that do not submit 
the required quality data for CY 2022, the home health payment update 
is 0.6 percent (2.6 percent minus 2 percentage points).
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 proposed 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

[[Page 62284]]

differences, using inpatient hospital wage data is appropriate and 
reasonable for the HH PPS.
    In the CY 2021 HH PPS final rule (85 FR 70298), we finalized the 
proposal to adopt the revised Office of Management and Budget (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 proposed 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 proposed 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 proposed 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 proposed 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 0.8539.
    On February 28, 2013, OMB issued Bulletin No. 13-01, announcing 
revisions to the delineations of MSAs, Micropolitan Statistical Areas, 
and CBSAs, and guidance on uses of the delineation of these areas. In 
the CY 2015 HH PPS final rule (79 FR 66085,66087), 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 0.8738. 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 proposed 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.
    We received several comments on the CY 2022 home health wage index 
proposals. A summary of these comments and our responses are as 
follows:
    Comment: A few commenters recommended overarching changes to the 
home health wage index including the creation of a home health specific 
wage index, allowing home health agencies to appeal their wage index 
values or utilize geographic reclassification, and establishing a home 
health floor of 0.80 similar to the hospice floor.
    Response: While we thank the commenters for their recommendations, 
these comments are outside the scope of the proposed rule. Any changes 
to the way we adjust home health payments to account for geographic 
wage differences, beyond the wage index proposals discussed in the CY 
2022 HH PPS proposed rule (86 FR 35874), would have to go through 
notice and comment rulemaking. While CMS and other stakeholders have 
explored potential alternatives to using OMB's statistical area 
definitions, CMS continues to explore potential alternatives to explore 
alternatives to using OMB's delineations but we continue to believe 
that in the absence of home health specific wage data, using the pre-
floor, pre-reclassified hospital wage data is appropriate and 
reasonable for home health payments. The reclassification provision at 
section 1886(d)(10)(C)(i) of the Act states that the Board shall 
consider the application of any subsection (d) hospital requesting the 
Secretary change the hospital's

[[Page 62285]]

geographic classification. The reclassification provision found in 
section 1886(d)(10) of the Act is specific to hospital inpatient 
prospective payment system (IPPS) hospitals only.
    Additionally, the application of the hospice floor is specific to 
hospices and does not apply to HHAs. The hospice floor was developed 
through a negotiated rulemaking advisory committee, under the process 
established by the Negotiated Rulemaking Act of 1990 (Pub. L. 101-648). 
Committee members included representatives of national hospice 
associations; rural, urban, large, and small hospices; multi-site 
hospices; consumer groups; and a government representative. The 
Committee reached consensus on a methodology that resulted in the 
hospice wage index. Because the reclassification provision applies only 
to hospitals, and the hospice floor applies only to hospices, we 
continue to believe the use of the pre-floor and pre-reclassified 
hospital wage index results in the most appropriate adjustment to the 
labor portion of the home health payment rates. This position is 
longstanding and consistent with other Medicare payment systems (for 
example, SNF PPS, IRF PPS, and Hospice).
    Comment: A commenter stated that the pre-floor, pre-reclassified 
hospital wage index is inadequate for adjusting home health costs, 
particularly in States like New York which has among the nation's 
highest labor costs now greatly exacerbated by the States' 
implementation of a phased in $15 per hour minimum wage hike, the 
balance of which is unfunded by Medicare''.
    Response: Regarding minimum wage standards, we note that such 
increases would be reflected in future data used to create the hospital 
wage index to the extent that these changes to State minimum wage 
standards are reflected in increased wages to hospital staff.
    Comment: A few commenters recommended that CMS reconsider its 
decision to apply the new OMB geographic designations for CBSAs in the 
annual wage index update. Specifically, commenters had concerns with 
wages index decreases for counties in New Jersey that moved from the 
New York City Metropolitan CBSA and now make up the newly created New 
Brunswick-Lakewood, NJ, CBSA as well as Franklin County, Massachusetts, 
that moved from rural to urban status.
    Response: We remind commenters that the revised OMB delineations 
were finalized in the CY 2021 HH PPS final rule (85 FR 70306). 
Additionally, we continue to believe it is important for the home 
health wage index to use the latest OMB delineations available in order 
to maintain an accurate and up-to-date payment system that reflects the 
reality of population shifts and labor market conditions. We note that 
the wage-index value is applied to home health payments are based on 
where the individual is receiving home health services and not the 
location of the home health agency. For example, if a home health 
agency in New Jersey is servicing a patient in the New York City 
Metropolitan CBSA, the wage index for New York City would apply to the 
payment.
    Comment: A few commenters stated that providers should be protected 
against substantial payment reductions due to dramatic reductions in 
wage index values from 1 year to the next and recommended that CMS 
maintain the 5 percent cap that was put in place for CY 2021. A 
commenter recommended that CMS should implement a 2 percent cap on wage 
index decreases for CY 2022. Other commenters recommended that CMS 
adopt a transition policy for home health providers that mirrors the 5-
percent cap on annual wage index reductions included in the FY 2022 
IPPS/LTCH PPS final rule.
    Response: We appreciate the suggestions for improving the HH PPS 
wage index. We did not propose changes to the HH PPS wage index 
methodology for CY 2022, and therefore we are not finalizing any 
changes to that methodology in this final rule. However, we will take 
these comments into consideration to potentially inform future 
rulemaking.
    Comment: A commenter stated that rural areas are disproportionately 
affected by what the commenter artificially reduced rural hospital wage 
indices. This commenter believes that in areas with lower population 
densities, travel costs are increased because of the time and mileage 
involved in traveling from patient to patient to provide services, and 
the current method of adjusting labor costs using the hospital wage 
index does not accurately account for increased travel costs and lost 
productivity in serving rural areas.
    Response: As discussed in the CY 2017 HH PPS final rule (81 FR 
76721), we do not believe that a population density adjustment is 
appropriate at this time. Rural HHAs continually cite the added cost of 
traveling from one patient to the next. However, urban HHAs cite the 
added costs associated with needed security measures and traffic 
congestion. The home health wage index values in rural areas are not 
necessarily lower than the home health wage index values in urban 
areas. The home health wage index reflects the wages that inpatient 
hospitals pay in their local geographic areas.
    Final Decision: After considering the comments received in response 
to the CY 2022 HH PPS proposed rule, we are finalizing our proposal to 
continue to use the pre-floor, pre-reclassified hospital inpatient wage 
index with no 5 percent cap on wage index decreases as the wage 
adjustment to the labor portion of the HH PPS rates. For CY 2022, the 
updated wage data are for the hospital cost reporting periods beginning 
on or after October 1, 2017 and before October 1, 2018 (FY 2018 cost 
report data).
    The final CY 2022 HH PPS 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 our policy 
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 2022:
     Multiply the national, standardized 30-day period rate by 
the patient's applicable case-mix weight.

[[Page 62286]]

     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
    In the CY 2022 HH PPS proposed rule (86 FR 35880), CMS provided 
preliminary monitoring data for the first year of the 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. For CY 2022, we did not propose to make any 
additional permanent or temporary adjustments to the national, 
standardized 30-day period payment 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 final 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 final case-mix 
weights budget neutrality factor for CY 2022 is 1.0396.
    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 
decided to continue our practice of using the most recent and complete 
home health claims data available; that is why we used CY 2020 claims 
data for the CY 2022 payment rate updates.
    To calculate the wage index budget neutrality factor, we first 
determine the payment rate needed for non-LUPA 30-day periods using the 
CY 2022 wage index so those total payments are equivalent to the total 
payments for non-LUPA 30-day periods using the CY 2021 wage index and 
the CY 2021 national standardized 30-day period payment rate adjusted 
by the case-mix weights recalibration neutrality factor. Then, by 
dividing the payment rate for non-LUPA 30-day periods using the CY 2022 
wage index by the payment rate for non-LUPA 30-day periods using the CY 
2021 wage index, we obtain a wage index budget neutrality factor of 
1.0019. We then apply the wage index budget neutrality factor of 1.0019 
to the 30-day period payment rate.
    Next, we update the 30-day period payment rate by the CY 2022 home 
health payment update percentage of 2.6 percent. The CY 2022 national, 
standardized 30-day period payment rate is calculated in Table 16.
[GRAPHIC] [TIFF OMITTED] TR09NO21.030

    The CY 2022 national, standardized 30-day period payment rate for 
an HHA that does not submit the required quality data is updated by the 
CY 2022 home health payment update of 2.6 percent minus 2 percentage 
points and is shown in Table 17.

[[Page 62287]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.031

(3) CY 2022 National Per-Visit Rates for 30-day Periods of Care
    The national per-visit rates are used to pay LUPAs and to compute 
imputed costs in outlier calculations. The per-visit rates are paid by 
type of visit or home health 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-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 
payment rates for LUPA 30-day periods of care using the CY 2022 wage 
index by the payment rates for LUPA 30-day periods of care using the CY 
2021 wage index, we obtained a wage index budget neutrality factor of 
1.0019. 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 2.6 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 2.6 percent and are shown in Table 18.
[GRAPHIC] [TIFF OMITTED] TR09NO21.032

    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 2.6 percent minus 2 percentage points and are 
shown in Table 19.

[[Page 62288]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.033

    The following is a summary of the public comments received about 
the CY 2022 payment update and our response.
    Comment: Several commenters stated their support for the CY 2022 
home health payment update. However, many stated that with the 
increasing demand of the home health industry because of the COVID-19 
PHE, CMS should consider increasing Medicare payments to ensure that 
HHAs are able to provide quality care. MedPAC mentioned that though CMS 
was updating payment rates according to statute, they believe that 
payments were higher than necessary and should be reduced. 
Additionally, several commenters recommended that CMS establish a 
process and methodology to modify HHA payment systems and rates when an 
extreme and uncontrollable circumstance (for example, PHE) occurs to 
accurately account for new costs triggered by the emergency, such as 
personal protective equipment (PPE).
    Response: We thank commenters for expressing their concerns. CMS is 
statutorily required to update the payment rates under the prospective 
payment system by the home health percentage in accordance with section 
1895(b)(3)(B) of the Act. We understand commenters' request to 
establish a process to modify payments during an unforeseen 
circumstance, such as a PHE. However, we do not have the statutory 
authority to modify the HH PPS methodology, in the event of an extreme 
and uncontrollable circumstance.
    Final Decision: For CY 2022, we are finalizing the national, 
standardized 30-day payment rates, the per-visit payment rates, and the 
home health payment update percentage of 2.6 percent for providers 
submitting quality data and 0.6 percent for those not submitting 
quality data.
    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 subsequent years 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 subsequent years, we finalized a payment reduction if the HHA 
does not submit the NOA within 5 calendar days from the start of care. 
That is, if an HHA fails to submit a timely NOA for CYs 2022 and 
subsequent years, the reduction in payment amount would be equal to a 
1/30 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 1/30 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 subsequent days (An NOA submitted on 
and after this date would 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 
our policy that CMS may waive the consequences

[[Page 62289]]

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.
    Though we did not solicit comments on the previously finalized NOA 
process for CY 2022, we did receive several comments on various 
components of the finalized policy. However, these comments were out of 
scope of the proposed rule because we did not propose to make any 
changes to the finalized policy. 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 final 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 $289.50 (1.8451 
multiplied by $156.90), subject to area wage adjustment.
(5) Occupational Therapy LUPA Add-On Factor
    In order to implement Division CC, section 115, of CAA 2021, we 
proposed conforming changes to regulations at Sec.  484.55(a)(2) and 
(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 
proposed 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 is no sufficient data regarding the average excess of 
minutes for the first visit in LUPA periods when the initial and 
comprehensive assessments are conducted by occupational therapists. 
Therefore, we proposed 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 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 solicited comments 
on this proposal.
    Comment: Commenters were in support of CMS creating an OT add-on 
factor for the OT LUPA add-on payments. Additionally, there was support 
utilizing the PT LUPA add-on factor as a proxy until there is enough CY 
2022 data to create an OT add-on factor for the OT LUPA add-on 
payments.
    Response: We thank commenters for their support of the OT add-on 
factor.
    Final Decision: We are finalizing our proposal to use the PT add-on 
factor as a proxy for the OT add-on factor, until we have sufficient CY 
2022 data to create an OT add-on factor.
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 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

[[Page 62290]]

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, 
would increase the CY 2022 30-day base payment rates, described in 
section III.C.3. of this final 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 20.
[GRAPHIC] [TIFF OMITTED] TR09NO21.034

    Though we did not make any proposals regarding the rural add-on 
percentages in the CY 2022 HH PPS proposed rule, we did receive some 
comments as summarized in this section of this final rule.
    Comment: While commenters understood the rural add-on payments 
decrease has been mandated by the BBA of 2018, many expressed continued 
concern and frustration of the reduction in support for access to rural 
beneficiaries. Commenters stated that providers in rural areas face 
higher overhead expenses due to increased travel time between patients 
as well as demands for extra staff in areas where workforce challenges 
already exist. A few commenters suggested that CMS should work with 
Congress to provide immediate relief to rural home health providers 
that face increased costs responding to patient's during the COVID-19 
PHE and to maintain the rural add-on payment at 3 percent in order to 
protect Medicare beneficiaries' access to home health in rural 
communities.
    Response: We thank commenters for their recommendations. We 
understand commenter concerns about the phase-out of rural add-on 
payments and potential effects on rural HHAs. However, because the 
current rural add-on policy is statutory, we have no regulatory 
discretion to modify or extend it. CMS will continue to monitor patient 
access to home health services and the costs associated with providing 
home health care in rural versus urban areas.
    Final Decision: Policies for the provision of rural add-on payments 
for CY 2019 through CY 2022 were finalized in the CY 2019 HH PPS final 
rule with comment period (83 FR 56443), in accordance with section 
50208 of the BBA of 2018. The data used to categorize each county or 
equivalent area are 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. 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.
e. 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

[[Page 62291]]

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 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, 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, 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 the 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 propose 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. For the proposed rule, with 
CY 2020 claims data (as of March 30, 2021), we proposed an FDL ratio of 
0.41. Using CY 2020 claims data (as of July 12, 2021) showed that for 
CY 2022 the final FDL ratio would need to be 0.40 to pay up to, but no 
more than, 2.5 percent of the total payment as outlier payments in CY 
2022.
    For this final rule, simulating payments using preliminary CY 2020 
claims data (as of July 12, 2021) and the CY 2021 HH PPS payment rates 
(85 FR 70316), we estimate that outlier payments in CY 2021 would 
comprise 2.1 percent of total payments. Based on simulations using CY 
2020 claims data (as of July 12, 2021) and the proposed CY 2022 payment 
rates presented in Section III.C.2 of this final rule, we estimate that 
outlier payments would constitute approximately 1.8 percent of

[[Page 62292]]

total HH PPS payments in CY 2022. Our simulations showed that the FDL 
ratio would need to be changed from 0.56 to 0.40 to pay up to, but no 
more than, 2.5 percent of total payments as outlier payments in CY 
2022.
    Comment: A commenter recommended ending the outlier provision and 
restore the 5 percent to fund the outlier payments into regular 
Medicare payments.
    Response: The HH PPS allows for outlier payments to be made to 
providers for episodes that have unusually large amounts of cost 
because of a patient's home health care needs. Nevertheless, we believe 
that section 1895(b)(5)(A) of the Act allows the Secretary the 
discretion as to whether or not to have an outlier policy under the HH 
PPS. CMS believes the outlier provision is beneficial since it 
addresses any additional or unpredictable cost that is medically 
necessary for a patient. In addition, we believe outlier payments are 
beneficial in helping to mitigate the incentive for HHAs to avoid 
patients that need higher levels of medical care.
    Final Decision: We are finalizing the fixed-dollar loss ratio of 
0.40 for CY 2022 so the estimated total outlier payments are up to, but 
not more than, 2.5 percent of the payments estimated to be made under 
the HH PPS.
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 
physician or allowed practitioner that performed the face-to-face 
encounter. These regulations text changes are not time 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 the CY 
2022 HH PPS proposed rule (86 FR 35915), we proposed 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.
    Comment: Commenters were supportive of the proposed conforming 
regulations text changes at Sec.  409.43 and noted that they are 
appreciative of CMS' attention to updating the regulations to prevent 
confusion regarding who is authorized to establish and review the home 
health plan of care. Additional commenters requested changes to the 
regulations at 42 CFR 424.22.
    Response: We thank commenters for their review of the rule and 
support of the changes at Sec.  409.43, and note that the suggested 
changes at 42 CFR 424.22 are out of scope of this final rule and would 
require a notice of proposed rulemaking.
    Final Decision: We are finalizing the conforming regulations at 
Sec.  409.43, consistent with section 3708 of the CARES Act to allow 
``allowed practitioners'' to establish and periodically review the home 
health plan of care.

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

A. Expansion of 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),\8\ 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 2 years' prior; for example, the CY 2018 payment 
adjustments were based on CY 2016 performance.
---------------------------------------------------------------------------

    \8\ OASIS is the instrument/data collection tool used to collect 
and report performance data by HHAs.

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[[Page 62293]]

    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,\9\ 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.\10\
---------------------------------------------------------------------------

    \9\ https://www.cms.gov/files/document/certification-home-health-value-based-purchasing-hhvbp-model.pdf.
    \10\ https://innovation.cms.gov/data-and-reports/2020/hhvbp-thirdann-rpt.
---------------------------------------------------------------------------

    As described in this final rule, we proposed 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 proposed 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,\11\ 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.
---------------------------------------------------------------------------

    \11\ 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 produce 
Medicare savings if expanded to all States.\12\
---------------------------------------------------------------------------

    \12\ 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 stated in the proposed 
rule that 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.
    We summarize in this section of this rule comments received 
regarding the requirements for expansion and our responses.
    Comment: Commenters disagreed that CMS has met the statutory 
requirement that expansion of the HHVBP Model would not deny or limit 
the coverage or provision of Medicare benefits for Medicare 
beneficiaries and stated that while incremental improvements in quality 
performance and cost-savings are encouraging, they questioned whether 
those numbers are sufficient to justify ending the original model early 
during a pandemic and expanding it nationwide. Commenters asserted that 
access under the original Model was negatively impacted and expansion 
of HHVBP will exponentially worsen access to care.
    Response: We disagree that expansion of the HHVBP Model should be 
suspended or the Model not expanded, or that the Model denies coverage 
to people who are not expected to improve. As stated previously, the 
original HHVBP Model did not make any changes to coverage or provision 
of benefits for Medicare beneficiaries. We further note that evaluation 
findings to date show that the implementation of the original HHVBP 
Model did not adversely impact home health utilization or market 
entries and exits differentially in HHVBP states relative to non-HHVBP 
states. We refer readers to Section 3, pages 25-36 in the Evaluation of 
the Home Health Value-Based Purchasing (HHVBP) Model Third Annual 
Report \13\ for our full analysis on beneficiary access to home health 
care covering the post-implementation period 2016-2018 and to Section 
3, pages 25-50 in the Evaluation of the Home Health Value-Based 
Purchasing (HHVBP) Model Fourth Annual Report \14\ for an updated 
analysis covering the post-implementation period 2016-2019. As 
previously summarized, the CMS Chief Actuary's certification and the 
Secretary's determination were based on evaluation findings.
---------------------------------------------------------------------------

    \13\ The HHVBP Third Annual Evaluation Report is available at 
https://innovation.cms.gov/data-and-reports/2020/hhvbp-thirdann-rpt.
    \14\ https://innovation.cms.gov/data-and-reports/2021/hhvbp-fourthann-rpt.
---------------------------------------------------------------------------

3. Overview
    We stated in the proposed rule that the proposed HHVBP Model 
expansion presents an opportunity to improve the quality of care 
furnished to Medicare beneficiaries nationwide through payment 
incentives to HHAs. We stated that 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.
    We stated in the proposed rule that 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

[[Page 62294]]

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 final 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 proposed 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. We stated in the proposed rule that 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 
further stated that 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 proposed 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.
    We proposed that the 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 proposed to 
codify this requirement at Sec.  484.350. We proposed 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 proposed 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 proposed 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 final rule and payment adjustment would be calculated based on an 
HHA's CCN.\15\
---------------------------------------------------------------------------

    \15\ 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 https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-G/part-484?toc=1.
---------------------------------------------------------------------------

    We summarize in this section of this rule comments received on the 
proposed timing and scope of the expanded model and our responses.
    Comment: The majority of commenters supported a home health value-
based purchasing payment model, but were opposed to expansion beginning 
in CY 2022 as the first performance year. Commenters expressed concern 
that HHAs continue to contend with challenges of the PHE and that 
expansion should be postponed until CY 2023 or the calendar year that 
is 1 year post the public health emergency which they stated would be a 
more stable time in the trajectory of health care delivery. Commenters 
expressed that HHAs need more time to prepare, institute operational 
reforms, and learn about the Model and encouraged CMS to provide 
technical assistance and training to support HHAs in preparing for the 
Model. Commenters stated that CMS should allow for more study time/data 
gathering and extend the original HHVBP Model for another year to 
collect data that is more reflective of the current state of care 
before expanding nationwide. A commenter recommended CMS carefully 
evaluate the impact of the HHVBP Model on hospital-operated HHAs as 
part of its overall evaluation of the Model before scaling it on a 
national level and seek broad stakeholder input on the design of the 
HHVBP expanded model in future rulemaking. Commenters requested that 
CMS develop a comprehensive plan for implementing the HHVBP model 
nationwide in CY 2023 after the conclusion of the original model. A 
commenter recommends that CMS make the first year of expansion 
voluntary and move to mandatory in CY 2023. We received a few comments 
that supported a CY 2022 start date for expansion.
    Response: We thank the commenters for their support for a value-
based purchasing payment model in the home health setting. However, we 
disagree that additional study time or an extension of the original 
Model to collect additional data is needed prior to expansion. The 
original Model was tested for four years, CYs 2016-2019. The original 
Model has met statutory requirements based on the CMS Chief Actuary's 
certification and evaluation findings in the Third Annual Evaluation 
Report covering the implementation period 2016-2018 that showed the 
Model improved quality of care without increased spending. Updated 
analysis of the original Model in the Fourth Annual Evaluation Report, 
covering the implementation period 2016-2019, continues to indicate 
improved quality of care without increased spending or adverse impacts 
on home health utilization, or market entries and exits. We note that 
the Fourth Annual Evaluation Report includes evaluation of the impacts 
to hospital-operated HHAs, and found that hospital based HHAs (in both 
HHVBP and non-HHVBP states) do care for higher risk patients. The model 
payment and the primary evaluation impact estimation use risk 
adjustment to account for such differences. The evaluation did not 
specifically analyze the outcomes by free-standing vs hospital-based 
entities in HHVBP and non-HHVBP states. However, we examined whether 
there is a pattern of the Model limiting admissions for more medically 
complex patients and do not find that to be the

[[Page 62295]]

case. We continued to observe a pattern of increasing clinical severity 
over time among all home health patients based on multiple measures of 
medical complexity or severity, and the trends were generally similar 
in HHVBP and non-HHVBP states. In addition, the CMS Chief Actuary 
concluded in its certification that since the selection of the states 
was random and participation by HHAs in the selected states was 
mandatory, it is unlikely that these evaluation results were biased.
    We understand the PHE, declared in January 2020, has had an impact 
on HHAs. We also believe that technical assistance and training may 
help those HHAs not part of the original Model to prepare for 
successful participation in the expanded HHVBP Model.
    After consideration of the comments received, we are therefore 
finalizing that CY 2022 will be a pre-implementation year, with CY 2023 
as the first performance year and CY 2025 as the first payment year, as 
we discuss further in this section and later in this rule.
    Comment: A commenter stated that expansion should be delayed until 
a payment framework is built to adequately account for the differences 
in healthcare systems, such as Medicaid safety-net hospitals, that by 
definition provide a disproportionate share of charity and other forms 
of uncompensated care to individuals who have a high level of social 
need, beyond their medical treatment. The commenter also stated that 
nationwide implementation of the HHVBP model should be delayed until 
the evaluation of appropriate risk adjustment for types of Social 
Determinants of Health (SDoH) and payment mechanisms appropriately 
account for the interaction of biological, behavioral, and social care 
needs when it comes to providing patient-tailored, comprehensive value-
based care.
    Response: As shown in Table 21, simulating the expanded HHVBP 
Model's national volume-based cohorts with CY 2019 data indicates a 
higher average payment adjustment for HHAs with a high percentage of 
dually eligible beneficiaries. Consequently, we do not have evidence to 
suggest that HHAs that care for beneficiaries with more significant 
social risk factors would receive decreased FFS payments under the 
expanded Model. We thank the commenter for their recommendations to 
evaluate types of Social Determinants of Health (SDoH) to account for 
the interaction of biological, behavioral, and social care needs when 
it comes to providing patient-tailored, comprehensive value-based care 
for potential modifications to risk adjustment and we will take this 
under consideration. As noted in section III.A.6.e.2 of this final 
rule, we are working collaboratively with HH QRP to determine how data 
collected on SDoHs under HH QRP could be part of the HHVBP Model 
expansion.
    Comment: Commenters stated that CMS should include a ``shared 
savings'' component to the expanded HHVBP Model to enhance the 
incentives that led HHAs to achieve significant savings to Medicare.
    Response: We appreciate this comment, but it is outside the scope 
of our proposals on the expansion of the HHVBP Model.
    Final Decision: After consideration of comments received, we are 
finalizing our proposal with modification. We are finalizing a one-year 
delay in assessing HHA performance and the calculation of a payment 
adjustment. To allow HHAs time to prepare and learn about the expanded 
Model, CY 2023 will be the first performance year and CY 2025 will be 
the first payment year, based on CY 2023 performance. CY 2022 will be a 
pre- implementation year, as discussed in more detail later in this 
rule. We will provide learning support about the Model to HHAs during 
CY 2022. We believe that by delaying payment adjustments by one year 
and providing HHAs with learning support in the pre-implementation 
phase, all HHAs will be better prepared to participate in the Model for 
the CY 2023 performance year. HHAs will incur a 0 percent payment 
adjustment risk for the CY 2022 pre-implementation year.
    We are finalizing as proposed that the expanded Model will 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 will be required to compete in the expanded Model. We are 
also finalizing to codify this requirement at Sec.  484.350. We are 
finalizing as proposed to define a `competing HHA' within the scope of 
the expanded HHVBP Model as an HHA that has a current Medicare 
certification and is being paid by CMS for home health care services. 
We are finalizing 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 final rule and 
payment adjustment will be calculated based on an HHA's CCN. Under our 
finalized policy to delay application of payment adjustments under the 
expanded Model, all HHAs certified for participation in Medicare before 
January 1, 2022, will have their CY 2023 performance assessed and would 
be eligible for a CY 2025 payment adjustment.
b. Overview of the Payment Adjustment
    We proposed that 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 stated in the proposed rule that 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. We 
stated that 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. 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

[[Page 62296]]

own performance during the baseline year. These proposals, as well as 
our finalized policies, are discussed in sections III.A.4, III.A.5, and 
III.A.7.a of this final rule.
    In addition, at Sec.  484.345 we proposed 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

    We note that we are generally finalizing the definitions at Sec.  
484.345 as proposed, with the addition of the term, pre-implementation 
year, to reflect that under our final policy to delay the application 
of payment adjustments under the expanded Model, CY 2022 will be a pre-
implementation year. We summarize and respond to any comments received 
on particular proposed definitions in the applicable sections of this 
rule.
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 
proposed 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. 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 proposed 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 proposed 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). We clarify in this final rule that, unlike under 
the HH QRP, and consistent with the original Model, HHAs would not need 
to submit an exemption request for HHCAHPS in accordance with the 
regulations at 42 CFR 484.245(b)(1)(iii)(A) for the purposes of 
qualifying for the smaller-volume HHA cohort. We stated that 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.\16\
---------------------------------------------------------------------------

    \16\ Detailed scoring information is contained in the Protocols 
and Guidelines manual posted on the HHCAHPS web site 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 unique HHCAHPS survey-
eligible 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 under the HH QRP. As under the 
original HHVBP Model, we proposed 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. We note that under the original Model, the HHA is not required to 
secure an exemption in order to qualify for the smaller-volume cohort; 
rather, CMS assesses whether an HHA qualifies for the smaller-volume 
cohort based on the volume of unique patients eligible to submit the 
HHCAHPS survey in a calendar year. As under the original Model, we also 
proposed 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 stated that 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. 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); \17\ 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.
---------------------------------------------------------------------------

    \17\ 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 final 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. We stated in the 
proposed rule that 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

[[Page 62297]]

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, 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 cohorts, the smaller-volume 
cohorts would need to be combined with the larger-volume cohorts in 
their respective 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 21 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.
[GRAPHIC] [TIFF OMITTED] TR09NO21.035


[[Page 62298]]


    As noted, under the original HHVBP Model, a minimum of eight HHAs 
is required for each size cohort. For the expanded HHVBP Model, we 
proposed to establish cohorts prospectively and with sufficient HHA 
counts to prevent the need to combine multiple cohorts retrospectively. 
We proposed to provide HHAs with their 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 estimated 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 21, 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 proposed to use cohorts based 
on all HHAs nationwide, rather than by State as under the original 
Model. Referencing the CY 2019 data in Table 21, 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 were proposed to account for 30 percent 
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 stated that 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 stated in the proposed rule that 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 
stated that 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 stated that 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 noted 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 proposed 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 
proposed 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 also requested comment on the alternative approach of 
applying State/territory-based cohorts only, without volume-based 
cohorts.
    We sought public comment on these proposals. We summarize in this 
section of this rule the comments received and provide our responses.
    Comment: Most commenters supported the use of State-based rather 
than national cohorts in order to preserve the geographical differences 
in quality benchmarks, which they contend result from variation in home 
health utilization and other differences across regions. They expressed 
concern that not using State-based cohorts will significantly shift 
home health payments across State lines, leading to shortages of 
necessary home health services in certain areas.
    Response: We thank commenters for their comments on selection of 
the appropriate cohorts to compare HHAs. We do not have evidence that 
suggests that moving to national small- and large-volume cohorts would 
significantly redistribute resources between states. We refer readers 
to Table 43 of this final rule for an analysis of expected shifts in 
FFS expenditures, as represented by the average FFS payment adjustments 
for small- and large-volume HHAs in each of the States, territories, 
and the District of Columbia, simulated with the proposed national 
size-based cohorts using CY 2019 data and a maximum adjustment of 
5 percent. We note that when the small- and large-volume 
HHAs in each of the States, territories, and the District of Columbia 
are combined, the average payment adjustment for the majority of 
States, territories, and the District of Columbia is within 1 percent, with none exceeding 2 percent. 
Furthermore, as discussed in the proposed rule, using the State-based 
cohorts could potentially lead to an insufficient count of HHAs in 11 
States, territories, and the District of Columbia. It is not apparent 
that clear similarities exist between those States, territories, or the 
District of Columbia with less than 20 HHAs in a cohort to support 
grouping them for competition based solely on their lower HHA counts, 
nor do we believe excluding these States, territories, or the District 
of Columbia would be consistent with the goal of including all eligible 
HHAs nationwide in the expanded Model.
    Comment: Several commenters expressed concern that using national 
rather than State-based cohorts would result in a shifting of resources 
away from geographic areas with a higher burden of social risk factors 
and toward areas with less social risk factors.
    Response: We thank the commenters for sharing this concern. The 
commenters' concern appears to assume that quality measure scores and 
payments would be lower in areas with a higher burden of social risk 
factors.

[[Page 62299]]

Table 41 in the proposed rule (86 FR 35996) demonstrates, however, that 
simulating the proposed national cohorts with CY 2019 data, a high 
percentage of dually eligible beneficiaries is associated with a higher 
average payment adjustment under the expanded Model. This association 
supports that use of national, volume-based cohorts would not 
disadvantage those HHAs that care for beneficiaries with more 
significant social risk factors. As noted previously, we also refer 
readers to Table 43 of this final rule for an analysis of the shifts of 
expenditures, as represented by the average payment adjustments for 
small- and large-volume HHAs in each of the States, territories, and 
the District of Columbia, simulated with the proposed national size-
based cohorts using 2019 data and a maximum adjustment of 5 
percent. When the small- and large-volume HHAs in each of the States, 
territories, and the District of Columbia are combined, the average 
payment adjustment for the majority of States, territories, and the 
District of Columbia is within 1 percent, with none 
exceeding 2 percent. We welcome further feedback or 
analysis on this issue from the public.
    Comment: A commenter, on the other hand, strongly supported using 
national cohorts, as proposed, stating that Medicare is a national 
program and beneficiaries should have the same expectations for high-
quality care, regardless of which state they live in.
    Response: We thank the commenter for this feedback. We agree that 
since Medicare is a national program, all beneficiaries should have the 
same expectations for high-quality care. As discussed previously, we 
believe the use of national cohorts for purposes of the expanded Model 
would allow for competition among HHAs across similar measures while 
also providing sufficient numbers of HHAs in each cohort. This is also 
consistent with value-based purchasing programs and the Home Health 
Compare star ratings.
    Comment: Other commenters requested that HHAs in States that did 
not compete on quality in the original Model not be compared to the 
same standard as HHAs in the original nine States, because they have 
only been subject to publicly reporting of the measures, without 
payment adjustments, over the past 5 years.
    Response: We agree that HHAs in the 9 original Model States may 
have more knowledge about the expanded Model, given many of these HHAs 
have participated in the original HHVBP Model since 2016. However, as 
discussed in section III.A.3.a of this final rule, after consideration 
of the comments received, we are delaying implementation of payment 
adjustments for 1 year, with CY 2023 serving as the first performance 
year and CY 2025 serving as the first payment year, in order to provide 
all HHAs with additional time to become familiar with and gain 
experience with the expanded Model. We further note, as stated in 
section XI.8.F.2 of the proposed rule and this final rule, based on our 
analysis of the State-level impacts and using CY 2019 data to simulate 
payment adjustments, we did 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 of using the national, 
volume-based cohorts.
    Final Decision: After considering the public comments received on 
the cohorts for model expansion, we are finalizing the use of national, 
volume-based cohorts in setting payment adjustments under the expanded 
Model, as proposed, and are also finalizing to codify this policy at 
Sec.  484.370. We are also finalizing the proposed definitions of 
smaller-volume cohort and larger-volume cohort at Sec.  484.345. 
Consistent with the original HHVBP Model, CMS will assess whether an 
HHA qualifies for the smaller-volume cohort based on the volume of 
unique patients eligible to submit the HHCAHPS survey in the prior 
calendar year.
5. Payment Adjustment Percentage and Performance Assessment and Payment 
Adjustment Periods
a. 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 proposed that the maximum payment adjustment, upward 
or downward, would be 5 percent. We stated that 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. We proposed that 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 stated in the proposed rule that 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 solicited public comment on the proposed payment adjustment 
percentage. We summarize in this section of this rule the comments 
received on the proposed payment adjustment percentage and provide our 
responses.
    Comment: Some commenters expressed concern that the proposed 5 
percent maximum payment adjustment was too high for the first year of 
the expanded model. A few commenters suggested a 3 percent maximum 
payment adjustment to match the first payment adjustment year of the 
original model, other commenters suggested a 2 percent maximum payment 
adjustment to match Hospital Value Based Purchasing, and others 
suggested a 1 percent maximum payment adjustment. A few commenters 
suggested starting the expanded model at a lower percentage and slowly 
increasing the maximum payment adjustment over time.
    Response: We appreciate commenters sharing their concerns about the 
potential for a 5 percent payment adjustment. Under the payment 
adjustment methodology described in III.A.8 of this rule, we anticipate 
that most HHAs will receive a positive or negative payment adjustment 
smaller than the proposed 5 percent maximum adjustment. We reviewed the 
payment distribution under the original HHVBP Model for CY 2019, the 
second payment adjustment year, when the maximum payment adjustment was 
5 percent. During that year, 93.2 percent of the HHAs participating in 
the original HHVBP Model received a payment adjustment ranging from -3 
percent to +3 percent and 98.8 percent of the HHAs received a payment 
adjustment ranging from -4 percent to +4 percent. Using simulated data 
with national cohorts, we found 72 percent of HHAs would have received 
a payment adjustment ranging from -3 percent to +3 percent and 85 
percent of HHAs would have received a payment adjustment ranging from -
4 percent to +4 percent. In the original HHVBP model, we increased the 
maximum payment adjustment each year to allow HHAs the opportunity to 
become familiar with the operation of the model before applying higher 
percentage

[[Page 62300]]

payment adjustments in later years, including a maximum payment 
adjustment of 5 percent for the second payment year. In this final 
rule, we are delaying the first payment adjustment year to provide HHAs 
with learning support in advance of the application of payment 
adjustments under the expanded Model. As discussed in the proposed 
rule, we will continue to evaluate the 5 percent payment adjustment and 
consider any changes for future rule making.
    Final Decision: After consideration of the public comments, we are 
finalizing the payment adjustment as proposed. As discussed previously, 
we are also finalizing a delay in the start of payment adjustments 
under the expanded Model, such that CY 2025 would be the first payment 
year, with payment adjustments based on performance in CY 2023.
b. 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 proposed 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 stated in the proposed rule that we may propose to update the 
baseline year for subsequent years of the expanded Model through future 
rulemaking. We stated that 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 solicited public comment on the proposed baseline year for the 
expanded Model. We summarize in this section of this rule the comments 
received on the proposed baseline year and provide our responses.
    Comment: A few commenters supported using CY 2019 as the baseline 
year. Other commenters cautioned against using 2019 as a baseline year 
because they asserted it inherently means comparing pre-COVID-19, pre-
Patient Driven Grouping Model (PDGM) performance to performance in a 
very different environment. A commenter recommended CMS provide 
clarification on subsequent baseline periods in future years of the 
Model in a timely fashion so that HHAs have as much advance notice as 
possible. The commenter also encouraged CMS to eventually automatically 
advance the baseline period of the model by one year as each 
performance year is advanced, like other value-based programs.
    Response: We proposed using CY 2019 as the baseline year, as 
opposed to CY 2020, due to the potentially de-stabilizing effects of 
the PHE on the CY 2020 data and because it was the most recent full 
year of data available prior to CY 2020 to provide HHAs with 
achievement thresholds and benchmarks as soon as administratively 
feasible and prior to the start or soon after the start of the 
applicable performance year. As noted later in this final rule, the 
PDGM is a case-mix adjustment model intended to pay for services more 
accurately and we believe the HHVBP Model can continue unchanged when 
HHA periods of care are paid according to the case-mix adjustments of 
the PDGM. We further believe that the payment change should not affect 
measure scoring between the baseline year and the performance years. 
However, CMS may consider conducting analyses of the impact of using 
various baseline periods, and would address any changes to the baseline 
period in future rulemaking. We appreciate the commenter's suggestion 
to eventually automatically advance the baseline period by one year as 
each performance year is advanced in an effort to align with other 
value-based programs and will take it under consideration.
    Final Decision: After consideration of comments received, we are 
finalizing our proposal to use CY 2019 (January 1, 2019 through 
December 31, 2019) as the baseline year. As discussed previously, we 
are also finalizing to delay the first performance and payment year 
under the expanded Model. Accordingly, the baseline year would be CY 
2019 for the CY 2023 performance year/CY 2025 payment year and 
subsequent years; however, we may conduct analyses of the impact of 
using various baseline periods and consider any changes for future 
rulemaking.
(2) New HHAs
    As noted previously, we generally proposed 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 proposed 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 proposed 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 proposed 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 22 shows 
the proposed HHA baseline, performance and payment years based on the 
HHA's Medicare-certification date through December 31, 2021.

[[Page 62301]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.036

    We also proposed to codify our proposal on new HHAs at Sec.  
484.350. We solicited public comment on these proposals.
    Final Decision: We did not receive any comments on our proposals 
regarding new HHAs and are finalizing our proposal that for new HHAs, 
specifically those HHAs that are certified by Medicare on or after 
January 1, 2019, 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 are finalizing that new HHAs would begin 
competing under the expanded HHVBP Model in the first full calendar 
year (beginning with CY 2023) following the full calendar year baseline 
year. For example, under this final policy, all HHAs certified for 
participation in Medicare before January 1, 2022, would have their CY 
2023 performance assessed and would be eligible for a CY 2025 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 23 
shows the finalized HHA baseline, performance and payment years based 
on the HHA's Medicare-certification date through December 31, 2021.
[GRAPHIC] [TIFF OMITTED] TR09NO21.037

    We are also finalizing our proposed codification of this policy at 
Sec.  484.350 with modification to reflect the one-year delay in the 
first performance year from CY 2022 to CY 2023. Specifically, we are 
adding ``(beginning with CY 2023)'' to reflect that for new HHAs 
certified by Medicare on or after January 1, 2019, the first 
performance year is the first full calendar year (beginning with CY 
2023) following the baseline year.
6. Quality Measures
a. General Considerations Used for the Selection of Quality Measures 
for the Expanded HHVBP Model
    We stated in the proposed rule that we plan to apply, to the extent 
possible, principles from CMS' Meaningful Measures Initiative \18\ 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

[[Page 62302]]

quality of care; Care coordination; Population/community health; 
efficiency and cost reduction; safety; and, Patient and caregiver-
centered experience.
---------------------------------------------------------------------------

    \18\ https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
    \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.
---------------------------------------------------------------------------

    We stated that 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 stated in the proposed rule that we intend to 
consider new measures for inclusion in subsequent years of the expanded 
HHVBP Model through future rulemaking. We stated that 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 authority under 
section 1115A of the Act 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 stated that 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 reiterated that we would propose any new 
measures through future rulemaking.
b. Initial Measure Set for the Expanded Model
    We proposed 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. (As 
discussed in the preceding section, we are finalizing CY 2023 as the 
first performance year, and CY 2025 as the first payment year, under 
the expanded Model.) The proposed measures were also used under the 
original Model (83 FR 56533). However, we noted that no ``New 
Measures'' as defined in the original Model (80 FR 68674) were 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 noted that any 
future additional measures proposed for the expanded HHVBP Model would 
not be considered ``New Measures'' as used in the original Model.
    We proposed the measures as detailed in Tables 26 and 27 of the 
proposed rule (86 FR 35923 through 35926) 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 stated in the proposed rule 
that 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 stated that 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 of the proposed rule (86 FR 35923 through 35926): 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 final 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 final rule).
(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 takes 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 M items. These six M items and 
their short name are as follows:

 Grooming (M1800)
 Upper Body Dressing (M1810)
 Lower Body Dressing (M1820)
 Bathing (M1830)
 Toileting Hygiene (M1845)
 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 M items and their short name are as follows:

 Toilet Transferring (M1840)
 Bed Transferring (M1850)
 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 stated in our discussion of the proposed TNC measures in the 
proposed rule that 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. In this final rule, we acknowledge that use of 
the term ``improvement'' to describe the TNC measures does not take 
into account the risk adjustment

[[Page 62303]]

methodology used to calculate these measures or that the structure of 
the measures also addresses how effectively a HHA can limit any decline 
of the patient because it implies that the TNC measures would only 
measure an increase in a patient's functional status, and we have 
revised our discussion of these proposed measures in this final rule 
accordingly. The risk adjustment methodology for these two measures is 
designed to take into account instances where the goal of home health 
care is to maintain the patient's current condition or to prevent or 
slow further deterioration of the patient's condition by including risk 
factors for a wide variety of beneficiary-level characteristics, 
including age, risk for hospitalization, 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 
without cognitive impairment. In effect, the self-care change 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. As discussed in our response to comments in this 
section of this rule, the technical specifications for the composite 
measures have been updated and the updated specifications can be found 
in the downloads section on the CMS website.\21\ 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).
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    \21\ https://innovation.cms.gov/innovation-models/home-health-value-based-purchasing-model.
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    We noted in the proposed rule 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 HH PPS 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 stated in 
the proposed rule that 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.\22\
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    \22\ 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 
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 invited public comment on our proposed measure set. We summarize 
in this section of this rule the comments and provide our responses.
Comments on the Measure Set Generally
    Comment: A commenter encouraged CMS to include more measures in a 
future nationwide HHVBP, including (but not limited to) measures of 
outcomes, safety, and caregiver engagement. Another commenter supported 
the proposed measure set saying the quality measures reflect functional 
independence and agreed with CMS that using measures that are outcome 
focused and risk adjusted is the most useful to stakeholders to 
demonstrate value. The commenter stated that process-based measures are 
of little value and that measures should be a balance of health 
outcomes, utilization, and patient satisfaction.
    Response: We thank the commenters for their recommendations and 
feedback on the proposed measure set. We agree that outcome, 
utilization and patient satisfaction measures are good indicators of 
value-based care and therefore have proposed to include these measure 
types in the expanded HHVBP Model. We believe the proposed measure set 
encourages HHAs to provide care that supports patients who wish to 
remain in their home whether the patient's goal is functional 
independence, stabilization or to prevent further decline. CMS will 
continue to monitor measure performance and to seek stakeholder input 
and may propose measure modification in future rulemaking.
    Comment: Commenters supported the removal of the three ``New 
Measures'' from the measure set under HHVBP Model expansion.
    Response: We thank the commenters for their support.
    Comment: Commenters stated that CMS should establish a Technical 
Expert Panel (TEP) to evaluate the proposed HHVBP measures to ensure 
that the measures appropriately consider the full scope of the patient 
population served with the home health benefit, particularly patients 
not likely to experience condition improvement. Another commenter 
asserted that there

[[Page 62304]]

is no evidence that CMS has sought out experts who can determine how to 
devise meaningful and inclusive measurements, and that there must be 
measurement experts CMS can engage who can determine how to measure 
everyone. The commenter further asserted that CMS should have located 
or developed appropriate quality measurements during the implementation 
period of the original HHVBP Model or for the Quality Reporting 
Program.
    Response: As described in the CY 2019 final rule (83 FR 56528-
56529), CMS received input from a TEP on measure set modifications for 
the measures under the original Model. As under the original Model, and 
noted in section III.A.6.5 of this final rule, we plan to continue to 
seek input on the measure set, including from stakeholders in relevant 
fields such as clinicians, statisticians, quality improvement, and 
methodologists, and to monitor quality measure performance to inform 
potential measure set changes under the expanded Model. We further note 
that the majority of the measures in the proposed expanded Model 
measure set were used since the implementation of the original Model in 
CY 2016 and that the majority of the measures overlap with the HH QRP, 
except for the TNC change measures.
    Comment: A commenter stated that home health payment reform must be 
implemented in a way that maintains beneficiary access to care and 
ensures beneficiaries receive necessary and appropriate care. A 
commenter stated that excessively stringent model payment design may 
increase Medicare savings but simultaneously cause HHAs to leave the 
market, particularly in rural and other underserved areas. The 
commenter stated that HHAs may also respond to payment pressure by 
avoiding beneficiaries whose care is perceived as potentially 
jeopardizing HHAs' performance scores, when those beneficiaries may be 
the ones having the greatest clinical needs for home health services.
    Response: We agree that home health payment reform, specifically 
for HHVBP, should be implemented so that beneficiaries maintain access 
to care and receive necessary and appropriate care. We disagree with 
the comments that the HHVBP model payment design may cause HHAs to 
leave the market. As previously noted, evaluation findings showed that 
implementation of the original HHVBP Model did not adversely impact 
home health utilization, market entry and exit.
    Comment: A commenter raised concerns that the measure set should 
score a small set of outcomes, patient experience, and value (for 
example, resource use) measures that are not unduly burdensome for 
providers to report. The commenter suggested that scores could be based 
on three claims-based measures of quality and resource use: All-
condition hospitalizations with the HH stay, successful discharge to 
the community, and Medicare spending per beneficiary.
    Response: The proposed measure set for the expanded HHVBP Model 
includes measures that are currently already reported by HHAs and 
therefore we do not believe these measures would be unduly burdensome 
for HHAs to report. As discussed in the proposed rule, in evaluating 
whether to augment the initial measure set, we would consider the 
potential burden on HHAs to report measure data that is not already 
collected through existing quality measure data reporting systems. We 
thank the commenter for their suggestion to score HHAs on three claims-
based measures. We note that the HHVBP expanded Model measure set was 
developed to encourage HHAs to focus on quality, patient-centered care 
and quality improvement across various focus areas, including those 
which are not directly measured through claims-based measures, such as 
patient experience. We further note that we did not propose the claims 
measures described but we may consider the use of additional claims-
based measures in the expanded HHVBP Model for future rulemaking.
    Comment: Some commenters stated that quality measures are not 
always under the control of the HHA. One example they provided is the 
OASIS quality measure, Self-Management of Oral Medications, where 
medication management could be done by an assisted living facility 
rather than the HHA. Commenters requested that CMS take these types of 
discrepancies into account so that the HHA is not penalized.
    Response: We disagree with the commenters that HHAs serving 
patients in an assisted living facility are at a disadvantage to 
achieve a higher quality score in this area of measurement. We believe 
that all HHAs must aim to provide high quality care and therefore 
assess for and put into place care planning and coordination of 
services, including the coordination on the management of oral 
medications, to mitigate poor quality outcomes regardless of care 
setting.
Comments Regarding Claims-Based Measures
    Comment: A commenter stated CMS should consider how recent changes 
to the payment system affect scoring some of the measures. The two 
claims-based measures, Acute Care Hospitalizations (ACH) and Emergency 
Department (ED) Use without Hospitalization, are measured during the 
first 60 days of home health. They encourage CMS to consider how the 
changes to the home health payment system from the 60-day unit under 
the previous case-mix system (in CY 2019) to the 30-day unit under 
Patient Driven Grouping Model (PDGM) (in CY 2020 and later) could 
affect HHAs' scores on the ACH and ED use measures between the baseline 
and performance years.
    Response: The PDGM is a case-mix adjustment model intended to pay 
for services more accurately We believe the HHVBP Model can continue 
unchanged when HHA periods of care are paid according to the case-mix 
adjustments of the PDGM. We may consider conducting analysis of the 
effects on HHAs' scores for ACH and ED Use measures between the 
baseline year and a performance year.
    Comment: A commenter suggested using functional status as a risk 
adjuster for the hospitalization measures in the HHVBP model.
    Response: Currently, there is no risk adjuster on our proposed 
claims measures. The proposed initial measure set for the expanded 
HHVBP Model includes the ACH measure which does not have any functional 
mobility elements. We thank the commenter for their suggestion and may 
take into consideration as we move forward in the implementation of the 
expanded HHVBP Model. We further note that we may make adjustments to 
the risk adjustment methodology based upon the removal of measures, 
changes to the assessment instrument, and diagnosis code changes.
Comments Regarding the OASIS-Based Measures
    Comment: A commenter recommends that CMS replace the OASIS-based 
Discharge to Community measure in the HHVBP proposed measure set with 
the new, claims-based Discharged to Community measure used under HH 
QRP. The commenter stated that maintaining both measures is confusing 
to HHAs as the measures have similar names but are calculated 
differently and that the new claims-based measure provides a more 
accurate score.
    Response: We thank the commenter for their recommendation. 
Additional

[[Page 62305]]

analysis is needed to evaluate the use of the claims-based Discharge to 
Community Measure used under the HH QRP in place of the OASIS-based 
measure. We will continue to monitor quality measure performance under 
expansion and will consider any potential measure modifications for 
future rulemaking.
    Comment: A commenter requested more detail on what changed in the 
updated risk adjustment methodology as it relates to the TNC measures.
    Response: We have updated the risk adjustment methodology as it 
relates to the TNC measures, which is available on the HHVBP Model 
Expansion webpage.\23\ CMS made optional OASIS items (M1030, M1242, 
M2030, and M2200) collected at the start or resumption of a care that 
were used in the risk adjustment and the update posted on the HH QRP 
website.\24\ Since voluntary items may be missing for some home health 
quality episodes, these four voluntary items were removed from the risk 
adjustment model update effective for episodes of care beginning 1/1/
2021 and posted on the HH QRP website, as noted above. We note that the 
updated methodology, posted on the HHVBP Model Expansion webpage noted 
above, is applicable to episodes of care for the CY 2022 pre-
implementation year, however as noted previously in this rule, HHAs 
will not be assessed on their performance of the TNC measures in CY 
2022 that are based on the updated risk adjustment methodology. We note 
that the next update of the risk adjustment models is planned for the 
release of OASIS E which would apply to episodes of care beginning 1/1/
2023, the first performance year under the expanded HHVBP Model. That 
is, as CY 2023 is the first performance year under the expanded Model, 
HHAs would be assessed on their performance on the TNC measures based 
on the updated risk adjusted methodology for episodes of care that 
would begin 1/1/2023. We further note that, during that update of the 
methodology that would be effective with episodes of care beginning 1/
1/2023 and for which HHA's performance will be assessed, the risk 
adjustment models will be based on refreshed data and all risk factors 
will be re-tested for inclusion.
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    \23\ https://innovation.cms.gov/innovation-models/home-health-value-based-purchasing-model.
    \24\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Measures in a file titled Risk Adjustment Technical Specifications.
---------------------------------------------------------------------------

    Comment: A commenter strongly supported the use of outcomes 
measures on functional status, such as the two OASIS composite measures 
(TNC Change in Mobility and TNC Change in Self-Care), stating that a 
patient's functional status is inextricably related to their ability to 
remain in a community setting and avoid unnecessary utilization of 
health care services. The commenter stated that it appreciates that 
these measures are broadly risk-adjusted to recognize patients with 
inherently limited goals for improvement, which can help account for 
differences in patient type that may affect an HHA's performance on 
certain measures. The commenter, however, recommended CMS consider 
whether additional risk adjustment would better account for patient 
differences, specifically for those with more limited potential for 
functional improvement.
    Response: We thank the commenter for their support of the use of 
outcome measures on functional status. We appreciate the commenter's 
suggestion regarding additional risk adjustment to better account for 
patients with more limited potential for functional improvement and 
refer readers to our detailed response, discussed later in this 
section, on the risk adjusted methodology for the TNC measures.
    Comment: Commenters expressed concern that the OASIS measures have 
the potential to reward non-legitimate quality improvement, because 
HHAs record and report functional assessment data through the OASIS 
assessment, and this information affects payments for HHAs and the 
calculation of certain quality metrics. The commenters asserted that 
providers have an incentive to report the information in ways that 
raise payments and appear to improve performance, resulting in 
questionable value for payment, quality measurement, and care planning. 
A commenter agreed that improving a patient's functional ability is a 
goal of home health care, but urged CMS not to include these OASIS-
based measures of function (for example, TNC Change in Self-Care and 
TNC Change in Mobility) in the expanded HHVBP Model until their 
accuracy is improved.
    Response: With regard to concern that the OASIS measures may have 
the potential to reward non-legitimate quality improvement or that the 
measures may incentivize providers to report their OASIS assessments in 
ways that raise payments, we believe that the OASIS-based measures 
yield reliable information for assessing HHAs' quality performance and 
capture important information about beneficiaries' function based on 
reliability testing.\25\ Most OASIS items achieve moderate to near 
perfect reliability based on reported Kappa values. With regard to the 
comment that CMS should not include the TNC measures in HHVBP until 
their accuracy is improved, we refer readers to our detailed response, 
that follows this response, on the TNC measures including their 
methodologies. We believe that our analysis of the TNC measures 
supports that these measures capture a change in a patient's status for 
the beneficiary population that may not have goals of improvement. We 
will continue, as with all measures in the measure set, to evaluate the 
benefit of the measure as the expanded Model progresses.
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    \25\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/OASIS-Field-Test-Summary-Report_02-2018.pdf.
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    Comment: We received many comments about including stabilization/
maintenance measures in the expanded Model and the proposed TNC 
measures. A commenter suggested that there be a modified risk 
adjustment that accounts for patients in palliative care population 
(for example, discharge to hospice care). Commenters suggest that a 
stronger risk adjustment model is needed for HHVBP to recognize that 
some home health agencies care for a much sicker and more complex 
population than others so agencies can be compared fairly and to ensure 
that incentives are aligned to care for patients with complex health 
and social determinant needs. Alternatively, commenters expressed that 
CMS could remove all patients with maintenance goals from HHVBP until 
all measures, incentives, and disincentives equally reflect their needs 
and qualifications for Medicare coverage as for those beneficiaries who 
can improve. The commenters suggest that improvement measures coupled 
with the higher weights assigned to the hospitalization and emergency 
department use claims-based measures may serve to disincentivize home 
health agencies from accepting into service Medicare beneficiaries that 
have chronic and/or unstable conditions or that the proposed measure 
set would negatively impact beneficiary access because HHAs may choose 
to care for patients who can show improvement in order to maximize 
their payment adjustment. Commenters stated that expansion should be 
temporarily halted in order to refine the methodology of how 
improvement is to be calculated to sufficiently account for patient 
populations whose appropriate goal may be to slow or temporarily halt

[[Page 62306]]

functional decline, but who cannot reasonably be expected to make major 
improvements in activities of daily life (ADL) scores. Some commenters 
expressed concern that the proposed measures focus largely on 
improvement and should include stabilization and maintenance measures 
as well. Commenters asserted that the measure set's improvement 
standards are relied upon too heavily, which will negatively impact 
HHAs with chronic care, palliative care, and end of life patient 
populations, and that CMS's current risk adjuster does not account for 
these differences sufficiently. A commenter asserted that since the 
HHVBP Model was first proposed in 2015, quality measures discriminate 
against Medicare beneficiaries with longer-term, chronic conditions who 
require skilled care but are not expected to improve--patients covered 
by the Jimmo class action settlement and provided an example of a 
patient that it asserted would be harmed by expanding HHVBP. The 
commenter asserted that the proposed TNC Self-Care and TNC Mobility 
composite measures are not appropriate or adequate for beneficiaries 
who are not able to improve. The commenter believes that the 
methodology for the TNC measures does not allow agencies to benefit 
from providing care to beneficiaries who are not expected to improve 
regardless of how high the quality of care.
    Response: We believe the goals of home health care are to provide 
restorative care when improvement is expected, maintain function and 
health status if improvement is not expected, slow the rate of 
functional decline to avoid institutionalization in an acute or post-
acute care setting, and/or facilitate transition to end-of-life care, 
when appropriate. We remind commenters that the structure of the home 
health benefit requires a multidisciplinary approach of not only 
therapy services, but skilled nursing, home health aide, and medical 
social services. The TNC measures, as previously stated, are not 
improvement measures but rather, they measure the change in function in 
either direction, both positive and negative.
    The TNC measures, in the proposed measure set, capture any risk-
adjusted change (negative and positive). In general, a positive change 
between Start of Care (SOC)/Resumption of Care (ROC) and End of Care 
(EOC) assessment increases the measure values more than no change or a 
negative change. But the risk adjustment methodology for these measures 
is designed to level the ``playing field'' based on underlying risk 
factors. We also have exclusions in place for nonresponsive patients. 
Relative to the functional improvement measures in the initial HHVBP 
measure set, the TNC measures reward HHAs that help patients maintain 
or prevent excessive decline in their functional abilities overall. The 
TNC measure is a composite of changes, not improvement. We provide an 
example to help demonstrate how HHAs would not be dis-incentivized to 
care for beneficiaries who are not expected to improve, demonstrating 
how the risk-adjustment model recalibrates the scores for HHAs caring 
for beneficiaries with more complex medical needs relative to HHAs 
caring for less complex beneficiaries.
Risk Adjustment for Proposed TNC Measures
    Risk adjustment is necessary to account for differences in patient 
case mix among different HHAs that affect performance on outcome 
measures. That is, age and pre-existing conditions impact how patients 
perform on outcome measures and risk adjustment accounts for the 
differing types of patients served by HHAs and enables comparison 
across HHAs. These same risk adjustment methods are employed in other 
quality measures, such as the hospital-based mortality measures, to 
prevent providers from avoiding the sickest patients and preferencing 
the healthiest.
    The general formula for risk adjustment of OASIS outcomes measure 
is as follows:

OutcomeRA = (ObservedHHA-PredictedHHA) + National

Where

OutcomeRA is the HHA's risk adjusted outcome measure 
value,
ObservedHHA is the HHA's average observed values for the 
outcome measure,
PredictedHHA is the HHA's average predicted values for 
the outcome. Predicted values are obtained from a regression model 
using a set of risk factors, and
National is the average predicted value across all episodes in the 
nation.

    An HHA's risk adjusted measure value is calculated by averaging the 
HHA observed measure value across all its patients and subtracting the 
HHA's average predicted measure value across all its patients. To 
standardize the result, the national measure value is then added to 
obtain the risk adjusted outcome measure for the HHA.
    The following example demonstrates how the formula, as previously 
discussed, would work for a hypothetical patient with the following 
risk factors, as referenced by a commenter:

 Age 56
 Diagnosis of multiple sclerosis
 Use of catheter

    Table 24 shows the risk adjustment coefficients on the selected 
risk factors for OASIS-based measures in the proposed measure set for 
the HHVBP expansion for this hypothetical beneficiary. The presence of 
these risk factors is almost always associated with lower predicted 
measure values for the OASIS-based outcome measures used in the 
proposed measure set for HHVBP expansion, as evidenced by the negative 
signs on the coefficients shown in this table.

[[Page 62307]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.038

    Negative coefficients lower the predicted value for a beneficiary 
with these characteristics and positive coefficients increase the 
predicted value. For each of the measures, summing the coefficients on 
the three risk factors shows that the presence of all three risk 
factors contributes negatively to the predicted value for those 
beneficiaries with the risk factors for all five measures in Table 24. 
Using the risk adjustment formula as previously discussed, the lower 
predicted values for these episodes would contribute to boosting the 
risk adjusted measure value if all other risk adjustment variables are 
equal across HHAs.
    For illustrative purposes, imagine that the national average TNC 
Mobility score is 0.73 and a particular HHA has an observed score of 
0.60. If all the HHA's patients had the three, previously discussed, 
risk factors (and no others), the HHA's risk adjusted TNC Mobility 
score would be 0.60--0.45 \26\ + 0.73 = 0.88. This score (0.88) is 
higher than the national score even though the observed value is lower 
than the national score. Note that this is purely hypothetical--actual 
episodes for an HHA would trigger multiple different risk factors 
(there are over a hundred) and the predicted value would be summed over 
the coefficients for all of these risk factors.
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    \26\ To calculate the 0.45, we sum the coefficients in the table 
above with the constant estimated from the updated risk adjustment 
model (https://www.innovation.cms.gov/innovation-models/home-health-value-based-purchasing-model) and apply the logistic formula (see 
Chapter 6 of https://www.cms.gov/files/document/hh-qrp-qm-users-manual-v1-addendum.pdf).
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    Based on the risk adjustment formula, the lower the average 
predicted measure value is for an HHA, the higher the HHA's risk 
adjusted outcome score. That is, patients with multiple risk factors 
associated with lower measure performance will have a lower predicted 
value than patients without those risk factors. The lower predicted 
value will increase the risk-adjusted measure score.
    We believe that our analysis of the TNC measures supports that 
these measures capture a change in a patient's status for the 
beneficiary population that may not have goals of improvement. We will 
continue, as with all measures in the measure set, to evaluate the 
benefit of the measures as the Model progresses.
    Comment: A commenter suggested that CMS consider including a falls 
prevention measure as key patient safety data necessary for a 
comprehensive HHVBP model. The commenter suggested, for example, that 
NQF 0101/CMIT 1247 Falls: Screening, Risk-Assessment, and Plan of Care 
to Prevent Future Falls could be considered. The commenter stated that 
a falls prevention measure would help to ensure that HHAs are 
addressing risks and planning for interventions to minimize patient 
falls in the home, which can lead to greatly increased cost if a 
patient requires an emergency room visit, hospitalization, or other 
care to treat any injuries. Another commenter suggested that because 
family caregivers often play an important role in caring for the 
beneficiary, CMS consider adopting a measure for use in both the HHVBP 
model and HH QRP program that addresses HHAs documenting whether the 
beneficiary has a family caregiver and provided additional factors for 
the HHA to collect surrounding a beneficiary's family caregiver.
    Response: We thank the commenters for their recommendations and we 
may consider these measures for inclusion in the expanded Model's 
measure set in a future year.
Comments Regarding the HHCAHPS Survey Measure
    Comment: A commenter was not in favor of the overall quality rating 
proposed as a HHCAHPS measure as they believe it is not specific or 
necessarily actionable for improvement opportunities.
    Response: We believe that patient experience is an important way to 
assess quality of care. The HHVBP expanded Model measure set was 
developed to encompass a home health episode of care from intake 
through to the patient experience survey encouraging HHAs to focus on 
quality, patient-centered care and quality improvement across various 
focus areas, including those which are not directly measured through 
the claims-based measures, such as patient experience.
    Comment: A commenter supported HHCAHPS as part of the expanded 
Model's measure set. Another commenter stated that since patient 
experience is a key measure of a provider's quality, the HHVBP Model 
should continue to score HHCAHPS measures and that the measure set 
should be revised as other measures become available.
    Response: We thank the commenters for their feedback. We agree that 
the HHCAHPS measure is a key measure of a provider's quality of care 
provided. We will continue to monitor quality measure performance as we 
consider any potential measure set changes for future rulemaking.
    Final Decision: After consideration of comments received, we are 
finalizing the measure set as proposed effective with the CY 2022 pre-
implementation year and subsequent years. We are also

[[Page 62308]]

finalizing our proposed regulation text at Sec.  484.355(a)(1) with 
modification to reflect that an HHA must submit data on the specified 
measures under the expanded HHVBP model for both the pre-implementation 
year and each performance year. As discussed in section III.A,3.a of 
this final rule, we are finalizing CY 2025 as the first payment year, 
instead of CY 2024. CY 2022 will be a pre-implementation year to allow 
all HHAs time to prepare and learn about the HHVBP expanded Model for 
successful implementation. Quality measure data collected during CY 
2022 will not be assessed for purposes of a payment adjustment under 
the expanded HHVBP Model; that is, HHAs will incur zero percent (0%) 
payment risk based upon CY 2022 performance. CY 2023 will be the first 
performance year, beginning January 1, 2023; CY 2025 will be the first 
payment year. Table 25 sets forth the finalized measure set for the 
expanded HHVBP Model. We note that in Table 26 of the proposed rule, 
the Measure Steward and Identifier for the Discharged to Community 
measure was NA and NA, respectively. In Table 25, the finalized measure 
set for the expanded Model, the Measure Steward and the Identifier is 
updated to CMS and NQF 3477, respectively.
BILLING CODE P
[GRAPHIC] [TIFF OMITTED] TR09NO21.039


[[Page 62309]]


[GRAPHIC] [TIFF OMITTED] TR09NO21.040

    Table 26 provides more granular detail on the elements of the Home 
Health Care Consumer Assessment of Healthcare Providers and Systems 
(HHCAHPS) Survey measure.

[[Page 62310]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.041

BILLING CODE C
c. Measure Modifications
    During the expanded Model, we will monitor the quality measures for 
lessons learned and address any needed adjustments or modifications to 
the expanded Model measure set.
(1) 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

[[Page 62311]]

emergency, CMS-identified, a technical expert panel (TEP), or NQF. We 
stated in the proposed rule that 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 stated in the proposed rule that 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 proposed 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 also proposed 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 stated 
that 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 invited public comment on our proposal. We summarize in this 
section of this rule the comments received and provide our responses.
    Comment: A commenter suggested that ongoing modifications to the 
HHVBP expanded model (for example, scoring methodology, quality measure 
inclusion, risk adjustment methodology) are necessary to ensure the 
expanded model accurately and appropriately reflects the value of 
services delivered and the beneficiary populations cared for.
    Response: CMS will continue to evaluate and monitor the expanded 
HHVBP Model for potential modifications to ensure the expanded model 
accurately and appropriately reflects the value of services delivered 
and the beneficiary populations cared for.
    Final Decision: After consideration of comments received, we are 
finalizing our proposal as proposed.
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 
the proposed rule, for greater transparency, we proposed factors we 
would consider in proposing to remove a measure as well as a policy for 
when immediate suspension is necessary.
(1) Removal Factors
    We proposed to generally use the following 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.

[[Page 62312]]

    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.
    We proposed 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 necessitate 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 solicited public comment on our proposals.
    Final Decision: We did not receive any comments on our proposal and 
are finalizing the measure removal factors as proposed.
(2) Measure Suspension Policy
    We stated in the proposed rule that removal of an expanded HHVBP 
Model measure would take place through notice and comment rulemaking as 
proposed in the preceding section unless we determine that a measure is 
causing concern for patient safety or harm. We proposed 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 solicited public comment on our proposal.
    Final Decision: We did not receive any comments on our proposal and 
are finalizing the measure suspension policy as proposed.
e. Future Topics or Measure Considerations
(1) Consideration To Align or Remove Measures With the HH QRP
    In section IV.C. of the proposed rule, CMS proposed 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) 
measure beginning with the CY 2023 under the HH QRP. (As discussed in 
section IV.C of this final rule, CMS is finalizing its proposal to 
replace the ACH and ED Use measures with the PPH measure for the HH QRP 
measure set beginning with CY 2023.) We noted in the proposed rule that 
while both the ACH and ED Use measure were being proposed for removal 
under the HH QRP, these measures were being proposed for inclusion in 
the expanded HHVBP Model beginning with the CY 2022 performance year. 
We solicited 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 noted that any measure removals would be proposed in future 
notice and comment rulemaking.
    We requested public feedback on this future consideration. We 
summarize in this section of this rule the feedback received and 
provide our responses.
    Comment: Commenters recommended that the HHVBP measure set align to 
measures of the HH QRP. Another commenter suggested that CMS move to 
align the included measures with the Star Ratings and other quality 
reporting activities. Another commenter stated that by bringing 
consistency to tracked outcomes across the HH QRP, Star Ratings, and 
HHVBP, CMS will minimize the difficulty of beneficiaries and payers to 
make comparative assessment of provider quality while also streamlining 
home health providers' data capture and reporting processes.
    Response: We thank the commenters for their suggestions. We note 
that the proposed measure set for the expanded HHVBP Model generally 
aligns with the HH QRP. We will take into consideration opportunities 
for further alignment, including with respect to the claims-based 
measures. If we consider adding new measures that require data that is 
not already collected through existing quality measure data reporting 
systems, we would propose that in future rulemaking being mindful of 
provider burden.
    Comment: Commenters expressed that they need at least one year to 
become familiar with the Home Health Within-Stay Potentially 
Preventable Hospitalization (PPH) measure, and to affect outcomes, if 
needed, before including it in the HHVBP expanded Model measure set.
    Response: We thank the commenters for their feedback and will take 
into future consideration.
(2) Health Equity Considerations for the Expanded HHVBP Model
    In section VIII.B. of the proposed rule, we included a Request for 
Information on ways to close the health equity gap in post-acute care 
quality reporting programs, including the HH QRP. In the proposed rule, 
we referred 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 requested public 
comment on ways in which we could incorporate health equity goals and 
principles into the expanded HHVBP Model. Specifically, we sought 
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.
    In this section of this rule, we summarize comments received and 
provide our responses.

[[Page 62313]]

    Comment: A commenter stated that in an effort to prevent bias in 
patient selection, it encouraged CMS to consider potential 
stabilization measures, rather than sole reliance on improvement 
measures. The commenter stated that this will continue to promote 
access to care for individuals with chronic illness or limited ability 
to improve, and is consistent with the renewed focus on health equity. 
Another commenter generally supported health equity goals and 
principles incorporated in the expanded HHVBP Model. The commenter 
recommended CMS collect patient-level demographic information based on 
segmented demographics (race, ethnicity, gender, etc.) on existing 
measures, instead of creating new or more complex measures. The 
commenter stated that should CMS move forward with adopting new health 
equity measures, it recommended CMS include these measures in the HH 
QRP prior to inclusion in the HHVBP Model.
    Response: We thank the commenters for their feedback. As discussed 
in section III.A.6.b of this final rule, we are finalizing the measure 
set as proposed, which includes improvement, total normalized composite 
change measures, utilization and patient experience measures. We refer 
readers to our earlier detailed response in this section of the rule on 
the TNC change measures, including the measure methodology, and why we 
believe the measure set would not dis-incentivize HHAs from caring for 
beneficiaries with chronic illness or limited ability to improve. 
Health equity including access to care for all beneficiaries is a 
priority. CMS will continue to monitor beneficiary access under the 
HHVBP Model expansion.
    Comment: A commenter recommended that outcomes measured in the HH 
QRP and HHVBP Model be stratified by various patient populations to 
determine how they are affected by Social Determinants of Health 
(SDOH).
    Response: We note that in section VIII.B of this final rule, we are 
finalizing our proposal to revise compliance dates for HHAs under the 
HH QRP. This policy includes the submission of certain standardized 
patient assessment data, some of which address social determinants of 
health (SDoH). These standardized patient assessment data, in part, 
support efforts to evaluate health equity in a manner we believe is 
consistent with the policy set out in Executive Order 13985 of January 
20, 2021, entitled ``Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government'' (86 FR 7009). 
We are working collaboratively with HH QRP to determine how data 
collected on SDoHs under HH QRP could be part of the HHVBP Model 
expansion in the future.
f. Measure Submissions--Form, Manner, and Timing
    We proposed 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 in the proposed rule and previously in this final rule, 
the measures that we proposed and are finalizing for the expanded HHVBP 
Model measure set would use data currently already reported by HHAs. 
The measure set includes OASIS \27\ 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. As we stated in the proposed rule, 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 the 
proposed rule and this final rule, in the future we may propose new 
measures that may not otherwise already be collected or submitted by 
HHAs.
---------------------------------------------------------------------------

    \27\ For detailed information on OASIS see the official CMS web 
resource available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits.
---------------------------------------------------------------------------

    We solicited comment on our proposal.
    As previously noted, we are finalizing our proposed regulation text 
at Sec.  484.355 with modification to reflect that an HHA must submit 
data on the specified measures under the expanded HHVBP model for both 
the pre-implementation year and each performance year.
(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) \28\ 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 (SOC) (initial assessment) or Resumption of Care (ROC) 
OASIS assessment and a Transfer or Discharge OASIS 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--
---------------------------------------------------------------------------

    \28\ 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 proposed 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). We 
stated in the proposed rule that 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 proposed that the underlying source

[[Page 62314]]

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 proposed to use raw OASIS 
assessments to calculate applicable measure scores consistent with how 
we developed these measures.
    We solicited comment on our proposals. We summarize in this section 
of this rule comments received and provide our responses.
    Comment: Several commenters were interested in knowing, if the HHA 
discharges the patient to either inpatient hospice care, or home 
hospice care, will declines in outcomes scored on the Home Health 
Discharge OASIS be counted against the HHA or would those declines be 
considered an outlier due to the patient transfer or discharge to a 
Hospice Provider. Another commenter questioned whether the agency data 
proposed to be collected from OASIS for completed episodes of care is 
SOC or ROC to discharge. Commenters expressed concern that if a patient 
opts for hospice, there is no ability to exclude these patients from 
the payment calculation at this point.
    Response: For some of the HHVBP OASIS measures, such as the TNC 
measures, OASIS items used in calculating the measure are only 
collected at discharge \29\ and therefore episodes that end in transfer 
are excluded from the measure calculation.\30\
---------------------------------------------------------------------------

    \29\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/draft-OASIS-D-Guidance-Manual-7-2-2018.pdf.
    \30\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-QRP-QM-Users-Manual-V10-August-2019.pdf.
---------------------------------------------------------------------------

    If the home health episode ends with a transfer to an institutional 
provider (M0100 = 06 or 07) or death (08), then the patient would be 
excluded from the Dyspnea, Oral Medications, TNC Mobility, and TNC 
Self-Care measures because the OASIS items that these measures use are 
not collected at the time of transfer for these patients. Patients who 
are transferred to an inpatient hospice facility count as a ``transfer 
to an inpatient facility'' (07) and are not included in the OASIS-based 
measures, while patients discharged to in-home hospice count as regular 
discharges (09) and are included in the OASIS-based measures. The two 
claims-based measures use the 60 days after the start of home health, 
and there are no exclusions for patients who go to a hospice. It is 
correct that an OASIS quality episode of care does go from SOC/ROC to 
transfer/discharge.
    Comment: Commenters discouraged CMS from including future VBP 
measures that are not collected in the OASIS data set (or through 
HHCAHPS or claims). Commenters stated that this would help prevent 
duplicative data collection and reduce administrative burden for 
agencies and assist HHAs to achieve better outcomes.
    Response: We note that we may, through future rulemaking, add new 
measures to the expanded Model where data is not already collected in 
order to study them for their appropriateness in the home health 
setting. As discussed in the proposed rule, if we consider adding new 
measures that require data that is not already collected through 
existing quality measure data reporting systems, we would propose that 
in future rulemaking being mindful of provider burden. We note that the 
proposed measure set for the expanded Model uses data already collected 
through OASIS, claims, and HHCAHPS.
    Final Decision: After consideration of the comments received, we 
are finalizing our proposals on the form, manner and timing of OASIS 
measure data as proposed. We reiterate that CY 2022 quality data will 
not be used to impact payments to eligible HHAs in CY 2024. CY 2023 
will be the first year in which the data collected on the OASIS, 
claims, and HHCAHPS measures in the expanded HHVBP Model's set will be 
assessed to determine payment adjustments for eligible HHAs in the 
expanded HHVBP Model in CY 2025, the first payment year under the 
expanded Model.
(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 proposed similar 
requirements that align with the HH QRP HHCAHPS survey measure data 
reporting requirement at Sec.  484.245(b)(1)(iii). Specifically, under 
the expanded Model we proposed 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 proposed to codify these proposals at Sec.  
484.355(a)(1)(ii).
    We requested public comment on these proposals.
    Final Decision: We did not receive comments on these proposals and 
are finalizing our proposals, including our proposed regulation text at 
Sec.  484.355(a)(1)(ii), as proposed.
(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

[[Page 62315]]

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 proposed 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 requested comment on our proposal.
    Final Decision: We did not receive comments on this proposal and 
are finalizing our proposal as proposed.
(4) Data Reporting for Monitoring and Evaluation of the Expanded HHVBP 
Model
    Consistent with requirements under the original HHVBP Model at 
Sec.  484.315(c), we proposed 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.\31\ We also proposed to codify this at Sec.  
484.355(b).
---------------------------------------------------------------------------

    \31\ See 1115A(b)(4) of the Act (42 U.S.C. 1315a).
---------------------------------------------------------------------------

    We sought public comment on these proposals.
    Comment: A commenter strongly recommended that CMS have a clear, 
ongoing plan to monitor beneficiary access in place from the inception 
of the expanded model, including distribution of HHAs in historically 
underserved areas. The commenter stated that the monitoring plan should 
be as close to real-time as is operationally feasible and include steps 
for corrective action for those HHAs found to be avoiding complex 
patients. The commenter stated that monitoring also should incorporate 
beneficiary input, such as surveys and focus groups, as well as 
frequent assessments of the numbers and types of beneficiary complaints 
and appeals.
    Response: We thank the commenter for their recommendations. We will 
continue to evaluate and monitor the expanded HHVBP Model and will take 
the commenter's recommendations under consideration.
    Final Decision: After consideration of comments received, we are 
finalizing our proposals as proposed, including our proposed regulation 
text at Sec.  484.355(b).
(5) 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
    As discussed in section III.A.11. of the proposed rule and this 
final rule, we proposed 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 proposed 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 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 proposed 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 did not propose 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 proposed 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. We stated in the proposed rule 
that 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 stated that 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. We stated that 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.
    We stated in the proposed rule that 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 sought 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.
    We summarize in this section of this rule comments received and 
provide our responses.

[[Page 62316]]

    Comment: A couple of commenters encouraged CMS to maintain current 
processes when developing, considering, and implementing new quality 
measures in any Medicare quality program, particularly for those 
measures that are not NQF endorsed and suggested CMS consider 
establishing a streamlined but standardized pathway applicable to the 
expanded HHVBP model that would allow for stakeholder input without 
unnecessarily delaying adoption of high-value measures.
    Response: We agree that stakeholder input is valuable to future 
measure set modifications for the HHVBP expanded model. As stated 
previously, in section III.A.6.5 of this final rule, we plan to 
continue to seek input on the measure set, including from stakeholders 
of various fields of expertise and to monitor quality measure 
performance to inform potential measure set changes under the expanded 
Model.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposal as proposed.
7. Performance Scoring Methodology
a. Considerations for Developing the 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 proposed to apply a similar 
methodology for the expanded HHVBP Model. We explain later in this 
section how we proposed 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. 
We stated in the proposed rule that 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. We stated that by limiting the improvement score to a 
scale across 0 to 9, we prioritize achievement relative to improvement.
    Fifth, we stated that 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 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. Performance Score Methodology
(1) Overview
    We stated in the proposed rule that 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 
final 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 final 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 final 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 
final 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 final 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 proposed that we would assess each HHA's TPS based upon 
all applicable quality measures (defined later in this section) in the 
expanded Model measure set in the applicable performance year. Each 
competing HHA would receive an interim assessment on

[[Page 62317]]

a quarterly basis, as described in detail in section III.A.9.a. of this 
final 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 final 
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 final 
rule.
    As noted, we proposed 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. We stated in the proposed rule that the primary changes 
between the original Model and the expanded Model would be that first, 
because we were 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 
proposed small changes to the achievement and improvement score 
formulas to simplify their calculation and interpretation, without 
materially changing the output. We also proposed 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 final rule. Finally, we proposed 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. We 
stated that 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) 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 proposed 
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 finalized in section 
III.A.5.b.1. of this final rule, with the exception of new HHAs, the 
baseline year would be CY 2019 (January 1, 2019 through December 31, 
2019) for the CY 2023 performance year/CY 2025 payment year and 
subsequent years. All benchmarks and achievement thresholds would be 
set based on HHA performance in the designated baseline year.
    We proposed 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 proposed 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 proposed 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 proposed to use 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 final rule. We also proposed 
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 proposed to codify the proposed 
definitions of achievement threshold, benchmark, and improvement 
threshold at Sec.  484.345. We sought public comment on these 
proposals.
    Final Decision: We did not receive comments on these proposals and 
are finalizing these proposals as proposed, including the proposed 
definitions of achievement threshold, benchmark, and improvement 
threshold at Sec.  484.345.
(i) 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 proposed 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 proposed 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 final rule. We proposed to calculate the 
achievement score using the following formula:

[[Page 62318]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.042

    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 proposed 
that the maximum achievement points would be capped at 10 achievement 
points. As under the original Model, we proposed 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 proposed 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 proposed 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 
final rule. We also proposed to codify these proposals at Sec.  
484.360. We sought public comment on these proposals.
    Final Decision: We did not receive comments on these proposals and 
are finalizing our proposals as proposed, including our proposed 
regulation text at Sec.  484.360.
(ii) 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 proposed 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. We 
stated in the proposed rule that 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 proposed 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] TR09NO21.043

    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 proposed 
that the maximum improvement points would be capped at 9 improvement 
points. Like the achievement points, we proposed 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 proposed 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 proposed 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 9 possible points, as previously stated. 
(We note that the discussion in the proposed rule referred to 10 rather 
than 9 possible points in error.) 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

[[Page 62319]]

III.A.7.e.(2).(iii). of this final rule. We also proposed to codify 
these proposals at Sec.  484.360. We sought public comment on these 
proposals. We summarize in this section of this rule comments received 
and provide our responses.
    Comment: A commenter requested that we no longer score improvement 
in quality measures relative to the baseline and only use the 
achievement score for calculating the TPS. The commenter stated that 
having one continuous performance scale results in every HHA having an 
incentive to improve, leaving no need for an improvement score, in 
addition to creating uniform beneficiary expectations.
    Response: We thank the commenter for their feedback on the proposed 
improvement score. While we agree with the commenter that the 
achievement score maintains the incentive to improve in the long-term, 
we believe that continuing to include the improvement score methodology 
is important in the initial years of the expanded model. This will 
allow HHAs with lower measure performance historically to be rewarded 
for improving upon those scores, even if the improvement does not move 
them into the highest performing tier of HHAs. By setting the highest 
possible improvement score out of 9 points, compared to the achievement 
score out of 10 points, we place a stronger emphasis on achievement 
relative to improvement. Furthermore, we note that this would be 
consistent with existing value-based purchasing programs.
    Comment: Several commenters expressed concern with using the 
improvement score methodology to assess HHAs on each of the quality 
measures, asserting that it may lead HHAs to exclude beneficiaries who 
are unlikely to improve.
    Response: We believe that these comments may be in reference to 
certain quality measures, rather than the improvement score 
methodology, and refer readers to our earlier responses regarding why 
we do not believe the measure set would disincentivize HHAs from 
serving beneficiaries who are less likely to improve. The improvement 
score methodology assesses improvement of HHAs across each of the 
applicable measures and does not measure improvement of beneficiaries 
over time.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposals as proposed, including our 
proposed regulation text at Sec.  484.360.
(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. As previously discussed, we are finalizing CY 2023 as 
the first performance year and have updated the following examples from 
the proposed rule to reflect CY 2023 as the performance year. Other 
than the updating the hypothetical performance year from CY 2022 to CY 
2023, all other detail in the following examples from the proposed rule 
remain the same. These HHA examples are based on illustrative data from 
CY 2019 (for the baseline year) and hypothetical data for CY 2023 (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 
2023 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 2023 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.\32\ 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.\33\ Because the higher of the achievement 
and improvement scores is used, HHA B would receive 4.864 improvement 
points for this measure.
---------------------------------------------------------------------------

    \32\ The finalized formula for calculating achievement points is 
10 * (HHA Performance Year Score - Achievement Threshold)/(Benchmark 
- Achievement Threshold).
    \33\ The finalized 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.

[[Page 62320]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.044


[[Page 62321]]


[GRAPHIC] [TIFF OMITTED] TR09NO21.045

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 proposed 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 proposed to 
continue to award an HHA the higher-of achievement or improvement 
points, as discussed 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 
proposed this minimum to align with the original HHVBP Model and the 
measure specifications used for the Patient Quality of Care Star 
Ratings.\34\ For the individual components that compose the HHCAHPS 
survey measure, we proposed that an ``applicable measure'' means a 
component for which a competing HHA has submitted a minimum of 40 
completed HHCAHPS surveys. We stated that 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.\35\
---------------------------------------------------------------------------

    \34\ 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.
    \35\ 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 proposed to codify this proposed definition of an 
``applicable measure'' at Sec.  484.345. We solicited public comment on 
these proposals.
    Final Decision: We did not receive comments on these proposals and 
are finalizing our proposals as proposed, including the proposed 
definition of an ``applicable measure'' at Sec.  484.345.
d. Minimum Number of Applicable Measures for an HHA To Receive a Total 
Performance Score
    For the expanded Model, we proposed to apply the same policies 
around the minimum number of applicable measures to receive a TPS, as 
implemented under the original Model. We proposed that, beginning with 
the CY 2022 performance year, which we are delaying until CY 2023 as 
the first performance year as described in section III.A.3 of this 
final rule, 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 stated that we believe 
that a minimum of five applicable measures allows for a

[[Page 62322]]

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 proposed 
that other applicable policies under the expanded HHVBP Model would 
still apply. We proposed that these HHAs 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 at the time of the 
development of the proposed rule, 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 proposed to codify this proposal at Sec.  484.360(c). We 
sought public comment on this proposal.
    Final Decision: We did not receive comments on this proposal and 
are finalizing our proposal as proposed, including our proposed 
regulation text at Sec.  484.360(c). As previously discussed, we are 
finalizing CY 2023 as the first performance year and CY 2025 as the 
first payment year under the expanded Model. We reiterate that HHAs 
will not be assessed on their performance on the quality measures 
during the CY 2022 pre-implementation year. As noted later in this 
rule, we will continue to collect and evaluate data under the expanded 
HHVBP Model during CY 2022 and anticipate providing sample reports to 
HHAs, where administratively feasible and based on available data, for 
learning purposes only. The sample report would include the same 
information as an Interim Performance Report (IPR), and would be based 
on the same scoring methodologies and other policies as finalized in 
this rule for a performance year. We also anticipate providing learning 
support to all HHAs during CY 2022 including, for example, scenario-
based performance reports and related learning events on the content of 
the reports and how they can be used to supplement an HHA's quality 
improvement efforts.
e. Weights for the Claims-Based, OASIS-Based, and HHCAHPS Survey 
Measures
    Except for removing the New Measures category, for the expanded 
HHVBP Model, we generally proposed the same policies regarding the 
weighting of measures and the redistribution of weights when measures 
or measure categories are missing as under the original Model (83 FR 
56536).
(1) Weighting and Re-Distribution of Weights Between the Measure 
Categories
    In the proposed rule, we proposed to group the expanded Model 
proposed measures into measure categories based on their data source as 
indicated in Table 27: Claims-based, OASIS-based, and the HHCAHPS 
survey-based. We proposed 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 proposed 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.36 37 Finally, we proposed that if 
two measure categories are missing, the remaining category would be 
weighted 100 percent. We refer readers to Table 28 for the distribution 
of measure category weights under various scenarios.
---------------------------------------------------------------------------

    \36\ OASIS-based measures reweighting = 35% original OASIS 
weight/(35% original OASIS weight + 30% original HHCAHPS weight) = 
53.85% revised OASIS weight.
    \37\ HHCAHPS reweighting = 30% original HHCAHPS weight/(35% 
original OASIS weight + 30% original HHCAHPS weight) = 46.15% 
revised HHCAHPS weight.
---------------------------------------------------------------------------

(2) Quality Measure Weights Within Measure Categories
    Within the measure categories, we proposed 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 proposed that all 5 
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 proposed 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 proposed 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 proposed 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 proposed to weight them slightly more than the

[[Page 62323]]

other 3 measures, which are not composite measures, as under the 
original Model. Under this proposal, should any measures in the 
category be missing, we proposed 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.38 39 40
---------------------------------------------------------------------------

    \38\ 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.
    \39\ 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.
    \40\ 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 27 for a comprehensive list of the proposed within-
category measure weights.
[GRAPHIC] [TIFF OMITTED] TR09NO21.046

    Table 28 presents the proposed weights for the proposed measures 
and measure categories under various reporting scenarios.

[[Page 62324]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.047

    We also proposed to codify these proposals at Sec.  484.360. We 
solicited public comment on these proposals.
    Final Decision: We did not receive comments on these proposals and 
are finalizing our proposals as proposed, including our proposed 
regulation text at Sec.  484.360.
f. Examples of the Total Performance Score Calculation
    The following are two examples of the finalized 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 measures. Under the finalized 
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 29 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.

[[Page 62325]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.048

    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 percent 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 62326]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.049

8. 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 stated in the proposed rule that 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 proposed to codify at Sec.  
484.370 a methodology for applying value-based payment adjustments to 
home health services. We proposed 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 proposed 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 proposed 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 percent (the proposed maximum payment 
adjustment for CY 2024; as previously discussed, we are finalizing CY 
2025 as the first payment year of the expanded Model) 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 proposed 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 31 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 
proposed CY 2024 payment year.

[[Page 62327]]

    Step #1 involves the calculation of the `Prior Year Aggregate HHA 
Payment Amount' (C2 in Table 31) that each HHA was paid from claims 
data under the HH PPS in the year prior to the performance year. For 
the proposed CY 2024 payment year, from claims data, all payments are 
summed together for each HHA for CY 2021, the year prior to the 
proposed performance year.
    Step #2 involves the calculation of the `5-percent Payment 
Reduction Amount' (C3 of Table 31 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 31 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 31) 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 31) 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 31) 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 31) 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 
proposed 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 proposed to codify this payment methodology policy at Sec.  
484.370. We invited comments on this proposal. We summarize in this 
section of this rule comments received and provide our responses.
[GRAPHIC] [TIFF OMITTED] TR09NO21.050

    Comment: A commenter asked about the ``X-percent Adjustment 
Percentage'' and how would an HHA know this value.
    Response: We believe the commenter is inquiring about the ``X-
percent Payment Reduction Amount.'' The ``X-percent Payment Reduction 
Amount'' is the maximum payment adjustment possible for an HHA under 
the HHVBP expanded model for the payment year. As discussed in section 
III.A.5.a of this final rule, we are finalizing that the maximum 
payment adjustment under the expanded Model would be 5 percent for CY 
2025, the first payment year under the expanded Model, and subsequent 
years.
    Comment: A few commenters stated that there is likely no 
significant difference between an HHA in 45th percentile and 55th 
percentile, but the HHA in the 45th percentile will receive a payment 
reduction and the HHA in the 55th percentile will receive a payment 
increase. A commenter asked CMS to make it more realistic to achieve 
the maximum bonus or penalty. Another commenter asked CMS to re-
evaluate the current payment adjustment structure because it is 
difficult to score within the top or bottom decile. The commenter 
stated that most HHAs fall in the middle of the curve and relatively 
neutral payment impact does not incentivize them to make significant 
changes. Conversely, a commenter recommended that we reward positive 
performance and not apply a negative adjustment to low performing HHAs.

[[Page 62328]]

    Response: Under the original HHVBP Model, we used the LEF to 
translate an HHA's TPS into a percentage of the value-based payment 
adjustment earned by each HHA. The LEF is similar to the methodology 
utilized by the HVBP program. The LEF was identified by the HVBP 
Program as the simplest and most straightforward option to provide the 
same marginal incentives to all hospitals, and we found the same to be 
true for HHAs under the original HHVBP Model. It is true that an HHA in 
the 45th percentile and an HHA in the 55th percentile could have a 
similar TPS and one could have a small positive payment adjustment and 
one could have a small negative payment adjustment. The possibility of 
either a negative or a positive payment adjustment incentivizes HHAs to 
improve quality. While we agree that a majority of the HHAs fall into 
the middle of the pack and most do not receive the maximum positive or 
negative payment adjustment, we disagree that HHAs are not incentivized 
to make significant changes unless it is easier to receive the maximum 
positive or negative payment adjustment. During the original HHVBP 
Model, we noted improvements in quality, as noted by a decrease in 
unplanned hospitalizations, emergency department visits leading to 
inpatient admission and skilled nursing facility use, and a $604.8 
million (1.3 percent) reduction of Medicare spending as noted in the 
HHVBP Fourth Annual Evaluation Report.\41\
---------------------------------------------------------------------------

    \41\ https://innovation.cms.gov/data-and-reports/2021/hhvbp-fourthann-rpt.
---------------------------------------------------------------------------

    Comment: A commenter expressed concern about an endless loop of 
rewarding the top half of HHAs and penalizing the lower half of HHAs.
    Response: We appreciate the concern of the commenter, but based on 
our examination of the data from the original HHVBP Model, we found 
that many HHAs moved between negative and positive payment adjustments. 
Of the HHAs that received a payment adjustment under the original Model 
in both CY 2019 and CY 2020, 15.4 percent moved from a negative 
adjustment to a positive adjustment, 15.5 percent moved from a positive 
adjustment to a negative adjustment, 33.6 percent had a negative 
adjustment in both years, and 35.5 percent had a positive adjustment in 
both years. Accordingly, because many HHAs moved from negative 
adjustments to positive adjustments and vice versa under the original 
Model, we disagree that there would be an endless loop of rewarding the 
top half and penalizing the lower half of HHAs.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the payment adjustment methodology as 
proposed, including our proposed regulation text at Sec.  484.370.
9. Performance Feedback Reports
    We proposed 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. 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. We proposed that 
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 
discussed in section III.A.10. of this final rule (Appeal Processes).
    In the proposed rule, 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 proposed to provide each HHA with an IPR that contains 
information on its performance during the 12 most recent months of data 
available. We proposed to provide the 12 most recent months of data 
because the 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 stated in the proposed rule that we expect to make the 
first IPR available in July 2022 and make IPRs for subsequent quarters 
available in October, January, and April. We stated that 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 proposed 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 proposed 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 noted 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, as 
proposed, 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 proposed 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

[[Page 62329]]

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.\42\ We noted 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 proposed 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.
---------------------------------------------------------------------------

    \42\ iQIES manuals are available at https://qtso.cms.gov/software/iqies/reference-manuals.
---------------------------------------------------------------------------

    We invited public comment on our proposals. We summarize and 
respond to comments on both the proposed IPRs and the proposed Annual 
Reports and present our final policies in the next section.
b. Annual TPS and Payment Adjustment Report
    We proposed 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 
proposed payment adjustment year, expected beginning in August 2023. We 
proposed 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 proposed 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 proposed 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 final 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 proposed 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 final rule (Appeal Processes). As under the original 
Model, we proposed 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.
    We stated that 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. We proposed that 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. We stated that 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. We stated that 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.
    We stated that data related to performance on quality measures 
would continue to be provided for the baseline year and all performance 
years of the expanded Model via a CMS data platform, such as the iQIES 
(this platform would present and might archive the previously described 
IPR and Annual Reports). We presented a sample timeline in Table 33 of 
the proposed rule showing the availability of each expanded HHVBP 
Model-specific performance report and the data included for the 
proposed CY 2022 performance year and CY 2024 payment year.
    We sought public comment on our proposals related to the Interim 
Performance and Annual Reports. We summarize in this section of this 
rule comments received and provide our responses.
    Comment: A commenter requested that CMS continue to provide 
quarterly reports to HHAs.
    Response: We are committed to providing the quarterly IPRs to HHAs 
in the expanded HHVBP Model, just as we did in the original HHVBP 
Model.
    Comment: A few commenters requested that performance feedback 
reports be completed in a timely manner. Another commenter requested 
that performance feedback reports be provided earlier so HHAs have the 
opportunity to adjust operations as early as possible. Another 
commenter requested that performance feedback reports be provided no 
later than January 2022.
    Response: We are committed to providing performance feedback 
reports, both the quarterly IPRs and Annual Reports, as soon as 
administratively feasible. We understands that both the IPRs and Annual 
reports are important tools that HHAs use to help adjust operations to 
improve quality. Due to the lag time between data submission and data 
processing of claims, HHCAHPS, and OASIS data, CMS is unable to provide 
the first IPR that includes CY 2023 performance year data for the first 
quarter quality measure performance scores any earlier than July 2023, 
as detailed in Table 32. As described in section III.A.3 of this rule, 
We have finalized the payment adjustments for the expanded HHVBP model 
to start in CY 2025 instead of CY 2024. We will provide sample reports 
as soon as administratively feasible and learning support during CY 
2022 on the content of the IPRs and Annual Reports to allow HHAs to 
learn how the HHVBP quarterly reports can support their quality 
improvement efforts and potentially make adjustments to their 
operations as they see fit.
    Comment: A commenter requested that CMS provide the baseline report 
as soon as possible, another commenter suggested CMS provide the 
baseline report before the performance year starts and another 
commenter suggested publishing the baseline report with this final 
rule.
    Response: We understand that HHAs want to have time to examine 
their baseline data as soon as possible and anticipate making available 
baseline reports using the CY 2019 baseline year data in advance of the 
first performance

[[Page 62330]]

year under the expanded Model (CY 2023). As noted, we will also make 
available during the CY 2022 pre-implementation year sample reports to 
individual HHAs via iQIES as soon as administratively feasible. The 
sample reports will provide, based on the data available, achievement 
threshold, benchmark, improvement threshold, and quality performance 
data.
    Comment: A commenter requested that CMS thoroughly test the iQIES 
system to ensure that it is capable and prepared to provide the IPRs 
and Annual Reports to HHAs.
    Response: We note that the iQIES already provides similar 
functionality in providing reports to HHAs for other purposes, and we 
have tested iQIES for acceptance of the file format to be used for the 
HHVBP model-reports and the test was successful.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposals for the proposed IPRs and 
Annual TPS and Payment Adjustment Reports, with modification, to 
reflect that CY 2023 will be the first performance year and CY 2025 the 
first payment year under the expanded Model, with CY 2022 as a pre-
implementation year. We will continue to collect and evaluate data 
under the expanded HHVBP Model during CY 2022 and anticipate providing 
sample reports to HHAs, where administratively feasible and based on 
available data, for learning purposes only. The sample report would 
include the same information as an IPR, and would be based on the same 
scoring methodologies and other policies as finalized in this rule for 
a performance year. We also anticipate providing learning support to 
all HHAs during CY 2022 including, for example, scenario-based 
performance reports and related learning events on the content of the 
reports and how they can be used to supplement an HHA's quality 
improvement efforts.
    As noted, CY 2023 will be the first performance year and CY 2025 
will be the first payment year under the expanded Model. We expect to 
make the first IPR available in July 2023 and make IPRs for subsequent 
quarters available in October, January, and April. The July 2023 IPR 
would be the first IPR issued that includes CY 2023 performance year 
data for the first quarter quality measure performance scores on the 
OASIS-based measures and baseline data for the HHCAHPS survey and 
claims-based measures. HHAs will be notified in advance of the first 
annual total performance score and payment adjustment being finalized 
for CY 2025. The total performance score and payment adjustment will be 
based on the CY 2023 performance year (January 1, 2023 to December 31, 
2023), 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, 2025 through December 31, 2025.
    Subsequent payment adjustments will 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, 2026 through December 31, 
2026, based on a full 12 months of the CY 2024 performance year. 
Notification of the second pending payment adjustment would occur in 
approximately August 2025 when the Preview Annual Report is issued, 
followed by the Preliminary (if applicable) and Final Annual Reports, 
as described previously.
    We present in Table 32 a sample timeline showing the availability 
of each expanded HHVBP Model-specific performance report and the data 
included for the CY 2023 performance year and CY 2025 payment year.
[GRAPHIC] [TIFF OMITTED] TR09NO21.051

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

[[Page 62331]]

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 proposed to use the same appeals 
process as the original Model. We proposed 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. Recalculation Request Process
    Under the expanded HHVBP Model, we proposed 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 proposed 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 proposed 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 proposed 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 
webpage. We proposed 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 proposed that recalculation requests (quarterly Preliminary IPR 
or Preview Annual Report recalculations) 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 webpage.
    Following receipt of a recalculation request, we proposed 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 stated that 
we anticipate providing this response as soon as administratively 
feasible following the submission of the request.
    We also proposed to codify the recalculation process at Sec.  
484.375(a). We invited comment on our proposals.
    Comment: A commenter requested that CMS consider 30 calendar days 
for HHAs to review and request recalculations.
    Response: While we appreciate that HHAs may want additional time to 
review the IPRs and Annual Reports, we believe that this proposed 
timeframe for submission of reconsideration requests is needed to allow 
for two levels of appeal prior to the payment adjustments being 
applied. The original HHVBP model used the same appeal process, 
including the 15 calendar day period for HHAs to submit recalculation 
requests, to allow for recalculations of the IPRs to be completed prior 
to the posting of the Annual Report in August and to allow both levels 
of appeals to be completed prior to the generation and submission of 
the final data files in advance of the applicable payment year. We 
proposed this same timeframe for submission of recalculation requests 
under the expanded Model in order to complete the entire appeals 
process for all HHAs timely, both the recalculations and 
reconsideration requests, and allow the Medicare Administrative 
Contractors (MACs) time to update each HHA's payment adjustment before 
the payment adjustment year. As discussed in the proposed rule, the 
recalculation process allows HHAs to request scoring recalculations or 
address discrepancies in the payment adjustment calculation, but 
changes cannot be made to the underlying data. We therefore believe 
that 15 calendar days is a sufficient amount of time to determine 
whether a recalculation is needed, collect supporting data, and submit 
a recalculation request following the posting of the Preliminary IPRs 
and Preview Annual Reports.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the proposed reconsideration process. We 
are also finalizing our proposed regulation text at Sec.  484.375(a).
b. Reconsideration Process
    Under the expanded Model, we proposed 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 proposed 
that an HHA may request reconsideration of the outcome of a 
recalculation request for its Preliminary Annual Report only. We stated 
that 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 stated that 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

[[Page 62332]]

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 webpage 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 stated that 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 proposed 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 proposed to codify the reconsideration process at Sec.  
484.375(b).
    We solicited comments on these proposals. We did not receive any 
comments on the proposed reconsideration process.
    Final Decision: We are finalizing the reconsideration process as 
proposed. We are also finalizing our proposed regulation text at Sec.  
484.375(b).
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 final rule, where we discuss our proposal to modify 
our public reporting policy for the original Model, given our proposal 
as discussed in section III.B.2. of this final 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.
b. Public Reporting for the Expanded Model
    We stated in the proposed rule that 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 proposed to publicly report performance 
data for the expanded HHVBP Model beginning with the proposed CY 2022 
performance year/CY 2024 payment adjustment and for subsequent years. 
For all years of the expanded HHVBP Model, we proposed 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 proposed to report these data by State, CCN, and agency name 
through a CMS website. We noted 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 proposed 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 stated that 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 proposed to 
publicly report those measure results as well.
    We stated that 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 proposed 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 stated

[[Page 62333]]

that 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 aligned), 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 stated in the proposed rule that 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 stated we would intend to 
complete the proposed CY 2022 Annual Report appeals process and 
issuance of the Final Annual Report to each competing HHA. For each 
year thereafter, we stated that 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 proposed to codify these proposals at Sec.  484.355(c).
    We sought public comment on these proposals.
    Comment: A commenter expressed concern that publicly reported 
measure scores may be misinterpreted since non-identical results could 
be generated between the HHVBP and HH QRP measure sets on Care Compare 
due to different baseline periods and scoring methodologies. Another 
commenter had a similar concern related to inconsistencies between the 
TPS and the star rating system. Both commenters recommended CMS take 
extra effort in the presentation of the results in order to assist 
beneficiaries in understanding why the results may not be identical.
    Response: As noted in the proposed rule, we will provide 
definitions for the TPS and the TPS Percentile Ranking methodology on 
the CMS website to assist in interpretation of these results. As the 
commenter notes, the TPS and the star rating system may have non-
identical results; however, we believe this increases the information 
available to the beneficiary and their family, and allows for greater 
transparency. In consideration of the public comments we received, we 
are considering additional methods to clarify this publicly reported 
data to assist in accurate public interpretation and understanding of 
the data results.
    Final Decision: After consideration of comments received, we are 
finalizing our proposal with modification. As previously described in 
this final rule, payment adjustments under the expanded HHVBP model 
will start in calendar year 2025 instead of calendar year 2024. As 
such, public reporting of performance data for the expanded HHVBP Model 
will begin with the CY 2023 performance year/CY 2025 payment adjustment 
and for subsequent years. We anticipate this information would be made 
available to the public on a CMS website on or after December 1, 2024, 
the date by which we would intend to complete the CY 2023 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.
    We are finalizing codification of this proposal at Sec.  
484.355(c).
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 proposed 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 
reporting requirements in the event of extraordinary circumstances 
beyond HHAs' control.
    Specifically, we proposed 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 proposed 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 stated that 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 
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 proposed to codify our ECE policy at Sec.  484.355(d).
    We solicited public comment on our proposals.
    Final Decision: We did not receive comments on this proposal and 
are finalizing our proposals as proposed, including our proposed 
regulation text at Sec.  484.355(d).

[[Page 62334]]

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

1. Background
    We stated in the proposed rule that 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),\43\ 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. We stated that 
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.
---------------------------------------------------------------------------

    \43\ OASIS is the instrument/data collection tool used to 
collect and report performance data by HHAs.
---------------------------------------------------------------------------

    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. CY 2022 Payment Adjustments
    For the reasons discussed in this section, we proposed 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 proposed 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 stated in the proposed rule 
that 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 stated in the proposed rule that we do not believe it would be 
appropriate to utilize data from that time period to calculate a TPS 
for CY 2020 that would 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 stated that we are concerned that because the COVID-19 
PHE has not impacted all HHAs equally,

[[Page 62335]]

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 stated that 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 stated that 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. We stated that 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 noted 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).
    Based on data available for this final rule, we note that, as found 
in Q1 and Q2 2020, OASIS assessments and claims-based home health stays 
decreased in Q3 and Q4 2020 as compared to Q3 and Q4 2019. We observed 
a 1.3 percent decrease in OASIS assessments and a 10.2 percent decrease 
in claims-based home health stays when comparing Q3 and Q4 2020 to Q3 
and Q4 2019.
    As stated in the proposed rule, after consideration of these 
issues, we proposed 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. We stated that 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. Based on data available for 
this final rule, we observed that using two quarters of 2020 data (Q3 
and Q4 2020) as compared to using four quarters of 2020 data (Q1 
through Q4 2020), would result in two-thirds of episodes of care being 
eliminated. As previously noted, data submissions in Q3 and Q4 2020 
also remained lower than Q3 and Q4 2019 submissions. We stated in the 
proposed rule that 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. We stated that 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 noted 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). We stated that as we 
proposed to not use CY 2020 (performance year 5) data to calculate CY 
2022 (payment year 5) payment adjustments, these years would not be 
evaluated. As we clarify in response to comments in this section, CMS 
does intend to include CY 2020 in its evaluation, during which the 6 
percent payment adjustment is applied.
    We stated that 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 proposed 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 noted 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 proposed 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 invited public comment on our proposal. We summarize in this 
section of this rule comments received and provide our responses.
    Comment: Several commenters opposed ending the model early and 
stated CMS should provide the 2022 incentive payments that would 
otherwise be made to HHAs in the nine states. Commenters opposed ending 
the model early stating that the final year should be evaluated. A 
commenter did not support ending the original model early, stating that 
if there is concern with impacts to the data due to the PHE, CMS should 
apply a risk adjuster to account for it.
    Response: As previously described, based on our analyses of the CY 
2020 data for this final rule, the volume and utilization patterns we 
observed in the Q1 and Q2 2020 data were also observed in the data for 
Q3 and Q4 2020, when compared to the same time period in CY 2019. 
Because the COVID-19 PHE did not impact all HHAs equally, we continue 
to believe that implementing payment adjustments based on the impacted 
data could unfairly penalize certain HHAs. While we also considered 
using only Q3 and Q4 CY 2020 quality measure data to calculate CY 2020 
annual total performance scores for CY 2022 payment adjustments, we 
found that, when compared to using four quarters of CY 2020 data, 13 
percent of HHAs would no longer have enough data at all to receive a 
TPS; only one state would have enough HHAs for a small cohort (compared 
to four states with full year data); 15 percent of HHAs would no longer 
have enough claims data to contribute to their TPS; and, 22 percent of 
HHAs would no longer have enough HHCAHPS data to contribute to their 
TPS. Based on our analyses, we continue to believe that using only two 
quarters of data is not sufficient

[[Page 62336]]

representation of the care provided by the HHA in CY 2020 for purposes 
of calculating quality measure scores and determining payment 
adjustments under the Model, and would disadvantage HHAs in an area of 
a State more heavily affected by the pandemic in Q3 and Q4 of 2020. We 
also continue to believe that the changes in volume and utilization for 
CY 2020, which, as noted, were also observed in the Q3 and Q4 2020 
data, could skew performance assessments on quality measures for HHAs 
such that the calculated TPSs may not accurately reflect the quality of 
care provided by HHAs.
    In addition, not using the CY 2020 performance year data to 
determine payment adjustments under the HHVBP Model would be part of a 
larger set of policies we have adopted to deal with quality data we 
believe have been significantly affected by circumstances caused by the 
COVID-19 PHE. For example, in the FY 2022 Hospice final rule (86 FR 
42590-42598), we addressed how HH QRP data affected by the PHE would be 
publicly displayed. We finalized a policy that will use three quarters 
rather than four quarters of data for the January 2022 refresh 
affecting OASIS-based measures. For certain claims-based measures, we 
will use three quarters rather than four quarters of data for refreshes 
between January 2022 and July 2024. Public reporting with refreshed 
data will begin in January 2022. For HHCAHPS, we finalized that 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.
    CMS finalized in the FY 2022 SNF PPS final rule (86 FR 19954) to 
suppress the Skilled Nursing Facility 30-Day All-Cause Readmission 
Measure (SNFRM) for the FY 2022 SNF VBP Program Year because 
circumstances caused by the PHE for COVID-19 have significantly 
affected the measure and the ability to make fair, national comparisons 
of SNFs' performance scores. Under the special scoring policy CMS 
finalized for FY 2022, CMS will assign a performance score of zero to 
all participating SNFs, to mitigate the effect that PHE-impacted 
measure results would otherwise have on SNF performance scores and 
incentive payment multipliers. CMS also finalized that it would assign 
an identical incentive payment multiplier, resulting in no payment 
adjustments for SNFs in FY 2022. We would then apply the Low-Volume 
Adjustment policy as previously finalized in the FY 2019 SNF PPS final 
rule (83 FR 39278 through 39280). That is, if a SNF has fewer than 25 
eligible stays during the performance period for a program year we 
would assign that SNF a performance score resulting in a net neutral 
payment incentive multiplier. SNFs will not be ranked for the FY 2022 
SNF VBP Program.
    CMS finalized in the FY 2022 IPPS/LTCH PPS final rule (86 FR 45266 
through 45277) that for FY 2022, it would suppress the use of measure 
data for a number of measures because circumstances caused by the 
COVID-19 PHE have affected those measures and the resulting quality 
scores significantly. Because calculating Total Performance Scores 
(TPSs) for hospitals based on the remaining measures would not result 
in a fair national comparison, CMS also finalized that it would not 
calculate a TPS for any hospital and would instead award each hospital 
a payment incentive multiplier that results in a value-based incentive 
payment that is equal to the amount withheld for the fiscal year (2 
percent).
    With regard to the comment that CMS should apply a risk adjustor to 
account for the PHE, we note that we did not propose to modify the risk 
adjustment methodology for the quality measures in the original Model's 
measure set. Regarding the comment that the final year of the Model 
should be evaluated, we clarify that the Model will be evaluated 
through the full period of performance. CY 2020 will be evaluated as 
this year reflects the 6 percent payment adjustment applied, based on 
CY 2018 performance.
    Final Decision: After consideration of public comments, we are 
finalizing our proposal not to apply any payment adjustments for CY 
2022 and to end the original Model early as proposed. We are also 
finalizing 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 this final policy.
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 final rule, 
we proposed to not use CY 2020 data for CY 2022 payment adjustments 
under the HHVBP Model. Consistent with this proposal, we also proposed 
to modify our existing policy and not publicly report performance data 
for the HHAs included in the original Model. We stated that 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 final rule, we proposed to begin 
public reporting for the expanded HHVBP Model with the proposed CY 2022 
performance year data, continuing for all performance years thereafter, 
and are finalizing to publicly report performance data under the 
expanded Model beginning with the CY 2023 performance year data, 
continuing for all performance years thereafter.
    We proposed 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 solicited comments on this proposal.
    Final Decision: We received no comments on this proposal and are 
finalizing as proposed, including our proposed amendment to Sec.  
484.315.

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

[[Page 62337]]

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 \44\ 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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    \44\ ONC, Draft 2 Trusted Exchange Framework and Common 
Agreement, https://www.healthit.gov/sites/default/files/page/2019-04/FINALTEFCAQTF41719508version.pdf.
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    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.\45\ For a healthcare 
provider (as defined in 45 CFR 171.102), the law 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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    \45\ 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 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)

[[Page 62338]]

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 
period (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).46 47
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    \46\ The HHCAHPS has five component questions that together are 
used to represent one NQF-endorsed measure.
    \47\ Data collection delayed due to the COVID-19 public health 
emergency for the TOH-Patient and TOH-Provider.
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BILLING CODE P
[GRAPHIC] [TIFF OMITTED] TR09NO21.052

BILLING CODE C

[[Page 62339]]

4. Changes for the HH QRP
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    \48\ Data collection delayed due to the COVID-19 public health 
emergency for the TOH-Patient and TOH-Provider.
    \49\ Ibid.
    \50\ The HHCAHPS has five component questions that together are 
used to represent one NQF-endorsed measure.
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a. Removal of 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.\51\ In line with our 
meaningful measures initiative, we proposed 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.
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    \51\ 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.\52\
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    \52\ 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.
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    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.\53\ 
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.\54\
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    \53\ Analysis of Home Health OASIS episodes from 2010 to 2019.
    \54\ 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 proposed 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.\55\ 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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    \55\ 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 invited public comments on these proposals.
    Comment: Most commenters supported the removal of the Drug 
Education on all Medications Provided to Patient/Caregiver measure. 
They supported the rationale supporting our proposal that showed the 
measure was less useful to the broader public as a measure with limited 
variation in scores across providers.
    Response: We thank commenters for their support of the proposal to 
remove the Drug Education on all Medications Provided to Patient/
Caregiver measure from the HH QRP. We will continue assess the value of 
each measure in the HH QRP to ensure it provides value to patients, 
providers and other stakeholders.
    Comment: Some commenters supported the measure removal yet 
expressed concerns that removal of this

[[Page 62340]]

measure would result in a significant impact on the drug education that 
HHAs have provided and requested that CMS continue to monitor drug 
education. A few commenters did not support the removal of the drug 
education measure out of concern that its removal as one of the patient 
safety measures would adversely affect patients.
    Response: We appreciate commenters raising the issue of patient 
safety. We continue to prioritize patient safety regarding patient 
medications. We believe other measures in the HH QRP, specifically the 
Improvement in Management of Oral Medications measure, adequately 
addresses this domain of patient safety with respect to medications 
along with other measures such as the Drug Regimen Review measure.
    Final Decision: After careful consideration of the public comments 
we received, we are finalizing our proposal to remove of 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 beginning January 1, 2023. HHAs will no longer be required to 
submit OASIS Item M2016, Patient/Caregiver Drug Education Intervention 
beginning January 1, 2023.\56\ We are finalizing that data for this 
measure will be publicly reported on Care Compare through October 1, 
2023, after which it would be removed from the site.
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    \56\ 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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b. Replacement of 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 proposed 
to replace the Acute Care Hospital 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 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.57 58 59 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.60 61 
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.\62\ 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).\63\ 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.\64\
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    \57\ 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.
    \58\ Moy, E., Chang, E., and Barret, M. Potentially Preventable 
Hospitalizations--United States, 2001-2009. MMWR, 2013, 62(03);139-
143.
    \59\ 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.
    \60\ Ibid.
    \61\ MedPAC, Payment policy for inpatient readmissions, in 
Report to the Congress: Promoting Greater Efficiency in Medicare. 
2007: Washington D.C. p. 103-120.
    \62\ 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.
    \63\ 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.
    \64\ 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.\65\ An additional beneficiary characteristic 
that is associated with a potential for hospitalization is the time 
since a beneficiary's most recent hospitalization \66\ and chronic 
conditions such as chronic obstructive pulmonary disease and congestive 
heart failure.\67\ How HHAs address these factors, including how HHAs 
address chronic conditions present before the HH stay, can determine 
whether beneficiaries can successfully avoid

[[Page 62341]]

hospitalizations.\68\ Understanding these factors can help HHAs design 
strategies to address avoidable hospitalizations.
---------------------------------------------------------------------------

    \65\ Lohman MC, Cotton, BP, Zagaria, AB, Bao, Y, Greenberg, RL, 
Fortuna, KL, Bruce, ML Hospitalization Risk and Potentially 
Inappropriate Medications among Medicare Home Health Nursing 
Patients, (2017) J Gen Intern Med. 32(12):1301-1308.
    \66\ Hua M, Gong, MN, Brady J, Wunsch, H, Early and late 
unplanned rehospitalizations for survivors of critical illness 
(2015) Critical Care Medicine;43(2):430-438.
    \67\ 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.
    \68\ Lohman MC, Cotton, BP, Zagaria, AB, Bao, Y, Greenberg, RL, 
Fortuna, KL, Bruce, ML 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.69 70 
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.\71\ Limitation of observation stays should be a goal of 
HHAs along with efforts to limit inpatient hospitalizations.
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    \69\ Lind KD, Noel-Miller CM, Sangaralingham LR, Shah ND, Hess 
EP, 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.
    \70\ 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.
    \71\ Sabbatini AK, 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), we 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 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), we 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.\72\
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    \72\ National Voluntary Consensus Standards for Care 
Coordination 2012 Draft Technical Report. Available from https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=70600.
---------------------------------------------------------------------------

    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.\73\
---------------------------------------------------------------------------

    \73\ 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,\74\ approaches 
developed by MedPAC, and proprietary approaches, such as the 3MTM 
algorithm for potentially preventable 
hospitalizations.75 76 77 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.78 79
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    \74\ Prevention Quality Indicators Overview. Available at: 
https://www.qualityindicators.ahrq.gov/modules/pqi_resources.aspx.
    \75\ 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/.
    \76\ National Quality Forum: Prevention Quality Indicators 
Overview. 2008.
    \77\ 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.
    \78\ 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.
    \79\ 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-and community-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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[[Page 62342]]

(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-Driven Groupings Model 
(PDGM) 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 
measures 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.\80\
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    \80\ 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 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.\81\
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    \81\ 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)

[[Page 62343]]

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 \82\ and Potentially 
Preventable Within Stay Readmission Measure for Inpatient 
Rehabilitation Facilities \83\ measures.
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    \82\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/Measure-Methodology.html.
    \83\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-Quality-Reporting-Program-Measures-Information-.html.
---------------------------------------------------------------------------

    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:
     Demographic characteristics (age, sex, original reason for 
Medicare entitlement).
     Care received during prior proximal hospitalization \84\ 
(if applicable) (including the length of the hospitalization and 
principal diagnoses during the prior proximal hospitalization).
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    \84\ Prior proximal hospitalizations for this measure are 
defined as inpatient stays within 30 days prior to home health 
admission.
---------------------------------------------------------------------------

     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 proposed 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,\85\ we proposed 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 proposed 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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    \85\ 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 proposed 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 invited public comments on this proposal.
    Comment: Most commenters supported our proposal to Replace the 
Acute Care Hospitalization During the First 60 Days of Home Health (NQF 
#1071) 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.
    Response: We thank commenters for their support of the proposal to 
replace the Acute Care Hospitalization During the First 60 Days of Home 
Health (NQF #1071) 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

[[Page 62344]]

measure. We regularly strive to improve domains of quality and this 
policy seeks to improve how hospitalizations are addressed in home 
health.
    Comment: Some commenters supported the PPH measure replacement with 
a condition that providers be given some time to adjust before it is 
added to either the HH QRP or HHVBP program.
    Response: We disagree with the commenters recommendation to be 
given additional time to adjust under the HH QRP. We interpret the 
comment to convey that finalization of this policy in the CY 2022 rule, 
confidential feedback to providers in October 2022, and reporting 
commencing no sooner than October 1, 2023, is too soon. We contend that 
HHAs would have more than a year after finalization of this policy to 
review their PPH measure scores and implement quality improvement 
measures if needed.
    At the present time, we only proposed the PPH measure under the HH 
QRP. We will note that where possible, CMS does seek alignment across 
our post-acute care quality programs.
    Comment: A few commenters supported the PPH replacement of the ACH 
and ED Use measures but had suggested modification to the PPH measure 
specification, including the removal of the observation stays from the 
numerator, addition of ED use to the numerator, and a strengthening of 
the risk adjustment model for the measure. Commenters were concerned 
with the launch of OASIS E and use of items associated with the HH 
Patient-Driven Groupings Model (PDGM) implemented January 2020 and 
concurrent with the development of the PPH measure.
    Response: With respect to modifications of the PPH measure, we 
continually seek improvement to the specifications of measures and 
anticipates a robust risk adjustment approach consistent with other 
claims-based outcome measures currently under the HH QRP. As is our 
practice, we will assess the appropriateness of inclusion of any new 
assessment items available for use to improve risk adjustment as those 
items are available. We have also assessed the importance of the 
inclusion of observation stays in the PPH measure and do believe that 
addressing preventable observation stays as well as inpatient stays are 
important aspects of quality improvement based on clinical research 
showing the trends of observation stays in inpatient settings and an 
improvement on addressing only ED use in the numerator. Observation 
stays are an important form of hospitalization and in the process of 
assessing for observation stays, ED use is also captured. As with other 
claims-based measures in the HH QRP, CMS will assess the impact of PDGM 
implementation on measure specification and update measure details as 
necessary.
    Comment: Some commenters suggested that it is important for the PPH 
measure to obtain NQF endorsement if the measure is to be added to the 
HH QRP.
    Response: We intend to submit the PPH measure for NQF endorsement.
    Final Decision: After careful consideration of the public comments 
we received, we are finalizing the replacement of the Acute Care 
Hospital 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) measures 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.
c. 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; 2 years after this date 
is January 1, 2021.
    We proposed 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 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, 3 months in advance of the inaugural display of 
these measures on Care Compare.
    We invited public comments on our proposed schedule to publicly 
display these measures.
    Comment: A few commenters requested clarification regarding what 
could be considered a major injury resulting from a fall for the 
Percent of Residents Experiencing One or More Major Falls with Injury 
measure.
    Response: We refer readers to the measure details outlined in the 
CY 2018 HH PPS final rule (82 FR 51727 through 51730) for the Percent 
of Residents Experiencing One or More Major Falls with Injury measure.
    Final Decision: We are finalizing our proposal to publicly report 
the Percent

[[Page 62345]]

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.
d. 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 1 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.\86\ 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.
---------------------------------------------------------------------------

    \86\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
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    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.\87\ 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.88 89 90 91
---------------------------------------------------------------------------

    \87\ https://www.healthaffairs.org/do/10.1377/hblog20201214.543463/full/.
    \88\ https://www.hartfordbusiness.com/article/demand-for-home-health-care-surges-amid-covid-19-shifting-industry-landscape.
    \89\ 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.
    \90\ https://www.wsj.com/articles/demand-for-in-home-care-rises-during-coronavirus-11588003076.
    \91\ 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. Collection of 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 proposed 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 2-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

[[Page 62346]]

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 data that includes 
addressing SDOH provides information that is expected to improve 
quality of care for all. Consequently, we proposed 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 proposed 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 proposed 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 proposed 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 invited public comment on these proposals.
    Comment: Most commenters supported our plan to establishing the 
OASIS-E effective January 1, 2023 for the corresponding collection of 
transfer and standardized patient data elements on the assessment tool.
    Response: We thank commenters for their support.
    Comment: Many commenters who were supportive of this proposal 
requested that CMS consider the overall burden associated with OASIS-E 
and to consider ways to mitigate the burden of reporting additional 
OASIS-E items.
    Response: We appreciate the importance of avoiding unnecessary 
burden on HHAs and will continue to evaluate and consider any burden 
associated with changes to the OASIS. We have taken into consideration 
any new burden that our proposals might place on HHAs outlined in the 
CY 2020 HH PPS final rule (84 FR 60566 through 60608).
    Comment: Some commenters did not support the launch of OASIS-E in 
January 1, 2023, citing the ongoing PHE and the additional burdens an 
assessment tool launch would incur.
    Response: We considered the ongoing impact of the PHE, provisions 
implemented to support HHAs, in managing the PHE impacts, and 
management of care provision since the start of the PHE (86 FR 35955 
through 35955). Based on a review of the current impacts of the PHE on 
HHAs nationally, we believe HHAs are well-positioned to successfully 
implement OASIS-E beginning January 1, 2023.
    Comment: Most commenters supported the collection of the Transfer 
of Health Information to Provider Post-Acute Care and Transfer of 
Health Information to Patient Post-Acute Care measures and certain 
standardized patient assessment data elements beginning in January 1, 
2023, highlighting the importance of these measures and items in 
support of CMS quality efforts.
    Response: We thank the commenters for their support of this 
proposal and outcome of these data collection efforts to further build 
on our ability to assess quality in HHAs.
    Comment: Some commenters did not support our proposal to revise the 
compliance date for the Standardized Patient Assessment Data Elements 
while the PHE continued, and suggested that CMS defer collection until 
after the conclusion of the PHE.
    Response: We considered the ongoing impact of the PHE, provisions 
implemented to support providers, including HHAs, in managing the PHE 
impacts and HHA management of care provision since the start of the 
PHE. Based on a review of the current impacts of the PHE on HHAs 
nationally, we believe HHAs are well-positioned to successfully collect 
these Standardized Patient Assessment Data Elements.
    Final Decision: After consideration of the public comments, we are 
finalizing our proposal that HHAs will 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 are finalizing 
that HHAs will begin collecting data on the two TOH measures beginning 
with discharges and transfers on January 1, 2023 on the OASIS-E. We are 
also finalizing that HHAs will collect 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.

D. 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 the statutory authority granted the 
Secretary 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 (and associated provisions in Title XI) to ensure that 
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 have issued HHAs a variety of regulatory waivers. 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 will be appropriate as 
permanent policy. These proposed changes and their respective 
background information are discussed in detail below.
    In addition, in order to implement section 115 of Division CC of 
the CAA 2021, we proposed to modify the

[[Page 62347]]

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. Regulatory Provisions
    We proposed 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 Sec.  484.80(g). However, we believe it is important to permit HHAs 
to complete this assessment virtually, in the rare circumstance that an 
onsite visit cannot be coordinated within the 14-day time period.
    We proposed 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 proposed 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 proposed to 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 could 
not exceed 2 virtual supervisory 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 noted an area of concern 
during the 14-day supervisory assessment, the supervising individual 
would have to make an on-site in-person visit to the location where the 
patient was receiving care while the aide performed care, in order to 
observe and assess the aide, as required at Sec.  484.80(h)(1)(ii) and 
(iii).
    While we proposed 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 
might 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 did not propose 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 also proposed 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 proposed 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 proposed 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

[[Page 62348]]

(direct) observation of each aide 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 the assessment 
found deficiencies in the aide's performance, the agency would have to 
conduct (and the home health aide would have to 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 proposed 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 proposed to maintain this requirement at Sec.  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 requested 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 welcomed comments from patients and caregivers who have 
experienced virtual supervisory assessments of home health aides during 
the PHE.
    Comment: Some commenters recommended that CMS eliminate the 14-day 
home health supervisory visit entirely. However, these commenters did 
not provide rationale for this recommendation.
    Response: We did not propose any changes to the 14-day home health 
aide supervisory visit at Sec.  484.80(h)(1) other than permitting this 
visit to be conducted virtually, via interactive telecommunications 
systems, in the rare circumstance that an onsite visit cannot be 
coordinated within the 14-day time period. The supervisory visits are 
conducted when patients are receiving aide services in conjunction with 
skilled home health services such as skilled nursing, occupational 
therapy, physical therapy, and speech language pathology services. 
These visits are the opportunity to verify the aide is following the 
patient's plan of care; effectively communicating with the patient; 
demonstrating competency with assigned tasks; complying with infection 
prevention and control policies and procedures; reporting changes in 
the patient's condition; and honoring patient rights. We believe these 
visits are an important component to ensuring that aides furnish care 
in a safe and effective manner.
    Comment: Commenters overwhelming supported the proposed change to 
permit the 14-day home health aide supervisory visit to be conducted 
virtually, via interactive telecommunications systems, in the rare 
circumstance that an onsite visit cannot be coordinated within the 14-
day time period. However, some of these commenters expressed concerns 
regarding the frequency that HHAs would be permitted to exercise this 
flexibility. Commenters indicated that it would be difficult, if not 
impossible, for home health agencies to track these visits at the 
agency level to ensure compliance. Many commenters recommended that CMS 
apply the frequency so that the virtual visits would be permissible at 
the patient-level rather than the agency-level. Some comments 
recommended a specific frequency for each patient, such as one or two 
per patient per 60-day episode.
    Response: In proposing the limit on HHA utilization of virtual home 
health aide supervisory visits at Sec.  484.80(h)(1), we sought to 
balance the need for in-person visits with flexibility for unplanned 
circumstances that may prevent an HHA from complying with this 
requirement. However, many commenters have indicated that the 
requirement, as proposed, would be difficult to track and monitor 
making it ineffective, especially for large agencies. We do believe it 
important to have this flexibility without creating additional burden 
for agencies. We are therefore revising the requirement to implement 
the change at the patient-level. However, we believe the in-person 
visits are an important component to ensuring that aides furnish care 
in a safe and effective manner. Therefore, we intend to limit this 
virtual nurse aide supervisory visit to one per patient per 60-day 
episode and only in the rare circumstance, from an unplanned 
occurrence, that an onsite visit cannot be coordinated within the 14-
day time period. In our proposed rule, we stated such occurrences may 
be from items such as, but not limited to, severe weather, a patient 
requesting to change the date of the scheduled visit, or unexpected 
staff illness or absence on the planned day for the visit. We believe 
these examples still apply. However, if the HHA finds it necessary to 
utilize this virtual option, the HHA will need to document in the 
patients record the rationale for the virtual visit.
    Comment: Several commenters recommended conducting all aide 
supervisory visits virtually. A commenter recommended removing any 
artificial cap the number and letting the HHA decide on which visits 
would be appropriate to be conducted in-person and which would be 
appropriate for virtual supervision.
    Response: We believe the home health services 14-day supervisory 
visit for aide services at Sec.  484.80(h)(1) should be conducted in-
person to ensure that patients are receiving care in a safe and 
effective manner. Replacing this requirement with completely virtual 
supervisory visits would reduce oversight of key aspects of care 
provided by aides.
    Comment: A commenter opposed the changes in home health aide 
supervisory visits permitting a virtual visit in rare circumstances at 
Sec.  484.80(h)(1), stating that the proposed change is inconsistent 
with the provision of quality care and limits the ability of HHAs to 
assess aides. This commenter suggested more evaluation and study be 
conducted before making the change permanent. Another commenter 
indicated that virtual visits are subject to numerous problems that may 
hinder effective home health aide supervision. This commenter indicated 
that there are frequently technical and economic barriers to virtual 
visits. They also indicated that many patients prefer in-person visits 
and that these forge a strong relationship with patients. Finally, the 
commenter indicated that

[[Page 62349]]

virtual aide supervision would hinder the nurse from assessing for 
changes in the patient's condition that would otherwise be detected 
with an in-person visit.
    Response: We appreciate these comments and the concern for patient 
safety and quality of care. However, we are proposed this flexibility 
to facilitate compliance with this requirement in the rare circumstance 
that an HHA cannot complete the requirement due to unplanned 
occurrences. Therefore, we expect HHAs to exercise this provision 
rarely and not more than once per patient every 60-day episode of care. 
Additionally, we do not expect to see this provision exercised for 
every patient during every 60-day period. We expect that home health 
surveyors would investigate such instances while conducting inspection 
of the home agency and seek supporting narrative in the home health 
patient record describing why a virtual visit was conducted in each 
instance. In instances when barriers prevent a virtual supervisory 
visit via a 2-way audio-visual telecommunications system, such as no 
internet service or the patient is unable to utilize the 
telecommunications system, the agency would be non-compliant with the 
supervisory visit requirement and would need to complete an in-person 
visit as soon as possible. Finally, the primary purpose of the aide 
supervisory visit at Sec.  484.80(h)(1) is to assess the aide care plan 
and services provided by the aide rather than an assessment of the 
patient that occurs during the skilled visit. The discussion that 
occurs between the nurse and the patient during this visit allows for 
open dialogue regarding the aide's services outlined in the plan of 
care and services carried out by the aide. If in the conversation the 
nurse notes a potential issue with the aide's care, a competency skills 
check will be triggered. Therefore, we believe the type and frequency 
of patient visits provided the necessary supervision to support quality 
care.
    Comment: Several commenters recommended CMS remove the 2-way audio-
visual requirement as part of the proposed virtual aide supervisory 
visit.
    Response: We appreciate the requests to remove the proposed 
language regarding 2-way audio-visual requirement as part of the 
virtual aide supervisory visit. While we understand some patients may 
not have access to the internet or the ability to use such technology; 
we believe it is imperative for the clinician to be able to see the 
patient during these 2-way audio-visual communications. Utilizing only 
the phone for audio communications does not allow the clinician to 
visualize the patient and assess areas such as wounds, mobility and 
circulation. In regards to the patient using audio-visual technology, 
being able to visualize the clinician they are speaking with assists in 
fostering and maintaining the patient and clinician relationship. If 
the patient does not have access to 2-way audio-visual technology, the 
agency would be non-compliant with the supervisory visit requirement 
and would need to complete an in-person visit. Therefore, we are 
finalizing the use of 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 1 virtual supervisory 
assessment per patient in a 60-day period, regardless of the number of 
aides or patients associated with a given HHA.
    Comment: Many commenters were supportive of the proposed provision 
at Sec.  484.80(h)(2) revising the supervisory assessment requirements 
for aides providing care to patients who are not receiving skilled care 
services, indicating that the change would significantly reduce burden 
for HHAs. These commenters stated that the on-site and virtual visits 
would provide the appropriate balance of supervision for this 
requirement. However, these same commenters also recommended that CMS 
monitor the feasibility for HHAs to conduct a semi-annual onsite, aide 
present, supervisory visit on their non-skilled patients. They stated 
that they have concerns with the logistics of conducting a semi-annual 
onsite visit, aide present, for all home health aides.
    Response: We appreciate the opportunity to clarify this 
requirement. CMS has previously received feedback that the prior 
requirement of an onsite visit every 60 days for each aide providing 
services to non-skilled patients was overly burdensome for the patient 
and the HHA if multiple home health aides provide care to the same 
patient. Retaining the 60-day frequency but changing the requirement 
for the in-person direct observation of the aide to biannually will 
decrease the amount of times the HHA must observe each aide in-person. 
For instance, over the course of 180 days, an HHA providing aide 
services to a patient receiving care from three aides would be required 
to coordinate and provide a total of nine supervisor visits with both 
the nurse and the aide present. Under the new requirement, the HHA 
would still be required to conduct nine supervisory visits but would 
only have to coordinate as few as three in-person supervisory with both 
the nurse and the aide present. Although this will require some 
coordination and planning on the part of the HHA, we believe this will 
provide for more efficient planning and scheduling for HHAs from the 
prior requirements while still maintaining oversight to ensure adequate 
supervision of the services provided.
    Comment: A commenter opposed the proposed change to aide 
supervision at Sec.  484.80(h)(2) for patients that are not receiving 
skilled services, permitting this supervisor visit to be conducted 
without the aide present. The commenter suggested that more evaluation 
and study be conducted before making the change permanent. Another 
commenter stated the proposed change results in the RN's assessment and 
observation of a home health aide occurring three times less 
frequently. The commenter stated that lack of frequent direct 
assessment of the home health aide by an RN could jeopardize a 
patient's health, safety, and ability to recover their highest level of 
function.
    Response: We appreciate these comments regarding the health and 
safety of patients and concerns for ensuring home health aides provide 
quality care. An important component to addressing these concerns is 
ensuring that home health aides enter the workforce meeting minimum 
qualifications that includes training and competency evaluation. We 
have extensive requirements specifying the content and duration of home 
health aide classroom and supervised practical training at Sec.  
484.80(b), competency evaluation requirements at Sec.  484.80(c), 
annual in-service training requirement at Sec.  484.80(d), 
qualifications for instructors conducting classroom and supervised 
practical training at Sec.  484.80(e), and eligibility requirements for 
training and competency evaluation organizations at Sec.  484.80(g). 
These aspects are critical components to ensuring the aide workforce is 
adequately trained and qualified to provide home health aide services. 
Aides are assigned to specific patients with written care instructions 
for the services they will be providing. Additionally, they will be 
provided periodic supervision by one of the HHA skilled professionals. 
Therefore, we do not believe the extensive direct supervision 
requirements for patients receiving non-skilled services only are 
necessary and believe these have been overly burdensome for HHAs. 
Regardless, we do believe that direct

[[Page 62350]]

observation of the aide while providing services is an important 
component of supervision. However, we also believe that patients should 
also have the opportunity to speak with the skilled professional 
without the aide present to provide the patient the opportunity to 
speak freely about any concerns they may have. We believe this is also 
an important aspect of the supervision component in hearing directly 
from the patient where some patients may be more reserved in sharing 
concerns if the aide were present. However, we do acknowledge the 
commenters concerns regarding the frequency of oversight that has been 
proposed. We had proposed that each aide receive one direct observation 
every 6 months for one non-skilled patients for which the aide is 
providing services. We are revising this requirement so that the aide 
receives a direct observation every 6 months for each patient to whom 
the aide is providing services. This is a significant decrease in the 
planning and coordination for HHAs from the previous requirement of a 
direct observation supervisory visit for each patient every 60 days. 
However, it provides an increase in supervisory visits over what was 
originally proposed. We believe this strikes a balance is reducing 
burden while providing necessary direct observation in ensuring the 
health and safety of patients receiving home health aide services.
    Comment: Several commenters requested clarification on the skills 
that would be considered related when a deficient skill was assessed 
during an aide supervisory visit. While other commenters requested 
additional examples, to promote consistency for applying this 
requirement and that CMS align the requirements with the hospice 
requirements.
    Response: We appreciate the commenters support on this issue and 
the request for clarification. 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 believe this is 
not a one size fits all in determining what is related. Every patient 
and aide presents a unique dynamic. Ultimately it is the supervising 
nurse's clinical judgement on a case by case basis to determine what 
additional competency areas are related.
    Final Decision: After consideration of the public comments 
received, we are finalizing the 14-day aide supervisor visit at Sec.  
484.80(h)(1) with modification. Based on public comment, we intend to 
apply the changes at patient-level rather than the agency-level. 
Therefore, we will permit the one virtual supervisory visit per patient 
per 60-day episode. This visit must only be done in rare instances for 
circumstances outside the HHA's control and must have documentation in 
the medical record detailing such circumstances. At Sec.  484.80(h)(2) 
we are finalizing the supervisory visit requirements for non-skilled 
patients with modification. We are modifying the semi-annual onsite 
visit to require that this visit be conducted on ``each'' patient the 
aide is providing services to rather than ``a'' patient. Lastly, after 
consideration of the public comments we received at Sec.  484.80(h)(3), 
we are finalizing the assessment of deficient skills as proposed.
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 proposed 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) provide that 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 professional. We proposed to add new 
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. This is necessary 
because a need for occupational therapy alone cannot 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 proposed 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).
    Comment: Many commenters were appreciative of the change proposing 
to permit occupational therapists to conduct the initial assessment 
visit and the comprehensive assessment for home health services but 
questioned why occupational therapy alone does not establish program 
eligibility. A commenter stated that occupational therapists address a 
wide range of patient populations and diagnoses with a focus on 
individual patient goals. The commenter stated that occupational 
therapy is often the most appropriate discipline to assess and evaluate 
the patient in their home environment and provide interventions to 
ensure that the patient is able to safely perform the activities and 
routines they need and want to do while in their home. This commenter 
requested that CMS support any Federal legislation to make occupational 
therapy a qualifying service. Another commenter questioned why CMS did 
not modify the Social Security Act to allow the need for occupational 
therapy to establish eligibility for home health services.
    Response: We appreciate the commenters' support. The eligibility 
requirements for the coverage of home health services is specified at 
sections 1814(a)(2)(c) and 1835(a)(2)(A) of the Act. The statute 
permits payment for

[[Page 62351]]

home health services when a patient is confined to a home and has a 
need for skilled nursing care (other than solely venipuncture for the 
purpose of obtaining a blood sample) on an intermittent basis or 
physical or speech therapy. Additionally, payment may also be made when 
a patient no longer has a need for these services but continues to need 
occupational therapy. Therefore, occupational therapy alone does not 
establish initial program eligibility. CMS does not have the statutory 
authority to permit occupational therapy to be a qualifying service. An 
act of Congress would be needed to change the statute.
    Comment: Many commenters recommended that all rehabilitation 
therapists (occupational therapists, physical therapist, and speech 
language pathologists) be permitted to conduct the initial assessment 
visit and the comprehensive assessment for home health services, even 
when ordered concurrently with skilled nursing services. Commenters 
stated that this change would facilitate more timely access to home 
health services.
    Response: The requirements for conducting the initial assessment 
visit and the comprehensive assessment for home health services are 
based on sections 1814(a)(2)(c) and 1835(a)(2)(A) of the Act regarding 
eligibility and payment for home health services. The requirements for 
these assessments are based on the professional disciplines that will 
be involved in, and coordinating, care for the patient. Therefore, when 
nursing is assigned to the case, it is likely the patient will have a 
greater need for nursing services than other services so we believe 
that skilled nurses should conduct the initial assessment visit and 
initiate the comprehensive assessment. In therapy-only cases, it would 
be appropriate for the therapist to conduct the initial assessment 
visit and the comprehensive assessment. We did not propose changes 
beyond those authorized under Division CC, Section 115 of The 
Consolidated Appropriations Act of 2021, but will consider this issue 
in future rulemaking.
    Comment: A commenter sought clarification on the sequence of 
services between qualifying services and other Medicare covered 
services, specifically occupational therapy. The commenter requested 
clarification on whether or not the sequencing of disciplines providing 
services, as described in the Medicare Benefits Policy Manual (CMS Pub 
100-02), Chapter 7, Section 30.2.11, would be irrelevant following the 
proposed changes permitting occupational therapists to conduct the 
initial assessment visit and comprehensive assessment. The commenter 
wanted to know if occupational therapists would be able to conduct 
these tasks before other therapy disciplines.
    Response: We appreciate the opportunity to clarify this policy. The 
change implementing Division CC, Section 115 of The Consolidated 
Appropriations Act of 2021 permits occupational therapists to conduct 
the initial assessment visit and comprehensive assessment in ``therapy-
only'' cases. This is when occupational therapy is on the home health 
plan of care along with physical therapy and/or speech therapy, but 
skilled nursing services are not initially on the plan of care. If the 
physician-ordered plan of care contains orders for a qualifying service 
other than skilled nursing services (physical therapy and/or speech 
language pathology services), then occupational therapy may conduct the 
initial assessment visit and comprehensive assessment prior to the 
visits from other therapy disciplines; however, the occupational 
therapist will be required to determine eligibility for the Medicare 
home health benefit, including homebound status, as part of the initial 
assessment and comprehensive assessment. In ``therapy-only'' cases for 
Medicare patients, the sequence in the delivery of the type of therapy 
is irrelevant as long as the need for a qualifying service is 
established during the initial assessment visit and when the 
comprehensive assessment of the patient is completed in accordance with 
the regulations at Sec.  484.55.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this provision as proposed.
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. We sought information about the adequacy 
of aide staffing and solicited 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 to 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.
    Comment: Several commenters provided feedback regarding the 
adequacy of aide staffing. Some of these commenters stated they are 
experiencing a severe shortage of nurses. While other commenters stated 
they are experiencing shortages in all disciplines, RN, PT, OT, ST, 
social worker, and aide staffing. A commenter noted that there had been 
a 50 percent decrease in the number of aides and professional staff 
applying for positions. The commenter also stated that ``the pandemic 
has caused many professionals to change course to stay at home with 
families, look for remote work opportunities, and remain employed in 
facilities where they feel safer due to the controlled environment''. 
Commenters also stated that field safety has become more of concern 
because of recent social unrest and the pandemic leaving some of our 
most vulnerable patient service areas under[hyphen]staffed. A commenter 
stated that ``agencies are increasingly not staffing for home health 
aides (current COVID-related circumstances aside). Instead of providing 
home health aides, agencies refer patients to their non-Medicare, 
private pay ``affiliates'' for related services, or cost-shift home 
health aides for patients dually enrolled in Medicare and Medicaid to 
Medicaid. In the case of Medicare Advantage, many plans simply do not 
allow home health aide services to be delivered. Denying access to 
Medicare-covered home health aides for help with activities of daily 
living as critical as bathing, toileting, grooming, skin care, walking, 
transferring, and assistance with self-administered medications, puts 
enrollees at risk of being hospitalized or entering a nursing home 
because they do not get the support they need to stay safely at home. 
These practices are costly for Medicare and detrimental to the 
enrollee's health and wellbeing''. Other commenters suggested that CMS 
should ensure that Medicare home health agencies serving beneficiaries 
who require Medicare-covered home health aide services meet the 
statutorily defined limit of 28 to 35 hours a week and that robust 
oversight is necessary to ensure that agencies provide necessary care.
    Response: We appreciate the robust comments in response to the 
adequacy of aide staffing questions. Ensuring home health workforce 
staffing adequacy is an important concern and we take reported 
shortages seriously.

[[Page 62352]]

We will continue to review the information received as we consider ways 
to ensure that aide services are meeting the patient's needs as such 
services are a critical part in maintaining safe, quality care.
d. Technical Correction (Sec.  484.50(d)(5))
    In the May 2020 COVID-19 IFC (85 FR 27550), we amended the home 
health regulations by adding ``or allowed practitioner(s)'' to the 
CoPs.
    Comment: A commenter noted that the ``allowed practitioner'' 
language is missing from Sec.  484.50(d)(5).
    Response: We did not propose this change in the proposed rule. 
However, we believe making this change in the final rule constitutes a 
minor technical change to our regulation, which conforms our rule to 
the statutory language. Therefore, we are making the suggested 
correction to Sec.  484.50(d)(5).

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

A. Home Infusion Therapy Payment Categories

    Section 5012 of the 21\st\ 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, we 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 did not propose 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).\92\ 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).\93\ 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) \94\ 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.
---------------------------------------------------------------------------

    \92\ Billing for Home Infusion Therapy Services on or After 
January 1, 2021 (MM11880). https://www.cms.gov/files/document/mm11880.pdf.
    \93\ Local Coverage Determination (LCD): External Infusion Pumps 
(L33794). https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=33794.
    \94\ 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 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

[[Page 62353]]

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. The DME MACs 
maintain and update the list of home infusion drugs and their 
respective payment categories for purposes of the home infusion therapy 
services benefit under the DME LCD for External Infusion Pumps 
(L33794). For these routine updates, we 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 reminded 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 (Pub. L. 113-93) (PAMA 2014). 
The CY 2022 PFS proposed GAFs are 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 60628), 
we stated that the application of the GAF would be budget-neutral, 
therefore there is no overall cost impact by applying a budget-
neutrality factor. We proposed 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. We did not receive any comments on the proposal to use the CY 
2022 GAFs to wage adjust home infusion therapy payments nor the 
proposal to continue the application of the GAF standardization factor.
    Final Decision: We are finalizing the proposal to use the CY 2022 
GAFs to wage adjust home infusion therapy payments for CY 2022. We are 
also finalizing our proposal to continue the apply a GAF budget 
neutrality factor to home infusion therapy payments whenever there are 
changes to the GAFs in order to eliminate the aggregate effect of 
variations in the GAFS. The CY 2022 GAF standardization factor that 
will be used in updating the payment amounts for CY 2022 will be 
1.0001. The final 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 webpage.\95\
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    \95\ Home Infusion Therapy Services Billing and Rates. https://www.cms.gov/medicare/home-infusion-therapy-services/billing-and-rates.
---------------------------------------------------------------------------

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 Consumer Price 
Index for all Urban Consumers (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 1-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 in June of 2021 is 5.4 
percent and the corresponding productivity adjustment is 0.3 percent. 
Therefore, the final home infusion therapy payment rate update for CY 
2022 is 5.1 percent.
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 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 reminded 
stakeholders that effective January 1, 2021 there were changes to the 
office/outpatient E/M visit code set (CPT codes 99201,99215) 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

[[Page 62354]]

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.
    Division N, section 101 of CAA 2021 added section 1848(t)(1) of the 
Act applied a 3.75 percent increase in PFS payment amounts only for CY 
2021.\96\ 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 1.33 percent. We 
noted 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 1.33 percent 
decrease for all subsequent visit payment amounts.
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    \96\ 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.
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    In the CY 2021 HH PPS final rule (85 FR 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 the preceding year reduced by a productivity adjustment beginning in 
2022. Therefore, we are 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 proposed to maintain the 20 percent 
increase calculated for the initial home infusion therapy service 
visits and the 1.33 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 invited 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. We did not receive 
any comments on our proposal to maintain the percentages for the 
initial and subsequent visits.

[[Page 62355]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.053

    Final Decision: We are finalizing the proposal to maintain the 20 
percent increase calculated for the initial home infusion therapy 
service visits and the 1.33 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.

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.\97\ For CY 2022, we 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 the CY 2022 home infusion therapy services payment amounts. 
Table E2 shows the CY 2021 unadjusted payment rates after removing the 
3.75 percent increase. The unadjusted CY 2021 rates will be updated for 
CY 2022 in accordance with section 1834(u)(3) of the Act using the 5.4 
percentage increase in the CPI-U for the 12-month period ending in June 
of 2021 reduced by the productivity adjustment of 0.3 percent, which 
results in a 5.1 percent increase.
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    \97\ Medicare Learning Network Connects ``Special Edition: 
Physician Fee Schedule Update'' (January 7, 2021). https://www.cms.gov/files/document/2021-01-07-mlnc-se.pdf.
---------------------------------------------------------------------------

    The unadjusted CY 2021 national home infusion therapy rates are 
located in Table 35. The final CY 2022 national home infusion therapy 
services 5-hour payment amounts are located in Table 36.
[GRAPHIC] [TIFF OMITTED] TR09NO21.054


[[Page 62356]]


[GRAPHIC] [TIFF OMITTED] TR09NO21.055

    The geographically adjusted home infusion therapy services payment 
rates will be released in a forthcoming change request CR and posted on 
the Home Infusion Therapy Services Billing and Rates webpage.\98\ 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). While we did not include CY 
2022 payment amounts in the proposed rule, we did not receive comments 
on the approach used to calculate these rates.
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    \98\ Home Infusion Therapy Services Billing and Rates. https://www.cms.gov/medicare/home-infusion-therapy-services/billing-and-rates.
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    Final Decision: The unadjusted CY 2021 rates will be updated for CY 
2022 in accordance with section 1834(u)(3) of the Act using the 5.4 
percentage increase in the CPI-U for the 12-month period ending in June 
of 2021 reduced by the productivity adjustment of 0.3 percentage point, 
which results in a 5.1 percent increase.

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 CMS 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.
    The previously-referenced regulations we have issued since 2006 
clarified and strengthened certain components of the enrollment 
process. Moreover, they enabled 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 final 
rule, we proposed several changes to our existing provider enrollment 
regulations in the proposed rule.
2. Legal Authorities
    There were 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. Provisions

1. Effective Dates
    We proposed to codify in regulation certain effective date 
practices discussed in CMS Publication 100-08, Program Integrity Manual 
(PIM) (or in other subregulatory guidance). We believed that 
incorporating these topics into 42 CFR part 424 would furnish needed 
clarification and allow the

[[Page 62357]]

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 aforementioned 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.
    Under the applicable PIM guidance, CMS 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.
    We proposed to add these nine supplier types to the scope of 
Sec. Sec.  424.520(d) and 424.521(a). Our specific regulatory changes 
were as follows:
    First, we proposed in the title and opening paragraph of Sec.  
424.520(d) to replace the current enumeration of all seven provider and 
supplier types therein with a simpler, more generic reference to the 
``provider and supplier types'' identified in paragraph (d)(2). This 
proposed classification would include the aforementioned seven provider 
and supplier types as well as the nine we proposed to add to Sec.  
424.520(d). Consistent with this change, we further proposed to:
     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, and similar to our change to Sec.  424.520(d), we proposed 
to revise the title and opening language of Sec.  424.521 to broadly 
encapsulate the 16 affected provider and supplier types (for example, 
the title would list them as ``certain provider and supplier types'') 
rather than to individually list all 16 of them in the title and 
opening paragraph. As part of this, we also proposed 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 previously discussed 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. 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. To codify this in regulation, we proposed 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 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 a 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. In this scenario, he or 
she will 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.
    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 
incorporate this in regulation, we proposed to state in new Sec.  
424.522(b) that 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.
c. Comments on Effective Date Proposals
    We did not receive specific comments on the foregoing effective 
date proposals and are therefore finalizing them as proposed and 
without modification.
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 return of provider enrollment applications, too, is discussed 
in the PIM. In general, an application has been returned when one of 
the return

[[Page 62358]]

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.
    As there has been uncertainty within the provider community 
regarding the difference between application rejections and returns as 
well as the grounds for both actions, we proposed to revise Sec.  
424.525 and to add a new Sec.  424.526.
b. Rejection and Return Policies
(1) Rejections
    The three previously discussed reasons in Sec.  424.525(a) for 
rejecting an application are currently designated as, respectively, 
paragraphs (a)(1), (2), and (3). We proposed 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 paragraph (a)(1) (for instance, furnishing correct and 
complete data) within the 30-day period stated therein. 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 e-mail 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.)
    Existing Sec.  424.525(b), (c), and (d) address various operational 
aspects of our rejection policy. We did not propose to revise them. 
However, and to clarify the scope of Sec.  424.525, we proposed 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). Concomitant with this change, we proposed to remove the 
word ``prospective'' from Sec.  424.525(a)(1), (2), and (3) and (b). 
This would clarify that these three rejection grounds apply to enrolled 
providers and suppliers and not simply to prospective enrollees.
(2) Returns
    We proposed 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 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 
would 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 done 
either of the following:
    ++ Not yet made a recommendation for approval concerning the 
initial application, both applications may be returned in this 
scenario.
    ++ Made a recommendation for approval concerning the initial

[[Page 62359]]

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 also proposed in Sec.  424.526 to explain certain operational 
components of our return policy. First, we proposed 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.) Second, we proposed to effectively duplicate proposed 
Sec.  424.525(e) in new proposed Sec.  424.526(c) in order to clarify 
the types of enrollment applications and transactions to which Sec.  
424.526 would apply.
(3) Comments on Rejection and Return Proposals
    We did not receive specific comments on the foregoing rejection and 
return proposals and are therefore finalizing them as proposed and 
without modification.
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.
    There are currently three grounds for deactivation under Sec.  
424.540(a), listed as, respectively, paragraphs (a)(1), (2), and (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 proposed several changes to 
Sec.  424.540 that we believed were necessary.
(b) Deactivation Grounds, Deactivation Effective Dates, and 
Reactivations
    First, existing Sec.  424.540(a) contains an opening clause 
followed by the three existing deactivation reasons, codified as 
paragraphs (a)(1), (2), and (3). We proposed to add several new 
deactivation grounds as paragraphs (a)(4) through (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).
    Second, we proposed to revise Sec.  424.540(b)(1) to state that 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 title 42.
    Third, and consistent with existing policy, we proposed in new 
paragraph (d)(1)(i) to specify that, except as provided in Sec.  
424.540(d)(1)(ii), the effective date of a deactivation is the date on 
which the deactivation is imposed. In paragraph (d)(1)(ii), we proposed 
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 Sec.  424.540(a)(2), (3), and (4), the 
effective date would be 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 Sec.  424.540(a)(5), the date on which 
the provider's or supplier's practice location became non-operational 
or otherwise invalid.
    ++ For deactivation reason Sec.  424.540(a)(6), the date of death 
of the provider or supplier.
    ++ For deactivation reason Sec.  424.540(a)(7), the date on which 
the provider or supplier voluntarily withdrew from Medicare.
    ++ For deactivation reason Sec.  424.540(a)(8), the date of the 
sale.
(c) Payment Prohibition
    We also proposed 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 
believed 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

[[Page 62360]]

items furnished while out of compliance. We stated that 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 proposed 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. We believed this sentence 
was too restrictive in that it did not address other reasons for our 
deactivation policy. Therefore, we proposed to delete it. (The existing 
second sentence of Sec.  424.540(c) was to 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 proposed 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. Thus, we proposed to delete the existing version of this 
paragraph and stated 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 
Title 42.
    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 proposed 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.
(e) Comments on Deactivation Proposals
    We did not receive specific comments on the foregoing deactivation 
proposals and are therefore finalizing them as proposed and without 
modification.
4. 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 MAC 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 proposed to insert the phrase ``(if the financial institution offers 
such attestations)'' after the term ``financial institution'' as used 
Sec.  489.28(d) and (e).
    We did not receive specific comments on this proposal and are 
therefore finalizing it as proposed and without modification.
5. 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.
    Section Sec.  424.550(b) contains several exceptions to the 
previously referenced requirement to enroll as a new HHA. One exception 
(identified in Sec.  424.550(b)(2)(i)) is that the HHA has submitted 2 
consecutive years of full cost reports. 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. To clarify this, we proposed 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.)
    We did not receive specific comments on this proposal and are 
therefore finalizing it as proposed and without modification.

C. Miscellaneous Comments

    We received the following three comments from stakeholders 
concerning our proposed enrollment provisions as a whole.
    Comment: A few commenters expressed support for the codification 
into regulation of the previously-discussed sub-regulatory guidance. 
However, one of these commenters requested that CMS: (1) Update the 
paper enrollment forms to mirror the PECOS system; and (2) explain when 
paper forms are required instead of submission via Internet-based 
PECOS.
    Response: We appreciate the commenters' support for our proposed 
codifications. However, we believe that the commenter's two requests 
are outside the scope of this rule.
    Comment: A commenter requested that CMS permit hospitals to update 
their Form CMS-855A enrollment to furnish home infusion therapy (HIT) 
and to provide durable medical equipment (DME) to support HIT. The 
commenter did not believe that hospitals should have to separately 
enroll as a HIT supplier or DME

[[Page 62361]]

supplier to provide these services and items.
    Response: We appreciate this comment but believe it is outside the 
scope of this rule.

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. 
Under this definition, an 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.
    As noted in Sec.  489.10(b), in order to be certified in the 
Medicare program, hospice programs must comply with applicable civil 
rights laws,\99\ 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.
---------------------------------------------------------------------------

    \99\ 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 we 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, we determine 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, 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

[[Page 62362]]

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. Regulatory Provisions

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 the CMS website in a manner that is 
prominent, easily accessible, searchable, and presented in a 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 AOs 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 the proposed rule, we proposed 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 proposed 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 proposed to amend Sec. Sec.  488.2 and 488.28, where 
appropriate, to include the reference to a hospice program. In 
addition, we proposed to amend termination and appeal requirements in 
42 CFR parts 489 and 498 based on the proposed enforcement remedies.
    We received 35 timely pieces of correspondence from hospice 
industry associations, patient advocacy organizations, AOs with hospice 
programs, and individuals.
    Comment: Multiple commenters expressed support for the steps 
Congress and CMS are taking to ensure high-quality hospice care and 
consistent hospice program survey process throughout the nation.
    Response: We appreciate the support from the public and agree that 
ensuring high-quality, safe care for all patients in Medicare-certified 
hospice programs is paramount and that a consistent survey and 
enforcement process will help ensure quality.
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 and enforcement 
procedures. We proposed to amend the requirement at Sec. Sec.  488.2 
and at 498.1 to include this statutory reference to hospice program 
services. We received no public comments on these provisions, and we 
are finalizing the regulations at Sec.  488.2 and at Sec.  498.1 as 
proposed.
b. Application and Re-Application Procedures for National Accrediting 
Organizations (Sec.  488.5)
    We proposed 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.

[[Page 62363]]

    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 
\100\ 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.
---------------------------------------------------------------------------

    \100\ 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).\101\ In 
mid-2021, CMS began 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.
---------------------------------------------------------------------------

    \101\ 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 continuing to assess 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 the 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 sought 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 XI of this final rule.
    We sought public comment on how AOs can customize their proprietary 
systems to incorporate a version of the Form CMS-2567 and then submit 
it to CMS via electronic data exchange.
    Comment: Several commenters supported the requirement for AOs to 
utilize the same forms as SA surveyors when documenting survey findings 
of noncompliance and noted it will promote consistency and 
standardization.
    Response: We thank the public for their support and believe this is 
one step to ensuring consistency and transparency for the survey 
process.
    Comment: Several commenters asked that CMS engage stakeholders when 
revising the Form CMS-2567. A suggestion was also made that CMS create 
and offer an electronic version of the form to all states and AOs.
    Response: Given the timeline mandated by the CAA 2021 and the 
timing of this final rule, CMS needed to quickly revise the existing 
Form CMS-

[[Page 62364]]

2567 in order for AOs to integrate it into their documentation systems 
for use. As required by the Paperwork Reduction Act of 1995 (PRA) 
requirements, CMS posted public notice of the proposed form changes for 
a 30-day comment period beginning July 13, 2021. 86 FR 36751. We 
received one comment on the Form CMS-2567 which was outside the scope 
of the information collection request. We made the necessary minimal 
updates to the form, that were needed for AO use, which we described in 
the proposed rule, 86 FR 35969, 35988, and in the public notice of 
proposed form changes, 86 FR 35874. If CMS decides to make further 
revisions to the form, it will go through public notice process again 
as required by the PRA.
    Additionally, as noted in the proposed rule discussion, CMS has 
begun transitioning to the new software system on a program-specific 
implementation schedule, starting with HHAs. While it may take several 
years to fully transition all programs to the new technology platform, 
SAs and AOs will have access to this system. The Form CMS-2567 is 
currently generated electronically through the CMS software system and 
will continue to be as we transition systems and provide additional 
user access. As the rule notes, the requirement is for the inclusion of 
a statement of deficiencies, which means the Form CMS-2567 or a 
successor form. CMS will communicate with stakeholders if we move away 
from the Form CMS-2567 to a different format.
    Comment: A few commenters noted that AO standards contain 
requirements that exceed those of CMS. The commenters believe that CMS 
should only require Medicare CoP requirements on the Form CMS-2567 
because any additional AO requirements that exceed Medicare CoPs are 
proprietary standards. In addition, commenters believed it could be 
confusing to the public if different requirements were listed for each 
AO and reported on for hospices. Similar to the comment regarding AO 
standards that exceed CMS requirements, a commenter also questioned 
whether Form CMS-2567s would also include state licensure requirements.
    Response: We explained in the proposed rule that changes to the 
Form CMS-2567 would require OMB approval via notice and comment, and 
that process would be separate from the rulemaking for this rule. 86 FR 
35988. As noted above, CMS has recently updated the Form CMS-2567 
pursuant to the process required by the PRA, including posting the 
proposed changes for public comment. We made minimal changes to the 
form, and we have no plans to update the form again to include any AO- 
or State-specific requirements.
    We note that including the Form CMS-2567 in AO reports of survey 
findings is required by the statute and is one step towards providing 
hospice patients and families information needed to make decisions on 
where they wish to receive care, and we want that information to be as 
clear and useful as possible. Since Medicare participation is partially 
based on the findings of compliance surveys, which are used to 
determine whether a hospice program meets the Medicare CoPs, we noted 
in the proposed regulation, that AOs must include a statement of 
deficiencies (that is, the Form CMS-2567 or a successor form) to 
document survey findings for the hospice Medicare CoPs. Although AOs 
are required to include the Form CMS-2567 in their reports to CMS, this 
regulation does not require AO surveyors to use the form. For example, 
while one AO may require its surveyors to use the Form CMS-2567 to 
record survey findings, another AO may continue to allow its surveyors 
to use its proprietary survey forms and then translate the survey 
findings to Medicare CoPs on the Form CMS-2567.
    Section 1865(a)(1) of the Act requires that for most provider 
entities, including hospices, if the Secretary finds that the 
requirements for accreditation from an AO demonstrate that a provider 
entity meets or exceeds all applicable conditions, the Secretary must 
deem such requirements to be met. The statutory language of ``meets or 
exceeds'' currently allows AOs to develop additional standards that 
differ from those of Medicare. When an AO applies for ``deeming 
authority,'' we determine whether its standards meet or exceed ours. 
With the required inclusion of the Form CMS-2567, we are not 
restricting AOs from using accreditation standards that exceed the 
Medicare CoPs. However, including the AO findings of the Medicare 
hospice CoPs on the Form CMS-2567 allows CMS to post hospice program 
survey reports from SAs and AOs in a manner that is standardized across 
both types of surveying entities. We believe that including only CMS 
requirements, and not state-specific licensure or AO-specific 
requirements that vary across states and AOs, provides for consistency 
and avoids confusion. AOs may still use additional standards that 
exceed the Medicare CoPs, but documentation of whether hospice programs 
meet those additional standards would not be on the Form CMS-2567.
    Comment: A commenter expressed concern that incorporation of the 
Form CMS-2567 into AO data systems could result in the duplication of 
data.
    Response: AO data systems are proprietary and therefore CMS is not 
able to address specifics of how AOs will implement the Form CMS-2567 
into in their systems. However, as part of the existing regulations at 
Sec.  488.5(a)(4)(iv), AO survey reports must identify for each finding 
of non-compliance with accreditation standards, the comparable Medicare 
CoP, conditions for coverage, conditions for certification, or 
requirements. Therefore, this data already exists in some form with 
each AO survey report. Adding the requirement to include the Form CMS-
2567 (or a successor form) only changes the format and not the data 
included. Additionally, we are not restricting the AO from reporting 
survey findings in their existing AO format to their accredited 
facilities. AOs would only need to extract the data related to the 
Medicare CoPs into the Form CMS-2567 (or a successor form) for our 
purposes. Ultimately, the information will align and be mirrored, but 
not duplicative.
    Comment: A commenter asked if there would be an opportunity for 
hospice programs to preview the forms before they are submitted to CMS 
to verify the accuracy of the reported information and to use 
internally to act to correct the issues. Additionally, the commenter 
asked what would happen if a deficiency is corrected during the survey 
process.
    Response: We thank the commenter for their clarifying questions and 
note that this rule does not change the existing survey process 
outlined in the State Operations Manual at Chapter 2 and Appendix M 
related to completing the statement of deficiencies and submitting it 
to the facility for review and response.
    Comment: A few commenters requested that CMS clarify if AOs were 
required to also have facilities use the form to submit their plan of 
correction (POC) for identified non-compliance. They stated the Form 
CMS-2567 formatting is antiquated and that AOs have electronic or 
customer portal POC formats that guide the hospice to create a strong 
POC, inclusive of all specific actions to be taken, date correction to 
be completed, and individual responsible for correction process to 
prevent recurrence with monitoring of corrective actions to ensure they 
effectively prevent a recurrence. Commenters encouraged CMS to allow 
AOs to continue the use of their electronic POCs and not require POC

[[Page 62365]]

documentation on the Form CMS-2567 itself.
    Response: The Form CMS-2567 has a section for listing the 
deficiencies and another section for providers to document their POC. 
In 2017, CMS indicated that providers may document POCs in a separate 
document instead of on the form itself. Stakeholders may refer to CMS 
memorandum S&C:17-34-ALL which can be found at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-17-34.pdf. 
Hospice programs have the flexibility to document their POCs in their 
preferred format, including the format currently used by an AO. It is 
important to note that all elements of an acceptable POC, as outlined 
in the State Operations Manual, Chapter 2, Section 2728B, are still 
required regardless of which format or document is used.
    Comment: Most commenters expressed serious concerns about the 
October 1, 2021, statutory deadline and urged CMS to provide enough 
time for AOs to adapt their technology systems to include the use of 
the Form CMS-2567. Specifically, AOs with hospice programs stated that 
the proposed rule did not provide critical information on the process 
and timing for submitting the Form CMS-2567 and therefore they do not 
have the information necessary to build their data systems for 
reporting purposes. AOs reported their need to analyze specifications, 
design solutions, create new processes, and then perform testing on 
their systems. Several commenters also noted the need to provide 
training to familiarize surveyors and other staff with any new 
processes and procedures that allow for completion and submission of 
the Form CMS-2567 to CMS. The AOs and several commenters stated CMS 
should either ask Congress for an extension of the October 1, 2021, 
statutory deadline or delay at least 3 to 6 months for inclusion and 
use of the form.
    Response: We appreciate the concern and understands that it takes 
time for AOs to adapt their systems to include the requisite form and 
then submit it in a manner specified by CMS. We thank commenters for 
their detailed feedback and note that CMS will develop associated 
guidance to address many of the concerns raised by commenters regarding 
the October 1, 2021, deadline, submission, and formatting/reporting. In 
accordance with Sec.  488.8(b), CMS specifies in a written notice any 
changes that affect accrediting organizations and provides a timeframe 
to submit its proposed equivalent changes.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the regulation at Sec.  488.5(a)(4)(x) as 
proposed.
c. Release and Use of Accreditation Surveys (Sec.  488.7)
    We proposed 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 its survey 
information are related to an enforcement action taken by CMS against 
the provider. However, CMS may post State agency complaints or 
validation survey results of deemed hospice providers; CMS utilizes the 
Quality, Oversight, and Certification Reports (QCOR) \102\ public 
website for this purpose.
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    \102\ Quality, Certification and Oversight Reports (QCOR)
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    As mentioned in section VII.B.1.b of this final rule, CMS 
recognizes there are challenges related to the system implications for 
use of the Form CMS-2567 by the AOs. However, Congress removed the 
prohibition that previously allowed AO hospice program survey reports 
to be considered confidential and proprietary. We proposed 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 final 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 sought 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. 
The 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 would require collaboration with industry stakeholders to 
assure the development is fair and equitable across all hospice 
programs.
    Comment: Many commenters recommended that CMS establish a Technical 
Expert Panel (TEP) that focuses on the display of survey findings, 
which should include a wide array of stakeholders. Furthermore, they 
believe this TEP should be responsible for identifying a comprehensive 
algorithm to include salient Form CMS-2567 findings related to the 
scope and severity of deficiencies and additional metrics that will 
provide a more comprehensive overview of the hospice provider.
    Response: The CAA 2021 mandates that survey findings be 
``prominent, easily accessible, readily understandable, and searchable 
for the general public and allows for timely updates.'' CMS recognizes 
that a metric or algorithm would help to accomplish this goal, which 
could integrate salient findings from the Form CMS-2567 that may be 
utilized by the general public to adequately compare hospice providers' 
services. CMS considers the publication of the Form CMS-2567 to be a 
first step in meeting the intent of this provision. CMS remains 
committed to continuing collaboration with hospice stakeholders after 
this rule is finalized; we appreciate and are considering commenters' 
suggestion to convene a TEP or other vehicle for gathering 
stakeholders' input on ways to define a more comprehensive metric or 
algorithm for public display in guidance.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposal at Sec.  488.7(c) with one 
technical change. We are modifying the regulatory text at Sec.  
488.7(c) by changing ``accreditation organization'' to ``accrediting 
organization'' for internal consistency within Sec.  488.7.
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

[[Page 62366]]

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 survey agency's judgment 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 separately 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 the SA or CMS. However, only CMS can impose an enforcement 
remedy or termination or both. It 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 proposed revising the heading for 
Sec.  488.28 to indicate that hospice programs would also be exempt 
from the requirements set out in that section because we proposed POC 
provisions for hospice programs with deficiencies in new subpart N, as 
discussed in section VII.B.4 of this final rule.
    Final Decision: We did not receive comments on this proposal and 
therefore are finalizing this provision without modification.
3. New Subpart M--Survey and Certification of Hospice Programs
a. Basis and Scope (Sec.  488.1100)
    We proposed at Sec.  488.1100 to specify the statutory authority 
and general scope of the hospice program. As stated in the proposed 
rule, this rule is generally based on the rulemaking authority in 
section 1822 of the Act as well as specific statutory provisions 
identified in the preamble where appropriate. We received no public 
comments on this provision and we are finalizing it as proposed.
b. Definitions (Sec.  488.1105)
    We proposed 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.
     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.
    Comment: An AO commenter stated that they do not conduct what CMS 
references as a standard level survey, but all initial and renewal 
reviews are comprehensive surveys.
    Response: We acknowledge that the terminology of ``standard 
survey'' may vary with AOs and that the AOs are still required under 
Section 1865 of the Act to meet or exceed Medicare requirements and 
survey procedures. We also note that the new requirement at Sec.  
488.1110(a) requires a hospice standard survey (initial, 
recertification, or renewal) to be conducted not later than 36 months 
after the date of the previous standard survey. While the regulation at 
Sec.  488.5(a)(4)(i) provides a timeframe for AOs of 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, we expect hospice AOs to follow the new requirement for hospice 
surveys at Sec.  488.1110(a) to be comparable with the requirements 
outlined for SAs. Therefore, the new hospice requirement at Sec.  
488.1110(a) would supersede the AO requirement at Sec.  488.5(a)(4)(i) 
for hospice surveys.
    After consideration of the public comments we received, we are 
finalizing this section as proposed.
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 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

[[Page 62367]]

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 proposed 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 proposed 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 would 
be described in the annual CMS Quality, Safety and Oversight Group's 
Mission and Priority Document (MPD) that serves as the scope of work to 
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 sought public comment on current experiences with the 
HHA toll-free hotline as required by section 1864(a) of the Act. We 
sought this information to inform CMS of potential 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.
    Comment: Several commenters were in support of the CAA 2021, which 
makes permanent the requirement that hospice programs receive 
recertification surveys no less frequently than once every 36 months. A 
commenter recommended that CMS clarify the implementation dates related 
to the hospice surveys.
    Response: The Improving Medicare Post-Acute Care Transformation Act 
of 2014 (IMPACT Act) (Pub. L. 114-185) initially amended section 
1861(dd)(4) of the Act to provide that hospice programs will be subject 
to a standard survey every 36 months beginning six months from 
enactment through September 2025. The CAA 2021 amends Title XVIII of 
the Act to permanently continue this provision. CMS is codifying this 
mandate into regulation. Hospice programs will continue to be surveyed 
not later than 36 months after the date of the previous survey.
    Comment: A commenter stated that CMS should establish a 6-month 
timeframe in which surveyors must conduct complaint surveys once an 
allegation is reported.
    Response: We currently maintain a national complaint tracking and 
prioritization system which prioritizes complaints according to the 
level of risk for a hospice program's patients. Complaints that 
indicate the possibility of an immediate jeopardy situation are given 
the highest priority and investigated by the State as soon as possible. 
The State Operations Manual, chapter 5, specifies the timeframes and 
procedures by which all types of complaints should be investigated.
    Comment: A commenter stated serious concerns about the ability of 
SAs and AOs to increase staffing to support more frequent surveys. The 
commenter states that the Department of Health and Human Services and 
the Office of the Inspector General (OIG) have documented a substantial 
backlog of standard surveys, with roughly 71 percent of nursing homes 
that have gone at least 16 months without a standard survey as of May 
31, 2021.
    Response: The requirement to survey hospice programs every three 
years was initially established in the Improving Medicare Post-Acute 
Care Transformation Act of 2014 (IMPACT Act) and the CAA 2021 
establishes permanency of the continuation of this requirement. We are 
codifying this mandate into regulation. The AOs are currently required 
in regulations to survey hospice programs every three years, which is 
the same as the legislative requirement. Hospice programs will continue 
to be surveyed not later than 36 months after the date of the previous 
survey by the SA or AO.
    The comment regarding the substantial backlog of nursing home 
surveys referenced is outside the scope of this rule.
    Comment: Several commenters support codifying and making uniform 
throughout the United States a dedicated toll-free hospice hotlines, 
each maintained by the appropriate State or local agency. The 
commenters supported the proposed use of hotlines to collect, maintain, 
and continually update information, as well as to receive complaints, 
on hospice programs located in the State or locality that are certified 
to participate in the Medicare program. Commenters noted that the State 
or local agency must also maintain a unit for investigating such 
complaints and that many State or local agencies have existing hotlines 
for home health agencies.
    Response: We appreciate the support. State or local agencies that 
have existing toll-free hotlines for home health agency complaints can 
utilize this hotline to also collect and maintain information on 
hospice programs. However, the State or local agency may decide to 
establish a separate toll-free hotline specific to hospice programs.
    Comment: A commenter recommends that the State or local agency 
staff the hospice hotline with individuals who are appropriately 
trained on hospice care and the hospice philosophy.
    Response: We believe that the hospice hotline staff decision should 
be left to the State or local agency. The State or local agency follows 
the MPD that discusses survey and certification functions as well as 
the Medicare funding allocation process for states, which directly 
impacts the work prioritization and planning for the required survey 
workload in the fiscal year the MPD is issued.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.
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 proposed 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

[[Page 62368]]

would be required to complete the online CMS hospice program basic 
training. CMS proposed that until the rule is finalized, that it 
accepts 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 
the 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 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 sought 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 proposed 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 proposed to include 
hospice AO surveyors under this 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.'' \103\
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    \103\ 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, an 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 proposed 
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 proposed 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 would 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;

[[Page 62369]]

and spouse of a grandparent or grandchild.
(1) Surveyor Qualifications
    Comment: While commenters notably agreed that requiring all 
surveyors (AOs, State, and CMS Location surveyors) to take the training 
offered by CMS provides greater consistency, several expressed concern 
that the timeline would have the effect of needing to pull surveyors 
without training from the field by October 1, 2021, contributing to 
further backlogs in surveys, already large due to COVID restrictions. 
They requested that CMS allow a period beyond October 1, 2021, the 
current date for implementation of this provision.
    Response: We anticipate that the revised Hospice Basic Training 
will be available at the time of the implementation of this rule. 
Surveyors should take the training that is available when their 
individual need for training arises (that is, upon hiring, or if 
beginning to survey a provider they have not previously been trained to 
survey). CMS will post a training update of changes in the new version 
for surveyors who used the older version of the CMS training so that 
they will not have to take the new training in its entirety.
    Comment: Commenters made several suggestions related to surveyor 
training. Additional training content areas were suggested such as 
addressing psychosocial, emotional, and spiritual components of hospice 
care, that surveyors be trained to cite based on evidence of trends 
rather than a single violation, and requiring a minimum number of 
surveys as well as ongoing eligibility via competency evaluation and 
continuing education.
    Response: These comments are outside of the scope of this rule, 
which focuses on the universality of CMS training. We note that the 
training suggestions are already included in CMS' hospice training (for 
example. citing deficiencies based on severity and frequency, and not 
just a single occurrence, unless it is severe) and among the 
experiential requirements for surveyors (minimum number of monitored/
supported surveys prior to surveying independently). Regarding ongoing 
training and competency, we rely on the managerial oversight of state 
agencies, with the assistance of state training coordinators to monitor 
surveyor abilities, and direct access to the many additional training 
opportunities available through the CMS Quality, Safety & Education 
Portal (QSEP-https://qsep.cms.gov/).
    Comment: Some commenters suggested that surveyors should have 
``real-world experience'' or have worked in hospice care to qualify to 
be hospice surveyors.
    Response: We are confident that given the appropriate professional 
background as a licensed physician, RN, social worker, or chaplain, 
surveyors' professional training, along with CMS training, that 
surveyors are fully prepared to conduct accurate field assessments of 
compliance with the Medicare Conditions of Participation (CoPs). 
Additionally, surveys are reviewed at multiple levels--through 
validation surveys and managerial oversight--to corroborate the 
interpretation of findings and citing of deficiencies.
    Comment: A commenter stated that we should include emergency 
preparedness (EP) in hospice training as well as address patient safety 
in the comprehensive assessment.
    Response: Though not expressly addressed in the comprehensive 
assessment, safety is addressed throughout the CoPs. EP is addressed in 
hospice training and references the dedicated State Operations Manual 
appendix and training related to EP.
    Final Decision: After consideration of the public comments we 
received, we are finalizing the surveyor qualification provisions as 
proposed.
(2) Prohibition of Conflicts of Interest
    Comment: A few commenters expressed appreciation of CMS' proposals 
to implement conflict of interest provisions as they believe it is an 
important element of ensuring fairness in the survey process.
    Response: We appreciate the support for our prohibition of 
conflicts of interest proposals.
    Comment: A commenter suggested that CMS develop a code of ethics 
for surveyors instead of trying to list out every potential conflict of 
interest. Additionally, it was suggested the code of ethics be tied to 
online training where surveyors would take the training and then sign 
the code of ethics.
    Response: We appreciate the suggestion. Addressing conflicts of 
interest can be challenging because it is not possible to list all 
situations which could be construed as potential conflicts. CMS takes 
the responsibility of public trust very seriously and as such has a 
long-standing policy in the State Operations Manual, Chapter 4, which 
outlines the process for abuses of influence, privileged information, 
or trust arising through conflicts of interest. We believe these 
provisions address the most common scenarios where conflicts arise 
nationally. While we believe a code of ethics for surveyors is 
valuable, we will consider this suggestion for future policy changes 
that would affect all surveyors and all programs as this is out of 
scope for the current hospice program rule. We also appreciate the idea 
of adding it to a CMS training course and will consider this in the 
future.
    Comment: A commenter suggested that CMS consider requiring 
surveyors to professionally attest that they are aware and will comply 
with the prohibition on conflicts of interest. Furthermore, they 
expressed support for a provision requiring surveyors to attest that 
they intend to judge providers objectively, within the bounds of the 
CoPs, and refrain from relying on any personal convictions about what 
end-of-life care should be or ought to entail.
    Response: Similar to the suggestion for CMS to consider developing 
a code of ethics for surveyors, we appreciate the idea of attestation 
and will consider this in future policy changes for surveyors of all 
programs.
    Comment: A few commenters stated CMS should develop materials to 
help guide surveyors and survey entities regarding potential conflicts 
of interest.
    Response: We agree that surveyors benefit from training materials 
related to conflicts of interest. Currently, CMS has training in the 
Quality Safety and Education Portal (QSEP) related to surveying for 
non-long term care (non-LTC) that aids learners in developing surveyor 
skills and proficiency by establishing a foundational understanding of 
the non-LTC survey process. This training addresses roles and 
responsibilities of surveyors, including conflicts of interest. CMS 
will review the existing training and will make updates as needed.
    Comment: Multiple commenters suggested additional conflicts of 
interest for consideration including: Prohibiting anyone who has a 
family member using hospice services; surveyors with prior work 
history, including termination from, a hospice being surveyed; or work 
history with a hospice's competitor. Specifically, commenters expressed 
concern with conflicts of interest arising out of a work history that 
includes an employment arrangement with a hospice's competitor and a 
suggestion was made that CMS consider a 2-year ban on staff from 
competing hospices surveying each other. However, a few commenters 
acknowledged addressing such a conflict through regulation may be 
challenging as it would be difficult to determine how far such a 
prohibition could extend. Several commenters also noted that adding 
additional conflicts

[[Page 62370]]

could create challenges in small, rural communities but encouraged CMS 
to provide surveyors with the opportunity to recuse themselves if 
needed.
    Response: We appreciate the additional considerations and concerns 
that commenters have raised. We are particularly interested in the 
comments raised regarding competition between hospices and the 
potential conflict of interest if surveyors work for one hospice and 
participate in survey activity of known competitors. CMS has considered 
this potential conflict of interest and agrees with commenters that it 
would be challenging to address through rulemaking as it could be said 
that all hospices in certain geographic locations are considered 
competitors. We also agree with the concerns raised regarding small, 
rural communities and limiting surveyor availability. CMS, SAs, and AOs 
are all responsible for evaluating the need for preventive measures to 
protect the integrity of the survey process. All relevant circumstances 
that may exist beyond the benchmarks given in regulations should be 
considered to ensure that the integrity of the survey process is 
preserved. As noted in the current CMS State Operations Manual policy, 
SA administrators should require employees to make a declaration of any 
such outside interests and update this declaration periodically. 
Therefore, we believe surveyors are responsible for disclosing and 
recusing themselves as needed.
    Final Decision: After consideration of these comments, we are 
revising Sec.  488.1115 to add a requirement that surveyors must 
disclose actual or perceived conflicts of interest prior to 
participating in a hospice program survey and be provided the 
opportunity to recuse themselves as necessary.
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 proposed 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--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 1 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, we seek to better understand the current 
professional makeup of survey entities' workforces. In order to track 
compliance with this provision, we proposed 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 an RN; (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 patient and family. The interdisciplinary group 
or IDG, must include, but not be limited to a physician, an RN, a 
medical social worker, and pastoral or other counselor. Therefore, we 
proposed that when the survey team comprises more than one surveyor, 
the additional slots would be filled by professionals from among these 
disciplines, and we sought comments on this approach. Similarly, 
section 1819(g)(2)(E) of the Act and 42 CFR 488.314 require that long-
term care (LTC) 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 LTC 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.
    Comment: Several commenters provided feedback on the makeup of 
survey teams, in response to the proposed provision that survey teams 
should be multi-disciplinary. Commenters suggested that a licensed 
practical nurse should be included on the survey team.
    Response: We proposed that the survey teams be multidisciplinary 
and that at least one member of the survey team must be an RN. These 
are statutory requirements, and they are consistent with the current 
guidance in the SOM, Appendix M. Because an RN will be on every survey 
team, to ensure that the survey team is multidisciplinary, if there is 
more than one surveyor, then the additional team members must be 
selected from other disciplines included in the interdisciplinary 
group.
    Comment: Several commenters suggested that the survey team members 
be required to have prior experience in the hospice field.
    Response: We do not require that surveyors have actual hospice 
experience, nor target particular types of hospice expertise (that is, 
former hospice administrators). It is at the discretion of the hiring 
state survey agencies to identify individuals whose background is 
suitable. All surveyors must successfully complete CMS-based training 
to ensure that they are capable of conducting accurate and complete 
surveys. CMS's training includes substantial detail in content and 
interactive learning in the hospice philosophy of care and all hospice 
regulatory requirements, as well as guidance in survey technique and 
procedures specific to the CoPs. With the appropriate professional 
background (that is, credentialing in one of the disciplines included 
in the IDG) and CMS's hospice-specific training, we believe surveyors 
will have the expertise needed to conduct surveys for compliance with 
Medicare's well-prescribed requirements.
    Final Decision: After consideration of the public comments we 
received, the proposed policy is being finalized without modification.

[[Page 62371]]

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 proposed 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, in the proposed rule we noted that we expected to 
promulgate objective measures of survey accuracy, and sought public 
opinion on what measures would be feasible for States. We desired 
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 
were found, CMS would be 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 
proposed 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 proposed for 
hospice programs 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 . . . 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 . . .'' 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 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, we 
proposed 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.
    Comment: Commenters supported our plans to create more 
opportunities for consistency between survey entities as well as 
between surveyors within the same surveying entity. They noted CMS' 
plan to require universal use of CMS hospice training as a key element 
of this effort. A commenter suggested that in this effort, CMS should 
provide AO surveyors with access to QSEP at the same level as state 
surveyors, so that all content and not just Basic Training is available 
to the AO surveyors as a means of greater consistency across agencies.

[[Page 62372]]

    Response: We will modify access to QSEP for AO surveyors on the 
same basis as for state surveyors, so that all appropriate content is 
available, though only Hospice Basic will be required by the AO 
surveyors.
    Final Decision: After consideration of the public comments we 
received, the proposed policy is being finalized without modification.
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 proposed 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 proposed 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 LTC facilities and outlined the following protocol for a 
hospice SFP in the proposed rule:
     The SA and CMS SOG location would receive a list from CMS 
of all hospice programs that meet the established criteria at proposed 
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 sought public comment regarding the SFP, specifically the 
following issues:
     Should CMS utilize a similar criteria, process, or 
framework for the SFP as outlined in the current Special Focus Facility 
Program used for LTC facilities? What if any differences should CMS 
consider to enhance the overall impact of the hospice SFP?
     Are there 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.
     Should we utilize a Technical Expert Panel (TEP) to 
enhance the SFP in terms of selection, enforcement and technical 
assistance criteria while a hospice is in the program? A TEP may assist 
CMS by identifying contextual data and relevant information that would 
help 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.
    Comment: Many commenters believe that CMS should not implement this 
provision until a comprehensive framework can be established that 
focuses on a targeted approach in the identification and enrollment of 
hospice programs to the SFP. Some commenters stated that the criteria 
outlined in the proposed rule are subjective and may lead to 
inconsistencies across State Agencies in hospice identification and 
enrollment in the SFP, without addressing the most non-compliant 
hospices for not delivering quality care and putting patients at risk. 
Given the complexities associated with this proposal, commenters agreed 
that CMS should use a TEP that includes a wide array of stakeholders to 
assist CMS in the development of a comprehensive algorithm that would 
include relevant findings from the Form CMS-2567 and other metrics 
related to hospice performance. Commenters also thought that CMS should 
include relevant tools and education to assist hospice providers that 
participate in the SFP to improve quality and compliance prior to 
termination.
    Response: The CAA 2021 mandates that a SFP be established to 
identify poor-performing hospice programs and enhance the quality of 
care. CMS recognizes that to accomplish the intent of this provision 
elements, in addition to the Form CMS-2567, may be needed to develop a 
comprehensive structure and methodology for a targeted approach to 
identify, select, and remove a hospice program for inclusion in the 
SFP. Given the intent of this provision to identify the poorest 
performing hospice programs and the need to define a comprehensive 
structure and methodology for selection into the SFP, CMS intends to 
review the public comments received and collaborate with hospice 
stakeholders to further develop the SFP that was initially proposed.
    Taking into account the comments that we have received on this 
proposal, we are not finalizing the proposed SFP requirements at 
proposed Sec.  488.1130. We intend to work on a revised proposal and 
will seek additional collaboration with stakeholders to further develop 
the structure and methodology for implementing the SFP, which we hope 
to include in a proposal for FY 2024 rulemaking.
4. New Subpart N--Enforcement Remedies for Hospice Programs With 
Deficiencies
a. Statutory Basis (Sec.  488.1200)
    We proposed 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

[[Page 62373]]

compliance with the Medicare requirements (that is, the failure to meet 
one or more CoPs is considered to be a lack of substantial compliance).
    We did not receive comments on this proposal and therefore are 
finalizing this provision without modification.
b. Definitions (Sec.  488.1205)
    We proposed 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 proposed 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.
    We did not receive comments on this proposal and therefore are 
finalizing this provision without modification.
c. General Provisions (Sec.  488.1210)
    We proposed 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. We proposed that our decision to impose one or more 
remedies, including termination, would 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 each discrete condition-level deficiency constituting 
noncompliance.
    As noted in the proposed rule, 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), we proposed that 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 would be corrected. CMS would determine if the 
POC was acceptable based on the information presented.
    At proposed Sec.  488.1210(e), we proposed the notification 
requirements for enforcement remedies for hospice programs that will be 
issued by CMS. CMS would 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 proposed a CMP and the amount being imposed 
(if applicable), the proposed effective date of the sanction, and 
appeal rights.
    We proposed 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 
proposed to codify these proposals at Sec. Sec.  488.1225(b) and 
488.1230(b), respectively.
    With respect to CMPs, we proposed 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 proposed to codify these proposals 
at Sec.  488.1245(e).
    We proposed 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).
    Comment: Several commenters recommended the incorporation of the 
informal dispute resolution (IDR) process to also align with the 
process available for HHAs.
    Response: We thank the commenters for their suggestion about 
incorporating an informal dispute resolution (IDR) process, but because 
the IDR process was not proposed in this rule, we are not including it 
at this time. We will consider the commenter's suggestions for future 
rulemaking.
    Final Decision: After consideration of the public comments 
received, we are finalizing this provision with one modification based 
on changes to proposed Sec.  488.1240, which are discussed in section 
VII.B.4.i of this final rule. Because payment suspensions will apply 
only to new patient admissions, there will be no ambiguity as to which 
payments are being suspended. Accordingly, we are removing the 
requirement at Sec.  488.1210(e) that the notice to hospice providers 
identify which payments are being suspended.
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 the proposed rule, we proposed to establish 
requirements for enforcement remedies that may be

[[Page 62374]]

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 immediate jeopardy (IJ) situation. We proposed 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, we proposed 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.
    Comment: Several commenters requested that CMS provide staff in the 
CMS locations (formerly CMS Regional Offices) training in the factors 
to be used in making determinations on when remedies should be applied 
and develop processes to ensure these remedies are consistently 
applied. A commenter stated that this guidance and training should also 
be made available to hospice providers.
    Response: We will develop associated guidance and provide training 
to CMS location and SA staff, as appropriate, that will address the 
concerns raised by the commenters regarding the procedures that will be 
followed to apply and implement the enforcement remedies while also 
allowing for surveyor judgment. Developed guidance and training will be 
made publicly available.
    Comment: A few commenters recommended a step-wise approach to 
enforcement remedies for hospice programs that consider the seriousness 
and prevalence of the deficiency beginning with more targeted education 
remedies (for example, directed plan of correction and directed in-
service training) to more stringent remedies for more severe 
deficiencies.
    Response: We have set forth the factors upon which we will base our 
choice of remedy or remedies. Those factors include the extent to which 
the deficiencies are directly related to a failure to provide quality 
care and pose an immediate threat to patient health and safety, as well 
as the nature, incidence, manner, degree, and duration of the 
deficiencies or noncompliance.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.
e. Available Remedies (Sec.  488.1220)
    Section 1822(c)(5)(A)(ii) of the Act provides that we ``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 1861(dd) of the Act; (2) suspension of all or part of payments, 
, 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 proposed to add a directed POC and directed in-service training as 
additional enforcement remedies at Sec.  488.1220.
    We did not receive comments on this proposal and therefore are 
finalizing this provision without modification.
f. Action When Deficiencies Pose Immediate Jeopardy (Sec.  488.1225) 
and Termination (Sec.  489.53)
    For situations involving IJ, if we determine 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 proposed 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, we will 
terminate the hospice program's provider agreement. In addition, we 
could impose one or more enforcement remedies including a CMP, 
temporary management, and/or suspension of Medicare payments before the 
effective date of termination.
    We proposed Sec.  488.1225(b), that for a deficiency or 
deficiencies that pose IJ, we 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 we 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, we proposed that we would 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 
proposed to amend Sec.  489.53(a)(17) to indicate that we would 
terminate a hospice program's (as well as an HHA's) provider agreement 
if

[[Page 62375]]

the hospice program failed to correct a deficiency or deficiencies 
within the required time frame.
    Finally, at proposed Sec.  488.1225(c), we proposed 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.
    Comment: Several commenters recommended that CMS clarify the notice 
period in calendar days for action imposed when deficiencies pose 
immediate jeopardy or are at the condition-level but do not pose 
immediate jeopardy.
    Response: We appreciate the comments and in this final rule added 
``calendar'' days for the notice period in the titles at Sec. Sec.  
488.1225(b) and 488.1230(b). Additionally, we are making a technical 
correction in Sec.  488.1225(b) to reflect the notice requirements are 
outlined in Sec.  488.1210(e), not Sec.  488.1225(e).
    Comment: Several commenters recommended that CMS consider the 
method that will be used to deliver the notices and whether 2 days is 
reasonable. Commenters stated situations where the statement of 
deficiencies has exceeded the 10-business day delivery requirement to 
the provider and they are concerned that delays will occur when 
enforcement remedies are applied. Commenters recommended that for 
delays in the statement of deficiencies that the hospice provider 
should be granted an extension for the plan of correction submission 
equivalent to the number of delinquent days, and commenters also 
believed that in situations where enforcement remedies are applied, the 
implementation date of the remedy should be delayed for the same number 
of days that the notice is delinquent. One commenter recommended that 
CMS investigate the reasons for these delays and implement processes to 
remedy the situation.
    Response: The 2-day calendar notice is to inform the hospice 
program of the immediate jeopardy situation and that the hospice 
program will be terminated in 23 days unless the immediate jeopardy is 
corrected and for all imposed remedies, except for CMPs. This policy is 
consistent with the current HHA requirements and has been used in 
immediate jeopardy situations for other providers. The written notice 
will be delivered in hard copy by mail or in an electronic format, such 
as email. The 2-day calendar notice of termination with an immediate 
jeopardy finding is prudent considering the short 23-day time frame to 
attain compliance and also given the serious risk to patient health and 
safety. For remedies imposed when there is immediate jeopardy, the 
notice will be given at least 2 calendar days before the effective date 
of the enforcement action. The notice will include the requirements 
finalized in Sec.  488.1210(e) that includes the proposed effective 
date of the remedy. The recommendation for us to investigate delays in 
notices and implement processes to remedy the situation is beyond the 
scope of this rule.
    Final Decision: After consideration of the public comments we 
received, we are adding the word ``calendar'' to the 2-day notice at 
Sec.  488.1225(b) and fixing a technical error in that same paragraph, 
in the reference to notice requirements, to accurately reflect Sec.  
488.1210(e).
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 the 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 the proposed rule, we specified that 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 would end 
when the hospice program corrects all condition-level deficiencies or 
is terminated from the Medicare program.
    We proposed at Sec.  488.1230, that for a deficiency or 
deficiencies that do not pose IJ, we would 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).
    Comment: Several commenters recommended that for enforcement 
remedies at the condition level that do not pose immediate jeopardy, 
CMS clarify that the notice period is in calendar days.
    Response: We appreciate the comments and in this final rule we have 
included ``calendar'' in the title at Sec.  488.1230(b).
    Final Decision: After consideration of the public comments we 
received, we are adding the word ``calendar'' to the 15-day notice at 
Sec.  488.1230(b).
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 proposed at Sec.  
488.1205, ``temporary management'' means the temporary appointment by 
us or an 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. Sec.  
418.100 and 418.114 and would be under the direction of the hospice 
program's governing body.
    We proposed 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 
proposed to specify the duration and effect of this

[[Page 62376]]

enforcement remedy, and the payment procedures for temporary managers' 
salaries and other additional costs. We 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 proposed that temporary management would 
be imposed when a hospice program is determined to have condition-level 
deficiencies and that the deficiencies or 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 
proposed 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 proposed at Sec.  488.1235(b) if the hospice program refuses to 
relinquish authority and control to the temporary manager, we would 
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 
proposed 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 would not exceed a period of 6 months 
from the date of the survey identifying noncompliance.
    At Sec.  488.1235, we proposed 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 proposed 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. We 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.
    Comment: Several commenters stated that when the temporary 
management enforcement remedy is imposed, the individual acting as the 
temporary manager should complete the basic CMS hospice surveyor 
training before beginning their assignment.
    Response: Although not an explicit requirement, we encourage the 
temporary manager to complete the basic CMS hospice surveyor training. 
The training is available free of charge on the QSEP website at https://qsep.cms.gov, to providers and all entities conducting surveys, and 
the public at large. QSEP training is accessible on an individual, 
self-paced basis. The basic training courses provide surveyors with the 
key knowledge and skills needed to survey the respective provider or 
supplier type for compliance with the Medicare CoPs and assure an 
adequately trained, effective surveyor workforce.
    Comment: Several commenters recommended that we clarify whether a 
temporary manager is required to be external to the hospice 
organization.
    Response: The temporary manager must have the experience and 
education that qualifies the individual to oversee the hospice program. 
The temporary manager can be either internal or external to the hospice 
program, and will be appointed by CMS or the SA based on qualifications 
described in Sec. Sec.  418.100 and 418.114. Additionally, the 
temporary manager would be under the direction of the hospice program's 
governing body.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.
i. Suspension of Payment for All New Patient Admissions (Sec.  
488.1240)
    We proposed in Sec.  488.1240 provisions describing when and how we 
would apply a suspension of payment for all new patient admissions on 
or after the date on which the Secretary determines that remedies 
should be imposed under Sec.  488.1225 or Sec.  488.1230. We proposed 
that 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. We proposed to determine whether to impose a suspension of all 
or part of the payments on or after the effective date of the 
enforcement remedy. We proposed to determine whether to impose a 
suspension of payment based on the factors outlined in proposed Sec.  
488.1215 that are considered when selecting remedies. The suspension of 
payment was proposed at Sec.  488.1240 to be for a period not to exceed 
6 months and would end when the hospice program either achieved 
substantial compliance or was terminated. We proposed to 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 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 we find 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 would end when the 
hospice program is determined to have corrected all condition-level 
deficiencies, or upon termination, whichever is earlier. We proposed to 
codify that duration of the remedy at Sec.  488.1240(c).

[[Page 62377]]

    Comment: Several commenters expressed concerns and requested that 
CMS consider limiting the suspension of all or part of payments to new 
hospice admissions only. The commenters stated that a suspension of 
payment not limited to new hospice admissions would result in a 
disproportionate financial burden on hospice providers and would affect 
access to care. Commenters also stated that limiting the suspension of 
all or part of payments to new hospice admissions only would be 
consistent with existing HHA enforcement sanctions, Congressional 
intent, and OIG recommendations. A commenter recommended we consider 
suspension of all or part of payments to new hospice admissions only in 
the case of an immediate jeopardy situation.
    Response: We have considered the commenters' suggestions and agree 
that limiting the payment suspension to all new patient admissions 
would help avoid disproportionate financial burdens on hospice 
programs. In addition, for poor performing hospice programs, CMS 
continues to have the option to terminate.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this provision with modifications to limit 
the suspension of payments to all new patient admissions. As noted 
elsewhere, we have made conforming edits to Sec. Sec.  488.1210(e), 
488.1220(b), and 488.1260(a)(1)(i).
j. CMPs (Sec.  488.1245)
    We proposed 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. We 
proposed 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. We 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 we 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 proposed 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 proposed to impose a CMP for that instance or those 
individual instances of noncompliance. We proposed 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 that we 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 proposed penalties from $1,000 to 
$10,000 per instance. Such penalties would be 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 proposed 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, we 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 proposed 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 
proposed to establish a three-tier system with subcategories that would 
establish the amount of a CMP.
    In proposed Sec.  488.1245(b)(3), (4), and (5), we proposed 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 we imposed a CMP, we 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 
proposed 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

[[Page 62378]]

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 proposed at Sec.  
488.1245(d) that in IJ cases, if the IJ is not removed, the CMP would 
continue to accrue until we 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 we 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 proposed 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;
     We 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 us.
    Comment: Commenters recommended CMS develop specifications for 
penalties collected at the national and/or state level for hospice 
program improvements.
    Response: Determinations on whether to impose an enforcement remedy 
and the specific remedy to be imposed will not be left to the sole 
discretion of the hospice surveyor. All final decisions regarding 
whether or not to impose a remedy and what type of remedy to be imposed 
will be made by the applicable CMS Location. Any funds collected as a 
result of CMPs imposed upon a hospice are distributed to the State 
Medicaid Agency and to the US Treasury under section 1128A(f) of the 
Act. Additionally, the CAA 2021 included a provision at section 
1822(c)(5)(C) that allows the Secretary to use a portion of the CMPs 
collected to support activities that benefit individuals receiving 
hospice care, including education and training programs to ensure 
hospice program compliance. We will consider using this authority to 
support improvement activities in hospices in the future and will 
consider developing interpretive guidance for clarification as needed.
    Comment: Many commenters recommended that CMS consider a hospice 
provider-initiated improvement plan to achieve positive outcomes and 
sustained compliance over a ``look back'' period in determining whether 
to impose the CMP remedy for previous noncompliance.
    Response: We disagree that a hospice provider-initiated improvement 
plan should be a determination on whether to impose the CMP remedy for 
previous noncompliance. The hospice program is expected to be in 
continuous compliance with the health and safety CoPs. When we 
determine the amount of the CMP penalty, one factor that is considered 
is evidence that the hospice program has an internal quality assessment 
and performance improvement system to ensure patient health and safety 
and compliance with the CoPs. We are finalizing as proposed the 
requirement at Sec.  488.1245(b)(1)(iii) that CMS take into account 
that the hospice program has evidence of a self-regulating quality 
assessment and improvement plan when determining the amount of the 
penalty. We can also decrease the CMP penalty amount from the upper 
range to the middle or lower range if a condition-level deficiency 
exists and the hospice program shows an earnest effort to correct 
systemic causes of the deficiencies and sustain improvement. We are 
finalizing as proposed the requirement at Sec.  488.1245(b)(7) to allow 
CMS to shift the CMP amount imposed per day from the upper range to the 
middle or lower range.
    Comment: Commenters recommended that CMS use a scaled approach to 
CMPs based on deficiency scope and severity and a commenter noted that 
CMS proposes criteria that also include factors that account for the 
size of the hospice program and its resources in order to provide some 
relief for small hospice programs.
    Response: We will factor in the size of the hospice program and its 
resources when considering the amount of the CMP as proposed in Sec.  
488.1245(b)(1)(ii). CMPs may be adjusted based on revisit survey 
findings and after a review of the provider's attempted correction of 
deficiencies as proposed in Sec.  488.1245(b)(2). Additionally, 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 as proposed in Sec.  488.1245(b)(8)(iii).
    Comment: Commenters encouraged CMS to provide a standardized, 
transparent process regarding the calculation of CMPs.
    Response: The proposed CMP regulations at Sec.  488.1245 provide a 
transparent process regarding CMP application, penalty amounts and 
adjustments, and appeal procedures consistent with requirements 
standardized for HHAs. CMS will also consider developing interpretive 
guidance for clarification as needed.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.

[[Page 62379]]

k. Directed Plan of Correction (Sec.  488.1250)
    We proposed 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 the correction of deficient practices. 
Specifically, we proposed that we 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 us 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, 
we 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, we would provide appropriate 
notice to the hospice program under Sec.  488.1210(e).
    Comment: Commenters were in support of the proposed directed POC 
and directed in-service training enforcement remedies that align with 
the available home health alternative sanctions. A commenter 
recommended that the directed POC be developed by CMS or by the 
temporary manager, with CMS approval. The commenter also recommended 
that the directed POC include follow-up reports to CMS or the SA and/or 
a resurvey to ensure continued progress and compliance with the 
directed POC. Additionally, the commenter recommended that directed 
POCs ultimately be publicly reported and delineate between and among 
deficiencies, especially regarding the scope and severity of such 
deficiencies.
    Response: We appreciate the support for the proposed directed POC 
and directed in-service training enforcement remedies that align with 
the available home health alternative sanctions. Similar to HHAs, a 
directed POC can be guided by CMS, the SA, or a temporary manager (with 
CMS/SA approval) to ensure that the underlying cause of the cited 
deficiency or deficiencies does not recur. Follow-up reports to the 
directed POC and/or a resurvey to ensure compliance with the directed 
POC will be at the discretion of CMS or the SA. The public reporting of 
directed POCs and delineation of deficiencies is beyond the scope of 
this rule.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.
l. Directed In-Service Training (Sec.  488.1255)
    We proposed 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 proposed 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. We would 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, we could impose one or more additional remedies. Before 
imposing this remedy, we would provide appropriate notice to the 
hospice program under proposed Sec.  488.1210(e).
    Comment: Commenters were in support of the proposed directed plan 
of correction and directed in-service training enforcement remedies 
that align with the available home health alternative sanctions.
    Response: We appreciate the support for the proposed directed plan 
of correction and directed in-service training enforcement remedies 
that align with the available home health alternative sanctions.
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section as proposed.
m. Continuation of Payments to a Hospice Program With Deficiencies 
(Sec.  488.1260)
    We proposed 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 would 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 proposed 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. We 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 proposed at Sec.  488.1230(d) that we 
would terminate the provider agreement.
    Comment: A commenter recommended that CMS modify the proposed 
regulatory text at Sec.  488.1260(a) by replacing ``may'' with ``will'' 
to ensure continuity of the continuation of payments to a hospice 
program with deficiencies.
    Response: We respectfully disagree with the commenter's suggested 
change

[[Page 62380]]

of ``may'' to ``will'' at Sec.  488.1260(a). The language for continued 
payments is consistent with the language in the HHA regulation at Sec.  
488.860. Therefore, the language at Sec.  488.1260(a) for continued 
payments will read ``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.''
    Final Decision: After consideration of the public comments we 
received, we are finalizing this section with one modification. Because 
we are finalizing Sec.  488.1240 to apply only to payments for all new 
patient admissions, we are removing the parenthetical in proposed Sec.  
488.1260(a)(1)(i) that excepted the suspension of all payment.
n. Termination of Provider Agreement (Sec.  488.1265)
    At Sec.  488.1265(a), we proposed 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), we 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 proposed 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 proposed 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)).
    We did not receive comments on this proposal and therefore are 
finalizing this provision without modification.

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

    In the proposed rule, we sought input on the following steps that 
would enable transformation of our quality measurement enterprise to be 
fully digital (86 FR 19765):
    1. What EHR/IT systems do you use and do you participate in a 
health information exchange (HIE)?
    2. How do you currently share information with other providers and 
are there specific industry best practices for integrating SDOH 
screening into EHR's?
    3. 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?
    4. 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?
    5. 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?
    6. What could be the potential use of FHIR dQMs that could be 
adopted across all QRPs?
    Most commenters supported the use and adoption of Fast Healthcare 
Interoperative Resources (FHIR) Application Programming Interfaces 
(APIs). Many commenters stressed the need for further work in 
standardizing data that are part of clinical documents to exchange 
information based on high-value use. Another requirement suggested by 
commenters is to specify the defined set of FHIR-APIs and HL7 messages 
that each health IT vendor must support to meet interoperability 
standards of practice or both. Many commenters shared that we need to 
consider providing incentives to working with EHR vendors that promote 
practices that support interoperability. Commenters supported the 
meaningful use framework and how it relates to promoting dQMs. They 
note that HHAs and other PAC providers were not included in the HITECH 
Act and therefore did not have the incentives as other provider 
communities that are needed to support providers and vendors. A 
commenter suggested that incentives need not be financial and that they 
could be in the form of points via a value-based purchasing program. 
Other incentives suggested included training and technical assistance 
for providers with the lowest adoption of technology infrastructure. 
Commenters requested there be a robust trial period before any dQM 
adoption nationally. Ideally, commenters would prefer 6 months to 1 
year from whenever final specifications around dQMs are made before 
implementation. A commenter noted that family or caregivers play an 
important role in older patients care and need to be included and 
supported in any transition to more digital records as they support 
patients. Some commenters also provided responses to questions about 
their EHR systems and capabilities. We appreciate commenters' input on 
this very important work.
    While we are not responding to comments in response to this Request 
for Information, we intend to use this input to inform future policy 
related to Fast Healthcare Interoperability Resources (FHIR) in Support 
of Digital Quality Measurement in Quality Programs.

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

    In the proposed rule, we sought public comment on the following:
     As finalized in the HH PPS final rule (84 FR 60597 through 
60608), HHAs will be required to report Standardized Patient Assessment 
Data Elements on certain SDOH, includingrace, ethnicity, preferred 
language, interpreter services, health literacy, transportation and 
social isolation.\104\ We sought 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.
---------------------------------------------------------------------------

    \104\ In response to the COVID-19 PHE, CMS released a 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 we 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

[[Page 62381]]

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 \105\ 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).
---------------------------------------------------------------------------

    \105\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods/methodology.
---------------------------------------------------------------------------

     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 of health to support care 
delivery and decision-making.
    Commenters consistently supported our focus on closing health 
equity gaps in post-acute care, including under the HH QRP. Many 
commenters shared that relevant data collection and appropriate 
stratification are very important in addressing any health equity gaps. 
Stratification of health outcomes would be very helpful to 
organizations and some commenters supported providing home health 
agencies with confidential reports that report quality measures 
stratified by social risk factors. Many commenters shared their 
strategies for addressing health disparities, noting that this was an 
important commitment for many health provider organizations. Some 
commenters who worked for HHAs note that they collect SDOH elements to 
develop comprehensive and individualized care plans. Commenters also 
shared that HHAs currently use OASIS data on payer information, race/
ethnicity, zip code, and age.
    Commenters had recommendations for additional SDOH elements that 
could strengthen data collection efforts. Many commenters suggest 
capturing information related to food insecurity, income, education, 
transportation, and housing. Other commenters suggested the data 
collection and measurement of demographic characteristics such as 
sexual orientation and gender identity (SOGI), language preference, 
tribal membership, and disability status. Numerous commenters suggested 
that for any data elements introduced, we need to ensure the format 
align with other Federal agency best practices, such as indicators used 
by the U.S. Census Bureau. Commenters also suggested that we need to 
consider adopting the use of Z codes for SDOH on home health claims. 
Some commenters emphasized balancing the need to have targeted new data 
elements that capture necessary information on non-clinical patient 
characteristics without introducing undue burden with too many new, 
untested items. Some commenters proposed working with existing efforts 
in the public and private sector that promote health equity by 
addressing social determinants of health. A commenter cautioned we from 
the inclusion of social risk factors without careful methodological 
considerations into risk adjustment models. They note inclusion of some 
social risk factors could perpetuate low performance expectations. 
Commenters noted that the COVID-19 PHE promoted use of more digital 
health tools and that this expansion need to be made permanent to help 
support the reduction in the equity gap. Some also highlighted how the 
PHE underscores the need for better data collection and analysis of 
demographic data to aid in addressing disparities in outcome and care. 
Some commenters are against indirect estimation methods and suggest 
that we need to work on a timeline for introducing any SDOH data 
elements needed and to focus on direct estimation. A commenter shared 
that it is important to consider the needs of American Indian/Alaska 
Natives in any data collection strategy.
    While we are not responding to specific comments submitted in 
response to this Health Equity request for information (RFI) in this 
final rule, we appreciate all of the comments and interest in this 
topic. We will continue to take all concerns, comments, and suggestions 
into account as we continue work to address and develop policies on 
this important topic. It is our hope to provide additional stratified 
information to HHAs related to race and ethnicity if feasible. The 
provision of stratified measure results will allow HHAs to understand 
how they are performing with respect to certain patient risk groups, to 
support these providers in their efforts to ensure equity for all of 
their patients, and to identify opportunities for improvements in 
health outcomes.

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

A. 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 1 
full fiscal year after the end of the COVID-19 PHE. We 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 1 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 1 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

[[Page 62382]]

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, we 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, 
we 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. We 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 (85 FR 48445 
through 48447),\106\ we 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.\107\ We also believe that much more is 
known about COVID-19 than we did at the time IFC-2 was 
finalized.108 109 110 111
---------------------------------------------------------------------------

    \106\ In the FY 2022 HH proposed rule (86 FR 35874), CMS 
provided an incorrect citation and is correcting that error here and 
throughout this final rule.
    \107\ CDC COVID Data Tracker. Retrieved from: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \108\ 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.
    \109\ COVID research: A year of scientific milestones. Nature. 
May 5, 2021. Retrieved from: https://www.nature.com/articles/d41586-020-00502-w.
    \110\ 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.
    \111\ 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 \112\ 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 (that were not 
available at the time the 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.\113\
---------------------------------------------------------------------------

    \112\ 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/.
    \113\ 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).
3. Collection of 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 proposed 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 we 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 proposed 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, we will provide the 
training and education for IRFs to be prepared for this implementation 
(84 FR 39119 through 39147). In addition, if we adopt an October 1, 
2022 compliance date, we would release a draft of the updated version 
of the IRF-PAI, IRF-PAI V4.0, in early 2022.
    Based upon our evaluation, we proposed that IRFs 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 proposed that IRFs begin collecting data on the two TOH 
measures beginning with discharges on October 1, 2022. We also proposed 
that IRFs 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 invited public comment on these proposals.
    Comment: Many commenters raised concerns with revising the 
compliance date from October 1st of the year that is at least 1 full 
fiscal year after the end of the PHE to October 1, 2022, given the 
current increase in the number of COVID-19 cases across the nation. 
Several commenters also stated CMS was too optimistic about the COVID-
19 data and IRFs' readiness to train staff on

[[Page 62383]]

the IRF-PAI V4.0. They point to the CDC's Daily Tracker which shows a 
7-day average of new COVID-19 cases having increased by >100,000 since 
the CY 2022 HH PPS proposed rule (86 FR 35874) was published on July 7, 
2021.
    Response: As stated in section IX.A. 2 of the CY 2022 HH PPS 
proposed rule (86 FR 35983 through 35984), CMS has provided IRFs a 
number of flexibilities to accommodate the COVID-19 PHE, including 
delaying 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 Standardized Patient Assessment Data 
Elements (85 FR 27595 through 27596). We also waived the IRF QRP 
reporting requirements for Q1 (January 1, 2020 through March 31, 2020) 
and Q2 (April 1, 2020 through June 30, 2020) and modified the required 
face-to-face visits in IRF such that they could be completed by 
telehealth (42 CFR 412.622(a)(3)(iv) and 412.29(e)) during the PHE for 
COVID-19. Additionally, we also made the waiver on the post-admission 
physician evaluation requirement permanent beginning October 1, 2021, 
in the FY 2021 IRF PPS final rule (85 FR 48445 through 48447). We 
believe we have provided a number of flexibilities to provide relief to 
IRFs throughout the PHE. We have also previously provided IRFs with the 
necessary tools they would need to implement the new IRF PAI 4.0, 
including release of the item set in 2019 and draft data specifications 
in early 2020. If this proposal is finalized, we will continue to 
provide IRFs with the tools they need well in advance of the 
implementation of the IRF PAI V4.0.
    Despite the COVID-19 PHE, we must maintain its commitment to the 
quality of care for all patients, and we continue to believe that the 
collection of the Standardized Patient Assessment Data Elements and TOH 
Information measures will contribute to this effort. That includes 
staying committed to achieving health equity by improving data 
collection to better measure and analyze disparities across programs 
and policies 114 115 116 117 118 119 and improving the 
quality of care in IRFs through a reduction in preventable adverse 
events. Health information, such as medication information, that is 
incomplete or missing increases the likelihood of a patient or resident 
safety risk, and is often life-
threatening.120 121 122 123 124 125 Poor communication and 
coordination across health care settings contributes to patient 
complications, hospital readmissions, emergency department visits and 
medication errors.126 127 128 129 130 131 132 133 134 135 
While we understand that there are concerns related to the timeline 
proposed, we do not believe that further delaying the data collection 
is an actionable solution to these concerns.
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    \114\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \115\ 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.
    \116\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018.
    \117\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \118\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \119\ 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.
    \120\ Kwan, J.L., Lo, L., Sampson, M., & Shojania, K.G., 
``Medication reconciliation during transitions of care as a patient 
safety strategy: a systematic review,'' Annals of Internal Medicine, 
2013, Vol. 158(5), pp. 397-403.
    \121\ Boockvar, K.S., Blum, S., Kugler, A., Livote, E., 
Mergenhagen, K.A., Nebeker, J.R., & Yeh, J., ``Effect of admission 
medication reconciliation on adverse drug events from admission 
medication changes,'' Archives of Internal Medicine, 2011, Vol. 
171(9), pp. 860-861.
    \122\ Bell, C.M., Brener, S.S., Gunraj, N., Huo, C., Bierman, 
A.S., Scales, D.C., & Urbach, D.R., ``Association of ICU or hospital 
admission with unintentional discontinuation of medications for 
chronic diseases,'' JAMA, 2011, Vol. 306(8), pp. 840-847.
    \123\ Basey, A.J., Krska, J., Kennedy, T.D., & Mackridge, A.J., 
``Prescribing errors on admission to hospital and their potential 
impact: a mixed-methods study,'' BMJ Quality & Safety, 2014, Vol. 
23(1), pp. 17-25.
    \124\ Desai, R., Williams, C.E., Greene, S.B., Pierson, S., & 
Hansen, R.A., ``Medication errors during patient transitions into 
nursing homes: characteristics and association with patient harm,'' 
The American Journal of Geriatric Pharmacotherapy, 2011, Vol. 9(6), 
pp. 413-422.
    \125\ Boling, P.A., ``Care transitions and home health care,'' 
Clinical Geriatric Medicine, 2009, Vol. 25(1), pp. 135-48.
    \126\ Barnsteiner, J.H., ``Medication Reconciliation: Transfer 
of medication information across settings--keeping it free from 
error,''
    \127\ Arbaje, A.I., Kansagara, D.L., Salanitro, A.H., Englander, 
H.L., Kripalani, S., Jencks, S.F., & Lindquist, L.A., ``Regardless 
of age: incorporating principles from geriatric medicine to improve 
care transitions for patients with complex needs,'' Journal of 
General Internal Medicine, 2014, Vol. 29(6), pp. 932-939.
    \128\ Jencks, S.F., Williams, M.V., & Coleman, E.A., 
``Rehospitalizations among patients in the Medicare fee-for-service 
program,'' New England Journal of Medicine, 2009, Vol. 360(14), pp. 
1418-1428.
    \129\ Institute of Medicine. ``Preventing medication errors: 
quality chasm series,'' Washington, DC: The National Academies Press 
2007. Available at https://www.nap.edu/read/11623/chapter/1.
    \130\ Kitson, N.A., Price, M., Lau, F.Y., & Showler, G., 
``Developing a medication communication framework across continuums 
of care using the Circle of Care Modeling app roach,'' BMC Health 
Services Research, 2013, Vol. 13(1), pp. 1-10.
    \131\ Mor, V., Intrator, O., Feng, Z., & Grabowski, D.C., ``The 
revolving door of rehospitalization from skilled nursing 
facilities,'' Health Affairs, 2010, Vol. 29(1), pp. 57-64.
    \132\ Institute of Medicine. ``Preventing medication errors: 
quality chasm series,'' Washington, DC: The National Academies Press 
2007. Available at https://www.nap.edu/read/11623/chapter/1.
    \133\ Kitson, N.A., Price, M., Lau, F.Y., & Showler, G., 
``Developing a medication communication framework across continuums 
of care using the Circle of Care Modeling app roach,'' BMC Health 
Services Research, 2013, Vol. 13(1), pp. 1-10.
    \134\ Forster, A.J., Murff, H.J., Peterson, J.F., Gandhi, T.K., 
& Bates, D.W., ``The incidence and severity of adverse events 
affecting patients after discharge from the hospital.'' Annals of 
Internal Medicine, 2003,138(3), pp. 161-167.
    \135\ King, B.J., Gilmore-Bykovsky, A.L., Roiland, R.A., 
Polnaszek, B.E., Bowers, B.J., & Kind, A.J. ``The consequences of 
poor communication during transitions from hospital to skilled 
nursing facility: a qualitative study,'' Journal of the American 
Geriatrics Society, 2013, Vol. 61(7), 1095-1102.
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    Comment: A commenter stated that CMS' original postponement from 
IFC-2 would likely have called for full adoption by October 1, 2023 and 
they believe this is still an appropriate adoption date.
    Response: We interpret the commenter's reference to ``full 
adoption'' to refer to the adoption of the IRF-PAI V4.0, which includes 
the items for the TOH-Patient measure, the TOH-Provider measure, and 
the Standardized Patient Assessment Data Elements. We believe that as 
the healthcare community continues to learn about the enormous impact 
that social determinants of health (SDOH) and social risk factors 
(SRFs) have on patient health and health outcomes,\136\ it becomes more 
critical to collect this in order to better understand the impact of 
the PHE on our healthcare system, as well as how to improve the 
inequities that the PHE has made so visible. We believe it will help 
IRFs, physicians, and other practitioners caring for patients in IRFs 
better prepare for the complex and resource-intensive care needs of 
patients with COVID-19, which will be particularly important during 
continued surges of this virus or new and emerging viruses. If 
finalized, this proposal would effectively grant a 2-year delay to the 
originally planned release of the IRF-PAI V4.0, a delay we granted due 
to the PHE. We believe that there has been a sufficient timeframe for

[[Page 62384]]

IRFs to adjust to the change in care patterns associated with the PHE.
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    \136\ Hood CM, Gennuso KP, Swain GR, Catlin BB. County Health 
Rankings: Relationships Between Determinant Factors and Health 
Outcomes. Am J Prev Med. 2016 Feb;50(2):129-35. Available at: 
https://pubmed.ncbi.nlm.nih.gov/26526164/. Accessed 9/1/21.
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    Comment: A commenter stated that the Delta variant, and the 
potential for other variants, has undermined the knowledge and 
experience gained by IRFs earlier in the pandemic. Commenters stated a 
continued delay would provide IRFs the necessary capacity to 
accommodate additional surges.
    Response: We understand the conditions under which IRFs are working 
to address the number of new COVID-19 cases resulting from the Delta 
variant. We disagree with the commenter, however, that the knowledge 
and experience IRFs have gained since the beginning of the pandemic has 
been undermined by the Delta variant. The Delta variant is a mutation 
of the original SARS-CoV-2 strain, rather than a novel virus as COVID-
19 was when it emerged in January of 2020. While the CDC has described 
the Delta variant as more transmissible than the Alpha COVID-19 
virus,\137\ many of the symptoms are similar.\138\ The methods of 
reducing transmission of the Delta variant are also similar, that is 
indoor masking, social distancing, and vaccination.\139\ Currently, 
there are multiple treatments 140 141 for COVID-19 and 
vaccines that are either authorized under a Food and Drug 
Administration's (FDA) Emergency Use Authorization 142 143 
or have approval from FDA.\144\
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    \137\ Delta Variant: What We Know about the Science. Available 
at: https://www.cdc.gov/coronavirus/2019-ncov/variants/delta-variant.html Accessed 9/1/2021.
    \138\ What Are the Symptoms of the COVID-19 Delta Variant? 
Available at: https://www.emedicinehealth.com/what_are_the_symptoms_of_covid19_delta_variant/article_em.htm. 
Accessed 9/1/2021.
    \139\ Things to Know About the Delta Variant. Available at: 
https://www.yalemedicine.org/news/5-things-to-know-delta-variant-covid. Accessed 9/1/2021.
    \140\ National Institutes of Health COVID-19 Treatment 
Guidelines. Available at: https://www.covid19treatmentguidelines.nih.gov/. Accessed 9/9/2021.
    \141\ FDA Approves First Treatment for COVID-19. October 22, 
2020. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19. Accessed 9/9/
2021.
    \142\ U.S. Food and Drug Administration (2021). Janssen Biotech, 
Inc. COVID-19 Vaccine EUA Letter of Authorization. Available at 
https://www.fda.gov/media/146303/download. Accessed 9/9/2021.
    \143\ U.S. Food and Drug Administration. (2021). ModernaTX, Inc. 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download. Accessed 9/9/2021.
    \144\ FDA Approves First COVID-19 Vaccine [bond] FDA, available 
at https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine. Accessed 9/03/21. The Pfizer-BioNTech 
vaccine also continues to be available under EUA. U.S. Food and Drug 
Administration (2021). Comirnaty and Pfizer-BioNTech COVID-19 
Vaccine. Accessed 9/28/2021.
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    Comment: A commenter stated that if the PHE was a valid reason to 
delay implementation of the TOH measures and certain Standardized 
Patient Assessment Data Elements a year ago, the recent surge is a 
valid reason to maintain the delay.
    Response: We disagree with the commenter. As described in section 
XI.A.1 of the CY 2022 HH PPS proposed rule (86 FR 35983 through 35984), 
at the time we finalized the policy in the IFC-2 (85 FR 27550), we were 
in the initial months of the COVID-19 PHE and very little was known 
about the COVID-19 virus. We believed the delay in collection of the 
TOH Information measures and Standardized Patient Assessment Data 
Elements was necessary in order to allow IRFs to focus on patient care 
and staff safety during a time when very little was known about COVID-
19. However, the COVID-19 PHE has illustrated the important need for 
these TOH Information measures and Standardized Patient Assessment Data 
Elements under the IRF QRP. The PHE's disproportionate impact among 
black, Latino, and American Indian and Alaska Native (AI/AN) persons 
145 146 demonstrates the importance of analyzing this impact 
in order to improve quality of care within IRFs especially during a 
crisis. As stated in section VII.F of the FY 2022 IRF PPS proposed rule 
(86 FR 19110 through 19112), one important strategy for addressing 
these important inequities is by improving data collection to allow for 
better measurement and reporting on equity across post-acute care 
programs and policies, and the data collected will 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).
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    \145\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \146\ 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/.
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    Currently, there are multiple treatments 147 148 for 
COVID-19, and vaccines that are either authorized under FDA's Emergency 
Use Authorization 149 150 or have approval from FDA.\151\ As 
of August 13, 2021, 82.2% of the population 65 years of age or older 
and 64.4% of the population 18 years of age or older have been fully 
vaccinated.\152\
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    \147\ National Institutes of Health COVID-19 Treatment 
Guidelines. Available at: https://www.covid19treatmentguidelines.nih.gov/. Accessed 9/9/2021.
    \148\ FDA Approves First Treatment for COVID-19. October 22, 
2020. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19. Accessed 9/9/
2021.
    \149\ U.S. Food and Drug Administration (2021). Janssen Biotech, 
Inc. COVID-19 Vaccine EUA Letter of Authorization. Available at 
https://www.fda.gov/media/146303/download. Accessed 9/9/2021.
    \150\ U.S. Food and Drug Administration. (2021). ModernaTX, Inc. 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download. Accessed 9/9/2021.
    \151\ FDA Approves First COVID-19 Vaccine. FDA. Available at: 
https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine. Accessed 9/03/21. The Pfizer-BioNTech 
vaccine also continues to be available under EUA. U.S. Food and Drug 
Administration (2021). Comirnaty and Pfizer-BioNTech COVID-19 
Vaccine. Accessed 9/28/2021.
    \152\ COVID-19 Vaccinations in the United States. Available at: 
https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-total-admin-rate-total. Accessed 9/9/2021.
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    Comment: Several commenters stated implementing the IRF-PAI V4.0 
would divert critical patient care resources at a time when IRFs are 
struggling to keep up with current documentation requirements. They 
raised concerns that having to train nursing staff to collect and 
report these data would divert their attention away from direct patient 
care. A commenter stated that hospitals are still requiring social 
distancing and limiting large group gatherings, so the logistics of 
training would be challenging. A commenter stated that implementing the 
new assessment tool at this time may increase the risk for patient-care 
errors, while another commenter stated they would have no means to 
dedicate staff to the task of training which would defeat the purpose 
of collecting the information.
    Response: As described in section IX.A.2. of this final rule, we 
granted IRF providers several waivers related to documentation in order 
to ease burden during the PHE, and many of these are still in effect. 
We are very mindful of burden that may occur from the collection and 
reporting of data. Both the TOH-Patient measure and TOH-Provider 
measure are comprised of one item, and further, the activities 
associated with the measure align with existing requirements related to 
transferring information at the time of discharge to safeguard patients 
(84 FR 51882 and Sec.  482.43). Additionally, TEP feedback and pilot 
testing of the items

[[Page 62385]]

did not find the burden of reporting to be significant.\153\
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    \153\ Transfer of Health Information TEP Meeting 4--June 2018. 
Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-TEP-Meeting-4-June2018.pdf. 
Accessed 9/9/2021.
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    The new Standardized Patient Assessment Data Element items in the 
IRF-PAI 4.0 are also reflective of patient characteristic that 
providers are likely already gathering in order to meet hospital 
conditions of participation, such as patient's preferred language, 
race, ethnicity, hearing, vision, health literacy, pain, high-risk drug 
classes and cognitive function.
    We also understand provider's concerns with developing training 
materials for the TOH-Patient measure and TOH-Provider measure items 
and the Standardized Patient Assessment Data Elements. We plan to 
provide multiple training resources and opportunities for IRFs to take 
advantage of, reducing the burden to IRFs in creating their own 
training resources. These training resources may include online 
learning modules, tip sheets, questions and answers documents, and/or 
recorded webinars and videos, and would be available to providers in 
early 2022, allowing IRFs several months to ensure their staff take 
advantage of the learning opportunities. Having the materials online 
and on-demand would also eliminate the need for large group gatherings, 
a concern raised by some commenters. The IRF QRP Helpdesk would also be 
available for providers to submit their follow up questions by email, 
further enhancing the educational resources.
    Comment: We received a comment stating that implementing the IRF-
PAI 4.0 would require additional staffing, specifically nursing staff, 
at a time when there is a pandemic-induced nursing staff shortage, 
which in some areas is so critical that IRF beds have been reduced. A 
commenter noted that although there are multiple positions open at 
their IRF, they have had no applicants. This same commenter reported 
they have had to reinstitute COVID emergency staffing registered nurse 
(RN)-to-patient ratios, and without a foreseeable end in the surge in 
cases, staff leadership cannot turn their resources and attention to 
the task of training. They suggested that not finalizing the proposal 
would minimize administrative and reporting requirements and provide an 
opportunity to recover from the pandemic's effects on the workforce.
    Response: We interpret the commenter's concern to be associating 
the nursing shortage with the COVID-19 pandemic. According to the 
Centers for Disease Control and Prevention's (CDC) COVID Data Tracker 
Weekly review on October 1, 2021,\154\ the current 7-day moving average 
of daily cases has decreased 13.3% compared to the previous 7-day 
moving average. Additionally, COVID-19 cases have been steadily 
declining since January 2021. Despite an uptick in weekly reported 
cases in September, the height of new cases at that time was still 36% 
less than the numbers reported in January 2021.\155\ According to the 
CDC's forecast modeling, new cases are estimated to continue to decline 
another 30% in the next four weeks. The impacts of the COVID-19 PHE on 
the healthcare system, including staffing shortages, make it especially 
important now to monitor quality of care.\156\ Still, we are mindful of 
burden that may occur from the collection and reporting of our 
measures. We emphasize, however, that that TOH Information Provider-PAC 
and TOH Information Patient-PAC measures consist of one item each, and 
further, the activities associated with the measures align with the 
existing requirements related to transferring information at the time 
of discharge to safeguard patients. Additionally, as stated in the FY 
2020 IRF PPS final rule (84 FR 39054 through 39173), we convened a 
Technical Expert Panel (TEP) \157\ and conducted a pilot test.\158\ 
Both the TEP feedback and the pilot participants found the burden of 
reporting not to be significant.
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    \154\ https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html.
    \155\ Centers for Disease Control and Prevention. COVID-19 
Forecasts: Cases. Available at: https://www.cdc.gov/coronavirus/2019-ncov/science/forecasting/forecasts-cases.html. Accessed 
September 27, 2021.
    \156\ Nursing and Patient Safety. Agency for Healthcare Research 
and Quality. April 21, 2021. Available at: https://psnet.ahrq.gov/primer/nursing-and-patient-safety. Accessed 10/4/2021.
    \157\ Transfer of Health Information TEP Meeting 4--June 2018. 
Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-TEP-Meeting-4-June2018.pdf. 
Accessed 9/1/2021.
    \158\ Transfer of Health Information 2018 Pilot Test Summary 
Report. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-Pilot-Test-Summary-Report_Final_Feb2018.pdf. Accessed 9/1/2021.
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    We have strived to balance the scope and level of detail of the 
data elements against the potential burden placed on IRFs. We plan to 
provide multiple training resources and opportunities for IRFs to take 
advantage of, which will reduce the burden to IRFs. We plan to make 
these training resources available to IRFs in early 2022.
    Comment: Several commenters pointed out the lack of Information 
Systems (IT) personnel as a barrier to being able to implement the IRF-
PAI V4.0 on October 1, 2022. They state that implementing the IRF-PAI 
V4.0 would require new flowsheets, interfaces, and reports to inform 
the new version of the assessment instrument, and they are limited in 
their resources. They state that IT systems and personnel had to 
quickly pivot to developing virtual platforms for care during the PHE, 
and/or develop platforms and reports to implement mandatory and time-
sensitive COVID-19-related tracking requirements. A commenter noted 
that there are also 2020 ``maintenance releases'' that have been 
delayed due to the PHE and staffing shortages. As a result, these 
commenters do not believe they have the operational resources to 
dedicate to the investment of retooling their electronic health record 
for the IRF-PAI V4.0.
    Response: While we acknowledge there will be some updates required 
of IT vendors and systems, we believe a significant portion of the work 
has already been completed. For example, we posted a change table in 
November 2019 illustrating the changes that would occur to the IRF-PAI 
with the transition from the IRF-PAI 3.0 to 4.0. In March 2020, we 
posted the IRF-PAI Draft Technical Data Submission Specifications. The 
IRF-PAI 4.0 was not postponed due to the PHE until June 17, 2020, fewer 
than 4 months before it was to be implemented October 1, 2020. 
Therefore, we believe that most IRFs would have already made the 
necessary enhancements to their electronic medical records and 
flowsheets in preparation for the transition. We plan to provide the 
final draft specifications and release that to providers and vendors in 
late 2021 or when technically feasible, which would give providers just 
under 1 year to build their necessary IT programs.
    Comment: Several commenters stated that if CMS finalized the 
October 1, 2022, date for the collection of the TOH Information to the 
Patient-PAC measure, the TOH Information to the Patient-Provider 
measure, and the Standardized Patient Assessment Data Elements, they 
would have to divert resources away from the tasks associated with 
patient care and instead put the resources in training nursing staff to 
complete the new assessment. A commenter stated they believe the 
benefit to CMS of having this information to study is significantly 
outweighed by the burden imposed on IRFs.

[[Page 62386]]

    Response: We would like to clarify that CMS proposed to begin 
collecting the TOH Information to the Patient-PAC measure, the TOH 
Information to the Patient-Provider measure and the Standardized 
Patient Assessment Data Elements to support our responsibility to 
monitor and ensure quality of care for patients. Additionally, this 
information will provide actionable data on which IRFs can improve 
health care outcomes.
    We disagree that the benefit of having this information is 
outweighed by the burden. As stated earlier, we plan to provide 
multiple training resources and opportunities for IRFs to take 
advantage of, which will reduce the burden to IRFs. We plan to make 
these training resources available to IRFs in early 2022, allowing IRFs 
several months to ensure their staff take advantage of the learning 
opportunities, and to allow IRFs to spread the cost of training out 
over several quarters.
    Comment: A commenter stated that proposing the implementation of 
the IRF-PAI V4.0 so soon after CMS' request for information (RFI) on 
creating new standardized data collection elements across the continuum 
of care (not just post-acute care) in the IRF PPS proposed rule (86 FR 
19110 through 19112) created confusion for providers. They believe it 
would create confusion and unnecessary administrative burden for CMS to 
add data elements to the IRF-PAI V4 because they are available, only to 
replace them with more reliable elements based on the feedback received 
to the FY 2022 IRF RFI.
    Response: To clarify, the Standardized Patient Assessment Data 
Elements that would be collected in the IRF-PAI V4.0 were finalized in 
the FY 2020 IRF PPS final rule (84 FR 4 FR 39109 through 39161). The 
request for information published in section VII.F. of the FY 2022 IRF 
PPS proposed rule (86 FR 19110 through 19112) requested public comment 
on recommendations for quality measures or measurement domains that 
address health equity as well as additional items that could be used to 
assess health equity in the care of IRF patients, which may or may not 
include Standardized Patient Assessment Data Elements. Therefore, we do 
not anticipate unnecessary administrative burden as a result of the 
feedback received to the FY 2022 IRF RFI.
    Comment: A commenter noted it was unclear if CMS' proposal intended 
to implement the full scope of the IRF-PAI version 4.0, or only those 
Standardized Patient Assessment Data Elements and the two new TOH 
measures discussed in the proposal. They reference the original change 
table CMS provided back in 2019. For example, the data elements for 
IRF-PAI V.4.0 in section O starting on page 26 of the change table are 
not addressed by CMS's proposed scope of adoption. The commenter asked 
CMS to clarify what data elements would be adopted to support their 
proposal.
    Response: We believe the commenter is referencing the document 
titled, ``Change Table for Final IRF-PAI Version 4.0--Effective date: 
October 1, 2020'', that was posted to the CMS QRP website on November 
21, 2019.\159\ This change table reflects the reporting requirements 
under the IRF QRP that were finalized in the FY 2020 IRF PPS Final 
Rule. Our proposal is consistent with the reporting requirements 
finalized in the FY 2020 IRF PPS Rule; specifically, IRFs would begin 
using the IRF Patient Assessment Instrument (PAI) V4.0 to report the 
TOH Information to Provider-PAC and the TOH Information to Patient--PAC 
measures and certain Standardized Patient Assessment Data Elements. If 
finalized, we would release an updated draft of the IRF-PAI V.4.0 and 
accompanying IRF-PAI V.4.0 manual in early 2022.
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    \159\ File available here: https://www.cms.gov/files/document/final-irf-pai-version-40-change-table-1.pdf and on the IRF-PAI and 
IRF-PAI Manual webpage in the Downloads section at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/IRF-PAI-and-IRF-PAI-Manual.
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    Comment: A commenter acknowledged that CMS has the authority to 
issue proposals through a variety of avenues, but requested CMS include 
proposals impacting IRF payment or the Quality Reporting Program (QRP) 
in the annual IRF Prospective Payment System (PPS) rulemaking in order 
to avoid confusion for stakeholders.
    Response: We thank the commenter for the suggestion and will take 
it under consideration. We note, however, that an announcement was 
posted to the IRF QRP Spotlights and Announcements \160\ webpage on 
June 28, 2021, an announcement was sent from the PAC listserv.
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    \160\ Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/IRF-Quality-Reporting/Spotlights-Announcements. Accessed 10/4/2021.
---------------------------------------------------------------------------

    Final Decision: After careful consideration of the comments 
received, we are finalizing our proposal that IRFs begin collecting the 
TOH Information to Provider-PAC measure, the TOH Information to the 
Patient-PAC measure, and 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.

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 1 full fiscal year 
after the end of the COVID-19 PHE. We 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 1 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 1 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

[[Page 62387]]

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, we have 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, we 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. We 
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, we 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.\161\ We also believe that much more is 
known about COVID-19 than at the time we finalized IFC-
2.162 163 164 165
---------------------------------------------------------------------------

    \161\ CDC COVID Data Tracker. Retrieved from: https://covid.cdc.gov/covid-data-tracker/#datatracker-home.
    \162\ 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.
    \163\ COVID research: a year of scientific milestones. Nature. 
May 5, 2021. Retrieved from: https://www.nature.com/articles/d41586-020-00502-w.
    \164\ 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.
    \165\ 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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    Based upon other flexibilities such as the previous examples, the 
increase in knowledge LTCH providers have about treating patients with 
COVID-19 \166\ 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.\167\
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    \166\ 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/.
    \167\ https://www.healthaffairs.org/do/10.1377/hblog20201214.543463/full/.
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    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. Collection of 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 proposed 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, 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 2-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 we 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 proposed 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, we will provide 
the training and education for LTCHs to be prepared for this 
implementation (84 FR 42540 through 42560). In addition, if we adopt an 
October 1, 2022, compliance date, we stated that we would release a 
draft of the updated version of the LCDS, LCDS V5.0, in early 2022.
    Based upon our evaluation, we proposed that LTCHs 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 
proposed that accordingly, LTCHs begin collecting data on the two TOH 
measures beginning with discharges on October 1, 2022. We also proposed 
that LTCHs 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 invited public comment on these proposals.
    Comment: Several commenters raised concerns with revising the 
compliance date from October 1st of the year that is at least 1 full 
year after the end of the PHE to October 1, 2022, given the current 
increase in the number of COVID-19 cases across the nation. Commenters 
also stated CMS was too optimistic about the COVID-19 data and LTCHs' 
readiness to train staff on the LCDS V5.0. They point to the CDC's 
Daily Tracker which shows a 7-day average of new COVID-19 cases having 
increased by >100,000 since the CY 2022 HH PPS proposed rule (86 FR 
35874) was published on July 7, 2021.

[[Page 62388]]

    Response: As stated in section IX.B. 2 of the CY 2022 HH PPS 
proposed rule (86 FR 35984 through 35985), we have provided LTCHs a 
number of flexibilities to accommodate the COVID-19 PHE. In addition to 
delaying the adoption of the updated version of the LCDSV5.0 with which 
LTCHs would have used to report the TOH measures and certain 
Standardized Patient Assessment Data Elements (85 FR 27595 through 
27596), we also waived the LTCH QRP reporting requirements for Q1 
(January 1, 2020 through March 31, 2020) and Q2 (April 1, 2020 through 
June 30, 2020). Additionally, we waived the requirement at 42 CFR 
482.43(a)(8), 482.61(e), and 485.642(a)(8) to provide detailed 
information regarding discharge planning, and waived the 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. Both of these waivers, as well as 
others, remain in place today. We believe we have provided a number of 
flexibilities to provide relief to LTCHs throughout the PHE. We have 
also previously provided LTCHs with the necessary tools they would need 
to implement the new LTCH V5.0, including release of the item set in 
2019 and draft data specifications in early 2020. If this proposal is 
finalized, we will continue to provide LTCHs with the tools they need 
well in advance of the implementation of the LTCH V5.0.
    Despite the ongoing COVID-19 PHE, we must maintain commitment to 
the quality of care for all patients, and we continue to believe that 
the collection of the Standardized Patient Assessment Data Elements and 
TOH Information measures will contribute to this effort. That includes 
staying committed to achieving health equity by improving data 
collection to better measure and analyze disparities across programs 
and policies168 169 170 171 172 173 and improving the 
quality of care in LTCHs through a reduction in preventable adverse 
events. Health information, such as medication information, that is 
incomplete or missing increases the likelihood of a patient or resident 
safety risk, and is often life-
threatening.174 175 176 177 178 179 Poor communication and 
coordination across health care settings contributes to patient 
complications, hospital readmissions, emergency department visits and 
medication errors.180 181 182 183 184 185 186 187 188 189 
While we understand that there are concerns related to the timeline 
proposed, we do not believe that further delaying the data collection 
is an appropriate response to these concerns. As the healthcare 
community continues to learn about the enormous impact that social 
determinants of health (SDOH) and social risk factors (SRFs) have on 
patient health and health outcomes,\190\ it becomes more critical for 
Medicare to collect this information. The information is extremely 
important to understanding the impact of the PHE on our healthcare 
system, and how to improve the inequities the PHE has made so visible, 
and we believe it will help LTCHs better prepare for the complex and 
resource-intensive care needs of patients with COVID-19, which will be 
particularly important during continued surges of this virus or new and 
emerging viruses. If finalized, this proposal would effectively grant a 
2-year delay to the originally planned release of the LCDS V5.0, a 
delay we granted due to the PHE. We believe that there has been a 
sufficient timeframe for LTCHs to adjust to the change in care patterns 
associated with the PHE.
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    \168\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \169\ 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.
    \170\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018.
    \171\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \172\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \173\ 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.
    \174\ Kwan, J. L., Lo, L., Sampson, M., & Shojania, K. G., 
``Medication reconciliation during transitions of care as a patient 
safety strategy: a systematic review,'' Annals of Internal Medicine, 
2013, Vol. 158(5), pp. 397-403.
    \175\ Boockvar, K. S., Blum, S., Kugler, A., Livote, E., 
Mergenhagen, K. A., Nebeker, J. R., & Yeh, J., ``Effect of admission 
medication reconciliation on adverse drug events from admission 
medication changes,'' Archives of Internal Medicine, 2011, Vol. 
171(9), pp. 860-861.
    \176\ Bell, C. M ., Brener, S. S., Gunraj, N., Huo, C., Bierman, 
A. S., Scales, D. C., & Urbach, D. R., ``Association of ICU or 
hospital admission with unintentional discontinuation of medications 
for chronic diseases,'' JAMA, 2011, Vol. 306(8), pp. 840-847.
    \177\ Basey, A. J., Krska, J., Kennedy, T. D., & Mackridge, A. 
J., ``Prescribing errors on admission to hospital and their 
potential impact: a mixed-methods study,'' BMJ Quality & Safety, 
2014, Vol. 23(1), pp. 17-25.
    \178\ Desai, R., Williams, C. E., Greene, S. B., Pierson, S., & 
Hansen, R. A., ``Medication errors during patient transitions into 
nursing homes: characteristics and association with patient harm,'' 
The American Journal of Geriatric Pharmacotherapy, 2011, Vol. 9(6), 
pp. 413-422.
    \179\ Boling, P. A., ``Care transitions and home health care,'' 
Clinical Geriatric Medicine, 2009, Vol. 25(1), pp. 135-48.
    \180\ Barnsteiner, J. H., ``Medication Reconciliation: Transfer 
of medication information across settings--keeping it free from 
error,''
    \181\ Arbaje, A. I., Kansagara, D. L., Salanitro, A. H., 
Englander, H. L., Kripalani, S., Jencks, S. F., & Lindquist, L. A., 
``Regardless of age: incorporating principles from geriatric 
medicine to improve care transitions for patients with complex 
needs,'' Journal of General Internal Medicine, 2014, Vol. 29(6), pp. 
932-939.
    \182\ Jencks, S. F., Williams, M. V., & Coleman, E. A., 
``Rehospitalizations among patients in the Medicare fee-for-service 
program,'' New England Journal of Medicine, 2009, Vol. 360(14), pp. 
1418-1428.
    \183\ Institute of Medicine. ``Preventing medication errors: 
quality chasm series,'' Washington, DC: The National Academies Press 
2007. Available at https://www.nap.edu/read/11623/chapter/1.
    \184\ Kitson, N. A., Price, M., Lau, F. Y., & Showler, G., 
``Developing a medication communication framework across continuums 
of care using the Circle of Care Modeling app roach,'' BMC Health 
Services Research, 2013, Vol. 13(1), pp. 1-10.
    \185\ Mor, V., Intrator, O., Feng, Z., & Grabowski, D. C., ``The 
revolving door of rehospitalization from skilled nursing 
facilities,'' Health Affairs, 2010, Vol. 29(1), pp. 57-64.
    \186\ Institute of Medicine. ``Preventing medication errors: 
quality chasm series,'' Washington, DC: The National Academies Press 
2007. Available at https://www.nap.edu/read/11623/chapter/1.
    \187\ Kitson, N. A., Price, M., Lau, F. Y., & Showler, G., 
``Developing a medication communication framework across continuums 
of care using the Circle of Care Modeling app roach,'' BMC Health 
Services Research, 2013, Vol. 13(1), pp. 1-10.
    \188\ Forster, A. J., Murff, H. J., Peterson, J. F., Gandhi, T. 
K., & Bates, D. W., ``The incidence and severity of adverse events 
affecting patients after discharge from the hospital.'' Annals of 
Internal Medicine, 2003,138(3), pp. 161-167.
    \189\ King, B. J., Gilmore[hyphen] Bykovsky, A. L., Roiland, R. 
A., Polnaszek, B. E., Bowers, B. J., & Kind, A. J. ``The 
consequences of poor communication during transitions from hospital 
to skilled nursing facility: a qualitative study,'' Journal of the 
American Geriatrics Society, 2013, Vol. 61(7), 1095-1102.
    \190\ Hood CM, Gennuso KP, Swain GR, Catlin BB. County Health 
Rankings: Relationships Between Determinant Factors and Health 
Outcomes. Am J Prev Med. 2016 Feb;50(2):129-35. Available at: 
https://pubmed.ncbi.nlm.nih.gov/26526164/. Accessed 9/1/21.
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    Comment: Another commenter stated that if the PHE was a valid 
reason to delay implementation of the TOH measures and certain 
Standardized Patient Assessment Data Elements a year ago, the recent 
surge is a valid reason to maintain the delay.
    Response: We disagree with the commenter. As described in section 
XI.A.1 of the CY 2022 HH PPS proposed rule (86 FR 35983 through 35984), 
at the time we finalized the policy in the IFC-2 (85 FR 27550), we were 
in the initial months of the COVID-19 PHE and very little was known 
about the COVID-19 virus. We believed the delay in

[[Page 62389]]

collection of the TOH Information measures and Standardized Patient 
Assessment Data Elements was necessary in order to allow LTCHs to focus 
on patient care and staff safety during a time when very little was 
known about COVID-19. However, the COVID-19 PHE has illustrated the 
important need for these TOH Information measures and Standardized 
Patient Assessment Data Elements under the LTCH QRP. The PHE's 
disproportionate impact among black, Latino, and American Indian and 
Alaska Native (AI/AN) persons 191 192 demonstrates the 
importance of analyzing this impact in order to improve quality of care 
within LTCHs especially during a crisis. As stated in section IX.E.7 of 
the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25616 through 25618) one 
important strategy for addressing these important inequities is by 
improving data collection to allow for better measurement and reporting 
on equity across post-acute care programs and policies, and the data 
collected will 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).
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    \191\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \192\ 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/.
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    Currently, there are multiple treatments193 194 for 
COVID-19, and vaccines that are either authorized through FDA's 
Emergency Use Authorization 195 196 or have approval from 
FDA.\197\ As of August 13, 2021, 82.2% of the population 65 years of 
age or older and 64.4% of the population 18 years of age or older have 
been fully vaccinated.\198\
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    \193\ National Institutes of Health COVID-19 Treatment 
Guidelines. Available at: https://www.covid19treatmentguidelines.nih.gov/. Accessed 9/9/2021.
    \194\ FDA Approves First Treatment for COVID-19. October 22, 
2020. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19. Accessed 9/9/
2021.
    \195\ U.S. Food and Drug Administration (2021). Janssen Biotech, 
Inc. COVID-19 Vaccine EUA Letter of Authorization. Available at 
https://www.fda.gov/media/146303/download. Accessed 9/9/2021.
    \196\ U.S. Food and Drug Administration. (2021). ModernaTX, Inc. 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download. Accessed 9/9/2021.
    \197\ FDA Approves First COVID-19 Vaccine [verbar] FDA. Accessed 
9/03/21. The Pfizer-BioNTech vaccine also continues to be available 
under EUA. U.S. Food and Drug Administration (2021). Comirnaty and 
Pfizer-BioNTech COVID-19 Vaccine. Accessed 9/28/2021.
    \198\ COVID-19 Vaccinations in the United States. Available at: 
https://covid.cdc.gov/covid-data-tracker/#vaccinations_vacc-total-admin-rate-total. Accessed 9/9/2021.
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    Comment: A commenter stated that the Delta variant of COVID-19, and 
the potential for other variants, has undermined the knowledge and 
experience gained by LTCHs earlier in the pandemic. Commenters stated a 
continued delay would provide LTCHs the necessary capacity to 
accommodate additional surges.
    Response: We understand the conditions under which LTCHs are 
working to address the number of new COVID-19 cases resulting from the 
COVID-19 Delta variant. We disagree with the commenter, however, that 
the knowledge and experience LTCHs have gained since the beginning of 
the PHE has been undermined by the Delta variant. The Delta variant is 
a mutation of the original SARS-CoV-2 strain, rather than a novel virus 
as COVID-19 was when it emerged in January of 2020. While the CDC has 
described Delta as more transmissible than the Alpha COVID-19 
virus,\199\ many of the symptoms are similar.\200\ The methods of 
reducing transmission of the Delta variant are also similar, that is 
indoor masking, social distancing, and vaccination.\201\ Currently, 
there are multiple treatments202 203 for COVID-19, and 
vaccines that are either authorized through FDA's Emergency Use 
Authorization 204 205 or have approval from FDA.\206\
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    \199\ Delta Variant: What We Know about the Science. Available 
at: https://www.cdc.gov/coronavirus/2019-ncov/variants/delta-variant.html. Accessed 9/1/2021.
    \200\ What Are the Symptoms of the COVID-19 Delta Variant? 
Available at: https://www.emedicinehealth.com/what_are_the_symptoms_of_covid19_delta_variant/article_em.htm. 
Accessed 9/1/2021.
    \201\ 5 Things to Know About the Delta Variant. Available at: 
https://www.yalemedicine.org/news/5-things-to-know-delta-variant-covid. Accessed 9/1/2021.
    \202\ National Institutes of Health COVID-19 Treatment 
Guidelines. Available at: https://www.covid19treatmentguidelines.nih.gov/. Accessed 9/9/2021.
    \203\ FDA Approves First Treatment for COVID-19. October 22, 
2020. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19. Accessed 9/9/
2021.
    \204\ U.S. Food and Drug Administration (2021). Janssen Biotech, 
Inc. COVID-19 Vaccine EUA Letter of Authorization. Available at 
https://www.fda.gov/media/146303/download. Accessed 9/9/2021.
    \205\ U.S. Food and Drug Administration. (2021). ModernaTX, Inc. 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download. Accessed 9/9/2021.
    \206\ FDA Approves First COVID-19 Vaccine [verbar] FDA. Accessed 
9/03/21. The Pfizer-BioNTech vaccine also continues to be available 
under EUA. U.S. Food and Drug Administration (2021). Comirnaty and 
Pfizer-BioNTech COVID-19 Vaccine. Accessed 9/28/2021.
---------------------------------------------------------------------------

    Comment: Several commenters stated implementing the LCDS V5.0 would 
divert critical patient care resources at a time when LTCHs are 
struggling to keep up with current documentation requirements. They 
raised concerns that having to train nursing staff to collect and 
report these data would divert their attention away from direct patient 
care.
    Response: As described in section IX.B.2. of this final rule, we 
have granted LTCH providers several waivers related to documentation in 
order to ease burden during the PHE, and many of these are still in 
effect. We are very mindful of burden that may occur from the 
collection and reporting of data. Both the TOH Information to the 
Patient--PAC measure and TOH Information to the Provider--PAC measure 
are comprised of one item, and further, the activities associated with 
the measure align with existing requirements related to transferring 
information at the time of discharge to safeguard patients (84 FR 51882 
and Sec.  482.43). Additionally, TEP feedback and pilot testing of the 
items did not find the burden of reporting to be significant.\207\
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    \207\ Transfer of Health Information TEP Meeting 4--June 2018. 
Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-TEP-Meeting-4-June2018.pdf. 
Accessed 9/9/2021.
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    The new Standardized Patient Assessment Data Element items in the 
LCDS V5.0 are also reflective of patient characteristic that providers 
are likely already gathering in order to meet hospital conditions of 
participation, such as patient's preferred language, race, ethnicity, 
hearing, vision, health literacy, pain, high-risk drug classes and 
cognitive function.
    We also understand provider's concerns with developing training 
materials for the TOH Information to the Patient--PAC measure and TOH 
Information to the Provider--PAC measure items and the Standardized 
Patient Assessment Data Elements. We plan to provide multiple training 
resources and opportunities for LTCHs

[[Page 62390]]

to take advantage of, reducing the burden to LTCHs in creating their 
own training resources. These training resources may include online 
learning modules, tip sheets, questions and answers documents, and/or 
recorded webinars and videos, and would be available to LTCHs in early 
2022, allowing LTCHs several months to ensure their staff take 
advantage of the learning opportunities. Having the materials online 
and on-demand would also eliminate the need for large group gatherings, 
a concern raised by some commenters. The LTCH QRP Helpdesk would also 
be available for providers to submit their follow up questions by 
email, further enhancing the educational resources.
    Comment: We received comment stating that implementing the LCDS 
V5.0 would require additional staffing, specifically nursing staff, at 
a time when there is a pandemic-induced nursing staff shortage, which 
in some areas is so critical that LTCH beds have been reduced.
    Response: We interpret the commenter's concern regarding the 
nursing shortage with the COVID-19 pandemic. According to the Centers 
for Disease Control and Prevention's (CDC) COVID Data Tracker Weekly 
review on October 1, 2021,\208\ the current 7-day moving average of 
daily cases has decreased 13.3% compared to the previous 7-day moving 
average. Additionally, COVID-19 cases have been steadily declining 
since January 2021. Despite an uptick in weekly reported cases in 
September, the height of new cases at that time was still 36% less than 
the numbers reported in January 2021.\209\ According to the CDC's 
forecast modeling, new cases are estimated to continue to decline 
another 30% in the next four weeks. The impacts of the COVID-19 PHE on 
the healthcare system, including staffing shortages, make it especially 
important now to monitor quality of care.\210\ Still, we are mindful of 
burden that may occur from the collection and reporting of our 
measures. We emphasize, however, that that TOH Information Provider--
PAC and TOH Information Patient--PAC measures consist of one item each, 
and further, the activities associated with the measures align with the 
existing requirements related to transferring information at the time 
of discharge to safeguard patients. Additionally, as stated in the FY 
2020 IPPS/LTCH PPS Final Rule (84 FR 42535 through 42588), we convened 
a Technical Expert Panel (TEP) \211\ and conducted a pilot test.\212\ 
Both the TEP feedback and the pilot participants found the burden of 
reporting not to be significant.
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    \208\ https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html.
    \209\ Centers for Disease Control and Prevention. COVID-19 
Forecasts: Cases. Available at: https://www.cdc.gov/coronavirus/2019-ncov/science/forecasting/forecasts-cases.html. Accessed 
September 27, 2021.
    \210\ Nursing and Patient Safety. Agency for Healthcare Research 
and Quality. April 21, 2021. Available at: https://psnet.ahrq.gov/primer/nursing-and-patient-safety. Accessed 10/4/2021.
    \211\ Transfer of Health Information TEP Meeting 4--June 2018. 
Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-TEP-Meeting-4-June2018.pdf. 
Accessed 9/1/2021.
    \212\ Transfer of Health Information 2018 Pilot Test Summary 
Report. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/Downloads/Transfer-of-Health-Information-Pilot-Test-Summary-Report_Final_Feb2018.pdf. Accessed 9/1/2021.
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    We have strived to balance the scope and level of detail of the 
data elements against the potential burden placed on LTCHs. We plan to 
provide multiple training resources and opportunities for LTCHs to take 
advantage of, which will reduce the burden to LTCHs. We plan to make 
these training resources available to LTCHs in early 2022.
    Comment: Several commenters pointed out the lack of Information 
Systems (IT) personnel as a barrier to being able to implement the LCDS 
V5.0 on October 1, 2022. They state that implementing the LCDS V5.0 
would require new flowsheets, interfaces, and reports to inform the new 
version of the assessment instrument, and they are limited in their 
resources. They state that IT systems and personnel had to quickly 
pivot to developing virtual platforms for care during the PHE, and/or 
develop platforms and reports to implement mandatory and time-sensitive 
COVID-19-related tracking requirements. A commenter noted that there 
are also 2020 ``maintenance releases'' that have been delayed due to 
the PHE and staffing shortages. As a result, these commenters do not 
believe they have the operational resources to dedicate to the 
investment of retooling their electronic health record for the LCDS 
V5.0.
    Response: While we acknowledge there will be some updates required 
of IT vendors and systems, we believe a significant portion of the work 
has already been completed. For example, we posted a change table in 
November 2019 illustrating the changes that would occur to the LCDS 
with the transition from the LCDS V4.0 to V5.0.\213\ In March 2020, we 
posted the LCDS V5.0 Draft Technical Data Submission 
Specifications.\214\ The LCDS V5.0 was not postponed due to the PHE 
until June 17, 2020, fewer than 4 months before it was to be 
implemented October 1, 2020. Therefore, we believe that most LTCHs 
would have already made the necessary enhancements to their electronic 
medical records and flowsheets in preparation for the transition. We 
plan to provide the final draft specifications and release that to 
providers and vendors in late 2021 or when technically feasible, which 
would give providers just under 1 year to build their necessary IT 
programs.
---------------------------------------------------------------------------

    \213\ File available here: https://www.cms.gov/files/zip/ltch-care-data-set-v50-effective-october-1-2020-zip.zip and on the LTCH 
LCDS and LTCH QRP Manual webpage in the Downloads section at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/LTCH-Quality-Reporting/LTCH-CARE-Data-Set-and-LTCH-QRP-Manual.
    \214\ File available here: https://www.cms.gov/files/zip/ltch-data-specs-v4000-draft-03-05-2020zip.zip and on the LTCH QRP 
Technical Information webpage at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/LTCH-Quality-Reporting/LTCH-Technical-Information.
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    Comment: A commenter stated they believe the benefit to CMS of 
having this information to study is significantly outweighed by the 
burden imposed on LTCHs.
    Response: We would like to clarify that CMS proposed to begin 
collecting the TOH Information to the Patient--PAC measure, the TOH 
Information to the Patient-Provider measure, and the Standardized 
Patient Assessment Data Elements to support our responsibility to 
monitor and ensure quality of care for patients. Additionally, this 
information will provide actionable data on which LTCHs can improve 
health care outcomes.
    Final Decision: After careful consideration of the comments 
received, we are finalizing our proposal that LTCHs begin collecting 
the TOH Information to Provider-PAC measure, the TOH Information to the 
Patient-PAC measure, and 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.

X. COVID-19 Reporting Requirements for Long Term Care Facilities

A. Background

    The United States is responding to the COVID-19 Public Health 
Emergency (PHE) caused by the coronavirus which has been detected in 
more than 190 countries internationally, and all 50

[[Page 62391]]

States and the District of Columbia. In an effort to respond to the 
COVID-19 PHE and protect the health and safety of LTC facility 
residents, CMS published three interim final rules with comment period 
(IFCs) directly affecting LTC facilities. The May 8, 2020 IFC 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'' (85 FR 27550) 
revised the infection prevention and control requirements for LTC 
facilities to more effectively respond to the specific challenges posed 
by the COVID-19 pandemic. Specifically, this IFC added provisions to 
require facilities to electronically report information related to 
confirmed or suspected COVID-19 cases in a standardized format and 
frequency specified by the Secretary and required facilities to inform 
residents and their representatives of confirmed or suspected COVID-19 
cases in the facility among residents and staff.
    The September 2, 2020 IFC, entitled ``Medicare and Medicaid 
Programs, Clinical Laboratory Improvement Amendments (CLIA), and 
Patient Protection and Affordable Care Act, Additional Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency'' (85 FR 54820, 54873) set out provisions regarding testing 
for COVID-19 in long-term care facilities, including documentation 
requirements and protocols specifying actions to be taken if a resident 
or staff member tests positive. The May 13, 2021 IFC, titled ``Medicare 
and Medicaid Programs; COVID-19 Vaccine Requirements for Long-Term Care 
(LTC) Facilities and Intermediate Care Facilities for Individuals with 
Intellectual Disabilities (ICFs-IID) Residents, Clients, and Staff'' 
(86 FR 26306) revised the infection control requirements that LTC 
facilities and intermediate care facilities for individuals with 
intellectual disabilities (ICFs-IID) must meet to participate in the 
Medicare and Medicaid programs. This IFC aimed to reduce the spread of 
SARS-CoV-2 infections, the virus that causes COVID-19 by requiring 
education about COVID-19 vaccines for LTC facility residents, ICF-IID 
clients, and staff serving both populations, and by requiring that such 
vaccines, when available, be offered to all residents, clients, and 
staff. It also required LTC facilities to report COVID-19 vaccination 
status of residents and staff to the Centers for Disease Control and 
Prevention (CDC). Additional information and data regarding SARS-CoV-2, 
and populations at greatest risk were presented in these IFCs (85 FR 
27550 and 86 FR 26306).
    This final rule focuses on the LTC facility COVID-related reporting 
requirements established in these three IFCs and codifies these 
requirements in order to extend them beyond the PHE. While COVID-19 
cases for both staff and residents had been consistently declining from 
April to July 2021, there has been a recent increase in confirmed cases 
for staff and residents of LTC facilities.\215\ In addition, the Delta 
variant is currently the predominant variant of the virus in the United 
States. It is more infectious and has led to increased transmissibility 
when compared to other variants, even in some vaccinated individuals. 
Specifically, the Delta variant is more than 2x contagious than 
previous variants. Preliminary data also suggest that the Delta variant 
may cause more severe illness than previous variants in unvaccinated 
people. Available data continue to suggest that breakthrough infections 
are relatively rare, and the majority of new cases are attributable to 
unvaccinated persons. The greatest risk of transmission is among 
unvaccinated people who are more likely to become infected, and 
therefore transmit the virus.\216\ Furthermore, while resident 
vaccination rates are high in LTC facilities, standing at about 84 
percent, it is not reasonable to anticipate complete vaccination 
coverage, leaving all facilities at risk for a COVID-19 outbreak after 
the official PHE declaration has ended. It is also important to note 
that only 64 percent of current nationwide LTC facility staff have been 
vaccinated.\217\ The nature of LTC facilities make outbreaks of COVID-
19 difficult to control, especially as many staff and potentially 
residents may be asymptomatic. Asymptomatic people with SARS-CoV-2 may 
move in and out of the LTC facility and the community, putting 
residents and staff at risk of infection. The CDC is continuing to 
assess data on whether fully vaccinated individuals with asymptomatic 
breakthrough infections can transmit the virus.\218\ Routine testing of 
LTC residents and staff, along with visitation restrictions, personal 
protective equipment (PPE) usage, social distancing, and vaccination 
for residents and staff are the best defense against COVID-19.
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    \215\ Data.CMS.gov, COVID-19 Nursing Home Data, https://data.cms.gov/covid-19/covid-19-nursing-home-data.
    \216\ Centers for Disease Control and Prevention, Delta Variant: 
What We Know About the Science https://www.cdc.gov/coronavirus/2019-ncov/variants/delta-variant.html.
    \217\ Data.CMS.gov, COVID-19 Nursing Home Data, https://data.cms.gov/covid-19/covid-19-nursing-home-data.
    \218\ Centers for Disease Control and Prevention, Delta Variant: 
What We Know About the Science https://www.cdc.gov/coronavirus/2019-ncov/variants/delta-variant.html?s_cid=11512:covid%20delta:sem.ga:p:RG:GM:gen:PTN:FY21.
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    The rate of staff vaccination, coupled with the continued threat of 
numerous variants, including the highly transmissible Delta variant, 
the congregate living nature of LTC facilities that make them more 
susceptible to COVID-19 outbreaks, and breakthrough cases, creates an 
ongoing risk of outbreaks, with significant risks of morbidity and 
mortality, in this higher risk population. This final rule maintains 
the current COVID-19 reporting requirements while modifying the 
reporting frequency of these requirements to no more than weekly, which 
may be reduced at the discretion of the Secretary, and adds a sunset 
date of December 31, 2024 for most of the reporting requirements, in 
order to ensure patient safety and health while informing future 
pandemic and emergency response.

B. Statutory Authority and Regulatory Background

    Under sections 1866 and 1902 of the Act, providers of services 
seeking to participate in the Medicare or Medicaid program, or both, 
must enter into an agreement with the Secretary or the State Medicaid 
agency, as appropriate. Long-term care (LTC) facilities seeking to be 
Medicare and Medicaid providers of services must be certified as 
meeting Federal participation requirements. LTC facilities include SNFs 
for Medicare and NFs for Medicaid. The Federal participation 
requirements for SNFs, NFs, and dually certified facilities, are set 
forth in sections 1819 and 1919 of the Act and codified in the 
implementing regulations at 42 CFR part 483, subpart B.
    Sections 1819(d)(3) and 1919(d)(3) of the Act explicitly require 
that LTC facilities develop and maintain an infection control program 
that is designed, constructed, equipped, and maintained in a manner to 
protect the health and safety of residents, personnel, and the general 
public. In addition, sections 1819(d)(4)(B) and 1919(d)(4)(B) of the 
Act explicitly authorize the Secretary to issue any regulations he 
deems necessary to protect the health and safety of

[[Page 62392]]

residents. Infection prevention and control is a primary goal of 
initiatives taking place in LTC facilities during the COVID-19 PHE. 
Under the explicit instructions of Congress, existing regulations at 
Sec.  483.80 require facilities to, among other things, establish and 
maintain an infection prevention and control program (IPCP) designed to 
provide a safe, sanitary, and comfortable environment and to help 
prevent the development and transmission of communicable diseases and 
infections.

C. Summary of the Provisions and Responses to Public Comments

    In response to the three IFCs that were published on May 8, 2020, 
September 2, 2020, and May 13, 2021, we received 537 total comments. 
Commenters included individuals, health care professionals and 
corporations, national associations and coalitions, patient advocacy 
organizations, and individual facilities that will be impacted by the 
rule.
    In this final rule, we are finalizing provisions from two of the 
three IFCs that made amendments to Sec.  483.80. We provide a summary 
of our proposed provisions, a summary of the public comments received 
and our responses to them, and the policies we are finalizing for LTC 
facilities. We have organized our proposed provisions and responses to 
the comments as follows: COVID-19 Reporting and Vaccine Reporting. 
Comments related to the collection of information requirements and 
impact analysis sections are addressed in sections XI and XII, 
``Collection of Information Requirements'' and ``Regulatory Impact 
Analysis'' of this final rule.
1. Requirement for Facilities To Report Nursing Home Residents and 
Staff Infections, Potential Infections, and Deaths Related to COVID-19 
(Sec.  483.80(g)(1) Through (3))
    In the IFC, ``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'' (85 FR 27550), we finalized a requirement at Sec.  483.80 
(g)(1), that LTC facilities electronically report information about 
COVID-19 in a standardized format specified by the secretary. This 
report must include suspected and confirmed COVID-19 infections among 
residents and staff, including residents previously treated for COVID-
19; total deaths and COVID-19 deaths among residents and staff; 
personal protective equipment and hand hygiene supplies in the 
facility; ventilator capacity and supplies in the facility; resident 
beds and census; access to COVID-9 testing while the resident is in the 
facility; and staffing shortages.
    In addition, Sec.  483.80(g)(2) requires that the information 
specified in Sec.  483.80(g)(1) be provided at a frequency specified by 
the Secretary, but no less than weekly to the CDC's National Healthcare 
Safety Network (NHSN). Finally, Sec.  483.80(g)(3) requires that 
residents, their representatives, and their families be informed of the 
occurrence of either a single or confirmed infection of COVID-19, or 
three or more residents or staff with new-onset of respiratory symptoms 
occurring within 72 hours of each other. This information must be 
reported to the residents, their representatives, and their families by 
5:00 PM the next calendar day.
    In response to the May 8, 2020 IFC, we received 297 public 
comments. While a significant number of commenters indicated that they 
supported increased reporting requirements, the majority of the 
comments expressed concerns about the burden of the reporting 
requirements.
    Comment: A significant number of commenters indicated that the 
reporting requirements were too burdensome, time consuming, 
duplicative, and create a heightened sense of alarm.
    Response: We understand the burden concerns expressed by 
commenters. However, due to the unpredictable nature of the virus and 
the new variants that are arising, we believe that it is vital that 
this information be collected and recorded. Retaining the data 
reporting requirements after the end of the PHE is an important element 
of maintaining effective surveillance of this novel virus. While COVID-
19 cases for both staff and residents were consistently declining for 
several weeks, there has been an increase in confirmed cases for staff 
and residents of LTC facilities. Specifically, national case rates have 
continued to climb precipitously, reaching levels not seen since early 
February 2021. As of October 1, 2021, the current 7-day moving average 
of daily new cases was 106,395. As of September 25, 2021, the overall 
rate of COVID-19 hospitalizations per 100,000 was 6.4 
hospitalizations.\219\ Collectively, this information highlights the 
gravity of the delta variant.
---------------------------------------------------------------------------

    \219\ COVID-NET, Laboratory-Confirmed COVID-19-Associated 
Hospitalizations https://gis.cdc.gov/grasp/covidnet/covid19_3.html.
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    The rate of staff vaccinations, coupled with the presence of 
multiple variants, specifically the highly contagious Delta variant, 
and breakthrough infections, creates an ongoing risk of outbreaks, with 
significant risks of morbidity and mortality, in this higher risk 
population. Timely and actionable surveillance will enable CMS to 
continue to respond to facilities in need of additional technical 
support and oversight, should they experience new COVID-19 infections.
    In addition, agencies across HHS have released data and guidance 
that should have addressed and alleviated some of the confusion that 
commenters are referring to. As such, we will be maintaining the 
current reporting requirements, which require LTC facilities to report 
weekly, unless the Secretary specifies a lesser frequency, and the 
potential to modify the number of data elements reported in the future, 
contingent upon the state of the pandemic. In an effort to further 
address concerns regarding burden, we are also finalizing a sunset date 
of December 31, 2024 for the reporting requirements, with the exception 
of the staff and resident vaccination reporting requirements in Sec.  
[thinsp]483.80(g)(1)(viii). We believe that the need to collect data 
will likely extend past the end of the PHE. We therefore are granting 
ourselves and other government authorities the continued ability to 
monitor LTC facilities, given that this population has been most 
vulnerable to the virus. This provision will automatically expire on 
December 31, 2024 unless it is determined that further regulations must 
be established.
    Comment: Several commenters questioned the need to report COVID 
related deaths for individuals with multiple comorbidities, as many LTC 
residents have pre-existing and chronic conditions, and they believe 
that COVID was not the primary or sole cause of death.
    Response: Many individuals that succumb to COVID-19 have multiple 
co-morbidities, none of which negate a person's COVID-19 infection 
status. COVID-19 related deaths need to be reported to provide CMS with 
information that enables us to protect these vulnerable populations and 
ensure that the appropriate care is being provided. Therefore, we are 
retaining the requirement that facilities must report nursing home 
resident and staff infections, potential infections, and deaths related 
to COVID-19.
    In an effort to support surveillance of COVID-19 cases, we are 
maintaining the requirements to establish explicit reporting 
requirements for confirmed or suspected cases with the possibility for 
reduced frequency of reporting and minimizing the number of required 
data

[[Page 62393]]

elements in the future at the discretion of the Secretary. 
Specifically, we are finalizing our requirements by maintaining the 
provision at Sec.  [thinsp]483.80(g)(1)(i) through (ix), to require 
facilities to electronically report information about COVID-19 in a 
standardized format specified by the Secretary. The report includes, 
but is not limited to, information on: Suspected and confirmed COVID-19 
infections among residents and staff, including residents previously 
treated for COVID-19; total deaths and COVID-19 deaths among residents 
and staff; personal protective equipment and hand hygiene supplies in 
the facility; ventilator capacity and supplies available in the 
facility; resident beds and census; access to COVID-19 testing while 
the resident is in the facility; staffing shortages; and other 
information specified by the Secretary. In the future, the number of 
data elements required to be reported may be reduced to allow for 
greater flexibility and mitigate burden concerns. This information will 
be used to monitor trends in infection rates, and inform future public 
health and emergency preparedness policies.
    Comment: A commenter stated that the rationale for additional 
reporting to Federal authorities is unclear, since LTC facilities must 
already report to State and local authorities and that a universal 
reporting system should be used instead.
    Response: Federal reporting requirements are used by State and 
local authorities to inform their operations and pandemic response for 
their particular population. We understand the burden concerns 
expressed by commenters and have therefore revised the frequency of 
reporting information specified in paragraph (g)(1) to weekly, unless 
the Secretary specifies a lesser frequency, and a reduced number of 
data elements in the future, at the discretion of the Secretary, when 
the COVID-19 virus is less prevalent and we may no longer need all of 
this data as frequently. Due to the variation in mandates across States 
and localities, we will continue to require surveillance efforts at the 
Federal level and maintain current reporting requirements.
    In addition, at Sec.  [thinsp]483.80(g)(2), we are revising the 
current requirements to require that LTC facilities provide the 
information noted previously weekly, unless the Secretary specifies a 
lesser frequency, to the Center for Disease Control and Prevention's 
(CDC) National Healthcare Safety Network (NHSN) with the possibility 
for reduced frequency of reporting in the future, contingent on the 
state of the PHE. Furthermore, we note that the information reported 
will be shared with us and we will retain and publicly report this 
information to support protecting the health and safety of residents, 
in accordance with sections 1819(d)(4)(B) and 1919(d)(4) of the Act, as 
well as facility personnel, and the general public. These requirements 
will support our efforts to proactively and transparently inform 
interested parties and ensure that the most complete information on 
COVID-19 cases is available. The existing reporting requirements at 
Sec.  483.80(g)(1) and (2) do not relieve LTC facilities of the 
obligation to continue to comply with Sec.  483.80(a)(2)(ii), which 
requires facilities to report possible incidents of communicable 
disease and infections. This includes complying with State and local 
reporting requirements for COVID-19.
    Comment: Many commenters indicated that the reporting requirements 
are not stringent or detailed enough, resulting from lack of oversight 
and the vague definitions/terminology set out in the IFCs. A 
significant portion of commenters requested further clarification and 
more detailed regulations to ensure that programs achieved better 
quality and lower costs.
    Commenters also recommended additional reporting requirements 
including but not limited to retroactive reporting and the collection 
of additional demographic information (race, ethnicity, sex, age, 
disability status, primary language, sexual orientation, gender 
identity, socio-economic status, and location (urban/rural)). The 
commenters noted that retroactive reporting dating back to January 1, 
2020, is necessary in order to gain a better understanding of the 
trajectory of SARS-CoV-2 and the rapidly evolving situation. A few 
commenters also expressed their desire for disability status to be 
collected as well, as these individuals are often predisposed to 
disease and are more likely to experience medical complications and 
succumb to the virus.
    The majority of commenters also recommended additional reporting 
requirements regarding the number of staff and residents who were 
hospitalized and who recovered from COVID-19. They stated that 
additional reporting requirements related to testing should include the 
number of residents and staff who have been tested, the percent of 
residents and staff who have been tested, the frequency of resident and 
staff testing, and the number of tests available.
    Response: The reporting requirements were written in a manner that 
would allow for maximum flexibility by covering a broad array of 
services and entities. While we agree that additional data, including 
demographic information, could be useful to inform the pandemic 
response, especially since underserved populations including racial and 
ethnic minorities have been disproportionately impacted by COVID-19, we 
also understand that additional requirements could be more burdensome 
for providers that are caring for residents during the pandemic at this 
time. However, we are committed to advancing health equity and reducing 
disparities for those in underserved populations that have been 
disproportionately impacted by COVID-19 and we believe that these data 
reporting requirements are an essential first steps in helping us 
better understand the impacts of COVID-19 on underserved populations 
that reside in LTC facilities. Information gained from this reported 
data will be assessed and used to determine if additional policy 
changes, especially those affecting underserved populations, should be 
made in the future. Additionally, the NHSN system already collects this 
type of information and, therefore, we are not adding additional 
categories in order to avoid duplicative efforts and further confusion. 
In an effort to mitigate potential concern about the burdensome nature 
of the requirements, we will not be adding additional reporting 
requirements and data elements at this time, but we have modified our 
regulations to include the flexibility to change the data elements that 
are required to be reported to NHSN in the future, as appropriate.
    Comment: Many commenters noted that the current reporting 
requirements do not accomplish the goal of ensuring that residents are 
informed participants in the care that they receive.
    Response: We disagree with the commenters. The collection of this 
data allows for residents and their caregivers to be informed 
participants in their care, as it allows them to understand the current 
state of the environment that they reside in. Resident health and 
safety are of the utmost importance, and therefore, we are continuing 
all of our current reporting requirements.
    Specifically, at Sec.  [thinsp]483.80(g)(3), we are maintaining the 
provision to require facilities to inform residents, their 
representatives, and families of those residing in facilities of 
confirmed or suspected COVID-19 cases in the facility among residents 
and staff. This reporting requirement supports the overall health and 
safety of residents by ensuring they are informed participants in the 
care that they receive as well as providing assurances of the 
mitigating

[[Page 62394]]

steps the facility is taking to prevent and control the spread of 
COVID-19. Facilities must inform residents, their representatives, and 
families by 5 p.m. the next calendar day following the occurrence of 
either: A single confirmed infection of COVID-19; or three or more 
residents or staff with new-onset of respiratory symptoms that occur 
within 72 hours of each other. Also, cumulative updates to residents, 
their representatives, and families must be provided at least weekly by 
5 p.m. the next calendar day following the subsequent occurrence of 
either: (1) Each time a confirmed infection of COVID-19 is identified; 
or (2) whenever three or more residents or staff with new onset of 
respiratory symptoms occur within 72 hours of each other. This 
information must be reported in accordance with existing privacy 
regulations and statute and must not include Personally Identifiable 
Information (PII). Facilities must include information on mitigating 
actions implemented to prevent or reduce the risk of transmission, 
including if normal operations in the nursing home will be altered such 
as restrictions or limitations to visitation or group activities. For 
purposes of this reporting requirement and to mitigate the concerns 
regarding burden that have been expressed in public comments, 
facilities are not expected to make individual telephone calls. 
Instead, facilities can utilize communication mechanisms that make this 
information easily available to all residents, their representatives, 
and families, such as paper notification, listservs, website postings, 
or recorded telephone messages.
    These reporting requirements, along with public reporting of the 
data, support our responsibility to protect and ensure the health and 
safety of residents by enforcing the standards required to help each 
resident attain or maintain their highest level of well-being. In 
addition, sections 1819(d)(3)(B) and 1919(d)(3) of the Act requires 
that a facility must establish an infection control program that is 
designed, constructed, equipped, and maintained in a manner to protect 
the health and safety of residents, personnel, and the general public. 
We believe that the reporting requirements comply with these statutory 
requirements. We also note that they are necessary for us to monitor 
whether individual nursing homes are appropriately tracking, 
responding, and mitigating the spread and impact of COVID-19 on our 
most vulnerable citizens, personnel who care for them, and the general 
public. The information provided may be used to inform residents, 
families, and communities of the status of COVID-19 infections in their 
area. We believe that this action strengthens our response to the PHE 
for the COVID-19 pandemic and reaffirms our commitment to transparency 
and protecting the health and safety of nursing home residents.
2. COVID-19 Vaccine Reporting for Residents and Staff (Sec.  
[thinsp]483.80(g)(1)(viii))
    In the May 2021 IFC, ``Medicare and Medicaid Programs; COVID-19 
Vaccine Requirements for Long-Term Care (LTC) Facilities and 
Intermediate Care Facilities for Individuals with Intellectual 
Disabilities (ICFs-IID) Residents, Clients, and Staff'', we finalized a 
requirement, at Sec.  [thinsp]483.80(g)(1)(viii), that LTC facilities 
report on the COVID-19 vaccine status of residents and staff, including 
total numbers of residents and staff, numbers of residents and staff 
vaccinated, numbers of each dose of COVID-19 vaccine received, and 
COVID-19 vaccination adverse events. We are also finalizing the 
requirement at Sec.  [thinsp]483.80(g)(1)(ix) to require the reporting 
of therapeutics administered to residents for treatment of COVID-19. We 
received 71 comments in response to this IFC, with no comments 
discussing the requirement to report information about therapeutics 
administered to residents for treatment of COVID-19. A significant 
number of commenters indicated that they supported increased reporting 
requirements, however, the majority of the comments expressed concerns 
about the burdensome nature of the requirements.
    Comment: Several commenters supported our staff and resident 
vaccination reporting requirements and cited statistics about the 
higher rate of contracting COVID-19 and succumbing to the virus 
compared to the general population. Additionally, they note, continued 
collection of data and surveillance will allow CDC and other Federal 
agencies to identify facilities that need additional support. This will 
also enable current and prospective residents and families to make 
informed decisions regarding their options for care.
    Response: We thank commenters for their support and their ability 
to recognize the gravity of the situation. Due to the evolving nature 
of the virus and the continued threat of the delta and other new 
variants, it is vital that surveillance be maintained. On August 18, 
CMS announced the development of an emergency regulation requiring 
staff vaccinations within the nation's more than 15,000 Medicare and 
Medicaid-participating nursing homes. Subsequently, on September 9, CMS 
announced the expansion of the August 18 announcement requiring staff 
vaccinations in nursing homes to add additional Medicare and Medicaid-
certified health care providers and suppliers certified by CMS, 
including, but not limited to, hospitals, dialysis facilities, 
ambulatory surgical centers, and home health agencies. We believe 
maintaining these vaccination reporting requirements aligns with the 
President's recent announcements \220\ regarding staff vaccination.
---------------------------------------------------------------------------

    \220\ The White House, Remarks by President Biden on Fighting 
the COVID-19 Pandemic https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/09/09/remarks-by-president-biden-on-fighting-the-covid-19-pandemic-3/.
---------------------------------------------------------------------------

    Comment: Most commenters indicated that this vaccine reporting 
requirement is challenging to comply with due to staffing shortages, 
difficulty hiring and retaining a qualified workforce, and paying 
competitive wages. Many commenters expressed concern about the time it 
takes to complete the reporting due to short staffing and the 
requirement to report to multiple entities. Commenters also questioned 
if this requirement is the best use of resources, and argue that this 
time would be better utilized providing personal care. A few commenters 
noted that smaller LTC facilities do not have the same kind of 
infrastructure and resources that larger agencies and other 
institutional providers have access to, and that this should be 
considered when determining compliance and expectations of the rule.
    The majority of commenters were concerned that these vaccine 
reporting requirements were duplicative of other currently existing 
requirements and systems used for reporting this data. Some of these 
commenters noted that the requirements are duplicative of requirements 
to report this data to State and local health departments. 
Additionally, a few commenters were unclear on where to report 
vaccination metrics and how to document compliance efforts. A commenter 
expressed concern that this type of reporting is only beneficial for 
data analysts, not the residents of the facility.
    Commenters believed that reporting should be more user friendly and 
less time consuming. Most commenters were in favor of using systems 
that are already in place and that they use often (Minimum Data Set 
[MDS], Payroll Based Journal [PBJ]) in order to improve these processes 
and comply with the requirements. Commenters recommended creating an 
item for

[[Page 62395]]

COVID-19 vaccinations in the MDS for residents and pulling data from 
there. Multiple commenters also proposed adding an item on PBJ data 
submissions for staff requirements. PBJ and MDS are already required, 
the commenters stated, and they explained that it would take less time 
to complete these reporting requirements through these platforms 
instead of NHSN. Additionally, a small number of commenters shared some 
privacy concerns and implications of tracking and documenting staff 
vaccination status through NHSN.
    Finally, a commenter indicated that they could use MDS to submit 
this information as they do for pneumonia and influenza; this would 
combine processes that are already in place. Another commenter also 
suggested REDCap as an alternative, as it is used for the Federal 
Partnership Vaccine Program.
    Response: We acknowledge the burdensome nature of some of these 
requirements and thank the staff for their hard work in complying with 
these requirements while providing care to their residents. Since this 
IFC was initially published, CMS and other agencies across HHS have 
released additional guidance in an effort to address some of these 
questions and concerns about how to comply to these requirements. 
Additionally, CMS has standing calls with several key stakeholders in 
an effort to address some of these questions and concerns. We recognize 
that some facilities have stronger infrastructures and more resources 
available to work with. However, while some of this reporting may seem 
duplicative of other State and local reporting requirements, it has 
been instrumental in developing a tailored pandemic response and allows 
authorities to understand where most resources need to be directed.
    Consistent vaccination reporting by LTC facilities via the NHSN 
will help to identify LTC facilities that have potential issues with 
vaccine confidence or slow uptake among either residents or staff or 
both. The NHSN is the nation's most widely used health care-associated 
infection (HAI) tracking system. It furnishes States, facilities, 
regions, and the government with data regarding problem areas and 
measures of progress. CDC and CMS use information from NHSN to support 
COVID-19 vaccination programs by focusing on groups or locations that 
would benefit from additional resources and strategies that promote 
vaccine uptake. CMS surveyors and State agency surveyors will use the 
vaccination data in conjunction with the reported data that includes 
COVID-19 cases, resident deaths, staff shortages, PPE supplies and 
testing. This combination of reported data is used by surveyors to 
determine individual facilities that need to have focused infection 
control surveys as well as technical assistance in expanding vaccine 
delivery and uptake. Facilities having difficulty with vaccine 
acceptance can be identified through examining trends in NHSN data; and 
the Quality Improvement Organizations (QIOs), groups of health quality 
experts, clinicians, and consumers organized to improve the quality of 
care delivered to people with Medicare, can provide assistance to 
increase vaccine acceptance. Specifically, QIOs may provide assistance 
to LTC facilities by targeting small, low performing, and rural nursing 
homes most in need of assistance, and those that have low COVID-19 
vaccination rates; disseminating accurate information related to access 
to COVID-19 vaccines to facilities; educating residents and staff on 
the benefits of COVID-19 vaccination; understanding nursing home 
leadership perspectives and assist them in developing a plan to 
increase COVID-19 vaccination rates among residents and staff; and 
assisting providers with reporting vaccinations accurately.
    We believe direct submission of data by LTC facilities through NHSN 
will show actions and trends that can be addressed more efficiently on 
a national level. All State health departments and many local health 
departments already have direct access through NHSN to LTC facilities' 
COVID-19 data and are using the data for their own local response 
efforts. Thus, reporting in NHSN will, in many cases, serve the needs 
of State and local health departments.
    Therefore, we are modifying the requirements at Sec.  
[thinsp]483.80(g)(1)(viii) to require that LTC facilities report to 
NHSN, on a weekly basis, unless the Secretary specifies a lesser 
frequency, the COVID-19 vaccination status and related data elements of 
all residents and staff. The data to be reported each week will be 
cumulative, that is, data on all residents and staff, including total 
numbers and those who have received the vaccine, as well as additional 
data elements. In this way, the vaccination status of every LTC 
facility will be known on a weekly basis. Data on vaccine uptake will 
be important to understanding the impact of vaccination on SARS-CoV-2 
infections and transmission in nursing homes. This understanding, in 
turn, will help CDC make changes to guidance to better protect 
residents and staff in LTC facilities. In addition, LTC facilities must 
also report any COVID-19 therapeutics administered to residents. CDC 
has currently defined ``therapeutics'' for the purposes of the NHSN as 
a ``treatment, therapy, or drug'' and stated that monoclonal antibodies 
are examples of anti-SARS-CoV-2 antibody-based therapeutics used to 
help the immune system recognize and respond more effectively to the 
SARS-CoV-2 virus.
    Our intent in mandating reporting of COVID-19 vaccines and 
therapeutics to NHSN is in part to monitor broader community vaccine 
uptake, but also to allow CDC to identify and alert CMS to facilities 
that may need additional support in regards to vaccine education and 
administration. The information reported to CDC in accordance with 
Sec.  [thinsp]483.80(g) will be shared with CMS and we will retain and 
publicly report this information to support protecting the health and 
safety of residents, staff, and the general public, in accordance with 
sections 1819(d)(3)(B) and 1919(d)(3) of the Act.
    Comment: A significant proportion of commenters recommended that 
CMS expand these vaccination reporting requirements to other facilities 
where Medicare beneficiaries receive care ([psychiatric] residential 
treatment facilities, psychiatric hospitals, adult foster care homes, 
group homes, and assisted living facilities) as these communities are 
at the highest risk for infection and severe illness. Another commenter 
stated that this requirement should also be expanded to include 
prisons, homeless shelters, forensic hospitals, supervised apartments, 
and inpatient hospice facilities. Several commenters also emphasized 
the importance of this due to the emergence of new variants and 
continued mitigation efforts.
    Some commenters highlighted the disproportionate impact that COVID-
19 has had on minority groups and individuals with disabilities. 
Because of this, commenters recommended that CMS arrange and collect 
vaccination reporting data by race and ethnicity. They stated that the 
data should be de-aggregated to examine the disparate outcomes for 
individuals based on sex, age, race, and ethnicity. Another commenter 
believes that in addition to data on race and ethnicity, data on sexual 
orientation, gender identity, preferred language, urban/rural 
environment, and service setting should be collected. The commenters 
stated that for people with intellectual and developmental 
disabilities, as well as other disability groups, the pandemic has 
revealed the need for public health

[[Page 62396]]

surveillance systems to include disability status as a basic 
demographic characteristic.
    Response: We agree that additional data collection could be useful 
in informing emergency preparedness and future pandemic response and we 
reaffirm our commitment to addressing disparities in healthcare that 
have disproportionately affected underserved populations. However, in 
an effort to mitigate some of the burden concerns expressed by 
commenters, we will not be adding additional data elements or reporting 
requirements. Instead, we will maintain the current reporting 
requirements for the reporting of staff and resident vaccinations. The 
May 2021 IFC sought information regarding the potential application of 
these requirements in other congregate living settings and suggested 
ICFs-IID report vaccine administration. However, in light of the 
commenters overall concerns regarding the burden of these reporting 
requirements, we do not believe that it is appropriate to mandate these 
requirements for other congregate living settings at this time. 
Additionally, CMS does not have the authority to extend these reporting 
requirements to some of the settings that commenters discuss, including 
prisons, assisted living facilities, supervised apartments, or homeless 
shelters. We appreciate this feedback and will consider it for future 
rulemaking.
    We believe that all LTC facility residents and the staff who care 
for them, should be provided with ongoing access to vaccination against 
COVID-19. The accountable entities responsible for the care of 
residents and clients of LTC facilities must proactively pursue access 
to COVID-19 vaccination due to a unique set of challenges that 
generally prevent these residents and clients from independently 
accessing the vaccine. These challenges create potential disparities in 
vaccine access for those residing in LTC facilities. It is CMS's 
understanding that very few individuals who are residents of LTC 
facilities are likely able to independently schedule or travel to 
public offsite vaccination opportunities. People reside in LTC 
facilities because they need ongoing support for medical, cognitive, 
behavioral, and/or functional reasons. Because of these issues, they 
may be less capable of self-care, including arranging for preventive 
health care. Independent scheduling and traveling off-site may be 
especially challenging for people with low health literacy, 
intellectual and developmental disabilities, dementia including 
Alzheimer's disease, visual or hearing impairments, or severe physical 
disability. To support national efforts to control the spread of COVID-
19, we are finalizing the LTC facility infection control regulations 
related to reporting COVID-19 data at Sec.  [thinsp]483.80(g)(1)(viii) 
so that they will continue in effect. We have not finalized a sunset 
date for these requirements in order to allow for continued monitoring 
and surveillance of vaccine delivery and uptake.
    Comment: Several commenters shared their stance on vaccination and 
indicated that vaccines should not be required and that this should be 
a decision between an individual and their provider. A commenter 
expressed feeling being ``discriminated'' against because of the 
commenter's decision to not receive the COVID vaccination.
    Response: The IFCs did not finalize a vaccination mandate for LTC 
staff or residents; therefore, these comments outside the scope of this 
rule. We are maintaining the requirement at Sec.  483.80(g)(1)(viii) 
for the reporting of staff and resident vaccinations.
    Final Decision: After consideration of the public comments we 
received on the COVID-19 reporting requirements, we are finalizing the 
requirements at Sec.  483.80(g)(1) through (3) with the following 
modifications: (1) Reporting frequency of the information specified in 
Sec.  483.80(g)(1) is modified to weekly, unless the Secretary 
specifies a lesser frequency; (2) Reporting data elements are 
unchanged, but may be reduced, contingent on the state of the pandemic 
and at the discretion of the Secretary; and (3) with a sunset date of 
December 31, 2024 for all reporting requirements, with the exclusion of 
the requirements at Sec.  [thinsp]483.80(g)(1)(viii).
BILLING CODE P

[[Page 62397]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.056


[[Page 62398]]


BILLING CODE C

XI. Collection of Information Requirements and Waiver of Proposed 
Rulemaking

A. Statutory Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In the CY 2022 HH PPS proposed rule, we solicited public comment on 
each of these issues for the following sections of this document that 
contain information collection requirements.

B. Collection of Information Requirements

1. HH QRP
    In section IV.C. of the proposed rule, we proposed 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 data to CMS under the HH QRP. For 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 38.
[GRAPHIC] [TIFF OMITTED] TR09NO21.057

    In section IV.C.4.a. of the final rule, we are finalizing our 
proposal 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. Further, we are finalizing our proposal to remove OASIS item 
M2016 used to calculate this measure. This item removal results in a 
decrease in overall burden.
    In sections IV.C.4.b. of this final rule, we are finalizing our 
proposal to adopt the Home Health Within Stay Potentially Preventable 
Hospitalization measure which is claims-based. We are replacing 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, their replacement or 
removal does not impact our collection of information.
    Therefore, the result of our final policies is 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 assumed that each 
data element requires 0.3 minutes of clinician time to complete. 
Therefore, we estimated 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 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 38 Individual providers 
determine the staffing necessary.
    Table 39 shows the total number of assessments submitted in CY 2020 
and estimated costs at each time point.

[[Page 62399]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.058

    Based on the data in Tables 38 and 39 for the 11,400 active 
Medicare-certified HHAs, we estimated 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 as derived in the RIA section. This 
corresponds to an estimated decrease in clinician burden associated 
with the changes to the HH QRP of approximately 3.1 hours per HHA or 
approximately 34,785 hours for all HHAs. This decrease in burden will 
be accounted for in the information collection under OMB control number 
0938-1279 (Expiration date: 12/31/2021).
    In section IV.C. of this final rule, we are finalizing our proposal 
to revise the 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.
    We did not receive any comments on this proposal and therefore are 
finalizing this provision without modification.
2. ICRs Regarding Revised Compliance Dates for Certain Reporting 
Requirements
a. IRF QRP Requirements
    In section VIII.A. of the proposed rule, we proposed to revise the 
compliance date for certain reporting requirements adopted for the IRF 
QRP. We believe that the burden associated with the IRF QRP proposed 
provision is the time and effort associated with reporting data. As of 
April 4, 2021, there are approximately 1,109 IRFs reporting IRF QRP 
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 proposed provision would 
not affect the information collection burden for the IRF QRP.
    We did not receive any comments on this proposal and therefore are 
finalizing this provision without modification.
b. LTCH QRP Requirements
    In section VIII.B. of the proposed rule, we proposed 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 data. As of April 21, 
2021, there are approximately 363 LTCHs reporting LTCH QRP 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 
(Expiration date: 12/31/2022). Therefore, this proposal would not 
affect the information collection burden for the LTCH QRP.
    We did not receive any comments on this proposal and therefore are 
finalizing this provision without modification.
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 the final rule, we revised 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 finalized 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 
met the patient's needs. The home health aide would not need to be 
present during this visit. We are also finalizing with modification 
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 each home health aide while he or she is performing care for 
each of their assigned patients. 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. In 
addition, we are finalizing Sec.  484.80(h)(3), which includes 
retraining and competency evaluations related to both the skills 
verified as deficient and any related skills. We believe that this 
would not add any information collection burden and would 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 and approved under OMB control number: 0938-1299 
(Expiration date: 06/30/2024). Therefore, we did not propose to seek

[[Page 62400]]

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 requested 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.
    We did not receive comments on his section of the collection of 
information proposed and therefore are finalizing this provision 
without modification.
b. ICRs Related To Permitting Occupational Therapist To Complete the 
Initial and Comprehensive Assessments for Home Health Agencies
    In section IV.D. of the final rule, we are implementing Division 
CC, section 115 of CAA 2021 by finalizing 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 not initially on the home health plan of care. These 
changes, which 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 finalized 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 did not propose 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 requested 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.
    We did not receive comments on his section of the collection of 
information proposed and therefore are finalizing this provision 
without modification.
4. ICRs Regarding Medicare Provider and Supplier Enrollment Provisions
    We did not anticipate any information collection burden associated 
with our provider and supplier enrollment proposed provisions. Since 
most of the provisions that we proposed and are finalizing 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 40 presents the mean hourly wage, 
the cost of fringe benefits and overhead (calculated at 100 percent of 
salary), and the adjusted hourly wage.
[GRAPHIC] [TIFF OMITTED] TR09NO21.059

    We did not receive comments on the ICR proposal for hospice survey 
and enforcement requirements and therefore are finalizing the 
application and re-application procedures for national accrediting 
organizations without modification. CMS has removed the proposed burden 
estimates for the surveyor qualifications and prohibition of conflicts 
of interest because no information collection is actually required.
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. 
At the time of the proposed rule, the information collection request 
for the Form CMS-2567, titled ``Statement Of Deficiencies And Plan Of 
Correction'' was active an approved under OMB control number 0938-0391 
(Expiration date: 6/30/2021); however, it did not account for any 
information collection related burden associated with AO use. As 
discussed in section VII.B.2.b. of the proposed rule, we note that the 
Form CMS-2567 did not include a place for the name of the AO completing 
the survey and AOs are not addressed in the instructions. These were 
minor revisions to the form and we submitted the revised information 
collection request to OMB for approval.
    We discussed in section VII.B.2.b. of the 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 noted that AOs would need to make a one-
time update to their existing proprietary electronic documentation 
systems to include the Form CMS-2567. We

[[Page 62401]]

estimated 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 estimated 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 estimated 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 estimated that the cost burden related to the work performed by 
two computer and information analysts would be $4,646.40 (24 hours x 
$193.60 ($96.80 x 2)). The total cost across the three AOs would be 
$13,939.20 (3 AOs x $4,646.40). The burden associated with this 
requirement was submitted to OMB for approval under OMB control number 
0938-0391. We sought comments that would help us to develop an accurate 
estimate of the cost and time burden that would result from this 
collection of information. No comments were received through the 
proposed rule public comment period.
    We sought OMB approval via the required notice and comment periods 
separate from the proposed rulemaking. The revised information 
collection request was announced in the Federal Register on July 13, 
2021 (86 FR 36751) and the public had the opportunity to review and 
comment. We received one comment on the Form CMS-2567 which was outside 
the scope of the information collection request. OMB approved the 
revised Form CMS-2567, titled ``Statement Of Deficiencies And Plan Of 
Correction'' under OMB control number 0938-0391 (Expiration date: 02/
28/2022) on August 25, 2021.
6. HHVBP Expanded Model
    In section III. of the final rule, we proposed policies necessary 
to implement the expanded Home Health Value-Based Purchasing Model (see 
final 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.
7. COVID-19 Reporting Requirements for Long Term Care Facilities
    Section 483.80(g) sets forth the requirements for COVID-19 
reporting for LTC facilities. Currently, Sec.  483.80(g)(1) states that 
LTC facilities must electronically report information about COVID-19 in 
a standardized format specified by the Secretary. Specific pieces of 
information that must be reported are set forth in that subsection. The 
required information includes, ``(viii) The COVID-19 vaccine status of 
residents and staff, including total numbers of residents and staff, 
numbers of residents and staff vaccinated, numbers of each dose of 
COVID-19 vaccine received, and COVID-19 vaccination adverse events.'' 
In this rule, we are revising the requirements, in response to comments 
that expressed concern about burden, to modify the reporting frequency 
to weekly, unless the Secretary specifies a lesser frequency, to add 
the potential for the data elements to be reduced in the future, 
contingent on the state of the pandemic and at the discretion of the 
Secretary. In addition, we are providing a sunset, or expiration date, 
of December 31, 2024, for all of the required information in paragraph 
(g)(1), except for the information set out at paragraph (g)(1)(viii) 
that covers that COVID-19 vaccine status of residents and staff.
    Since the infection prevention and control program (IPCP) is the 
responsibility of the infection preventionist (IP), the IP would be 
responsible for making the necessary changes to the policies and 
procedures to comply with the requirements in this rule (42 CFR 
483.80(b)). According to the Bureau of Labor Statistics (BLS), a 
registered nurse in an LTC facility earns a mean hourly wage of 
$34.66.\221\ For the total hourly cost, we doubled the mean hourly wage 
for a 100 percent increase to cover overhead and fringe benefits, 
according to standard HHS estimating procedures. Hence, the hourly-
adjusted wage for an IP in an LTC facility is $69.
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    \221\ BLS. May 2020 National Occupational Employment and Wage 
Estimates United States. United States Department of Labor. Accessed 
at https://www.bls.gov/oes/current/oes_nat.htm. Accessed on August 
25, 2021.
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    We estimate that it would require 1 hour of the IP's time to update 
the required policies and procedures to comply with the changes in this 
rule. For each LTC facility, the burden would be 1 hour at an estimated 
cost of $69. According to CMS, there are currently 15,401 LTC 
facilities. Hence, the total burden for these requirements would be 
15,401 hours (1 x 15,401) at an estimated cost of $1,062,699 (15,401 x 
$69).
    Comment: Some commenters disagreed with the estimate in the IFC 
that reporting takes about 30 minutes, and instead they indicated that 
it would take about 1 to 2 hours to complete. Additionally, many 
commenters noted that the time by which the weekly reporting would have 
to be submitted (every Sunday by 11:59 p.m.) is not realistic. This 
requirement, they argue, is challenging to meet as there are often less 
staff working on the weekends, new residents are often admitted on the 
weekend, and Mondays are often holidays.
    Response: After reviewing this comment and other feedback that we 
have received, we have made modifications to the reporting requirement 
for LTC facilities regarding COVID-19 in order to address public 
commenter's concerns regarding burden. The changes in this rule will 
provide the Secretary with the discretion to reduce the amount of 
information they must report to the NHSN in the future. Currently they 
must report no less frequently than weekly. This rule changes that to 
weekly, unless the Secretary specifies a lesser frequency. In addition, 
we have inserted a sunset provision for all of the information 
elements, except for the COVID-19 vaccine status for its residents and 
staff. The sunset or expiration date is December 31, 2024. After 
consideration of the public comments we received, we are finalizing the 
requirements at Sec.  483.80(g)(1) through (3) with the following 
modifications: Reporting frequency is modified to weekly, unless the 
Secretary specifies a lesser frequency; (2) Reporting data elements are 
unchanged, but may be reduced, contingent on the state of the pandemic 
and at the discretion of the Secretary; and (3) with a sunset date of 
December 31, 2024 for all reporting requirements with the exclusion of 
Sec.  [thinsp]483.80(g)(1)(viii).

C. Submission of PRA-Related Comments

    We have submitted a copy of this final rule to OMB for its review 
of the rule's information collection requirements. The requirements are 
not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the collections discussed in this rule, please visit the CMS Web 
site at https://

[[Page 62402]]

www.cms.gov/Regulations-and-Guidance/Legislation/
PaperworkReductionActof1995/PRA-Listing.

D. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and substance 
of the proposed rule or a description of the subjects and issues 
involved. This procedure can be waived, however, if an agency finds 
good cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the rule issued.
    In section IV.D.2.d. of this final rule, we include a technical 
change to Sec.  484.50(d)(5) that was not proposed. We believe that a 
notice-and-comment rulemaking procedure is unnecessary for the 
technical change that added ``or allowed practitioner'' at Sec.  
484.50(d)(5) because we inadvertently omitted the reference at this 
location during prior rulemaking (85 FR 27550). This change is 
technical in nature and ensures that all that all providers, physicians 
and allowed practitioners issuing orders for the patient are informed 
of a discharge of the patient. This technical correction aligns with 
changes made throughout the HHA CoPs in which we amended the home 
health regulations by adding ``or allowed practitioner(s)''. Therefore, 
we find good cause to waive the notice of proposed rulemaking.

XII. 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 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,\222\ 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.
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    \222\ https://www.cms.gov/files/document/certification-home-health-value-based-purchasing-hhvbp-model.pdf.
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    We are finalizing in this rule that 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 with CY 2022 as a pre-implementation year. As discussed in the 
preamble, CY 2023 will be the first performance year, beginning January 
1, 2023; and CY 2025 will be the first payment year. 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 2023 through 2027, of $3,376,000,000. 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 noted in section III.A.3.b. of the final rule, 
under the expanded duration and scope of this Model, we would continue 
to examine whether the 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

[[Page 62403]]

Medicare beneficiaries, as well as reductions in Medicare spending.
3. HH QRP
    Section 1895(b)(3)(B)(v) of the Act authorizes the HH QRP which 
requires HHAs to submit data in accordance with the requirements of the 
HH QRP. 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 for that calendar year by 2 percentage points.
    Finalizing the removal of the Drug Education on All Medications 
Provided to Patient/Caregiver measure supports the CMS Meaningful 
measures framework by reducing where possible the burden on providers 
and clinicians. The addition of the Potentially Preventable 
Hospitalization measure, which is claims-based, to the HH QRP effective 
January 1, 2022 as a replacement of 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) beginning with the CY 2023 HH QRP 
addresses attribution issues identified and would capture observation 
stay which are currently not addressed with the existing measures. The 
public reporting of the Application of Percent of Residents 
Experiencing One or More Major Falls with Injury (NQF #0674) and The 
Application of Percent of Long-Term Care Hospital Patients with an 
Admission and Discharge Function Assessment and a Care Plan That 
Addresses Function (NQF #2631) supports the requirements that the 
Secretary provide public reporting of PAC provider performance, 
including HHAs, on quality measures under section 1899B(c)(1) of the 
Act. Given the recent Executive order on ``Advancing Racial Equity and 
Support for Underserved Communities throughout the Federal 
Government,'' \223\ we proposed an earlier effective date for the 
adoption of the assessment instruments whereby HHAs would begin 
reporting on January 1, 2023 on items related to Social Determinants of 
Health.
---------------------------------------------------------------------------

    \223\ Executive Order On Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government $verbar; The 
White House.
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a. Virtual Supervision of HHA Aides
    In accordance with sections 1861(o) and 1891 of the Act, the 
Secretary has established in regulations the requirements that an HHA 
must meet to participate in the Medicare program. In this rule, we are 
finalizing our proposed changes to make permanent selected regulatory 
blanket waivers related to home health aide supervision that we 
extended to Medicare participating home health agencies during the 
COVID-19 PHE.
b. Permitting Occupational Therapists To Conduct the Initial Assessment 
Visit and Complete the Comprehensive Assessment for Home Health 
Agencies Under the Medicare Program
    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. These conforming changes are 
being finalized in this regulation.
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 provisions 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 provisions will 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.
7. Survey and Enforcement Requirements for Hospice Providers
    In accordance with section 407 of the CAA 2021, we are making 
conforming regulations which establish new hospice program survey and 
enforcement requirements. We believe these provisions not only meet the 
statutory requirements but will 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.
8. COVID-19 Reporting Requirements for Long Term Care Facilities
    The COVID-19 PHE has precipitated the greatest health crises since 
the 1918 Influenza pandemic. Of the approximately 666,440 Americans 
estimated to have died from COVID-19

[[Page 62404]]

through September 2021,\224\ over one-third are estimated to have died 
during or after a nursing home stay.\225\ The development and large-
scale utilization of vaccines to prevent COVID-19 cases have the 
potential to end future COVID-19 related nursing home deaths. In 
addition, continued reporting of COVID-19 data in LTC facilities, 
beyond the COVID-19 PHE, will have a significant positive impact by 
maintaining effective surveillance of this novel virus. This final rule 
finalizes the important reporting requirements that were issued in 
previous IFCs so that CMS can continue to respond to facilities in need 
of additional technical support and oversight, should they experience 
new COVID-19 infections.
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    \224\ https://covid.cdc.gov/covid-data-tracker/#trends_dailycases.
    \225\ https://www.kff.org/coronavirus-covid-19/issue-brief/state-covid-19-data-and-policy-actions/.
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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.
    Based on our estimates, OMB's Office of Information and Regulatory 
Affairs has determined this rulemaking is ``economically significant'' 
as measured by the $100 million threshold, and hence also a major rule 
under Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (also known as the Congressional Review Act). Accordingly, 
we have prepared, to the best of our ability, a final Regulatory Impact 
Analysis that presents the costs and benefits of the rulemaking.

C. Detailed Economic Analysis

1. Impacts for the HH PPS
    This final rule updates Medicare payments under the HH PPS for CY 
2022. The net transfer impact related to the changes in payments under 
the HH PPS for CY 2022 is estimated to be $570 million (3.2 percent). 
The $570 million increase in estimated payments for CY 2022 reflects 
the effects of the CY 2022 home health payment update percentage of 2.6 
percent ($465 million increase), an estimated 0.7 percent increase that 
reflects the effects of an updated FDL ($125 million increase) and an 
estimated 0.1 percent decrease in payments due to the changes in the 
rural add-on percentages for CY 2022 ($20 million decrease). We note 
that we inadvertently did not account for the impact of the proposed 
changes to the FDL in the CY 2022 HH PPS proposed rule (86 FR 35873). 
However, in this final rule we have included the payment effects of the 
new lower FDL in Table 41.
    We use the latest data and analysis available. However, 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 that began 
in CY 2020 and ended 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 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 41 represents how HHA revenues are likely to be affected by 
the finalized policy changes 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 41 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 recalibration of the case-Mix weights offset by the 
case-mix weights budget 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 final CY 2022 home health payment update 
percentage. The seventh column shows the payment effects of the new 
lower FDL and the last column shows the combined effects of all the 
finalized provisions.
    Overall, it is projected that aggregate payments in CY 2022 would 
increase by 3.2 percent which reflects the 2.6 payment update 
percentage increase, the 0.7 percent increase from lowering the FDL and 
the 0.1 percent decrease from the effects of the rural add-on policy. 
As illustrated in Table 41, 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 LUPA or paid as outlier payments, and the degree of Medicare 
utilization.
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BILLING CODE C
2. Impacts for the Expanded HHVBP Model
    Based on finalized policies discussed in section III.A. of this 
final rule, Tables 43 and 44 display our analysis of the distribution 
of possible payment adjustments using 2019 data as the performance 
year, while Table 42 provides information on the estimated impact of 
this finalized 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.
    Table 43 shows the value-based incentive payment adjustments for 
the estimated 7,500-plus HHAs that would qualify to compete in the 
HHVBP Model expansion based on the CY 2019 data stratified by size, as 
defined in section III.F. of the final rule. For example, Table 43 
shows California has 69 HHAs that do not provide services to at least 
60 unique beneficiaries in the prior calendar year, and therefore, 
would be considered to be in the smaller-volume cohort under the Model 
expansion. Using 2019 performance year data and the finalized 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.
    It was brought to our attention after the close of the comment 
period for the proposed rule that the larger-volume cohort section of 
Table 43: HHA Cohort Payment Adjustment Distributions as presented in 
the proposed rule (86 FR 35994 and 35995) inadvertently ended with the 
entry for the state of Montana (MT). In this final rule, we are 
presenting Table 43 from the proposed rule in its entirety, along with 
the other impact tables included in the proposed rule.
    Table 43 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 C
3. Impacts for the HH QRP for CY 2022
    Estimated impacts for the HH QRP for CY 2022 are based on analysis 
discussed in section XI.B. of this final rule. Finalizing the HH QRP 
requirements reduces burden to the active collection under OMB control 
number #0938-1279 (CMS-10545; expiration 12/31/21).
    Failure to submit HH QRP 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 for that calendar year by 2 
percentage points. For the CY 2021, representing HH QRP data collected 
from July 1, 2019 to June 30, 2020, by HHAs, 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 out of a 
total $16.7B for all HHAs.
    As discussed in section IV.C. of this final rule, we are finalizing 
the removal of one OASIS-based measure beginning with the CY 2023 HH 
QRP. The assessment-based measure we are removing is: (1) Drug 
Education on All Medications Provided to Patient/Caregiver during All 
Episodes of Care. We also are replacing 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 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 would be no impact to our collection of information.
    Section XI.B. of this final 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 would submit HH QRP 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

[[Page 62411]]

annualized cost to HHAs, discounted at 7 percent relative to year 2020, 
over a perpetual time horizon beginning in CY 2023.
    We described the estimated burden and cost reductions for these 
measures in section XI.B. of this final rule.
    In summary, the HH QRP measure removals results 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 45:
[GRAPHIC] [TIFF OMITTED] TR09NO21.068

    We did not receive comments on the outlined burden estimates for 
the HH QRP proposals.
4. Changes to the Home Health CoPs
a. Virtual Supervision of HHA Aides
    In section IV.D. we are finalizing the 14-day aide supervisory 
visit at Sec.  484.80(h)(1) with modification. We will permit the one 
virtual supervisory visit per patient per 60-day episode. This visit 
must only be permitted only in rare instances for circumstances outside 
the HHA's control and must include notations in the medical record 
detailing the circumstances. We are finalizing the supervisory visit 
requirements for non-skilled patients with modification. We are 
modifying the proposed semi-annual onsite visit to require that this 
visit be conducted on ``each'' patient the aide is providing services 
to rather than ``a'' patient. Lastly, we are finalizing the assessment 
of deficient skills as proposed. 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 
finalizing 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, this may facilitate efficiencies 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 would cause any appreciable 
amount of expense or anticipated saving and we do not believe this 
standard would impose any additional regulatory burden.
5. Impact of the CY 2022 Payment for Home Infusion Therapy Services
    We are finalizing two provisions in this final 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 home infusion therapy service payments 
using the CY 2022 GAFs. The provision to maintain the percentages for 
the initial subsequent policy as well as the provision to use the CY 
2022 GAFs to wage adjust home infusion therapy service payments are 
both implemented in a budget neutral manner, therefore, there is no 
estimated impact on payments to HIT suppliers due to these policies. 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.\226\ For CY 2022, we 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 
the CY 2022 home infusion therapy services payment amounts. The 
unadjusted CY 2021 rates will be updated for CY 2022 in accordance with 
section 1834(u)(3) of the Act using the 5.4 percentage increase in the 
CPI-U for the 12-month period ending in June of 2021 reduced by the 
productivity adjustment of 0.3 percentage point, which results in a 5.1 
percent increase ($300,000) to HIT suppliers for CY 2022.
---------------------------------------------------------------------------

    \226\ Medicare Learning Network Connects ``Special Edition: 
Physician Fee Schedule Update'' (January 7, 2021). https://www.cms.gov/files/document/2021-01-07-mlnc-se.pdf.
---------------------------------------------------------------------------

6. Medicare Provider and Supplier Enrollment Provisions
a. General Impact
    Similar to our position regarding information collection 
requirements, and except as discussed in section XI.C.6.b. of this 
final rule, we did not anticipate any costs, savings, or transfers 
associated with our proposed provider and supplier enrollment 
provisions. Most of these provisions have been in sub-regulatory 
guidance for a number of years, and we are merely incorporating them 
into regulation; those 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 the proposed rule, we proposed 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 sub-regulatory guidance permits the provider or 
supplier to bill for services or items furnished up to 30 days prior to 
the

[[Page 62412]]

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 the proposed rule.
    Although the figure varies widely by individual provider or 
supplier, internal CMS data suggests that the average provider/supplier 
impacted by the aforementioned 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 again 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 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:
[GRAPHIC] [TIFF OMITTED] TR09NO21.069

    We did not receive comments on this estimate and are therefore 
finalizing it as proposed and without modification.
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 the 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 sought comments that would help us to develop an accurate estimate 
of the cost and time burden that would result from this collection of 
information.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
d. Surveyor Qualifications and Prohibition of Conflicts of Interest 
(Sec.  488.1115)
    We proposed at Sec.  488.1115, to require AO hospice program 
surveyors to complete the CMS hospice basic training currently 
available online. We have removed the proposed burden estimates for the 
surveyor qualifications because we do not expect any increase in burden 
for this provision. In fact, for AOs with hospice programs, this may 
facilitate efficiencies by removing the need for AOs to develop and 
maintain their own training courses based on the CMS regulations and 
process. Therefore, the regulatory impact (including benefits of such 
provisions) is negligible. Additionally, we did not receive comments on 
the estimated impact.
    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 changes would 
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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
e. Survey Teams (Sec.  488.1120)
    We proposed 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. 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.

[[Page 62413]]

    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 x $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 sought 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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification.
g. Enforcement Remedies (Sec. Sec.  488.1200 through Sec.  488.1265)
    We proposed 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. These data were 
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.
    We did not receive comments on this estimated impact and therefore 
are finalizing this section without modification. However, we have 
removed the SFP regulatory impact analysis because we are not 
finalizing the SFP in this rule.
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 final rule does not impose any new information collection 
requirements under the IRF QRP. However, this final 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 the proposed rule, for purposes of 
calculating the FY 2023 Annual Increase Factor (AIF), we proposed that 
IRFs would begin collecting 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 collecting 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. If finalized as proposed, IRFs would use the 
IRF-PAI V4.0 to submit IRF QRP data.
    We are finalizing the proposed IRF QRP requirements, which do not 
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 provision does not impose any new information 
collection requirements under the LTCH QRP. However, this proposed 
provision does reference associated information collections that are 
not discussed in the regulation text of the proposed or this final 
rule. The following is a discussion of this information collection 
discussed in section XI. of the proposed rule, 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 the proposed rule for purposes of 
calculating the FY 2023 Annual Payment Update (APU), we proposed that 
LTCHs would begin collecting 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 
LTCHs would begin to collect data on certain

[[Page 62414]]

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. If finalized as 
proposed, LTCHs would use the LTCH Continuity Assessment Record and 
Evaluation (CARE) Data Set (LCDS) V5.0 to submit LTCH QRP data.
    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).
9. COVID-19 Reporting Requirements for Long Term Care Facilities
a. Anticipated Cost
    Section 483.80(g) sets forth the requirements for COVID-19 
reporting for LTC facilities. Currently, Sec.  483.80(g)(1) states that 
LTC facilities must electronically report information about COVID-19 in 
a standardized format specified by the Secretary. Specific pieces of 
information that must be reported are set forth in that subsection. One 
of the information requirements is ``the COVID-19 vaccine status of 
residents and staff, including total numbers of residents and staff, 
numbers of residents and staff vaccinated, numbers of each dose of 
COVID-19 vaccine received, and COVID-19 vaccination adverse events''.
    This final rule requires LTC facilities to continue to report 
certain information required by CDC's NHSN. However, this change will 
provide flexibility if there are future changes to the information NHSN 
requires to be reported. In addition, we are revising paragraph (g)(1) 
to include a sunset, or expiration date, of December 31, 2024, for all 
of the required information in paragraph (g)(1), except for the 
information set out at (g)(1)(viii) that covers that COVID-19 vaccine 
status of residents and staff. In Sec.  483.80(g)(2), we are removing 
the ``less'' after ``no'' and inserting ``more'' so that the required 
frequency of reporting is no more than weekly instead of no less than 
weekly.
    For the estimated costs contained in the analysis below, we used 
data from the United States Bureau of Labor Statistics (BLS) to 
determine the mean hourly wage for the positions used in this 
analysis.\227\ For the total hourly cost, we doubled the mean hourly 
wage for a 100 percent increase to cover overhead and fringe benefits, 
according to standard HHS estimating procedures. If the total cost 
after doubling resulted in .50 or more, the cost was rounded up to the 
next dollar. If it was 0.49 or below, the total cost was rounded down 
to the next dollar. The total costs used in this analysis are indicated 
in the chart below.
---------------------------------------------------------------------------

    \227\ BLS. May 2020 National Occupational Employment and Wage 
Estimates United States. United States Department of Labor. Accessed 
at https://www.bls.gov/oes/current/oes_nat.htm. Accessed on August 
25, 2021.
[GRAPHIC] [TIFF OMITTED] TR09NO21.070

    As determined in the COI section, the burden for ICR requirements 
for this rule would be 15,401 hours (1 x 15,401) at an estimated cost 
of $1,062,669 (15,401 x $69). In addition to the ICR requirements, 
there would be addition requirements for the IP to report on these 
changes in policies and procedures to the medical director, director of 
nursing (DON), and an administrator. We believe this would require an 
addition 10 minutes or 0.1666 hours for the IP, medical director, DON, 
and administrator. According to Table 1 above, the medical director 
earns an adjusted hourly wage of $171. Thus, the burden for the medical 
director would be 0.1666 hours at an estimated cost of $28.50 (0.1666 x 
$171). The adjusted hourly wage for both the DON and administrator is 
$96. Thus, the burden for each of them would be 0.1666 hours at an 
estimated cost of $16 (0.1666 x $96) and for both it would be 0.3332 
hours at an estimated cost of $32. The adjust hourly wage for the IP is 
$69. The burden for the IP would be 0.1666 hours at an estimated cost 
of $11.50 (0.1666 x $69). Thus, the burden for each LTC facility would 
be 0.67 hour or about 40 minutes (0.1666 x 4) at an estimated cost of 
$72 ($28.50 + $16 + $16 + $11.50). For all 15,401 LTC facilities the 
total burden would be 10,319 hours (0.67 x 15,401) at an estimated cost 
of $1,108,872 (15,401 x $72).
    Thus, the total burden for the requirements in this rule is 25,720 
hours (15,401 + 10,319) at an estimated cost of $2,171,541 ($1,062,669 
+ $1,108,872).
b. Anticipated Benefits
    These changes will provide LTC facilities will more flexibility and 
eliminate unnecessary burden on these facilities by revising the 
requirements for the reporting frequency to no more

[[Page 62415]]

than weekly, with the possibility of reduced reporting at the 
discretion of the Secretary and the data reporting elements may be 
changed in the future. The reporting requirements, with the exception 
of the requirements at Sec.  [thinsp]483.80 (g)(1)(viii), will end on 
December 31, 2024. We did not receive comments on this proposal and 
therefore are finalizing this provision without modification.

D. Limitations of Our Analysis

    Our estimates of the effects of this final rule are subject to 
significant uncertainty. It is difficult to estimate the burden and 
savings from the proposed changes that are being finalized in this rule 
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 sought 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 final 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 final rule would be the similar to the number 
of reviewers on this 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 also recognize that different types of 
entities are in many cases affected by mutually exclusive sections of 
this final rule, and therefore for the purposes of our estimate we 
assume that each reviewer reads approximately 50 percent of the rule. 
While we solicited comments on the approach in estimating the number of 
entities which would review the proposed rule and the assumption of how 
much of the rule reviewers would read, we did not receive any comments.
    Therefore, 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. Assuming an 
average reading speed of 250 words per minute, we estimate that it 
would take approximately 5.73 hours for the staff to review half of 
this final rule, which consists of approximately 171,832 words. For 
each HHA that reviews the rule, the estimated cost is $654.34 (5.73 
hours x $114.24). Therefore, we estimate that the total cost of 
reviewing this final rule is $135,447.61 ($654.34 x 207 reviewers). For 
purposes of this estimate, the number of reviewers of this year's rule 
is equivalent to the number of comments received for the CY 2022 HH PPS 
proposed rule.

F. Alternatives Considered

1. HH PPS
    For the CY 2022 HH PPS final rule, we considered alternatives to 
the provisions articulated in section II. of this final 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 rate setting, which would be CY 2020 claims data. Additionally, 
we considered alternatives to our case-mix recalibration proposal. 
These alternatives included an option to 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. HHVBP
    We considered alternatives to the proposed policies in sections 
III.A. and III.B. of the 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 proposed. However, this approach 
could

[[Page 62416]]

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. 
We refer readers to Table 43 of this final rule for an analysis of the 
shifts of expenditures, as represented by the average payment 
adjustments for small- and large-volume HHAs in each of the States, 
territories, and the District of Columbia, simulated with the proposed 
national size-based cohorts using 2019 data and a maximum adjustment of 
 5 percent. When the small- and large-volume HHAs in each 
of the States, territories, and the District of Columbia are combined, 
the average payment adjustment for the majority of States, territories, 
and the District of Columbia is within  1 percent, with 
none exceeding  2 percent. 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.
3. Deactivation Payment Prohibition
    As discussed in section VI.B. of the proposed rule, we proposed 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 the proposed and final rules, 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.
4. COVID-19 Reporting in Long-Term Care Facilities
    We considered retaining all of the requirements in Sec.  483.80(g). 
However, we anticipate that NHSN will change the information items that 
are required in the future. The change made to this section will enable 
LTC facilities to continue to report the information required by the 
NHSN without requiring the facilities to report information that the 
NHSN no longer requires. We also considered not setting a sunset or 
expiration date for all of the requirements for the information 
elements in paragraph (g)(1). However, we do not believe that all of 
this information will be needed in the future. The information on the 
vaccine status for the residents and staff is necessary so that health 
authorities can assess the needs in this area though. Thus, we have 
added the sunset date of December 31, 2024 for all of the information 
elements, except for paragraph (g)(1)(viii) which covers the 
vaccinations. Hence, this reduces the burden for the LTC facilities 
while maintaining the requirement to report information so that health 
authorities can assess the COVID-19 vaccination environment in LTC 
facilities. There has also been some confusion created by the language 
in (g)(2), which indicated that the frequency of the reporting was to 
be ``no less than weekly''. We considered retaining the language in 
(g)(2); however, we believe that the confusion was adding undue burden 
to some LTC facilities. Thus, we have changed the language to read, 
``no more than weekly'' to address any confusion. LTC facilities should 
report as NHSN requires.

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 46, 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] TR09NO21.071

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 47, we have prepared an accounting statement showing 
the classification of the expenditures associated with this final rule 
as they relate to hospitals and SNFs. Table 47 provides our best 
estimate of the decrease in Medicare payments under the expanded HHVBP 
Model.

[[Page 62417]]

[GRAPHIC] [TIFF OMITTED] TR09NO21.072

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 48, we have prepared an accounting statement showing 
the classification of the expenditures associated with this final rule 
as they relate to HHAs. Table 48 provides our best estimate of the 
decrease in Medicare payments.
[GRAPHIC] [TIFF OMITTED] TR09NO21.073

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 
\228\ and approximately 96 percent of HHAs and home infusion therapy 
suppliers are considered small entities. Table 49 shows the number of 
firms, revenue, and estimated impact per home health care service 
category.
---------------------------------------------------------------------------

    \228\ https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
[GRAPHIC] [TIFF OMITTED] TR09NO21.074

    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

[[Page 62418]]

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 final rule, our 
provision to prohibit payments for services and items furnished by 
deactivated providers and suppliers will affect only a very limited 
number of Medicare providers and suppliers. Therefore, the Secretary 
has determined that this HH PPS final 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 a 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 43 and 44 of this 
final rule for our analysis of payment adjustment distributions by 
State, HHA characteristics, HHA size and percentiles.
    Thus, the Secretary has certified that this final 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.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a metropolitan statistical area and has fewer 
than 100 beds. This rule is not applicable to hospitals. Therefore, the 
Secretary has certified that this final rule will not have a 
significant economic impact on the operations of small rural hospitals.

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 final 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 final rule 
will result in an estimated net increase in home health payments 3.2 
percent for CY 2022 ($570 million). The $570 million increase in 
estimated payments for CY 2022 reflects the effects of the CY 2022 home 
health payment update percentage of 2.6 percent ($465 million 
increase), a 0.7 percent increase in payments due to the new lower FDL 
ratio, which will increase outlier payments in order to target to pay 
no more than 2.5 percent of total payments as outlier payments ($125 
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 final rule.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 28, 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 483

    Grant programs-health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

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 amends 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) 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

[[Page 62419]]

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 Medicare 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 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)(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
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 the section heading and paragraph (a)(1);
0
b. In paragraphs (a)(2) and (3) and (b) by removing the phrase 
``prospective provider'' and adding the word ``provider'' in its place; 
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 e-mail 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

[[Page 62420]]

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 
paragraph (a)(2) 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.
    (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

[[Page 62421]]

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 the exception in this paragraph 
(b)(2)(i), low utilization or no utilization cost reports do not 
qualify as full cost reports.
* * * * *

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
11. The authority for part 483 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1320a-7, 1395i, 1395hh and 1396r.


0
12. Section 483.80 is amended by revising paragraph (g) to read as 
follows:


Sec.  483.80  Infection control.

* * * * *
    (g) COVID-19 reporting. Until December 31, 2024, with the exception 
of the requirements in paragraph (g)(1)(viii) of this section, the 
facility must do all of the following:
    (1) Electronically report information about COVID-19 in a 
standardized format specified by the Secretary. To the extent as 
required by the Secretary, this report must include the following:
    (i) Suspected and confirmed COVID-19 infections among residents and 
staff, including residents previously treated for COVID-19.
    (ii) Total deaths and COVID-19 deaths among residents and staff.
    (iii) Personal protective equipment and hand hygiene supplies in 
the facility.
    (iv) Ventilator capacity and supplies in the facility.
    (v) Resident beds and census.
    (vi) Access to COVID-19 testing while the resident is in the 
facility.
    (vii) Staffing shortages.
    (viii) The COVID-19 vaccine status of residents and staff, 
including total numbers of residents and staff, numbers of residents 
and staff vaccinated, numbers of each dose of COVID-19 vaccine 
received, and COVID-19 vaccination adverse events.
    (ix) Therapeutics administered to residents for treatment of COVID-
19.
    (2) Provide the information specified in paragraph (g)(1) of this 
section weekly, unless the Secretary specifies a lesser frequency, to 
the Centers for Disease Control and Prevention's National Healthcare 
Safety Network. This information will be posted publicly by CMS to 
support protecting the health and safety of residents, personnel, and 
the general public.
    (3) Inform residents, their representatives, and families of those 
residing in facilities by 5 p.m. the next calendar day following the 
occurrence of either a single confirmed infection of COVID-19, or three 
or more residents or staff with new-onset of respiratory symptoms 
occurring within 72 hours of each other. This information must do all 
of the following:
    (i) Not include personally identifiable information.
    (ii) Include information on mitigating actions implemented to 
prevent or reduce the risk of transmission, including if normal 
operations of the facility will be altered.
    (iii) Include any cumulative updates for residents, their 
representatives, and families at least weekly or by 5 p.m. the next 
calendar day following the subsequent occurrence of either: Each time a 
confirmed infection of COVID-19 is identified, or whenever three or 
more residents or staff with new onset of respiratory symptoms occur 
within 72 hours of each other.
* * * * *

PART 484--HOME HEALTH SERVICES

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

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


Sec.  484.50  [Amended]

0
14. Section 484.50 is amended in paragraph (d)(5)(i) by removing the 
phrase ``representative (if any), the physician(s) issuing orders'' and 
adding in its place the phrase ``the representative (if any), the 
physician(s) or allowed practitioner(s) issuing orders``.

0
15. 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.
* * * * *

0
16. Section 484.80 is amended by:
0
a. Revising paragraph (h)(1)(i);
0
b. Redesignating paragraphs (h)(1)(ii) and (iii) as paragraphs 
(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 on the rare occasion by

[[Page 62422]]

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 1 
virtual supervisory assessment per patient in a 60-day episode.
* * * * *
    (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 each 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.
* * * * *

0
17. The heading for subpart F is revised to read as follows:

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


0
18. Add 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
19. 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
20. Section 484.315 is amended by removing paragraph (d).

0
21. Add 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 this 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 this 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 of the Act.


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 
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 U.S. 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.
    Pre-Implementation year means CY 2022.
    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

[[Page 62423]]

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 calendar year (CY) 2021, and the 
first performance year is the first full calendar year (beginning with 
CY 2023) 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, for the pre-implementation year and each 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 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

[[Page 62424]]

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 in this part 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) of this section.
    (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.
    (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
22. The authority citation for part 488 continues to read as follows:

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

0
23. 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.
* * * * *

[[Page 62425]]


0
24. 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.

* * * * *
* * * * *
    (x) For accrediting organizations applying for approval or re-
approval of CMS-approved hospice programs, a statement acknowledging 
that the accrediting organization (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
25. Section 488.7 is amended by revising paragraph (b) and 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 accrediting 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
26. 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
27. 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.
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 payment for all new patient admissions.
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
    (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

[[Page 62426]]

Course, and additional training as specified by CMS.
    (b) Disqualifications. Surveyor(s) must disclose actual or 
perceived conflicts of interest prior to participating in a hospice 
program survey and be provided the opportunity to recuse themselves as 
necessary. 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.

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/survey agency (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 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 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 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. Sec.  488.1225(b) and 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.

[[Page 62427]]

    (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 of this chapter, for a period not to exceed 6 
months:
    (a) Civil money penalties.
    (b) Suspension of payment for all new patient admissions.
    (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-calendar 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.  488.1210(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-calendar 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. 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 
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 the remedy in 
paragraph (a) of this section, 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 payment for all new patient admissions.

    (a) Application. (1) CMS may suspend payment for all new admissions 
to a hospice program on or after the date on which the Secretary 
determines that remedies should be imposed.
    (2) CMS considers the remedy in paragraph (a)(1) of this section 
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 for all

[[Page 62428]]

new admissions, 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) The suspension of payment for all new 
admissions remedy may be imposed anytime a hospice program is found to 
be out of substantial compliance with the conditions of participation.
    (ii) The suspension of payment for all new admissions 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 for all new admissions 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. The remedy in paragraph (a) of 
this section 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 civil money penalty (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 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

[[Page 62429]]

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) Accrual 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.
    (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 the remedy in paragraph (a) of 
this section, CMS notifies the hospice program in accordance with Sec.  
488.1210(e).

[[Page 62430]]

    (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 the remedy in 
paragraph (a) of this section, 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, 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 paragaph (a) 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).
    (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
28. 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 1395hh.

0
29. 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

[[Page 62431]]

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
30. 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
31. The authority citation for part 498 continues to read as follows:

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

0
32. 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
33. 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 Sec. Sec.  
488.845(h) and 488.1195(h) of this chapter); or
* * * * *


Sec.  498.60  [Amended]

0
34. 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: October 29, 2021.
Xavier Becerra,
Secretary Department of Health and Human Services.
[FR Doc. 2021-23993 Filed 11-2-21; 4:15 pm]
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