[Federal Register Volume 88, Number 64 (Tuesday, April 4, 2023)]
[Proposed Rules]
[Pages 20022-20057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06769]



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Vol. 88

Tuesday,

No. 64

April 4, 2023

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 418 and 424





Medicare Program; FY 2024 Hospice Wage Index and Payment Rate Update, 
Hospice Conditions of Participation Updates, Hospice Quality Reporting 
Program Requirements, and Hospice Certifying Physician Provider 
Enrollment Requirements; Proposed Rule

  Federal Register / Vol. 88 , No. 64 / Tuesday, April 4, 2023 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 418 and 424

[CMS-1787-P]
RIN 0938-AV10


Medicare Program; FY 2024 Hospice Wage Index and Payment Rate 
Update, Hospice Conditions of Participation Updates, Hospice Quality 
Reporting Program Requirements, and Hospice Certifying Physician 
Provider Enrollment Requirements

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the hospice wage index, 
payment rates, and aggregate cap amount for fiscal year (FY) 2024. This 
rule includes information on hospice utilization trends and solicits 
comments regarding information related to the provision of higher 
levels of hospice care; spending patterns for non-hospice services 
provided during the election of the hospice benefit; ownership 
transparency; equipping patients and caregivers with information to 
inform hospice selection; and ways to examine health equity under the 
hospice benefit. This rule also proposes conforming regulations text 
changes related to the anticipated expiration of the COVID-19 public 
health emergency (PHE). In addition, this rule proposes updates to the 
Hospice Quality Reporting Program; discusses the Hospice Outcomes and 
Patient Evaluation tool; provides an update on Health Equity and future 
quality measures; and provides updates on the Consumer Assessment of 
Healthcare Providers and Systems, Hospice Survey Mode Experiment. This 
rule also proposes to codify hospice data submission thresholds and 
discusses updates to hospice survey and enforcement procedures. 
Additionally, the rule proposes to require hospice certifying 
physicians to be Medicare-enrolled or to have validly opted-out.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below by May 30, 2023.

ADDRESSES: In commenting, refer to file code CMS-1787-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (choose only one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1787-P, P.O. Box 8010, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1787-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    For general questions about hospice payment policy, send your 
inquiry via email to: [email protected].
    For questions regarding the CAHPS[supreg] Hospice Survey, contact 
Lauren Fuentes at (410) 786-2290.
    For questions regarding the hospice conditions of participation 
(CoPs), contact Mary Rossi-Coajou at (410) 786-6051.
    For questions regarding the hospice public reporting, contact 
Charles Padgett at (410) 786-2811.
    For questions regarding the hospice quality reporting program, 
contact Jermama Keys at (410) 786-7778.
    For questions regarding hospice certifying physician provider 
enrollment, contact Frank Whelan at (410) 786-1302.
    For information regarding the hospice special focus program, send 
your inquiry via email to [email protected].

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.
    Wage index addenda will be available only through the internet on 
our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.

I. Executive Summary

A. Purpose

    This rule proposes updates to the hospice wage index, payment 
rates, and cap amount for fiscal year (FY) 2024 as required under 
section 1814(i) of the Social Security Act (the Act). In addition, this 
rule includes information on hospice utilization and spending trends 
and solicits comments regarding those trends and ways to examine health 
equity under the hospice benefit. This rule also proposes text changes 
to regulations that align with the anticipated expiration of the COVID-
19 PHE. This proposed rule discusses updates to the Hospice Quality 
Reporting Program (HQRP) and the further development of the Hospice 
Outcomes and Patient Evaluation (HOPE) tool with national beta test 
analyses; and discusses updates on Health Equity and future quality 
measures (QMs). It also provides updates on the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS), Hospice Survey Mode 
Experiment. This rule includes a proposal to codify hospice data 
submission thresholds and discusses updates to hospice survey and 
enforcement procedures. In addition, this rule proposes provider 
enrollment requirements for ordering/certifying physicians for hospice 
services.

B. Summary of the Major Provisions

    Section III.A of this proposed rule includes data analysis on 
historical hospice utilization trends. The analysis includes data on 
the number of beneficiaries using the hospice benefit, live discharges, 
reported diagnoses on hospice claims, Medicare hospice spending, and 
Medicare Parts A, B, and D non-hospice spending during a hospice 
election. In this section, we also solicit comments from the public, 
including hospice providers, beneficiaries, and patient advocates 
related to the following: increasing access to higher levels of hospice 
care; our analysis of non-hospice spending during a hospice election; 
ownership

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transparency; hospice election decision-making; and ways to examine 
health equity under the hospice benefit.
    In section III.B of this proposed rule, we discuss the proposed FY 
2024 hospice payment update percentage of 2.8 percent, updates to the 
hospice payment rates, as well as the updates to the hospice cap amount 
for FY 2024 by the hospice payment update percentage of 2.8 percent. We 
also propose text changes to the regulations related to the anticipated 
expiration of the COVID-19 PHE.
    In section III.C of this proposed rule, we discuss updates to the 
HQRP, including the HOPE tool; an update on Health Equity and future 
quality measures; updates on the CAHPS[supreg] Hospice Survey Mode 
Experiment; and a proposal to codify the hospice data submission 
threshold.
    In section III.D of this proposed rule, we propose updates on 
hospice survey and enforcement procedures.
    Finally, in section III.E of this proposed rule, we propose to 
require physicians who order or certify hospice services for Medicare 
beneficiaries to be enrolled in or validly opted-out of Medicare as a 
prerequisite for the payment of the hospice service in question.
    The overall economic impact of this proposed rule is estimated to 
be $720 million in increased payments to hospices for FY 2024.

II. Background

A. Hospice Care

    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes the impending death of a terminally ill individual and 
warrants a change in the focus from curative care to palliative care 
for relief of pain and for symptom management. Medicare regulations 
define ``palliative care'' as patient and family-centered care that 
optimizes quality of life by anticipating, preventing, and treating 
suffering. Palliative care throughout the continuum of illness involves 
addressing physical, intellectual, emotional, social, and spiritual 
needs and to facilitate patient autonomy, access to information, and 
choice (Sec.  418.3). Palliative care is at the core of hospice 
philosophy and care practices, and is a critical component of the 
Medicare hospice benefit.
    The goal of hospice care is to help terminally ill individuals 
continue life with minimal disruption to normal activities while 
remaining primarily in the home environment. A hospice uses an 
interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through a 
collaboration of professionals and other caregivers, with the goal of 
making the beneficiary as physically and emotionally comfortable as 
possible. Hospice is compassionate beneficiary and family/caregiver-
centered care for those who are terminally ill.
    As referenced in our regulations at Sec.  418.22(b)(1), to be 
eligible for Medicare hospice services, the patient's attending 
physician (if any) and the hospice medical director must certify that 
the individual is ``terminally ill,'' as defined in section 
1861(dd)(3)(A) of the Act and our regulations at Sec.  418.3; that is, 
the individual has a medical prognosis that his or her life expectancy 
is 6 months or less if the illness runs its normal course. The 
regulations at Sec.  418.22(b)(2) require that clinical information and 
other documentation that support the medical prognosis accompany the 
certification and be filed in the medical record with it and 
regulations at Sec.  418.22(b)(3) require that the certification and 
recertification forms include a brief narrative explanation of the 
clinical findings that support a life expectancy of 6 months or less.
    Under the Medicare hospice benefit, the election of hospice care is 
a patient choice and once a terminally ill patient elects to receive 
hospice care, a hospice interdisciplinary group is essential in the 
seamless provision of primarily home-based services. The hospice 
interdisciplinary group works with the beneficiary, family, and 
caregivers to develop a coordinated, comprehensive care plan; reduce 
unnecessary diagnostics or ineffective therapies; and maintain ongoing 
communication with individuals and their families about changes in 
their condition. The beneficiary's care plan will shift over time to 
meet the changing needs of the individual, family, and caregiver(s) as 
the individual approaches the end of life.
    If, in the judgment of the hospice interdisciplinary team, which 
includes the hospice physician, the patient's symptoms cannot be 
effectively managed at home, then the patient is eligible for general 
inpatient care (GIP), a more medically intense level of care. GIP must 
be provided in a Medicare-certified hospice freestanding facility, 
skilled nursing facility, or hospital. GIP is provided to ensure that 
any new or worsening symptoms are intensively addressed so that the 
beneficiary can return to his or her home and continue to receive 
routine home care (RHC). Limited, short-term, intermittent, inpatient 
respite care (IRC) is also available because of the absence or need for 
relief of the family or other caregivers. Additionally, an individual 
can receive continuous home care (CHC) during a period of crisis in 
which an individual requires continuous care to achieve palliation or 
management of acute medical symptoms so that the individual can remain 
at home. CHC may be covered for as much as 24 hours a day, and these 
periods must be predominantly nursing care, in accordance with the 
regulations at Sec.  418.204. A minimum of 8 hours of nursing care or 
nursing and aide care, must be furnished on a particular day to qualify 
for the CHC rate (Sec.  418.302(e)(4)).
    Hospices covered by this rule must comply with applicable civil 
rights laws, including section 1557 of the Affordable Care Act, section 
504 of the Rehabilitation Act of 1973 and the Americans with 
Disabilities Act, which require covered programs to take appropriate 
steps to ensure effective communication with patients with disabilities 
and patient companions with disabilities, including the provisions of 
auxiliary aids and services when necessary for effective 
communication.\1\ Further information may be found at: https://www.hhs.gov/ocr/civilrights.
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    \1\ Hospices receiving Medicare Part A funds or other Federal 
financial assistance from the Department are also subject to 
additional Federal civil rights laws, including the Age 
Discrimination Act, and are subject to conscience and religious 
freedom laws where applicable.
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    Title VI of the Civil Rights Act of 1964 prohibits discrimination 
on the basis of race, color or national origin in federally assisted 
programs or activities. Department Guidance indicates that the 
Department interprets Title VI to require covered entities to take 
reasonable steps to provide meaningful access to their programs or 
activities to individuals with limited English proficiency (LEP). 
Regulations implementing section 1557 require reasonable steps to 
provide meaningful access to LEP individuals. Meaningful access may 
require the use of interpreters and translated materials.

B. Services Covered by the Medicare Hospice Benefit

    Coverage under the Medicare hospice benefit requires that hospice 
services must be reasonable and necessary for the palliation and 
management of the terminal illness and related conditions. Section 
1861(dd)(1) of the Act establishes the services that are to be rendered 
by a Medicare-certified hospice program. These covered services 
include: nursing care; physical therapy; occupational therapy; speech-

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language pathology therapy; medical social services; home health aide 
services (called hospice aide services); physician services; homemaker 
services; medical supplies (including drugs and biologicals); medical 
appliances; counseling services (including dietary counseling); short-
term inpatient care in a hospital, nursing facility or hospice 
inpatient facility (including both respite care and procedures 
necessary for pain control and acute or chronic symptom management); 
continuous home care during periods of crisis, and only as necessary, 
to maintain the terminally ill individual at home; and any other item 
or service which is specified in the plan of care and for which payment 
may otherwise be made under Medicare, in accordance with Title XVIII of 
the Act.
    Section 1814(a)(7)(B) of the Act requires that a written plan for 
providing hospice care to a beneficiary, who is a hospice patient, be 
established before care is provided by, or under arrangements made by, 
the hospice program; and that the written plan be periodically reviewed 
by the beneficiary's attending physician (if any), the hospice medical 
director, and an interdisciplinary group (section 1861(dd)(2)(B) of the 
Act). The services offered under the Medicare hospice benefit must be 
available to beneficiaries as needed, 24 hours a day, 7 days a week 
(section 1861(dd)(2)(A)(i) of the Act).
    Upon the implementation of the hospice benefit, the Congress also 
expected hospices to continue to use volunteer services, although 
Medicare does not pay for these volunteer services (section 
1861(dd)(2)(E) of the Act). As stated in the Health Care Financing 
Administration's (now Centers for Medicare & Medicaid Services (CMS)) 
proposed rule ``Medicare Program; Hospice Care'' (48 FR 38149), the 
hospice must have an interdisciplinary group composed of paid hospice 
employees as well as hospice volunteers, and that ``the hospice benefit 
and the resulting Medicare reimbursement is not intended to diminish 
the voluntary spirit of hospices.'' This expectation supports the 
hospice philosophy of community based, holistic, comprehensive, and 
compassionate end of life care.

C. Medicare Payment for Hospice Care

    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and the regulations in 42 CFR part 418, establish eligibility 
requirements, payment standards and procedures; define covered 
services; and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart 
G, provides for a per diem payment based on one of four prospectively 
determined rate categories of hospice care (RHC, CHC, IRC, and GIP), 
based on each day a qualified Medicare beneficiary is under hospice 
care (once the individual has elected the benefit). 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.
    While payment made to hospices is to cover all items, services, and 
drugs for the palliation and management of the terminal illness and 
related conditions, Federal funds cannot be used for prohibited 
activities, even in the context of a per diem payment. While a recent 
article in a policy journal \2\ discussed the potential role hospices 
could play in medical aid in dying (MAID) where such practices have 
been legalized in certain states, the Assisted Suicide Funding 
Restriction Act of 1997 (Pub. L. 105-12, April 30, 1997) prohibits the 
use of Federal funds to provide or pay for any health care item or 
service or health benefit coverage for the purpose of causing, or 
assisting to cause, the death of any individual including ``mercy 
killing, euthanasia, or assisted suicide''. However, the prohibition 
does not pertain to the provision of an item or service for the purpose 
of alleviating pain or discomfort, even if such use may increase the 
risk of death, so long as the item or service is not furnished for the 
specific purpose of causing or accelerating death.
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    \2\ Nelson, R., Should Medical Aid in Dying Be Part of Hospice 
Care? Medscape Nurses. February 26, 2020. https://www.medscape.com/viewarticle/925769#vp_1.
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1. Omnibus Budget Reconciliation Act of 1989
    Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided 
changes in the methodology concerning updating the daily payment rates 
based on the hospital market basket percentage increase applied to the 
payment rates in effect during the previous Federal fiscal year.
2. Balanced Budget Act of 1997
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) established that updates to the hospice payment rates beginning 
fiscal year (FY) 2002 and subsequent FYs be the hospital market basket 
percentage increase for the FY. Section 4442 of the BBA amended section 
1814(i)(2) of the Act, effective for services furnished on or after 
October 1, 1997, to require that hospices submit claims for payment for 
hospice care furnished in an individual's home only on the basis of the 
geographic location at which the service is furnished. Previously, 
local wage index values were applied based on the geographic location 
of the hospice provider, regardless of where the hospice care was 
furnished. Section 4443 of the BBA amended sections 1812(a)(4) and 
1812(d)(1) of the Act to provide for hospice benefit periods of two 90-
day periods, followed by an unlimited number of 60-day periods.
3. FY 1998 Hospice Wage Index Final Rule
    The FY 1998 Hospice Wage Index final rule (62 FR 42860) implemented 
a new methodology for calculating the hospice wage index and instituted 
an annual Budget Neutrality Adjustment Factor (BNAF) so aggregate 
Medicare payments to hospices would remain budget neutral to payments 
calculated using the 1983 wage index.
4. FY 2010 Hospice Wage Index Final Rule
    The FY 2010 Hospice Wage Index and Rate Update final rule (74 FR 
39384) instituted an incremental 7-year phase-out of the BNAF beginning 
in FY 2010 through FY 2016. The BNAF phase-out reduced the amount of 
the BNAF increase applied to the hospice wage index value, but was not 
a reduction in the hospice wage index value itself or in the hospice 
payment rates.
5. The Affordable Care Act
    Starting with FY 2013 (and in subsequent FYs), the market basket 
percentage increase under the hospice payment system referenced in 
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act are 
subject to annual reductions related to changes in economy-wide 
productivity, as specified in section 1814(i)(1)(C)(iv) of the Act.
    In addition, sections 1814(i)(5)(A) through (C) of the Act, as 
added by section 3132(a) of the Patient Protection and Affordable Care 
Act (PPACA) (Pub. L. 111-148), required hospices to begin submitting 
quality data, based on measures specified by the Secretary of the 
Department of Health and Human Services (the Secretary), for FY 2014 
and subsequent FYs. Since FY 2014, hospices that fail to report quality 
data have their market basket percentage increase reduced by 2 
percentage points. We note that with the passage of the Consolidated 
Appropriations Act, 2021 (hereafter referred to as CAA, 2021) (Pub. L. 
116-260), the reduction for

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failure to report quality data changes to 4 percentage points beginning 
in FY 2024.
    Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) 
of the PPACA, required that effective January 1, 2011, a hospice 
physician or nurse practitioner have a face-to-face encounter with the 
beneficiary to determine continued eligibility of the beneficiary's 
hospice care prior to the 180th day recertification and each subsequent 
recertification and to attest that such visit took place. When 
implementing this provision, CMS finalized, in the FY 2011 Hospice Wage 
Index final rule (75 FR 70435), that the 180th day recertification and 
subsequent recertifications would correspond to the beneficiary's third 
or subsequent benefit periods. Further, section 1814(i)(6) of the Act, 
as added by section 3132(a)(1)(B) of the PPACA, authorized the 
Secretary to collect additional data and information determined 
appropriate to revise payments for hospice care and other purposes. The 
types of data and information suggested in the PPACA could capture 
accurate resource utilization, which could be collected on claims, cost 
reports, and possibly other mechanisms, as the Secretary determined to 
be appropriate. The data collected could be used to revise the 
methodology for determining the payment rates for RHC and other 
services included in hospice care, no earlier than October 1, 2013, as 
described in section 1814(i)(6)(D) of the Act. In addition, CMS was 
required to consult with hospice programs and the Medicare Payment 
Advisory Commission (MedPAC) regarding additional data collection and 
payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
    In the FY 2012 Hospice Wage Index final rule (76 FR 47308 through 
47314) it was announced that beginning in 2012, the hospice aggregate 
cap would be calculated using the patient-by-patient proportional 
methodology, within certain limits. Existing hospices had the option of 
having their cap calculated through the original streamlined 
methodology, also within certain limits. As of FY 2012, new hospices 
have their cap determinations calculated using the patient-by-patient 
proportional methodology. If a hospice's total Medicare payments for 
the cap year exceed the hospice aggregate cap, then the hospice must 
repay the excess back to Medicare.
7. IMPACT Act of 2014
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act) (Pub. L. 113-185) became law on October 6, 2014. Section 
3(a) of the IMPACT Act mandated that all Medicare certified hospices be 
surveyed every 3 years beginning April 6, 2015 and ending September 30, 
2025. In addition, section 3(c) of the IMPACT Act requires medical 
review of hospice cases involving beneficiaries receiving more than 180 
days of care in select hospices that show a preponderance of such 
patients; section 3(d) of the IMPACT Act mandates that the cap amount 
for accounting years that end after September 30, 2016, and before 
October 1, 2025, be updated by the hospice payment percentage update 
rather than using the consumer price index for urban consumers (CPI-U) 
for medical care expenditures.
8. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50452) finalized a requirement that the Notice of Election (NOE) be 
filed within 5 calendar days after the effective date of hospice 
election. If the NOE is filed beyond this 5-day period, hospice 
providers are liable for the services furnished during the days from 
the effective date of hospice election to the date of NOE filing (79 FR 
50474). As with the NOE, the claims processing system must be notified 
of a beneficiary's discharge from hospice or hospice benefit revocation 
within 5 calendar days after the effective date of the discharge/
revocation (unless the hospice has already filed a final claim) through 
the submission of a final claim or a Notice of Termination or 
Revocation (NOTR).
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50479) also finalized a requirement that the election form include the 
beneficiary's choice of attending physician and that the beneficiary 
provide the hospice with a signed document when he or she chooses to 
change attending physicians.
    In addition, the FY 2015 Hospice Wage Index and Rate Update final 
rule (79 FR 50496) provided background, described eligibility criteria, 
identified survey respondents, and otherwise implemented the Hospice 
Experience of Care Survey for informal caregivers. Hospice providers 
were required to begin using this survey for hospice patients as of 
2015.
    Finally, the FY 2015 Hospice Wage Index and Rate Update final rule 
required providers to complete their aggregate cap determination not 
sooner than 3 months after the end of the cap year, and not later than 
5 months after, and remit any overpayments. Those hospices that fail to 
submit their aggregate cap determinations on a timely basis have their 
payments suspended until the determination is completed and received by 
the Medicare contractor (79 FR 50503).
9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142), CMS finalized two different payment rates for RHC: a higher per 
diem base payment rate for the first 60 days of hospice care and a 
reduced per diem base payment rate for subsequent days of hospice care. 
We also finalized a service intensity add-on (SIA) payment payable for 
certain services during the last 7 days of the beneficiary's life. A 
service intensity add-on payment will be made for the social worker 
visits and nursing visits provided by a registered nurse (RN), when 
provided during routine home care in the last 7 days of life. The SIA 
payment is in addition to the routine home care rate. The SIA payment 
is provided for visits of a minimum of 15 minutes and a maximum of 4 
hours per day (80 FR 47172).
    In addition to the hospice payment reform changes discussed, the FY 
2016 Hospice Wage Index and Rate Update final rule implemented changes 
mandated by the IMPACT Act, in which the cap amount for accounting 
years that end after September 30, 2016 and before October 1, 2025, 
would be updated by the hospice payment update percentage rather than 
using the CPI-U (80 FR 47186). In addition, we finalized a provision to 
align the cap accounting year for both the inpatient cap and the 
hospice aggregate cap with the FY for FY 2017 and thereafter. Finally, 
the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47144) 
clarified that hospices would have to report all diagnoses on the 
hospice claim as a part of the ongoing data collection efforts for 
possible future hospice payment refinements.
10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 
52160), we finalized several new policies and requirements related to 
the HQRP. First, we codified the policy that if a Consensus-Based 
Entity (CBE), as noted in section 1890 of the Social

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Security Act,\3\ made non-substantive changes to specifications for 
HQRP measures as part of the measure re-endorsement process, we would 
continue to utilize the measure in its new endorsed status, without 
going through new notice-and-comment rulemaking. We would also continue 
to use rulemaking to adopt substantive updates made by the CBE to the 
endorsed measures adopted for the HQRP; determinations about what 
constitutes a substantive versus non-substantive change would be made 
on a measure-by-measure basis. Second, we finalized two new quality 
measures for the HQRP for the FY 2019 payment determination and 
subsequent years: Hospice Visits when Death is Imminent Measure Pair 
and Hospice and Palliative Care Composite Process Measure-Comprehensive 
Assessment at Admission (81 FR 52173). The data collection mechanism 
for both of these measures is the Hospice Item Set (HIS), and the 
measures were effective April 1, 2017. Regarding the CAHPS[supreg] 
Hospice Survey, we finalized a policy that hospices that receive their 
CMS Certification Number (CCN) after January 1, 2017 for the FY 2019 
Annual Payment Update (APU) and January 1, 2018 for the FY 2020 APU 
will be exempted from the Hospice CAHPS[supreg] requirements due to 
newness (81 FR 52182). The exemption is determined by CMS and is only 
for 1 year.
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    \3\ Section 1890 of the Social Security Act requires the 
Secretary of HHS to contract with a Consensus-based Entity (CBE) 
regarding performance measurement. The National Quality Forum (NQF) 
was the CBE from 2010-2023. Battelle Memorial Institute has been 
contracted as the CBE from March 2023-March 2028. In this rule and 
henceforth, references to NQF will be replaced with CBE.
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11. FY 2020 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 
38484), we finalized rebased payment rates for CHC and GIP and set 
those rates equal to their average estimated FY 2019 costs per day. We 
also rebased IRC per diem rates equal to the estimated FY 2019 average 
costs per day, with a reduction of 5 percent to the FY 2019 average 
cost per day to account for coinsurance. We finalized the FY 2020 
proposal to reduce the RHC payment rates by 2.72 percent to offset the 
increases to CHC, IRC, and GIP payment rates to implement this policy 
in a budget-neutral manner in accordance with section 1814(i)(6) of the 
Act (84 FR 38496).
    In addition, we finalized a policy to use the current year's pre-
floor, pre-reclassified hospital inpatient wage index as the wage 
adjustment to the labor portion of the hospice rates. Finally, in the 
FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 38505), we 
finalized modifications to the hospice election statement content 
requirements at Sec.  418.24(b) by requiring hospices, upon request, to 
furnish an election statement addendum effective beginning in FY 2021. 
The addendum must list those items, services, and drugs the hospice has 
determined to be unrelated to the terminal illness and related 
conditions, increasing coverage transparency for beneficiaries under a 
hospice election.
12. Consolidated Appropriations Act, 2021 (CAA, 2021)
    Division CC, section 404 of the CAA, 2021, amended section 
1814(i)(2)(B) of the Act and extended the provision that currently 
mandates the hospice cap be updated by the hospice payment update 
percentage (hospital market basket percentage increase (also referred 
to as the hospital market basket update) reduced by the productivity 
adjustment) rather than the CPI-U for accounting years that end after 
September 30, 2016 and before October 1, 2030. Before the enactment of 
this provision, the hospice cap update was set to revert to the 
original methodology of updating the annual cap amount by the CPI-U 
beginning on October 1, 2025. Division CC, section 407(b) of CAA, 2021 
revised section 1814(i)(5)(A)(i) of the Act to increase the payment 
reduction for hospices who failed to meet hospice quality measure 
reporting requirements from 2 percent to 4 percent beginning with FY 
2024.
13. Consolidated Appropriations Act, 2022 (CAA, 2022)
    Division P, section 312 of the CAA, 2022 (Pub. L. 117-103) amended 
section 1814(i)(2)(B) of the Act and extended the provision that 
currently mandates the hospice cap be updated by the hospice payment 
update percentage (hospital market basket percentage increase reduced 
by the productivity adjustment) rather than the CPI-U for accounting 
years that end after September 30, 2016 and before October 1, 2031. 
Before the enactment of this provision, the hospice cap update was set 
to revert to the original methodology of updating the annual cap amount 
by the CPI-U beginning on October 1, 2030.
14. FY 2022 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2022 Hospice Wage Index and Rate Update final rule (86 FR 
42532 through 42539), we finalized a policy to rebase and revise the 
labor shares for CHC, RHC, IRC, and GIP using Medicare cost report 
(MCR) data for freestanding hospices (collected via CMS Form 1984-14, 
OMB No. 0938-0758) for 2018. We established separate labor shares for 
CHC, RHC, IRC, and GIP based on the calculated compensation cost 
weights for each level of care from the 2018 MCR data. The revised 
labor shares were implemented in a budget neutral manner through the 
use of labor share standardization factors. In the FY 2022 Hospice Wage 
Index and Rate Update final rule, we removed the seven original Hospice 
Item Set (HIS) measures from the program because a more broadly 
applicable measure (across settings, populations, or conditions) for 
the particular topic is available and already publicly reported. The 
Hospice Comprehensive Assessment Measure is one measure that is 
calculated and rolled-up by completion of the seven individual 
measures. This measure helps to ensure all hospice patients receive a 
holistic comprehensive assessment. In August 2022, we began publicly 
reporting the two new claims-based measures. Specifically, this 
includes the: (1) Hospice Visits in the Last Days of Life (HVLDL) 
(which replaces the HIS Hospice Visits when Death is Imminent measure 
pair); and (2) Hospice Care Index (HCI) that includes 10 indicators 
that collectively represent different aspects of hospice care and aim 
to convey a comprehensive characterization of the quality of care 
furnished by a hospice throughout the hospice stay. Related to these 
changes, we finalized reporting eight quarters of claims data in order 
to display small providers. We finalized the public reporting of 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Hospice Survey Star ratings on Care Compare to begin no sooner than FY 
2022.
15. Consolidated Appropriations Act, 2023 (CAA, 2023)
    Division FF, section 4162 of the CAA, 2023 amended section 
1814(i)(2)(B) of the Act and extended the provision that currently 
mandates the hospice cap be updated by the hospice payment update 
percentage (hospital market basket percentage increase reduced by the 
productivity adjustment), rather than the CPI-U for accounting years 
that end after September 30, 2016 and before October 1, 2032. Before 
the enactment of this provision, the hospice cap update was set to 
revert to the original methodology of updating the annual cap

[[Page 20027]]

amount by the CPI-U beginning on October 1, 2031.

III. Provisions of the Proposed Rule

A. Hospice Utilization and Spending Patterns

    CMS provides analyses of hospice utilization measures such as 
Medicare spending; level of care utilization; lengths of stay; live 
discharge rates; as well as services used outside of the hospice 
benefit while a patient is under a hospice election, using the most 
recent, complete claims data. Stakeholders report that such information 
can be used to educate hospices on Medicare policies to help ensure 
compliance. Moreover, in response to the Office of Inspector General 
(OIG) reports highlighting vulnerabilities in the Medicare hospice 
benefit (for example, hospices engaging in inappropriate billing, not 
providing needed services and crucial information to beneficiaries in 
order for them to make informed decisions about their care \4\), we 
continue to monitor both hospice and non-hospice spending under the 
hospice benefit.
---------------------------------------------------------------------------

    \4\ ``Hospice Inappropriately Billed Medicare Over $250 Million 
for General Inpatient Care'', OEI-02-10-00491, March, 2016. 
``Vulnerabilities in the Medicare Hospice Program Affect Quality 
Care and Program Integrity: An OIG Portfolio'', OEI-02-16-00570, 
July, 2018.
---------------------------------------------------------------------------

1. General Hospice Utilization Trends
    Since the implementation of the hospice benefit in 1983, there has 
been substantial growth in utilization of the hospice benefit. The 
number of Medicare beneficiaries receiving hospice services has grown 
from 715,349 in Federal FY 2003 to over 1.7 million in FY 2022. 
Medicare hospice expenditures have risen from $5 billion in FY 2003 to 
approximately $23 billion in FY 2022.\5\ CMS' Office of the Actuary 
expects aggregate hospice expenditures will continue to increase by 
approximately 9.1 percent annually.
---------------------------------------------------------------------------

    \5\ Analysis of data for FY 2003 through FY 2022 accessed from 
the Chronic Conditions Data Warehouse (CCW) on January 20, 2023.
---------------------------------------------------------------------------

    The percentage of Medicare decedents who died while receiving 
services under the Medicare hospice benefit increased from FY 2013 to 
FY 2019, but then slowly declined from FY 2019 through FY 2022, as 
shown in Table 1.

                                    Table 1--Deaths in Hospice by Fiscal Year
----------------------------------------------------------------------------------------------------------------
                                                                                     Deaths of
                                                                   Total deaths      medicare      Percentage of
                               FY                                   of medicare    beneficiaries     deaths in
                                                                   beneficiaries   using hospice    hospice (%)
----------------------------------------------------------------------------------------------------------------
2013............................................................       2,137,210       1,008,696            47.2
2014............................................................       2,123,163       1,019,681            48.0
2015............................................................       2,223,276       1,073,414            48.3
2016............................................................       2,206,351       1,090,208            49.4
2017............................................................       2,277,722       1,142,726            50.2
2018............................................................       2,328,210       1,183,284            50.8
2019............................................................       2,326,932       1,208,997            52.0
2020............................................................       2,578,741       1,290,390            50.0
2021............................................................       2,807,442       1,339,339            47.7
2022............................................................       2,695,584       1,314,765            48.8
----------------------------------------------------------------------------------------------------------------
Source: Analysis of data for FYs 2013 through 2022 accessed from the CCW on January 20, 2023.
Note: Hospice deaths are counted as any hospice claim with a discharge status code of ``40'', ``41'', or ``42''.

    Similar to the increase in the number of beneficiaries using the 
benefit, the total number of organizations offering hospice services 
also continues to grow, with for-profit providers entering the market 
at higher rates than not-for-profit providers. In its March 2023 Report 
to the Congress,\6\ MedPAC stated that for more than a decade, the 
increasing number of hospice providers is due almost entirely to the 
entry of for-profit providers. MedPAC also stated that long stays in 
hospice have been very profitable and this has attracted new provider 
entrants with revenue-generating strategies specifically targeting 
those patients expected to have longer lengths of stay. MedPAC has also 
stated that private equity involvement in the health care sector has 
been growing and that private equity funds have invested in home health 
and hospice.\7\ In FY 2022, approximately 74 percent (4,204 out of 
5,689) of hospices were for-profit and approximately 16 percent (897 
out of 5,689) were non-profit, whereas in FY 2016, approximately 65 
percent (2,842 out of 4,373) were for-profit and approximately 23 
percent (991 out of 4,373) of hospices were non-profit. In FY 2022, 
for-profit hospices provided approximately 64 percent of all hospice 
days while non-profit hospices provided approximately 27 percent of all 
hospice days.\8\ Hospices that listed their ownership status as 
``Other'', ``Government'', or had an unknown ownership status accounted 
for the remaining 9 percent of hospice days.
---------------------------------------------------------------------------

    \6\ Report to Congress, Medicare Payment Policy. Hospice 
Services, Chapter 10. MedPAC. March 2023. https://www.medpac.gov/wp-content/uploads/2023/03/Ch10_Mar23_MedPAC_Report_To_Congress_SEC.pdf.
    \7\ Report to Congress, Medicare and the Healthcare Delivery 
System. Congressional Request: Private equity and Medicare. June 
2021. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/default-document-library/jun21_ch3_medpac_report_to_congress_sec.pdf.
    \8\ FY 2016-FY 2022 hospice claims data from CCW on January 20, 
2023. Fourth quarter 2022 Provider of Service (POS) File (https://www.cms.gov/files/zip/posothercsvdec19.zip). Using the analytic 
file, we found there were 5,689 hospices that submitted at least one 
claim in FY 2022. Of those, we show the frequency of their ownership 
type as shown in the POS file. For-profit hospices include the 
``proprietary'' categories. Non-profit includes the ``voluntary non-
profit'' categories. Government includes the ``Government'' 
categories and the ``Combination Government & Nonprofit'' option. 
Other represents the ``other'' category. Thirty-nine hospices could 
not be linked to the POS file and are listed as unknown.
---------------------------------------------------------------------------

    There have been notable changes in the pattern of diagnoses among 
Medicare hospice enrollees since the implementation of the Medicare 
hospice benefit from primarily cancer diagnoses to neurological 
diagnoses, including Alzheimer's disease and other related dementias 
(80 FR 25839). These patterns are consistent across all hospices 
regardless of ownership type. Our ongoing analysis of diagnosis 
reporting finds that neurological and organ-based failure conditions 
remain the top-reported principal diagnoses. Beneficiaries with these 
terminal conditions tend to have longer hospice stays, which have 
historically been

[[Page 20028]]

more profitable than shorter stays.\9\ Table 2 shows the top 20 most 
frequently reported principal diagnoses on FY 2022 hospice claims.
---------------------------------------------------------------------------

    \9\ Report to Congress, Medicare Payment Policy. Hospice 
Services, Chapter 10. MedPAC. March 2023. https://www.medpac.gov/wp-content/uploads/2023/03/Ch10_Mar23_MedPAC_Report_To_Congress_SEC.pdf.

             Table 2--Top Twenty Principal Hospice Diagnoses
                                [FY 2022]
------------------------------------------------------------------------
                      International
                    classification of                      Percentage of
     Rank       diseases, tenth revision     Number of     all reported
                    (ICD-10)/reported      beneficiaries     principal
                   principal diagnosis                     diagnoses (%)
------------------------------------------------------------------------
1.............  G30.9--Alzheimer                 135,910             7.4
                 disease, unspecified.
2.............  G31.1--Senile                    124,365             6.8
                 degeneration of brain,
                 not elsewhere
                 classified.
3.............  J44.9--Chronic                    78,630             4.3
                 obstructive pulmonary
                 disease, unspecified.
4.............  G30.1--Alzheimer disease          63,980             3.5
                 with late onset.
5.............  I50.9--Heart failure,             52,375             2.8
                 unspecified.
6.............  G20--Parkinson disease..          52,155             2.8
7.............  I25.10--Atherosclerotic           47,117             2.6
                 heart disease of native
                 coronary artery without
                 angina pectoris.
8.............  C34.90--Malignant                 44,093             2.4
                 neoplasm of unspecified
                 part of unspecified
                 bronchus or lung.
9.............  U07.1--Emergency use of           43,505             2.4
                 U07.1.
10............  I67.2--Cerebral                   38,543             2.1
                 atherosclerosis.
11............  I11.0--Hypertensive               36,860             2.0
                 heart disease with
                 (congestive) heart
                 failure.
12............  I67.9--Cerebrovascular            35,120             1.9
                 disease, unspecified.
13............  E43--Unspecified severe           33,111             1.8
                 protein-energy
                 malnutrition.
14............  I63.9--Cerebral                   29,291             1.6
                 infarction, unspecified.
15............  I13.0--Hypertensive               27,455             1.5
                 heart and renal disease
                 with (congestive) heart
                 failure.
16............  C61--Malignant neoplasm           24,806             1.3
                 of prostate.
17............  N18.6--End stage renal            24,565             1.3
                 disease.
18............  J96.01--Acute                     23,329             1.3
                 respiratory failure
                 with hypoxia.
19............  C25.9--Malignant                  22,128             1.2
                 neoplasm: Pancreas,
                 unspecified.
20............  J44.1--Chronic                    20,928             1.1
                 obstructive pulmonary
                 disease with acute
                 exacerbation,
                 unspecified.
------------------------------------------------------------------------
Source: Analysis of data for FY 2022 accessed from the CCW on January
  20, 2023.
Notes: The frequencies shown represent beneficiaries that had a least
  one claim with the specific ICD-10 code reported as the principal
  diagnosis. Beneficiaries could be represented multiple times in the
  results if they had multiple claims during FY 2022 with different
  principal diagnoses. The percentage column represents the percentage
  of beneficiary/diagnosis pairs in a fiscal year with a specific ICD-10
  code.

Hospice Utilization by Level of Care
    Our analysis shows that there have only been slight changes over 
time in how hospices have utilized the different levels of care. RHC 
consistently represents the highest percentage of total hospice days as 
well as the highest percentage of total hospice payments as shown in 
Table 3.

               Table 3--Percent of Hospice Days and Payments by Level of Care, FY 2013 and FY 2022
----------------------------------------------------------------------------------------------------------------
                                                    Percent of      Percent of      Percent of      Percent of
                  Level of Care                    hospice days,   hospice days,   payments, FY    payments, FY
                                                    FY 2013 (%)     FY 2022 (%)      2013 (%)        2022 (%)
----------------------------------------------------------------------------------------------------------------
RHC.............................................            97.5            98.8            90.6            93.7
CHC.............................................             0.4             0.1             1.8             0.6
IRC.............................................             0.3             0.3             0.3             0.7
GIP.............................................             1.8             0.9             7.3             5.0
----------------------------------------------------------------------------------------------------------------
Source: Analysis of data for FY 2013 through FY 2022 accessed from the CCW on Jan 20, 2023.

    In the FY 2020 Hospice Wage Index and Payment Rate Update final 
rule (84 FR 38496), we rebased the payment rates for the CHC, IRC, and 
GIP levels of care to better align hospice payment with the costs of 
providing care. It was our intent that rebasing these rates would 
adequately cover the costs of providing these higher intensity levels 
of care to ensure that hospices have access to the providers needed to 
comply with the hospice Conditions of Participation (CoPs), and promote 
patient access to all levels of care. Figure 1 shows that, despite 
rebasing payment rates for the higher levels of care, there still 
remains a high percentage of hospices that provide little to no CHC, 
IRC, or GIP.
    We find that for-profit hospices make up 71.6 percent of hospices 
from FY 2019 through FY 2022, and that for-profit hospices make up 82.9 
percent of the hospices that do not provide GIP in a given FY and 84.3 
percent of the hospices that do not provide IRC in a given FY. 
Conversely, for-profit hospices make up 68.5 percent of the hospices 
that provide CHC in a given FY, indicating for-profit hospices are more 
likely to provide CHC compared to other ownership types. Hospices that 
are unable, or unwilling, to provide higher levels of care such as CHC 
and GIP may not adequately be able to care for patients who are in 
crisis or have symptoms that cannot be managed in the home, resulting 
in a worse outcome for the patient. Furthermore, not providing those 
levels of care, and also not providing IRC, places a greater burden on 
caregivers which may worsen

[[Page 20029]]

the quality of care at the end of life. Also, most hospices that do not 
provide a particular level of care amongst CHC, IRC, and GIP are more 
likely to be in the bottom 25 percent of hospices across all FYs. That 
is, the bottom 25 percent of hospices, which are the smallest from FY 
2019 through FY 2022 make-up 40.6 percent of hospices that do not 
provide GIP in a given FY and make up 50.8 percent of the hospices that 
do not provide IRC in a given FY. The smallest hospices make up 27.7 
percent of the hospices that do not provide CHC in a given FY, meaning 
that group of small hospices has only a slightly higher rate of 
providing than would be expected otherwise.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AP23.000

2. Trends in Hospice Length of Stay and Live Discharges
    Eligibility under the Medicare hospice benefit is predicated on the 
individual being certified as terminally ill. Medicare regulations at 
Sec.  418.3 define ``terminally ill'' to mean that the individual has a 
medical prognosis of life expectancy 6 months or less if the illness 
runs its normal course. However, we recognize that a beneficiary may be 
under a hospice election longer than 6 months, and the beneficiary is 
still eligible as long as there remains a reasonable expectation that 
the individual has a life expectancy of 6 months or less. It has always 
been our expectation that the certifying physicians would use their 
best clinical judgment, as described in our regulations at Sec. Sec.  
418.22 and 418.25, to determine if an individual has a life expectancy 
of 6 months or less with each certification and recertification.
Hospice Length of Stay
    We examined hospice length of stay in three ways: (1) average 
length of election, meaning the number of hospice days during a single 
hospice election at the time of live discharge or death; (2) the median 
lifetime length of stay, which represents the 50th percentile, and (3) 
average lifetime length of stay, which includes the sum of all days of 
hospice care across all hospice elections. Extremely long lengths of 
stay influence both the average length of election and average lifetime 
length of stay. Table 4 shows the average length of election, the 
median and average lifetime lengths of stay from FYs 2019 through 2022.

                              Table 4--Hospice Length of Stay in Days FYs 2019-2022
----------------------------------------------------------------------------------------------------------------
                                                      FY 2019         FY 2020         FY 2021         FY 2022
----------------------------------------------------------------------------------------------------------------
Average Length of Election......................              77              79              79              80
Median Lifetime Length of Stay..................              20              19              18              19
Average Lifetime Length of Stay.................              99             100             100             102
----------------------------------------------------------------------------------------------------------------
Source: Hospice claims data accessed from the CCW on January 20, 2023.


[[Page 20030]]

    Length of stay estimates vary based on the reported principal 
diagnosis. Table 5 lists six of the most common clinical categories of 
principal diagnoses reported on hospice claims in FY 2022 along with 
the corresponding number of hospice discharges. Patients with 
neurological and organ-based failure conditions (with the exception of 
kidney disease/kidney failure) tend to have much longer lengths of stay 
compared to patients with cancer diagnoses.

                      Table 5--Average Length of Stay in Days for Hospice Users in FY 2022
----------------------------------------------------------------------------------------------------------------
                                                     Number of
                                                   hospice users                      Median          Average
                    Category                       discharged at  Average length     lifetime        lifetime
                                                   the end of FY    of election   length of stay  length of stay
                                                       2022
----------------------------------------------------------------------------------------------------------------
Alzheimer's, Dementia, and Parkinson's..........         286,884           129.0              50           170.2
CVA/Stroke......................................         135,336            97.4              21           125.3
Cancers.........................................         350,889            46.5              16            53.8
Chronic Kidney Disease..........................          33,624            32.8               7            41.1
Heart (CHF and Other Heart Diseases)............         241,166            90.7              25           115.3
Lung (COPD and Pneumonias)......................         142,517            72.2              11            95.1
Other...........................................         181,948            52.6              10            66.5
All Diagnoses...................................       1,372,364            79.9              19           101.7
----------------------------------------------------------------------------------------------------------------
Source: Hospice claims data accessed from the CCW on January 20, 2023.
Notes: Only beneficiaries whose last day of hospice in FY 2022 was not associated with a discharge status code
  of ``30'' were counted (``30'' indicates they remained in hospice). We count the start of an election as when
  a patient begins hospice and is not already within a hospice election. We count elections as ending when we
  observe a discharge status code other than ``30''. Lifetime length of stay is determined using all hospice
  elections over the beneficiary's lifetime.

Hospice Live Discharges
    Federal regulations limit the circumstances in which a Medicare 
hospice provider may discharge a patient from its care. In accordance 
with Sec.  418.26, discharge from hospice care is permissible when the 
patient moves out of the provider's service area, is determined to be 
no longer terminally ill, or for cause.\10\ Hospices may not discharge 
the patient at their discretion, even if the care may be costly or 
inconvenient for the hospice. Additionally, an individual or 
representative may revoke the individual's election of hospice care at 
any time during an election period in accordance with the regulations 
at Sec.  418.28. However, at any time thereafter, the beneficiary may 
re-elect hospice coverage at any other hospice election period that 
they are eligible to receive. Immediately upon hospice revocation, 
Medicare coverage resumes for those Medicare benefits previously waived 
with the hospice election. Only the beneficiary (or representative) can 
revoke the hospice election. A revocation must be in writing and must 
specify the effective date of the revocation. A hospice cannot revoke a 
beneficiary's hospice election, nor is it appropriate for hospices to 
encourage, request, or demand that the beneficiary or his or her 
representative revoke his or her hospice election.
---------------------------------------------------------------------------

    \10\ Live discharge ``for cause'' is defined in Chapter 9, 
Section 20.2.3 of the Hospice Benefit Policy Manual. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c09.pdf.
---------------------------------------------------------------------------

    From FY 2013 through FY 2022, the average live discharge rate has 
been approximately 17 percent per year. Of the live discharges in FY 
2022, 35 percent were because of revocations, 36 percent were because 
the beneficiary was determined to no longer be terminally ill, 14.2 
percent were because beneficiaries moved out of the service area 
without transferring hospices, and 12.9 percent were because 
beneficiaries transferred to another hospice. The remaining 1.9 percent 
were discharged for cause. The rate of live discharge varies by 
ownership status, where non- profit hospices have live discharge rates 
of approximately 12 percent per year, for-profit hospices have 
approximately 21-22 percent of live discharges per year, and 
government/other types of hospices have live discharge rates of 
approximately 15 percent per year. Figure 2 shows the average annual 
rates of live discharge from FYs 2013 through 2022.

[[Page 20031]]

[GRAPHIC] [TIFF OMITTED] TP04AP23.001

    Finally, we looked at the distribution of live discharges by length 
of stay intervals. Figure 3 shows the live discharge rates by length of 
stay intervals from FY 2019 through FY 2022. We found that the majority 
of live discharges occur in the first 30 days of hospice care and after 
180 days of hospice care. The proportion of live discharges occurring 
between the lengths of stay intervals was relatively constant from FY 
2019 to FY 2022 where approximately 25 percent of live discharges 
occurred within 30 days of the start of hospice care, and approximately 
33 percent occurred after a length of stay over 180 days of hospice 
care.

[[Page 20032]]

[GRAPHIC] [TIFF OMITTED] TP04AP23.002

Non-Hospice Spending During a Hospice Election
    The Medicare hospice per diem payment amounts were developed to 
cover all services needed for the palliation and management of the 
terminal illness and related conditions, as described in section 
1861(dd)(1) of the Act. Hospice services provided under a written plan 
of care (POC) should reflect patient and family goals and interventions 
based on the problems identified in the initial, comprehensive, and 
updated comprehensive assessments. As referenced in our regulations at 
Sec.  418.64 and section II.B of this proposed rule, a hospice must 
routinely provide all core services directly by hospice employees and 
they must be provided in a manner consistent with acceptable standards 
of practice. Under the current payment system, hospices are paid for 
each day that a beneficiary is enrolled in hospice care, regardless of 
whether services are rendered on any given day.
    Additionally, when a beneficiary elects the Medicare hospice 
benefit, he or she waives the right to Medicare payment for services 
related to the treatment of the terminal illness and related 
conditions, except for services provided by the designated hospice and 
the attending physician. The comprehensive nature of the services 
covered under the Medicare hospice benefit is structured so that 
hospice beneficiaries would not have to routinely seek items, services, 
and medications beyond those provided by hospice. We believe that it 
would be unusual and exceptional to see services provided outside of 
hospice for those individuals who are approaching the end of life and 
we have reiterated since 1983 that ``virtually all'' care needed by the 
terminally ill individual would be provided by the hospice.
    In examining overall non-hospice spending during a hospice 
election, Medicare paid over $1.4 billion in non-hospice spending 
during a hospice election in FY 2022 for items and services under Parts 
A, B, and D Medicare payments for non-hospice Part A and Part B items 
and services received by hospice beneficiaries during a hospice 
election increased from $685 million in FY 2019 to nearly $883 million 
in FY 2022 (see Figure 4). This represents an increase in non-hospice 
Medicare spending for Parts A and B of 28.9 percent. Whereas, there is 
minimal beneficiary cost sharing under the Medicare hospice 
benefit,\11\ non-hospice services received outside of the Medicare 
hospice benefit are subject to beneficiary cost sharing. In FY 2022, 
the total beneficiary cost sharing amount for beneficiaries electing 
the hospice benefit was $197 million for Parts A and B.\12\ In FY 2022, 
beneficiaries receiving hospice services from for-profit hospices

[[Page 20033]]

had, on average, 60 percent higher non-hospice spending per day 
compared to beneficiaries under non-profit hospice care.
---------------------------------------------------------------------------

    \11\ The amount of coinsurance for each prescription 
approximates five percent of the cost of the drug or biological to 
the hospice determined in accordance with the drug copayment 
schedule established by the hospice, except that the amount of 
coinsurance for each prescription may not exceed $5. The amount of 
coinsurance for each respite care day is equal to five percent of 
the payment made by CMS for a respite care.
    \12\ Part A and B cost sharing is calculated by summing together 
the deductible and coinsurance amounts for each claim.
[GRAPHIC] [TIFF OMITTED] TP04AP23.003

    We also examined non-hospice spending during a hospice election by 
claim type for Parts A and B, as shown in Table 6. In percentage terms, 
we found a notable increase in billing related to skilled nursing 
facility claims in recent years. From FY 2019 to FY 2020, non-hospice 
spending related to skilled nursing facilities (SNFs) increase by 323 
percent and then increased another 49 percent between FY 2020 and FY 
2021. We found that roughly half of the SNF non-hospice spending that 
occurred in FY 2020 and FY 2021 was driven by SNF claims with a 
diagnosis of COVID-19. We also found that in FY 2022 SNF spending has 
declined, which may coincide with a reduction in COVID-19 cases.

Table 6--Total Medicare Spending Outside the Hospice Benefit During Days of Hospice Service (Excluding Admission/
                             Live Discharge Days) by Claim Type [All Beneficiaries]
                                                 [FYs 2019-2022]
----------------------------------------------------------------------------------------------------------------
                   Claim type                         FY 2019         FY 2020         FY 2021         FY 2022
----------------------------------------------------------------------------------------------------------------
Durable Medical Equipment.......................     $54,366,410     $62,911,894     $53,089,457     $57,214,990
Home Health Agency..............................      16,274,533      17,207,271      16,600,988      15,391,571
Inpatient.......................................     135,556,881     152,237,654     164,126,999     144,970,909
Outpatient......................................     134,890,458     144,512,733     161,433,749     150,063,938
Physician Billing...............................     334,867,809     374,275,518     459,259,144     471,598,388
Skilled Nursing Facility........................       9,199,526      38,609,985      57,590,547      43,726,037
                                                 ---------------------------------------------------------------
    Total.......................................     685,155,617     789,755,055     912,100,884     882,965,833
----------------------------------------------------------------------------------------------------------------
Source: Analysis of 100% Medicare Part A and B claims analytic files, FYs 2019-2022, from the CCW, accessed
  January 20, 2023.
Notes: Payments are based on estimated total non-hospice Medicare utilization ($) per hospice service day,
  excluding utilization on hospice admission or live discharge days. Only Medicare paid amounts are included.
  The Medicare paid amounts were equally apportioned across the length of each claim and only the days that
  overlapped a hospice election (not including hospice admission or live discharge days) were counted.


[[Page 20034]]

    Hospices are responsible for covering drugs and biologicals related 
to the palliation and management of the terminal illness and related 
conditions while the patient is under hospice care. For a prescription 
drug to be covered under Part D for an individual enrolled in hospice, 
the drug must be for treatment completely unrelated to the terminal 
illness or related conditions. After a hospice election, many 
maintenance drugs or drugs used to treat or cure a condition are 
typically discontinued as the focus of care shifts to palliation and 
comfort measures. However, those same drugs may be appropriate to 
continue as they may offer symptom relief for the palliation and 
management of the terminal prognosis.\13\ Similar to the increase in 
non-hospice spending during a hospice election for Medicare Parts A and 
B items and services, non-hospice spending for Part D drugs increased 
in from $493 million in FY 2019 to $623 million in FY 2022 (Figure 5).
---------------------------------------------------------------------------

    \13\ Update on Part D Payment Responsibility for Drugs for 
Beneficiaries Enrolled in Medicare Hospice. November 2016. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.
[GRAPHIC] [TIFF OMITTED] TP04AP23.004

    Analysis of Part D prescription drug events (PDEs) data suggests 
that the current use of prior authorization (PA) by Part D sponsors has 
reduced Part D program payments for drugs in four targeted categories 
(analgesics, anti-nauseants, anti-anxiety, and laxatives), which are 
typically used to treat common symptoms experienced during the end of 
life. However, under Medicare Part D there has been an increase in 
hospice beneficiaries filling prescriptions for a separate category of 
drugs we refer to as maintenance drugs.\14\ Under CMS's current policy, 
Part D sponsors are not expected to place hospice PA requirements on 
categories of drugs (other than the four targeted categories listed 
above) or take special measures beyond their normal compliance and 
utilization review activities. Under this policy, sponsors are not 
expected to place PA requirements on maintenance drugs, for 
beneficiaries under a hospice election, though these drugs may still be 
subject to standard Part D formulary

[[Page 20035]]

management practices. This policy was put in place in recognition of 
the operational challenges associated with requiring PA on all drugs 
for beneficiaries who have elected hospice and because of the potential 
barriers to access that could be created by requiring PA on all 
drugs.\15\ Examples of maintenance drugs are those used to treat high 
blood pressure, heart disease, asthma, and diabetes. These categories 
include beta blockers, calcium channel blockers, corticosteroids, and 
insulin.
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    \14\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.
    \15\ Part D Payment for Drugs for Beneficiaries Enrolled in 
Medicare Hospice. July 18, 2014. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2014-PartD-Hospice-Guidance-Revised-Memo.pdf.
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    Table 7 details the various components of Part D spending for 
patients receiving hospice care for FY 2022. The portion of the FY 2022 
Part D spending that was paid by Medicare is the sum of the Low-Income 
Cost-Sharing Subsidy and the Covered Drug Plan Paid Amount, 
approximately $623 million. The beneficiary cost sharing amount was 
approximately $69 million.\16\
---------------------------------------------------------------------------

    \16\ Part D cost sharing is calculated by summing together the 
``the patient pay amount'' and the ``other true out of pocket'' 
amount that are recorded on the Part D PDE.

   Table 7--Drug Cost Sources for Hospice Beneficiaries' FY 2022 Drugs
                         Received Through Part D
------------------------------------------------------------------------
                                                              FY 2022
                        Component                          expenditures
------------------------------------------------------------------------
Patient Pay Amount......................................     $67,633,318
Low-Income Cost-Sharing Subsidy.........................     169,197,953
Other True Out-of Pocket Amount.........................       1,547,055
Patient Liability Reduction Due to Other Payer Amount...      24,265,070
Covered Drug Plan Paid Amount...........................     453,610,449
Non-Covered Plan Paid Amount............................      23,197,266
Six Payment Amount Totals...............................     739,451,111
Unknown/Unreconciled....................................      47,238,184
Gross Total Drug Costs, Reported........................     786,689,295
------------------------------------------------------------------------
Source: Analysis of 100% Part D PDEs, FY 2022, from the CCW, accessed
  January 20, 2023.
Notes: Payments and costs that occur on hospice admission or live
  discharge days are excluded from the analysis.

Hospice and End-Stage Renal Disease (ESRD)
    Hospice enrollment for Medicare beneficiaries receiving maintenance 
dialysis for end-stage renal disease (ESRD) occurs less than half as 
often and much closer to the time of death, compared to the general 
Medicare population.
    We analyzed fee for service (FFS) Medicare utilization from FYs 
2017 through 2022 to better understand how ESRD patients use hospice. 
Our analysis included 8,991,619 beneficiaries with a date of death from 
FY 2017 through FY 2022. As shown in Figure 6, during this time period 
we found there were 85,763 beneficiaries with both hospice and ESRD 
service claims in the 30 days before death and they make up 27.5 
percent of the 311,336 beneficiaries with ESRD services in the 30 days 
before death. That is a little over half of the rate of hospice use at 
the end of life compared to the overall rate of hospice use among all 
Medicare beneficiaries in our sample (46.7 percent). Results are 
similar when looking at hospice and ESRD service claims in the 14 days 
before death, 60 days before death, and 90 days before death.
[GRAPHIC] [TIFF OMITTED] TP04AP23.005


[[Page 20036]]


BILLING CODE 4120-01-C
    Separately, we looked at all FFS beneficiaries from FY 2017 through 
FY 2021 and identified 110,159 beneficiaries who had both ESRD service 
and hospice claims during that time. For those beneficiaries with no 
overlap between their hospice and ESRD claims, we examined the number 
of days that passed from the last ESRD service claim and their day of 
death.\17\ Looking at those beneficiaries who began hospice within 14 
days of their last ESRD claim, we find that the average number of days 
between the last date of the ESRD service and their day of death is 
15.2 days. The median is 11 days and 95 percent of beneficiaries have 
31 or fewer days between their last date of ESRD service and their day 
of death.
---------------------------------------------------------------------------

    \17\ For the analysis, we begin with 110,159 beneficiaries. We 
first exclude beneficiaries with one or more days of overlap between 
a hospice claim and an ESRD service claim (n = 24,095). We then 
exclude beneficiaries whose first day of hospice is not after their 
last ESRD service date (n = 7,235). Next, we exclude beneficiaries 
whose last hospice date is recorded as occurring after their day of 
death (n = 122). Finally, we exclude beneficiaries if they started 
hospice 14 days or more after their last ESRD service claim (n = 
24,420). After the exclusions, we are left with 54,287 
beneficiaries. For this analysis we do not require a beneficiary to 
remain continuously enrolled in hospice until death, although for 
most beneficiaries that does occur.
---------------------------------------------------------------------------

    Our expectation continues to be that hospices offer and provide 
comprehensive, virtually all-inclusive care. In order to preserve the 
Medicare hospice benefit and ensure that Medicare beneficiaries have 
access to comprehensive, high quality and appropriate end-of-life 
hospice care, we would continue to examine program vulnerabilities and 
implement safeguards in the Medicare hospice benefit, when appropriate.
a. Request for Information (RFI) on Hospice Utilization; Non-Hospice 
Spending; Ownership Transparency; and Hospice Election Decision-Making
    We define hospice care as a set of comprehensive services, 
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 (Sec.  418.3). Hospice care changes the 
focus to comfort care (palliative care) for pain relief and symptom 
management instead of care to cure the patient's illness. Under the 
hospice benefit, palliative care is defined as patient and family-
centered care that optimizes quality of life by anticipating, 
preventing, and treating suffering (Sec.  418.3). Palliative care 
throughout the continuum of illness involves addressing physical, 
intellectual, emotional, social, and spiritual needs and to facilitate 
patient autonomy, access to information, and choice. CMS continually 
works to ensure access to quality hospice care for all eligible 
Medicare beneficiaries by establishing, refining, readapting, and 
reinforcing policies to improve the value of care at the end of life 
for these beneficiaries. That is, we seek to strengthen the notion that 
in order to provide the highest level of care for hospice 
beneficiaries, we must provide ongoing focus to those services that 
enforce CMS' definitions of hospice and palliative care, and eliminate 
any barriers to accessing hospice care.
    Adequate care under the hospice benefit has consistently been 
demonstrated to be associated with symptom reduction, less intensive 
care, decreased hospitalizations, improved outcomes from caregivers, 
lower overall costs and higher alignment with patient preferences and 
family satisfaction.\18\ Although hospice use has grown considerably 
since the 1983 inception of the Medicare hospice benefit, there are 
still barriers that terminally ill and hospice benefit eligible 
beneficiaries may face when trying to access hospice care. 
Specifically, the national trends \19\ that examine hospice enrollment 
and service utilization for those beneficiary populations with complex 
palliative needs and potentially high-cost medical care needs reveal 
that there may be an underuse of the hospice benefit, despite the 
demonstrated potential to both improve quality of care and lower 
costs.\20\
---------------------------------------------------------------------------

    \18\ Obermeyer Z, Makar M, Abujaber S, Dominici F, Block S, 
Cutler DM. Association Between the Medicare Hospice Benefit and 
Health Care Utilization and Costs for Patients With Poor-Prognosis 
Cancer. JAMA. 2014;312(18):1888-1896. doi:10.1001/jama.2014.14950.
    \19\ Wachterman MW, Hailpern SM, Keating NL, Kurella Tamura M, 
O'Hare AM. Association Between Hospice Length of Stay, Health Care 
Utilization, and Medicare Costs at the End of Life Among Patients 
Who Received Maintenance Hemodialysis. JAMA Intern Med. 2018 Jun 
1;178(6):792-799. doi: 10.1001/jamainternmed.2018.0256. PMID: 
29710217; PMCID: PMC5988968.
    \20\ Meier DE. Increased access to palliative care and hospice 
services: opportunities to improve value in health care. Milbank Q. 
2011 Sep;89(3):343-80. doi: 10.1111/j.1468-0009.2011.00632.x. PMID: 
21933272; PMCID: PMC3214714.
---------------------------------------------------------------------------

    In particular, our analysis in Table 3 illustrates the decrease in 
the percentages of hospices billing for higher levels of care (LOC) 
(CHC, GIP, IRC), despite substantial payment rate increases as a result 
of rebasing beginning in FY 2020 (84 FR 38496). Additionally, as 
illustrated in Figure 1, the percentages of hospices providing no CHC, 
IRC, or GIP have also increased from FY 2019 to FY 2022. We received 
comments in the FY 2020 final rule (84 FR 38484), noting that the 
rebased payment rates would help ensure that hospices would have 
greater access to the contractors and facilities that provide these 
levels of care, which would ultimately benefit patients and their 
caregivers due to increased availability. As such, we anticipated that 
rebasing the payment rates for these three levels would result in an 
increase in utilization; however, as indicated in section III.A. of 
this proposed rule, this has not been the case.
    It is longstanding that there is a subset of hospice eligible 
beneficiaries that would likely benefit from receiving palliative 
rather than curative chemotherapy, radiation, blood transfusions, and 
dialysis for treatment. The analysis shown in Figure 6 highlights that 
most beneficiaries that use dialysis shortly before death typically do 
not use hospice, while comparatively, a smaller subset of beneficiaries 
with diagnoses unrelated to kidney disease do use hospice and dialysis 
for several weeks on average. Similarly, anecdotally we have heard from 
beneficiaries and families their understanding that palliative 
therapies such as dialysis, chemotherapy, radiation, and blood 
transfusions are not options upon election of the hospice benefit. 
Generally, these patients report that they have been told by hospices 
that Medicare does not allow for the provision of these types of 
treatments upon hospice election. While these types of treatments are 
not intended to cure the patient's terminal illness, some 
practitioners, with input from the hospice interdisciplinary group 
(IDG), may determine for some patients these adjuvant treatment 
modalities would be beneficial for symptom control. In these instances, 
these palliative treatments would be covered under the hospice benefit.
    These persistent decreases in the use of higher LOC (even after 
increased payments) and limited higher cost palliative treatments under 
the hospice benefit, suggest that there may be some barriers for those 
beneficiary populations with complex palliative needs to access higher 
LOC. These findings are contrary to the manner by which CMS strives to 
set the stage for eliminating barriers for eligible beneficiaries, and 
reduces access to hospice care that is wholly patient centered, uses a 
multidisciplinary care team in medical decision making, is coordinated 
across settings, reduces unnecessary hospitalizations, and saves

[[Page 20037]]

health care dollars. As such, the results of the aforementioned 
findings serve as a call to action for CMS to address issues related to 
quality care and access when striving to improve health equity. As we 
continue to focus on improved access and value within the hospice 
benefit, we are soliciting public comment on the following questions:
     Are there any enrollment policies for hospices that may be 
perceived as restrictive to those beneficiaries that may require higher 
cost end of life palliative care, such as blood transfusions, 
chemotherapy, radiation, or dialysis?
     Are there any enrollment policies for hospices that may be 
perceived as restrictive to those beneficiaries that may require higher 
intensity levels of hospice care?
     What continued education efforts do hospices take to 
understand the distinction between curative treatment and complex 
palliative treatment for services such as chemotherapy, radiation, 
dialysis, and blood transfusions as it relates to beneficiary 
eligibility under the hospice benefit? How is that information shared 
with patients at the time of election and throughout hospice service?
     Although the previously referenced analysis did not 
identify the cause for lower utilization of complex palliative 
treatments and/or higher intensity levels of hospice care, do the costs 
incurred with providing these services correlate to financial risks 
associated with enrolling such hospice patients?
     What are the overall barriers to providing higher 
intensity levels of hospice care and/or complex palliative treatments 
for eligible Medicare beneficiaries (for example, are there issues 
related to established formal partnerships with general inpatient/
inpatient respite care facilities)? What steps, if any, can hospice 
providers or CMS take to address these barriers?
     What are reasons why non-hospice spending is growing for 
beneficiaries who elect hospice? What are ways to ensure that hospice 
is appropriately covering services under the benefit?
     What additional information should CMS or the hospice be 
required to provide the family/patient about what is and is not covered 
under the hospice benefit and how should that information be 
communicated?
     Are patients requesting the Patient Notification of 
Hospice Non-Covered Items, Services, and Drugs? Should this information 
be provided to all prospective patients at the time of hospice election 
or as part of the care plan?
     Should information about hospice staffing levels, 
frequency of hospice staff encounters, or utilization of higher LOC be 
provided to help patients and their caregivers make informed decisions 
about hospice selection? Through what mechanisms?
     The analysis included in this proposed rule shows 
increased overall non-hospice spending for Part D drugs for 
beneficiaries under a hospice election. What are tools to ensure that 
hospice is appropriately covering prescription drugs related to 
terminal illnesses and related conditions, besides prior authorization 
and the hospice election statement addendum?
     Given some of the differences between for-profit and not-
for-profit utilization and spending patterns highlighted in this 
proposed rule, how can CMS improve transparency around ownership 
trends? For example, what and how should CMS publicly provide 
information around hospice ownership? Would this information be helpful 
for beneficiaries seeking to select a hospice for end of life care?
    CMS is committed to improving the Medicare hospice benefit based, 
in part, on information collected by hospices not currently available 
on claims, assessments, or other publicly available data sources to 
support development of improved quality for end of life hospice care. 
We will continue to review our policies to support ownership 
transparency, patient education and transparency of hospice benefits, 
and to analyze the type of care that patients are receiving while in 
hospice to help to inform future rulemaking. We believe the information 
gathered under this RFI would help to improve the continuum of care 
under the hospice benefit by: (1) heightened patient and family 
satisfaction; (2) improvement in quality indicators; (3) lower rates of 
hospitalization (to include decreased intensive care unit admission and 
invasive procedures at the end of life); and (4) significantly lower 
health care expenditures at the end of life.
b. Request for Information on Health Equity Under the Hospice Benefit
    CMS defines health equity as ``the attainment of the highest level 
of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes.'' \21\ CMS is working 
to advance health equity by designing, implementing, and 
operationalizing policies and programs that support health for all the 
people served by our programs, eliminating avoidable differences in 
health outcomes experienced by people who are vulnerable or 
underserved, and providing the care and support that our beneficiaries 
need to thrive. CMS' goals are in line with Executive Order 13985, 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government.'' \22\
---------------------------------------------------------------------------

    \21\ CMS Framework for Health Equity 2022-2032. https://www.cms.gov/files/document/cms-framework-health-equity.pdf.
    \22\ https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021-01753.pdf.
---------------------------------------------------------------------------

    Health inequities persist overall in hospice and palliative care, 
where Black and Hispanic populations are less likely to utilize care 
and over 80 percent of patients are White.\23\ \24\ \25\ \26\ After 
hospice admission, some studies have shown that minorities experience 
disparities in the quality of care, with some evidence of higher rates 
of hospice disenrollment and concerns about care coordination amongst 
hospices with a higher proportion of Black enrollees; however, data on 
minority hospice enrollees is limited.\27\ An important first step in 
addressing these disparities is improving data collection to allow for 
better measurement and reporting on equity across our programs and 
policies.\28\ \29\ We are interested in receiving input regarding the 
potential collection of additional indices and data elements that can 
provide insight regarding underlying health status and non-medical 
factors, access to care, and experience in medical care. Indices for 
measurements related to health-related social needs, social 
determinants of health, and social risk factors, have been

[[Page 20038]]

developed and are currently being studied to better understand the 
policy implications.\30\
---------------------------------------------------------------------------

    \23\ Addressing Disparities in Hospice & Palliative Care. 
Nalley, Catlin. Oncology Times: March 20, 2021-Volume 43-Issue 6-p 
1,10doi: 10.1097/01.COT.0000741732.73529.bb.
    \24\ https://journalofethics.ama-assn.org/article/racial-disparities-hospice-moving-analysis-intervention/2006-09.
    \25\ Capital Caring, Seasons Execs: Improving Hospice Diversity 
Starts from the Inside Out. 11/17/21. Holly Vossel. Capital Caring, 
Seasons Execs: Improving Hospice Diversity Starts from the Inside 
Out--Hospice & Palliative Care Network of Maryland https://hospicenews.com/2021/11/17/capital-caring-seasons-execs-improving-hospice-diversity-starts-from-the-inside-out/.
    \26\ Disparities in Palliative and Hospice Care and Completion 
of Advance Care Planning and Directives Among Non-Hispanic Blacks: A 
Scoping Review of Recent Literature (nih.gov).
    \27\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3822363/.
    \28\ https://hospicenews.com/2021/05/27/hospice-providers-leverage-data-to-reach-the-underserved/.
    \29\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3822363/.
    \30\ https://aspe.hhs.gov/sites/default/files/documents/474a62378abf941f20b3eaa74ca5721c/Area-level-Indices-ASPE-Reflections.pdf.
---------------------------------------------------------------------------

    CMS defines health equity data as the combination of quantitative 
and qualitative elements that enable the examination of health 
differences between populations and their causes.\31\ The Office of 
Disease Prevention and Health Promotion and Healthy People defines 
social determinants of health (SDOH) as the conditions in the 
environments where people are born, live, learn, work, play, worship, 
and age that affect a wide range of health, functioning, and quality-
of-life outcomes and risks.\32\ Health-related social needs are defined 
as the individual-level manifestations of SDOH, such as housing 
instability and food insecurity.\33\ Social risk factors are defined as 
adverse social conditions that are associated with poor health, and can 
be measures from the community or individual-level for characteristics 
such as socioeconomic position, cultural context, social relationships, 
and residential and community context.\34\
---------------------------------------------------------------------------

    \31\ https://www.cms.gov/files/document/path-forwardhe-data-paper.pdf.
    \32\ Healthy People 2030, U.S. Department of Health and Human 
Services, Office of Disease Prevention and Health Promotion. 
Retrieved, from https://health.gov/healthypeople/objectives-and-data/social-determinants-health.
    \33\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Available at: https://innovation.cms.gov/media/document/ahcm-
screeningtool-companion. Accessed: November 23, 2021.
    \34\ Alderwick H, Gottlieb LM, 2019. Meanings and 
misunderstandings: a social determinants of health lexicon for 
health care systems. The Milbank Quarterly, 97(2), p.407. https://doi.org/10.1111%2F1468-0009.12390.
---------------------------------------------------------------------------

    We appreciate hospice agencies and industry associations sharing 
their support and commitment to addressing health disparities and 
offering meaningful comments for consideration. Given the value of this 
engagement with CMS, and the ongoing development of activities to 
improve health equity, we solicit public comment on the following 
questions:
     What efforts do hospices employ to measure impact on 
health equity?
     What factors do hospices observe that influence 
beneficiaries in electing and accessing hospice care?
     What geographical area indices, beyond urban/rural, can 
CMS use to assess disparities in hospice?
     What information can CMS collect and share to help 
hospices serve vulnerable and underserved populations and address 
barriers to access?
     What sociodemographic and SDOH data should be collected 
and used to effectively evaluate health equity in hospice settings?
     What are feasible and best practice approaches for the 
capture and analysis of data related to health equity?
     What barriers do hospices face in collecting information 
on SDOH and race and ethnicity? What is needed to overcome those 
barriers?

B. Proposed Routine FY 2024 Hospice Wage Index and Rate Update

1. Proposed FY 2024 Hospice Wage Index
    The hospice wage index is used to adjust payment rates for hospices 
under the Medicare program to reflect local differences in area wage 
levels, based on the location where services are furnished. The hospice 
wage index utilizes the wage adjustment factors used by the Secretary 
for purposes of section 1886(d)(3)(E) of the Act for hospital wage 
adjustments. Our regulations at Sec.  418.306(c) require each labor 
market to be established using the most current hospital wage data 
available, including any changes made by the Office of Management and 
Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.
    In general, OMB issues major revisions to statistical areas every 
10 years, based on the results of the decennial census. However, OMB 
occasionally issues minor updates and revisions to statistical areas in 
the years between the decennial censuses. 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 the following website: 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 Area (CSA), 
and changes to New England City and Town Area (NECTA) delineations. In 
the FY 2021 Hospice Wage Index final rule (85 FR 47070), 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 
determined that the changes in Bulletin 20-01 encompassed delineation 
changes that would not affect the Medicare wage index for FY 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 FY 2021 
Hospice Wage Index final rule (85 FR 47070), we include hospitals 
located in Micropolitan Statistical areas in each state's rural wage 
index.
    In the FY 2020 Hospice Wage Index final rule (84 FR 38484), we 
finalized the proposal to use the current FY's hospital wage index data 
to calculate the hospice wage index values. In the FY 2021 Hospice Wage 
Index final rule (85 FR 47070), we adopted the revised OMB delineations 
with a 5-percent cap on wage index decreases, where the estimated 
reduction in a geographic area's wage index would be capped at 5 
percent in FY 2021 and no cap would be applied to wage index decreases 
for the second year (FY 2022). In the FY 2023 Hospice Wage Index final 
rule (87 FR 45673), we finalized for FY 2023 and subsequent years the 
application of a permanent 5-percent cap on any decrease to a 
geographic area's wage index from its wage index in the prior year, 
regardless of the circumstances causing the decline, so that a 
geographic area's wage index would not be less than 95 percent of its 
wage index calculated in the prior FY.
    For FY 2024, the proposed hospice wage index would be based on the 
FY 2024 hospital pre-floor, pre-reclassified wage index for hospital 
cost reporting periods beginning on or after October 1, 2019 and before 
October 1, 2020 (FY 2020 cost report data). The proposed FY 2024 
hospice wage index would not take into account any geographic 
reclassification of hospitals, including those in accordance with 
section 1886(d)(8)(B) or 1886(d)(10) of the Act. The proposed FY 2024 
hospice wage index would include a 5-percent cap on wage index 
decreases. The appropriate wage index value would be applied to the 
labor portion of the hospice payment rate based on the geographic area 
in which the beneficiary resides when receiving RHC or CHC. The 
appropriate wage index value is applied to the labor portion of the 
payment rate based on the geographic location of the facility for 
beneficiaries receiving GIP or IRC.

[[Page 20039]]

    In the FY 2006 Hospice Wage Index final rule (70 FR 45135), we 
adopted the policy that, for urban labor markets without a hospital 
from which hospital wage index data could be derived, all of the CBSAs 
within the state would be used to calculate a statewide urban average 
pre-floor, pre-reclassified hospital wage index value to use as a 
reasonable proxy for these areas. For FY 2023, the only CBSA without a 
hospital from which hospital wage data can be derived is 25980, 
Hinesville-Fort Stewart, Georgia. This remains the same for FY 2024 and 
the wage index value for Hinesville-Fort Stewart, Georgia is 0.8711.
    To address rural areas where there were no hospitals, and thus no 
hospital wage data on which to base the calculation of the hospice wage 
index, in the FY 2008 Hospice Wage Index final rule (72 FR 50217 
through 50218), we implemented a methodology to update the hospice wage 
index for rural areas without hospital wage data. In cases where there 
was a rural area without rural hospital wage data, we use the average 
pre-floor, pre-reclassified hospital wage index data from all 
contiguous CBSAs, to represent a reasonable proxy for the rural area. 
The term ``contiguous'' means sharing a border (72 FR 50217). 
Currently, the only rural area without a hospital from which hospital 
wage data could be derived is Puerto Rico. However, for rural Puerto 
Rico, we would not apply this methodology due to the distinct economic 
circumstances that exist there (for example, due to the close proximity 
of almost all of Puerto Rico's various urban areas to non-urban areas, 
this methodology would produce a wage index for rural Puerto Rico that 
is higher than that in half of its urban areas); instead, we would 
continue to use the most recent wage index previously available for 
that area. For FY 2024, we propose to continue using the most recent 
pre-floor, pre-reclassified hospital wage index value available for 
Puerto Rico, which is 0.4047, subsequently adjusted by the hospice 
floor.
    As described in the August 8, 1997 Hospice Wage Index final rule 
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index 
is used as the raw wage index for the hospice benefit. These raw wage 
index values are subject to application of the hospice floor to compute 
the hospice wage index used to determine payments to hospices. As 
previously discussed, the pre-floor, pre-reclassified hospital wage 
index values below 0.8 would be further adjusted by a 15 percent 
increase subject to a maximum wage index value of 0.8. For example, if 
County A has a pre-floor, pre-reclassified hospital wage index value of 
0.3994, we would multiply 0.3994 by 1.15, which equals 0.4593. Since 
0.4593 is not greater than 0.8, then County A's hospice wage index 
would be 0.4593. In another example, if County B has a pre-floor, pre-
reclassified hospital wage index value of 0.7440, we would multiply 
0.7440 by 1.15, which equals 0.8556. Because 0.8556 is greater than 
0.8, County B's hospice wage index would be 0.8.
    The proposed hospice wage index applicable for FY 2024 (October 1, 
2023 through September 30, 2024) is available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.
2. Proposed FY 2024 Hospice Payment Update Percentage
    Section 4441(a) of the BBA (Pub. L. 105-33) amended section 
1814(i)(1)(C)(ii)(VI) of the Act to establish updates to hospice rates 
for FYs 1998 through 2002. Hospice rates were to be updated by a factor 
equal to the inpatient hospital market basket percentage increase set 
out under section 1886(b)(3)(B)(iii) of the Act, minus 1 percentage 
point. Payment rates for FYs since 2002 have been updated according to 
section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update 
to the payment rates for subsequent FYs must be the inpatient market 
basket percentage increase for that FY. In the FY 2022 inpatient 
prospective payment system (IPPS) final rule we finalized the rebased 
and revised IPPS market basket to reflect a 2018 base year. We refer 
readers to the FY 2022 IPPS final rule (86 FR 45194 through 45208) for 
further information.
    Section 3401(g) of the Affordable Care Act mandated that, starting 
with FY 2013 (and in subsequent FYs), the hospice payment update 
percentage would be annually reduced by changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
The statute defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm 
business multifactor productivity (MFP) as projected by the Secretary 
for the 10-year period ending with the applicable FY, year, cost 
reporting period, or other annual period) (the ``productivity 
adjustment''). The United States Department of Labor's Bureau of Labor 
Statistics (BLS) publishes the official measures of productivity for 
the United States economy. We note that previously the productivity 
measure referenced in section 1886(b)(3)(B)(xi)(II) was published by 
BLS as private nonfarm business multifactor productivity. Beginning 
with the November 18, 2021 release of productivity data, BLS replaced 
the term ``multifactor productivity'' with ``total factor 
productivity'' (TFP). BLS noted that this is a change in terminology 
only and would not affect the data or methodology. As a result of the 
BLS name change, the productivity measure referenced in section 
1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as ``private 
nonfarm business total factor productivity.'' However, as mentioned, 
the data and methods are unchanged. We refer readers to https://www.bls.gov for the BLS historical published TFP data. A complete 
description of IHS Global Inc.'s (IGI's) TFP projection methodology is 
available on the CMS website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch. In addition, in the FY 
2022 IPPS final rule (86 FR 45214), we noted that beginning with FY 
2022, CMS changed the name of this adjustment to refer to it as the 
``productivity adjustment'' rather than the ``MFP adjustment''.
    The proposed hospice payment update percentage for FY 2024 is based 
on the proposed inpatient hospital market basket update of 3.0 percent 
(based on IGI's fourth quarter 2022 forecast with historical data 
through the third quarter 2022). Due to the requirements at sections 
1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the proposed 
inpatient hospital market basket update for FY 2024 of 3.0 percent must 
be reduced by a productivity adjustment as mandated by the Affordable 
Care Act (currently estimated to be 0.2 percentage point for FY 2024). 
In effect, the proposed hospice payment update percentage for FY 2024 
would be 2.8 percent. We also propose that if more recent data become 
available after the publication of this proposed rule and before the 
publication of the final rule (for example, a more recent estimate of 
the inpatient hospital market basket update and/or productivity 
adjustment), we would use such data, if appropriate, to determine the 
hospice payment update percentage for FY 2024 in the final rule. We 
continue to believe it is appropriate to routinely update the hospice 
payment system so that it reflects the best available data encompassing 
differences in patient resource use and costs among

[[Page 20040]]

hospices as required by the statute. Therefore, we are proposing to: 
(1) update hospice payments using the methodology outlined and apply 
the 2018-based IPPS market basket update for FY 2024 of 3.0 percent, 
reduced by the statutorily required productivity adjustment of 0.2 
percentage point along with the wage index budget neutrality adjustment 
to update the payment rates; and (2) use the FY 2024 hospice wage index 
which uses the FY 2024 pre-floor, pre-reclassified IPPS hospital wage 
index as its basis.
    In the FY 2022 Hospice Wage Index final rule (86 FR 42532 through 
42539), we rebased and revised the labor shares for RHC, CHC, GIP, and 
IRC using MCR data for freestanding hospices (CMS Form 1984-14, OMB 
Control Number 0938-0758) from 2018. The current labor portion of the 
payment rates are: for RHC, 66.0 percent; for CHC, 75.2 percent; for 
GIP, 63.5 percent; and for IRC, 61.0 percent. The non-labor portion is 
equal to 100 percent minus the labor portion for each level of care. 
The non-labor portion of the payment rates are as follows: for RHC, 
34.0 percent; for CHC, 24.8 percent; for GIP, 36.5 percent; and for 
IRC, 39.0 percent.
3. Proposed FY 2024 Hospice Payment Rates
    There are four payment categories that are distinguished by the 
location and intensity of the hospice services provided. The base 
payments are adjusted for geographic differences in wages by 
multiplying the labor share, which varies by category, of each base 
rate by the applicable hospice wage index. A hospice is paid the RHC 
rate for each day the beneficiary is enrolled in hospice, unless the 
hospice provides CHC, IRC, or GIP. CHC is provided during a period of 
patient crisis to maintain the patient at home; IRC is short-term care 
to allow the usual caregiver to rest and be relieved from caregiving; 
and GIP care is intended to treat symptoms that cannot be managed in 
another setting.
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47172), we implemented two different RHC payment 
rates, one RHC rate for the first 60 days and a second RHC rate for 
days 61 and beyond. In addition, in that final rule, we implemented an 
SIA payment for RHC when direct patient care is provided by an RN or 
social worker during the last 7 days of the beneficiary's life. The SIA 
payment is equal to the CHC hourly rate multiplied by the hours of 
nursing or social work provided (up to 4 hours total) that occurred on 
the day of service, if certain criteria are met. In order to maintain 
budget neutrality, as required under section 1814(i)(6)(D)(ii) of the 
Act, the new RHC rates were adjusted by a service intensity add-on 
budget neutrality factor (SBNF). The SBNF is used to reduce the overall 
RHC rate in order to ensure that SIA payments are budget-neutral. At 
the beginning of every FY, SIA utilization is compared to the prior 
year in order calculate a budget neutrality adjustment.
    In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 
52156), we initiated a policy of applying a wage index standardization 
factor to hospice payments in order to eliminate the aggregate effect 
of annual variations in hospital wage data. For FY 2024 hospice rate 
setting, we are continuing our longstanding policy of using the most 
recent data available. Specifically, we are using FY 2022 claims data 
with the FY 2024 payment rate updates. In order to calculate the wage 
index standardization factor, we simulate total payments using FY 2022 
hospice utilization claims data with the FY 2023 wage index (pre-floor, 
pre-reclassified hospital wage index with the hospice floor, and the 5 
percent cap on wage index decreases) and FY 2023 payment rates and 
compare it to our simulation of total payments using FY 2022 
utilization claims data, the FY 2024 hospice wage index (pre-floor, 
pre-reclassified hospital wage index with hospice floor, and the 5 
percent cap on wage index decreases) and FY 2023 payment rates. By 
dividing payments for each level of care (RHC days 1 through 60, RHC 
days 61+, CHC, IRC, and GIP) using the FY 2023 wage index and payment 
rates for each level of care by the FY 2024 wage index and FY 2023 
payment rates, we obtain a wage index standardization factor for each 
level of care. The wage index standardization factors for each level of 
care are shown in the Tables 8 and 9.
    The proposed FY 2024 RHC rates are shown in Table 8. The proposed 
FY 2024 payment rates for CHC, IRC, and GIP are shown in Table 9.

                               Table 8--Proposed FY 2024 Hospice RHC Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                   SIA budget       Wage index      Proposed FY     Proposed FY
   Code         Description          FY 2023       neutrality    standardization   2024 hospice    2024 payment
                                  payment rates      factor           factor      payment update       rates
----------------------------------------------------------------------------------------------------------------
651......  Routine Home Care            $211.34          1.0010           1.0012           1.028         $217.74
            (days 1-60).
651......  Routine Home Care             167.00          1.0000           1.0011           1.028          171.86
            (days 61+).
----------------------------------------------------------------------------------------------------------------


                        Table 9--Proposed FY 2024 Hospice CHC, IRC, and GIP Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                             Wage index      Proposed FY
   Code          Description       FY 2023 payment rates  standardization   2024 hospice      Proposed FY 2024
                                                               factor      payment update      payment rates
----------------------------------------------------------------------------------------------------------------
652.......  Continuous Home Care   $1,522.04 ($63.42 per           0.9980           1.028  $1,561.53 ($65.06 per
             Full Rate = 24 hours   hour).                                                  hour).
             of care.
655.......  Inpatient Respite      $492.10..............           1.0010           1.028  $506.38.
             Care.
656.......  General Inpatient      $1,110.76............           1.0003           1.028  $1,142.20.
             Care.
----------------------------------------------------------------------------------------------------------------

    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data, based on measures to be specified by the 
Secretary. In the FY 2012 Hospice Wage Index and Rate Update final rule 
(76 FR 47320 through 47324), we implemented a HQRP as required by those 
sections. Hospices were required to begin collecting quality data in 
October 2012 and submit those quality data in 2013. Section 
1814(i)(5)(A)(i) of the Act requires that

[[Page 20041]]

beginning with FY 2014 through FY 2023, the Secretary shall reduce the 
market basket update by 2 percentage points for any hospice that does 
not comply with the quality data submission requirements with respect 
to that FY. Section 1814(i)(5)(A)(i) of the Act was amended by section 
407(b) of Division CC, Title IV of the CAA, 2021 to change the payment 
reduction for failing to meet hospice quality reporting requirements 
from 2 to 4 percentage points. This policy would apply beginning with 
the FY 2024 annual payment update (APU) that is based on calendar year 
(CY) 2022 quality data. Specifically, the Act requires that, for FY 
2014 through FY 2023, the Secretary shall reduce the market basket 
update by 2 percentage points and beginning with the FY 2024 APU and 
for each subsequent year, the Secretary shall reduce the market basket 
update by 4 percentage points for any hospice that does not comply with 
the quality data submission requirements for that FY. The proposed FY 
2024 rates for hospices that do not submit the required quality data 
would be updated by the proposed FY 2024 hospice payment update 
percentage of 2.8 percent minus 4 percentage points. These rates are 
shown in Tables 10 and 11.

 Table 10--Proposed FY 2024 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                      FY 2024
                                                                                      hospice
                                     FY 2023       SIA budget       Wage index    payment update    Proposed FY
   Code         Description       payment rates    neutrality    standardization   of 2.8% minus   2024 payment
                                                     factor           factor       4 percentage        rates
                                                                                  points = -1.2%
----------------------------------------------------------------------------------------------------------------
651......  Routine Home Care            $211.34          1.0010           1.0012           0.988         $209.26
            (days 1-60).
651......  Routine Home Care             167.00          1.0000           1.0011           0.988          165.18
            (days 61+).
----------------------------------------------------------------------------------------------------------------


 Table 11--Proposed FY 2024 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required
                                                  Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                             FY 2024
                                                                             hospice
                                            FY 2023        Wage index    payment update      Proposed FY 2024
     Code            Description         payment rates  standardization   of 2.8% minus       payment rates
                                                             factor       4 percentage
                                                                         points = -1.2%
----------------------------------------------------------------------------------------------------------------
652..........  Continuous Home Care          $1,522.04           0.9980           0.988  $1,500.77 ($62.53 per
                Full Rate = 24 hours                                                      hour).
                of care.
655..........  Inpatient Respite Care.          492.10           1.0010           0.988  486.68.
656..........  General Inpatient Care.        1,110.76           1.0003           0.988  1,097.76.
----------------------------------------------------------------------------------------------------------------

4. Proposed Hospice Cap Amount for FY 2024
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47183), we implemented changes mandated by the IMPACT 
Act of 2014. Specifically, we stated that for accounting years that end 
after September 30, 2016, and before October 1, 2025, the hospice cap 
is updated by the hospice payment update percentage rather than using 
the CPI-U. Division CC, section 404 of the CAA, 2021 extended the 
accounting years impacted by the adjustment made to the hospice cap 
calculation until 2030. In the FY 2022 Hospice Wage Index final rule 
(86 FR 42539), we finalized conforming regulations text changes at 
Sec.  418.309 to reflect the provisions of the CAA, 2021. Division P, 
section 312 of the CAA, 2022 amended section 1814(i)(2)(B) of the Act 
and extended the provision that mandates the hospice cap be updated by 
the hospice payment update percentage (hospital market basket update 
reduced by the productivity adjustment) rather than the CPI-U for 
accounting years that end after September 30, 2016, and before October 
1, 2031. Division FF, section 4162 of the CAA, 2023 amended section 
1814(i)(2)(B) of the Act and extended the provision that currently 
mandates the hospice cap be updated by the hospice payment update 
percentage (hospital market basket update reduced by the productivity 
adjustment) rather than the CPI-U for accounting years that end after 
September 30, 2016, and before October 1, 2032. Before the enactment of 
this provision, the hospice cap update was set to revert to the 
original methodology of updating the annual cap amount by the CPI-U 
beginning on October 1, 2031. Therefore, for accounting years that end 
after September 30, 2016, and before October 1, 2032, the hospice cap 
amount is updated by the hospice payment update percentage rather than 
the CPI-U. As a result of the changes mandated by the CAA 2023, we are 
proposing conforming regulation text changes at Sec.  418.309 to 
reflect the new language added to section 1814(i)(2)(B) of the Act.
    The proposed hospice cap amount for the FY 2024 cap year is 
$33,396.55, which is equal to the FY 2023 cap amount ($32,486.92) 
updated by the proposed FY 2024 hospice payment update percentage of 
2.8 percent.
5. Conforming Regulations Text Revisions for Telehealth Services
    We are proposing to revise the regulations text at Sec.  
418.22(a)(4)(ii) in accordance with Division FF, section 4113(f) of the 
CAA, 2023, effective January 1, 2024. Additionally, we are proposing to 
remove Sec.  418.204(d), effective retroactively to May 12, 2023, to 
align with the anticipated end of the COVID-19 PHE. In the first COVID-
19 interim final rule ``Medicare and Medicaid Programs; Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency'' (85 FR 19230, 19289) (April 6, 2020), we amended the 
hospice regulations at

[[Page 20042]]

Sec.  418.204 on an interim basis to specify that when a patient is 
receiving routine home care, hospices may provide services via a 
telecommunications system, if it is feasible and appropriate to ensure 
that Medicare patients can continue receiving services that are 
reasonable and necessary for the palliation and management of a 
patients' terminal illness and related conditions without jeopardizing 
the patients' health or the health of those who are providing such 
services during the COVID-19 PHE. We stated that this change was 
effective for the duration of the COVID-19 PHE. Specifically, we 
propose to:
     Revise Sec.  418.22(a)(4)(ii), which outlines the 
certification of terminal illness requirements. We propose to add ``or 
through December 31, 2024, whichever is later'' after ``During a Public 
Health Emergency, as defined in Sec.  400.200 of this chapter.''
     Revise Sec.  418.204, to remove paragraph (d) to eliminate 
the use of technology in furnishing services during a PHE.

C. Proposals and Updates to the Hospice Quality Reporting Program 
(HQRP)

1. Background and Statutory Authority
    The Hospice Quality Reporting Program (HQRP) specifies reporting 
requirements for the Hospice Item Set (HIS), administrative data, and 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Hospice Survey. Section 1814(i)(5) of the Act requires the Secretary to 
establish and maintain a quality reporting program for hospices. 
Section 1814(i)(5)(A)(i) of the Act was amended by section 407(b) of 
Division CC, Title IV of the CAA 2021 to change the payment reduction 
for failing to meet hospice quality reporting requirements from 2 to 4 
percentage points. Specifically, the Act requires that, beginning with 
FY 2014 through FY 2023, the Secretary shall reduce the market basket 
update by 2 percentage points and beginning with the FY 2024 APU and 
for each subsequent year, the Secretary shall reduce the market basket 
update by 4 percentage points for any hospice that does not comply with 
the quality data submission requirements for that FY. This payment 
penalty increase to 4 percent is statutorily required; as discussed 
below, we are proposing to codify its application and set completeness 
thresholds at proposed Sec.  418.312(j).
    Depending on the amount of the annual update for a particular year, 
a reduction of 4 percentage points beginning in FY 2024 could result in 
the annual market basket update being less than zero percent for a FY 
and may result in payment rates that are less than payment rates for 
the preceding FY. Any reduction based on failure to comply with the 
reporting requirements, as required by section 1814(i)(5)(B) of the 
Act, would apply only for the specified year. Typically, about 18 
percent of Medicare-certified hospices are found non-compliant with the 
HQRP reporting requirements and subject to the APU payment reduction 
for a given FY.
    In the FY 2022 Hospice Wage Index and Payment Rate Update final 
rule (86 FR 42552), we finalized two new measures using claims data: 
(1) Hospice Visits in the Last Days of Life (HVLDL); and (2) Hospice 
Care Index (HCI). We also finalized a policy that claims-based measures 
would use 8 quarters of data in order to publicly report on more 
hospices.
    In addition, we removed the seven Hospice Item Set (HIS) Process 
Measures from the program as individual measures and public reporting 
because the HIS Comprehensive Assessment Measure is sufficient for 
measuring care at admission without the seven individual process 
measures. For a detailed discussion of the historical use for measure 
selection and removal for the HQRP quality measures, we refer readers 
to the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142) and the FY 2019 Hospice Wage Index and Rate Update final rule 
(83 FR 38622). In the FY 2022 Hospice Wage Index and Rate Update final 
rule (86 FR 42553), we finalized Sec.  418.312(b)(2), which requires 
hospices to provide administrative data, including claims-based 
measures, as part of the HQRP requirements for Sec.  418.306(b). In 
that same final rule, we provided CAHPS Hospice Survey updates. We 
finalized temporary changes to our public reporting policies based on 
the March 27, 2020 memorandum \35\ and provided another tip sheet, 
referred to as the ``Third Edition HQRP Public Reporting Tip Sheet'' on 
the HQRP Requirements and Best Practices web page.
---------------------------------------------------------------------------

    \35\ Exceptions and Extensions for Quality Reporting 
Requirements for Acute Care Hospitals, PPS-Exempt Cancer Hospitals, 
Inpatient Psychiatric Facilities, Skilled Nursing Facilities, Home 
Health Agencies, Hospices, Inpatient Rehabilitation Facilities, 
Long-Term Care Hospitals, Ambulatory Surgical Centers, Renal 
Dialysis Facilities, and MIPS Eligible Clinicians Affected by COVID-
19 are available at: https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
---------------------------------------------------------------------------

    As finalized in the FY 2022 Hospice Wage Index and Payment Rate 
Update final rule (86 FR 42552), public reporting of the two new 
claims-based quality measures (QMs), the Hospice Visits in Last Days of 
Life (HVLDL) and the Hospice Care Index (HCI) is available on the Care 
Compare/Provider Data Catalogue (PDC) web pages as of the August 2022 
refresh. In the FY 2023 Hospice proposed rule (87 FR 19442), we did not 
propose any new quality measures. However, we provide updates on 
already-adopted measures. Table 12 shows current quality measures 
finalized since the FY 2022 Hospice Wage Index and Payment Rate Update 
final rule.

 Table 12--Quality Measures in Effect for the Hospice Quality Reporting
                                 Program
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                    Hospice Quality Reporting Program
------------------------------------------------------------------------
                            Hospice Item set
------------------------------------------------------------------------
Hospice and Palliative Care Composite Process Measure--HIS-Comprehensive
 Assessment Measure at Admission includes:
  1. Patients Treated with an Opioid who are Given a Bowel Regimen.
  2. Pain Screening.
  3. Pain Assessment.
  4. Dyspnea Treatment.
  5. Dyspnea Screening.
  6. Treatment Preferences.
  7. Beliefs/Values Addressed (if desired by the patient).
------------------------------------------------------------------------

[[Page 20043]]

 
          Administrative Data, including Claims-based Measures
------------------------------------------------------------------------
Hospice Visits in Last Days of Life (HVLDL)
Hospice Care Index (HCI):
  1. Continuous Home Care (CHC) or General Inpatient (GIP) Provided.
  2. Gaps in Skilled Nursing Visits.
  3. Early Live Discharges.
  4. Late Live Discharges.
  5. Burdensome Transitions (Type 1)--Live Discharges from Hospice
   Followed by Hospitalization and Subsequent Hospice Readmission.
  6. Burdensome Transitions (Type 2)--Live Discharges from Hospice
   Followed by Hospitalization with the Patient Dying in the Hospital.
  7. Per-beneficiary Medicare Spending.
  8. Skilled Nursing Care Minutes per Routine Home Care (RHC) Day.
  9. Skilled Nursing Minutes on Weekends.
  10. Visits Near Death.
------------------------------------------------------------------------
                          CAHPS Hospice Survey
------------------------------------------------------------------------
CAHPS Hospice Survey:
  1. Communication with Family.
  2. Getting timely help.
  3. Treating patient with respect.
  4. Emotional and spiritual support.
  5. Help for pain and symptoms.
  6. Training family to care for the patient.
  7. Rating of this hospice.
  8. Willing to recommend this hospice.
------------------------------------------------------------------------

2. Proposed Hospice Outcomes & Patient Evaluation (HOPE) Update
    As finalized in the FY 2020 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements final rule (84 FR 
38484), we are developing a hospice instrument named Hospice Outcomes & 
Patient Evaluation (HOPE). Our primary objectives for HOPE are to 
provide quality data for the HQRP requirements through standardized 
data collection; and provide additional clinical data that could inform 
future payment refinements. To the extent that the instrument utilizes 
data already being collected for the Hospice QRP, our statutory 
authority for the HOPE instrument derives from section 1814(i)(5)(C) of 
the Act. In addition, statutory language at section 1861(aa)(2)(G) of 
the Act permits the Secretary to impose ``such other requirements as 
the Secretary may find necessary in the interest of the health and 
safety of the individuals who are provided care and services.''
    The HOPE tool would be a component of implementing high-quality and 
safe hospice care for patients, both in Medicare and non-Medicare. HOPE 
would also contribute to the patient's plan of care through providing 
patient data ongoing throughout the hospice stay. By providing data 
from multiple time points across the hospice stay, HOPE would provide 
information to hospice providers to improve practice and care quality. 
HOPE is intended to provide quality data to calculate outcomes and 
develop additional quality measures.
    We stated in the FY 2022 Hospice Wage Index and Payment Update 
final rule (86 FR 42528) that while the standardized patient assessment 
data elements for certain post-acute care providers required under the 
IMPACT Act of 2014 are not applicable to hospices, it would be 
reasonable to include some of those standardized elements that 
appropriately and feasibly apply to hospice to the extent permitted by 
our statutory authority. Many patients move through other providers 
within the healthcare system to hospice. Therefore, considering 
tracking key demographic and social risk factor items that apply to 
hospice could support our goals for continuity of care, overall patient 
care and well-being, development of infrastructure for the 
interoperability of electronic health information, and health equity 
which is also discussed in this rule.
    In the FY 2023 Hospice final rule (87 FR 45669), we outlined the 
testing phases HOPE has undergone, including cognitive, pilot, alpha 
testing, and national beta field testing.
    National beta testing, completed at the end of October 2022, 
allowed us to obtain input from participating hospice teams about the 
assessment instrument and field testing to refine and support the final 
draft items and time points for HOPE. It also allowed us to estimate 
the time to complete the HOPE data items and establish the interrater 
reliability of each item.
    We continue HOPE development in accordance with the Blueprint for 
the CMS Measures Management System. The development of HOPE is grounded 
in information gathering activities to identify and refine hospice 
domains and candidate items. We appreciate the industry's and trade 
associations' engagement in providing input through information sharing 
activities, including listening sessions, expert interviews, key 
stakeholder interviews, and focus groups to support HOPE development. 
As CMS proceeds with the refinement of HOPE, we will continue to engage 
with stakeholders through sub-regulatory channels. We intend to 
continue to host HQRP Forums to allow hospices and other interested 
parties to engage with us on the latest updates and ask questions on 
the development of HOPE and related quality measures as appropriate. We 
also have a dedicated email account, [email protected], for 
comments about HOPE. We will use field test results to create a final 
version of HOPE to propose in future rulemaking for national 
implementation. We will continue to inform all stakeholders throughout 
this process by using a variety of sub-regulatory channels and regular 
HQRP communication strategies, such as Open Door Forums (ODF), Medicare 
Learning Network (MLN), CMS.gov website announcements, listserv 
messaging, and other ad hoc publicly announced opportunities. We 
appreciate the support for HOPE and reiterate our commitment to 
providing updates and engaging stakeholders through sub-

[[Page 20044]]

regulatory means. HOPE updates can be found at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HOPE and engagement opportunities, including those 
regarding HOPE are at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-QRP-Provider-Engagement-Opportunities.
    We plan to provide additional information regarding HOPE testing 
results on the HQRP website in late Spring of 2023.
3. Proposed Update on Future Quality Measure (QM) Development
    In the FY 2020 Hospice Wage Index and Payment Rate Update final 
rule (84 FR 38484), we provided updates related to CMS's process for 
identifying high priority areas of quality measurement and improvement 
and for developing quality measures that address those priorities. 
Information on the current HQRP quality measures can be found at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Current-Measures.
    In this proposed rule, we provide updates on the status of current 
HQRP measures and the development of hospice quality measure concepts 
based on the future use of HOPE, administrative, and health equity 
data. On July 26, 2022, the CBE endorsed the claims-based Hospice 
Visits in the Last Days of Life measure (HVLDL). More information can 
be found on the HQRP Quality Measure Development web page: https://www.cms.gov/medicare/hospice-quality-reporting-program/quality-measure-development. CMS intends to develop several quality measures based on 
information collected by HOPE when it is implemented. Currently, CMS 
intends to develop at least two HOPE-based process and outcome quality 
measures: (1) Timely Reassessment of Pain Impact; and (2) Timely 
Reassessment of Non-Pain Symptom Impact. Additional information about 
CMS's HOPE-based measure development efforts is available in the 2021 
technical expert panel (TEP) Summary Reports and the 2021 Information 
Gathering Report, available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-QRP-Provider-Engagement-Opportunities.
4. Proposed Health Equity Updates Related to HQRP
a. Background
    In the FY 2023 Hospice Payment Rate Update proposed rule (87 FR 
19442), we included a Request for Information (RFI) on hospices' 
current health equity activities and a future approach to advancing 
health equity in hospice. We define health equity as the attainment of 
the highest level of health for all people, where everyone has a fair 
and just opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes. We are working to 
advance health equity by designing, implementing, and operationalizing 
policies and programs that support health for all the people served by 
our programs, eliminating avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved, and 
providing the care and support that our enrollees need to thrive. CMS' 
goals outlined in the CMS Framework for Health Equity 2022-2023 are in 
line with Executive Order 13985, ``Advancing Racial Equity and Support 
for Underserved Communities Through the Federal Government.'' \36\ The 
goals included in the CMS Framework for Health Equity serve to further 
advance health equity, expand coverage, and improve health outcomes for 
the more than 170 million individuals supported by our programs, and 
sets a foundation and priorities for our work, including: strengthening 
our infrastructure for assessment, creating synergies across the health 
care system to drive structural change, and identifying and working to 
eliminate barriers to CMS-supported benefits, services, and coverage.
---------------------------------------------------------------------------

    \36\ https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021-01753.pdf.
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    In addition to the CMS Framework for Health Equity, CMS seeks to 
``advance health equity'' as one of eight goals comprising the CMS 
National Quality Strategy (NQS).\37\ The NQS identifies a wide range of 
potential quality levers that can support our advancement of equity, 
including: establishing a standardized approach for patient-reported 
data and stratification; employing quality and value-based programs to 
publicly report and incentivize closing equity gaps; and developing 
equity-focused performance metrics, regulations, oversight strategies, 
and quality improvement initiatives.
---------------------------------------------------------------------------

    \37\ Centers for Medicare & Medicaid Services. What is the CMS 
Quality Strategy? Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
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    A goal of this NQS is to address persistent disparities that 
underly our healthcare system. Racial disparities, in particular, are 
estimated to cost the U.S. $93B in excess medical costs and $42B in 
lost productivity per year, in addition to economic losses due to 
premature deaths.\38\ At the same time, racial and ethnic diversity has 
increased in recent years with an increase in the percentage of people 
who identify as two or more races accounting for most of the change, 
rising from 2.9 percent to 10.2 percent between 2010 and 2020.\39\ 
Therefore, we need to consider ways to reduce disparities, achieve 
equity, and support our diverse population through the way we measure 
quality and display of data.
---------------------------------------------------------------------------

    \38\ Ani Turner, The Business Case for Racial Equity, A Strategy 
for Growth, W.K. Kellogg Foundation and Altarum, April 2018.
    \39\ 2022 National Healthcare Quality and Disparities Report. 
Content last reviewed November 2022. Agency for Healthcare Research 
and Quality, Rockville, MD. https://www.ahrq.gov/research/findings/nhqrdr/nhqdr22/index.html.
---------------------------------------------------------------------------

    We solicited public comments via the aforementioned RFI on a 
potential health equity structural composite measure in the Hospice 
Quality Reporting Program. CMS defines a health equity quality measure 
as a measure (or group of measures) that has the capability to 
identify, quantify, characterize, and/or link drivers of health and 
related needs to disparities in health access, processes, outcomes, or 
patient experiences; the measure(s) can be used to inform the design, 
implementation, and evaluation of interventions to advance equitable 
opportunity for optimal health and well-being for all individuals and 
populations. We refer readers to the FY 2023 Hospice Payment Rate 
Update final rule (87 FR 45669) for a summary of the public comments 
and suggestions received in response to the health equity RFI.
    We took these comments into account, and we continue to work to 
develop policies, quality measures, and measurement strategies on this 
important topic. After considering public comments, CMS decided to 
convene a health equity technical expert panel to provide additional 
input to inform the development of health equity quality measures. The 
work of this technical expert panel is described in detail below.

[[Page 20045]]

Home Health and Hospice Health Equity Technical Expert Panel
    To support new health equity measure development, the Home Health 
and Hospice Health Equity Technical Expert Panel (Home Health & Hospice 
HE TEP) was convened by a CMS contractor in Fall 2022. The Home Health 
& Hospice HE TEP was comprised of health equity experts from hospice 
and home health settings, specializing in quality assurance, patient 
advocacy, clinical work, and measure development. The TEP was charged 
with providing input on a potential cross-setting health equity 
structural composite measure concept as set forth in the FY 2023 
Hospice Payment Rate Update proposed rule (87 FR 19442) as part of an 
RFI related to the HQRP Health Equity Initiative. Specifically, the TEP 
assessed the face validity and feasibility of the potential structural 
measure. The TEP also provided input on possible confidential feedback 
report options to be used for monitoring health equity. TEP members 
also had the opportunity to provide ideas for additional health equity 
measure concepts or approaches to addressing health equity in hospice 
and home health settings. A summary of the Home Health & Hospice HE TEP 
meetings and final TEP recommendations would be available in 2023.
Universal Foundation
    To further the goals of the CMS National Quality Strategy (NQS), 
CMS leaders from across the Agency have come together to move towards a 
building-block approach to streamline quality measures across CMS 
quality programs for the adult and pediatric populations. This 
``Universal Foundation'' of quality measure will focus provider 
attention, reduce burden, identify disparities in care, prioritize 
development of interoperable, digital quality measures, allow for 
cross-comparisons across programs, and help identify measurement gaps. 
The development and implementation of the Preliminary Adult and 
Pediatric Universal Foundation Measures will promote the best, safest, 
and most equitable care for individuals as we all come together on 
these critical quality areas. As CMS moves forward with the Universal 
Foundation, we will be working to identify foundational measures in 
other specific settings and populations to support further measure 
alignment across CMS programs as applicable.
    To learn more regarding the impact and next steps of the Universal 
Foundation, read the recent publication of ``Aligning Quality Measures 
Across CMS--the Universal Foundation'' in the New England Journal of 
Medicine at https://www.nejm.org/doi/pdf/10.1056/NEJMp2215539.
b. Anticipated Future State
Possible Future Health Equity Efforts
    We are committed to developing approaches to meaningfully 
incorporate the advancement of health equity into the HQRP. One 
consideration is including social determinants of health into our 
quality measures and data stratification. Social determinants of 
health--social, economic, environmental, and community conditions--may 
have a stronger influence on the population's health and well-being 
than services delivered by practitioners and healthcare delivery 
organizations.\40\ Given these impacts, measure stratification is 
important. Measure stratification helps identify disparities by 
calculating quality measure outcomes separately for different 
beneficiary populations. By looking at measure results for different 
populations separately, CMS and providers can see how care outcomes may 
differ between certain patient populations in a way that would not be 
apparent from an overall score (i.e., a score averaged over all 
beneficiaries). This helps CMS to better fulfill our health equity 
goals. For example, when certain quality measures from the past two 
decades related to healthcare outcomes for children are stratified by 
race, ethnicity, and income, they show that important health 
disparities have been narrowed, because outcomes for children in the 
lowest income households and for Black and Hispanic children improved 
faster than outcomes for children in the highest income households or 
for White children.\41\ This differential impact would not be apparent 
without stratification. This work supports our desire to understand 
with providers what can be learned from stratifying our quality 
measures by race, ethnicity, and income.
---------------------------------------------------------------------------

    \40\ 2022 National Healthcare Quality and Disparities Report. 
Content last reviewed November 2022. Agency for Healthcare Research 
and Quality, Rockville, MD. https://www.ahrq.gov/research/findings/nhqrdr/nhqdr22/index.html.
    \41\ 2022 National Healthcare Quality and Disparities Report. 
Content last reviewed November 2022. Agency for Healthcare Research 
and Quality, Rockville, MD. https://www.ahrq.gov/research/findings/nhqrdr/nhqdr22/index.html.
---------------------------------------------------------------------------

    As part of our efforts to advance health equity in hospice, we are 
taking into consideration the health equity measures used in other 
health care provider settings. There are social determinants of health 
(SDOH) data items in the standardized patient assessment instruments 
used in the post-acute care (PAC) settings, and data items related to 
social drivers of health in acute care settings such as the hospital 
inpatient quality reporting program. We see value in aligning SDOH data 
items across all care settings and might consider adding SDOH data 
items used by other care settings into HQRP as we develop future health 
equity quality measures under our HQRP statutory authority.\42\ This 
would further the NQS to align quality measures across our programs as 
part of the Universal Foundation.\43\
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    \42\ https://www.nejm.org/doi/full/10.1056/NEJMp2215539, 
February 1, 2023.
    \43\ https://www.nejm.org/doi/full/10.1056/NEJMp2215539, 
February 1, 2023.
---------------------------------------------------------------------------

    As we move this important work forward, we will continue to take 
input from hospice stakeholders into account and monitor the 
application of proposed health equity policies across CMS and other HHS 
initiatives. As of this publication, the Initial Proposals for Updating 
OMB's Race and Ethnicity Statistical Standards, 88 FR 5375, seeks 
public comment. Also, the Office of the National Coordinator for Health 
IT (ONC) welcomes input on data classes and data elements for future 
versions of the United States Core Data for Interoperability (USCDI)--a 
standardized set of health data classes and constituent data elements 
for nationwide, interoperable health information exchange.\44\ In 
addition, while the anticipated health equity efforts that impact 
policy changes would proceed through the notice and comment rulemaking 
process, other activities would be completed through sub-regulatory 
channels and regular communication strategies, such as Open-Door 
Forums, Medicare Learning Network, CMS.gov website announcements, 
listserv messaging, and other opportunities.
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    \44\ https://www.healthit.gov/sites/isa/files/2023-01/Draft-USCDI-Version-4-January-2023-Final.pdf.
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5. Proposed CAHPS Hospice Survey Updates
CAHPS Hospice Survey Mode Experiment
    In the FY 2023 Hospice Payment Rate Update final rule (87 FR 
45669), we provided information on a mode experiment CMS conducted in 
2021. The purpose of the experiment was to test:
     A web-mail mode (email invitation to a web survey, with 
mail follow-up to non-responders).

[[Page 20046]]

     A revised survey version, which is shorter and simpler 
than the current survey, and includes new questions on topics suggested 
by stakeholders.
     Modifications to survey administration protocols designed 
to improve overall response rates, such as a prenotification letter and 
extended field period.
    Fifty-six large hospices participated in the mode experiment, 
representing a range of geographic regions, ownership, and past 
performance on the CAHPS Hospice Survey. A total of 15,515 decedents/
caregivers were randomly sampled from these hospices. Sampled 
decedents/caregivers were randomly assigned to one of four modes of 
administration (mail only, telephone only, mail-telephone, web-mail); 
mail only cases were randomly assigned to be administered either the 
revised or the current survey.
    The information received on the CAHPS Hospice Survey Mode 
Experiment CMS conducted in 2021, resulted in the following findings:
     Response rates to the revised survey were 35.1 percent in 
mail only mode, 31.5 percent in telephone only mode, 45.3 percent in 
mail-telephone, and 39.7 percent in web-mail mode;
     Response rates to web-mail mode were similar to mail only 
mode for those without email addresses (35.2 percent vs. 34.4 percent), 
but 13 percentage points higher for those with email addresses (49.6 
percent vs. 36.7 percent);
     Response rates to mail-only administration of the revised 
and current survey were similar (35.1 percent vs. 34.2 percent);
     Mailing of a prenotification letter resulted in an 
increased response rate of 2.4 percentage points;
     Extending the field period to 49 days (from the current 42 
days) resulted in an increased response rate of 2.5 percentage points 
in the mail only mode.
    In addition, the following changes were tested as part of the 
revised CAHPS Hospice Survey:
     Removal of one survey item regarding confusing or 
contradictory information from the Hospice Team Communication measure;
     Replacement of the multi-item Getting Hospice Care 
Training measure with a new, one-item summary measure;
     Addition of a new, two-item Care Preferences measure;
     Simplified wording to component items in the Hospice Team 
Communication, Getting Timely Care, and Treating Family Member with 
Respect measures
    CMS will use mode experiment results to inform decisions about 
potential changes to administration protocols and survey instrument 
content. Potential measure changes will be submitted to the Measures 
Under Consideration (MUC) process in 2023 and may be proposed in future 
rulemaking. We are not proposing any changes in this rule.
6. Form, Manner, and Timing of Quality Data Submission
a. Statutory Penalty for Failure To Report
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
The data must be submitted in a form and manner, and at a time 
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act was 
amended by the CAA 2021 and the payment reduction for failing to meet 
hospice quality reporting requirements is increased from 2 percent to 4 
percent beginning with FY 2024. The Act requires that, beginning with 
FY 2014 through FY 2023, the Secretary shall reduce the market basket 
update by 2 percentage points and then beginning in FY 2024 and for 
each subsequent year, the Secretary shall reduce the market basket 
update by 4 percentage points for any hospice that does not comply with 
the quality data submission requirements for that FY. In the FY 2023 
Hospice Wage Index and Payment Rate Update proposed rule (87 FR 19442), 
we revised our regulations at Sec.  418.306(b)(2) in accordance with 
this statutory change (86 FR 42605). We are not proposing any new 
public reporting proposals in this rule.
b. Compliance
    HQRP Compliance requires understanding three timeframes for both 
HIS and CAHPS: (1) The relevant Reporting Year, payment FY, and the 
Reference Year (The ``Reporting Year'' (HIS)/``Data Collection Year'' 
(CAHPS). This timeframe is based on the calendar year (CY). It is the 
same CY for both HIS and CAHPS. If the CAHPS Data Collection year is CY 
2023, then the HIS reporting year is also CY 2023.); (2) The APU is 
subsequently applied to FY payments based on compliance in the 
corresponding Reporting Year/Data Collection Year; and (3) For the 
CAHPS Hospice Survey, the Reference Year is the CY before the Data 
Collection Year. The Reference Year applies to hospices submitting a 
size exemption from the CAHPS survey (there is no similar exemption for 
HIS). For example, for the CY 2023 data collection year, the Reference 
Year, is CY 2022. This means providers seeking a size exemption for 
CAHPS in CY 2023 will base it on their hospice size in CY 2022. 
Submission requirements are codified in Sec.  418.312.
    For every CY, all Medicare-certified hospices are required to 
submit HIS and CAHPS data according to the requirements in Sec.  
418.312. Table 13 summarizes the three timeframes. It illustrates how 
the CY interacts with the FY payments, covering the CY 2022 through CY 
2025 data collection periods and the corresponding APU application from 
FY 2024 through FY 2027.

 Table 13--HQRP Reporting Requirements and Corresponding Annual Payment
                                 Updates
------------------------------------------------------------------------
                                    Annual payment    Reference year for
 Reporting year for HIS and data    update impacts        CAHPS size
(collection year for CAHPS data)   (payments for the   (exemption (CAHPS
                                          FY)               only))
------------------------------------------------------------------------
CY 2022.........................  FY 2024 APU.......  CY 2021.
CY 2023.........................  FY 2025 APU.......  CY 2022.
CY 2024.........................  FY 2026 APU.......  CY 2023.
CY 2025.........................  FY 2027 APU.......  CY 2024.
------------------------------------------------------------------------

    As illustrated in Table 13, CY 2022 data submissions compliance 
impacts the FY 2024 APU. CY 2023 data submissions compliance impacts 
the FY 2025 APU. CY 2024 data submissions compliance impacts FY 2026 
APU. This CY data submission impacting FY APU pattern follows for 
subsequent years.
c. Submission of Data Requirements
    As finalized in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47142, 47192), hospices' compliance with HIS 
requirements beginning with the FY 2020 APU determination (that is, 
based on HIS-Admission and Discharge records submitted in CY 2018) are 
based

[[Page 20047]]

on a timeliness threshold of 90 percent. This means CMS requires that 
hospices submit 90 percent of all required HIS records within 30 days 
of the event (that is, patient's admission or discharge). The 90-
percent threshold is hereafter referred to as the timeliness compliance 
threshold. Ninety percent of all required HIS records must be submitted 
and accepted within the 30-day submission deadline to avoid the 
statutorily-mandated payment penalty. Hospice compliance with claims 
data requirements is based on administrative data collection. Since 
Medicare claims data are already collected from claims, hospices are 
considered 100 percent compliant with the submission of these data for 
the HQRP. There is no additional submission requirement for 
administrative data.
    To comply with CMS' quality reporting requirements for CAHPS, 
hospices are required to collect data monthly using the CAHPS Hospice 
Survey. Hospices comply by utilizing a CMS-approved third-party vendor. 
Approved Hospice CAHPS vendors must successfully submit data on the 
hospice's behalf to the CAHPS Hospice Survey Data Center. A list of the 
approved vendors can be found on the CAHPS Hospice Survey website: 
www.hospicecahpssurvey.org. Table 14, HQRP Compliance Checklist, 
illustrates the APU and timeliness threshold requirements.

                   Table 14--HQRP Compliance Checklist
------------------------------------------------------------------------
 Annual payment
     update                   HIS                        CAHPS
------------------------------------------------------------------------
FY 2024.........  Submit at least 90 percent  Ongoing monthly
                   of all HIS records or its   participation in the
                   successor instrument        Hospice CAHPS survey 1/1/
                   within 30 days of the       2022-12/31/2022.
                   event date (patient's
                   admission or discharge)
                   for patient admissions/
                   discharges occurring 1/1/
                   22-12/31/22.
FY 2025.........  Submit at least 90 percent  Ongoing monthly
                   of all HIS records or its   participation in the
                   successor instrument        Hospice CAHPS survey 1/1/
                   within 30 days of the       2023-12/31/2023.
                   event date (patient's
                   admission or discharge)
                   for patient admissions/
                   discharges occurring 1/1/
                   23-12/31/23.
FY 2026.........  Submit at least 90 percent  Ongoing monthly
                   of all HIS records or its   participation in the
                   successor instrument        Hospice CAHPS survey 1/1/
                   within 30 days of the       2024-12/31/2024.
                   event date (patient's
                   admission or discharge)
                   for patient admissions/
                   discharges occurring 1/1/
                   24-12/31/24.
FY 2027.........  Submit at least 90 percent  Ongoing monthly
                   of all HIS records or its   participation in the
                   successor instrument        Hospice CAHPS survey 1/1/
                   within 30 days of the       2025-12/31/2025.
                   event date (patient's
                   admission or discharge)
                   for patient admissions/
                   discharges occurring 1/1/
                   25-12/31/25.
------------------------------------------------------------------------
Note: The data source for the claims-based measures will be Medicare
  claims data that are already collected and submitted to CMS. There is
  no additional submission requirement for administrative data (Medicare
  claims), and hospices with claims data are 100-percent compliant with
  this requirement.

    Most hospices that fail to meet HQRP requirements do so because 
they miss the 90 percent threshold. We offer many training and 
education opportunities through our website, which are available 24/7, 
365 days per year, to enable hospice staff to learn at the pace and 
time of their choice. We want hospices to be successful with meeting 
the HQRP requirements. We encourage hospices to use the website at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Quality-Reporting-Training-Training-and-Education-Library. For more information about 
HQRP Requirements, we refer readers to visit the frequently-updated 
HQRP website and especially the Best Practice, Education and Training 
Library, and Help Desk web pages at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting. We also encourage readers to visit the HQRP web page and 
sign-up for the Hospice Quality ListServ to stay informed about HQRP.
d. Proposal To Codify HQRP Data Completion Thresholds
    As previously noted, we are proposing to add paragraph (j) to Sec.  
418.312 for data completion thresholds. In the FY 2016 Hospice Wage 
Index final rule (80 FR 47192 through 47193), we finalized HQRP 
thresholds for completeness of HQRP data submissions. To ensure that 
hospices are meeting an acceptable standard for completeness of 
submitted data, we finalized the policy that, beginning with the FY 
2018 HQRP, hospices must meet or exceed one data submission threshold. 
Hospices must meet or exceed a data submission threshold set at 90 
percent of all required HIS or successor instrument records within 30 
days of the event (that is, patient's admission or discharge).
    Under our finalized policy, some assessment data did not obtain a 
response and, in those circumstances, are not ``missing'' nor is the 
data incomplete. For example, in the case of a patient who does not 
have any of the medical conditions in a ``check all that apply'' 
listing, the absence of a response of a health condition indicates that 
the condition is not present, and it would be incorrect to consider the 
absence of such data as missing in a threshold determination.
    In the FY 2017 Hospice Wage Index proposed rule (81 FR 25498), we 
received comments on our previously finalized policies for form, 
manner, and timing of data collection. These public comments were 
considered and summarized in the FY 2017 Hospice Wage Index final rule 
(81 FR 52143). In the FY 2022 Hospice Wage Index and Payment Rate 
Update final rule and the FY 2023 Hospice Wage Index and Payment Rate 
Update final rule (87 FR 45669), we provided an HQRP Compliance 
Checklist, which illustrated additional details about how the 
compliance thresholds applied to APUs by FY.
    We propose to codify these data completeness thresholds at Sec.  
418.312(j)(1) for measures data collected using the HIS or a successor 
instrument. Under this section, we propose to codify our requirement 
that hospices must meet or exceed a data submission threshold set at 90 
percent

[[Page 20048]]

of all required HIS or successor instrument records within 30 days of 
the event (that is, patient's admission or discharge) and submit the 
data through the CMS designated data submission systems. This threshold 
would apply to all HIS or successor instrument-based measures and data 
elements adopted into HQRP. We also propose to codify Sec.  
418.312(j)(2) that a hospice must meet or exceed this threshold to 
avoid receiving a 4-percentage point reduction to its annual payment 
update for a given FY as codified at Sec.  418.306(b)(2).
    We invite public comment on our proposal to codify in regulations 
text the HQRP data completion thresholds at Sec.  418.312(j) for 
measures and standardized patient assessment elements collected using 
the HIS or successor instrument and compliance threshold to avoid 
receiving 4 percentage point reduction as described under Sec.  
412.306(b)(2).
e. Establishing Hospice Program Survey and Enforcement Procedures Under 
the Medicare Program; Provisions Update (CAA 2021, Section 407)
    Division CC, section 407 of the CAA 2021, amended Part A of Title 
XVIII of the Act to add a new section 1822, and amended sections 
1864(a) and 1865(b) of the Act, establishing new hospice program survey 
and enforcement requirements, required public reporting of survey 
information, and a new hospice hotline.
    This law (CAA 2021) requires public reporting of hospice program 
surveys conducted by both State Agencies (SAs) and Accrediting 
Organizations (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 removes the prohibition at section 1865(b) of 
the Act of public disclosure of hospice surveys performed by AOs, and 
requires 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 CAA 2021 also requires hospice programs to measure and reduce 
inconsistency in the application of survey results among all hospice 
program surveyors, and 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 CAA 2021 
prohibits SA surveyors from surveying hospice programs for which they 
have worked in the last 2 years or 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 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.
    The provisions in the CAA 2021 also direct 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 remedies can be imposed instead of, or 
in addition to, termination of a hospice programs' participation in the 
Medicare program. The remedies include civil money penalties (CMPs), 
suspension of all or part of payments, and appointment of temporary 
management to oversee operations.
    In the CY 2022 Home Health Prospective Payment System (HH PPS) 
final rule (86 FR 62240), we addressed provisions related to the 
hospice survey enforcement and other activities described in this 
section. A summary of the finalized CAA provisions can be found in the 
CY 2022 HH PPS final rule: https://www.govinfo.gov/content/pkg/FR-2021-11-09/pdf/2021-23993.pdf. We finalized all the CAA provisions in CY 
2022 rulemaking except for the special focus program (SFP). As outlined 
in the CY 2022 HH PPS final rule, we stated that we would take into 
account comments that we received and work on a revised proposal, 
seeking additional collaboration with stakeholders to further develop 
the methodology for the SFP since the publication of the CY 2022 HH PPS 
final rule.
    In the FY 2023 Hospice Wage Index and Payment Rate Update and 
Hospice Quality Reporting Requirements (87 FR 45669) final rule, we 
affirmed our intention to initiate a hospice special focus program 
Technical Expert Panel (TEP) to provide input on the structure and 
methodology of the SFP. Public comments received in response to the FY 
2023 Hospice Wage Index and Payment Rate Update proposed rule were 
generally supportive of CMS's efforts to establish an SFP and to 
convene a TEP to provide feedback on the development of the SFP. A TEP 
convened by a CMS contractor provided feedback and considerations on 
the preliminary SFP concepts, including the development of a 
methodology to identify hospice poor-performers, as well as graduation 
and termination criteria, and public reporting. A 30-day call for 
nominations was held July 14 through August 14, 2022 and nine TEP 
members were selected, representing a diverse range of experience and 
expertise related to hospice care and quality. The final TEP feedback 
will be publicly available on the CMS website in April 2023.
    Accordingly, CMS plans to include a proposal implementing an SFP in 
the CY 2024 Home Health Prospective Payment Update Rate proposed rule.

E. Proposals Regarding Hospice Ordering/Certifying Physician Enrollment

1. Medicare Provider Enrollment
    Section 1866(j)(1)(A) of the Act requires the Secretary to 
establish a process for the enrollment of providers and suppliers into 
the Medicare program. The overarching purpose of the enrollment process 
is to help confirm that providers and suppliers furnishing services or 
items (or ordering/certifying the provision thereof) to Medicare 
beneficiaries meet all applicable Federal and state requirements. The 
process is, to an extent, a ``gatekeeper'' that prevents unqualified 
and potentially fraudulent individuals and entities from entering and 
inappropriately billing Medicare. Since 2006, we have undertaken 
rulemaking efforts to outline our enrollment procedures. These 
regulations are generally codified in 42 CFR part 424, subpart P 
(currently Sec. Sec.  424.500 through 424.575 and hereafter 
occasionally referenced as subpart P). They address, among other 
things, requirements that providers and suppliers must meet to enroll 
in Medicare.
    As outlined in Sec.  424.510, one requirement is that the provider 
or supplier must complete, sign, and submit to its assigned Medicare 
Administrative Contractor (MAC) the appropriate enrollment form, 
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 (System of Record Notice (SORN): 09-70-0532), 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

[[Page 20049]]

the MAC reviews and confirms the information thereon and determines 
whether the provider or supplier meets all applicable Medicare 
requirements. We believe this screening process has greatly assisted 
CMS in executing its responsibility to prevent Medicare fraud, waste, 
and abuse.
    As previously mentioned, over the years we have issued various 
final rules pertaining to provider enrollment. These rules were 
intended not only to clarify or strengthen certain components of the 
enrollment process but also to enable us to take further action against 
providers and suppliers: (1) engaging (or potentially engaging) in 
fraudulent or abusive behavior; (2) presenting a risk of harm to 
Medicare beneficiaries or the Medicare Trust Funds; or (3) that are 
otherwise unqualified to furnish Medicare services or items. Consistent 
with this, and for reasons explained in section III.E.2. of this 
proposed rule, we are proposing to require physicians who order or 
certify hospice services for Medicare beneficiaries (hereafter 
occasionally referenced as ``hospice physicians'') to be enrolled in or 
validly opted-out of Medicare as a prerequisite for the payment of the 
hospice service in question.
2. Statutory and Policy Background
    Section 6405(a) of the Affordable Care Act (which amended section 
1834(a)(11)(B) of the Act) states that the Secretary may require that a 
physician ordering durable medical equipment, prosthetics, orthotics, 
and supplies (DMEPOS) be enrolled in Medicare for payment for the 
DMEPOS item to be made. Section 6405(b) of the Affordable Care Act 
(which amended sections 1814(a)(2) and 1835(a)(2) of the Act) contains 
a similar provision regarding the certification of a physician (or 
certain eligible professionals) for Part A and B home health services. 
Section 6405(c) of the Affordable Care Act, meanwhile, authorizes the 
Secretary to extend the requirements of sections 6405(a) and (b) to all 
other categories of items or services under title XVIII of the Act 
(including covered Part D drugs) that are ordered, prescribed, or 
referred by a physician or eligible professional enrolled in Medicare 
under section 1866(j) of the Act.
    Pursuant to this authority, we finalized 42 CFR 424.507(a) and (b) 
in an April 27, 2012 final rule titled ``Medicare and Medicaid 
Programs; Changes in Provider and Supplier Enrollment, Ordering and 
Referring, and Documentation Requirements; and Changes in Provider 
Agreements'' (77 FR 25284). Section 424.507(a) and (b) collectively 
state that for payment to be made for ordered imaging services, 
clinical laboratory services, DMEPOS items, or home health services, 
the service or item must have been ordered or certified by a physician 
or, when permitted, an eligible professional who--(1) is enrolled in 
Medicare in an approved status; or (2) has a valid opt-out affidavit on 
file with a Part A and B MAC. The purpose of Sec.  424.507(a) and (b) 
is to confirm that the physicians and eligible professionals who order 
or certify the items and services referenced in those paragraphs are 
qualified.
    In a proposed rule titled ``Medicare, Medicaid, and Children's 
Health Insurance Programs; Program Integrity Enhancements to the 
Provider Enrollment Process,'' which was published in the Federal 
Register on March 1, 2016 (81 FR 10720), we proposed to significantly 
expand the scope of Sec.  424.507(a) and (b) to include physicians and 
eligible professionals furnishing, ordering, referring, certifying, or 
prescribing any Part A and Part B service, item, or drug. Section 
424.507(a) and (b) would no longer have been restricted to the four 
services and items referenced therein. A number of commenters expressed 
concern about the burden of having to enroll in Medicare pursuant to 
our proposal. Largely for this reason, we did not finalize our proposal 
in the subsequent September 10, 2019 final rule with comment 
period.\45\
---------------------------------------------------------------------------

    \45\ ``Medicare, Medicaid, and Children's Health Insurance 
Programs; Program Integrity Enhancements to the Provider Enrollment 
Process'' (84 FR 47794).
---------------------------------------------------------------------------

    This non-finalization did not, however, negate our aforementioned 
and continued authority under section 6405(c) of the Affordable Care 
Act to apply the requirements of sections 6405(a) and (b) of the 
Affordable Care Act to other categories of Medicare covered items and 
services. We constantly review program integrity trends to determine 
whether certain provider and supplier types and services warrant closer 
scrutiny from a provider enrollment perspective. During this process, 
and notwithstanding the previously mentioned non-finalization, we have 
remained ready to propose expansions to Sec.  424.507(a) and (b) should 
circumstances warrant. We believe that the latter situation currently 
exists with respect to hospices.
    The OIG in July 2018 issued a study titled ``Vulnerabilities in the 
Medicare Hospice Program Affect Quality Care and Program Integrity'' 
(OEI-02-16-00570). This report noted that Medicare in 2016 spent about 
$16.7 billion for hospice care for 1.4 million beneficiaries, up from 
$9.2 billion for fewer than 1 million beneficiaries in 2006; with this 
growth, the OIG stated, ``significant vulnerabilities have arisen, one 
of which involves improper activity.'' \46\ The report described how 
some hospice fraud schemes involved paying recruiters to target 
beneficiaries who are not eligible for hospice care; other schemes 
involved physicians falsely certifying beneficiaries as terminally ill 
when they were not.\47\ (Pursuant to 42 CFR 418.20(b), a physician must 
certify the beneficiary as being terminally ill in order for the 
beneficiary to be eligible to elect hospice care.) The OIG cited 
several examples of this behavior, including the following:
---------------------------------------------------------------------------

    \46\ https://oig.hhs.gov/oei/reports/oei-02-16-00570.pdf, p. 1.
    \47\ Ibid, 6.
---------------------------------------------------------------------------

     Two certifying physicians from a California hospice were 
convicted of health care fraud for falsely certifying beneficiaries as 
terminally ill. The false certifications were part of a wider fraud 
scheme that the hospice owner organized. The scheme involved illegal 
payments to patient recruiters for bringing in beneficiaries, 
establishing fraudulent diagnoses, and altering medical records.\48\
---------------------------------------------------------------------------

    \48\ Ibid, p. 7.
---------------------------------------------------------------------------

     A Mississippi hospice owner used patient recruiters to 
solicit beneficiaries who were not eligible for hospice care. These 
patients were unaware of their enrollment in hospice care. The owner 
submitted fraudulent charges and received more than $1 million from 
Medicare.\49\
---------------------------------------------------------------------------

    \49\ Ibid.
---------------------------------------------------------------------------

     A Minnesota-based hospice chain agreed to pay $18 million 
to resolve allegations that it improperly billed Medicare for care 
provided to beneficiaries who were ineligible for hospice because they 
were not terminally ill. The hospice chain also allegedly discouraged 
physicians from discharging ineligible beneficiaries.\50\
---------------------------------------------------------------------------

    \50\ Ibid.
---------------------------------------------------------------------------

     A hospice physician improperly certified a beneficiary who 
a hospital determined to be in ``good shape'' only days before as 
terminally ill.\51\
---------------------------------------------------------------------------

    \51\ Ibid, p. 6.
---------------------------------------------------------------------------

     A hospice falsely informed a beneficiary that she could 
remain on a liver transplant list even if she chose hospice care. 
However, she was removed from the transplant list when she elected 
hospice care. When the beneficiary learned of this, she ceased hospice 
care so she could be reinstated on the transplant list.\52\
---------------------------------------------------------------------------

    \52\ Ibid.

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

[[Page 20050]]

     A physician received kickbacks for recruiting 
beneficiaries, many of whom were not terminally ill but seeking 
opioids.\53\
---------------------------------------------------------------------------

    \53\ Ibid, p. 12.
---------------------------------------------------------------------------

    More generally, the OIG expressed concern that: (1) beneficiaries 
are put at risk when they are inappropriately enrolled in hospice care 
because they might be unwittingly forgoing needed treatment; \54\ (2) 
``some hospice physicians are not always meeting requirements when 
certifying beneficiaries for hospice care;'' \55\ and (3) hospice fraud 
schemes are growing.\56\
---------------------------------------------------------------------------

    \54\ Ibid, p. 6.
    \55\ Ibid, p. 12.
    \56\ Ibid.
---------------------------------------------------------------------------

    We note further that the Government Accountability Office (GAO) in 
October 2019 issued a report titled ``Medicare Hospice Care: 
Opportunities Exist to Strengthen CMS Oversight of Hospice Providers'' 
(GAO-20-10).\57\ The GAO observed therein that the number of: (1) 
Medicare hospice beneficiaries had almost tripled to nearly 1.5 million 
by fiscal year 2017; and (2) Medicare hospice providers had 
doubled.\58\ The GAO stated that in light of this growth: ``It is 
imperative that CMS's oversight of the quality of Medicare hospice care 
keeps pace with changes so that the agency can ensure the health and 
safety of these terminally ill beneficiaries.'' \59\
---------------------------------------------------------------------------

    \57\ https://www.gao.gov/assets/gao-20-10.pdf.
    \58\ Ibid., p. 25.
    \59\ Ibid.
---------------------------------------------------------------------------

    In light of the foregoing, we believe that expanding Sec.  
424.507(a) and (b) to include hospice services could strengthen the 
program integrity aspect of physician certifications. The careful 
screening that the enrollment process entails would help us determine 
whether the physician meets all Federal and state requirements (such as 
licensure) or presents any program integrity risks, such as past final 
adverse actions (as that term is defined in Sec.  424.502). If an 
unenrolled physician certifies a Medicare beneficiary's need for 
hospice care, we have insufficient background on the physician to know 
whether he or she was qualified to do so or has an adverse history. We 
believe that some of the aforementioned examples of improper behavior 
the OIG found can be at least partially avoided through closer vetting 
of the physician. Moreover, the screening process could help foster 
beneficiary health and safety by ensuring the physician is 
appropriately licensed.
3. Proposed Provisions
    Using our authority under section 6405(c) of the Affordable Care 
Act, we accordingly propose the following revisions to Sec.  424.507.
    First, the current heading of Sec.  424.507(b) is ``Conditions for 
payment of claims for covered home health services''. We propose to add 
``and hospice'' between ``health'' and ``services'' to account for our 
intended inclusion of hospice services within Sec.  424.507(b).
    Second, the introductory text of Sec.  424.507(b) reads: ``To 
receive payment for covered Part A or Part B home health services, a 
provider's home health services claim must meet all of the following 
requirements:''. To accommodate hospice services, we would revise this 
to state: ``To receive payment for covered Part A or Part B home health 
services or for covered hospice services, a provider's home health or 
hospice services claim must meet all of the following requirements:''.
    Third, the opening language of Sec.  424.507(b)(1) states: ``The 
ordering/certifying physician, or the ordering/certifying physician 
assistant, nurse practitioner, or clinical nurse specialist working in 
accordance with State law . . .''. Under 42 CFR 418.22(b), and as 
alluded to previously, only a physician (which can include the 
hospice's medical director) can certify that the beneficiary is 
terminally ill. We propose to revise the beginning of Sec.  
424.507(b)(1) to state: ``The ordering/certifying physician for hospice 
or home health services, or, for home health services, the ordering/
certifying physician assistant, nurse practitioner, or clinical nurse 
specialist working in accordance with State law . . .''. This would 
help clarify that Sec.  424.507(b)(1) should not be read to imply that 
the eligible professionals listed therein can certify the beneficiary's 
terminal status.
    Fourth, we note that Sec.  418.22(c)(1)(i) and (ii) state that for 
the initial 90-day hospice period, the following physicians, 
respectively, must certify that the beneficiary is terminally ill: (1) 
the hospice's medical director or the physician member of the hospice 
interdisciplinary group; and (2) the individual's attending physician 
(who must meet the definition of physician in Sec.  410.20) if the 
beneficiary has one. For subsequent hospice periods, Sec.  418.22(c)(2) 
states that only one of the physicians in Sec.  418.22(c)(1)(i) must 
provide the certification. Given the hospice program integrity concerns 
previously mentioned, we believe that each certification required under 
Sec.  418.22(c) should be by an enrolled or validly opted-out 
physician. Therefore, we propose to add Sec.  424.507(b)(3) to reflect 
this requirement and would refer therein to the requirements of Sec.  
418.22(c).
    As already mentioned, we did not finalize our March 1, 2016 
proposed revisions to Sec.  424.507(b)(1) due partly to the burden 
involved. Our intended changes to Sec.  424.507(b)(1) in this proposed 
rule would be significantly less burdensome on health care providers 
and suppliers than our March 1, 2016 proposal because they would only 
impact one additional provider/supplier type. Moreover, many hospice 
certifying physicians are already enrolled in Medicare or have validly 
opted-out, meaning that they need take no action should our proposal be 
finalized, thus further reducing the burden on the hospice physician 
community. We seek comment on this proposal.
4. Additional Information
    We note that CMS is taking steps in the area of provider enrollment 
to capture additional information about provider and supplier 
ownership, including for hospices. For instance, we proposed in a 
December 15, 2022 Paperwork Reduction Act submission (87 FR 76626) to 
revise the Form CMS-855A Medicare provider enrollment application 
(Medicare Enrollment Application--Institutional Providers; OMB Control 
No. 0938-0685) to collect from providers/suppliers that complete this 
form important data such as (but not limited to):
     Requiring the provider/supplier/hospice to specifically 
identify via a checkbox whether a reported organizational owner is 
itself owned by another organization or individual.
     Requiring the provider/supplier/hospice to explicitly 
identify whether a listed organizational owner/manager does or does not 
fall within the categories of entities listed on the application (e.g., 
holding company, investment firm, etc.), with ``private-equity 
company'' and ``real estate investment trust'' added to this list of 
types of organizations.
    This information will help CMS better understand the provider/
supplier/hospice's indirect ownership relationships and the types of 
entities that own it. Moreover, CMS is considering additional provider 
enrollment measures related to hospice ownership and management as a 
means of strengthening protections against hospice fraud schemes and to 
improve transparency.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-

[[Page 20051]]

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.
    We are soliciting public comment on each of these issues for the 
following sections of this rule that contain information collection 
requirements.

A. Hospice Certifying Physician Enrollment

    As proposed in section III E. of this proposed rule, physicians who 
order or certify hospice services for Medicare beneficiaries (hereafter 
occasionally referenced as ``hospice physicians,'' as described in 
section III. E) must be enrolled in Medicare or validly opted-out as a 
prerequisite for payment of the hospice service in question. Most 
hospice certifying physicians are already Medicare-enrolled or validly 
opted-out. Nonetheless, CMS data indicates that approximately 2,173 
physicians who have ordered or certified Medicare hospice services are 
not. These physicians, as already stated, would be required to enroll 
or opt-out under our proposal.
    Strictly for purposes of establishing an estimate, we would project 
that the average hospice physician would complete a Form CMS-855O 
enrollment application (Medicare Enrollment Application--Registration 
for Eligible Ordering and Referring Physicians and Non-Physician 
Practitioners--OMB Control No.: 0938-1135) rather than an opt-out 
affidavit to comply with our proposed requirements. Per previous 
estimates, it would take approximately 0.5 hours for a physician to 
complete the Form CMS-855O application.
    According to the most recent wage data provided by the Bureau of 
Labor Statistics (BLS) for May 2021 (see https://www.bls.gov/oes/current/oes_nat.htm), the mean hourly wage for the general category of 
``Physicians, All Other'' is $111.30. With fringe benefits and 
overhead, the total per hour rate is $222.60. The foregoing wage 
figures are outlined in Table 15:

                          Table 15--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                Fringe benefits
              Occupation title                Occupation code    Mean hourly    and overhead ($/ Adjusted hourly
                                                                 wage ($/hr)          hr)          wage ($/hr)
----------------------------------------------------------------------------------------------------------------
Physicians, All Other.......................         29-1216           111.30           111.30           222.60
----------------------------------------------------------------------------------------------------------------

    Our proposal would therefore result in a 1,087-hour burden at a 
cost of $241,966 (1,087 x $222.60). (Most of these physicians would 
enroll during the first year of our proposal in order to continue 
ordering or certifying hospice services.) Averaged over the 3-year OMB-
approval period, this results in annual burdens of 362 hours and 
$80,655. This burden would be updated as part of a separate Paperwork 
Reduction Act submission.

B. Codification of HQRP Data Completeness Thresholds

    The proposal to codify HQRP data completeness thresholds reflects 
the same thresholds which have been applied to the HQRP since the FY 
2018 Hospice final rule (82 FR 36638). As such, this proposal would not 
impose any additional collection of information burden on hospices.

V. Response to Comments

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

VI. Regulatory Impact Analysis

A. Statement of Need

1. Hospice Payment
    This proposed rule meets the requirements of our regulations at 
Sec.  418.306(c) and (d), which require annual issuance, in the Federal 
Register, of the hospice wage index based on the most current available 
CMS hospital wage data, including any changes to the definitions of 
CBSAs or previously used Metropolitan Statistical Areas (MSAs), as well 
as any changes to the methodology for determining the per diem payment 
rates. This proposed rule would also update payment rates for each of 
the categories of hospice care, described in Sec.  418.302(b), for FY 
2024 as required under section 1814(i)(1)(C)(ii)(VII) of the Act. The 
payment rate updates are subject to changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act.
2. Hospice Quality Reporting Program
    Sections 1814(i)(5)(A) through (C) of the Act authorizes the HQRP 
which requires that hospices submit quality data, based on measures to 
be specified by the Secretary. In the FY 2012 Hospice Wage Index and 
Rate Update final rule (76 FR 47320 through 47324), we implemented a 
HQRP as required by those sections. Hospices were required to begin 
collecting quality data in October 2012 and submit those quality data 
in 2013. Section 1814(i)(5)(A)(i) of the Act requires that beginning 
with FY 2014 through FY 2023, the Secretary shall reduce the market 
basket update by 2 percentage points for any hospice that does not 
comply with the quality data submission requirements with respect to 
that FY. Section 1814(i)(5)(A)(i) of the Act was amended by section 
407(b) of Division CC, Title IV of the CAA 2021 to change the payment 
reduction for failing to meet hospice quality reporting requirements 
from 2 to 4 percentage points. This policy will apply beginning with 
the FY 2024 annual payment update (APU) that is based on CY 2022 
quality data. Specifically, the Act requires that, for FY 2014 through 
FY 2023, the Secretary shall reduce the market basket update by 2 
percentage points and beginning with the FY 2024 APU and for each 
subsequent year, the Secretary shall reduce the market basket update by 
4 percentage points for any hospice that does not comply with the 
quality data submission requirements for that FY.

[[Page 20052]]

3. Impact of Hospice Ordering/Certifying Physician Enrollment
    We believe that the only impact of this proposal would involve the 
burden estimated in section IV of this proposed rule regarding the 
completion of the Form CMS-855O, which we projected to be $241,966, 
over a 3-year period, or $80,655 per year.

B. Overall Impacts

1. Hospice Payment
    We estimate that the aggregate impact of the payment provisions in 
this proposed rule would result in an estimated increase of $720 
million in payments to hospices, resulting from the hospice payment 
update percentage of 2.8 percent for FY 2024. The impact analysis of 
this proposed rule represents the projected effects of the changes in 
hospice payments from FY 2023 to FY 2024. Using the most recent 
complete data available at the time of rulemaking, in this case FY 2022 
hospice claims data as of January 22, 2023, we simulate total payments 
using the FY 2023 wage index (pre-floor, pre-reclassified hospital wage 
index with the hospice floor, and the 5 percent cap on wage index 
decreases) and FY 2023 payment rates and compare it to our simulation 
of total payments using FY 2022 utilization claims data, the FY 2024 
hospice wage index (pre-floor, pre-reclassified hospital wage index 
with hospice floor, and the 5-percent cap on wage index decreases) and 
FY 2023 payment rates. By dividing payments for each level of care (RHC 
days 1 through 60, RHC days 61+, CHC, IRC, and GIP) using the FY 2023 
wage index and payment rates for each level of care by the FY 2024 wage 
index and FY 2023 payment rates, we obtain a wage index standardization 
factor for each level of care. We apply the wage index standardization 
factors so that the aggregate simulated payments do not increase or 
decrease due to changes in the wage index.
    Certain events may limit the scope or accuracy of our impact 
analysis, because such an analysis is susceptible to forecasting errors 
due to other changes in the forecasted impact time period. The nature 
of the Medicare program is such that the changes may interact, and the 
complexity of the interaction of these changes could make it difficult 
to predict accurately the full scope of the impact upon hospices.
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    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; (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.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.
    A regulatory impact analysis (RIA) must be prepared for rules that 
are significant under section 3(f)(1) as described above. We estimate 
that this rulemaking exceeds the $100 million threshold under section 
3(f)(1). Accordingly, we have prepared a RIA, that to the best of our 
ability, presents the costs and benefits of the rulemaking.

C. Detailed Economic Analysis

1. Proposed Hospice Payment Update for FY 2024
    The FY 2024 hospice payment impacts appear in Table 16. We tabulate 
the resulting payments according to the classifications (for example, 
provider type, geographic region, facility size), and compare the 
difference between current and future payments to determine the overall 
impact. The first column shows the breakdown of all hospices by 
provider type and control (non-profit, for-profit, government, other), 
facility location, facility size. The second column shows the number of 
hospices in each of the categories in the first column. The third 
column shows the effect of using the FY 2024 updated wage index data 
with a 5-percent cap on wage index decreases. This represents the 
effect of moving from the FY 2023 hospice wage index to the FY 2024 
hospice wage index with a 5-percent cap on wage index decreases. The 
aggregate impact of the changes in column three is zero percent, due to 
the hospice wage index standardization factor. However, there are 
distributional effects of the FY 2024 hospice wage index. The fourth 
column shows the effect of the hospice payment update percentage as 
mandated by section 1814(i)(1)(C) of the Act, and is consistent for all 
providers. The proposed hospice payment update percentage of 2.8 
percent is based on the proposed 3.0 percent inpatient hospital market 
basket update, reduced by a proposed 0.2 percentage point productivity 
adjustment. The fifth column shows the total effect of the proposed 
updated wage data and the proposed hospice payment update percentage on 
FY 2024 hospice payments but does not include the effect of moving from 
the 2 percent reduction to the 4 percent reduction for failure to 
report quality. It is projected aggregate payments would increase by 
2.8 percent; assuming hospices do not change their billing practices. 
As illustrated in Table 16, the combined effects of all the proposals 
vary by specific types of providers and by location. We note that 
simulated payments are based on utilization in FY 2022 as seen on 
Medicare hospice claims (accessed from the CCW in January 22, 2023) and 
only include payments related to the level of care and do not include 
payments related to the service intensity add-on.
    As illustrated in Table 16, the combined effects of all the 
proposals vary by specific types of providers and by location.

[[Page 20053]]



                               Table 16--Projected Impact to Hospices for FY 2024
----------------------------------------------------------------------------------------------------------------
                                                                                      FY 2024
                                                                      FY 2024        proposed      Overall total
           Hospice subgroup                     Hospices           updated wage       hospice      impact for FY
                                                                     data (%)     payment update     2024 (%)
                                                                                        (%)
----------------------------------------------------------------------------------------------------------------
All Hospices..........................  5,640...................             0.0             2.8             2.8
----------------------------------------------------------------------------------------------------------------
                                            Hospice Type and Control
----------------------------------------------------------------------------------------------------------------
Freestanding/Non-Profit...............  567.....................            -0.1             2.8             2.7
Freestanding/For-Profit...............  4,007...................             0.0             2.8             2.8
Freestanding/Government...............  41......................            -0.2             2.8             2.6
Freestanding/Other....................  353.....................             0.3             2.8             3.1
Facility/HHA Based/Non-Profit.........  329.....................            -0.1             2.8             2.7
Facility/HHA Based/For-Profit.........  188.....................            -0.4             2.8             2.4
Facility/HHA Based/Government.........  73......................             0.1             2.8             2.9
Facility/HHA Based/Other..............  82......................             0.0             2.8             2.8
                                       -------------------------------------------------------------------------
    Subtotal: Freestanding Facility     4,968...................             0.0             2.8             2.8
     Type.
    Subtotal: Facility/HHA Based        672.....................            -0.1             2.8             2.7
     Facility Type.
    Subtotal: Non-Profit..............  896.....................            -0.1             2.8             2.7
    Subtotal: For-Profit..............  4,195...................             0.0             2.8             2.8
    Subtotal: Government..............  114.....................            -0.1             2.8             2.7
    Subtotal: Other...................  435.....................             0.2             2.8             3.0
----------------------------------------------------------------------------------------------------------------
                                         Hospice Type and Control: Rural
----------------------------------------------------------------------------------------------------------------
Freestanding/Non-Profit...............  127.....................            -0.3             2.8             2.5
Freestanding/For-Profit...............  358.....................            -0.3             2.8             2.5
Freestanding/Government...............  23......................            -0.7             2.8             2.1
Freestanding/Other....................  50......................            -0.2             2.8             2.6
Facility/HHA Based/Non-Profit.........  128.....................            -0.4             2.8             2.4
Facility/HHA Based/For-Profit.........  51......................            -0.1             2.8             2.7
Facility/HHA Based/Government.........  57......................            -0.2             2.8             2.6
Facility/HHA Based/Other..............  44......................            -0.3             2.8             2.5
----------------------------------------------------------------------------------------------------------------
                                         Hospice Type and Control: Urban
----------------------------------------------------------------------------------------------------------------
Freestanding/Non-Profit...............  440.....................            -0.1             2.8             2.7
Freestanding/For-Profit...............  3,649...................             0.1             2.8             2.9
Freestanding/Government...............  18......................            -0.1             2.8             2.7
Freestanding/Other....................  303.....................             0.3             2.8             3.1
Facility/HHA Based/Non-Profit.........  201.....................             0.0             2.8             2.8
Facility/HHA Based/For-Profit.........  137.....................            -0.5             2.8             2.3
Facility/HHA Based/Government.........  16......................             0.3             2.8             3.1
Facility/HHA Based/Other..............  38......................             0.1             2.8             2.9
----------------------------------------------------------------------------------------------------------------
                                        Hospice Location: Urban or Rural
----------------------------------------------------------------------------------------------------------------
Rural.................................  838.....................            -0.3             2.8             2.5
Urban.................................  4,802...................             0.0             2.8             2.8
----------------------------------------------------------------------------------------------------------------
                            Hospice Location: Region of the Country (Census Division)
----------------------------------------------------------------------------------------------------------------
New England...........................  151.....................            -0.7             2.8             2.1
Middle Atlantic.......................  284.....................             0.5             2.8             3.3
South Atlantic........................  607.....................             0.3             2.8             3.1
East North Central....................  587.....................            -0.5             2.8             2.3
East South Central....................  255.....................            -0.1             2.8             2.7
West North Central....................  420.....................            -0.3             2.8             2.5
West South Central....................  1,101...................             0.2             2.8             3.0
Mountain..............................  589.....................            -0.3             2.8             2.5
Pacific...............................  1,597...................             0.2             2.8             3.0
Outlying..............................  49......................            -1.6             2.8             1.2
----------------------------------------------------------------------------------------------------------------
                                                  Hospice Size
----------------------------------------------------------------------------------------------------------------
0-3,499 RHC Days (Small)..............  1,414...................             0.1             2.8             2.9
3,500-19,999 RHC Days (Medium)........  2,551...................             0.0             2.8             2.8
20,000+ RHC Days (Large)..............  1,675...................             0.0             2.8             2.8
----------------------------------------------------------------------------------------------------------------
Source: FY 2022 hospice claims data from CCW accessed on January 22, 2023.

[[Page 20054]]

 
Note: The overall total impact reflects the addition of the individual impacts, which includes the wage index
  impact as well as the proposed 2.8 percent market basket update. However, it does not include the effect of
  moving from the 2 percent reduction to the 4 percent reduction for failure to report quality data.
Region Key:
New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.
Middle Atlantic=Pennsylvania, New Jersey, New York.
South Atlantic=Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina,
  Virginia, West Virginia.
East North Central=Illinois, Indiana, Michigan, Ohio, Wisconsin.
East South Central=Alabama, Kentucky, Mississippi, Tennessee.
West North Central=Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota.
West South Central=Arkansas, Louisiana, Oklahoma, Texas.
Mountain=Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming.
Pacific=Alaska, California, Hawaii, Oregon, Washington.

2. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review this rule, we assume that the total number of unique 
commenters on last year's proposed rule will be the number of reviewers 
of this proposed rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this proposed rule. It 
is possible that not all commenters reviewed last year's rule in 
detail, and it is also possible that some reviewers chose not to 
comment on the proposed rule. For these reasons we thought that the 
number of past commenters would be a fair estimate of the number of 
reviewers of this proposed rule. We welcome any comments on the 
approach in estimating the number of entities which will review this 
proposed rule. We also recognize that different types of entities are 
in many cases affected by mutually exclusive sections of this proposed 
rule, and therefore for the purposes of our estimate we assume that 
each reviewer reads approximately 50 percent of the rule. We are 
soliciting public comments on this assumption.
    Using the occupational wage information from the BLS for medical 
and health service managers (Code 11-9111) from May 2021; we estimate 
that the cost of reviewing this rule is $115.22 per hour, including 
overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). This proposed rule consists of approximately 30,000 
words. Assuming an average reading speed of 250 words per minute, it 
would take approximately 1 hour for staff to review half of it. For 
each hospice that reviews the rule, the estimated cost is $115.22 (1 
hour x $115.22). Therefore, we estimate that the total cost of 
reviewing this regulation is $8,526.28 ($115.22 x 74 reviewers).
3. Impacts for the Hospice Quality Reporting Program for FY 2024
    The HQRP requires the active collection under OMB control number 
#0938-1153 (CMS 10390; expiration 02/29/2024) of the Hospice Items Set 
(HIS) and CAHPS[supreg] Hospice Survey (OMB control number 0938-1257) 
(CMS-10537; expiration 01/31/2023). Failure to submit data required 
under section 1814(i)(5) of the Act with respect to a CY will result in 
the reduction of the annual hospice market basket percentage increase 
otherwise applicable to a hospice for that calendar year. From FY 2014 
through FY 2023, hospices that failed to report quality data had their 
market basket percentage increase reduced by 2 percentage points. As 
noted in section C.5. of this proposed rule, section 1814(i)(5)(A)(i) 
of the Act was amended by section 407(b) of Division CC, Title IV of 
the CAA 2021 (Pub. L. 116-260) to change the payment reduction for 
failing to meet hospice quality reporting requirements to 4 percentage 
points, beginning with FY 2024. This section analyzes the estimated 
impact of the transition from 2 percentage points to 4 percentage 
points.
    Based on historical performance trends, we estimate that roughly 
18.4 percent of hospices (an estimated 1,049 out of approximately 5,700 
active hospices) will fail to receive the full annual percentage 
increase in FY 2024, if active Medicare-certified hospices perform 
similarly in CY 2022 to hospice performance in previous years. We 
project that the 4 percentage point penalty for hospices will represent 
approximately $53 million in hospice payment dollars during the 
reporting period, out of an estimated total $23.8 billion paid to all 
hospices. The net impact of the policy change from 2 percent APU 
penalty to 4 percent APU penalty is estimated to be $26.5 million.

D. Alternatives Considered

1. Hospice Payment
    Since the hospice payment update percentage is determined based on 
statutory requirements, we did not consider not updating the hospice 
payment rates by the payment update percentage. The proposed 2.8 
percent hospice payment update percentage for FY 2024 is based on a 
proposed 3.0 percent inpatient hospital market basket update for FY 
2024, reduced by a proposed 0.2 percentage point productivity 
adjustment. Payment rates since FY 2002 have been updated according to 
section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update 
to the payment rates for subsequent years must be the market basket 
percentage increase for that FY. Section 3401(g) of the Affordable Care 
Act also mandates that, starting with FY 2013 (and in subsequent 
years), the hospice payment update percentage will be annually reduced 
by changes in economy-wide productivity as specified in section 
1886(b)(3)(B)(xi)(II) of the Act. For FY 2024, since the hospice 
payment update percentage is determined based on statutory requirements 
at section 1814(i)(1)(C) of the Act, we cannot consider not updating 
the hospice payment rates by the hospice payment update percentage.
2. Hospice Quality Reporting Program
    We did not consider any alternatives in this proposed rule.
3. Hospice Physician Enrollment
    We did not consider any alternatives to our proposal to require 
physicians who order or certify hospice services for Medicare 
beneficiaries to be enrolled in or validly opted-out of Medicare as a 
prerequisite for the payment of the hospice service in question. This 
is because the enrollment process is the only available, feasible means 
of ascertaining the physician's compliance with all applicable 
requirements and whether he or she has any adverse legal history.

E. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), in Table 11, we have prepared an accounting 
statement showing the classification of the

[[Page 20055]]

expenditures associated with the provisions of this proposed rule. 
Table 17 provides our best estimate of the possible changes in Medicare 
payments under the hospice benefit as a result of the policies in this 
proposed rule. This estimate is based on the data for 5,640 hospices in 
our impact analysis file, which was constructed using FY 2022 claims 
available in January 22, 2023. All expenditures are classified as 
transfers to hospices.

Table 17--Accounting Statement Classification of Estimated Transfers and
                     Costs, From FY 2023 to FY 2024
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $720 million.\*\
From Whom to Whom?.....................  Federal Government to Medicare
                                          Hospices.
------------------------------------------------------------------------
Category                                 Costs
------------------------------------------------------------------------
Annualized Monetized Costs Associated    $26.5 million.**
 with Changes in APU Reductions due to
 Data Submission Requirements.
------------------------------------------------------------------------
* The increase of $720 million in transfer payments is a result of the
  proposed 2.8 percent hospice payment update compared to payments in FY
  2023.
** The $26.5 million is the amount CMS is projected to recoup based on
  the increased penalty for hospices that fail to meet HQRP data
  submission requirements, Compared to APU penalties in FY 2023.

F. 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. We consider all hospices as small entities 
as that term is used in the RFA. 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. There is no NAICS code specific to hospice services. 
Therefore, 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.\60\ Table 18 shows the number of firms, revenue, and estimated 
impact per home health care service category.
---------------------------------------------------------------------------

    \60\ https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.

                       Table 18--Number of Firms, Revenue, and Estimated Impact of Home Health Care Services by NAICS Code 621610
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Estimated
                                                                                                                                              impact
          NAICS code                      NAICS description                 Enterprise size         Number of       Receipts ($1,000)      ($1,000) per
                                                                                                      firms                                 enterprise
                                                                                                                                               size
--------------------------------------------------------------------------------------------------------------------------------------------------------
621610.......................  Home Health Care Services..............                     <100           5,861                  210,697           35.95
621610.......................  Home Health Care Services..............                  100-499           5,687                1,504,668          264.58
621610.......................  Home Health Care Services..............                  500-999           3,342                2,430,807          727.35
621610.......................  Home Health Care Services..............              1,000-2,499           4,434                7,040,174        1,587.77
621610.......................  Home Health Care Services..............              2,500-4,999           1,951                6,657,387        3,412.29
621610.......................  Home Health Care Services..............              5,000-7,499             672                3,912,082        5,821.55
621610.......................  Home Health Care Services..............              7,500-9,999             356                2,910,943        8,176.81
621610.......................  Home Health Care Services..............            10,000-14,999             346                3,767,710       10,889.34
621610.......................  Home Health Care Services..............            15,000-19,999             191                2,750,180       14,398.85
621610.......................  Home Health Care Services..............                 >=20,000             961               51,776,636       53,877.87
621610.......................  Home Health Care Services..............                    Total          23,801               82,961,284        3,485.62
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data obtained from United States Census Bureau table ``us_6digitnaics_rcptsize_2017'' (SOURCE: 2017 County Business Patterns and Economic
  Census) Release Date: 5/28/2021: https://www2.census.gov/programs-surveys/susb/tables/2017/.
Notes: Estimated impact is calculated as Receipts ($1,000)/Number of firms.

    The Department of Health and Human Services practice in 
interpreting the RFA is to consider effects economically 
``significant'' only if greater than 5 percent of providers reach a 
threshold of 3 to 5 percent or more of total revenue or total costs. 
The majority of hospice visits are Medicare paid visits and therefore 
the majority of hospice's revenue consists of Medicare payments. Based 
on our analysis, we conclude that the policies finalized in this rule 
would result in an estimated total impact of 3 to 5 percent or more on 
Medicare revenue for greater than 5 percent of hospices. Therefore, the 
Secretary has certified that this hospice proposed rule would have 
significant economic impact on a substantial number of small entities. 
We estimate that the net impact of the policies in this rule is a 2.8 
percent or approximately $720 million in increased revenue to hospices 
in FY 2024. The 2.8 percent increase in expenditures when comparing FY 
2023 payments to estimated FY 2024 payments is reflected in the last 
column of the first row in Table 18 and is driven solely by the impact 
of the hospice payment update percentage reflected in the fourth column 
of the impact table. In addition, small hospices would experience a 
greater estimated increase

[[Page 20056]]

(4.1 percent), compared to large hospices (3.8 percent) due to the 
policy to cap wage index decreases at 5 percent. Further detail is 
presented in Table 18, by hospice type and location.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a MSA and has fewer 
than 100 beds. This rule will only affect hospices. Therefore, the 
Secretary has determined that this rule will not have a significant 
impact on the operations of a substantial number of small rural 
hospitals (see Table 18).

G. Unfunded Mandates Reform Act (UMRA)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2023, that 
threshold is approximately $177 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 $177 million or more in any 1 
year.

H. 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 rule under these criteria of 
Executive Order 13132, and have determined that it will not impose 
substantial direct costs on state or local governments.

I. Conclusion

    We estimate that aggregate payments to hospices in FY 2024 will 
increase by $720 million as a result of the market basket update, 
compared to payments in FY 2023. We estimate that in FY 2024, hospices 
in urban areas will experience, on average, a 2.8 percent increase in 
estimated payments compared to FY 2023; while hospices in rural areas 
will experience, on average, a 2.5 percent increase in estimated 
payments compared to FY 2023. Hospices providing services in the Middle 
and South Atlantic regions would experience the largest estimated 
increases in payments of 3.3 percent and 3.1 percent, respectively. 
Hospices serving patients in areas in the Outlying regions would 
experience, on average, the lowest estimated increase of 1.2 percent in 
FY 2024 payments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on March 28, 2023.

List of Subjects

42 CFR Part 418

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

42 CFR Part 424

    Health facilities, Health professions, Medicare Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below.

PART 418--HOSPICE CARE

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

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

0
2. Amend Sec.  418.22 by revising paragraph (a)(4)(ii) to read as 
follows:


Sec.  418.22  Certification of terminal illness.

    (a) * * *
    (4) * * *
    (ii) During a Public Health Emergency, as defined in Sec.  400.200 
of this chapter, or through December 31, 2024, whichever is later, if 
the face-to-face encounter conducted by a hospice physician or hospice 
nurse practitioner is for the sole purpose of hospice recertification, 
such encounter may occur via a telecommunications technology and is 
considered an administrative expense. Telecommunications technology 
means the use of interactive multimedia communications equipment that 
includes, at a minimum, the use of audio and video equipment permitting 
two-way, real-time interactive communication between the patient and 
the distant site hospice physician or hospice nurse practitioner.
* * * * *


Sec.  418.204  [Amended]

0
3. Amend Sec.  418.204 by removing paragraph (d).


Sec.  418.309  [Amended]

0
4. Amend Sec.  418.309 in paragraphs (a)(1) and (2) by removing 
``2030'' and adding ``2032'' in its place.
0
5. Amend Sec.  418.312 by adding paragraph (j) to read as follows:


Sec.  418.312  Data submission requirements under the hospice quality 
reporting program.

* * * * *
    (j) Data completion thresholds. (1) Hospices must meet or exceed 
data submission threshold set at 90 percent of all required Hospice 
Item Set (HIS) or successor instrument records within 30-days of the 
beneficiary's admission or discharge and submitted through the CMS 
designated data submission systems.
    (2) A hospice must meet or exceed the data submission compliance 
threshold in paragraph (j)(1) of this section to avoid receiving a 4-
percentage point reduction to its annual payment update for a given 
fiscal year as describe under Sec.  412.306(b)(2) of this chapter.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

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

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

0
7. Amend Sec.  424.507 by revising paragraphs (b) introductory text and 
(b)(1) introductory text and adding paragraph (b)(3) to read as 
follows:


Sec.  424.507  Ordering covered items and services for Medicare 
beneficiaries.

* * * * *
    (b) Conditions for payment of claims for covered home health and 
hospice services. To receive payment for covered Part A or Part B home 
health services or for covered hospice services, a provider's home 
health or hospice services claim must meet all of the following 
requirements:
    (1) The ordering/certifying physician for hospice or home health 
services, or, for home health services, the ordering/certifying 
physician assistant, nurse practitioner, or clinical nurse specialist 
working in accordance with State law, must meet all of the following 
requirements:
* * * * *
    (3) For claims for hospice services, the requirements of paragraph 
(b) of this section apply with respect to any physician described in 
Sec.  418.22(c) of this chapter who made the applicable certification 
described in Sec.  418.22(c).
* * * * *


[[Page 20057]]


    Dated: March 28, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-06769 Filed 3-31-23; 4:15 pm]
BILLING CODE 4120-01-P