[Federal Register Volume 89, Number 151 (Tuesday, August 6, 2024)]
[Rules and Regulations]
[Pages 64202-64273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16910]



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Vol. 89

Tuesday,

No. 151

August 6, 2024

Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 418





Medicare Program; FY 2025 Hospice Wage Index and Payment Rate Update, 
Hospice Conditions of Participation Updates, and Hospice Quality 
Reporting Program Requirements; Final Rule

  Federal Register / Vol. 89 , No. 151 / Tuesday, August 6, 2024 / 
Rules and Regulations  

[[Page 64202]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1810-F]
RIN 0938-AV29


Medicare Program; FY 2025 Hospice Wage Index and Payment Rate 
Update, Hospice Conditions of Participation Updates, and Hospice 
Quality Reporting Program Requirements

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

ACTION: Final rule.

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SUMMARY: This final rule updates the hospice wage index, payment rates, 
and aggregate cap amount for Fiscal Year (FY) 2025. This rule also 
adopts the most recent Office of Management and Budget statistical area 
delineations, which will impact the hospice wage index. This rule 
clarifies current policy related to the ``election statement'' and the 
``notice of election'', as well as adds clarifying language regarding 
hospice certification and includes a technical regulation text change 
to the Conditions of Participation (CoPs). This rule finalizes changes 
to the Hospice Quality Reporting Program. Finally, this rule summarizes 
comments received regarding potential implementation of a separate 
payment mechanism to account for high intensity palliative care 
services.

DATES: These regulations are effective on October 1, 2024.

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 quality reporting program, 
contact Jermama Keys at (410) 786-7778.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose

    This final rule updates the hospice wage index, payment rates, and 
cap amount for Fiscal Year (FY) 2025 as required under section 1814(i) 
of the Social Security Act (the Act). This rule also finalizes the 
adoption of the most recent Office of Management and Budget (OMB) 
statistical area delineations based on data collected during the 2020 
Decennial Census, which will result in changes to the hospice wage 
index. In addition, this rule finalizes the reorganization of the 
regulations to clarify current policy related to the ``election 
statement'' and the ``notice of election (NOE),'' and adds clarifying 
language regarding who can certify terminal illness and admit patients 
to hospice. This rule also summarizes comments solicited regarding a 
potential policy to account for the increased hospice costs of 
providing high intensity palliative care services.
    Additionally, this rule finalizes the Hospice Quality Reporting 
Program (HQRP) measures collected through a new collection instrument, 
the Hospice Outcomes and Patient Evaluation (HOPE); finalizes two HOPE-
based measures and lays out the planned trajectory for further 
development of this instrument; and provides updates on Health Equity, 
future quality measures (QMs), and public reporting requirements. We 
also acknowledge responses on the request for information on potential 
social determinants of health (SDOH) elements. Finally, this rule also 
finalizes changes to the Hospice Consumer Assessment of Healthcare 
Providers and Systems (Hospice CAHPS) Survey.

B. Summary of the Major Provisions

    Section III.A.1 of this final rule updates the hospice wage index 
and makes the application of the updated wage data budget neutral for 
all four levels of hospice care.
    Section III.A.2 of this final rule adopts the new OMB labor market 
delineations from the July 21, 2023, OMB Bulletin No. 23-01 based on 
data collected from the 2020 Decennial Census.
    Section III.A.3 of this final rule includes the final FY 2025 
hospice payment update percentage of 2.9 percent.
    Section III.A.4 of this final rule includes updates to hospice 
payment rates.
    Section III.A.5 of this final rule includes an update to the 
hospice cap amount for FY 2025 by the hospice payment update percentage 
of 2.9 percent.
    In section III.B of this final rule, we make clarifying changes to 
the hospice Conditions of Participation (CoPs) and adopt clarifying 
regulations text, with no change to current policy. This includes 
reorganizing the regulations to clearly identify the distinction 
between the ``election statement'' and the ``notice of election,'' as 
well as including clarifying text changes that align payment 
regulations and CoPs regarding who may certify terminal illness and 
determine admission to hospice care. This section also finalizes 
technical regulations text changes in the Medical Director CoP at Sec.  
418.102. In addition, we are making a technical correction in the 
personnel requirements at Sec.  418.114(b)(9), where we inadvertently 
used the term ``marriage and family counselor'' when the correct term 
is ``marriage and family therapist.''
    In section III.C of this final rule, we include a summary of 
comments received on a potential policy to account for higher hospice 
costs involved in the provision of high intensity palliative care 
treatments.
    Finally, in section III.D of this final rule, we finalize HOPE-
based process measures; finalize the HOPE instrument; discuss updates 
to potential future quality measures; and finalize changes to the 
CAHPS[supreg] Hospice Survey.

C. Summary of Impacts

    The overall economic impact of this final rule is estimated to be 
$790 million in increased payments to hospices in FY 2025.

II. Background

A. Hospice Care

    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes the impending death of a terminally ill individual and 
warrants a change in the focus from curative care to palliative care 
for relief of pain and for symptom management. Medicare regulations 
define ``palliative care'' as patient and family-centered care that 
optimizes quality of life by anticipating, preventing, and treating 
suffering. Palliative care throughout the continuum of illness involves 
addressing physical, intellectual, emotional, social, and spiritual 
needs and to facilitate patient autonomy, access to information, and 
choice (42 CFR 418.3). Palliative care is at the core of hospice 
philosophy and care practices and is a critical component of the 
Medicare hospice benefit.
    The goal of hospice care is to help terminally ill individuals 
continue life with minimal disruption to normal activities while 
remaining primarily in the home environment. A hospice uses an 
interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through a 
collaboration of professionals and other caregivers, with the goal of 
making the beneficiary as physically

[[Page 64203]]

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 the individual's 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. The 
regulations at Sec.  418.22(b)(3) require that the certification and 
recertification forms, or an addendum to 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 group (as 
specified at Sec.  418.56(a)(1)), 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 home for 
hospice care (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 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 
individuals with disabilities and companions with disabilities, 
including the provisions of auxiliary aids and services when necessary 
to afford qualified individuals with disabilities, including 
applicants, participants, beneficiaries, companions and members of the 
public, an equal opportunity to participate in, and enjoy the benefits 
of, a service, program or activity of a recipient or public entity.\1\ 
Further information may be found at: https://www.hhs.gov/civil-rights/for-providers/provider-obligations/index.html.
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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. The Office for Civil Rights (OCR) interprets 
this to require that recipients of Federal financial assistance take 
reasonable steps to provide meaningful access to their programs or 
activities to individuals with limited English proficiency (LEP).\2\ 
Similarly, section 1557's of the Affordable Care Act implementing 
regulation requires covered entities to take reasonable steps to 
provide meaningful access to LEP individuals in federally funded health 
programs and activities (45 CFR 92.201(a)). Meaningful access may 
require the provision of interpreter services and translated materials 
(45 CFR 92.201(c)).\3\
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    \2\ HHS OCR, Guidance to Federal Financial Assistance Recipients 
Regarding Title VI Prohibition Against National Origin 
Discrimination Affecting Limited English Proficient Persons, 68 Fed. 
Reg 47311 (Aug. 8, 2003), https://www.hhs.gov/civil-rights/for-individuals/special-topics/limited-english-proficiency/guidance-federal-financial-assistance-recipients-title-vi/index.html.
    \3\ The Section 1557 final rule has been challenged in several 
courts and is not currently in effect in Texas and Montana. 
Additional information about the rule is available here: Section 
1557 of the Patient Protection and Affordable Care Act [verbar] 
HHS.gov.
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B. Services Covered by the Medicare Hospice Benefit

    Coverage under the Medicare hospice benefit requires that hospice 
services must be reasonable and necessary for the palliation and 
management of the terminal illness and related conditions. Section 
1861(dd)(1) of the Act establishes the services that are to be rendered 
by a Medicare-certified hospice program. These covered services 
include: nursing care; physical therapy; occupational therapy; speech-
language pathology therapy; medical social services; home health aide 
services (called hospice aide services); physician services; homemaker 
services; medical supplies (including drugs and biological products); 
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 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, 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

[[Page 64204]]

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 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. For example, 
hospices are prohibited from playing a role 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.
    The Medicare hospice benefit has been revised and refined since its 
implementation after various Acts of Congress and Medicare rules. For a 
historical list of changes and regulatory actions, we refer readers to 
the background section of previous Hospice Wage Index and Payment Rate 
Update rules.\4\
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    \4\ Hospice Regulations and Notices. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Regulations-and-Notices.
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III. Provisions of the Final Rule

A. Final FY 2025 Hospice Wage Index and Rate Update

1. Final FY 2025 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. 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 Metropolitan Statistical Area (MSA) 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 September 14, 2018, OMB 
issued OMB Bulletin No. 18-04, which superseded the April 10, 2018, OMB 
Bulletin No. 18-03. OMB Bulletin No. 18-04 made revisions to the 
delineations of MSAs, Micropolitan Statistical Areas, and Combined 
Statistical Areas (CSA), and guidance on uses of the delineations in 
these areas. This bulletin provided the delineations of all MSAs, 
Metropolitan Divisions, Micropolitan Statistical Areas, CSAs, and New 
England City and Town Areas in the United States and Puerto Rico based 
on the standards published on June 28, 2010, in the Federal Register 
(75 FR 37246 through 37252), and Census Bureau data. A copy of the 
September 14, 2018, bulletin is available online at: https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf. In 
the FY 2021 Hospice Wage Index final rule (85 FR 47080), we finalized 
our proposal to adopt the revised OMB delineations from the September 
14, 2018, OMB Bulletin 18-04 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). 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 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.
    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 0.8000 will be further adjusted by a 15 percent 
increase subject to a maximum wage index value of 0.8000. 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 0.8000, 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 
0.8000,

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County B's hospice wage index would be 0.8000.
    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. When calculating the 5-percent cap on wage index 
decreases we start with the current fiscal year's pre-floor, pre-
reclassification hospital wage index value for a core-based statistical 
area (CBSA) or statewide rural area and if that wage index value is 
below 0.8000, we apply the hospice floor as discussed here. Next, we 
compare the current fiscal year's wage index value after the 
application of the hospice floor to the final wage index value from the 
previous fiscal year. If the current fiscal year's wage index value is 
less than 95 percent of the previous year's wage index value, the 5-
percent cap on wage index decreases would be applied and the final wage 
index value would be set equal to 95 percent of the previous fiscal 
year's wage index value. If the 5-percent cap is applied in one fiscal 
year, then in the subsequent fiscal year, that year's pre-floor, pre-
reclassification hospital wage index would be used as the starting wage 
index value and adjusted by the hospice floor. The hospice floor 
adjusted wage index value would be compared to the previous fiscal 
year's wage index which had the 5-percent cap applied. If the hospice 
floor adjusted wage index value for that fiscal year is less than 95 
percent of the capped wage index from the previous year, then the 5-
percent cap would be applied again, and the final wage index value 
would be 95 percent of the capped wage index from the previous fiscal 
year. Using the example previously stated, 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. If County A had a wage index value 
of 0.6200 in the previous fiscal year, then we would compare 0.4593 to 
the previous fiscal year's wage index value. Since 0.4593 is less than 
95 percent of 0.6200, then County A's hospice wage index would be 
0.5890, which is equal to 95-percent of the previous fiscal year's wage 
index value of 0.6200. In the next fiscal year, the updated wage index 
value would be compared to the wage index value of 0.5890.
    Previously, this methodology was applied to all the counties that 
make up the CBSA or rural area. However, as discussed in section 
III.A.2.f of this final rule, because we are adopting the revised OMB 
delineations this methodology will also be applied to individual 
counties.
    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. For FY 2025, we proposed 
that the hospice wage index would be based on the FY 2025 hospital pre-
floor, pre-reclassified wage index for hospital cost reporting periods 
beginning on or after October 1, 2020 and before October 1, 2021 (FY 
2021 cost report data). We also stated that the proposed FY 2025 
hospice wage index would not consider any geographic reclassification 
of hospitals, including those in accordance with section 1886(d)(8)(B) 
or 1886(d)(10) of the Act. The regulations that govern hospice payment 
do not provide a mechanism for allowing hospices to seek geographic 
reclassification or to utilize the rural floor provisions that exist 
for Inpatient Prospective Payment System (IPPS) hospitals. The 
reclassification provision found in section 1886(d)(10) of the Act is 
specific to hospitals. Section 4410(a) of the Balanced Budget Act of 
1997 (Pub. L. 105-33) provides that the area wage index applicable to 
any hospital that is located in an urban area of a State may not be 
less than the area wage index applicable to hospitals located in rural 
areas in that State. This rural floor provision is also specific to 
hospitals. Because the reclassification and the hospital rural floor 
policies apply to hospitals only, and not to hospices, we continue to 
believe the use of the pre-floor and pre-reclassified hospital wage 
index results is the most appropriate adjustment to the labor portion 
of the hospice payment rates. This position is longstanding and 
consistent with other Medicare payment systems, for example, the 
skilled nursing facility prospective payment system (SNF PPS), the 
inpatient rehabilitation facility prospective payment system (IRF PPS), 
and the home health prospective payment system (HH PPS). However, the 
hospice wage index does include the hospice floor, which is applicable 
to all CBSAs, both rural and urban. The hospice floor adjusts pre-
floor, pre-reclassified hospital wage index values below 0.8000 by a 15 
percent increase subject to a maximum wage index value of 0.8000. We 
proposed that the FY 2025 hospice wage index would also include the 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.
    We received 28 comments on the proposed FY 2025 hospice wage index 
from various stakeholders including hospices, national industry 
associations, and the Medicare Payment Advisory Commission (MedPAC). A 
summary of these comments and our responses appear below:
    Comment: One commenter expressed concern with the wage index 
assigned to Montgomery County, Maryland (MD). This commenter stated 
that Montgomery County, MD has a similar cost of living compared to 
Washington, DC and shares the same labor market when competing for 
labor; therefore, hospices in Montgomery County should be reimbursed at 
the same level as hospices in Washington, DC This commenter stated that 
hospices in Montgomery County are at a long-term competitive 
disadvantage due to a Medicare hospice federal payment inequity 
involving CBSAs and recommended that CMS assign the hospice wage index 
valuation for the Washington, DC CBSA to the Montgomery/Frederick 
County CBSA for a time-limited period, such as 5 years, in order to 
evaluate the impact on Montgomery County hospices.
    Response: We thank the commenter for the recommendation. However, 
we continue to believe that the OMB's geographic area delineations 
represent a useful proxy for differentiating between labor markets and 
that the geographic area delineations are appropriate for use in 
determining Medicare hospice payments. The general concept of the CBSAs 
is that of an area containing a recognized population nucleus and 
adjacent communities that have a high degree of integration with that 
nucleus. The purpose of the 2020 standards for delineating Core Based 
Statistical Areas is to provide nationally consistent definitions for 
collecting, tabulating, and publishing federal statistics for a set of 
geographic areas. CBSAs include adjacent counties that have a minimum 
of 25 percent commuting to the central counties of the area. Based on 
the OMB's current delineations, Montgomery County belongs in a separate 
CBSA from the areas defined in the Washington, DC CBSA (CBSA 47764). 
Unlike IPPS hospitals, IRFs, and SNFs, where each provider uses a 
single wage index value, hospice agencies may serve multiple CBSAs and 
be

[[Page 64206]]

reimbursed based on more than one wage index value. Payments are based 
upon the location of the beneficiary for routine and continuous home 
care or the location of the facility for respite and general inpatient 
care. Hospices in Montgomery County, Maryland may provide RHC and CHC 
to patients in the Washington, DC CBSA, as well as to patients in other 
surrounding CBSAs. We have used CBSAs for determining hospice payments 
since FY 2006 and continue to believe that using the most current OMB 
delineations provides an accurate representation of geographic 
variation in wage levels and do not believe it would be appropriate to 
allow hospices to opt for, or be assigned, a CBSA designation with a 
higher wage index value. However, if a future OMB Bulletin updates the 
designation for Montgomery County, Maryland, we would propose this 
change through our normal rulemaking process.
    Comment: A few commenters opposed the use of the IPPS wage index as 
the basis for the hospice wage index. In general, these commenters 
stated that the use of hospital wage data is inappropriate and 
recommended that CMS utilize more appropriate wage information for the 
hospice wage index. These commenters expressed concern that the 
hospital wage index is derived from cost report wage data submitted by 
hospitals which explicitly excludes hospice wage costs. Commenters 
suggested that the exclusion of hospice costs undermines the accuracy 
of wage adjustments for hospice providers and has the potential to lead 
to inadequate services for terminally ill beneficiaries. Additionally, 
two commenters also expressed concern with the lag in the hospital cost 
report data used as the basis for the hospice wage index. One commenter 
stated that the lag in the wage index data used in the proposed rule 
likely means that any increase in reimbursement rates will be quickly, 
and possibly completely, subsumed by recent and anticipated inflation 
rates.
    Response: We appreciate the commenters concerns; however, these 
comments are outside the scope of the proposed rule, as we did not 
propose changes to our hospice wage index methodology. Changes to the 
hospice wage index methodology, including changes to the underlying 
data used to create the hospice wage index, would have to go through 
notice and comment rulemaking. Furthermore, we continue to believe the 
use of the pre-floor and pre-reclassified hospital wage index results 
is the most appropriate adjustment to the labor portion of the hospice 
payment rates. This position is longstanding and consistent with other 
Medicare payment systems; however, we will consider these comments in 
the future if CMS does consider changes to this methodology.
    Comment: A few commenters recommended more far-reaching revisions 
to the hospice wage index methodology. Some commenters, including 
MedPAC, recommended an overhaul of the entire hospice wage index 
methodology. One commenter stated that the time is long overdue for CMS 
to develop and implement a wage index model that is consistent across 
all provider types so that all providers have a level playing field 
from which to compete for personnel. MedPAC recommended that existing 
Medicare wage index policies be repealed, including current exceptions, 
and to phase in a new Medicare wage index system for hospitals and 
other types of providers that uses all-employer, occupation-level wage 
data with different occupation weights for the wage index of each 
provider type; reflects local area level differences in wages between 
and within metropolitan statistical areas and statewide rural areas; 
and smooths wage index differences across adjacent local areas. In 
addition, many commenters recommended allowing hospices to take 
advantage of wage index protections afforded to hospitals such as 
geographic redesignation and the rural floor. One commenter suggested 
that CMS investigate how MedPAC's wage index proposal would impact 
hospices and work with stakeholders, including Congress, to determine 
how to implement a fairer system that also takes into account increased 
labor costs.
    Response: We appreciate the commenters' recommendations; however, 
these comments are outside the scope of the proposed rule, as we did 
not propose changes to our hospice wage index methodology. Any changes 
regarding the adjustment of the hospice payments to account for 
geographic wage differences, beyond the wage index proposals discussed 
in the FY 2025 Hospice Wage Index and Rate Update proposed rule, would 
require notice and comment rulemaking.
    Comment: Several commenters also expressed concern that hospices 
are not given the opportunity for geographic reclassification like 
hospitals. These commenters recommended that hospices be allowed to 
reclassify to a different CBSA to receive a higher wage index in order 
to compete with hospitals and other health systems for the same labor 
pool. One commenter stated that the inability to reclassify a hospice's 
wage index means the hospice wage index often fails to reflect true 
labor costs accurately, placing the hospice at a competitive and 
financial disadvantage. Another commenter recommended that 
reclassification be allowed for provider-based home health and hospice 
providers who are a part of a hospital and/or health system. Many 
commenters also recommended that CMS reinstitute the rural floor policy 
so that no hospice serving patients in urban areas is paid below the 
rural wage index value of the State. These commenters stated that 
hospices are at a competitive disadvantage because they are unable to 
take advantage of geographic reclassification and the rural floor 
provisions that are allowed for hospitals.
    Response: We remind stakeholders that the statutory provisions that 
govern hospice payment do not provide a mechanism for allowing hospices 
to seek geographic reclassification or to utilize the rural floor 
provisions that exist for IPPS hospitals. The reclassification 
provision found in section 1886(d)(10) of the Act is specific to 
hospitals. Section 4410(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33) provides that the area wage index applicable to any hospital 
that is in an urban area of a State may not be less than the area wage 
index applicable to hospitals located in rural areas in that State. 
This rural floor provision is also specific to hospitals. Because the 
reclassification provision and the hospital rural floor apply only to 
hospitals, and not to hospices (even those hospices that are affiliated 
with a hospital or other health care system), we continue to believe 
the use of the pre-floor and pre-reclassified hospital wage index 
results is the most appropriate adjustment to the labor portion of the 
hospice payment rates. However, we note that hospices do receive the 
hospice floor which adjusts the pre-floor, pre-reclassified hospital 
wage index values below 0.8000 by a 15 percent increase subject to a 
maximum wage index value of 0.8000 and the 5-percent cap on wage index 
decreases.
    Comment: Two commenters encouraged CMS to add details and 
transparency to the wage index section of the rule. These commenters 
requested that CMS describe in detail how the wage index is calculated, 
the basis in the hospital cost report, and the role of the wage index 
standardization factor. Commenters requested this information so that 
hospices receive more information on how and why year to year wage 
index variation occurs.
    Response: We thank the commenters for their recommendations. In 
reference to the commenters' recommendation for more details describing 
how the pre-

[[Page 64207]]

floor pre-reclassified wage index is calculated, we refer readers to 
the FY 2025 IPPS proposed rule (89 FR 36139 through 36159) for 
additional information on the cost report worksheets used to calculate 
the wage index, information on how those worksheets are validated, the 
process for hospitals to request corrections, and the method for 
calculating the proposed unadjusted wage index. Once we receive the 
pre-floor, pre-reclassified wage index values as discussed, those 
values are then adjusted by the hospice floor so that all wage index 
values lower than 0.8000 are increased by 15 percent up to 0.8000. The 
hospice floor adjusted wage index values are subsequently updated by 
the permanent 5-percent cap on wage index decreases so that the wage 
index for the current fiscal year is not less than 95 percent of the 
wage index value the previous fiscal year. Regarding the wage index 
standardization factors, we finalized in the FY 2017 Hospice Wage Index 
and Rate Update final rule (81 FR 52156), a policy of applying wage 
index standardization factors for each level of care to hospice 
payments in order to eliminate the aggregate effect of annual 
variations in hospital wage data. In order to calculate the wage index 
standardization factor, we simulate total payments using FY 2023 
hospice utilization claims data with the FY 2024 wage index (pre-floor, 
pre-reclassified hospital wage index with the hospice floor, old OMB 
delineations, and the 5-percent cap on wage index decreases) and FY 
2024 payment rates and compare that total to our simulation of total 
payments using FY 2023 utilization claims data, the final FY 2025 
hospice wage index (pre-floor, pre-reclassified hospital wage index 
with hospice floor, and the revised OMB delineations, with the 5-
percent cap on wage index decreases) and FY 2024 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 2024 wage index and FY 2024 
payment rates for each level of care by the FY 2025 wage index and FY 
2024 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 then applied to the national payment amounts for that 
level of care to calculate the final FY 2025 payment amounts.
    Final Decision: We are finalizing our proposal to use the FY 2025 
pre-floor, pre-reclassified hospital wage index data as the basis for 
the FY 2025 hospice wage index. The wage index applicable for FY 2025 
is available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index. The hospice wage 
index for FY 2025 is effective October 1, 2024, through September 30, 
2025.
    There exist some geographic areas where there are no hospitals, and 
thus, no hospital wage data on which to base the calculation of the 
hospice wage index. 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 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 2025, the only CBSA without 
a hospital from which hospital wage data can be derived is 25980, 
Hinesville-Fort Stewart, Georgia. The FY 2025 final wage index value 
for Hinesville-Fort Stewart, Georgia is 0.8872.
    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). For FY 2025, as 
part of our proposal to adopt the revised OMB delineations discussed 
further in section III.A.2 of this final rule, we proposed that rural 
North Dakota would now become a rural area without a hospital from 
which hospital wage data can be derived. Therefore, to calculate the 
wage index for rural area 99935, North Dakota, we proposed to use as a 
proxy, the average pre-floor, pre-reclassified hospital wage data 
(updated by the hospice floor) from the contiguous CBSAs: CBSA 13900-
Bismark, ND, CBSA 22020-Fargo, ND-MN, CBSA 24220-Grand Forks, ND-MN and 
CBSA 33500, Minot, ND, which resulted in a proposed FY 2025 hospice 
wage index of 0.8446 for rural North Dakota.
    While no commenters expressly opposed or supported this proposal, 
we did receive one comment acknowledging the proposal to shift rural 
North Dakota to a rural area without a hospital from which hospital 
data can be formulated. We are finalizing our proposal to use as a 
proxy the average pre-floor, pre-reclassified hospital wage data 
(updated by the hospice floor) from the contiguous CBSAs: CBSA 13900-
Bismark, ND, CBSA 22020-Fargo, ND-MN, CBSA 24220-Grand Forks, ND-MN and 
CBSA 33500, Minot, ND. For this final rule, using updated data, the 
final FY 2025 hospice wage index for rural North Dakota is 0.8545.
[GRAPHIC] [TIFF OMITTED] TR06AU24.052


[[Page 64208]]


    Previously, the only rural area without a hospital from which 
hospital wage data could be derived was in Puerto Rico. However, for 
rural Puerto Rico, we did 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 used the most recent wage index previously available for 
that area which was 0.4047, subsequently adjusted by the hospice floor 
for an adjusted wage index value of 0.4654. For FY 2025, we noted that 
as part of our proposal to adopt the revised OMB delineations discussed 
further in section III.A.2.c of this final rule, there would now be a 
hospital in rural Puerto Rico from which hospital wage data can be 
derived. Therefore, we proposed that the wage index for rural Puerto 
Rico would now be based on the hospital wage data for the area instead 
of the previously available pre-hospice floor wage index of 0.4047, 
which equaled an adjusted wage index value of 0.4654. The FY 2025 
proposed pre-hospice floor unadjusted wage index for rural Puerto Rico 
would be 0.2520, and is subsequently adjusted by the hospice floor to 
equal 0.2898. Because 0.2898 is more than a 5-percent decline in the FY 
2024 wage index, the adjusted FY 2025 wage index with the 5-percent cap 
applied would equal 0.95 multiplied by 0.4654 (that is, the FY 2024 
wage index with floor), which resulted in a proposed wage index of 
0.4421.
    We did not receive any comments on our proposal to use hospital 
wage data to calculate the wage index of rural Puerto Rico instead of 
the previously available hospice floor adjusted wage index of 0.4654. 
We are finalizing this policy as proposed. For FY 2025 the final 
hospice wage index for rural Puerto Rico is 0.2510, subsequently 
adjusted by the hospice floor which equals 0.2887. Because 0.2887 is 
more than a 5-percent decline in the FY 2024 wage index, the adjusted 
FY 2025 wage index with the 5-percent cap applied will equal 0.95 
multiplied by 0.4654 (that is, the FY 2024 wage index with floor), 
which results in a final wage index of 0.4421.
    Finally, due to the proposed adoption of the revised OMB 
delineations discussed in section III.A.2.c of this final rule, we 
noted that Delaware, which was previously an all-urban State, would now 
have one rural area with a hospital from which hospital wage data can 
be derived. As such, the proposed FY 2025 wage index for rural area 
99908 Delaware was 1.0429. We did not receive any comments on our 
proposal to use hospital wage data to calculate the wage index of rural 
Delaware. We are finalizing our proposal and the FY 2025 final hospice 
wage index for rural Delaware is 1.0385.
2. Implementation of New Labor Market Delineations
    As discussed, on July 21, 2023, OMB issued Bulletin No. 23-01, 
which updates and supersedes OMB Bulletin No. 20-01, issued on March 6, 
2020. OMB Bulletin No. 23-01 establishes revised delineations for the 
MSAs, Micropolitan Statistical Areas, CSAs, and Metropolitan Divisions, 
collectively referred to as Core Based Statistical Areas (CBSAs). 
According to OMB, the delineations reflect the 2020 Standards for 
Delineating Core Based Statistical Areas (the ``2020 Standards''), 
which appeared in the Federal Register (86 FR 37770 through 37778) on 
July 16, 2021, and application of those standards to Census Bureau 
population and journey-to-work data (for example, 2020 Decennial 
Census, American Community Survey, and Census Population Estimates 
Program data). A copy of OMB Bulletin No. 23-01 is available online at: 
https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf.
    The July 21, 2023, OMB Bulletin No. 23-01 contains a number of 
significant changes. For example, there are new CBSAs, urban counties 
that have become rural, rural counties that have become urban, and 
existing CBSAs that have been split apart. We believe it is important 
for the hospice wage index to use the latest OMB delineations available 
in order to maintain the most accurate and up-to-date payment system, 
reflecting the reality of population shifts and labor market 
conditions. We further believe that using the most current OMB 
delineations would increase the integrity of the hospice wage index by 
creating a more accurate representation of geographic variation in wage 
levels. We proposed to implement the new OMB delineations as described 
in the July 21, 2023, OMB Bulletin No. 23-01 for the hospice wage index 
effective beginning in FY 2025. A summary of comments and our responses 
on this overall proposal, and on the more specific changes discussed in 
sections III.A.2.c through III.A.2.f of this final rule that occur as a 
result of this final policy, are discussed further in this document.
a. Micropolitan Statistical Areas
    As discussed in the FY 2006 Hospice Wage Index and Payment Rate 
Update proposed rule (70 FR 22397) and final rule (70 FR 45132), we 
considered how to use the Micropolitan Statistical Area definitions in 
the calculation of the wage index. Previously, OMB defined a 
``Micropolitan Statistical Area'' as a ``CBSA'' ``associated with at 
least one urban cluster that has a population of at least 10,000, but 
less than 50,000'' (75 FR 37252). We refer to these as Micropolitan 
Areas. After extensive impact analysis, consistent with the treatment 
of these areas under the IPPS as discussed in the FY 2005 IPPS final 
rule (69 FR 49029), we determined the best course of action would be to 
treat Micropolitan Areas as ``rural'' and include them in the 
calculation of each State's Hospice rural wage index (70 FR 22397 and 
70 FR 45132). Thus, the hospice statewide rural wage index has been 
determined using IPPS hospital data from hospitals located in non-MSAs. 
In the FY 2021 Hospice final rule (85 FR 47074, 47080), we finalized a 
policy to continue to treat Micropolitan Areas as ``rural'' and to 
include Micropolitan Areas in the calculation of each State's rural 
wage index.
    The OMB ``2020 Standards'' continues to define a ``Micropolitan 
Statistical Area'' as a CBSA with at least one Urban Area that has a 
population of at least 10,000, but less than 50,000. The Micropolitan 
Statistical Area comprises the central county or counties containing 
the core, plus adjacent outlying counties having a high degree of 
social and economic integration with the central county, or counties as 
measured through commuting. (86 FR 37778). Overall, there are the same 
number of Micropolitan Areas (542) under the new OMB delineations based 
on the 2020 Census as there were using the 2010 Census. We note, 
however, that a number of urban counties have switched status and have 
joined or become Micropolitan Areas, and some counties that once were 
part of a Micropolitan Area, and thus were treated as rural, have 
become urban based on the 2020 Decennial Census data. We believe that 
the best course of action would be to continue our established policy 
and include Micropolitan Areas in each State's rural wage index as 
these areas continue to be defined as having relatively small urban 
cores (populations of 10,000 to 49,999). Therefore, in conjunction with 
our proposal to implement the new OMB labor market delineations 
beginning in FY 2025, and consistent with the treatment of Micropolitan 
Areas under

[[Page 64209]]

the IPPS, we also proposed to continue to treat Micropolitan Areas as 
``rural'' and to include Micropolitan Areas in the calculation of each 
State's rural wage index.
    Final Decision: We did not receive any comments on our proposal to 
continue to treat Micropolitan Areas as rural and to include those 
areas in the calculation of each State's rural wage index. We are 
finalizing this policy as proposed.
b. Change to County-Equivalents in the State of Connecticut
    In a June 6, 2022, Notice (87 FR 34235--34240), the Census Bureau 
announced that it was implementing the State of Connecticut's request 
to replace the eight counties in the State with nine new ``Planning 
Regions''. Planning regions are included in OMB Bulletin No. 23-01 and 
now serve as county-equivalents within the CBSA system. We evaluated 
the change and proposed to adopt the planning regions as county 
equivalents for wage index purposes. We believe it is necessary to 
adopt this migration from counties to planning region county-
equivalents in order to maintain consistency with our established 
policy of adopting the most recent OMB updates.
    Final Decision: We did not receive any comments on our proposal to 
adopt the Connecticut planning regions as county equivalents for wage 
index purposes. We are finalizing this policy as proposed. We are 
providing the following crosswalk in Table 2 for counties located in 
Connecticut with the current and final FIPS county and county-
equivalent codes and CBSA assignments.
[GRAPHIC] [TIFF OMITTED] TR06AU24.053

c. Urban Counties That Would Become Rural
    Under the revised OMB statistical area delineations (based upon OMB 
Bulletin No. 23-01), a total of 53 counties (and county equivalents) 
that are currently considered urban would be considered rural beginning 
in FY 2025. Table 3 lists the 53 counties that will become rural when 
we implement the revised OMB delineations.

[[Page 64210]]

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[[Page 64211]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.055

d. Rural Counties That Would Become Urban
    Under the revised OMB statistical area delineations (based upon OMB 
Bulletin No. 23-01), a total of 54 counties (and county equivalents) 
that are currently located in rural areas will be considered located in 
urban areas under the revised OMB delineations beginning in FY 2025. 
Table 4 lists the 54 counties that will be urban if we implement the 
revised OMB delineations beginning in FY 2025.

[[Page 64212]]

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[[Page 64213]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.057

e. Urban Counties That Would Move to a Different Urban CBSA Under the 
Revised OMB Delineations
    In addition to rural counties becoming urban and urban counties 
becoming rural, several urban counties would shift from one urban CBSA 
to a new or existing urban CBSA under our proposal to adopt the revised 
OMB delineations. In other cases, applying the new OMB delineations 
would involve a change only in CBSA name or number, while the CBSA 
would continue to encompass the same constituent counties. For example, 
CBSA 35154 (New Brunswick-Lakewood, NJ) would experience both a change 
to its number and its name, and become CBSA 29484 (Lakewood-New 
Brunswick, NJ), while all three of its constituent counties would 
remain the same. In other cases, only the name of the CBSA would be 
modified. Table 5 lists CBSAs that would change in name and/or CBSA 
number only, but the constituent counties would not change (except in 
instances where an urban county became rural, or a rural county became 
urban, as discussed in the previous sections).

[[Page 64214]]

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[[Page 64215]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.059

    In some cases, all the urban counties from a FY 2024 CBSA would be 
moved and subsumed by another CBSA in FY 2025. Table 6 lists the CBSAs 
that, under our proposal to adopt the revised OMB statistical area 
delineations, would be subsumed by another CBSA.
[GRAPHIC] [TIFF OMITTED] TR06AU24.060

    In other cases, if we adopt the new OMB delineations, some counties 
will shift between existing and new CBSAs, changing the constituent 
makeup of the CBSAs. In another type of change, some CBSAs have 
counties that would split off to become part of or to form entirely new 
labor market areas. For example, the District of Columbia, DC, Charles 
County, MD and Prince Georges County, MD would move from CBSA 47894 
(Washington-Arlington-Alexandria, DC-VA-MD-WV) into CBSA 47764 
(Washington, DC-MD). Calvert County, MD would move from CBSA 47894 
(Washington-Arlington-Alexandria, DC-VA-MD-WV) into CBSA 30500 
(Lexington Park, MD). The remaining counties that currently make up 
47894 (Washington-Arlington-Alexandria, DC-VA-MD-WV) would move into 
CBSA 11694 (Arlington-Alexandria-Reston, VA-WV). Finally, in some 
cases, a CBSA will lose counties to another existing

[[Page 64216]]

CBSA if we adopt the new OMB delineations. For example, Grainger 
County, TN would move from CBSA 34100 (Morristown, TN) into CBSA 28940 
(Knoxville, TN). Table 7 lists the 73 urban counties that would move 
from one urban CBSA to a new or modified urban CBSA if we adopt the 
revised OMB delineations.
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[[Page 64218]]


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[[Page 64220]]


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f. Transition Period
    In the past we have provided for transition periods when adopting 
changes that have significant payment implications, particularly large 
negative impacts, in order to mitigate the potential impacts of 
proposed policies on hospices. For example, we have proposed and 
finalized budget-neutral transition policies to help mitigate negative 
impacts on hospices following the adoption of the new CBSA delineations 
based on the 2010 Decennial Census data in the FY 2016 hospice final 
rule (80 FR 47142). Specifically, we applied a blended wage index for 
one year (FY 2016) for all geographic areas that consisted of a 50/50 
blend of the wage index values using OMB's old area delineations and 
the wage index values using OMB's new area delineations. That is, for 
each county, a blended wage index was calculated equal to 50 percent of 
the FY 2016 wage index using the old labor market area delineation and 
50 percent of the FY 2016 wage index using the new labor market area 
delineations, which resulted in an average of the two values. 
Additionally, in the FY 2021 hospice final rule (85 FR 47079 through 
47080), we proposed and finalized a transition policy to apply a 5-
percent cap on any decrease in a geographic area's wage index value 
from the wage index value from the prior FY. This transition allowed 
the effects of our adoption of the revised CBSA delineations from OMB 
Bulletin 18-04 to be phased in over 2 years, where the estimated 
reduction in a geographic area's wage index was capped at five percent 
in FY 2021 (that is, no cap was applied to the reduction in the wage 
index for the second year (FY 2022)). We explained that we believed a 
5-percent cap on the overall decrease in a geographic area's wage index 
value would be appropriate for FY 2021, as it provided predictability 
in payment levels from FY 2020 to FY 2021 and additional transparency 
because it was administratively simpler than our prior one-year 50/50 
blended wage index approach.
    As discussed previously, in the FY 2023 hospice final rule, we 
adopted a permanent 5-percent cap on wage index decreases beginning in 
FY 2023 and each subsequent year (87 FR 45677). The policy applies 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 2025, we believe that the permanent 5-percent cap on wage 
index decreases would be sufficient to mitigate any potential negative 
impact for hospices serving beneficiaries in areas that are impacted by 
the proposal to adopt the revised OMB delineations and that no further 
transition is necessary. Previously, the 5-percent cap had been applied 
at the CBSA or statewide rural area level, meaning that all the 
counties that make up the CBSA or rural area received the 5-percent 
cap. However, for FY 2025, to mitigate any

[[Page 64221]]

potential negative impact caused by our proposed adoption of the 
revised delineations, we proposed that in addition to the 5-percent cap 
being calculated for an entire CBSA or statewide rural area the cap 
would also be calculated at the county level, so that individual 
counties moving to a new delineation would not experience more than a 5 
percent decrease in wage index from the previous fiscal year. 
Specifically, we proposed for FY 2025, that the 5-percent cap would 
also be applied to counties that move from a CBSA or statewide rural 
area with a higher wage index value into a new CBSA or rural area with 
a lower wage index value, so that the county's FY 2025 wage index would 
not be less than 95 percent of the county's FY 2024 wage index value 
under the old delineation despite moving into a new delineation with a 
lower wage index.
    Due to the way that we proposed to calculate the 5-percent cap for 
counties that experience an OMB designation change, some CBSAs and 
statewide rural areas could have more than one wage index value because 
of the potential for their constituent counties to have different wage 
index values as a result of application of the 5-percent cap. 
Specifically, some counties that change OMB designations would have a 
wage index value that is different than the wage index value assigned 
to the other constituent counties that make up the CBSA or statewide 
rural area that they are moving into because of the application of the 
5-percent cap. However, for hospice claims processing, each CBSA or 
statewide rural area can have only one wage index value assigned to 
that CBSA or statewide rural area.
    Therefore, hospices that serve beneficiaries in a county that would 
receive the cap would need to use a number other than the CBSA or 
statewide rural area number to identify the county's appropriate wage 
index value for hospice claims in FY 2025. We proposed that beginning 
in FY 2025, counties that have a different wage index value than the 
CBSA or rural area into which they are designated due to the 
application of the 5-percent cap would use a wage index transition 
code. These special codes are five digits in length and begin with 
``50.'' The 50XXX wage index transition codes would be used only in 
specific counties; counties located in CBSAs and rural areas that do 
not correspond to a different transition wage index value will still 
use the CBSA number. For example, FIPS county 13171 Lamar County, GA is 
currently part of CBSA 12060 Atlanta-Sandy Springs-Alpharetta. However, 
for FY 2025 we proposed that Lamar County would be redesignated into 
the Rural Georgia Code 99911. Because the wage index value of rural 
Georgia is more than a 5-percent decrease from the wage index value 
that Lamar County previously received under CBSA 12060, the FY 2025 
wage index for Lamar County would be capped at 95 percent of the FY 
2024 wage index value for CBSA 12060. Additionally, because rural 
Georgia can only have one wage index value assigned to code 99911, in 
order for Lamar County to receive the capped wage index for FY 2025, 
transition code 50002 would be used instead of rural Georgia code 
99911.
    Table 8 includes a list of counties that have changed designation 
and must use a transition code beginning in FY 2025. This list is 
comprised of counties that are redesignated into a new CBSA or rural 
area and will receive the 5-percent cap on wage index decreases. These 
counties must use a transition code because the wage index for that 
county is higher than all other constituent counties that make up the 
CBSA or rural area (like the example above for Lamar County, GA.) 
Additionally, the list also includes counties that move into a new CBSA 
or rural area and have a different wage index value because the 
constituent counties that make up the CBSA or rural receive the 5-
percent cap for FY 2025 while the county that moves into the CBSA or 
rural area does not. For example, rural area 99922 rural Massachusetts 
is comprised of FIPS code 25007 Dukes County, FIPS code 25019 Nantucket 
County and the redesignated FIPS code 25011 Franklin County. Dukes 
County and Nantucket County were part of rural area 99922 Massachusetts 
for FY 2024 and will receive the 5-percent cap because the FY 2025 wage 
index for rural area 99922 is more than a 5-percent decrease from the 
FY 2024 wage index for rural area 99922. However, Franklin County was 
included in CBSA 44140 Springfield, MA in FY 2024 and the uncapped FY 
2025 wage index for rural area 99922 is higher than the FY 2024 wage 
index for CBSA 44140. In this example, Franklin County, MA would 
receive the uncapped wage index for rural Area 99922 while Dukes and 
Nantucket counties receive the 5-percent capped wage index. Therefore, 
hospices that serve beneficiaries in Franklin County, MA must use the 
transition code 50010 on hospice claims.
    Additionally, we proposed that the 5-percent cap would apply to a 
county that corresponds to a different wage index value than the wage 
index value in the CBSA or rural area in which they are designated due 
to a delineation change until the county's new wage index is more than 
95 percent of the wage index from the previous fiscal year. We also 
proposed that in order to capture the correct wage index value, the 
county would continue to use the assigned 50XXX transition code until 
the county's wage index value calculated for that fiscal year using the 
new OMB delineations is not less than 95 percent of the county's capped 
wage index from the previous fiscal year. Thus, in the example 
mentioned previously, Lamar County would continue to use transition 
code 50002 until the wage index in its revised designation of Rural 
Georgia is equal to or more than 95 percent of its wage index value 
from the previous fiscal year. The counties that will require a 
transition code in FY 2025 and the corresponding 50XXX codes are shown 
in Table 8 and will also be shown in the last column of the FY 2025 
hospice wage index file.

[[Page 64222]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.066

    We received 11 comments on our proposal to adopt the latest OMB 
delineations from OMB Bulletin No. 23-01 (and the resulting changes) 
with the permanent 5-percent cap as a transition. The following is a 
summary of these

[[Page 64223]]

comments and our responses to those comments.
    Comment: Most commenters stated that they support the adoption of 
the revised OMB delineations from the July 21, 2023, Bulletin No. 23-
01. Most commenters also expressed support for the use of the permanent 
5-percent cap policy as a transition to the policy.
    Response: We appreciate the commenters' support of the adoption of 
the new OMB delineations and the use of the permanent 5-percent cap as 
a transition.
    Comment: A few commenters opposed our proposal to adopt the new 
delineations. One commenter from Montgomery County, MD, expressed 
concern that the revised delineations fail to resolve the issue of the 
county being excluded from the Washington, DC CBSA. Other commenters 
stated that the adoption of the revised OMB delineations would result 
in a reduction in reimbursement for counties in states such as 
California, Illinois, and New York. One commenter suggested that the 
proposed updates to CBSAs based on the 2020 Decennial Census will not 
only eliminate any proposed rate increase but will reduce reimbursement 
in thirty-three percent of New York's sixty-one counties.
    Response: We appreciate the concerns commenters raised regarding 
the impact of implementing the revised designations on their specific 
counties. While we understand the concern regarding the potential 
financial impact, we believe that implementing the revised OMB 
delineations will create more accurate representations of labor market 
areas nationally and result in hospice wage index values being more 
representative of the actual costs of labor in a given area. Although 
these comments only addressed any negative impacts on specific 
geographic areas, we believe it is important to note that there are 
many geographic locations and hospice providers that will experience 
positive impacts upon implementation of the revised CBSA designations. 
We believe that the OMB delineations for Metropolitan and Micropolitan 
Statistical Areas are appropriate for use in accounting for wage area 
differences and that the values computed under the revised delineations 
will result in more appropriate payments to providers by more 
accurately accounting for and reflecting the differences in area wage 
levels. We also recognize that there are areas which will experience a 
decrease in their wage index. As such, it is our longstanding policy to 
provide temporary adjustments to mitigate negative impacts from the 
adoption of new policies or procedures. In the FY 2025 Hospice Wage 
Index and Payment Rate Update proposed rule, we proposed to use the 
finalized 5-percent cap policy as a transition in order to mitigate the 
resulting short-term instability and negative impacts on certain 
providers. We continue to believe that the finalized 5-percent cap 
policy provides an adequate safeguard against any significant payment 
reductions, allows for sufficient time to make operational changes for 
future fiscal years, and provides a reasonable balance between 
mitigating some short-term instability in hospice payments and 
improving the accuracy of the payment adjustment for differences in 
area wage levels.
    Comment: A few commenters, including MedPAC, suggested alternatives 
to the 5-percent cap transition policy. MedPAC suggested that the 5-
percent cap limit should apply to both increases and decreases in the 
wage index so that no provider would have its wage index value increase 
or decrease by more than 5 percent. However, several commenters 
recommended lowering the finalized 5-percent cap on wage index 
decreases (for example, a 2-percent cap was recommended). These 
commenters stated that capping decreases at 5 percent is insufficient 
to mitigate negative impacts faced by hospices. One commenter stated 
that while the permanent maximum drop in wage index values is 
appreciated, even a 5 percent drop in rates from one year to the next 
in this inflationary time is very difficult. Another commenter 
recommended that CMS limit the maximum wage index reduction to a 
percentage equal to or less than the payment update for that year. This 
commenter also suggested that CMS change the policy so that there is no 
reduction in wage index values but instead only increases. One 
commenter recommended the wage index cap be lowered for FY 2025 as a 
transition to the adoption of the revised delineations. Two commenters 
requested that CMS institute a one-time zero wage index adjustment in 
all CBSAs where there is a negative adjustment.
    Response: We appreciate the commenters' recommendations for changes 
to the finalized cap policy. Regarding MedPAC's suggestion that the cap 
on wage index changes of more than 5 percent should also be applied to 
wage index increases, as we discussed previously, the purpose of the 
finalized 5-percent cap policy is to help mitigate the significant 
negative impacts of certain wage index changes. Additionally, we 
believe that the 5-percent cap on wage index decreases is an adequate 
safeguard against any significant payment reductions and do not believe 
that capping wage index decreases at 2 percent instead of 5 percent is 
appropriate. We also do not believe it would be appropriate to 
institute a one-time zero wage index adjustment or implement a policy 
where there are no wage index decreases. We continue to believe that a 
5-percent cap would more effectively mitigate any significant decreases 
in a hospice's wage index for a fiscal year, while still balancing the 
importance of ensuring that area wage index values accurately reflect 
relative differences in area wage levels. Furthermore, a 5-percent cap 
on wage index decreases provides a degree of predictability in payment 
changes for providers and allows providers time to adjust to any 
significant decreases they may face year to year.
    Final Decision: We are finalizing our proposal to adopt the revised 
OMB delineations from the July 21, 2018 OMB Bulletin 23-01, and will 
also apply the permanent 5-percent cap on wage index decreases at the 
county level with the use of a transition code, so that counties 
impacted by the revised designations will receive a 5-percent cap on 
any decrease in a geographic area's wage index value from the wage 
index value from the prior fiscal year for FY 2025. We are also 
finalizing that beginning in FY 2025, counties that have a different 
wage index value than the CBSA or rural area into which they are 
designated due to the application of the 5-percent cap (including 
redesignated counties that will receive the 5-percent cap and 
redesignated counties that move into a CBSA or rural area where all 
other constituent counties receive the 5-percent cap) would use a wage 
index transition code. These special codes are five digits in length 
and begin with ``50.'' The 50XXX wage index transition codes will be 
used only in specific counties; counties located in CBSAs and rural 
areas that do not correspond to a different transition wage index value 
will still use the CBSA number. Finally, we are finalizing the policy 
that the 5-percent cap will apply to a county that corresponds to a 
different wage index value than the wage index value in the CBSA or 
rural area in which they are designated due to a delineation change 
until the county's new wage index is more than 95 percent of the wage 
index from the previous fiscal year. In order to capture the correct 
wage index value, the county will continue to use the assigned 50XXX 
transition code until the county's wage index value calculated for that 
fiscal year using the new OMB delineations is

[[Page 64224]]

not less than 95 percent of the county's capped wage index from the 
previous fiscal year.
    The final FY 2025 wage index file provides a crosswalk between the 
current OMB delineations and the final revised OMB delineations that 
will be in effect in FY 2025. This file shows each State and county and 
its corresponding final wage index along with the previous CBSA number, 
the final CBSA number or alternate identification number, and the final 
CBSA name. The final hospice wage index file applicable for FY 2025 
(October 1, 2024 through September 30, 2025) is available on the CMS 
website at: https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-wage-index.
3. FY 2025 Hospice Payment Update Percentage
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish 
updates to hospice rates for FYs 1998 through 2002. Hospice rates were 
to be updated by a factor equal to the inpatient hospital market basket 
percentage increase set out under section 1886(b)(3)(B)(iii) of the 
Act, minus one percentage point. Payment rates for FYs since 2002 have 
been updated as required by 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 hospital market basket percentage increase for 
that FY. In the FY 2022 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) 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) of the Act 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 http://www.bls.gov for the BLS historical published TFP data. A complete 
description of IGI's TFP projection methodology is available on the CMS 
website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. 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''. Consistent with our historical practice, 
we estimate the market basket percentage increase and the productivity 
adjustment based on IHS Global Inc.'s (IGI's) forecast using the most 
recent available data. The proposed hospice payment update percentage 
for FY 2025 was based on the most recent estimate of the inpatient 
hospital market basket (based on IGI's fourth quarter 2023 forecast 
with historical data through the third quarter of 2023). 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 percentage 
increase for FY 2025 of 3.0 percent is required to be reduced by a 
productivity adjustment as mandated by section 3401(g) of the 
Affordable Care Act. The proposed productivity adjustment for FY 2025 
was 0.4 percentage point (based on IGI's fourth quarter 2023 forecast). 
Therefore, the proposed hospice payment update percentage for FY 2025 
was 2.6 percent. We also proposed that if more recent data became 
available after the publication of the proposed rule and before the 
publication of the final rule (for example, a more recent estimate of 
the inpatient hospital market basket percentage increase or 
productivity adjustment), we would use such data, if appropriate, to 
determine the hospice payment update percentage in the FY 2025 final 
rule. We continue to believe it is appropriate to routinely update the 
hospice payment system so that it reflects the best available data 
about differences in patient resource use and costs among hospices as 
required by the statute.
    In the FY 2022 Hospice Wage Index final rule (86 FR 42532), we 
rebased and revised the labor shares for RHC, CHC, GIP, and IRC using 
Medicare cost report data for freestanding hospices (CMS Form 1984-14, 
OMB Control Number 0938-0758) from 2018. The current labor portion of 
the payment rates are: RHC, 66.0 percent; CHC, 75.2 percent; GIP, 63.5 
percent; and 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: RHC, 34.0 percent; CHC, 
24.8 percent; GIP, 36.5 percent; and IRC, 39.0 percent. We received 45 
comments on the proposed hospice update percentage of 2.6 percent. A 
summary of the comments and our responses to those comments are as 
follows:
    Comment: A couple of commenters stated appreciation for the 
proposed hospice market basket update for FY 2025; however, most 
commenters stated that the proposed 2.6 percent increase does not cover 
the increased operating costs they have faced throughout the pandemic. 
The commenters requested CMS determine whether additional updates could 
be made during FY 2025.
    Specifically, the commenters stated that they have been facing 
unprecedented increases in labor costs, particularly for nursing staff 
and that labor accounts for a large percentage of their operating 
costs, more so than other provider types. Additionally, several 
commenters noted that the healthcare worker shortages exacerbate wage 
pressure increases. For example, a few commenters stated that their 
compensation costs account for approximately 80 percent of the overall 
operating costs. Several commenters stated that they have experienced 
increased expenses for employed nursing staff, therapy staff, and 
ancillary staff. Many commenters noted the difficulty in recruiting and 
retaining staff, as other provider types can pay higher wages. One 
commenter stated that New York State Medicaid recognized the 
catastrophic impact of rising healthcare costs and approved a rate 
increase of 3.5 percent, acknowledging the higher cost of doing 
business in New York, which was partly driven by the largest wage 
increase in New York City's public sector nursing history. One industry 
association stated that their members reported that

[[Page 64225]]

workforce shortages are their biggest challenge.
    The commenters also stated that the proposed payment update does 
not appropriately capture the inflation pressures experienced for non-
labor operating expenses, specifically the increased costs for medical 
supplies, pharmaceuticals, materials, and utilities. One commenter 
stated that their total drug expenses per hospice day are 14 percent 
higher and medical supply costs and staff travel reimbursement (as 
staff travel to patient homes to provide care) have increased 4 percent 
and 6.5 percent, respectively, over the past year. The commenters 
stated that it has been difficult to budget wage increases in order to 
attract and retain staff while at the same time covering higher input 
costs for other operating expenses.
    Several commenters explicitly noted that the proposed 2.6 percent 
increase in hospice payments is less than the current rate of U.S. 
inflation as measured by the Consumer Price Index for All Urban 
Consumers (CPI-U) which they state increased by 3.4 percent year-over-
year in April 2024, nearly a percent higher than the proposed FY 2025 
hospice update of 2.6 percent. One commenter also noted that the 
proposed update is below the 3.7 percent increase for Medicare 
Advantage plans. Several commenters stated that unlike other Medicare 
provider types, like hospitals, most hospice care is financed 
predominantly by Medicare and Medicaid and as a result, hospice 
providers are unable to shift costs to other payers to help offset 
losses.
    MedPAC recognized that CMS is required by statute to propose an 
increase to the hospice payment rates; however, the Commission 
recommended eliminating the update for FY 2025. The Commission 
referenced their March 2024 Report to the Congress and that their 
assessment of indicators of payment adequacy for hospices--beneficiary 
access to care, quality of care, provider access to capital, and 
Medicare payments relative to providers' costs--were positive. 
Additionally, MedPAC noted that hospice Medicare profit margins were 
between 13 to 17 percent in aggregate.
    Response: We appreciate the commenters' support for the statutorily 
required hospice payment update and reiterate that we are required to 
update hospice payments by the IPPS market basket update adjusted for 
productivity, as directed by section 1814(i)(1)(C)(ii)(VII) of the Act. 
We believe the increase in the 2018-based IPPS operating market basket 
adequately reflects the average change in the price of goods and 
services hospitals purchase in order to provide medical services. The 
IPPS market basket is a fixed-weight, Laspeyres-type index that 
measures price changes over time and would not reflect increases in 
costs associated with changes in the volume or intensity of input goods 
and services. As such, the IPPS market basket update would reflect the 
prospective price pressures described by the commenters during a high 
inflation period (such as faster wage growth or higher energy prices) 
but might not reflect other factors that could increase costs such as 
the quantity of labor used or any shifts between contract and staff 
nurses. We note that cost changes (that is, the product of price and 
quantities) would only be reflected when a market basket is rebased, 
and the base year weights are updated to a more recent time period.
    We agree with the commenters that recent higher inflationary trends 
have impacted the outlook for price growth over the pandemic period. 
However, the purpose of the FY 2025 hospice payment update is to 
reflect the price pressures providers are expected to face in FY 2025, 
and thus is a forward-looking update as opposed to one that reflects 
historical price changes. At the time of the FY 2025 hospice PPS 
proposed rule, based on IGI's fourth quarter 2023 forecast with 
historical data through third quarter 2023, IGI forecasted the 2018-
based IPPS market basket update of 3.0 percent for FY 2025 reflecting a 
3.6-percent forecasted compensation price increase. We would note that 
the 10-year historical average (2014-2023) growth rate of the 2018-
based IPPS market basket is 2.8 percent with compensation prices 
increasing 2.8 percent. We stated in the FY 2025 hospice PPS proposed 
rule (89 FR 23800) that if more recent data became available, we would 
use such data, if appropriate, to derive the final FY 2025 hospice 
payment update percentage for the final rule. For this final rule, we 
are using an updated forecast of the price proxies underlying the 2018-
based IPPS market basket that incorporates more recent historical data 
and reflects a revised outlook regarding the U.S. economy, including 
compensation and inflationary pressures. Based on IGI's second quarter 
2024 forecast with historical data through first quarter 2024, the FY 
2025 IPPS market basket update is 3.4 percent (reflecting forecasted 
compensation price growth of 3.9 percent). The FY 2025 productivity 
adjustment based on IGI's second quarter 2024 forecast is 0.5 
percentage point. Therefore, as discussed further in this section and 
after consideration of the comments received, for FY 2025, the final 
hospice payment update is 2.9 percent (3.4 percent market basket 
percentage increase less a 0.5 percentage point productivity 
adjustment), compared to the proposed hospice payment update of 2.6 
percent. Finally, we believe the FY 2025 hospice payment update to be 
adequate based on the MedPAC analysis that showed positive payment 
indicators of beneficiary access to care, quality of care, provider 
access to capital, and Medicare payments relative to providers' costs.
    Comment: Many commenters stated that there have been 3 years of 
under forecasted payment rate updates. The commenters noted that the 
market basket forecast for FY 2021 through FY 2023 was cumulatively 
under forecast by 4.6 percentage points over those 3 years and 
requested a one-time retrospective adjustment to rectify the 
significant forecast error since 2021. The commenters stated that they 
understand that the market basket updates are based on a forecast of 
projected inflation; however, they also stated that multiple years in a 
row of significantly under forecast updates is not sustainable and has 
impaired hospices' capacity to serve their beneficiary communities. 
Several commenters also acknowledged that while the adjustment can be 
applied positively or negatively, the update for the last 3 years was 
consistently and significantly under forecast. A few commenters pointed 
to the public data from the CMS Office of the Actuary, which show the 
actual forecast error. Finally, commenters noted that the inadequacy of 
this payment update is further compounded by continued sequestration, 
which reduces Medicare payments by two percent and is currently set to 
continue through FY 2032. Many commenters requested a retrospective 
adjustment be finalized to account for the significant forecast error 
since 2021.
    Several commenters highlighted that the CMS response to a similar 
concern in the FY 2024 rule stated that CMS lacks the statutory 
authority to implement an adjustment; however, the commenters requested 
that CMS provide additional information and a specific explanation 
supporting that it lacks the statutory authority to apply an adjustment 
using the special exceptions and adjustment authority. Several 
commenters also stated that there exists a precedent for CMS to adjust 
for forecast errors in the market basket updates, as was previously 
implemented in a SNF PPS update, which finalized a 3.6 percent forecast 
error adjustment in the FY 2024 SNF

[[Page 64226]]

PPS final rule (88 FR 53205 through 53206). One commenter stated the 
cumulative forecast error of hospital market basket updates was below 
both the growth in the Employment Cost Index (ECI) total compensation 
index and the Producer Price Index (PPI)--All Commodities Index. One 
commenter requested that CMS impose an additional 3 percent payment 
adjustment at a minimum even if the full cumulative forecast error 
adjustment is not possible.
    Several commenters stated that if CMS is limited by statute to 
implement a forecast error adjustment for updating hospice payments 
that CMS work with Congress to include funding for a one-time market 
basket forecast error adjustment for hospice providers as a component 
of any end of year legislation taken up by the 118th Congress.
    Response: We thank the commenters for their recommendations. The 
inpatient hospital market basket percentage increases are required by 
law to be set prospectively, which means that the update relies on a 
mix of both historical data for part of the period for which the update 
is calculated and forecasted data for the remainder. There is currently 
no mechanism to adjust for market basket forecast error in the hospice 
payment update. Furthermore, beginning in 1989, the Congress gave 
hospices their first increase (20 percent) in payment since 1986 and 
tied future increases to the annual increase in the hospital market 
basket through a provision contained in the Omnibus Budget 
Reconciliation Act of 1989. While the projected inpatient hospital 
market basket percentage increases for FY 2021, FY 2022, and FY 2023 
were under forecast, this was largely due to unanticipated inflationary 
and labor market pressures as the economy emerged from the COVID-19 
PHE. Importantly, the hospital market basket has been used for many 
years to update hospice payment rates and an analysis of the forecast 
error over a longer period of time shows that the forecast error has 
been both positive and negative. For example, the 10-year cumulative 
forecast error (excluding FY 2018 when the hospice payment update was 
statutorily required to be 1.0 percent) was slightly positive, equal to 
0.2 percentage point (2014-2023). Each year from 2014 through 2020, the 
final FY hospital market basket update was higher than the actual 
hospital market basket update once historical data was finalized; with 
(5 out of the 7 years between 2014 to 2020 having a forecast error 
greater than 0.5 percentage point.). Only considering the forecast 
error for years when the final inpatient hospital market basket 
percentage increase was lower than the actual inpatient hospital market 
basket percentage increase does not consider the numerous years that 
providers benefited from the forecast error. CMS understands that the 
market basket updates may differ from other overall inflation indexes 
such as the topline ECI, CPI, or PPI; however, we would reiterate that 
comparisons between these topline indexes are not comparable since they 
measure different mixes of products, services, or wages than reflected 
in the legislatively defined CMS IPPS hospital market basket.
    Comment: One commenter stated they have repeatedly shared concerns 
with CMS on the quality of cost report data, especially with regards to 
capturing actual labor costs, and that cost reports should be improved 
and optimized before they are used for payment purposes. The commenter 
recommends that the cost reports be amended to allow for a greater 
breakdown of costs for contracted versus hospice-administered inpatient 
services to apportion the labor share appropriately. They further 
requested that CMS clarify how frequently they intend to update the 
labor share component moving forward and clarify the development and 
methodology around the ``standardization factor.'' This includes 
clarification as to how CMS will adjust the labor share if certain 
types of hospices are found to provide more services and thus, are 
likely to have a larger labor share but contribute fewer cost reports. 
Lastly the commenter recommended that the definition of a ``day'' be 
any 24-hour period or that CMS create a modifier to allow hospices to 
bill into a second day up to a 24-hour limit.
    Response: We appreciate the commenter's request for future changes 
to the hospice cost report. The labor shares for other PPS systems (for 
example, IPPS and HHA) are typically updated every 4 to 5 years. As 
stated in the FY 2022 hospice final rule (86 FR 42533 through 42534), 
we tentatively plan to rebase the hospice labor shares on a similar 
schedule as the other payment systems under Medicare. However, in light 
of the COVID-19 Public Health Emergency (PHE), we plan to monitor the 
upcoming Medicare cost report data to see if more frequent revision of 
the hospice labor shares is necessary in order to reflect more recent 
cost structures of hospice providers. Given that the COVID-19 PHE 
continued into 2023, we have only been able to conduct preliminary 
analysis of 2021 and 2022 Medicare cost report data as the 2023 
Medicare cost report data are not yet available. Therefore, in the FY 
2025 hospice proposed rule, we did not propose to rebase the hospice 
labor shares because of this incomplete data. We will continue to 
monitor these data and any future revisions to the hospice labor shares 
will be proposed and subject to public comments in future rulemaking.
    Comment: One commenter stated that the updated hospice wage index 
should reflect the competitive nature of the healthcare job market and 
include substantial increases in hourly rates for hospice registered 
nurses, certified nursing assistants, and support staff. They further 
stated that the Bureau of Labor Statistics reports that a hospice nurse 
earns an average of $32.10 per hour while the average for nurses in all 
other settings is $39.05 per hour. They noted that vacancy rates for 
registered nurses and licensed practical nurses is averaging as high as 
20 percent in some states. They stated that this issue can be solved by 
increasing the payment rate of hospice workers through the update of 
this rule.
    Response: We appreciate the commenter's concerns regarding labor 
wage rates. Hospice payment rates for FYs since 2002 have been updated 
according to section 1814(i)(1)(C)(ii)(VII) of the Act, which provides 
that the update to the payment rates for subsequent FYs must be the 
inpatient hospital market basket percentage increase for that FY. 
Additionally, as mandated by section 3401(g) of the Affordable Care 
Act, the inpatient hospital market basket percentage increase is 
required to be reduced by a productivity adjustment. The inpatient 
hospital market basket percentage increase reflects the projected wage 
inflation for healthcare and non-health care workers employed in 
hospitals (as measured by the Employment Cost Index (ECI) for wages and 
salaries for hospital workers). As stated in the FY 2025 hospice 
proposed rule (89 FR 23800), we estimated the market basket percentage 
increase and the productivity adjustment based on IHS Global Inc.'s 
(IGI's) forecast using the most recent available data. IGI is a 
nationally recognized economic and financial forecasting firm with 
which CMS contracts to forecast the price proxies of the market 
baskets. The proposed inpatient hospital market basket percentage 
increase for FY 2025 was 3.0 percent reflecting compensation prices 
increasing 3.6 percent. When developing its forecasts for the ECI for 
wages and salaries and employee benefits for hospital workers, IHS 
Global Inc. considers the overall competitive

[[Page 64227]]

nature of labor market conditions. We would note that the 10-year 
historical average (2014-2023) growth rate of the 2018-based IPPS 
market basket is 2.8 percent with compensation prices increasing 2.8 
percent. As also stated in the FY 2025 hospice proposed rule (89 FR 
23800), we stated that if more recent data became available after the 
publication of the proposed rule and before the publication of the 
final rule (for example, a more recent estimate of the inpatient 
hospital market basket percentage increase or productivity adjustment), 
we would use such data, if appropriate, to determine the hospice 
payment update percentage in the FY 2025 final rule.
    Final Decision: We are finalizing the hospice payment update using 
the methodology outlined. For this final rule, based on the more recent 
IGI second quarter 2024 forecast with historical data through the first 
quarter of 2024 the 2018-based IPPS market basket increase factor for 
FY 2025 is 3.4 percent. The FY 2025 productivity adjustment based on 
the more recent IGI second quarter 2024 forecast is 0.5 percentage 
point. Therefore, CMS is finalizing for FY 2025, a hospice payment 
update of 2.9 percent (3.4 percent market basket percentage increase 
less a 0.5 percentage point productivity adjustment).
4. FY 2025 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 a 
Service Intensity Add-On (SIA) payment for RHC when direct patient care 
is provided by a registered nurse (RN) or social worker during the last 
seven 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 four hours total) that occurred on the day of service 
if certain criteria are met. To maintain budget neutrality, as required 
under section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were 
adjusted by an SIA 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. For FY 2025, the proposed SIA budget neutrality factor is 
1.009 for RHC days 1-60 and 1.000 for RHC days 61+.
    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 2025 hospice rate 
setting, we are continuing our longstanding policy of using the most 
recent data available. Specifically, we proposed to use FY 2023 claims 
data as of January 11, 2024 for the FY 2025 payment rate updates. We 
noted that the budget neutrality factors and payment rates would be 
updated with more complete FY 2023 claims data for the final rule. In 
order to calculate the wage index standardization factor, we simulate 
total payments using FY 2023 hospice utilization claims data with the 
FY 2024 wage index (pre-floor, pre-reclassified hospital wage index 
with the hospice floor, old OMB delineations, and the 5-percent cap on 
wage index decreases) and FY 2024 payment rates and compare it to our 
simulation of total payments using FY 2023 utilization claims data, the 
final FY 2025 hospice wage index (pre-floor, pre-reclassified hospital 
wage index with hospice floor, and the revised OMB delineations, with 
the 5-percent cap on wage index decreases) and FY 2024 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 2024 wage index and FY 2024 
payment rates for each level of care by the FY 2025 wage index and FY 
2024 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 Tables 1 and 2.
    The final FY 2025 RHC rates are shown in Table 9. The final FY 2025 
payment rates for CHC, IRC, and GIP are shown in Table 10.
[GRAPHIC] [TIFF OMITTED] TR06AU24.067


[[Page 64228]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.068

    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data 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 Hospice Quality Reporting Program 
(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 percentage increase 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 Consolidated 
Appropriations Act (CAA), 2021 (Pub. L. 116-260) to change the payment 
reduction for failing to meet hospice quality reporting requirements 
from 2 to 4-percentage points. Depending on the amount of the annual 
update for a particular year, a reduction of 4 percentage points 
beginning in FY 2024 makes a negative payment update more likely than 
the previous 2 percent reduction. This 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. We applied this policy beginning with the FY 2024 Annual 
Payment Update (APU), which we based on CY 2022 quality data. 
Therefore, the final FY 2025 rates for hospices that do not submit the 
required quality data would be updated by -1.1 percent, which is the 
final FY 2025 hospice payment update percentage of 2.9 percent minus 
four percentage points. Using updated data, these final rates are shown 
in Tables 11 and 12.
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[[Page 64229]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.070

5. Hospice Cap Amount for FY 2025
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47183), we implemented changes mandated by the IMPACT 
Act of 2014 (Pub. L. 113-185, Oct. 6, 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 
(Pub. L. 117-103) 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 (the inpatient 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. Division FF, section 4162 of the CAA, 2023 
(Pub. L. 118-328) 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 (the inpatient 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. Division G, Section 308 of the Consolidated 
Appropriations Act, 2024 (CAA, 2024) (Pub. L. 118-42) extends this 
provision to October 1, 2033. 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, 
2032. Therefore, for accounting years that end after September 30, 
2016, and before October 1, 2033, 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, 2024, we proposed conforming 
regulation text changes at Sec.  418.309 to reflect the revisions at 
section 1814(i)(2)(B) of the Act.
    The proposed hospice cap amount for the FY 2025 cap year was 
$34,364.85, which is equal to the FY 2024 cap amount ($33,494.01) 
updated by the proposed FY 2025 hospice payment update percentage of 
2.6 percent. We also proposed that if more recent data became available 
after the publication of the proposed rule and before the publication 
of the final rule (for example, a more recent estimate of the hospice 
payment update percentage), we would use such data, if appropriate, to 
determine the hospice cap amount in the FY 2025 final rule. As such, 
the hospice cap amount for the FY 2025 cap year is $34,465.34, which is 
equal to the FY 2024 cap amount ($33,494.01) updated by the FY 2025 
hospice payment update percentage of 2.9 percent.
    We received 3 comments on the proposed hospice cap. The following 
is a summary of these comments and our responses:
    Comment: One commenter expressed support for the FY 2025 hospice 
cap.
    Response: We thank the commenter for their support.
    Comment: Two commenters opposed an increase to the hospice cap. One 
commenter recommended the cap remain at the FY 2024 level of $33,494.01 
and one commenter recommended that the cap be lowered for FY 2025.
    Response: We thank the commenters for their recommendations to 
improve the hospice cap; however, we are required by law to update the 
hospice cap amount from the preceding year by the hospice payment 
update percentage, in accordance with section 1814(i)(2)(B)(ii) of the 
Act.
    Final Decision: We are finalizing the update to the hospice cap 
amount for FY 2025 in accordance with statutorily mandated requirements 
and adopting the proposed regulation text change at Sec.  418.309 to 
reflect the revisions at section 1814(i)(2)(B) of the Act, which 
require that, for accounting years that end after September 30, 2016, 
and before October 1, 2033, the hospice cap amount be updated by the 
hospice payment update percentage rather than the CPI-U.

B. Clarifying Regulation Text Changes and Technical Edit

1. Medical Director Condition of Participation
    CMS has broad statutory authority to establish health and safety 
standards for most Medicare- and Medicaid-participating provider and 
supplier types. The Secretary gives CMS the authority to enact 
regulations that are in the interest of the health and safety of

[[Page 64230]]

individuals who are furnished services in an institution, while other 
laws, as outlined below, give CMS the authority to prescribe 
regulations as may be necessary to carry out the administration of the 
program. Section 122 of the Tax Equity and Fiscal Responsibility Act of 
1982 (TEFRA) (Pub. L. 97-248) added section 1861(dd) to the Act to 
provide coverage for hospice care to terminally ill Medicare 
beneficiaries who elect to receive care from a Medicare-participating 
hospice. The CoPs apply to the hospice as an entity, as well as to the 
services furnished to each individual patient under hospice care. In 
accordance with section 1861(dd) of the Act, the Secretary is 
responsible for ensuring that the CoPs are adequate to protect the 
health and safety of the individuals under hospice care.
    Based on feedback from interested parties, including hospice 
providers, national hospice associations, and accrediting 
organizations, we identified discrepancies between the Medical Director 
CoP at Sec.  418.102 and the payment requirements for the 
``certification of the terminal illness'' and the ``admission to 
hospice care'' at Sec.  418.22 and Sec.  418.25, respectively. 
Specifically, the industry questioned the language in the requirements 
as it relates to medical directors in the CoPs, physician designees in 
the CoPs, and physician members of the interdisciplinary group (IDG) in 
the payment requirements. Currently, the medical director provisions in 
the CoPs at Sec. Sec.  418.102(b) and (c) require the medical director 
or physician designee to review the clinical information for each 
patient and provide written certification that it is anticipated that 
the patient's life expectancy is 6 months or less if the illness runs 
its normal course. However, the statutory requirements in sections 
1814(a)(7)(A)(i)(II) and (ii) of the Act and the regulatory payment 
requirements at Sec.  418.22 (Certification of terminal illness) 
provide that the medical director of the hospice or the physician 
member of the hospice interdisciplinary group can certify the patient's 
terminal illness. Although the CoP provisions at Sec. Sec.  418.102(b) 
and (c) include requirements for the initial certification and 
recertification of terminal illness, they do not include the physician 
member of the interdisciplinary group among the types of practitioners 
who can provide these certifications, even though these physicians are 
able to certify terminal illness under the payment regulation at Sec.  
418.22 (Certification of terminal illness).
    This misalignment between the CoPs and the payment requirements has 
caused some confusion for hospice providers, accrediting bodies, and 
surveyors. As a result, we determined that conforming changes to the 
medical director CoP were appropriate for clarity and consistency. To 
align the medical director CoP and the hospice payment requirements, we 
proposed to amend Sec.  418.102(b) by adding the physician member of 
the hospice interdisciplinary group, as defined in Sec.  
418.56(a)(1)(i), as an individual who may provide the initial 
certification of terminal illness. We also proposed to amend the 
medical director CoP in Sec.  418.102(c) to include the medical 
director, or physician designee, as defined at Sec.  418.3, if the 
medical director is not available, or physician member of the IDG among 
the specified physicians who may review the clinical information as 
part of the recertification of the terminal illness.
    We refer readers to section III.B.2 of this final rule for comments 
and responses received on the proposed payment regulation changes 
regarding the certification of the terminal illness and admission to 
hospice care under Sec. Sec.  418.22 and 418.25, which are also 
intended to align the medical director CoP and payment regulations.
    In this section, we discuss the public comments received on the 
alignment of language in the existing requirements for hospices 
regarding the medical director, physician designee, and physician 
member of the IDG.
    We received a total of 27 comments from individuals, health care 
professionals, and national associations that expressed general support 
and appreciation for the proposed alignment of language used in the 
CoPs with the language in the corresponding payment policy. Commenters 
highlighted how the clarification would reduce variability and 
confusion related to who provides certification of terminal illness. 
Additionally, commenters noted that the clarification supports hospice 
providers and audit contractors and ensures continued care for 
patients. The following is a summary of the comments we received, our 
responses, and the policies we are finalizing.
    Comment: Multiple commenters expressed support and appreciation for 
our proposal to align the CoPs at Sec.  418.102 with the payment policy 
language at Sec. Sec.  418.22(c) and 418.25, stating that these changes 
would allow for greater clarity and consistency between key components 
of the hospice requirements. Commenters also stated the misalignment 
between the CoPs and the payment requirements has caused some confusion 
for hospice providers, accrediting bodies, and surveyors and that the 
proposed conforming changes to the medical director CoP and the payment 
requirements would result in more clarity and consistency for hospices.
    Response: We appreciate the supportive feedback from commenters 
regarding the alignment of language in the CoPs with language in 
payment policy.
    Comment: Several commenters expressed support for the proposed 
alignment of the CoPs with the payment policy and recommended further 
language alignment in the standards for the Medical Director in the 
hospice CoPs at Sec.  418.102. Specifically, they recommended that we 
replace the terms ``physician designated by'' with ``physician 
designee'' in the CoP at Sec.  418.102, which states, ``When the 
medical director is not available, a physician designated by the 
hospice assumes the same responsibilities and obligations as the 
medical director.'' Commenters noted that this would align with the 
existing terminology used throughout the requirements.
    Response: We appreciate the commenters' support and recommendation 
to further modify the introductory language in the medical director CoP 
at Sec.  418.102. We agree with the commenters' recommendation to align 
this first paragraph of the medical director CoP by replacing 
``physician designated by'' with ``physician designee'' to align the 
terminology used through the requirements.
    Final Decision: After consideration of public comments on this 
provision, we are finalizing the requirements at Sec.  418.102(b) and 
Sec.  418.102(c) as proposed. In addition, we are modifying Sec.  
418.102 by removing the phrase ``physician designated by'' and 
replacing it with ``physician designee as defined at Sec.  418.3''. The 
definition of ``physician designee'' at Sec.  418.3 is defined as, ``. 
. . a doctor of medicine or osteopathy designated by the hospice who 
assumes the same responsibilities and obligations as the medical 
director when the medical director is not available.'' We are 
finalizing revisions to the medical director standard to state, ``The 
hospice must designate a physician to serve as medical director. The 
medical director must be a doctor of medicine or osteopathy who is an 
employee, or is under contract with the hospice. When the medical 
director is not available, a physician designee as defined at Sec.  
418.3, assumes the same responsibilities and obligations as the medical 
director.'' Lastly, we are

[[Page 64231]]

revising the standards for initial certification of terminal illness 
and recertification of terminal illness at Sec.  418.102(b) and Sec.  
418.102(c), respectively, to provide in a parenthetical that physician 
designee, as defined at Sec.  418.3, can conduct the review of clinical 
information and certification or recertification if the medical 
director is unavailable.
    We believe this modification will provide consistency and alignment 
in the payment and CoP requirements. These changes align the payment 
requirements and the health and safety requirements such that there 
will be consistency across the requirements for hospices, resulting in 
improved compliance and clearer enforcement activities.
2. Certification of Terminal Illness and Admission to Hospice Care
    The Medicare hospice benefit provides coverage for a comprehensive 
set of services described in section 1861(dd)(1) of the Act for 
individuals who are deemed ``terminally ill'' based on a medical 
prognosis that the individual's life expectancy is 6 months or less, as 
described in section 1861(dd)(3)(A) of the Act.
    As such, section 1814(a)(7)(A) of the Act requires the individual's 
attending physician (if the patient designates an attending physician) 
and hospice medical director or physician member of the IDG to certify 
in writing at the beginning of the first 90-day period of hospice care 
that the individual is ``terminally ill'' based on the physician's or 
medical director's clinical judgment regarding the normal course of the 
individual's illness. In a subsequent 90- or 60-day period of hospice 
care, only the hospice medical director or the physician member of the 
IDG is required to recertify at the beginning of the period that the 
patient is terminally ill based on such clinical judgment.
    The CoPs at Sec.  418.102 state that ``when the medical director is 
not available, a physician designated by the hospice assumes the same 
responsibilities and obligations as the medical director.'' The term 
``physician designee'' was utilized in the 1983 hospice final rule (48 
FR 56029) that implemented the Medicare hospice benefit when describing 
who can establish and review the hospice plan of care and was later 
defined and finalized in the FY 2008 hospice final rule (73 FR 32093) 
in response to comments requesting CMS clarify this individual's role. 
Section 418.3 defines ``physician designee'' to mean a doctor of 
medicine or osteopathy designated by the hospice who assumes the same 
responsibilities and obligations as the medical director when the 
medical director is not available. Currently, the requirements at Sec.  
418.22(c), Sources of Certification, state that for the initial 90-day 
period, the hospice must obtain written certification statements from 
the medical director of the hospice or the physician member of the IDG 
and the individual's attending physician if the individual has an 
attending physician. For subsequent periods, only the ``medical 
director of the hospice or the physician member of the 
interdisciplinary group'' must certify terminal illness. Similarly, the 
requirements at Sec.  418.22(b), Content of Certification, only include 
the ``the physician's or medical director's'' when referencing the 
clinical judgment on which the certification must be based. 
Additionally, Sec.  418.25, Admission to Hospice Care, only refers to 
the recommendation of the hospice medical director (in consultation 
with the patient's attending physician (if any)) when determining 
admission to hospice and when reaching a decision to certify that the 
patient is terminally ill. We note that in the preamble of the proposed 
rule, we inadvertently referred to paragraph (b) of Sec.  418.22 as the 
paragraph we proposed to amend. However, the proposed amendment to the 
text of the regulation was to paragraph (c) of Sec.  418.22. We refer 
in the preamble to this final rule to the correct paragraph of Sec.  
418.22, which is paragraph (c), not paragraph (b).
    In order to align Sec. Sec.  418.22(c) and 418.25 with the CoPs at 
Sec.  418.102, we proposed to add ``physician designee (as defined in 
Sec.  418.3)'' to clarify that when the medical director is not 
available, a physician designated by the hospice, who is assuming the 
same responsibilities and obligations as the medical director, may 
certify terminal illness and determine admission to hospice care. We 
clarified that this does not connote a change in policy; rather, we 
believe aligning the language at Sec. Sec.  418.22(c) and 418.25 with 
the CoPs at Sec.  418.102 allows for greater clarity and consistency 
between key components of hospice regulations and policies.
    We received 29 comments on these proposed clarifying hospice 
regulation text changes. A summary of the comments and our responses to 
those comments are as follows:
    Comment: All commenters supported the clarifying regulation text 
changes and applauded CMS for the clarification and consistency between 
key components of the hospice regulations. Commenters stated that the 
clarification will help simplify language, reduce confusion among 
stakeholders (that is, hospice providers, CMS audit contractors, and 
Medicare Administrative Contractors (MACs)), and protect hospices 
against inappropriate citations.
    Response: We thank commenters for their support.
    Comment: Several commenters requested ``physician member of the 
interdisciplinary group'' be added to Sec.  418.25 to further reduce 
confusion and provide clarity regarding the hospice admission process. 
Additionally, one commenter requested that nurse practitioners (NPs) 
and physician assistants (PAs) be allowed to certify a beneficiary as 
terminally ill and be included on initial hospice certifications.
    Response: We thank commenters for their recommendations; however, 
adding ``physician member of the interdisciplinary group'' to Sec.  
418.25 would be a substantive policy change and the proposals included 
in the proposed rule were intended only to clarify existing policy. 
Additionally, allowing NPs and PAs to certify a beneficiary as 
terminally ill is not permitted under the statute.
    Final Decision: We are finalizing the regulation text revisions to 
add ``physician designee (as defined in Sec.  418.3)'' at Sec. Sec.  
418.22(c) and 418.25 as proposed.
3. Election of Hospice Care
    A distinctive characteristic of the Medicare hospice benefit is 
that it requires a patient (or their representative) to intentionally 
choose hospice care by electing the benefit. As part of the election 
required by Sec.  418.24, a beneficiary (or their representative) must 
file an ``election statement'' with the hospice, which must include an 
acknowledgement that they fully understand the palliative, rather than 
curative, nature of hospice care as it relates to the individual's 
terminal illness and related conditions, as well as other requirements 
as set out at Sec.  418.24(b). Additionally, as set out at Sec.  
418.24(f), when electing the hospice benefit, an individual waives all 
rights to Medicare payment for any care for the terminal illness and 
related conditions except for services provided by the designated 
hospice, another hospice under arrangement with the designated hospice, 
and the individual's attending physician if that physician is not an 
employee of the designated hospice or receiving compensation from the 
hospice for those services. Because of this waiver, this means that the 
designated hospice is the only provider to which Medicare payment can 
be

[[Page 64232]]

made for services related to the terminal illness and related 
conditions for the patient; providers other than the designated 
hospice, a hospice under arrangement with the designated hospice, or 
the individual's attending physician cannot receive payment for 
services to a hospice beneficiary unless those services are unrelated 
to the terminal illness and related conditions when a patient is under 
a hospice election.
    In the FY 2015 Hospice Wage Index and Payment Rate Update final 
rule (79 FR 50452, 50478), we finalized a requirement that a Notice of 
Election (NOE) must be filed with the hospice MAC within five calendar 
days after the effective date of hospice election. If the NOE is filed 
beyond this timeframe, 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 50478). Also, because non-hospice 
providers may be unaware of a hospice election, late filing of the NOE 
leaves Medicare vulnerable to paying non-hospice claims related to the 
terminal illness and related conditions when these services are 
furnished by these non-hospice providers. Moreover, beneficiaries may 
potentially be liable for any associated cost-sharing they would not 
have incurred if these services were furnished by the hospice provider.
    When discussing hospice election, stakeholders (such as Medicare 
contractors, medical reviewers, and hospices) often conflate the terms 
``election statement'' and ``NOE.'' Further, we have received recent 
inquiries requesting clarification on timeframe requirements for both 
the election statement and the NOE that indicate confusion between such 
documents. Upon review of this regulation, we believe the organization 
at Sec.  418.24 does not make it clear that these are two separate and 
distinct documents intended for separate purposes under the benefit. We 
proposed to reorganize the language in this section to clearly denote 
the differences between the election statement and the NOE. That is, we 
proposed to title Sec.  418.24(b) as ``Election Statement'' and would 
include the title ``Notice of Election'' at Sec.  418.24(e). We stated 
that by clearly titling this section, the requirements for the election 
statement and the notice of election would be distinguished from one 
another, mitigating any confusion between the two documents. These 
changes would align with existing subregulatory guidance. We also noted 
this reorganization would not be a change in policy, rather it is 
intended to identify the requirements more clearly for the election 
statement and the NOE by reorganizing the structure of the regulations. 
We believe this reorganization is important to ensure that stakeholders 
fully understand that the election statement is required as 
acknowledgement of a beneficiary's understanding of the decision to 
elect hospice and filed with the hospice, whereas the NOE is required 
for claims processing purposes and filed with the hospice MAC within 
five calendar days after the effective date of the election statement.
    We also noted that the MACs have informed us of ongoing instances 
of hospices omitting certain elements of the hospice election 
statement. We reminded readers that a complete election statement 
containing all required elements as set forth at Sec.  418.24(b) is a 
condition for payment. Additionally, we emphasized the importance of 
each element in informing the beneficiary of their coverage when 
choosing to elect the Medicare hospice benefit. We continued to 
encourage hospice agencies to utilize the ``Model Example of Hospice 
Election Statement'' on the hospice web page at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice to limit potential 
claims denials.
    We received 21 comments on the proposed clarification of the 
election statement and the NOE. A summary of the comments and our 
responses to those comments are as follows:
    Comment: All commenters supported the reorganization and 
clarification of the election statement and the NOE and expressed 
appreciation that CMS is working to mitigate confusion between the two 
documents and promoting clarity. Other commenters stated that the 
changes are helpful in clarifying key components of the hospice 
regulations for hospice providers, Administrative Law Judges (ALJs), 
CMS audit contractors, MACs, and other stakeholders.
    Response: We thank commenters for their support.
    Comment: We received four comments on the reference to the model 
election statement and a concern that the MACs are treating the model 
election statement example as a required form despite CMS instruction 
that the model election statement is intended to be an example of a 
form agencies can utilize if desired. Specifically, a few commenters 
reported receiving ``technical denials'' from MACs when specific 
language or organization did not match the election statement example. 
Lastly, a commenter suggested that CMS conduct an analysis of 
overturned claim denials to improve audit activity.
    Response: We thank the commenters for their feedback. We reiterate 
that the model election statement is intended to be an example of a 
form that hospices may utilize and that hospice agencies are not 
required to use this exact example. We appreciate the suggestion to 
analyze overturned claim denials in order to improve future audit 
activity.
    Comment: One commenter recommended the physician national provider 
identifier (NPI) number be included on the model hospice election 
statement.
    Response: We thank the commenter for the suggestion. A provider may 
add additional information, such as an NPI number, to their own 
election statement; however, we do not want providers to infer the NPI 
is required under Sec.  418.24(b), and as such, will not add it to the 
model election statement at this time.
    Final Decision: We are finalizing the regulation text revisions to 
reorganize and clarify the election statement and the NOE requirements 
at Sec.  418.24 as proposed.
4. Hospice Marriage and Family Therapist Technical Edit
    In the final rule that appeared in the November 16, 2023 Federal 
Register on (88 FR 78818) titled ``Medicare and Medicaid Programs; CY 
2024 Payment Policies Under the Physician Fee Schedule and Other 
Changes to Part B Payment and Coverage Policies; Medicare Shared 
Savings Program Requirements; Medicare Advantage; Medicare and Medicaid 
Provider and Supplier Enrollment Policies; and Basic Health Program'' 
there is one technical error noted in the hospice personnel 
requirements at Sec.  418.114(b)(9) that is identified and corrected in 
this final rule.
    Throughout the final rule (88 FR 78818) we correctly used the term 
``marriage and family therapist.'' However, on page 79539 under Sec.  
418.114(b)(9) of the final rule, we inadvertently finalized regulation 
text that uses the term ``marriage and family counselor'' when the 
correct term is ``marriage and family therapist.'' Therefore, we are 
making a technical correction in this final rule by replacing 
``marriage and family counselor'' with ``marriage and family 
therapist'' at Sec.  418.114(b)(9).

[[Page 64233]]

C. Request for Information (RFI) on Payment Mechanism for High 
Intensity Palliative Care Services

    We define hospice care as a set of comprehensive services described 
in section 1861(dd)(1) of the Act, identified and coordinated by an IDG 
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 of a patient's illness to comfort care (palliative care) for 
pain relief and symptom management from a curative type of care. 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 facilitating 
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 on those services that are 
consistent with CMS' definitions of hospice and palliative care and 
eliminate any barriers to accessing hospice care.
    Adequate care under the hospice benefit has consistently been 
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.\5\ Although hospice use has grown considerably since the 
inception of the Medicare hospice benefit in 1983, there are still 
barriers that terminally ill and hospice benefit eligible beneficiaries 
may face when accessing hospice care. Specifically, the national trends 
\6\ 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.\7\
---------------------------------------------------------------------------

    \5\ Obermeyer Z, Makar M, Abujaber S, Dominici F, Block S, 
Cutler DM. Association Betweeen 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.
    \6\ 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.
    \7\ 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.
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    There is a subset of hospice eligible beneficiaries that would 
likely benefit from receiving palliative, rather than curative, 
chemotherapy, radiation, blood transfusions, and dialysis. Anecdotally, 
we have heard from beneficiaries and families their understanding that 
upon election of the hospice benefit, certain therapies such as 
dialysis, chemotherapy, radiation, and blood transfusions are not 
available to them, even if such therapies would provide palliation for 
their symptoms. 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 IDG, may determine 
that, for some patients, these adjuvant treatment modalities would be 
beneficial for symptom control. In such instances, these palliative 
treatments would be covered under the hospice benefit because they are 
not intended to be curative. In the FY 2024 Hospice final rule (88 FR 
51168), we noted in response to our RFI on hospice utilization; non-
hospice spending; ownership transparency; and hospice election 
decision-making, that commenters stated providing complex palliative 
treatments and higher intensity levels of hospice care may pose 
financial risks to hospices when enrolling such patients. Commenters 
stated that the current bundled per diem payment is not reflective of 
the increased expenses associated with higher-cost and certain patient 
subgroups. As we continue to focus on improved access and value within 
the hospice benefit, we solicited additional information on the 
potential implementation of a payment mechanism to account for the 
increased costs of providing more intensive palliative treatments.
    We received approximately 60 comments on our RFI on high-cost 
palliative services. Most of the comments we received included both 
general recommendations as well as specific comments in response to the 
questions asked in the proposed rule. Therefore, we summarize general 
comments, followed by specific comments we received in response to each 
question presented in the proposed rule.
    Comment: A few commenters suggested that, to minimize the 
complexity of the topic and prior to consideration of RFI responses, 
CMS should first avoid using ``comfort care'' interchangeably with 
``palliative care'', clearly distinguish between ``hospice care'' and 
``palliative care'', and remove the term ``palliative'' altogether and 
replace it with ``high-cost therapies''. Many commenters stated there 
is an underutilization of the hospice benefit, in part due to the 
availability of high-cost, intensive services outside of the hospice 
benefit (that is services covered under another Medicare benefit, such 
as ESRD). For example, several commenters stated that patients often 
choose not to elect hospice, or they elect later in the trajectory of 
their illness, as they would need to give up the option for many of the 
palliative but higher cost treatments. This often results in patients 
electing hospice services in the final days or weeks of their lives 
when the patient and their families do not receive the full benefit of 
hospice. Several anecdotal stories were provided in support of 
continuing these high-cost services, particularly home blood 
transfusions, and often these were provided to align with patient goals 
at end of life. A few commenters stated the issue is not a lack of 
access to these services, but rather hospices' decisions that the costs 
of these services are prohibitive. A few commenters expressed concern 
about potential fraudulent activity by certain providers if a separate 
payment mechanism was established and suggested that CMS should first 
identify gaps in care and potential fraud, waste, and abuse. The 
commenters recommended incentivizing advance care planning, as well as 
monitoring and enforcing appropriate provisions of the hospice benefit. 
Another commenter stated the financial impact is not the only concern 
for electing hospice; they stated that there can be a concern related 
to a patient's prognosis and understanding palliative treatment versus 
a reluctance to forgo a plan to continue curative treatment. The 
commenter recommended CMS consider the roles of specialists 
(oncologists, hematologists, etc.) when determining the impact of this 
potential policy on the hospice

[[Page 64234]]

philosophy of reducing patients' suffering as well as the requirement 
to determine a life expectancy of six-months or less. Some commenters 
requested that CMS consider additional data mining to determine whether 
high intensity, high-cost palliative treatments are offered more 
frequently during the course of a hospice stay versus upon admission 
when conflicting goals of the medical providers are more obvious. 
Lastly, a commenter recommended better electronic medical record (EMR) 
coordination and interoperability between the hospice teams and 
specialists to ensure all potential treatments are communicated. 
Multiple commenters, including several national organizations, stated 
concern that under the current statutory budget neutrality requirement, 
the introduction of any new payment would have to be offset by 
reductions to existing payments. Commenters stated they do not believe 
this is tenable given hospices' financial pressures and the challenges 
they already experience paying for high-intensity palliative services 
under the current reimbursement rates. Likewise, a few commenters 
stated that smaller and non-profit hospices disproportionately tend to 
care for the sickest patients who often require these types of high-
intensity services, and the costs associated with providing these 
higher-intensity services are too often prohibitive, particularly for 
these small hospices and non-profit hospices. Commenters expressed 
concern that any changes implemented under CMS' current statutory 
authority would not sufficiently address this issue. These commenters 
recommended CMS work with industry stakeholders to pursue legislative 
authority from Congress to create a payment policy to ensure that 
hospice patients have adequate access to high intensity palliative care 
services. In addition, commenters recommended CMS convene a Technical 
Expert Panel (TEP) in conjunction with robust data collection to be 
able to advance those discussions. For robust data collection, several 
commenters recommended gathering comprehensive data on historic and 
current beneficiary utilization of high-cost palliative interventions 
for hospice and hospice-eligible patients, conducting an analysis of 
any specific barriers impacting access to these services throughout the 
care continuum, and developing rules, protocols, and sustainable 
payment avenues for these kinds of treatments to improve access to 
hospice for traditionally underserved patients and families that come 
from diverse racial and ethnic backgrounds.
    MedPAC reported it plans to conduct research regarding access to 
hospice and end-of-life care for beneficiaries with End Stage Renal 
Disease (ESRD), interviewing clinicians; hospice providers; and ESRD 
facilities, including programs that provide palliative kidney care, and 
other groups.
    A few commenters recommended providing further education and 
clarity to providers and new hospice enrollees upfront to promote a 
better understanding of the coverage policy regarding the 
appropriateness of the use of high intensity palliative care services 
in conjunction with traditional hospice services. These commenters also 
recommended CMS issue guidance, rules, or incentives that make it 
easier for hospices to secure contracts with the upstream providers of 
these services. Several commenters recommended implementing measures to 
reduce administrative burden to hospices for these high-cost services.
    We received a comment that greater utilization of physician 
assistants (PAs) has the potential to reduce care barriers and move 
toward ameliorating the problem of eligible beneficiaries not 
sufficiently accessing hospice services, including high-cost palliative 
services. The commenter recommended modifying the hospice regulations 
and the Medicare Benefit Policy Manual to authorize PAs employed by the 
hospice to serve in the role of a patient's attending physician if an 
attending physician was not previously selected by the patient.
    Below are the questions we posed in RFI in the proposed rule, along 
with the comment summaries.
    What could eliminate the financial risk commenters previously noted 
when providing complex palliative treatments and higher intensity 
levels of hospice care?
    Comment: Several commenters strongly supported a more robust 
payment for high intensity palliative care services to help cover the 
costs. Specifically, we received multiple comments stating that if all 
hospices are expected to regularly provide complex palliative 
treatments and higher intensity levels of hospice care, additional 
payment or a higher daily per diem rate must be provided for patients 
receiving these complex, high-cost treatments. Commenters stated higher 
payment rates, add-on payments, or an outlier payment would allow 
hospice agencies to provide the additional treatments and staff to 
support higher intensity care without having significant financial 
burdens. Specifically, commenters suggested additional payments for 
staff training and resource support to sufficiently ensure skills to 
deliver high-quality, complex care and staff retention to support 
quality patient outcomes and cost-effective care delivery.
    Commenters stated these extra payments should not only include the 
cost of the service or item itself, but also costs associated with the 
care management and coordination activities such as monitoring, 
mapping, office visits, repeat imaging, and transportation. Commenters 
recommended various modifiers or ``payment tiers'' to reflect the 
intensity of services or resource utilization, and suggested CMS 
analyze the cost of care for various services to determine individual 
payment tiers, as well as implementing a ``cap'' for these higher 
intensity service payments.
    Other commenters opposed additional payment under the hospice 
benefit and multiple commenters recommended some version of a carve out 
or concurrent care payments. We received several comments recommending 
different payment models including adopting the Medicare Care Choices 
Model (MCCM) or a modified version of the MCCM and reviving and 
expanding the Medicare Coordinated Care Demonstration (MCCD). Many 
commenters stated that CMS should not attempt to cover these high-cost 
services within the existing hospice benefit payment structure, rather 
specialty providers should be able to bill Medicare Part B directly 
while the patient remains under a hospice plan of care. These 
commenters recommended CMS permit conditioned access to these 
treatments for beneficiaries concurrently enrolled in hospice and 
develop new policy and payment guidelines for the specialty 
practitioners. They suggested these practitioners could use modifiers 
and advised limiting the number of treatments while patients are under 
a hospice election. Some commenters recommended that the concurrent 
care payment for high-cost palliative treatments only be available 
during the first benefit period.
    A few commenters recommended that in addition to covering high-cost 
treatments and their related medications, it would also be beneficial 
for Medicare to cover high-cost medications unrelated to higher 
intensity services (for example, novel oral anticoagulants, certain 
inhalers, antibiotics, other medications typically used for curative 
purposes) when provided with palliative intent.
    What specific financial risks or costs are of particular concern to 
hospices that would prevent the provision of higher-cost palliative 
treatments when

[[Page 64235]]

appropriate for some beneficiaries? Are there individual cost barriers 
which may prevent a hospice from providing higher-cost palliative care 
services? For example, is there a cost barrier related to obtaining the 
appropriate equipment (for example, dialysis machine)? Or is there a 
cost barrier related to the treatment itself (for example, obtaining 
the necessary drugs or access to specialized staff)?
    Comment: Almost all commenters provided specific financial risks 
and cost barriers to providing higher-cost palliative care services. 
Commenters stated that across all diagnoses and situations there is a 
wide variance of incremental costs involved in higher intensive care. 
Commenters described barriers related to both direct and ancillary 
costs. The most cited expenses included the treatment itself, staffing, 
equipment, transportation logistics, contracting, facility usage, and 
administrative burden.
    Many commenters stated these palliative treatments require the use 
of high-cost drugs, which represent a significant proportion of the 
cost. Commenters noted even medications covered by Medicare Part D 
prior to hospice election continue to prove challenging for hospices to 
manage. Commenters stated that these high-cost palliative treatments 
can also require additional medications to address burdensome side 
effects and symptoms of the interventions themselves. Several 
commenters recommended developing a national formulary with negotiated 
rates that hospices could use to procure medications or seek to 
leverage Veterans Affairs pharmacy contracts. Alternatively, one 
commenter noted that while the equipment required for these services 
will still be needed, some of the drugs and related supplies (for 
bundled and separately payable drugs) and labs could potentially be 
discontinued or reduced, as they may not support the goals of comfort 
at the end of life.
    Commenters also stated many of these treatments require specialized 
staff, such as oncologists, nephrologists, and trained nurses who have 
the expertise to administer complex treatments like chemotherapy and 
dialysis. Commenters noted the salaries and benefits for these 
specialized professionals are higher than for general hospice staff, 
adding to the financial burden on hospices. In addition, existing 
hospice staff may need additional training and certifications to 
understand and/or help administer and educate patients and families on 
these interventions and their side effects. Commenters stated the costs 
associated with staff training can include course fees, travel, and 
time away from regular duties which can present a significant barrier. 
Commenters also stated these high intensity patients also typically 
require more frequent medication adjustments requiring more frequent 
provider and nursing visits, which increases the financial burden. A 
commenter noted for many of these services, there is also an increased 
complexity for the caregiver at home, therefore there can be a greater 
need for respite and GIP care.
    Several commenters stated that the cost of specialized equipment 
can vary depending on the treatment provided. Although one commenter 
said it is unlikely that a hospice would obtain the necessary 
equipment, such as a dialysis machine, as it is available in most 
communities, many commenters raised issues securing contracts with 
specialty providers and hospitals or other facilities where these 
treatments are administered. Commenters also stated the contracting and 
payment processes for these services would be an uncharted and 
potentially confusing process for the hospices and specialty providers 
alike. In addition, commenters stated hospice providers are unable to 
negotiate contracts at Medicare allowable rates for these related 
services, and therefore providers of these high-cost palliative 
treatments may be reluctant to reduce costs for hospices compared to 
other existing reimbursement rates. A few commenters noted that even if 
a contract is in place, there may be a lack of access to beds and 
treatments when needed.
    Commenters also stated a potential burden with care management, 
such as coordination with the facilities where these treatments are 
delivered and with the providers who deliver them. Commenters reported 
that hospices can dedicate signi[filig]cant resources when arranging 
for high-intensity services including labs, imaging, and transportation 
for patients and family to a location where these high-cost treatments 
are administered. One commenter also stated patients and their 
specialty providers, not the hospice provider, decide where to receive 
treatment, and that beneficiaries may choose to continue receiving 
dialysis from their current provider, rather than the hospice-
contracted provider.
    A commenter also reported that regulatory burdens related to 
compliance requirements governing the provision of complex palliative 
treatments may add administrative burden and costs to the agency. 
Overall, commenters stated the complexity and variability of these 
costs, coupled with uncertainties in reimbursement rates for such 
services, pose significant barriers for hospices to offer them 
routinely.
    Should there be any parameters around when palliative treatments 
should qualify for a different type of payment? For example, we are 
interested in understanding from hospices who do provide these types of 
palliative treatments whether the patient is generally in a higher 
level of care (CHC, GIP) when the decision is made to furnish a higher-
cost palliative treatment? Should an additional payment only be 
applicable when the patient is in RHC?
    Comment: Most commenters stated CMS should not limit higher 
reimbursement for complex treatments to certain types of patients. 
Commenters stated that patients at any level of care could benefit from 
a high-cost palliative service and that such service should not only be 
provided to patients in a higher level of care.
    Several commenters stated that the use of these services does not 
necessarily correlate to a need for a higher intensity level of hospice 
care and therefore, beneficiaries do frequently remain at an RHC level. 
For example, a commenter stated that beneficiaries with uncontrolled 
symptoms and at the CHC or GIP level of care are unlikely to be 
candidates for receiving these high intensity services as these 
services are intended for long-term symptom management rather than 
acute symptom management. However, several commenters stated there are 
times when a patient might be eligible for a higher level of care for 
reasons unrelated to the administration of the high intensity 
palliative services, but that high intensity service might still be 
appropriate.
    Commenters also reported that symptom burden can also result in the 
need for GIP or CHC and providing a higher intensity palliative 
treatment during RHC may reduce or eliminate the need for this higher 
level of care.
    We received a few comments in support of establishing parameters 
around these high-cost palliative services. These commenters 
recommended that payment for higher cost palliative treatments should 
be subject only to the determination based on the ability to improve 
the person's quality of life. That is, these treatments should only be 
utilized by a hospice beneficiary expressly for palliative purposes as 
evidenced by current clinical guidelines for the treatment's 
utilization as palliative care. Another commenter stated guidelines for 
additional payments should be based upon identified symptom burden that 
would reasonably be expected to be

[[Page 64236]]

relieved or managed by the palliative intervention with specified 
outcomes.
    Another commenter stated that moving to a higher level of care (for 
example, GIP, CHC) could trigger higher cost palliative treatments or 
that these patients may need a higher level of monitoring and would 
therefore be expected to be in GIP or CHC while receiving these 
treatments.
    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). In 
addition to this definition of palliative care, should CMS consider 
defining palliative services, specifically regarding high-cost 
treatments? Note, CMS is not seeking a change to the definition of 
palliative care, but rather should CMS consider defining palliative 
services with regard to high-cost treatments?
    Comment: A few commenters stated it can be easy to misconstrue the 
use of high-cost services, as the intent, dose, duration, or stage of 
the illness can dictate whether these services are palliative or 
curative. Additionally, commenters recommended first considering how 
palliative care fits within the current hospice benefit especially if 
palliative care is life prolonging. Another commenter recommended any 
palliative definitions should align with the Center to Advance 
Palliative Care (CPAC) definitions related to palliation.
    We received multiple comments in support of defining palliative 
services, particularly for additional reimbursement. Commenters in 
support of a definition of palliative services stated it could help 
provide clarity, standardization, and understanding about the types of 
services that would be included under this potential additional payment 
category which could help promote equity in patient care. Commenters 
stated a definition of palliative services should characterize these 
services as resource intensive services that are independent of 
curative treatments. A few commenters, while in support of a 
definition, also cautioned that any definition should be broad enough 
so as not to inadvertently exclude certain services. For example, 
commenters stated the definition should not specify individual drugs, 
durable medical equipment (DME), or other therapies, to allow for 
separate billing for these items. Another commenter stated a definition 
of palliative services should be specific to services offered under the 
Medicare hospice benefit, to eliminate potential confusion that this 
would be a separate palliative care benefit. Lastly, some commenters in 
support of defining palliative services stated establishing specific 
criteria can help prevent overuse or misuse of expensive treatment, as 
well as allow hospices to better plan financially and ensure they are 
adequately compensated for providing these complex and expensive 
services.
    We also received multiple comments in opposition of defining 
palliative services. These commenters stated defining services that 
could be disease-modifying as palliative is a dynamic area and instead 
treatments should be determined on an individual patient basis rather 
than explicitly defining palliative services. Commenters stated a 
flexible approach is needed, as patient and family goals and needs are 
highly specific and medical advances in the future could result in as-
yet unidentified treatments that could be considered ``palliative 
services.'' A few commenters stated defining palliative services would 
be a substantial undertaking that would require broad stakeholder 
engagement, as narrowing the definition of palliative care based on 
certain services would likely lead to additional confusion and 
administrative burden. As such, any definition of ``palliative 
services'' as separate from the definition of palliative care should be 
focused on facilitating understanding of payment of these services.
    Should there be documentation that all other palliative measures 
have been exhausted prior to billing for a payment for a higher-cost 
treatment? If so, would that continue to be a barrier for hospices?
    Comment: Commenters stated the focus should be on the goals and 
quality of life for beneficiaries. They stated that physicians' 
clinical judgment should be the basis to determine if such treatment is 
necessary and beneficial to the patient. Commenters raised concerns 
that requiring all other palliative measures be exhausted prior to 
billing for a higher-cost treatment is nebulous and could be a barrier 
to patient care. Multiple commenters stated, while the rationale for 
billing for a higher-cost treatment should be documented in the record, 
they oppose additional requirements to document that all other 
palliative measures have been exhausted prior to billing for a higher-
cost service. They stated this could lead to inefficiencies, 
administrative burden, unnecessary services, delays in hospice 
admissions leading to shorter lengths of hospice stays, and delays in 
the relief of symptoms. Commenters also stated that time spent trying 
other, potentially lower cost but ineffective interventions before 
utilizing the higher cost treatment will raise total costs for these 
patients and extend the time they are not receiving proper care for 
their condition(s). Commenters also stated as treatment decisions are 
often made urgently, CMS should limit the barriers to the use of 
complex treatments. And finally, commenters stated this could undermine 
the clinical judgment of the hospice IDG and upstream providers and 
lead to fear of retrospective audits questioning the clinical 
appropriateness of providing one treatment instead of another. These 
commenters stated that determining when all other measures have been 
exhausted may be clinically subjective and challenging, leading to 
variations in interpretation and exacerbating delays in treatment or 
claims denials.
    Other commenters stated that the use of complex treatments is 
individualized and should be used only if all other treatments have 
been tried. Commenters recommended that documentation should include 
the symptoms being addressed, the treatments that have been tried 
unsuccessfully, and the plan for using a particular complex treatment. 
Some commenters stated that requiring documentation that all other 
palliative measures have been exhausted prior to billing ensures high-
cost treatments are used as a last resort and maintains cost-
effectiveness and appropriate resource allocation; however, as this 
could be a huge barrier to hospice providers, they suggested that 
covering these treatments outside of the hospice benefit may help 
eliminate this burden.
    Should there be separate payments for different types of higher-
cost palliative treatments or one standard payment for any higher-cost 
treatment that would exceed the per-diem rate?
    Comment: A few commenters stated that making blanket inclusions of 
therapies in all situations would not align with the hospice philosophy 
and recommended separate payments for different treatments. Other 
commenters noted the costs of these treatments vary greatly, and 
separate payments would be necessary to adequately account for this 
variation. Commenters stated that separate payments would ensure that 
hospices have adequate financial resources to provide a range of 
higher-cost treatments as needed. They stated each treatment should be 
reimbursed at a predetermined rate, reflecting its value and cost-
effectiveness and separate from the standard per diem payment for 
hospice care. Multiple commenters recommended using Medicare allowable 
rates and existing CPT or HCPCS codes sets. Other recommendations 
included individual billing modifiers that could be used when these 
treatments are furnished to a hospice patient for

[[Page 64237]]

palliative purposes. Commenters also noted that a single rate to cover 
all high-cost treatments would inevitably pay too much for some and not 
enough for others.
    We received several comments in support of a single per diem rate 
for all high-cost treatments. Commenters stated that one standard 
payment for any higher-cost treatment would be in alignment with the 
structure of the per diem rate provided by hospice for standard care 
and reduce confusion. Other commenters noted that having separate 
payments for different types of higher-cost palliative treatments could 
lead to a particular therapy being inadvertently left out of the higher 
cost structure and managing separate payments could increase 
administrative complexity to the claim-submission process.
    A few commenters stated either option would work as long as it 
alleviates the concerns of the financial impact of these high-cost 
treatments and other commenters recommended simply increasing 
reimbursement overall to encompass the costs of high-intensity 
treatments. A few commenters recommended starting with a single payment 
for a period of time while CMS engages in a robust cost analysis to 
develop the most appropriate payment mechanism. And finally, many 
commenters stated CMS should not have separate payments nor a single 
payment, and instead cover these treatments separately from the 
existing hospice benefit. Commenters again recommended concurrent care 
and suggested carving out these palliative treatments under Medicare 
Part B.
    Response: We thank the commenters for their insight and thoughtful 
recommendations. We are incredibly appreciative of the time and effort 
readers put forth in collaborating with CMS as we explore ways to 
improve coverage under the Medicare hospice benefit. We will consider 
all comments and recommendations received on this rule and will 
continue to welcome thoughts regarding these issues through our hospice 
policy mailbox at [email protected]. We also remind readers 
they can report suspected fraud, waste, or abuse to CMS. Further 
information on reporting fraud can be found in The Medicare & You 
handbook at page 105 and at https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity/reporting-fraud. Readers can also 
report suspected fraud, waste, and abuse to the Office of Inspector 
General at https://oig.hhs.gov/fraud/report-fraud/.

D. Proposals 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, and 
requires, beginning with FY 2014, that the Secretary reduce the market 
basket update by 2 percentage points for those hospices failing to meet 
quality reporting requirements. 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 beginning in FY 
2024 for any hospice that does not comply with the quality data 
submission requirements for that FY. In the FY 2024 Hospice final rule, 
we codified the application of the 4-percentage point payment reduction 
for failing to meet hospice quality reporting requirements and set 
completeness thresholds at 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 annually and are subject to the APU payment 
reduction for a given FY.
    In the FY 2014 Hospice Wage Index and Payment Rate Update final 
rule (78 FR 48234, 48257 through 48262), and in compliance with section 
1814(i)(5)(C) of the Act, we finalized a new standardized patient-level 
data collection vehicle called the Hospice Item Set (HIS). We also 
finalized the specific collection of data items that support eight 
consensus-based entity (CBE)-endorsed measures for hospice.
    In the FY 2015 Hospice Wage Index and Payment Rate Update final 
rule (79 FR 50452), we finalized national implementation of the 
CAHPS[supreg] Hospice Survey, a component of the CMS HQRP which is used 
to collect data on the experiences of hospice patients and the primary 
caregivers listed in their hospice records. Readers who want more 
information about the development of the survey, originally called the 
Hospice Experience of Care Survey, may refer to the FY 2014 and FY 2015 
Hospice Wage Index and Payment Update final rules (78 FR 48261 and 79 
FR 50452, respectively). National implementation commenced January 1, 
2015. We adopted eight CAHPS[supreg] survey-based measures for the CY 
2018 data collection period and for subsequent years. These eight 
measures are publicly reported on the Care Compare website.
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142, 47186 through 47188), we finalized the policy for retention of 
HQRP measures adopted for previous payment determinations and seven 
factors for removal. In that same final rule, we discussed how we would 
provide public notice through rulemaking of measures under 
consideration for removal, suspension, or replacement. We also stated 
that if we had reason to believe continued collection of a measure 
raised potential safety concerns, we would take immediate action to 
remove the measure from the HQRP and not wait for the annual rulemaking 
cycle. The measures would be promptly removed and we would immediately 
notify hospices and the public of such a decision through the usual 
HQRP communication channels, including but not limited to listening 
sessions, email notifications, Open Door Forums, and Web postings. In 
such instances, the removal of a measure will be formally announced in 
the next annual rulemaking cycle.
    On August 31, 2020, we added correcting language to the FY 2016 
Hospice Wage Index and Payment Rate Update and Hospice Quality 
Reporting Requirements; Correcting Amendment (85 FR 53679) hereafter 
referred to as the FY 2021 HQRP Correcting Amendment. In this final 
rule, we made correcting amendments to 42 CFR 418.312 to correct 
technical errors identified in the FY 2016 Hospice Wage Index and 
Payment Rate Update final rule. Specifically, the FY 2021 HQRP 
Correcting Amendment (85 FR 53679) adds paragraph (i) to Sec.  418.312 
to reflect our exemptions and extensions requirements, which were 
referenced in the preamble but inadvertently omitted from the 
regulations text. Thus, these exemptions or extensions can occur when a 
hospice encounters certain extraordinary circumstances.
    In the FY 2017 Hospice Wage Index and Payment Rate Update final 
rule, we

[[Page 64238]]

finalized the ``Hospice Visits When Death is Imminent'' measure pair 
(HVWDII, Measure 1 and Measure 2), effective April 1, 2017. We refer 
the public to the FY 2017 Hospice Wage Index and Payment Rate Update 
final rule (81 FR 52144, 52163 through 52169) for a detailed 
discussion.
    As stated in the FY 2019 Hospice Wage Index and Rate Update final 
rule (83 FR 38622, 38635 through 38648), we launched the ``Meaningful 
Measures Initiative'' (which identifies high priority areas for quality 
measurement and improvement) to improve outcomes for patients, their 
families, and providers while also reducing burden on clinicians and 
providers. The Meaningful Measures Initiative is not intended to 
replace any existing CMS quality reporting programs, but will help such 
programs identify and select individual measures. The Meaningful 
Measure Initiative areas are intended to increase measure alignment 
across our quality programs and other public and private initiatives. 
Additionally, it will point to high priority areas where there may be 
gaps in available quality measures while helping to guide our efforts 
to develop and implement quality measures to fill those gaps. More 
information about the Meaningful Measures Initiative can be found at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    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 removed the Hospice Visits when Death is 
Imminent (HVWDII) measure, as it was replaced by HVLDL. We also 
finalized a policy that claims-based measures would use 8 quarters of 
data 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 ceased their 
public reporting because, in our view, the HIS Comprehensive Assessment 
Measure is sufficient for measuring care at admission without the seven 
individual process measures. 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.
    As finalized in the FY 2022 Hospice Wage Index and Payment Rate 
Update final rule (86 FR 42552), public data reflecting hospices' 
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) measures, are available on the Care Compare/Provider Data 
Catalogue (PDC) web pages as of the August 2022 refresh. In the FY 2023 
and FY 2024 Hospice Wage Index final rules, we did not propose any new 
quality measures. However, we provided updates on already-adopted 
measures. Table 13 shows the current quality measures in effect for the 
FY 2025 HQRP, which were finalized in the FY 2022 Hospice Wage Index 
and Payment Rate Update final rule and have been carried over in each 
subsequent year.

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[GRAPHIC] [TIFF OMITTED] TR06AU24.071

2. Implementation of Two Process Quality Measures Based on Proposed 
HOPE Data Collection
    Section 1814(i)(5) of the Act requires the Secretary to establish 
and maintain a quality reporting program for hospices, develop and 
implement quality measures, and publicly report quality measures. In 
this final rule, we are finalizing the addition of two process measures 
no sooner than FY 2028 to the HQRP calculated from data collected from 
HOPE: Timely Follow-Up for Pain Impact and Timely Follow-Up for Non-
Pain Symptom Impact. We will use the data collected from HOPE (see 
section III.D.3 on the proposal to implement HOPE and associated PRA), 
which a nurse would assess at multiple time points during a hospice 
stay to collect data related to patients' symptoms during those 
assessments. These two measures will determine whether a follow-up 
visit occurs within two (2) days of an initial assessment of moderate 
or severe symptom impact.
    Symptom alleviation is an important aspect of hospice care, 
including both pain management and non-pain symptom management. CMS has 
heard this feedback consistently from both clinicians and caregivers, 
including the Technical Expert Panel (TEP) which CMS convened from 2019 
through 2023. At present, HQRP only has a component of a measure 
indicating whether the pain symptom was assessed, as a part of the 
comprehensive assessment at admission measure. This measure alone does 
not adequately measure whether hospices are alleviating hospice 
patients' symptoms throughout their hospice stay.
    CMS considers symptom management an important domain to address 
further via the HQRP program. Therefore, we will implement these new 
concepts on

[[Page 64240]]

timely follow-up of symptoms with the support and input of hospice 
experts. For cases where a patient is assessed as having high (that is, 
more severe) symptom impact, practitioners suggest that good care 
processes include trying to follow-up with the patient and having in-
person visits within two (2) days to ensure treatment has helped 
alleviate and/or manage those symptoms. Therefore, we are finalizing 
two process measures derived from HOPE data--Timely Follow-Up for Pain 
Impact and Timely Follow-Up for Non-Pain Symptom Impact--will capture 
these care processes.
    Our paramount concern is the successful development of an HQRP that 
promotes the delivery of high-quality healthcare services. We seek to 
adopt measures for the HQRP that promote efficient, safer, and patient-
centered care. Our measure selection activities for the HQRP take into 
consideration input we receive from the CBE, as part of a pre-
rulemaking process that we have established and are required to follow 
under section 1890A of the Act. The CBE convenes interested parties 
from multiple groups to provide CMS with recommendations on the 
Measures Under Consideration (MUC) list. This input informs how CMS 
selects certain categories of quality and efficiency measures as 
required by section 1890A(a)(3) of the Act. By February 1st of each 
year, the CBE must provide that input to CMS. For more details about 
the pre-rulemaking process, please visit the Partnership for Quality 
Measurement website at https://p4qm.org/PRMR.
    We also consider national priorities, such as those established by 
the Partnership for Quality Measurement, the HHS Strategic Plan, and 
the National Strategy for Quality Improvement in Healthcare located at 
https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/quality03212011a. To the extent possible, we have sought to adopt 
measures that have been endorsed by the national CBE, recommended by 
multiple organizations of interested parties, and developed with the 
input of providers, payers, and other relevant stakeholders.
a. Measure Importance
    The FY 2019 Hospice Wage Index final rule (83 FR 38622) introduced 
the Meaningful Measure Initiative to hospice providers to identify high 
priority areas for quality measurement and improvement. The Meaningful 
Measure Initiative areas are intended to increase measure alignment 
across programs and other public and private initiatives. Additionally, 
the Initiative points to high priority areas where there may be 
informational gaps in available quality measures. The Initiative helps 
guide our efforts to develop and implement quality measures to fill 
those gaps and develop those concepts towards quality measures that 
meet the standards for public reporting. The goal of HQRP quality 
measure development is to identify measures from a variety of data 
sources that provide a window into hospice care services throughout the 
dying process, fit well with the hospice business model, and meet the 
objectives of the Meaningful Measures Initiative.
    To that end, the Timely Follow-Up for Pain Impact and Timely 
Follow-Up for Non-Pain Symptom Impact measures will add value to HQRP 
by filling an identified informational gap in the current measure set. 
Specifically, the Timely Follow-Up for Pain Impact process measure will 
determine how many patients assessed with moderate or severe pain 
impact were reassessed by the hospice within 2-calendar days, and the 
Timely Follow-Up for Non-Pain Symptom Impact process measure will 
determine how many patients assessed with moderate or severe non-pain 
impact were reassessed by the hospice within 2-calendar days. Compared 
to the single existing HQRP measure that includes pain symptom 
assessment, the two HOPE-based process measures will better reflect 
hospices' efforts to alleviate patients' symptoms on an ongoing basis.
b. Specifications of the Measures
    We are finalizing that both the process measures based on HOPE data 
will be calculated using assessments collected at admission or the HOPE 
Update Visit (HUV) timepoints. Pain symptom severity and impact will be 
determined based on hospice patients' responses to the pain symptom 
impact data elements within HOPE. Non-pain symptom severity and impact 
will be determined based on patients' responses to the HOPE data 
elements related to shortness of breath, anxiety, nausea, vomiting, 
diarrhea, constipation, and agitation. Additional information regarding 
these data items and time points can be found in the draft HOPE 
Guidance Manual of the HOPE web page at https://www.cms.gov/medicare/quality/hospice/hope and the PRA package that accompanies this Rule can 
be accessed at https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing. We finalize the 
proposal that only in-person visits will count for the collection of 
data for these proposed measures--that is, telehealth calls will not 
count for a follow-up. We sought comment on whether only in-person 
visits are appropriate for collection of data for these proposed 
measures or if other types of visits, such as telehealth, should be 
included. We are finalizing the decision that a follow-up visit cannot 
be the same visit as the initial assessment, but it can occur later in 
the same day (as a separate visit).
    However, we recognize that requiring in-person visits may impact 
existing staffing shortages faced by many hospice providers. CMS 
maintains to avoid creating unnecessary burden for hospice providers. 
Therefore, to minimize the burdensome impact of the in-person staffing 
requirement and to take advantage of the staff members hospices have, 
we are finalizing a decision that symptom follow-up visits (SFVs), 
referred to in the proposed rule as the Symptom Reassessment, may be 
performed by either RNs or Licensed Practical Nurses (LPNs)/Licensed 
Vocational Nurses (LVNs).
    For both the Timely Follow-Up for Pain Impact and Timely Follow-Up 
for Non-Pain Symptom Impact measures, beneficiaries will be included in 
the denominator if they have a moderate or severe level of pain or non-
pain symptom impact, respectively, at their initial assessment. 
However, certain exclusions will apply to these denominators, such as 
beneficiaries who die or are discharged alive before the two-day 
window, if the patient/caregiver refused the follow-up visit, the 
hospice was unable to contact the patient/caregiver to perform the 
follow-up, the patient traveled outside the service area, or the 
patient was in the ER/hospital during the two-day follow-up window. In 
these situations, a hospice will be unable to conduct a follow-up due 
to circumstances beyond their control, and therefore these situations 
will not be included in the measure denominator.
    The numerators for these measures will reflect beneficiaries who 
did receive a timely symptom follow-up. These will include 
beneficiaries who receive a separate HOPE follow-up within 2-calendar 
days of the initial assessment (for example, if a pain has moderate or 
severe symptoms assessed on Sunday, the hospice would be expected to 
complete the follow-up on or before Tuesday).
c. Measure Reportability, Variability, and Validity
    As part of developing these quality measures, CMS and their measure 
development contractor conducted simulations of measure reportability 
rates and measure variability. We used

[[Page 64241]]

the results of the HOPE Beta Test to estimate HOPE data availability 
for a national population of hospice patients. Detailed information 
regarding reportability and variability testing is provided in the HOPE 
Beta Testing Report, available on the HOPE web page at https://www.cms.gov/medicare/quality/hospice/hope. Additionally, CMS assessed 
each proposed quality measure face validity with input from TEP members 
convened in March 2023. Further information about our validity analysis 
is provided in the 2022-2023 HQRP TEP Report, available in the 
Downloads section of the HQRP Provider and Stakeholder Engagement page. 
Our reportability and variability analyses did not present concerns for 
the proposed HOPE-based process measures, and our validity analysis 
indicated that the proposed measures have high face validity.
d. Future Plans for Testing HOPE-Based Quality Measures
    Testing of the two process quality measures has thus far relied on 
data from the HOPE beta (field) test. We proposed future measure 
testing to be conducted using a full sample of hospices collected after 
HOPE has been implemented nationally, to support further development of 
quality measures.
e. Public Engagement and Support
    CMS engaged the public in multiple stages of HOPE-based measure 
development. To support measure development, CMS convened multiple 
technical expert panel (TEP) meetings which served as information 
gathering activities, consistent with the Meaningful Measure 
Initiative. The TEP consisted of experts in hospice and clinical 
quality measurement, and it has contributed to development of the HOPE 
tool and measure concepts since 2019. Based on early TEP input about 
measure prioritization, measure concept development focused on pain and 
non-pain symptoms. TEP members noted the importance of measuring the 
quality of pain and symptom management, as this is a key role of 
hospice. Through 2020 and 2021, the TEP provided further feedback on 
pain and non-pain symptom measure specifications. In Spring 2023, CMS 
convened the TEP a final time to review the final measure 
specifications, HOPE Beta test results, and rate face validity of the 
measure score. The TEP gave strong support for the proposed measure 
specifications, rated high face validity for these two process 
measures, and noted the importance of measuring the quality of pain 
management in hospice care. More information about the TEP meetings and 
recommendations can be found in the HQRP TEP Reports for 2019-2023, 
available on the Provider and Stakeholder Engagement web page. CMS also 
sought hospice provider input during the HOPE Beta Test to further 
inform the development of these HOPE-based process measures. During 
beta testing, registered nurses (RNs) reported that the two-day window 
of HOPE symptom follow-up aligned with their usual practices.
f. Update on Future Quality Measure (QM) Development
    As stated in the FY 2022 Hospice Wage Index final rule (86 FR 
42528), we continue to consider developing hybrid quality measures that 
could be calculated from multiple data sources, such as claims, HOPE 
data, or other data sources (for example, CAHPS Hospice Survey). To 
support new measure development, our contractor convened technical 
expert panel (TEP) meetings in 2022 and 2023. The TEP agreed that CMS 
should consider applying several risk adjustment factors, such as age 
and diagnosis, to ensure comparable, representative comparisons between 
hospices. The TEP also suggested using length of hospice stay but not 
functional status as risk adjustment factor for hospice performance.
    To support new HOPE-based measure development, our contractor 
convened technical expert panel (TEP) meetings between 2020 and 2023. 
The TEP recommended specifications for the two HOPE-based quality 
measures proposed in this Rule--Timely Follow-Up for Pain Impact and 
Timely Follow-Up for Non-Pain Symptom Impact. CMS also sought TEP input 
on several measurement concepts proposed for future quality measure 
development. Of these measurement concepts, the TEP supported CMS 
further developing the Education for Medication Management and Wound 
Management Addressed in Plan of Care process concepts. More information 
about the TEP recommendations can be found in the 2023 HQRP TEP Report, 
available on the Provider and Stakeholder Engagement web page. CMS will 
take the TEP's recommendations under consideration as we continue to 
develop HOPE-based quality measures.
    Additional information about CMS's HOPE-based measure development 
efforts is available in the 2022-2023 HQRP TEP Summary Report (https://www.cms.gov/files/document/2023-hqrp-tep-summary-report.pdf and the 
2023 Information Gathering Report, available on the HQRP Provider and 
Stakeholder Engagement web page, or at https://www.cms.gov/files/document/hospicequalityreportingprograminformationgatheringreport2023508.pdf. 
For further details about the ongoing development of these measures, 
please visit the Partnership for Quality Measurement website: https://p4qm.org/.
    Comment: We received 13 public comments regarding the two HOPE-
based process measures. Public comments generally supported the 
addition of the two proposed HOPE-based QMs.
    Several commenters suggested modifications to the measures. One 
commenter suggested that CMS discontinue the collection of some HIS 
measures rather than combining them into the HOPE tool. One commenter 
suggested that CMS standardize the definitions of slight, moderate, and 
severe symptom impact to improve the reliability of QM data. One 
commenter requested guidance regarding how hospices should categorize 
patients whose symptom impact has lessened or stabilized at the time of 
the follow-up visit. Another commenter suggested that CMS calculate the 
measures both with and without patients who refused to visit to 
determine whether visit refusals correlate with other quality concerns.
    One commenter requested clarification regarding penalties to 
hospices for patients who decline a symptom follow-up visit. One 
comment requested clarification about the start date of HOPE QM public 
reporting and whether the start date would be based on the Fiscal Year 
(FY) or the Calendar Year (CY). One commenter requested clarification 
regarding penalties to hospices for patients who decline a symptom 
follow-up visit. Another commenter requested that CMS provide data 
regarding the proportion of QRP compliant agencies nationally, efforts 
to improve hospices' ability to report data to CMS, and efforts to 
enhance transparency to the public. Several commenters requested that 
CMS delay public reporting of the HOPE-based QMs until 2028 to ensure 
adequate time for hospices and EMR vendors to implement the measures, 
as well as sufficient time to collect data and issue provider preview 
reports.
    Some commenters expressed concerns about the new QMs. One comment 
recommended the measures be further developed before implementation, 
citing the lack of CBE endorsement. Several comments encouraged CMS to 
next focus on developing HOPE-based outcome measures, which would add 
further value to HQRP.
    Response: CMS appreciates all public comments regarding the new 
HOPE-

[[Page 64242]]

based process QMs. We understand that there are several tools to 
measure the severity of these symptoms. However, the items for Symptom 
Impact are not measuring symptom intensity or severity, but rather the 
impact the patient is experiencing. The Symptom Impact data elements 
were adapted from an Integrated Palliative Outcome Scale (IPOS) data 
element that asked about the effect of symptoms on the patient. Please 
refer to the HOPE development and Testing Report posted on the HOPE web 
page for more details: https://www.cms.gov/files/document/hqrp-hospice-outcomes-and-patient-evaluation-hope-development-and-testing-report.pdf. We will continue to provide guidance on this measure, which 
will be informed by commenters questions and concerns.
    CMS is committed to providing hospice providers and vendors with 
adequate time to implement the new HOPE-based QMs, and intends to 
support hospices during the transition period. In this final rule, we 
clarified the timeframes for anticipated public reporting. Additional 
guidance regarding the new HOPE-based measures will be provided through 
education and training materials and events leading up to the public 
reporting of the measures. CMS also intends to continue working with 
the CBE to ensure that these and future quality measures meaningfully 
measure the quality of hospice care and help patients, families, and 
caregivers to make important hospice decisions.
    Comments: We received 15 public comments regarding the time points 
and burden of the two HOPE-based measures.
    Several commenters sought clarification on the number of symptom 
follow-up visits required and whether the symptom follow-up is allowed 
at the admission or HUV timepoints. One comment suggested that symptom 
follow-up should be considered an additional timepoint if it may not be 
completed during another timepoint.
    Several commenters requested that CMS clarify whether the time 
frame for symptom follow-up will be 48 hours or 2-calendar days. One 
commenter requested that CMS extend the time frame for follow-up 
visits. Another commenter appreciated CMS' decision that the symptom 
follow-up visit cannot be the same as the initial assessment visit, 
although it can occur in the same day.
    Several commenters expressed concerns about the anticipated burden 
the new measures will add to hospices. Many commenters requested that 
we allow telehealth or phone visits for symptom follow-up. Two 
commenters recommended that patients' preference for and tolerance of 
pain be included in the measures. Two commenters requested that LPNs be 
allowed to reassess patients' symptom impact. One commenter requested 
that occupational therapists be included as members of the hospice 
interdisciplinary team for purposes of the new QMs. One comment 
suggested that any hospice team member should be allowed to complete 
the symptom follow-up visit, whether clinical or administrative.
    Many comments expressed concern that the symptom follow-up visits 
(SFV) would create undue burden unless they can be completed via 
telehealth or phone visits. Two comments highlighted staffing 
challenges, and several other comments anticipated burdensome costs due 
to staff training, EMR management, monitoring and oversight, and/or the 
increased number of patient visits. One commenter raised concerns that 
the measures would disproportionately burden rural hospices.
    Response: CMS appreciates all comments regarding the new HOPE-based 
process QMs and their corresponding time points.
    At this time, CMS does not believe the symptom follow-up should be 
considered a unique HOPE time point. Commenters seeking additional 
guidance regarding the symptom follow-up visits should refer to the 
HOPE v1.0 Guidance Manual (page 8 and 9), which states that ``Depending 
upon responses to J2051. Symptom Impact, at Admission and the two HUV 
timepoints, up to three symptom follow-up visits may be required over 
the course of the hospice stay.'' The Guidance Manual further states 
that ``Although multiple symptom follow-up visits are not required for 
the purpose of the HQRP, it is expected that the hospice staff will 
continue to follow up with the patient, based on their clinical and 
symptom management needs.''
    We acknowledge the commenters' recommendation that more hospice 
team members should be allowed to complete the symptom follow-up visit. 
Therefore, in this final rule, we have decided that both RNs and LPNs/
LVNs may complete the symptom follow-up. At this time, CMS believes it 
is most appropriate for clinical staff to complete symptom assessments 
and follow-up visits.
    While we understand commenters' concerns about the potential 
staffing burdens of in-person visits, CMS selected this requirement 
based on expert input regarding hospice best practices. However, to 
minimize the burdensome impact of the in-person staffing requirement 
and to take advantage of the staff members hospices have, we are 
finalizing a decision that symptom follow-up visits (SFVs) may be 
performed by either RNs or LPNs/LVNs. We will continue to monitor the 
provision and burden of in-person HOPE follow-up visits after HOPE 
implementation and evaluate whether revisions to the HOPE 
administration requirements are necessary. If modifications to the HOPE 
instrument are required, they will be proposed in future rulemaking.
    Commenters seeking additional guidance regarding the symptom 
follow-up visits should refer to the HOPE v1.0 Guidance Manual (page 8 
and 9), which states that ``Depending upon responses to J2051. Symptom 
Impact, at Admission and the two HUV timepoints, up to three symptom 
follow-up visits may be required over the course of the hospice stay.'' 
The Guidance Manual further states that ``Although multiple symptom 
follow-up visits are not required for the purpose of the HQRP, it is 
expected that the hospice staff will continue to follow up with the 
patient, based on their clinical and symptom management needs.''
    CMS is committed to providing hospice providers and vendors with 
adequate time to implement the new HOPE-based QMs, and intends to 
support hospice stakeholders during the transition period. In this 
final rule, CMS has clarified the time frames for the HOPE-based QMs 
and anticipated public reporting. Additional guidance regarding the new 
HOPE-based measures will be provided through education and training 
materials and events leading up to the public reporting of the 
measures, anticipated to occur no earlier than November 2027 (FY 2028). 
CMS also intends to continue working with CBEs to ensure that these and 
future quality measures meaningfully measure the quality of hospice 
care and help patients, families, and caregivers to make important 
hospice decisions.
    After considering the public feedback received on the FY 2025 
Hospice proposed rule we are finalizing the measures with modifications 
from the version proposed in the proposed rule. As finalized, theses 
QMs measure whether patients receive an in-person nursing follow-up 
visit within 2-calendar days of initial assessment of moderate to 
severe symptoms impact. Theses (SFVs) may be performed by RNs or LPNs/
LVNs. CMS believes that these finalized measures will add value to 
HQRP. We will continue to monitor measure performance after

[[Page 64243]]

implementation and will evaluate incoming HOPE data to determine 
whether to revise the measures in future rulemaking.
3. Hospice Outcomes & Patient Evaluation (HOPE) Assessment Instrument
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
The data must be submitted in a form, manner, and at a time specified 
by the Secretary.
    CMS has developed a new standardized patient level data collection 
tool, the Hospice Outcomes & Patient Evaluation or HOPE. In past rules, 
we have described this as a new collection tool, however we believe it 
is better characterized as a modification of, and functional 
replacement for, the existing HIS structure.
    We proposed and now finalize the decision to begin collecting the 
HOPE standardized patient level data collection tool on or after 
October 1, 2025, for quality measures discussed in section III.D.2 of 
this final rule. The HOPE assessment instrument will replace the HIS 
upon implementation, as discussed in section III.D.6.(b) of this final 
rule. In the FY 2020 Hospice Wage Index and Payment Rate Update and 
Hospice Quality Reporting Requirements final rule (84 FR 38484), we 
finalized the instrument name and discussed the primary objectives for 
HOPE. Specifically, HOPE will provide data for the HQRP quality 
measures and its requirements through standardized data collection; and 
provide additional clinical data that could inform future payment 
refinements. All data collected by the instrument are expected to be 
used for quality measures, as authorized under section 1814(i)(5)(C) of 
the Act, and only for quality measures under section 1814(i)(5)(D) of 
the Act, which will include the measures Timely Follow-Up for Pain 
Impact and Timely Follow-Up for Non-Pain Symptom Impact measures 
finalized in this rule.
    HOPE will be a component of implementing high-quality and safe 
hospice care for patients, Medicare beneficiaries and non-beneficiaries 
alike. HOPE will also contribute to the patient's plan of care through 
providing patient data throughout the hospice stay. We finalize the 
proposal to collect data from multiple time points across the hospice 
stay, that will inform hospice providers potentially resulting in 
improved practice and care quality. Additional information about the 
final HOPE tool v1.0 and the data elements included therein are 
available at https://www.cms.gov/medicare/quality/hospice/hope 
discussed in the Paperwork Reduction Act submission for this collection 
(CMS-10390).
    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 could 
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. We will propose any additions of 
standardized elements in future rulemaking.
    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 items and time points for HOPE. 
It also allowed us to estimate the time to complete the HOPE elements 
and establish the interrater reliability of each item. For additional 
details and results from HOPE testing, see the HOPE Testing Report, 
available in the Downloads section of the HOPE page of the HQRP 
website.
    CMS will adopt and implement HOPE as a standardized patient element 
set to replace the current Hospice Item Set (HIS). Relative to HIS, 
HOPE includes new items in several domains that are new or expanded 
(Sociodemographic, Living Arrangements, Availability of Assistance, 
Diagnoses, Symptom Impact Assessment, Imminent Death, Skin), and 
includes an additional timepoint (the Hospice Update Visit, or HUV).
    HOPE v1.0 will contain demographic, record processing, and patient-
level standardized data elements that will be collected by all 
Medicare-certified hospices for all patients, regardless of payer 
source or patient age, to support HQRP quality measures. New HOPE data 
elements will be collected in real-time to assess patients based on the 
hospice's interactions with the patient and family/caregiver, 
accommodate patients with varying clinical needs, and provide 
additional information to contribute to the patient's care plan 
throughout the hospice stay (not just at admission and discharge). 
These data elements represent domains such as Administrative, 
Preferences for Customary Routine Activities, Active Diagnoses, Health 
Conditions, Medications, and Skin Conditions. HOPE data will be 
collected by hospice staff for each patient admission at three distinct 
time points: admission, the hospice update visit (HUV), and discharge, 
as discussed in the PRA as well as sections IV.A and V of this final 
rule in which we discuss Collection of Information requirements and the 
Regulatory Impact Analysis. We finalize the timepoint for the HOPE 
Update Visits (HUV), which is dependent on the patient's length of stay 
(LOS), is limited to a subset of HOPE items addressing clinical issues 
important to the care of hospice patients as updates to the hospice 
plan of care. HOPE data will be collected at these timepoints during 
the hospice's routine clinical assessments, based on unique patient 
assessment visits and additional follow-up visits as needed. As further 
discussed in the finalized HOPE Guidance Manual and PRA, not all HOPE 
items will be required to be completed at every timepoint. These time 
points could also be revised in future rulemaking.
    HOPE data reporting and collection will be effective beginning on 
or after October 1, 2025 to support the quality measures anticipated 
for public reporting on or after FY 2028. After HOPE implementation, 
hospices will no longer need to collect and submit the Hospice Item Set 
(HIS). Additional details regarding the data collection required for 
the new HOPE item set are discussed in section III.D.6, ``Form, Manner, 
and Timing of Quality Measure Data Submission'', and section IV, 
``Collection of Information.''
    We are finalizing updates Sec.  418.312(a)(b)(1) to require 
hospices to complete and submit a standardized set of items for each 
patient to capture patient-level data, regardless of payer or patient 
age. This change will take effect October 1, 2025. This update will 
replace the previous requirement for hospices to complete the HIS and 
the newly standardized set of items will have to be completed at 
admission and discharge, and at the two HUV timepoints within the first 
30 days after the hospice election. We note that, as authorized under 
section 1814(i)(5) of the Act, CMS would impose a 4 percent reduction 
on hospices for failure to submit HOPE collections timely with respect 
to that FY.

[[Page 64244]]

    CMS is committed to ensuring hospices are ready for the data 
reporting and collection beginning on or after October 1, 2025. We will 
provide information about upcoming provider trainings related to HOPE 
v1.0 that will be posted on the CMS HQRP website \8\ on the 
Announcement and Spotlight \9\ page and announced during Open Door 
Forums. Past trainings about the HQRP are available through the HQRP 
Training and Education Library.\10\ These trainings will help providers 
understand the requirements necessary to be successful with the HQRP, 
including how data collected via the new HOPE tool is submitted for 
quality measures and contributes to compliance with the HQRP.
---------------------------------------------------------------------------

    \8\ https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/hospice-quality-reporting.
    \9\ https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/hospice-quality-reporting/spotlight.
    \10\ https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/hospice-quality-reporting/hospice-quality-reporting-training-training-and-education-library.
---------------------------------------------------------------------------

    The final HOPE Guidance Manual v1.0 will be available on the HQRP 
HOPE web page after the publication of the final rule. This guidance 
manual offers hospices direction on the collection and submission of 
hospice patient stay data to CMS to support the HQRP quality measures.
Public Availability of Data Submitted
    Under section 1814(i)(5)(E) of the Act, the Secretary is required 
to establish procedures for making any quality measure data submitted 
by hospices available to the public. The procedures ensure that a 
hospice will have the opportunity to review the data regarding the 
hospice's respective program before it is made public. In addition, 
under section 1814(i)(5)(E) of the Act, the Secretary is authorized to 
report data collected to support quality measures under section 
1814(i)(5)(C) of the Act on the CMS website, that relate to services 
furnished by a hospice. We recognize that public reporting of quality 
measure data is a vital component of a robust quality reporting program 
and are fully committed to developing the necessary systems for public 
reporting of hospice quality measure data. We also recognize it is 
essential that the data made available to the public be meaningful and 
that comparing performance between hospices requires that measures be 
constructed from data collected in a standardized and uniform manner. 
The development and implementation of a standardized data set for 
hospices should precede public reporting of hospice quality measures. 
Once hospices have implemented the standardized data collection 
approach, we will have the data needed to establish the scientific 
soundness of the quality measures that can be calculated using the 
standardized data. It is critical to establish the reliability and 
validity of the measures prior to public reporting in order to 
demonstrate the ability of the measures to distinguish the quality of 
services provided. To establish reliability and validity of the quality 
measures, at least four quarters of data will need to be analyzed. 
Typically, the first two quarters of data reflect the learning curve of 
the providers as they adopt a standardized data collection; these data 
are not used to establish reliability and validity. We are finalizing 
the decision that the data from the first quarter Q4 CY 2025, if HOPE 
data collection begins in October 2025, it will not be used for 
assessing validity and reliability of the quality measures.
    We will assess the quality and completeness of the data that we 
receive as we near the end of Q4 2025 before public reporting the 
measures. Data collected by hospices during the four quarters of CY 
2026 (for example, Q 1, 2, 3 and 4 CY 2026) will be analyzed starting 
in CY 2027. We will inform the public of the decisions about whether to 
report some or all of the quality measures publicly based on the 
findings of analysis of the CY 2026 data.
    In addition, as noted, the Affordable Care Act requires that 
reporting on the quality measures adopted under section 1814(i)(5)(D) 
of the Act be made public on a CMS website and that providers have an 
opportunity to review their data prior to public reporting. In light of 
all the steps required prior to data being publicly reported, we 
finalize the decision that public reporting of the proposed quality 
measures will be implemented no earlier than FY 2028, allowing ample 
time for data analysis, review of measures' appropriateness for use for 
public reporting, and allowing hospices the required time to review 
their own data prior to public reporting.
    CMS will consider public reporting using fewer than four (4) 
quarters of data for the initial reporting period, but we are 
finalizing the decision to use 4 quarters of data as the standard 
reporting period for future public reporting. If the initial reporting 
period would include any excluded quarters of data, we will use as many 
non-excluded quarters of data as are included in the reporting period 
for public reporting. For example, if the first reporting period 
includes Q4 2025 through Q3 2026, then public reporting of HOPE will be 
based on Q1 2026, Q2 2026, and Q3 2026. The next public reporting 
period would include Q1 2026-Q4 2026, and public reporting would be 
based on four (4) quarters of data, as would all subsequent rolling 
reporting periods.
    Comment: We received 43 comments related to the HOPE instrument. 
Most commenters supported the implementation of the HOPE tool as a 
replacement for HIS and commended CMS's efforts to improve data 
collection and enhance the quality of care for patients. However, those 
in support of the HOPE tool expressed a variety of concerns with the 
HOPE instrument proposal. A majority of commenters asked for CMS to 
allow both HOPE assessments and reassessments to be completed via 
telehealth, as well as allow any member of the IDG to complete the 
assessments, to reduce the burden of in-patient visits. Most commenters 
also asked for a delay in implementation, ranging from July 2025 to FY 
2027, to account for the need to implement new staff training, system 
updates, and additional staffing. This delay would also allow EMR 
vendors to update their systems to account for the new instrument. In 
relation, some commenters also asked for a phased approach rather than 
requiring hospices to reach the 90 percent threshold immediately upon 
implementation or allow a ``pilot'' period to test out the new 
processes and instrument. Some commenters also expressed concern that 
the burden estimates did not seem to reflect the total additional 
clinical and administrative costs that would be incurred by 
implementing the HOPE instrument.
    Other commenters requested clarifications regarding the assessments 
and instrument items. One of the most common requests for clarification 
is whether the HOPE assessment needs to be completed for all patients 
or only those over the age of 18. Many commenters also sought 
clarification around the timing associated with the symptom follow-up 
visits--whether it is 48 hours or two calendar days. Other questions 
included how long the symptom follow-up visits should continue, if the 
admission and comprehensive assessment can be done on the same visit, 
and how the date for completing the assessment and symptom follow-up 
visits should be entered.
    Some commenters recommended modifications to the HOPE instrument. 
One commenter felt that HOPE should assess the spiritual and 
psychosocial aspects of the hospice experience. A few comments 
mentioned specific data elements included in the HOPE tool.

[[Page 64245]]

One noted the item A1805, ``Admitted From and thought it should be 
revised to name the referral source. There were also several 
clarifications suggested for some of the new items.
    Many commenters mentioned that the instrument, as it exists now, 
contains only process measures and they urged CMS to consider adding 
outcome measures in the future. Some commenters also suggested that CMS 
monitor and evaluate the measures post-implementation to ensure the 
validity of the data and that providers aren't ``manipulating'' the 
data to their benefit when possible. Finally, regarding public 
reporting, some commenters sought clarification on how many quarters 
will be excluded and if providers will be able to preview the data 
before it is publicly reported.
    Response: CMS appreciates all stakeholders' input regarding the new 
HOPE instrument. In this final rule, we have clarified the timing and 
requirements for pain and non-pain symptom follow-up visits, which must 
be completed within 2 calendar days of an initial assessment. 
Commenters seeking additional guidance regarding the pain and non-pain 
symptom follow-up visits should refer to the HOPE v1.0 Guidance Manual 
(page 8 and 9), which states that ``Depending upon responses to J2051. 
Symptom Impact, at Admission and the two HUV timepoints, up to three 
symptom follow-up visits may be required over the course of the hospice 
stay.'' The Guidance Manual further states that ``Although multiple 
symptom follow-ups are not required for the purpose of the HQRP, it is 
expected that the hospice staff will continue to follow up with the 
patient, based on their clinical and symptom management needs.''
    A few comments mentioned specific data elements included in the 
HOPE tool. With respect to the comment regarding item A1805, ``Admitted 
From'' and the suggestion that this be revised to name the referral 
source,\11\ we note that this item, along with many others, has been 
included in the HIS since 2014, and while there are several new items 
in HOPE, many are original and have not changed, or include only minor 
adjustments for HOPE. There were also several clarifications suggested 
for some of the new items, such as A1110. Language, I0010. Principle 
Diagnosis, and J0915. Neuropathic pain.\12\
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    \11\ A1805 replaces a similar item (A1802) that has been 
included in the Hospice Item Set (HIS) since its inception in 2014. 
The change was made to use 1805 in order to align across settings as 
this item is in use in the SNF setting.
    \12\ A2220 Language is a cross-setting item and currently in use 
in the other PAC settings. This has been added to HOPE to assist 
hospice providers and CMS in understanding the language needs of 
hospice patients and their families. I0010 Principle Diagnosis is 
the primary terminal diagnosis for which the patient is being 
referred to hospice. All care related to the primary hospice 
diagnosis is expected to be covered under the Medicare Hospice 
Benefit (MHB). J0915 Neuropathic pain has been added to HOPE for 
possible risk adjustment in future outcome quality measures that 
measure improvement in symptoms. Neuropathic pain is unique and 
unlike other types of pain can take more time and be much more 
difficult to successfully treat and improve.
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    During the development of HOPE, CMS considered how to capture data 
that could reflect the quality of the spiritual and psychosocial 
aspects of the hospice experience. For more information about the 
results of these development efforts, please refer to the HOPE Beta 
Testing Report, available at: https://www.cms.gov/files/document/hqrp-hospice-outcomes-and-patient-evaluation-hope-development-and-testing-report.pdf
    While we understand commenters' concerns about the potential 
staffing burdens of in-person visits, CMS selected this requirement 
based on expert input regarding hospice best practices. We will 
continue to monitor the provision and burden of in-person HOPE follow-
up visits after HOPE implementation and evaluate whether revisions to 
the HOPE administration requirements are necessary. If modifications to 
the HOPE instrument are required, they will be proposed in future 
rulemaking.
    CMS also reminds commenters that the burden calculations associated 
with HOPE only reflect the costs of implementation and administration 
of the HOPE assessment instrument, and do not include costs hospices 
may incur associated with visits to patients. This calculation 
methodology is consistent with the current HIS instrument. 
Additionally, the HOPE burden calculations represent incremental or 
additional costs hospices will incur in addition to the existing costs 
associated with HIS, as HOPE will replace HIS once implemented. 
Therefore, any costs hospices currently incur administering HIS will 
still be incurred but will not be the direct result of implementation 
of HOPE. We will continue to monitor the cost impact of HOPE after 
implementation.
    CMS is committed to providing hospice providers and vendors with 
adequate time to implement the new HOPE instrument and intends to 
support hospice stakeholders during the transition period. Additional 
guidance regarding the new HOPE-based measures will be provided through 
education and training materials and events leading up to the 
implementation of the instrument in October 2025. Providers will have 
the opportunity to preview HOPE data before it is publicly reported, 
with the first HOPE-based QM public reporting anticipated to be no 
earlier than November 2027 (FY 2028).
    We recognize commenters' concerns that there will not be a phased 
approach for the 90 percent reporting threshold as there was with HIS. 
CMS remains committed to providing hospice providers and vendors with 
adequate time to implement these provisions. Because hospices already 
have a 90 percent reporting threshold for HIS and HOPE builds on the 
foundations of HIS, we anticipate that hospices will be able to 
continue meeting the 90 percent reporting threshold after HOPE 
implementation.
    Additional guidance regarding the new HOPE-based measures will be 
provided through education and training materials and events leading up 
to the public reporting of the measures, anticipated to occur no 
earlier than November 2027 (FY 2028). CMS also intends to continue 
working with CBEs to ensure that these and future quality measures 
meaningfully measure the quality of hospice care and help patients, 
families, and caregivers to make important hospice decisions.
    CMS appreciates commenters' recommendations to develop HOPE-based 
outcome measures. We intend to continue to develop HOPE-based outcome 
measures to add to HQRP to increase the value of the quality data 
collected and reported by the program.
    Comment: We received 21 public comments related to the HUV 
timepoints. Many comments expressed concern that the HUV timepoints 
would create undue burden unless it can be completed via telehealth or 
phone visits. One comment suggested that CMS should add a third HUV 
timepoints at the first patient recertification and start of their 
second benefit period.
    One comment suggested revising the items included in the HUV 
timepoints to omit some administrative items, while adding items that 
may enhance hospices' ability to evaluate health equity, such as Living 
Arrangement, Availability of Assistance, and Preferences for Customary 
Routine and Activities.
    Several comments sought clarification on the HOPE submission rate 
and whether the HUV may be conducted at the same visit as updates to 
the comprehensive assessment. Two

[[Page 64246]]

comments expressed concern that the cost burden estimates in the 
proposed rule were unrealistic in light of the amount of additional 
data collection and newly required visits.
    Response: CMS appreciates all stakeholders' input regarding the HUV 
timepoints. While we understand commenters' concerns about the 
potential staffing burdens of in-person visits, CMS selected this 
requirement based on expert input regarding hospice best practices. We 
will continue to monitor the provision and burden of in-person HOPE 
follow-up visits after HOPE implementation and evaluate whether 
revisions to the HOPE administration requirements are necessary. If 
modifications to the HOPE instrument are required, they will be 
proposed in future rulemaking.
    CMS also reminds commenters that the burden calculations associated 
with HOPE only reflect the costs of implementation and administration 
of the HOPE assessment instrument, and do not include costs hospices 
may incur associated with visits to patients. This calculation 
methodology is consistent with the current HIS instrument. 
Additionally, the HOPE burden calculations represent incremental or 
additional costs hospices will incur in addition to the existing costs 
associated with HIS, as HOPE will replace HIS once implemented. 
Therefore, any costs hospices currently incur administering HIS will 
still be incurred but will not be the direct result of implementation 
of HOPE. We will continue to monitor the cost impact of HOPE after 
implementation to determine whether adjustments to the HUV are 
necessary.
    Likewise, CMS will continue to evaluate HOPE after implementation 
to determine whether items should be added to or removed from the HUV 
timepoints. While CMS considered a third timepoints and more, the 
current HOPE v1.0 is a start to collecting more useful data during the 
hospice stay for the HQRP. This input may be considered for future 
versions of HOPE.
    Comment: We received 5 public comments related to CMS' future 
quality measure development efforts. Commenters were generally 
supportive of CMS's ongoing measure development efforts. Several 
commenters suggested additional measure concepts for CMS consideration, 
including patients' access to hospice teams, ensuring that hospices can 
provide all four levels of hospice care, and patients' ability to 
manage their own health care. One commenter encouraged CMS to include 
the entire hospice team in the measure assessment and outcomes plan 
development, including occupational therapy.
    Response: CMS appreciates all stakeholders' input regarding ongoing 
and future quality measure development. We will take all public 
comments into consideration as we select measure development 
priorities. We intend to continue to develop HOPE-based outcome 
measures to add to HQRP to increase the value of the quality data 
collected and reported by the program. Additional information regarding 
quality measure development will be provided in future rulemaking.
4. Health Equity Updates Related to HQRP
a. Background
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. We believe 
that this ``Universal Foundation'' of quality measures 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 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.
TEP Recommendations
    In November and December 2022, CMS convened a group of stakeholders 
to provide input on the health equity measure development process. This 
HQRP and HH QRP Health Equity Structural Composite Measure Development 
Technical Expert Panel (or Home Health & Hospice HE TEP) included 
health equity experts from hospice and home health settings 
specializing in quality assurance, patience advocacy, clinical work, 
and measure development.
    The TEP largely supported the potential health equity measure 
domains of Equity as a Key Organizational Priority, Trainings for 
Health Equity, and Organizational Culture of Equity. The TEP also 
recommended that CMS not only measure equity in service provision, but 
also equity in access to services. TEP members raised concerns about 
collecting hospice quality measure data from family or caregivers of 
hospice decedents rather than collecting data directly from patients 
while they are receiving care. Vulnerable populations without contacts 
post-mortem may be left out of data collection, such as hospice 
patients who do not have family members to help with their care or 
unhoused people. This feedback highlighted the importance of including 
SDOH such as housing instability in hospice quality reporting. Hospice 
TEP members also recommended adding specific questions to the 
CAHPS[supreg] survey about cultural sensitivity.
    Additional information regarding the Home Health & Hospice HE TEP 
are available in the TEP Report, available on the Hospice QRP Health 
Equity web page at https://www.cms.gov/medicare/quality/hospice/hospice-qrp-health-equity.
b. Request for Information (RFI) Regarding Future HQRP Social 
Determinants of Health (SDOH) Items
    CMS is committed to developing approaches to meaningfully 
incorporate the advancement of health equity into the HQRP. One 
consideration is including social determinants of health (SDOH) into 
our quality measures and data stratification. SDOH are the 
socioeconomic, cultural, and environmental circumstances in which 
individuals live that impact their health. SDOH can be grouped into 
five broad domains: economic stability; education access and quality; 
health care access and quality; neighborhood and built environment; and 
social and community context. Health-related social needs (HRSNs) are 
the resulting effects of SDOH, which are individual-level, adverse 
social conditions that negatively impact a person's health or health 
care. Examples of HRSN include lack of access to food, housing, or 
transportation, and have been associated with poorer health outcomes, 
greater use of emergency departments and hospitals, and higher health 
care costs. Certain HRSNs can lead to unmet social needs that directly 
influence an individual's physical, psychosocial, and functional 
status.

[[Page 64247]]

This is particularly true for food security, housing stability, 
utilities security, and access to transportation. In recent years, we 
have addressed SDOH through the identification and standardization of 
screening for HRSN, including finalizing several standardized patient 
assessment data requirements for post-acute care providers \13\ and 
testing the Accountable Health Communities (AHC) model under section 
1115A of the Social Security Act.\14\
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    \13\ See the ``Medicare and Medicaid Programs: CY 2020 Home 
Health Prospective Payment System Rate Update; Home Health Value-
Based Purchasing Model; Home Health Quality Reporting Requirements; 
and Home Infusion Therapy Requirements'' final rule (84 FR 39151) as 
an example. In the interim final rule with comment period (IFC) 
``Medicare and Medicaid Programs, Basic Health Program and 
Exchanges; Additional Policy and Regulatory Revisions in Response to 
the COVID-19 Public Health Emergency and Delay of Certain Reporting 
Requirements for the Skilled Nursing Facility Quality Reporting 
Program'' (85 FR 27550 through 27629), CMS delayed the compliance 
dates for these standardized patient assessment data under the 
Inpatient Rehabilitation Facility (IRF) Quality Reporting Program 
(QRP), Long-Term Care Hospital (LTCH) QRP, Skilled Nursing Facility 
(SNF) QRP, and the Home Health (HH) QRP due to the public health 
emergency. In the ``CY 2022 Home Health Prospective Payment System 
Rate Update; Home Health Value-Based Purchasing Model Requirements 
and Model Expansion; Home Health and Other Quality Reporting Program 
Requirements; Home Infusion Therapy Services Requirements; Survey 
and Enforcement Requirements for Hospice Programs; Medicare Provider 
Enrollment Requirements; and COVID-19 Reporting Requirements for 
Long-Term Care Facilities'' final rule (86 FR 62240 through 62431), 
CMS finalized its proposals to require collection of standardized 
patient assessment data under the IRF QRP and LTCH QRP effective 
October 1, 2022, and January 1, 2023, for the HH QRP.
    \14\ The Accountable Health Communities Model is a nationwide 
initiative established by the Center for Medicare and Medicaid 
Innovation Center to test innovative payment and service delivery 
models that have the potential to reduce Medicare, Medicaid, and 
Children's Health Insurance Program expenditures while maintaining 
or enhancing the quality of beneficiaries care and was based on 
emerging evidence that addressing health-related social needs 
through enhanced clinical-community linkages can improve health 
outcomes and reduce costs. More information can be found at: https://www.cms.gov/priorities/innovation/innovation-models/ahcm.
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    We have repeatedly heard from the public that CMS should develop 
new HQRP mechanisms to better address significant and persistent health 
care outcome inequities. For example, in the FY 2022 Hospice Wage Index 
final rule, we received comments supportive of gathering standardized 
patient assessment data elements and additional SDOH data to improve 
health equity. In the FY 2023 Hospice final rule, we again received 
comments highlighting the need for more sociodemographic and SDOH data 
to effectively evaluate health equity in hospice settings. Commenters 
suggested that CMS consider standardizing the sociodemographic and SDOH 
data collected across provider settings and across third party vendors 
(for example, EMRs) and other tools. To this end, CMS expects to seek 
endorsement by the CBE contracted with CMS under section 1890(a) of the 
Act for measures that would utilize SDOH data within HQRP.
    We are committed to achieving health equity in health care outcomes 
for our beneficiaries, including by improving data collection to better 
measure and analyze disparities across programs and policies.\15\ We 
believe that the ongoing measurement of SDOHs will have two significant 
benefits. First, because SDOHs disproportionately impact underserved 
communities, promoting measurement of these factors may serve as 
evidence-based building blocks for supporting healthcare providers and 
health systems in actualizing commitment to address disparities, 
improving health equity through addressing the social needs with 
community partners, and implementing associated equity measures to 
track progress.\16\
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    \15\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf
    \16\ American Hospital Association. (2020). Health Equity, 
Diversity & Inclusion Measures for Hospitals and Health System 
Dashboards. December 2020. Accessed: January 18, 2022. Available at: 
https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
---------------------------------------------------------------------------

    Second, these factors could support ongoing HQRP initiatives by 
providing data with which to measure stratified resident risk and 
organizational performance. Further, we believe measuring resident-
level SDOH through screening is essential in the long-term in 
encouraging meaningful collaboration between healthcare providers and 
community-based organizations, as well as in implementing and 
evaluating related innovations in health and social care delivery. 
Analysis of SDOH measures could allow providers to more effectively 
identify patient needs and identify opportunities for effective 
partnership with community-based organizations with the capacity to 
help address those needs. Thorough SDOH measures would also provide a 
better evidence base for evaluating the effectiveness and 
appropriateness of health and social care delivery innovations. The 
SDOH category of standardized patient assessment data elements could 
provide hospices and policymakers with meaningful measures as we seek 
to reduce disparities and improve care for beneficiaries with social 
risk factors. SDOH measures would also permit us to develop the 
statistical tools necessary to reduce costs and improve the quality of 
care for all beneficiaries. We note that advancing health equity by 
addressing the health disparities that underlie the country's health 
system is one of our strategic pillars \17\ and a Biden-Harris 
Administration priority.\18\
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    \17\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go 
from Here: A Strategic Vision for CMS. Centers for Medicare & 
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \18\ The White House. The Biden-Harris Administration Immediate 
Priorities [website]. https://www.whitehouse.gov/priorities/
---------------------------------------------------------------------------

    CMS reviewed SDOH domains to determine which domains align across 
post-acute care (PAC) and hospice care settings, circumstances, and 
setting-specific care goals. CMS identified four SDOH domains that are 
relevant across the PAC and hospice care setting: housing instability, 
food insecurity, utility challenges, and barriers to transportation 
access. These data elements have supported measures of quality in other 
settings. For example, as of 2023 the Hospital Inpatient Quality 
Reporting Program mandates reporting on the ``Screening for Social 
Drivers of Health'' and ``Screen Positive Rate for Social Drivers of 
Health'' measures.
    These SDOH are important to consider for all patients, however they 
may manifest differently for patients in hospice compared to other care 
settings. For example, HRSNs such as housing instability and utilities 
challenges may be especially problematic for hospice patients in home-
based hospice care, which comprises most hospice care.\19\ In contrast, 
other HRSNs may seem less relevant for hospice patients but may still 
influence the end-of-life outcomes in different ways. For example, 
compared to other settings, food insecurity may not be as common an 
issue for EOL patients, who typically have reduced needs for food and 
water. However, caregiver experiences of food insecurity may have 
important consequences on their ability to carry out their caregiving 
responsibilities. Therefore, CMS requested input on which of the 
existing HRSN data collection items outlined below are suitable for the 
hospice setting, and how they may need to be adapted to be more 
appropriate for the hospice setting.
---------------------------------------------------------------------------

    \19\ Tucker-Seeley, R.D., Abel, G.D., Uno, H., & Prigerson, H. 
(2014). Financial hardship and the intensity of medical care 
received near death. Psychooncology,24(5):572-8. doi:10.1002/
pon.3624.

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[[Page 64248]]

Housing Instability
    Healthy People 2030 prioritizes economic stability as a key SDOH, 
of which housing stability is a component.20 21 Lack of 
housing stability encompasses several challenges, such as having 
trouble paying rent, overcrowding, moving frequently, or spending the 
bulk of household income on housing.\22\ These experiences may 
negatively affect physical health and make it harder to access health 
care. Lack of housing stability can also lead to homelessness, which is 
housing deprivation in its most severe form. The United States 
Department of Housing and Urban Development (HUD) defines literal 
homelessness as ``lacking a fixed regular, and adequate nighttime 
residence.'' \23\ On a single night in 2023, roughly 653,100 people, or 
20 out of every 10,000 people in the United States, were experiencing 
homelessness.\24\ Studies also found that newly homeless people have an 
increased risk of premature death and experience chronic disease more 
often than among the general population.
---------------------------------------------------------------------------

    \20\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
    \21\ Healthy People 2030 is a long-term, evidence-based effort 
led by the U.S. Department of Health and Human Services (HHS) that 
aims to identify nationwide health improvement priorities and 
improve the health of all Americans.
    \22\ Kushel, M.B., Gupta, R., Gee, L., & Haas, J.S. (2006). 
Housing instability and food insecurity as barriers to health care 
among low-income Americans. Journal of General Internal Medicine, 
21(1), 71-77. doi: 10.1111/j.1525-1497.2005.00278.x.
    \23\ https://www.hudexchange.info/homelessness-assistance/coc-esg-virtual-binders/coc-esg-homeless-eligibility/four-categories/category-1/.
    \24\ The 2023 Annual Homeless Assessment Report (AHAR) to 
Congress. The U.S. Department of Housing and Urban Development 2023. 
https://www.huduser.gov/portal/sites/default/files/pdf/2023-AHAR-Part-1.pdf.
---------------------------------------------------------------------------

    The following options were identified as potential complimentary 
items to collect housing information, in addition to proposed HOPE item 
A1905--Living Arrangements.
[GRAPHIC] [TIFF OMITTED] TR06AU24.072

Food Insecurity
    The U.S. Department of Agriculture, Economic Research Service 
defines a lack of food security as a household-level economic and 
social condition of limited or uncertain access to adequate food.\25\ 
Food insecurity has been a priority for the Biden-Harris 
Administration, with the White House recently announcing 141 
stakeholder funding commitments to support the White House Challenge to 
End Hunger and Build Healthy Communities.\26\ Adults who are food 
insecure may be at an increased risk for a variety of negative health 
outcomes and health disparities. For example, a study found that food-
insecure adults may be at an increased risk for obesity.\27\ Nutrition 
security is also an important component that builds on and complements 
long standing efforts to advance food security. The United States 
Department of Agriculture (USDA) defines nutrition security as 
``consistent and equitable access to healthy, safe, affordable foods 
essential to optimal health and well-being.'' \28\ While having enough 
food is one of many predictors for health outcomes, a diet low in 
nutritious foods is also a factor.\29\ Studies have shown that older 
adults struggling with food security consume fewer calories and 
nutrients and have lower overall dietary quality than those who are 
food secure, which can put them at nutritional risk. Older adults are 
also at a higher risk of developing malnutrition, which is considered a 
state of deficit, excess, or

[[Page 64249]]

imbalance in protein, energy, or other nutrients that adversely impacts 
an individual's own body form, function, and clinical outcomes. Up to 
50 percent of older adults are affected by or at risk for malnutrition, 
which is further aggravated by a lack of food security and poverty.\30\
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    \25\ U.S. Department of Agriculture, Economic Research Service. 
(n.d.). Definitions of food security. Retrieved March 10, 2022, from 
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/definitions-of-food-security/.
    \26\ https://www.whitehouse.gov/briefing-room/statements-releases/2024/02/27/fact-sheet-the-biden-harris-administration-announces-nearly-1-7-billion-in-new-commitments-cultivated-through-the-white-house-challenge-to-end-hunger-and-build-healthy-communities/.
    \27\ Hernandez, D.C., Reesor, L.M., & Murillo, R. (2017). Food 
insecurity and adult overweight/obesity: Gender and race/ethnic 
disparities. Appetite, 117, 373-378.
    \28\ Food and Nutrition Security. (n.d.). USDA. https://www.usda.gov/nutrition-security.
    \29\ National Center for Health Statistics. (2022, September 6). 
Exercise or Physical Activity. Retrieved from Centers for Disease 
Control and Prevention: https://www.cdc.gov/nchs/fastats/exercise.htm.
    \30\ Food Research & Action Center (FRAC). ``Hunger is a Health 
Issue for Older Adults: Food Security, Health, and the Federal 
Nutrition Programs.'' December 2019. https://frac.org/wp-content/uploads/hunger-is-a-health-issue-for-older-adults-1.pdf.
[GRAPHIC] [TIFF OMITTED] TR06AU24.073

Utility Insecurity
    A lack of energy (utility) security can be defined as an inability 
to adequately meet basic household energy needs.\31\ According to the 
Department of Energy, one in three households in the US are unable to 
adequately meet basic household energy needs.\32\ The consequences 
associated with a lack of utility security are represented by three 
primary dimensions: economic, physical, and behavioral. Individuals 
with low incomes are disproportionately affected by high energy costs, 
and they may be forced to prioritize paying for housing and food over 
utilities. Some people may face limited housing options and are at 
increased risk of living in lower-quality physical conditions with 
malfunctioning heating and cooling systems, poor lighting, and outdated 
plumbing and electrical systems. Finally, individuals who lack of 
utility security may use negative behavioral approaches to cope, such 
as using stoves and space heaters for heat.\33\ In addition, data from 
the Department of Energy's US Energy Information Administration confirm 
that a lack of energy security disproportionately affects certain 
populations, such as low-income and African American households.\34\ 
The effects of a lack of utility security include vulnerability to 
environmental exposures such as dampness, mold, and thermal discomfort 
in the home, which have direct effect on residents' health. For 
example, research has shown associations between a lack of energy 
security and respiratory conditions as well as mental health-related 
disparities and poor sleep quality in vulnerable populations such as 
older adults, children, the socioeconomically disadvantaged, and the 
medically vulnerable.\35\ Adopting a data element to collect 
information about utility security across PAC settings could facilitate 
the identification of residents who may not have utility security and 
who may benefit from engagement efforts.
---------------------------------------------------------------------------

    \31\ Hern[aacute]ndez D. Understanding `energy insecurity' and 
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. doi: 
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003; 
PMCID: PMC5114037.
    \32\ US Energy Information Administration. ``One in Three U.S. 
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017 
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
    \33\ Hern[aacute]ndez D. ``What `Merle' Taught Me About Energy 
Insecurity and Health.'' Health Affairs, VOL.37, NO.3: Advancing 
Health Equity Narrative Matters. March 2018. https://doi.org/10.1377/hlthaff.2017.1413.
    \34\ US Energy Information Administration. ``One in Three U.S. 
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017 
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
    \35\ Hern[aacute]ndez D. ``Understanding `energy insecurity' and 
why it matters to health.'' Soc Sci Med. 2016; 167:1-10.

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[[Page 64250]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.074

Transportation Needs
    Transportation barriers can both directly and indirectly affect a 
person's health. A lack of transportation can keep patients from 
accessing medical appointments, getting medications, or from getting 
things they need daily. It can also affect a person's health by 
creating a barrier to accessing goods and services, obtaining adequate 
food and clothing, or attending social activities. Therefore, reliable 
transportation services are fundamental to a person's health.
[GRAPHIC] [TIFF OMITTED] TR06AU24.075


[[Page 64251]]


All Domains
[GRAPHIC] [TIFF OMITTED] TR06AU24.076

    We solicited public comment on the following questions:
     For each of the domains:
    ++ Are these items relevant for hospice patients? Are these items 
relevant for hospice caregivers?
    ++ Which of these items are most suitable for hospice?
    ++ How might the items need to be adapted to improve relevance for 
hospice patients and their caregivers? Would you recommend adjusting 
the listed timeframes for any items? Would you recommend revising any 
of the items' response options?
     Are there additional SDOH domains that would also be 
useful for identifying and addressing health equity issues in Hospice?
    Comment: We received 39 public comments related to the RFI on 
health equity and SDOH. The majority of commenters were supportive of 
including sociodemographic and SDOH data to evaluate health equity in 
the hospice setting. The same majority supported the inclusion of the 
four proposed domains, while offering insights into what they felt was 
most relevant within each domain and what additional factors or 
questions CMS should consider within each domain (for example, for food 
insecurity, thinking about nutritional supplements for those who no 
longer consume food in traditional ways; for transportation item, 
focusing on caregiver transportation needs to enhance their ability to 
support the beneficiary).
    Several commenters expressed concern with how the collected SDOH 
data will be, or should be, used by hospices. They encouraged CMS to 
establish clear expectations on how hospices should utilize the data to 
improve patient care and address patient needs. They felt it was 
important that the data be used, and not just collected. Similarly, 
several commenters recommended that SDOH data collection must be 
coupled with provider education, adequate resources, and community 
networks that would allow agencies to effectively address SDOH needs, 
improve quality of care, and achieve health equity. Some commenters 
also mentioned concerns around the burden associated with collecting 
this additional data, especially considering the short length of stays 
many hospice patients experience. There were suggestions to allow the 
data to be gathered from pre-existing sources, such as EHRs from PCPs 
or standardized SDOH data elements used in other healthcare settings, 
as well as allowing the data to be collected through observation, in 
addition to talking with the patient and/or caregivers.
    Other commenters made additional suggestions, such as including the 
response option, ``I choose not to answer this question,'' for all SDOH 
questions for those who are reluctant or refuse to answer a question 
and reducing the time window listed in some questions to allow the 
hospice provider to pinpoint more pressing needs and to take into 
account the shorter length of stay of most hospice beneficiaries (for 
example, considering the past 3 or 6 months rather than the past 12 
months). Several commenters also noted that adaptations of the SDOH 
items may be necessary to account for differences in facility versus 
home-based hospice care.
    Lastly, suggestions for additional domains for consideration 
included: the presence of a caregiver, economic stability, criminal 
history, access to a PCP, education levels, preferred language, 
religion, gender identity, exposure to adverse weather events, safety 
of foods being consumed (for example, expired goods), home 
accessibility, and health literacy. A few commenters suggested specific 
tools, such as the Use of Area Deprivation Index (ADI), a Needs 
Navigation model, and the Accountable Health Communities Health Related 
Social Needs Screening Tool.
    Response: CMS appreciates all stakeholders' input regarding the 
potential inclusion of additional SDOH items in HQRP, among other 
efforts to improve hospice health equity. We will consider this input 
on the proposed and other recommended potential SDOH items in HQRP as 
we continue work to develop and work towards implementation of these 
data elements.
5. CAHPS Hospice Survey and Measure Changes
a. Survey and Measure Changes
    In the Fiscal Year 2024 Hospice Payment Rate Update final rule (88 
FR 51164), CMS provided the results of a mode experiment conducted with 
56 large hospices in 2021. The experiment tested a web-mail mode, 
modification to survey administration protocols such as adding a 
prenotification letter and extending the data collection period, and a 
revised survey version. Because we believe the results of the 
experiment were successful, we are finalizing changes to the CAHPS 
Hospice Survey and administrative protocol. The revised survey is 
shorter and simpler than the current survey and includes new questions 
on topics suggested by

[[Page 64252]]

stakeholders. Specifically, finalized changes to the survey and the 
quality measures derived from testing include:
     Removal of three nursing home items and an item about 
moving the family member \36\ that are not included in scored measures.
---------------------------------------------------------------------------

    \36\ The current version of the CAHPS Hospice Survey is 
available at: https://hospicecahpssurvey.org/en/survey-materials/. 
The proposed items for removal from this version of the survey are: 
Questions 32 through 34 (nursing home items), Question 30 (item 
about moving a family member), Question 10 (item regarding confusing 
or contradictory information), and Questions 17 through 20, 23, 28, 
and 29 (screening and evaluative items used to calculate the Getting 
Hospice Care Training measure).
---------------------------------------------------------------------------

     Removal of one survey item regarding confusing or 
contradictory information from the Hospice Team Communication measure 
\37\
---------------------------------------------------------------------------

    \37\ Ibid.
---------------------------------------------------------------------------

     Replacement of the multi-item Getting Hospice Care 
Training measure \38\ with a new, one-item summary measure.
---------------------------------------------------------------------------

    \31\ Ibid.
---------------------------------------------------------------------------

     Addition of two new items, which will be used to calculate 
a new Care Preferences measure.
     Simplified wording to component items in the Hospice Team 
Communication, Getting Timely Care, and Treating Family Member with 
Respect measures.
    The revised CAHPS Hospice Survey, including the new Care 
Preferences measure, the revised Hospice Team Communication measure, 
and the revised Getting Hospice Care Training measure received 
endorsement through the Consensus Standards Approval Committee (CSAC) 
Fall 2022 endorsement and maintenance cycle. Recommendations from the 
endorsement committee resulted in edits to the Getting Emotional and 
Religious Support to reflect cultural needs.
    The Care Preferences, Hospice Team Communication, and Getting 
Hospice Care Training measures were on the 2023 Measures Under 
Consideration list (MUC2023-183, 191 & 192) and evaluated by the Pre-
Rulemaking Measure Review (PRMR) Post-Acute Care/Long-Term Care (PAC/
LTC) Committee. The Consensus-Based Entity (CBE) utilizes the Novel 
Hybrid Delphi and Nominal Group (NHDNG) multi-step process, which is an 
iterative consensus-building approach aimed at a minimum of 75 percent 
agreement among voting members, rather than a simple majority vote, and 
supports maximizing the time spent to build consensus by focusing 
discussion on measures where there is disagreement. The final result 
from the committee's vote can be: ``Recommend'', ``Recommend with 
conditions'', ``Do not recommend'' or ``Consensus not reached''. 
``Consensus not reached'' signals continued disagreement amongst the 
committee despite being presented with perspectives from public 
comment, committee member feedback and discussion, and highlights the 
multi-faceted assessments of quality measures. The CBE did not reach 
consensus on the CAHPS Hospice Survey measures. More details regarding 
the CBE Pre-Rulemaking Measure Review (PRMR) voting procedures may be 
found in Chapter 4 of the Guidebook of Policies and Procedures for Pre-
Rulemaking Measure Review and Measure Set Review.\39\
---------------------------------------------------------------------------

    \39\ https://p4qm.org/sites/default/files/2023-09/Guidebook-of-Policies-and-Procedures-for-Pre-Rulemaking-Measure-Review-%28PRMR%29-and-Measure-Set-Review-%28MSR%29-Final_0.pdf.
---------------------------------------------------------------------------

    Comment: Most commenters overwhelmingly supported the changes 
proposed for the CAHPS Hospice survey, including implementation of a 
web-mail mode, a shortened and simplified CAHPS Hospice Survey, 
extension of the field period, and the switch from Telephone Only to 
Mail Only as the reference mode for mode adjustments. However, many 
commenters asked that CMS delay the implementation of changes to the 
CAHPS Hospice Survey questionnaire and survey administration 
procedures.
    Response: CMS appreciates the input and support of all stakeholders 
regarding the proposed changes. We had proposed that updates to the 
CAHPS Hospice Survey questionnaire and survey administration 
procedures, including availability of a new web-mail mode, be 
implemented with January 2025 decedents. The web-mail mode is optional; 
hospices do not need to select this mode in the first quarter in which 
it is available. Rather, hospices may choose to pursue this mode for 
any future quarter, when they and their EMR vendors are ready to 
provide caregiver email addresses. The sample frame file layout 
provided in the Quality Assurance Guidelines currently available on the 
CAHPS Hospice Survey website (https://hospicecahpssurvey.org/en/quality-assurance-guidelines/) includes a variable for caregiver email 
addresses.
    In response to commenters' concerns, CMS is finalizing 
implementation for April 2025 decedents, allowing hospices and vendors 
additional time to prepare. Survey vendors will be evaluated as to 
their readiness to administer the updated CAHPS Hospice Survey, as well 
as the web-mail mode. Training materials will be made available in 
early fall 2024; administration for April 2025 decedents is not slated 
to begin until summer 2025, allowing approximately 10 months for 
vendors to program and prepare materials. A draft of the updated survey 
instrument is already available for survey vendor review on the CAHPS 
Hospice Survey website (https://www.hospicecahpssurvey.org/globalassets/hospice-cahps4/survey-instruments/revised_cahps-hospice-survey_for-website.pdf).
    CMS is finalizing the decision to implement the revised CAHPS 
Hospice Survey beginning with April 2025 decedents. Table 14 provides a 
comparison of the current and proposed CAHPS Hospice Survey measures.

[[Page 64253]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.077


[[Page 64254]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.078


[[Page 64255]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.079

    Comment: Some commenters requested changes in wording to the 
proposed new unscored item on unfair treatment because of race or 
ethnicity, noting that the proposed item uses a frequency response 
scale that may lead respondents to assume that unfair treatment 
occurred, and suggesting a broader question that addresses more 
potential sources of perceived unfair treatment.
    Response: CMS thanks the commenters for these suggestions and may 
consider them in the future. The unfair treatment question included in 
the proposed updated CAHPS Hospice Survey questionnaire is the version 
that CMS tested in a 2021 experiment. Given the unique features of 
hospice and the caregiver respondents to the CAHPS Hospice Survey, CMS 
generally includes only those survey items that have been tested among 
hospice caregivers. The frequency response scale (never/sometimes/
usually/always) used in the proposed question is parallel to the 
response scale to many questions on

[[Page 64256]]

the CAHPS Hospice Survey. The ``never'' response option allows 
respondents to indicate that unfair treatment did not occur. In the 
2021 experiment, 98.8 percent of respondents selected ``never,'' 
indicating clearly that respondents did not assume unfair treatment 
occurred.
    Comment: Some commenters requested updates to the questions on race 
and ethnicity to adhere to the Office of Management and Budget (OMB)'s 
recently published revised ``Standards for Maintaining, Collecting, and 
Presenting Federal Data on Race and Ethnicity.''
    Response: CMS is currently evaluating the best option for 
implementing the revised standards for collecting race and ethnicity 
across all CAHPS surveys. When plans are finalized for implementing the 
revised standards, we will alert survey vendors and hospices.
    Comment: Some commenters requested alignment across of CAHPS 
surveys in terms of language translations offered. One commenter asked 
that the web survey be available in multiple languages.
    Response: The CAHPS Hospice Survey is available in a wide array of 
languages commonly spoken in the United States: English, Spanish, 
Traditional Chinese, Simplified Chinese, Russian, Portuguese, 
Vietnamese, Polish, and Korean. These translations are made available 
on the survey website (https://hospicecahpssurvey.org/en/survey-materials/); however, some translations have never been administered. 
We will continue to make additional translations available as 
additional needs are identified for translations.
    Comment: A few commenters suggested additional edits to CAHPS 
Hospice Survey content, including minor edits to question wording, 
removal of an item regarding whether the respondent is male or female, 
and addition of a question about pain medication training.
    Response: CMS appreciates commenters' suggestions regarding 
potential revisions to the questionnaire. The proposed updated CAHPS 
Hospice Survey questionnaire was drafted and tested in response to 
stakeholder feedback received over several years. Revisions, including 
item deletions and additions, were informed by submissions in response 
to calls for public comment in prior years' of federal rulemaking and 
by CMS's consensus-based entity, as well as a formal literacy review, a 
technical expert panel, cognitive interviews, and field testing. CMS is 
finalizing the updated CAHPS Hospice Survey questionnaire as proposed, 
to be implemented beginning with April 2025 decedents.
b. Impact to Public Reporting and Star Ratings
    CAHPS Hospice Survey measure scores are calculated across eight 
rolling quarters and are published quarterly for all hospices with 30 
or more completed surveys over the reporting period. The Family 
Caregiver Survey Rating summary Star Rating is also calculated using 
eight rolling quarters and is publicly reported for all hospices with 
75 or more completed surveys over the reporting period. Star Ratings 
are updated every other quarter. To determine what impact the changes 
to the survey measures would have on public reporting, CMS considered 
the nature of the measure change. As ``Care Preferences'' would be a 
new measure for the CAHPS Hospice Survey, we would have to wait to 
introduce public reporting until we have eight quarters of data. 
Although the revised ``Getting Hospice Care Training'' measure would be 
conceptually similar to the current ``Getting Hospice Care Training'' 
measure, we believe the change (one summary item instead of several 
items) is substantive and the revised measure should be treated as new 
for purposes of public reporting and Star Ratings. As such, we are 
waiting to publicly report the new version of ``Getting Hospice Care 
Training'' until we have eight quarters of data. We anticipate that the 
first Care Compare refresh in which publicly reported measures scores 
would be updated to include the new measures would be February 2028 (FY 
2028), with scores calculated using data from Q2 2025 through Q1 2027. 
Because measure scores are calculated quarterly and Star Ratings are 
calculated every other quarter, these changes may be introduced in 
different quarters for measure scores and Star Ratings. In the interim 
period, measure scores would be made available to hospices 
confidentially in their Provider Preview reports once they met a 
threshold number of completed surveys.
    We believe the finalized changes to the ``Hospice Team 
Communication'' measure (removing one item and slight wording changes) 
are non-substantive (that is, would not meaningfully change the 
measure) and that the measure could continue to be publicly reported 
and used in Star Ratings in the transition period between the current 
and new surveys. During the transition period, scores and Star Ratings 
would be calculated by combining scores from quarters using the current 
and new survey. As a result of the survey measure changes, the Family 
Caregiver Survey Rating summary Star Rating will be based on seven 
measures rather than the current eight measures during the interim 
period until a full eight quarters of data are available for the 
``Getting Hospice Care Training'' measure. The summary Star Rating 
would be based on nine measures once eight quarters of data are 
available for the new Care Preference and Getting Hospice Care Training 
measures.
c. Survey Administration Changes
    CMS is also finalizing the decision to add a web-mail mode (email 
invitation to a web survey, with mail follow-up to non-responders); to 
add a pre-notification letter; and to extend the field period from 42 
to 49 days, beginning with April 2025 decedents. The 2021 mode 
experiment found increases to response rates with these changes to 
survey administrative protocols. The web-mail mode would be an 
alternative to the current modes (mail-only, telephone-only, and mixed 
mode (mail with telephone follow-up)) that hospices could select. In 
the mode experiment, among those with no available email addresses, 
response rates to the mail-only and web-mail modes were similar (35.2 
percent vs. 34.3 percent); however, among those with available email 
addresses, adjusted response rates were substantially and significantly 
different--36.7 percent for mail-only versus 49.6 percent for web-
mail--suggesting a notable benefit of the web-mail mode for hospices 
with available email addresses for some caregivers.
    In the mode experiment, we found that mailing a pre-notification 
letter one week prior to survey administration was associated with an 
increase in response rates of 2.4 percentage points. We currently 
require a prenotification letter for the Medicare Advantage and 
Prescription Drug Plan and the In-center Hemodialysis CAHPS 
initiatives, so there is precedent for this requirement for CAHPS 
surveys, and mailing the letter is well within the capabilities of all 
approved survey vendors.
    Comment: Some commenters supported the addition of a 
prenotification letter as an evidence-based approach to increasing 
survey response rates, while other commenters noted concerns that a 
prenotification letter might increase costs to hospices. One commenter 
suggested that the prenotification letter be sent 14 days prior to 
survey administration.
    Response: Mailed prenotification letters increase response to the 
first survey mailings, thereby reducing costs

[[Page 64257]]

associated with sending a second mailing. CMS anticipates that any 
increases in cost will be small relative to the anticipated gains in 
survey response rates expected from the addition of a prenotification 
letter. In a 2021 experiment, CMS tested a prenotification letter 7 
days prior to survey administration and determined that it was both 
acceptable to caregivers and workable on the current timeline for 
survey administration and data submission. CMS is finalizing the 
addition of a prenotification letter to the CAHPS Hospice Survey 
administration process beginning with April 2025 decedents.
    Currently, the CAHPS Hospice Survey is fielded over 42 days; 
responses that come in after the 42-day window are not included in 
analysis and scoring. Extending the field period by one week (to 49 
days) is feasible within the current national implementation data 
collection and submission timeline. Our decision to extend the field 
period to 49 days is estimated to result in an increased response rate 
of 2.5 percentage points in the mail-only mode, the predominant mode in 
which CAHPS Hospice Surveys are currently administered.
d. Case-mix and Mode Adjustments
    Prior to public reporting, hospices' CAHPS Hospice Survey scores 
are adjusted for the effects of both mode of survey administration and 
case mix. Case mix refers to characteristics of the decedent and the 
caregiver that are not under control of the hospice that may affect 
reports of hospice experiences. Case-mix adjustment is performed within 
each quarter of data after data cleaning and mode adjustment. The 
current case-mix adjustment model includes the following variables: 
response percentile (the lag time between patient death and survey 
response), decedent's age, payer for hospice care, decedent's primary 
diagnosis, decedent's length of final episode of hospice care, 
caregiver's education, decedent's relationship to caregiver, 
caregiver's preferred language and language in which the survey was 
completed, and caregiver's age. CMS reviewed the variables included in 
the case-mix adjustment models currently in use for the CAHPS Hospice 
Survey to determine if any changes needed to be introduced along with 
the revised survey and new mode. We found that no case-mix variables 
need to be added or removed.
    With the introduction of a new mode of survey administration and 
survey items, CMS finalizes the decision to update the analytic 
adjustments that adjust responses for the effect of mode on survey 
responses. When we make mode adjustments, it is necessary to choose one 
mode as a reference mode. One can then interpret all adjusted responses 
from all modes as if they had been surveyed in the reference mode. 
Telephone-only is currently the reference mode for the CAHPS Hospice 
Survey. We are finalizing the decision to change the reference mode to 
mail-only. In the 2015 CAHPS Hospice Survey mode experiment, telephone-
only respondents had consistently worse scores than mail-only 
respondents across measures. However, in the 2021 mode experiment, 
differences in scores between mail-only and telephone-only respondents 
were no longer in a consistent direction across measures. Given this, 
we are finalizing the decision to use mail-only as the reference mode 
beginning with April 2025 decedents as most surveys are currently 
completed in the mail-only mode.
    Comment: Several commenters recommended that CMS add race and 
ethnicity to the case-mix adjustment model to reflect that hospices 
vary with regard to the proportion of their patients who are members of 
traditionally underserved communities.
    Response: CMS is committed to scoring CAHPS Hospice Survey measures 
in a manner that allows for fair comparison between hospices, 
regardless of the populations they serve. Case-mix adjustment must 
account for factors outside of hospices' control that affect how 
caregivers respond to the CAHPS Hospice Survey. Given disagreement 
about whether and how to directly adjust for race and ethnicity, CMS 
instead adjusts CAHPS Hospice Survey measures for factors that are 
often associated with race and ethnicity. These include markers of 
socioeconomic status, such as caregiver education and payer for hospice 
care; preferred language, which has been shown to be associated with 
systematic differences in response; response percentile, which 
considers differential likelihood of response across hospices; and 
length of stay, a care pattern which in some instances may be 
associated with differential care preferences across racial and ethnic 
groups.
    Comment: A commenter suggested that length of stay should be 
considered in analysis of CAHPS Hospice Survey data, noting that very 
short lengths of stay can influence survey responses.
    Response: CMS agrees that length of stay is an important 
consideration; for this reason, caregivers of decedents who received 
hospice care for less than 48 hours are not eligible for the CAHPS 
Hospice Survey, and length of stay is one of the variables used in 
case-mix adjustment of CAHPS Hospice Survey measure scores.
    Comment: Several commenters requested that CMS conduct an analysis 
of the effects of updates to the CAHPS Hospice Survey questionnaire and 
administration procedures on the Hospice Special Focus Program (SFP) 
algorithm.
    Response: CMS has specified four CAHPS Hospice Survey measures for 
use in calculating the SFP algorithm. These measures, Help for Pain and 
Symptoms, Getting Timely Help, Willingness to Recommend this Hospice, 
and Overall Rating of this Hospice, are not undergoing substantive 
changes in the proposed update of the CAHPS Hospice Survey 
questionnaire (that is, no survey items are being removed from, 
replaced, or added to these measures). CMS adjusts measure scores for 
mode of survey administration, so the introduction of a new mode should 
not impact measure scores. All changes to the survey instrument and 
administration procedures will be introduced at the same time for all 
hospices, so it should affect their scores equally; therefore, changes 
are not expected to differentially impact any hospices' performance on 
the SFP algorithm.
6. Form, Manner, and Timing of Quality Measure 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 was increased from 2 percent to 
4 percent beginning with FY 2024. During FYs 2014 through 2023, the 
Secretary reduced the market basket update by 2 percentage points for 
non-compliance. Beginning in FY 2024 and for each subsequent year, the 
Secretary will reduce the market basket update by 4 percentage points 
for any hospice that does not comply with the quality measure data 
submission requirements for that FY. In the FY 2023 Hospice Wage Index 
final rule (87 FR 45669), we revised our regulations at Sec.  
418.306(b)(2) in accordance with this statutory change (86 FR 42605).

[[Page 64258]]

b. HOPE Data Collection
    Hospices will be required to begin collecting and submitting HOPE 
data as of October 1, 2025. After this effective date, hospices will no 
longer be required to collect or submit the Hospice Item Set (HIS).
    Hospices will begin the use of HOPE in October 2025 and submit HOPE 
assessments to the CMS data submission and processing system in the 
required format designated by CMS (as set out in subregulatory 
guidance. At the time of implementation (that is, October 2025), all 
HOPE records will need to be submitted as an XML file, which is also 
the required format for the HIS. The format is subject to change in 
future years as technological advancements occur and healthcare 
provider use of electronic records increases, as well as systems become 
more interoperable.
    We will provide the HOPE technical data specifications for software 
developers and vendors on the CMS website. Software developers and 
vendors should not wait for final technical data specifications to 
begin development of their own products. Rather, software developers 
and vendors are encouraged to thoroughly review the draft technical 
data specifications and provide feedback to CMS so we may address 
potential issues adequately and in a timely manner. We will conduct a 
call with software developers and vendors after the draft 
specifications are posted, during which we will respond to questions, 
comments, and suggestions. This process will ensure software developers 
and vendors are successful in developing their products to better 
support the successful implementation of HOPE for all parties. Hospice 
providers will need to use vendor software to submit HOPE records to 
CMS. As with HIS, facilities that fail to submit at least 90 percent of 
all required HOPE assessments to CMS will be subject to a 4 percent 
reduction. See ``Submission of Data Requirements'' section below for 
additional information.
c. Retirement of Hospice Abstraction Reporting Tool (HART)
    In 2014, CMS made a free tool (Hospice Abstraction Reporting Tool, 
or HART) available which providers could use to collect HIS data. Over 
time we observed that only a small percentage of hospices utilized the 
tool. Therefore, in light of the limited utility the free tool 
provided, we will no longer provide a free tool for standardized data 
collection. Beginning October 1, 2025, hospices will need to select a 
private vendor to collect and submit HOPE data to CMS.
d. Compliance
    HQRP Compliance requires understanding three timeframes for both 
HIS and CAHPS: The relevant Reporting Year; the payment FY; and the 
Reference Year.
    (1) The 'Reporting Year'' (HIS) or 'Data Collection Year'' (CAHPS) 
is based on the calendar year (CY). It is the same CY for both HIS (or 
HOPE, once it is implemented) and CAHPS. If the CAHPS Data Collection 
year is CY 2025, then the HIS (or HOPE) reporting year is also CY 2025.
    (2) In the ``Payment FY'', the APU is subsequently applied to FY 
payments based on compliance in the corresponding Reporting Year/Data 
Collection Year.
    (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 or HOPE). For example, for the CY 2025 data 
collection year, the Reference Year is CY 2024. This means providers 
seeking a size exemption for CAHPS in CY 2025 will base it on their 
hospice size in CY 2024.
    Submission requirements are codified at 42 CFR 418.312. Table 15 
summarizes the three timeframes. It illustrates how the CY interacts 
with the FY payments, covering the CY 2023 through CY 2026 data 
collection periods and the corresponding APU application from FY 2025 
through FY 2028. Please note that during the first reporting year that 
implements HOPE, APUs may be based on fewer than four quarters of data. 
CMS will provide additional subregulatory guidance regarding APUs for 
the HOPE implementation year.
[GRAPHIC] [TIFF OMITTED] TR06AU24.080

    As illustrated in Table 15 CY 2023 data submissions compliance 
impacts the FY 2025 APU. CY 2024 data submissions compliance impacts 
the FY 2026 APU. CY 2025 data submissions compliance impacts FY 2027 
APU. This CY data submission impacting FY APU pattern follows for 
subsequent years.
e. Submission of Data Requirements
    As finalized in the FY 2016 Hospice Wage Index 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 on a timeliness 
threshold of 90 percent. This means CMS requires that hospices

[[Page 64259]]

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.
    We will apply the same submission requirements for HOPE admission, 
discharge, and two HUV records. After HIS is phased out, hospices will 
continue to submit 90 percent of all required HOPE records to support 
the quality measures within 30 days of the event or completion date 
(patient's admission, discharge, and based on the patient's length of 
stay up to two HUV timepoints.
    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 16. HQRP Compliance Checklist illustrates the APU and 
timeliness threshold requirements.
[GRAPHIC] [TIFF OMITTED] TR06AU24.081


[[Page 64260]]


    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 Requirements and 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.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 required 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 solicited public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. Hospice Outcomes & Patient Evaluation (HOPE)

    As finalized in section III. of this final rule, we are using HOPE 
to collect QRP information through revisions to Sec.  418.312(b). We 
are also finalizing the requirement of HOPE as a hospice patient-level 
item set to be used by all hospices to collect and submit standardized 
data on each patient admitted to hospice. The OMB control number will 
remain 0938-1153. HOPE will be used to support the standardized 
collection of the requisite data elements to calculate quality measures 
being utilized by the QRP. Hospices will be required to complete and 
submit an admission HOPE and a discharge HOPE collecting a range of 
status data (set out in the PRA accompanying this Rule, as well as the 
HOPE Guidance Manual finalized in this Rule) for each patient, as well 
as a HOPE Update Visit assessment, when applicable, starting October 1, 
2025, for FY 2027 APU determination.
    CMS data indicates that approximately 5,640 hospices enroll 
approximately 2,763,850 patients in hospice annually.
    According to the most recent wage data provided by the Bureau of 
Labor Statistics (BLS) for May 2022 (see http://www.bls.gov/oes/current/oes_nat.htm), the median hourly wage for Registered Nurses is 
$39.05 and the mean hourly wage for Medical Secretaries is $18.51. With 
fringe benefits and overhead, the total per hour rate for Registered 
Nurses is $78.10, and the total per hour rate for Medical Secretaries 
is $37.02. The foregoing wage figures are outlined in Table 17:
[GRAPHIC] [TIFF OMITTED] TR06AU24.082

    The annual time and cost burden for HOPE is calculated by 
determining the number of hours spent on each HOPE timepoint and using 
an average salary for nurses and medical secretaries to determine the 
average cost of the time spent on the assessment.
    The total number of Medicare-participating hospices (5,640) and the 
total number of admissions per year (2,763,850) are gathered from 
claims data collected by CMS. Based on these claims data, we determined 
that there are approximately 490 admissions per hospice per year. We 
then use data from previous HIS item timings and HOPE beta testing to 
determine the average time to complete the three HOPE timepoints. The 
time-to-complete is then calculated for each HOPE timepoint for nurses 
(clerical staff are assumed to take 5 minutes per timepoint to upload 
data). HOPE Admission is estimated to take 27 minutes for a nurse to 
complete relative to HIS, the new HOPE HUV is estimated to take 22 
minutes for a nurse to complete, and 5 minutes for clerical staff to 
upload data and HOPE Discharge is estimated to take 0 minutes to 
complete. Together, these burden increases represent a 54-minute 
increase per assessment (22 + 27 + 5 = 54 minutes). We also note that, 
due to the addition of the HUV timepoints, hospices will submit an 
estimated 2,763,850 additional HOPE assessments (one HUV assessment per 
admission).
    By multiplying the average time-to-complete with the number of 
records for a timepoint, we determine the average increase in burden 
hours spent for both nurses and clinical staff annually (Admission: 
1,243,733 hours, HUV: 1,243,733 hours, Discharge: 0 hours).

[[Page 64261]]

For additional information regarding the calculation of HOPE time and 
cost burdens, please refer to the HOPE Beta Testing Report found on the 
HOPE web page at https://www.cms.gov/medicare/quality/hospice/hope and 
the PRA package associated with this rule found at https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing.
    To calculate the cost burden, we multiply hospice staff wages by 
the amount of time those staff need to spend administering HOPE. We use 
the most recent hourly wage data for Registered Nurses ($39.05 per 
hour) and Medical Secretaries ($18.51 per hour) from the U.S. Bureau of 
Labor Statistics. These wages are doubled to account for fringe 
benefits ($78.10 for Registered Nurses, $37.02 for Medical 
Secretaries). Nurse and Medical Secretary wages are then calculated 
separately by multiplying time spent on timepoints with the number of 
HOPE records with the average wages (for example: 49 clinical minute 
increase on HOPE x 490 HOPE records per year/60 minutes x $78.10 = 
$31,253.02 nursing wages spent per hospice per year). The calculations 
for each of these hospice staff disciplines are added together to 
determine the total cost burden increase per hospice.
    Based on these calculations, we estimate that our proposal would 
therefore result in an incremental increase of 2,487,466-hour annual 
burden (1,243,733 hours for HOPE Admissions, 1,243,733 hours for HOPE 
Update Visits, and 0 hours for HOPE Discharges) at a cost of 
$184,792,739. The total cost burden per hospice ($32,764.67) is 
calculated by adding the total clinical cost ($31,253.02,) with the 
total clerical staff cost burden (5 minutes x 490 HOPE Records per each 
hospice per year/60 minutes per hour x $37.02 per hour = $1,511.65). 
This leads to a cost burden of $184, 792,739 across all hospices 
($32,764.67 per hospice x 5,640 hospices). Table 18 provides the 
summary of changes in burden relative to the new HOPE Admission, Update 
Visit and Discharge timepoints. We received public comments that 
expressed concerns about the anticipated incremental burden the new 
measures will add to hospices. This increase in incremental burden is 
explained further in the Regulatory Impact Analysis (RIA) section of 
this Rule, and is also discussed in detail in the Information 
Collection Request and PRA accompanying this Rule.

[[Page 64262]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.083

B. Amendment of HQRP Data Completeness Thresholds

    The amended HQRP data completeness thresholds reflect the same 
thresholds which have been applied to the HQRP since the FY 2018 
Hospice final rule as they relate to HIS. As such, this requirement 
does not impose any additional completeness or timeliness burden on 
hospices for the forthcoming fiscal year.

V. Regulatory Impact Analysis

A. Statement of Need

1. Hospice Payment
    This final rule meets the requirements of our regulations at Sec.  
418.306(c) and (d), which require annual issuance, in the Federal 
Register, of the Hospice Wage Index based on the most current available 
CMS hospital wage data, including any changes to the definitions of 
CBSAs or previously used Metropolitan Statistical Areas (MSAs), as well 
as any changes to the methodology for determining the per diem payment 
rates. This final rule updates the payment rates for each of the 
categories of hospice care, described in Sec.  418.302(b), for FY 2025 
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. Quality Reporting Program
    This final rule updates the requirements for HQRP to use a new 
standardized patient assessment tool, HOPE, which is more comprehensive 
than the previous HIS and includes new data elements and a new time 
point. These changes will allow HQRP to reflect a more consistent and 
holistic view of each patient's hospice election. This new reporting 
instrument will collect data that supports current and newly finalized 
quality measures included in this rule and potential future quality 
measures. The new HOPE data elements are not only collected by chart 
abstraction but in real-time to adequately assess patients based on the 
hospice's interactions with the patient and family/caregiver, 
accommodate patients with varying clinical needs, and provide 
additional information to contribute to the patient's care plan 
throughout the hospice stay (not just at admission and discharge).

[[Page 64263]]

B. Overall Impacts

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 14094 on Modernizing Regulatory Review (April 6, 2023), 
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 (CRA) (5 U.S.C. 804(2)).
    Executive Orders 12866 (as amended by E.O. 14094) and E.O. 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). Executive Order 14094 amends 3(f) of Executive 
Order 12866 to define a ``significant regulatory action'' as an action 
that is likely to result in a rule that: (1) has an annual effect on 
the economy of $200 million or more in any 1 year, or adversely affect 
in a material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, territorial, or tribal governments or communities; (2) creates a 
serious inconsistency or otherwise interfering with an action taken or 
planned by another agency; (3) materially alters the budgetary impacts 
of entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise legal or policy issues 
for which centralized review would meaningfully further the President's 
priorities or the principles set forth in this Executive Order.
    A regulatory impact analysis (RIA) must be prepared for a 
regulatory action that is significant section 3(f)(1). Based on our 
estimates, OMB'S Office of Information and Regulatory Affairs has 
determined this rulemaking is significant under section 3(f)(1) of E.O. 
12866. Accordingly, we have prepared a regulatory impact analysis 
presents the costs and benefits of the rulemaking to the best of our 
ability. Pursuant to Subtitle E of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (also known as the Congressional 
Review Act), OIRA has also determined that this rule meets the criteria 
set forth in 5 U.S.C. 804(2).
1. Hospice Payment
    The aggregate impact of the payment provisions in this final rule 
will result in an estimated increase of $790 million in payments to 
hospices, resulting from the finalized hospice payment update 
percentage of 2.9 percent for FY 2025. The impact analysis of this rule 
represents the projected effects of the changes in hospice payments 
from FY 2024 to FY 2025. Using the most recent complete data available 
at the time of rulemaking, in this case FY 2023 hospice claims data as 
of May 09, 2024, we simulate total payments using the FY 2024 wage 
index (pre-floor, pre-reclassified hospital wage index with the hospice 
floor, and old OMB delineations with the 5-percent cap on wage index 
decreases) and FY 2024 payment rates and compare it to our simulation 
of total payments using FY 2023 utilization claims data, the final FY 
2025 Hospice Wage Index (pre-floor, pre-reclassified hospital wage 
index with hospice floor, and the revised OMB delineations with a 5-
percent cap on wage index decreases) and FY 2024 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 2024 wage index and payment 
rates for each level of care by the final FY 2025 wage index and FY 
2024 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.
2. Hospice Quality Reporting Program
    As finalized in section III of this final rule, we are requiring 
implementation of a hospice patient-level item set to be used by all 
hospices to collect and submit standardized data on each patient 
admitted to hospice. Based on the cost estimates provided in the 
Collection of Information section, we are finalizing an annual cost 
burden of $184,729,739 across all hospices ($32,764.67 per hospice x 
5,640 hospices) starting in FY 2026.

[[Page 64264]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.084

    Our final analysis will therefore result in a 2,487,466 -hour 
annual burden (1,243,733 hours for HOPE Admissions, 1,243,733 hours for 
HOPE Update Visits, and 0 hours for HOPE Discharges). The total cost 
burden per hospice ($32,764.67) is calculated by adding the total 
nursing cost with the total clerical staff cost burden. This leads to a 
cost burden of $184, 792,739 across all hospices ($32,764.67 per 
hospice x 5,640 hospices). This burden is also discussed in detail 
below and as part of an accompanying PRA submission.

C. Detailed Economic Analysis

1. Hospice Payment Update for FY 2025
    The FY 2025 hospice payment impacts appear in Table 20. 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, and 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 2025 updated wage index 
data and moving from the old OMB delineations to the new revised OMB 
delineations 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 factors. However, there are 
distributional effects of using the FY 2025 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 hospice payment update percentage of 2.9 percent is 
based on the 3.4 percent inpatient hospital market basket percentage 
increase reduced by a final 0.5 percentage point productivity 
adjustment. The fifth column shows the total effect of the updated wage 
data and the hospice payment update percentage on FY 2025 hospice 
payments. As illustrated in Table 20, the combined effects vary by 
specific types of providers and by location. We note that simulated 
payments are based on utilization in FY 2023 as seen on Medicare 
hospice claims (accessed from the CCW on May 09, 2024) 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 20, the combined effects vary by specific 
types of providers and by location.

[[Page 64265]]

[GRAPHIC] [TIFF OMITTED] TR06AU24.085


[[Page 64266]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.086


[[Page 64267]]


2. Impacts for the Hospice Quality Reporting Program for FY 2025
    The HQRP requires the active collection under OMB control number 
#0938-1153 (CMS 10390; expiration 01/31/2026) of the Hospice Items Set 
(HIS) and CAHPS[supreg] Hospice Survey (OMB control number 0938-1257 
(CMS-10537; 07/31/2026). 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 market basket percentage increase otherwise applicable to 
a hospice for that calendar year.
    Once adopted, the federal government will incur costs related to 
the transition from HIS to HOPE. These costs will include provider 
training, preparation of HOPE manuals and materials, receipt and 
storage of data, data analysis, and upkeep of data submission software. 
There are costs associated with the maintenance and upkeep of a CMS-
sponsored web-based program that hospice providers would use to submit 
their HOPE data. In addition, the Federal government will also incur 
costs for help-desk support that must be provided to assist hospices 
with the data submission process. There will also be costs associated 
with the transmission, analysis, processing, and storage of the hospice 
data by CMS contractors.
    Also, pursuant to section 1814(i)(5)(A)(i) of the Act, hospices 
that do not submit the required QRP data would receive a 4 percentage 
point reduction of the annual market basket increase. The federal 
government will incur additional costs associated with aggregation and 
analysis of the data necessary to determine provider compliance with 
the reporting requirements for any given fiscal year.
    The total annual cost to the federal government for the 
implementation and ongoing management of HOPE data is estimated to be 
$1,583,500. As this number is the same as the current final costs to 
the federal government associated with HIS, HOPE implementation and 
ongoing maintenance would not incur additional annual costs.
    The costs to hospice providers associated with HOPE are calculated 
as follows:
Part 1. Time Burden
[GRAPHIC] [TIFF OMITTED] TR06AU24.087

[GRAPHIC] [TIFF OMITTED] TR06AU24.088


[[Page 64268]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.089

Part 2. Cost/Wage Calculation
    Note that this analysis of HOPE costs presents rounded inputs for 
each calculation and based on the incremental increase of burden from 
the HIS timepoints. The actual calculations were performed using 
unrounded inputs, so the outputs of each equation shown may vary 
slightly from what would be expected from the rounded inputs.
[GRAPHIC] [TIFF OMITTED] TR06AU24.090


[[Page 64269]]


[GRAPHIC] [TIFF OMITTED] TR06AU24.091

    Additional details regarding these costs and calculations are 
available in the FY 2025 PRA package.
    In addition, the transition from HIS to HOPE may result in other 
clinical and administrative time to hospice providers. However, as 
illustrated above the incremental burden assumes that hospices are 
providing in-person visits as part of their regular update to the plan 
of care, and anticipated patient needs for pain and symptom management 
(42 CFR 418.54 and 418.56) beyond meeting the requirement for quality 
reporting data collection (42 CFR 418.312). This assumption is 
supported by HOPE testing and hospice provider and TEP feedback 
throughout the HOPE development process. CMS acknowledges that we have 
not in this rule quantified the costs associated beyond the time 
necessary to gather and submit assessment instrument data. However, 
based on public comments, we will monitor the burden of in-person 
follow-up visits after HOPE implementation and its implications to 
quality of care, as noted above.
3. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this final rule, we 
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 this year's proposed rule will be the number of reviewers 
of this final rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this final rule. It is possible 
that not all commenters reviewed this year's proposed rule in detail, 
and it is also possible that some reviewers chose not to comment on the 
proposed rule. For these reasons we thought that the number of past 
commenters would be a fair estimate of the number of reviewers of this 
final rule. We received no comments on the approach to estimating the 
number of entities that will review this final rule. We also recognize 
that different types of entities are in many cases affected by mutually 
exclusive sections of this rule, and therefore for the purposes of our 
estimate we assume that each reviewer reads approximately 50 percent of 
the rule.
    Using the occupational wage information from the BLS for medical 
and health service managers (Code 11-9111); we estimate that the cost 
of reviewing this rule is $129.28 per hour, including overhead and 
fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). This 
final rule consists of approximately 53,138 words. Assuming an average 
reading speed we estimate that it would take approximately 1.76 hour 
for staff to review half of this final rule. For each hospice that 
reviews the rule, the estimated cost is $227.53 (1.76 hours x $129.28). 
Therefore, we estimate that the total cost of reviewing this regulation 
is $25,028 ($227.53 x 110 reviewers).

[[Page 64270]]

D. Alternatives Considered

1. Hospice Payment
    For the FY 2025 Hospice Wage Index and Rate Update final rule, we 
considered alternatives to the proposals articulated in section III.A 
of this final rule. We considered not proposing to adopt the OMB 
delineations listed in OMB Bulletin 23-01; however, we have 
historically adopted the latest OMB delineations in subsequent 
rulemaking after a new OMB Bulletin is released.
    Since the hospice payment update percentage is determined based on 
statutory requirements, we did not consider alternatives to updating 
the hospice payment rates by the hospice payment update percentage. The 
final 2.9 percent hospice payment update percentage for FY 2025 is 
based on a 3.4 percent inpatient hospital market basket percentage 
increase for FY 2025, reduced by a 0.5 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 2025, since the hospice 
payment update percentage is determined based on statutory requirements 
at section 1814(i)(1)(C) of the Act, we did not consider alternatives 
for the hospice payment update percentage.
2. Hospice Quality Reporting Program
    CMS considered proposing the HOPE instrument with more items, 
including data collection about the treatment and activities provided 
by multiple disciplines (such as medical social workers (MSW) and 
chaplains). However, CMS ultimately omitted those additional items, and 
is only finalizing HOPE with items deemed relevant to current and 
planned quality measurement and public reporting activities.
    CMS considered proposing that hospices only need to collect HOPE 
data during one HUV rather than two. CMS considered changing the data 
submission requirement from thirty (30) days to fifteen (15) days. 
However, CMS determined that such a change would provide minimal 
benefit at this time while also being disruptive to hospice providers 
and this was not proposed or finalized.

E. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf), in 
Table 22, we have prepared an accounting statement showing the 
classification of the expenditures associated with the provisions of 
this final rule. Table 22 provides our best estimate of the possible 
changes in Medicare payments under the hospice benefit as a result of 
the policies in this rule. This estimate is based on the data for 6,044 
hospices in our impact analysis file, which was constructed using FY 
2023 claims (accessed from the CCW on May 09, 2024). All expenditures 
are classified as transfers to hospices. Also, Table 22 also provides 
the impact costs associated with the Hospice Quality Reporting Program 
starting FY 2026.
[GRAPHIC] [TIFF OMITTED] TR06AU24.092

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 
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 $19 million.\40\ 
Table 23 shows the number of firms, revenue, and estimated impact per 
home health care service category.
---------------------------------------------------------------------------

    \40\ Ibid INK ``https://www.sba.gov/sites/sbagov/files/2023-03/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281%29%20%281%29_0.pdf https://www.sba.gov/sites/sbagov/files/2023-03/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281%29%20%281%29_0.pdf .''

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

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[GRAPHIC] [TIFF OMITTED] TR06AU24.093

    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 final 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 2.9 
percent or approximately $790 million in increased revenue to hospices 
in FY 2025. The 2.9 percent increase in expenditures when comparing FY 
2024 payments to estimated FY 2025 payments is reflected in the last 
column of the first row in Table 20 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 will experience a 
lower estimated increase (1.8 percent), compared to large hospices (3.0 
percent) due to the final updated wage index. Further detail is 
presented in Table 20 by hospice type and location.
    We estimate that the new impact of the HQRP data collection 
requirements would be $32,764.81 per hospice. While small hospices will 
incur the same data collection impact as all other hospices, we 
recognize that the impact value is likely to represent a larger 
percentage of small provider costs. HOPE already minimizes the burden 
that Information Collection Requests (ICRs) place on the provider. The 
type of quality data specified for participation in the HQRP is already 
currently collected by hospices as part of their patient care 
processes.
    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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a 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 19).

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 2024, that 
threshold is approximately $183 million. This rule will have an effect 
on state, local, or tribal governments, in the aggregate, or on the 
private sector of $183 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

    The aggregate payments to hospices in FY 2025 will increase by $790 
million as a result of the hospice payment update, compared to payments 
in FY 2024. We estimate that in FY 2025, hospices in urban areas would 
experience, on average, a 2.9 percent increase in estimated payments 
compared to FY 2024; while hospices in rural areas would experience, on 
average, a 3.2 percent increase in estimated payments compared to FY 
2024. Hospices providing services in the Mountain region would 
experience the largest estimated increases in payments of 4.4 percent. 
Hospices serving patients in the Pacific region will experience, on 
average, the lowest estimated increase of 1.0 percent in FY 2025 
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,

[[Page 64272]]

approved this document on July 23, 2024.

List of Subjects in 42 CFR Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV, part 418 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. Section 418.22 is amended by revising paragraph (c)(1)(i) to read as 
follows:


Sec.  418.22  Certification of terminal illness.

* * * * *
    (c) * * *
    (1) * * *
    (i) The medical director of the hospice, the physician designee (as 
defined in Sec.  418.3), or the physician member of the hospice 
interdisciplinary group; and
* * * * *

0
3. Section 418.24 is amended by--
0
a. Revising paragraphs (a) and (b)(3);
0
b. Redesignating paragraphs (e) through (h) as paragraphs (f) through 
(i), respectively; and
0
c. Adding paragraph (e).
    The revisions and addition read as follows:


Sec.  418.24  Election of hospice care.

    (a) Election statement. An individual who meets the eligibility 
requirement of Sec.  418.20 may file an election statement with a 
particular hospice. If the individual is physically or mentally 
incapacitated, his or her representative (as defined in Sec.  418.3) 
may file the election statement.
    (b) * * *
    (3) Acknowledgement that the individual has been provided 
information on the hospice's coverage responsibility and that certain 
Medicare services, as set forth in paragraph (g) of this section, are 
waived by the election. For Hospice elections beginning on or after 
October 1, 2020, this would include providing the individual with 
information indicating that services unrelated to the terminal illness 
and related conditions are exceptional and unusual and hospice should 
be providing virtually all care needed by the individual who has 
elected hospice.
* * * * *
    (e) Notice of election. The hospice chosen by the eligible 
individual (or his or her representative) must file the Notice of 
Election (NOE) with its Medicare contractor within 5 calendar days 
after the effective date of the election statement.
    (1) Consequences of failure to submit a timely notice of election. 
When a hospice does not file the required Notice of Election for its 
Medicare patients within 5 calendar days after the effective date of 
election, Medicare will not cover and pay for days of hospice care from 
the effective date of election to the date of filing of the notice of 
election. These days are a provider liability, and the provider may not 
bill the beneficiary for them.
    (2) Exception to the consequences for filing the NOE late. CMS may 
waive the consequences of failure to submit a timely-filed NOE 
specified in paragraph (e)(1) of this section. CMS will determine if a 
circumstance encountered by a hospice is exceptional and qualifies for 
waiver of the consequence specified in paragraph (e)(1) of this 
section. A hospice must fully document and furnish any requested 
documentation to CMS for a determination of exception. An exceptional 
circumstance may be due to, but is not limited to, the following:
    (i) Fires, floods, earthquakes, or similar unusual events that 
inflict extensive damage to the hospice's ability to operate.
    (ii) A CMS or Medicare contractor systems issue that is beyond the 
control of the hospice.
    (iii) A newly Medicare-certified hospice that is notified of that 
certification after the Medicare certification date, or which is 
awaiting its user ID from its Medicare contractor.
    (iv) Other situations determined by CMS to be beyond the control of 
the hospice.

0
4. Section 418.25 is amended by revising paragraphs (a) and (b) 
introductory text to read as follows:


Sec.  418.25  Admission to hospice care.

    (a) The hospice admits a patient only on the recommendation of the 
medical director (or the physician designee, as defined in Sec.  418.3) 
in consultation with, or with input from, the patient's attending 
physician (if any).
    (b) In reaching a decision to certify that the patient is 
terminally ill, the hospice medical director (or the physician 
designee, as defined in Sec.  418.3) must consider at least the 
following information:
* * * * *

0
5. Section 418.102 is amended by revising the introductory paragraph, 
paragraph (b) introductory text, and paragraph (c) to read as follows:


Sec.  418.102  Condition of participation: Medical director.

    The hospice must designate a physician to serve as medical 
director. The medical director must be a doctor of medicine or 
osteopathy who is an employee or is under contract with the hospice. 
When the medical director is not available, a physician designee as 
defined at Sec.  418.3 assumes the same responsibilities and 
obligations as the medical director.
* * * * *
    (b) Standard: Initial certification of terminal illness. The 
medical director (or physician designee, as defined in Sec.  418.3, if 
the medical director is unavailable) or physician member of the IDG 
reviews the clinical information for each hospice patient and provides 
written certification that it is anticipated that the patient's life 
expectancy is 6 months or less if the illness runs its normal course. 
The physician must consider the following when making this 
determination:
* * * * *
    (c) Standard: Recertification of the terminal illness. Before each 
recertification period for each patient, as described in Sec.  
418.21(a), the medical director (or physician designee, as defined in 
Sec.  418.3, if the medical director is unavailable) or physician 
member of the IDG must review the patient's clinical information.
* * * * *

0
6. Section 418.114 is amended by revising paragraph (b)(9) to read as 
follows:


Sec.  418.114  Condition of participation: Personnel qualifications.

* * * * *
    (b) * * *
    (9) Marriage and family therapist as defined at Sec.  410.53.
* * * * *


Sec.  418.309  [Amended]

0
7. Section 418.309 is amended in paragraphs (a)(1) and (2) by removing 
``2032'' and adding in its place ``2033''.

0
8. Section 418.312 is amended by revising paragraph (b)(1) to read as 
follows:


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

* * * * *
    (b) * * *
    (1) Hospices are required to complete and submit a standardized set 
of items for each patient to capture patient-level data, regardless of 
payer or patient age. The standardized set of items must be completed 
no less frequently than at

[[Page 64273]]

admission, the hospice update visit (HUV), and discharge, as directed 
in the associated guidance manual and required by the Hospice Quality 
Reporting Program. Definitions for changes in patient condition that 
warrant updated assessment, as well as the data elements to be 
completed for each applicable change in patient condition, are to be 
provided in sub-regulatory guidance for the current standardized 
hospice instrument.
* * * * *

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-16910 Filed 7-30-24; 4:15 pm]
BILLING CODE 4120-01-P