Medicare Program; FY 2015 Hospice Wage Index and Payment Rate Update; Hospice Quality Reporting Requirements and Process and Appeals for Part D Payment for Drugs for Beneficiaries Enrolled in Hospice
Federal RegisterMay 8, 2014
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Department of Health and Human Services
Centers for Medicare & Medicaid Services
42 CFR Parts 405 and 418
[CMS-1609-P]
RIN 0938-AS10
Medicare Program; FY 2015 Hospice Wage Index and Payment Rate Update; Hospice Quality Reporting Requirements and Process and Appeals for Part D Payment for Drugs for Beneficiaries Enrolled in Hospice
AGENCY:
Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION:
Proposed rule.
SUMMARY:
This proposed rule would update the hospice payment rates and the wage index for fiscal year (FY) 2015 and continue the phase out of the wage index budget neutrality adjustment factor (BNAF). This rule provides an update on hospice payment reform analyses and solicits comments on “terminal illness” and “related conditions” definitions, and on a process and appeals for Part D payment for drugs, while beneficiaries are under a hospice election. Also, this rule proposes timeframes for filing the notice of election and the notice of termination/revocation; adding the attending physician to the hospice election form; a requirement that hospices complete their hospice inpatient and aggregate cap determinations within 5 months after the cap year ends, and remit any overpayments; and updates for the hospice quality reporting program.
In addition, this rule would provide guidance on determining hospice eligibility, information on the delay in the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM), and would further clarify how hospices are to report diagnoses on hospice claims. Finally, the rule proposes to make a technical regulatory text change.
DATES:
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on July 1, 2014.
ADDRESSES:
In commenting, please refer to file code CMS-1609-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
1.
Electronically.
You may submit electronic comments on this regulation to
http://www.regulations.gov.
Follow the “Submit a comment” instructions.
2.
By regular mail.
You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1609-P, P.O. Box 8010, Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
By express or overnight mail.
You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1609-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4.
By hand or courier.
Alternatively, you may deliver (by hand or courier) your written comments ONLY to the following addresses prior to the close of the comment period:
a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
For information on viewing public comments, see the beginning of the
SUPPLEMENTARY INFORMATION
section.
FOR FURTHER INFORMATION CONTACT:
Debra Dean-Whittaker, (410) 786-0848 for questions regarding the CAHPS® Hospice Survey. Robin Dowell, (410) 786-0060 for questions regarding the hospice quality reporting program. Deborah Larwood, (410) 786-9500 for questions regarding process and appeals for Part D payment for drugs while beneficiaries are under a hospice election. Owen Osaghae, (410) 786-7550 for questions regarding the hospice inpatient and aggregate cap determinations.
For general questions about hospice payment policy please send your inquiry via email to:
hospicepolicy@cms.hhs.gov.
SUPPLEMENTARY INFORMATION:
Wage index addenda will be available only through the internet on the CMS Web site at: (
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.
) Readers who experience any problems accessing any of the wage index addenda related to the hospice payment rules that are posted on the CMS Web site identified above should contact Hillary Loeffler at 410-786-0456.
Inspection of Public Comments:
All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received:
http://www.regulations.gov.
Follow the search instructions on that Web site to view public comments.
Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Costs, Benefits, and Transfers
II. Background
A. Hospice Care
B. History of the Medicare Hospice Benefit
C. Services Covered by the Medicare Hospice Benefit
D. Medicare Payment for Hospice Care
1. Omnibus Budget Reconciliation Act of 1989
2. Balanced Budget Act of 1997
3. FY 1998 Hospice Wage Index Final Rule
4. FY 2010 Hospice Wage Index Final Rule
5. The Affordable Care Act
6. FY 2012 Hospice Wage Index Final Rule
E. Trends in Medicare Hospice Utilization
III. Provisions of the Proposed Rule
A. Hospice Payment Reform: Research and Analyses
1. Beneficiaries Dying Without Skilled Visits in the Last Days of Life
2. General Inpatient Care, Continuous Home Care, and Inpatient Respite Care Utilization
3. Hospice Live Discharges
4. Non-hospice Spending for Hospice Beneficiaries During an Election
B. Solicitation of Comments on Definitions of “Terminal Illness” and “Related Conditions”
1. The Development of the Medicare Hospice Benefit
2. Legislative History of the Medicare Hospice Benefit
3. Hospice Care Today
4. Definition of “Terminal Illness”
5. Definition of “Related Conditions”
C. Guidance on Determining Beneficiaries' Eligibility
D. Proposed Timeframe for Hospice Cap Determinations and Overpayment Remittances
E. Proposed Timeframes for Filing the Notice of Election and Notice of Termination/Revocation
1. Proposed Timeframe for Filing the Notice of Election
2. Proposed Timeframe for Filing the Notice of Termination/Revocation
F. Proposed Addition of the Attending Physician to the Hospice Election Form
G. FY 2015 Hospice Wage Index and Rates Update
1. FY 2015 Hospice Wage Index
2. FY 2015 Wage Index with an Additional 15 Percent Reduced Budget Neutrality Adjustment Factor (BNAF)
3. Proposed Hospice Payment Update Percentage
4. Proposed FY 2015 Hospice Payment Rates
H. Proposed Updates to the Hospice Quality Reporting Program
1. Background and Statutory Authority
2. Measures for Hospice Quality Reporting Program and Data Submission Requirements for Payment Years FY 2014 and FY 2015
3. Quality Measures for Hospice Quality Reporting Program and Data Submission Requirements for Payment Year FY 2016 and Beyond
4. Future Measure Development
5. Public Availability of Data Submitted
6. Proposed Adoption of the CAHPS® Hospice Survey for the FY 2017 Payment Determination
a. Background and Description of the Survey
b. Participation Requirements to Meet Quality Reporting Requirements for the FY 2017 APU
c. Participation Requirements to Meet Quality Reporting Requirements for the FY 2018 APU
d. Vendor Participation Requirements for the 2017 APU
e. Annual Payment Update
f. CAHPS® Hospice Survey Oversight Activities
7. Procedures for Payment Year 2016 and Subsequent Years
I. Solicitation of Comments on Coordination of Benefits Process and Appeals for Part D Payment for Drugs While Beneficiaries are Under a Hospice Election
1. Part D Sponsor Coordination of Payment with Hospice Providers
2. Hospice Coordination of Payment with Part D Sponsors and Other Payers
3. Beneficiary Rights and Appeals
J. Update on the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) and Coding Guidelines for Hospice Claims Reporting
1. International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)
2. Coding Guidelines for Hospice Claims Reporting
K. Technical Regulatory Text Change
IV. Collection of Information Requirements
A. Proposed Changes Related to Hospice Payment Policy
1. Proposed Changes to the Election Statement (§ 418.24)
2. Proposed Changes to Inpatient and Aggregate Cap Determination Reporting (§ 418.308)
B. CAHPS® Hospice Survey
V. Regulatory Impact Analysis
A. Statement of Need
B. Introduction
C. Overall Impact
1. Detailed Economic Analysis
a. Effects on Hospices
b. Hospice Size
c. Geographic Location
d. Type of Ownership
e. Hospice Base
f. Effects on Other Providers
g. Effects on the Medicare and Medicaid Programs
h. Alternatives Considered
i. Accounting Statement
j. Conclusion
2. Regulatory Flexibility Act Analysis
3. Unfunded Mandates Reform Act Analysis
VI. Federalism Analysis and Regulations Text
Acronyms
Because of the many terms to which we refer by acronym in this proposed rule, we are listing the acronyms used and their corresponding meanings in alphabetical order below:
ACA Affordable Care Act
APU Annual Payment Update
BBA Balanced Budget Act of 1997
BIPA Benefits Improvement and Protection Act of 2000
BNAF Budget Neutrality Adjustment Factor
BLS Bureau of Labor Statistics
CAHPS® Consumer Assessment of Healthcare Providers and Systems
CBSA Core-Based Statistical Area
CCW Chronic Conditions Data Warehouse
CFR Code of Federal Regulations
CHC Continuous Home Care
CMS Centers for Medicare & Medicaid Services
COPD Chronic Obstructive Pulmonary Disease
CoPs Conditions of Participation
CR Change Request
CVA Cerebral Vascular Accident
CWF Common Working File
CY Calendar Year
DDE Direct Data Entry
DME Durable Medical Equipment
DRG Diagnostic Related Group
DTRR Daily Transaction Reply Report
ER Emergency Room
FEHC Family Evaluation of Hospice Care
FR Federal Register
FY Fiscal Year
GAO Government Accountability Office
GIP General Inpatient Care
HCFA Healthcare Financing Administration
HHS Health and Human Services
HIPPA Health Insurance Portability and Accountability Act
HIS Hospice Item Set
HQRP Hospice Quality Reporting Program
IACS Individuals Authorized Access to CMS Computer Services
ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision, Clinical Modification
ICR Information Collection Requirement
IDG Interdisciplinary Group
IPPS Inpatient Prospective Payment System
IRC Inpatient Respite Care
LCD Local Coverage Determination
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MedPAC Medicare Payment Advisory Commission
MFP Multi-Factor Productivity
MSA Metropolitan Statistical Area
NCPDP National Council for Prescription Drug Programs
NHPCO National Hospice and Palliative Care Organization
NF Long Term Care Nursing Facility
NOE Notice of Election
NOTR Notice of Termination/Revocation
NP Nurse Practitioner
NPI National Provider Identifier
NQF National Quality Forum
OIG Office of the Inspector General
OACT Office of the Actuary
OIG Office of Inspector General
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health Information Technology
PA Prior Authorization
PBM Pharmacy Benefit Manager
PDE Prescription Drug Event
PRA Paperwork Reduction Act
PRRB Provider Reimbursement Review Board
PS&R Provider Statistical and Reimbursement Report
Pub. L. Public Law
QAPI Quality Assessment and Performance Improvement
QIO Quality Improvement Organization
QRP Quality Reporting Program
RFA Regulatory Flexibility Act
RHC Routine Home Care
SAF Standard Analytic File
SBA Small Business Administration
SNF Skilled Nursing Facility
TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEP Technical Expert Panel
TrOOP True Out-of-Pocket
U.S.C. United States Code
I. Executive Summary for This Proposed Rule
A. Purpose
This rule proposes updates to the payment rates for hospices for fiscal year (FY) 2015 as required under section 1814(i) of the Social Security Act (the Act). The proposed updates incorporate the use of updated hospital wage index data, the 6th year of the 7-year Budget Neutrality Adjustment Factor (BNAF) phase-out, and an update to the hospice payment rates by the hospice payment update percentage. In addition, section 3004(c) of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act (Pub. L. 111-152) (the Affordable Care Act) established a quality reporting program for hospices. Starting in FY 2014, hospices that failed to meet quality reporting requirements received a two percentage point reduction to their market basket update. The Affordable Care Act also requires the Secretary to implement revisions to the hospice payment methodology no earlier than October 1, 2013. As such, this proposed rule provides an update of our hospice payment reform activities. This rule solicits comments on: Definitions of “terminal illness” and “related conditions”; and process and appeals for Part D payment for drugs while beneficiaries are under a hospice election. This rule proposes timeframes for filing the hospice notice of election and the notice of termination/revocation; adding the attending physician to the hospice election form; expediting hospice inpatient and aggregate cap determinations; and updates to the hospice quality reporting program. Additionally, this proposed rule provides guidance on determining a patient's eligibility for hospice, discusses the delay in the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM), clarifies how hospices would report diagnoses, in accordance with current ICD-9-CM guidelines, on hospice claims, and proposes a technical regulations text change.
B. Summary of the Major Provisions
In this rule we propose to update the hospice payment rates for FY 2015 by 1.3 percent as described in section III.G.3. The hospice wage index would be updated with more current wage data and the BNAF would be reduced by an additional 15 percent for a total BNAF reduction of 85 percent as described in section III.G.2. The total BNAF phase-out would be complete by FY 2016. In 2010, the Congress amended section 1814(i)(6) of the Act with section 3132(a) of the Affordable Care Act. The amendment authorized the Secretary to collect additional data and information determined appropriate to revise payments for hospice care (no earlier than October 1, 2013) and for other purposes. An initial step of hospice payment reform in this proposed rule is to clarify and enforce hospice payment policy, when necessary, in order to safeguard beneficiaries and the Medicare hospice benefit. In section III.A, we provide information on hospice behavior and trends that raise program integrity concerns; the impact of beneficiary access to quality end of life care; and the effect of hospice providers' market driven goals rather than preserving the intent of the Medicare Hospice benefit. In response to the concerning trends and comments received in response to prior rulemaking, we are soliciting comments on definitions of “terminal illness” and “related conditions” in section III.B, in order to strengthen and clarify the current concepts of holistic and comprehensive hospice care under the Medicare hospice benefit. In section III.I, we are soliciting comments on processes that Part D plan sponsors could use to coordinate with Medicare hospices in determining coverage of drugs for hospice beneficiaries and resolving disagreements between the parties. In section III.E, we propose to require hospices to file both the notice of election (NOE) and the notice of termination/revocation (NOTR) on behalf of beneficiaries within 3 calendar days of admission/discharge. If an NOE is not filed timely, the days from the effective date of election to the date of filing the NOE would be the financial responsibility of the hospice. In section III.F, we propose to require the hospice to identify the attending physician on the election form. In section III.D, we propose that hospices complete their cap determinations, using a pro-forma spreadsheet, within 150 days after the cap period, and remit any overpayments at that time. Given concerns about hospices increasingly exceeding their aggregate cap, along with the average overpayment per beneficiary, we believe that this procedural change is necessary in order to better safeguard the Medicare Trust Fund.
This proposed rule, in section III.H, discusses updates to the hospice quality reporting program, including participation requirements for CY 2015 regarding the CAHPS® Hospice Survey, and reminds the hospice industry that last year we set the July 1, 2014 implementation date for the Hospice Item Set and the January 1, 2015 implementation date for the CAHPS® Hospice Survey.
More than seven new quality measures would be derived from these tools; therefore, no new measures are proposed this year. Section III.H of this rule also proposes changes related to the reconsideration process, extraordinary circumstance extensions or exemptions, and hospice quality reporting program (HQRP) eligibility requirements for newly certified hospices. Finally, this proposed rule provides: guidance on determining the beneficiary's eligibility for hospice in section III.C; discusses the delay in the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM); clarifies appropriate diagnosis reporting on hospice claims. We propose that, effective October 1, 2014, claims would be returned to the provider if the claim listed a non-specific symptom diagnosis as the principal hospice diagnosis in section III. J. We also propose a technical regulations text change in section III.K pertaining to the definition of “social worker”.
C. Summary of Impacts
Table 1—Impact Summary Table
Provision
description
Transfers
FY 2015 Hospice Wage Index and Payment Rate Update
The overall economic impact of this proposed rule is estimated to be $230 million in increased payments to hospices during FY 2015.
Provision description
Total costs
New Quality Reporting Requirements for Hospices (FY 2015)
$8.77 million.
II. Background
A. Hospice Care
Hospice care is an approach to treatment that recognizes that the impending death of an individual warrants a change in the focus from curative care to palliative care for relief of pain and for symptom management.
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 use of a broad spectrum of professionals and other caregivers, with the goal of making the individual as physically and emotionally comfortable as possible. Hospice is compassionate patient and family-centered care for those who are terminally ill. It is a comprehensive, holistic approach to treatment that recognizes that the impending death of an individual necessitates a change from curative to palliative care.
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. As stated in the June 5, 2008 Hospice Conditions of Participation final rule (73 FR 32088), palliative care is an approach that “optimizes quality of life by anticipating, preventing, and treating suffering.” The goal of palliative care in hospice is to improve the quality of life of individuals, and their families, facing the issues associated with a life-threatening illness through the prevention and relief of suffering by means of early identification, assessment and treatment of pain and other issues. This is achieved by the hospice interdisciplinary team working with the patient and family to develop a comprehensive care plan focused on coordinating care services, reduce unnecessary diagnostics or ineffective therapies, and offering ongoing conversations with individuals and their families about changes in the disease. It is expected that this comprehensive care plan would shift over time to meet the changing needs of the patient and family as the individual approaches the end-of-life.
Medicare hospice care is palliative care for individuals with a prognosis of living 6 months or less if the terminal illness runs its normal course. As generally accepted by the medical community, the term “terminal illness” refers to an advanced and progressively deteriorating illness, and that the illness is diagnosed as incurable (please see section III.B for a discussion and solicitation of comments on a possible Medicare hospice definition of “terminal illness”). When an individual is terminally ill, many health problems are brought on by underlying condition(s), as bodily systems are interdependent. In the June 5, 2008 Hospice Conditions of Participation final rule (73 FR 32088), we stated that “the medical director must consider the primary terminal condition, related diagnoses, current subjective and objective medical findings, current medication and treatment orders, and information about unrelated conditions when considering the initial certification of the terminal illness.” As referenced in our regulations at § 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, that is, the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course as defined in section 1861(dd)(3)(A) of the Act and our regulations at § 418.3. The certification of terminal illness must include a brief narrative explanation of the clinical findings that supports a life expectancy of 6 months or less as part of the certification and recertification forms, as stated in § 418.22(b)(3).
The goal of hospice care is to make the hospice patient as physically and emotionally comfortable as possible, with minimal disruption to normal activities, while remaining primarily in the home environment. Hospice care uses an interdisciplinary approach to deliver medical, nursing, social, psychological, emotional, and spiritual services through the use of a broad spectrum of professional and other caregivers and volunteers. While the goal of hospice care is to allow for the individual to remain in his or her home environment, circumstances during the end-of-life may necessitate short-term inpatient admission to a hospital, skilled nursing facility (SNF), or hospice facility for procedures necessary for pain control or acute or chronic symptom management that cannot be managed in any other setting. These acute hospice care services are to ensure that any new or worsening symptoms are intensively addressed so that the individual can return to his or her home environment under a home level of care. Short-term, intermittent, inpatient respite services are also available to the family of the hospice patient when needed to relieve the family or other caregivers. Additionally, an individual can receive continuous home care during a period of crisis in which an individual requires primarily continuous nursing care to achieve palliation or management of acute medical symptoms so that the individual can remain at home. Continuous home care may be covered on a continuous basis for as much as 24 hours a day, and these periods must be predominantly nursing care per our regulations at § 418.204. A minimum of 8 hours of care must be furnished on a particular day to qualify for the continuous home care rate (§ 418.302(e)(4)).
Hospices are expected to comply with all civil rights laws, including the provision of auxiliary aids and services to ensure effective communication with patients or patient care representatives with disabilities consistent with Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act, and to provide language access for such persons who are limited in English proficiency, consistent with Title VI of the Civil Rights Act of 1964. Further information about these requirements may be found at
http://www.hhs.gov/ocr/civilrights.
B. History of the Medicare Hospice Benefit
Before the creation of the Medicare hospice benefit, hospice was originally run by volunteers who cared for the dying. During the early development stages of the Medicare hospice benefit, hospice advocates were clear that they wanted a Medicare benefit available that provided all-inclusive care for terminally-ill individuals, provided pain relief and symptom management, and offered the opportunity to die with dignity in the comfort of one's home rather than in an institutional setting.
1
As stated in the August 22, 1983 proposed rule entitled “Medicare Program; Hospice Care” (48 FR 38146), “the hospice experience in the United States has placed emphasis on home care. It offers physician services, specialized nursing services, and other forms of care in the home to enable the terminally ill individual to remain at home in the company of family and friends as long as possible.” The concept of a patient “electing” the hospice benefit and being certified as terminally ill were two key components in the legislation responsible for the creation of the Medicare Hospice Benefit (section 122 of the Tax Equity
and Fiscal Responsibility Act of 1982 (TEFRA), (Pub. L. 97-248)). Section 122 of TEFRA created the Medicare Hospice Benefit, which was implemented on November 1, 1983. Under sections 1812(d) and 1861(dd) of the Social Security Act (the Act), codified at 42 U.S.C. 1395d(d) and 1395x(dd), we provide coverage of hospice care for terminally ill Medicare beneficiaries who elect to receive care from a Medicare-certified hospice. Our regulations at § 418.54(c) stipulate that the comprehensive hospice assessment must identify the patient's physical, psychosocial, emotional, and spiritual needs related to the terminal illness and related conditions, and address those needs in order to promote the hospice patient's well-being, comfort, and dignity throughout the dying process. The comprehensive assessment must take into consideration the following factors: the nature and condition causing admission (including the presence or lack of objective data and subjective complaints); complications and risk factors that affect care planning; functional status; imminence of death; and severity of symptoms (§ 418.54(c)). The Medicare hospice benefit requires the hospice to cover all reasonable and necessary palliative care related to the terminal prognosis and related conditions, as described in the patient's plan of care. The December 16, 1983 Hospice final rule (48 FR 56008) requires hospices to cover care for interventions to manage pain and symptoms. Clinically, related conditions are any physical or mental conditions that are related to or caused by either the terminal illness or the medications used to manage the terminal illness.
2
See section III.B of this proposed rule for a discussion and solicitation of comments on a possible Medicare hospice definition of “related conditions.” Additionally, the hospice Conditions of Participation at § 418.56(c) require that the hospice must provide all services necessary for the palliation and management of the terminal illness, related conditions and interventions to manage pain and symptoms. Therapy and interventions must be assessed and managed in terms of providing palliation and comfort without undue symptom burden for the hospice patient or family.
3
For example, a hospice patient with lung cancer (the principal terminal diagnosis) may receive inhalants for shortness of breath (related to the terminal condition). The patient may also suffer from metastatic bone pain (a related condition) and would be treated with opioid analgesics. As a result of the opioid therapy, the patient may suffer from constipation (a related condition) and require a laxative for symptom relief. It is often not a single diagnosis that represents the terminal prognosis of the patient, but the combined effect of several conditions that makes the patient's condition terminal. In the December 16, 1983 Hospice final rule (48 FR 56010 through 56011), regarding what is related versus unrelated to the terminal illness, we stated: “. . . we believe that the unique physical condition of each terminally ill individual makes it necessary for these decisions to be made on a case-by-case basis. It is our general view that hospices are required to provide virtually all the care that is needed by terminally ill patients.” Therefore, unless there is clear evidence that a condition is unrelated to the terminal prognosis, all services would be considered related. It is also the responsibility of the hospice physician to document why a patient's medical needs would be unrelated to the terminal prognosis.
1
Connor, Stephen. (2007). Development of Hospice and Palliative Care in the United States. OMEGA. 56(1), p89-99.
2
Harder, PharmD, CGP, Julia. (2012). To Cover or Not To Cover: Guidelines for Covered Medications in Hospice Patients. The Clinician. 7(2), p1-3.
3
Paolini, DO, Charlotte. (2001). Symptoms Management at End of Life. JAOA. 101(10). p609-615.
As stated in the December 16,1983 Hospice final rule, the fundamental premise upon which the hospice benefit was designed was the “revocation” of traditional curative care and the “election” of hospice care for end-of-life symptom management and maximization of quality of life (48 FR 56008). After electing hospice care, the patient typically returns to the home from an institutionalized setting or remains in the home, to be surrounded by family and friends, and to prepare emotionally and spiritually for death while receiving expert symptom management and other supportive services. Election of hospice care also includes waiving the right to Medicare payment for curative treatment for the terminal prognosis, and instead receiving palliative care to manage pain or symptoms.
The benefit was originally designed to cover hospice care for a finite period of time that roughly corresponded to a life expectancy of 6 months or less. Initially, beneficiaries could receive three election periods: Two 90-day periods and one 30-day period. Currently, Medicare beneficiaries can elect hospice care for two 90-day periods and an unlimited number of subsequent 60-day periods; however, the expectation remains that beneficiaries have a life expectancy of 6 months or less if the terminal illness runs its normal course.
C. Services Covered by the Medicare Hospice Benefit
One requirement for coverage under the Medicare Hospice Benefit is that hospice services must be reasonable and necessary for the palliation and management of the terminal illness and related conditions. Section 1861(dd)(1) of the Act establishes the services that are to be rendered by a Medicare certified hospice program. These covered services include: Nursing care; physical therapy; occupational therapy; speech-language pathology therapy; medical social services; home health aide services (now called hospice aide services); physician services; homemaker services; medical supplies (including drugs and biologics); medical appliances; counseling services (including dietary counseling); short-term inpatient care (including both respite care and procedures necessary for pain control and acute or chronic symptom management) in a hospital, nursing facility, or hospice inpatient facility; continuous home care during periods of crisis and only as necessary to maintain the terminally ill individual at home; and any other item or service which is specified in the plan of care and for which payment may otherwise be made under Medicare, in accordance with Title XVIII of the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for providing hospice care to a beneficiary who is a hospice patient be established before care is provided by, or under arrangements made by, that hospice program and that the written plan be periodically reviewed by the beneficiary's attending physician (if any), the hospice medical director, and an interdisciplinary group (described in section 1861(dd)(2)(B) of the Act). The services offered under the Medicare hospice benefit must be available, as needed, to beneficiaries 24 hours a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the implementation of the hospice benefit, the Congress expected hospices to continue to use volunteer services, though these services are not reimbursed by Medicare (see Section 1861(dd)(2)(E) of the Act and (48 FR 38149)). As stated in the August 22, 1983 Hospice proposed rule, the hospice interdisciplinary group should be comprised of paid hospice employees as well as hospice volunteers (48 FR 38149). This expectation is in line with the history of hospice and philosophy of holistic, comprehensive, compassionate, end-of-life care.
Before the Medicare hospice benefit was established, Congress requested a demonstration project to test the
feasibility of covering hospice care under Medicare. The National Hospice Study was initiated in 1980 through a grant sponsored by the Robert Wood Johnson and John A. Hartford Foundations and CMS (then, the Health Care Financing Administration (HCFA)). The demonstration project was conducted between October 1980 and March 1983. The project summarized the hospice care philosophy as the following:
• Patient and family know of the terminal condition.
• Further medical treatment and intervention are indicated only on a supportive basis.
• Pain control should be available to patients as needed to prevent rather than to just ameliorate pain.
• Interdisciplinary teamwork is essential in caring for patient and family.
• Family members and friends should be active in providing support during the death and bereavement process.
• Trained volunteers should provide additional support as needed.
The cost data and the findings on what services hospices provided in the demonstration project were used to design the Medicare hospice benefit. The identified hospice services were incorporated into the service requirements under the Medicare hospice benefit. Importantly, in the August 22, 1983 hospice proposed rule, we stated “the hospice benefit and the resulting Medicare reimbursement is not intended to diminish the voluntary spirit of hospices” (48 FR 38149).
D. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of the Act, and our regulations in part 418, establish eligibility requirements, payment standards and procedures, define covered services, and delineate the conditions a hospice must meet to be approved for participation in the Medicare program. Part 418, subpart G, provides for a per diem payment in one of four prospectively-determined rate categories of hospice care (routine home care, continuous home care, inpatient respite care, and general inpatient care), based on each day a qualified Medicare beneficiary is under hospice care (once the individual has elected). This per diem payment is to include all of the hospice services needed to manage the beneficiaries' care, as required by section 1861(dd)(1) of the Act. There has been little change in the hospice payment structure since the benefit's inception. The per diem rate based on level of care was established in 1983, and this payment structure remains today with some adjustments, as noted below:
1. Omnibus Budget Reconciliation Act of 1989
Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided for the following two changes in the methodology concerning updating the daily payment rates: (1) Effective January 1, 1990, the daily payment rates for routine home care and other services in included in hospice care were increased to equal 120 percent of the rates in effect on September 30, 1989; and (2) the daily payment rate for routine home care and other services included in hospice care for fiscal years beginning on or after October 1, 1990, were the payment rates in effect during the previous Federal fiscal year increased by the hospital market basket percentage increase.
2. Balanced Budget Act of 1997
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 updated by a factor equal to the hospital market basket percentage increase, minus 1 percentage point. Payment rates for FYs from 2002 have been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the payment rates for subsequent FYs will be the hospital market basket percentage increase for the FY. The Act requires us to use the inpatient hospital market basket to determine hospice payment rates.
3. FY 1998 Hospice Wage Index Final Rule
In the August 8, 1997 FY 1998 Hospice Wage Index final rule (62 FR 42860), we implemented a new methodology for calculating the hospice wage index based on the recommendations of a negotiated rulemaking committee. The original hospice wage index was based on 1981 Bureau of Labor Statistics hospital data and had not been updated since 1983. In 1994, because of disparity in wages from one geographical location to another, the Hospice Wage Index Negotiated Rulemaking Committee was formed to negotiate a new wage index methodology that could be accepted by the industry and the government. This Committee was comprised of representatives from national hospice associations; rural, urban, large and small hospices, and multi-site hospices; consumer groups; and a government representative. The Committee decided that in updating the hospice wage index, aggregate Medicare payments to hospices would remain budget neutral to payments calculated using the 1983 wage index, to cushion the impact of using a new wage index methodology. To implement this policy, a Budget Neutrality Adjustment Factor (BNAF) would be computed and applied annually to the pre-floor, pre-reclassified hospital wage index when deriving the hospice wage index, subject to a wage index floor.
4. FY 2010 Hospice Wage Index Final Rule
Inpatient hospital pre-floor and pre-reclassified wage index values, as described in the August 8, 1997 Hospice Wage Index final rule, are subject to either a budget neutrality adjustment or application of the wage index floor. Wage index values of 0.8 or greater are adjusted by the (BNAF). Starting in FY 2010, a 7-year phase-out of the BNAF began (August 6, 2009 FY 2010 Hospice Wage Index final rule, (74 FR 39384)), with a 10 percent reduction in FY 2010, an additional 15 percent reduction for a total of 25 percent in FY 2011, an additional 15 percent reduction for a total 40 percent reduction in FY 2012, an additional 15 percent reduction for a total of 55 percent in FY 2013, and an additional 15 percent reduction for a total 70 percent reduction in FY 2014. The phase-out would continue with an additional 15 percent reduction for a total reduction of 85 percent in FY 2015, and an additional 15 percent reduction for complete elimination in FY 2016. Note that the BNAF is an adjustment which increases the hospice wage index value. Therefore, the BNAF reduction is a reduction in the amount of the BNAF increase applied to the hospice wage index value. It is not a reduction in the hospice wage index value, or in the hospice payment rates.
5. The Affordable Care Act
Starting with FY 2013 (and in subsequent fiscal years), the market basket percentage update under the hospice payment system referenced in sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act will be annually reduced by changes in economy-wide productivity, as specified in section 1886(b)(3)(B)(xi)(II) of the Act, as amended by section 3132(a) of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act (Pub. L. 111-152) (the Affordable Care Act)). In FY 2013 through FY 2019, the market
basket percentage update under the hospice payment system will be reduced by an additional 0.3 percentage point (although for FY 2014 to FY 2019, the potential 0.3 percentage point reduction is subject to suspension under conditions as specified in section 1814(i)(1)(C)(v) of the Act).
In addition, sections 1814(i)(5)(A) through (C) of the Act, as amended by section 3132(a) of the Affordable Care Act, require hospices to begin submitting quality data, based on measures to be specified by the Secretary, for FY 2014 and subsequent fiscal years. Beginning in FY 2014, hospices which fail to report quality data will have their market basket update reduced by 2 percentage points.
Section 1814(a)(7)(D)(i) of the Act was amended by section 3132 (b)(2)(D)(i) of the Affordable Care Act, and requires, effective January 1, 2011, that a hospice physician or nurse practitioner have a face-to-face encounter with an individual to determine continued eligibility of the individual for hospice care prior to the 180th-day recertification and each subsequent recertification, and to attest that such visit took place. When implementing this provision, we decided that the 180th-day recertification and subsequent recertifications corresponded to the recertification for a beneficiary's third or subsequent benefit periods (CY 2011 Home Health Prospective Payment System final rule (75 FR 70435)). Further, section 1814(i)(6) of the Act, as amended by section 3132(a)(1)(B) of the Affordable Care Act, authorizes the Secretary to collect additional data and information determined appropriate to revise payments for hospice care and other purposes. The types of data and information suggested in the Affordable Care Act would capture accurate resource utilization, which could be collected on claims, cost reports, and possibly other mechanisms, as the Secretary determines to be appropriate. The data collected may be used to revise the methodology for determining the payment rates for routine home care and other services included in hospice care, no earlier than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. In addition, we are required to consult with hospice programs and the Medicare Payment Advisory Commission (MedPAC) regarding additional data collection and payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
When the Medicare Hospice Benefit was implemented, the Congress included an aggregate cap on hospice payments, which limits the total aggregate payments any individual hospice can receive in a year. The Congress stipulated that a “cap amount” be computed each year. The cap amount was set at $6,500 per beneficiary when first enacted in 1983 and is adjusted annually by the change in the medical care expenditure category of the consumer price index for urban consumers from March 1984 to March of the cap year (section 1814(i)(2)(B) of the Act). The cap year is defined as the period from November 1st to October 31st. As we stated in the August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR 47308 through 47314), for the 2012 cap year and subsequent cap years, the hospice aggregate cap will be calculated using the patient-by-patient proportional methodology, within certain limits. We will allow existing hospices the option of having their cap calculated via the original streamlined methodology, also within certain limits. New hospices will have their cap determinations calculated using the patient-by-patient proportional methodology. The patient-by-patient proportional methodology and the streamlined methodology are two different methodologies for counting beneficiaries when calculating the hospice aggregate cap. A detailed explanation of these methods is found in the August 4, 2011 FY 2012 Hospice Wage Index final rule (76 FR 47308 through 47314). If a hospice's total Medicare reimbursement for the cap year exceeded the hospice aggregate cap, then the hospice would have to repay the excess back to Medicare.
E. Trends in Medicare Hospice Utilization
Since the implementation of the hospice benefit in 1983, and especially within the last decade, there has been substantial growth in hospice utilization. The number of Medicare beneficiaries receiving hospice services has grown from 513,000 in FY 2000 to over 1.3 million in FY 2013. Similarly, Medicare hospice expenditures have risen from $2.9 billion in FY 2000 to an estimated $15.1 billion in FY 2013. Our Office of the Actuary (OACT) projects that hospice expenditures are expected to continue to increase, by approximately 8 percent annually, reflecting an increase in the number of Medicare beneficiaries, more beneficiary awareness of the Medicare Hospice Benefit for end-of-life care, and a growing preference for care provided in home and community-based settings. However, this increased spending is partly due to an increased average lifetime length of stay for beneficiaries, from 54 days in 2000 to 86 days in 2011, an increase of 59 percent.
There have also been noted changes in the diagnosis patterns among Medicare hospice enrollees. Specifically, there were notable increases between 2002 and 2007 in neurologically-based diagnoses, including various dementia diagnoses. Additionally, there have been significant increases in the use of non-specific, symptom-classified diagnoses, such as “debility” and “adult failure to thrive.” In FY 2012, both “debility” and “adult failure to thrive” were the first and third most common hospice diagnoses, respectively. “Debility” and “adult failure to thrive” continue to be among the most common hospice principal diagnoses (14 percent), and those, combined with “dementia” and Alzheimer's disease constituted approximately 30 percent of all claims-reported principal diagnosis codes reported in FY 2013 (see Table 2 below).
Table 2—The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007, FY 2012, FY 2013
Rank
ICD-9/Reported principal diagnosis
Count
Percentage
Year: FY 2002
1
162.9 Lung Cancer
73,769
11
2
428.0 Congestive Heart Failure
45,951
7
3
799.3 Debility Unspecified
36,999
6
4
496 COPD
35,197
5
5
331.0 Alzheimer's Disease
28,787
4
6
436 CVA/Stroke
26,897
4
7
185 Prostate Cancer
20,262
3
8
783.7 Adult Failure To Thrive
18,304
3
9
174.9 Breast Cancer
17,812
3
10
290.0 Senile Dementia, Uncomp.
16,999
3
11
153.0 Colon Cancer
16,379
2
12
157.9 Pancreatic Cancer
15,427
2
13
294.8 Organic Brain Synd Nec
10,394
2
14
429.9 Heart Disease Unspecified
10,332
2
15
154.0 Rectosigmoid Colon Cancer
8,956
1
16
332.0 Parkinson's Disease
8,865
1
17
586 Renal Failure Unspecified
8,764
1
18
585 Chronic Renal Failure (End 2005)
8,599
1
19
183.0 Ovarian Cancer
7,432
1
20
188.9 Bladder Cancer
6,916
1
Year: FY 2007
1
799.3 Debility Unspecified
90,150
9
2
162.9 Lung Cancer
86,954
8
3
428.0 Congestive Heart Failure
77,836
7
4
496 COPD
60,815
6
5
783.7 Adult Failure To Thrive
58,303
6
6
331.0 Alzheimer's Disease
58,200
6
7
290.0 Senile Dementia Uncomp.
37,667
4
8
436 CVA/Stroke
31,800
3
9
429.9 Heart Disease Unspecified
22,170
2
10
185 Prostate Cancer
22,086
2
11
174.9 Breast Cancer
20,378
2
12
157.9 Pancreas Unspecified
19,082
2
13
153.9 Colon Cancer
19,080
2
14
294.8 Organic Brain Syndrome NEC
17,697
2
15
332.0 Parkinson's Disease
16,524
2
16
294.10 Dementia In Other Diseases w/o Behav. Dist
15,777
2
17
586 Renal Failure Unspecified
12,188
1
18
585.6 End Stage Renal Disease
11,196
1
19
188.9 Bladder Cancer
8,806
1
20
183.0 Ovarian Cancer
8,434
1
Year: FY 2012
1
799.3 Debility Unspecified
161,163
12
2
162.9 Lung Cancer
89,636
7
3
783.7 Adult Failure To Thrive
86,467
7
4
428.0 Congestive Heart Failure
84,333
6
5
496 COPD
74,786
6
6
331.0 Alzheimer's Disease
64,199
5
7
290.0 Senile Dementia, Uncomp.
56,234
4
8
429.9 Heart Disease Unspecified
32,081
2
9
436 CVA/Stroke
31,987
2
10
294.10 Dementia In Other Diseases w/o Behavioral Dist
27,417
2
11
174.9 Breast Cancer
22,421
2
12
153.9 Colon Cancer
22,197
2
13
157.9 Pancreatic Cancer
22,007
2
14
332.0 Parkinson's Disease
21,183
2
15
185 Prostate Cancer
21,042
2
16
294.8 Other Persistent Mental Dis.—classified elsewhere
17,762
1
17
585.6 End Stage Renal Disease
17,545
1
18
518.81 Respiratory Failure
12,962
1
19
294.11 Dementia In Other Diseases w/Behavioral Dist
11,751
1
20
188.9 Bladder Cancer
10,511
1
Year: FY 2013
1
799.3 Debility Unspecified
127,308
9
2
428.0 Congestive Heart Failure
95,850
7
3
162.9 Lung Cancer
91,263
6
4
496 COPD
81,944
6
5
331.0 Alzheimer's Disease
79,360
6
6
783.7 Adult Failure to Thrive
71,033
5
7
290.0 Senile Dementia, Uncomp.
60,441
4
8
429.9 Heart Disease Unspecified
36,817
3
9
436 CVA/Stroke
34,330
2
10
294.10 Dementia In Other Diseases w/o Behavioral Dist
30,884
2
11
332.0 Parkinson's Disease
25,308
2
12
153.9 Colon Cancer
23,133
2
13
294.20 Dementia Unspecified w/o Behavioral Dist
23,108
2
14
174.9 Breast Cancer
22,986
2
15
157.9 Pancreatic Cancer
22,267
2
16
185 Prostate Cancer
21,701
2
17
585.6 End-Stage Renal Disease
19,212
1
18
518.81 Acute Respiratory Failure
15,900
1
19
294.8 Other Persistent Mental Dis.—classified elsewhere
14,337
1
20
294.11 Dementia In Other Diseases w/Behavioral Dist
13,648
1
Note(s): The frequencies shown represent beneficiaries that had at least one claim with the specific ICD-9-CM code reported as the principal diagnosis. Beneficiaries could be represented multiple times in the results if they have multiple claims during that time period with different principal diagnoses.
Source: FY 2002, 2007, and 2012 hospice claims data from the Chronic Conditions Data Warehouse (CCW), accessed on February 14 and February 20, 2013. FY 2013 hospice claims data from the CCW, accessed on February 27, 2014.
III. Provisions of the Proposed Rule
A. Hospice Payment Reform: Research and Analyses
In 2010, the Congress amended section 1814(i)(6) of the Act with section 3132(a) of the Affordable Care Act. The amendment authorized the Secretary to collect additional data and information determined appropriate to revise payments for hospice care and for other purposes. The data collected may be used to revise the methodology for determining the payment rates for routine home care and other services included in hospice care, no earlier than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. We are also required to consult with hospice programs and the Medicare Payment Advisory Commission (MedPAC) regarding additional data collection and payment revision options. Since 2010, we have been working with our hospice reform contractor, Abt Associates, to review the most current peer-reviewed literature; conduct research and analyses; identify potential vulnerabilities in the current payment system; and research and develop hospice payment model options. We recently required additional information on hospice claims regarding drugs and certain durable medical equipment, effective April 1, 2014; and are in the process of finalizing changes to the hospice cost report to better collect data on the costs of providing hospice care. The additional information on hospice claims and the hospice cost report will be used in our hospice payment reform efforts, once the data are available for analysis.
The research and analyses conducted thus far on available Medicare claims and cost report data have highlighted hospice utilization trends that could raise concerns regarding the viability of the Medicare hospice program and the impact of beneficiary access to quality end of life care. In March 2009, the Medicare Payment Advisory Commission (MedPAC) recommended that Medicare improve its payment system for hospice services to address a misalignment between Medicare's payments and hospice's costs that created incentives for providers to enroll patients who are more likely to have long stays because those stays are more profitable than short ones (
http://www.medpac.gov/chapters/Mar09_Ch06.pdf
). MedPAC 's June 2013 Report To Congress on Medicare and the Health Care Delivery System reiterated concerns about utilization trends and suggested that such trends were driven by a misalignment in the payment system (
http://www.medpac.gov/chapters/Jun13_Ch05.pdf
). MedPAC's June 2013 report added that, while payment reform would better align payments with costs, additional administrative controls were necessary to balance incentives and strengthen provider compliance. As such, we believe that a critical goal of the Medicare hospice payment system is to strengthen and safeguard the current scope of the Medicare hospice benefit. This will provide a solid foundation on which to reform the methodology used to pay for Medicare hospice services. Program integrity is being addressed immediately while we fully develop our data and research to address payment reform in the near future.
Abt Associates, with its subcontractor Brown University, has developed a technical report entitled, “Medicare Hospice Payment Reform: Analyses to Support Payment Reform”, dated May 1, 2014 (hereafter, referred to as the May 2014 Technical Report) that thoroughly describes the analytic file and extensive work performed on analyzing current hospice utilization data, of which many of the results of the analyses are presented in this proposed rule. Both the May 2014 Technical Report and an updated literature review will be available on our hospice center Web page in May, 2014 at:
http://www.cms.gov/Center/Provider-Type/Hospice-Center.html
in the “Research and Analyses” section. We further examined hospice utilization data and developed a provider-level file to identify aberrant hospice behavior. The provider-level file contains information on beneficiaries who were discharged (alive or deceased) in Calendar Year (CY) 2012 and includes claims data from January 1, 2010 through December 31, 2012. Some of the findings described in this section, are based on this provider-level file.
1. Beneficiaries Dying Without Skilled Visits in the Last Days of Life
Hospice clinicians are experts in recognizing changes as a patient is approaching the last few days of life and helping to prepare and support the patient and family. Most individuals approaching end-of-life have noted declines over the several days prior to death. As such, the expectation is that there would be an increased need for hospice services in the days leading up to the hospice beneficiary's death. Although we recognize that prognostication is not an exact science, there are hallmark physical, functional, nutritional and cognitive changes that are typically present leading up the hospice patient's death (see section III.C of this proposed rule).
When looking at skilled visits provided in the last days of life, as reported on the hospice claim, our
analysis found that a relatively high percentage (28.9 percent) of hospice decedents who were receiving RHC on their last day of life did not receive a skilled visit on that day (see Table 3 below). This could be explained, in part, by sudden or unexpected death. Expanding this analysis to skilled visits provided in the last two to four days of life, we found that 14.4 percent of hospice decedents did not receive skilled visits in the last 2 days of life and 6.2 percent of hospice decedents did not receive skilled visits in the last 4 days of life. While this could also be explained, in part, by sudden or unexpected death, we are concerned with the possibility that those beneficiaries and their families are not receiving hospice care and support at the very end of life. If hospices are actively engaging with the beneficiary and the family throughout the election period, we would expect to see skilled visits during those last days of life.
Table 3—Frequency and Percentage of Decedents Not Receiving Skilled Visits at the End of Life, Calendar Year 2012
Number of
decedents
Percentage of decedents with no skilled
visits
No skilled visits on last day (and last day was RHC)
656,355
28.9
No skilled visits on last two days (and last two days were RHC)
622,334
14.4
No skilled visits on last three days (and last three days were RHC)
585,648
9.1
No skilled visits on last four days (and last four days were RHC)
551,359
6.2
Note(s): Skilled visit was considered to be a visit from a social worker, therapist, or nurse.
Source: Beneficiaries whose last days of hospice enrollment were billed to the RHC level of care using 100% of hospice days from the Hospice Standard Analytic File (SAF), Calendar Year (CY) 2012.
Further analysis of skilled visits during the last two days of life found that 10.3 percent of very short stay decedents (5 days or less) did not receive skilled visits during the last two days of life. In contrast, 15.9 percent of decedents with lengths of stay 181 days or longer did not receive visits in the last two days of life. Newer hospices (5 years or less since Medicare certification) were more likely to have decedents with no skilled visits during the last two days of life (17.8 percent) compared to older hospices (6 years or more since Medicare certification) (14.0 percent). We also found geographic differences in this analysis. The five states with the lowest percentage of decedents with no skilled visits on the last two days of life included: Wisconsin (5.7 percent), North Dakota (7.3 percent), Vermont (7.5 percent), Tennessee (7.5 percent), and Kansas (8.7 percent). The five states with the highest percentage of decedents with no skilled visits on the last two days of life included: New Jersey (23 percent), Massachusetts (22.9 percent), Oregon (21.2 percent), Washington (21 percent), and Minnesota (19.4 percent).
Using the provider-level file referenced above, we also found that, on average, hospices did not report any skilled visits in the last two days of life for 9.7 percent of their decedents who died receiving routine home care.
4
Nearly 5 percent of hospices did not provide any skilled visits in the last two days of life to more than 50 percent of their decedents receiving routine home care on those last two days; the average lifetime length of stay among those decedents was 143 days. We note that the average lifetime length of stay in our provider-level file was 95.4 days (among beneficiaries who were discharged alive or deceased in CY 2012). Furthermore, we found that 34 hospices did not make any skilled visits in the last 48 hours of life to any of their decedents who died while receiving routine home care.
4
The provider-level analysis conducted on whether skilled visits were provided in the last two days of life only examined instances where the decedent was receiving routine home care in the last two days of life. We note that 21 providers did not have any decedents that died while on routine home care.
2. General Inpatient Care, Continuous Home Care, and Inpatient Respite Care Utilization
Medicare Conditions of Participation require hospices to demonstrate that they are able to provide all four levels of care—Routine Home Care (RHC), General Inpatient Care (GIP), Continuous Home Care (CHC) and Inpatient Respite Care (IRC) to be a certified Medicare hospice provider. As stated in our regulations at § 418.302(b)(4), a general inpatient care (GIP) day is a day in which an individual who has elected hospice care, receives general inpatient care in an inpatient facility for pain control or acute or chronic symptom management which cannot be managed in other settings. For FY 2014, the payment rate for GIP was $694.19 per day compared to $156.06 for a day of RHC.
While the goal of hospice care is to allow for the individual to remain in his or her home environment, circumstances during the end-of-life may necessitate short-term inpatient admission to a hospital, skilled nursing facility (SNF), or hospice inpatient facility for procedures necessary for pain control or acute or chronic symptom management that cannot be managed in any other setting. These acute hospice care services are to ensure that any new or worsening symptoms are intensively addressed so that the individual can return to his or her home environment under a home level of care.
As part of our reform work, we analyzed CY 2012 data to better understand GIP utilization. We found that 77.3 percent of beneficiaries did not have any GIP care in 2012. Using provider-level data for beneficiaries discharged in 2012, we also found that 21.1 percent of hospices did not provide any GIP care to their beneficiaries. While there are appropriate circumstances where a hospice provides no GIP (for example, when a provider only has a few patients, none of whom needs GIP), we are concerned that more than a fifth of hospices not providing any GIP may be an indication that hospice beneficiaries do not have adequate access to a necessary level of care for acute or chronic symptom management. We also found that there were site of service differences such that the longest GIP length of stay was in the inpatient hospice setting (6.1 days) and shortest at in the inpatient hospital setting (4.5 days). Over two-thirds of GIP days were provided in an inpatient hospice setting (68 percent), and about a quarter of GIP days were provided in an inpatient hospital (24.9 percent). Only 5.5 percent of GIP days were provided in a SNF.
As stated in our regulations at § 418.302(b)(2), a continuous home care day is a day on which an individual who has elected to receive hospice care, is not in an inpatient facility, and receives hospice care consisting predominantly of nursing care on a continuous basis at home. Home health aide (also known as a hospice aide) or homemaker services, or both, may also be provided on a continuous basis. Continuous home care is only furnished during brief periods of crisis as described in § 418.204(a), and only as necessary to maintain the terminally ill patient at home. Continuous home care may be covered on a continuous basis for as much as 24 hours a day, and these periods must be predominantly nursing care per our regulations at § 418.204. A minimum of 8 hours of care must be furnished on a particular day to qualify for the continuous home care rate (§ 418.302(e)(4)).
As part of our reform work, we analyzed CY 2012 data to better understand CHC utilization. Overall, approximately 0.4 percent of all hospice days in 2012 were billed as CHC, but that percentage decreases to 0.2 when a large chain provider with a large percentage of its hospice days billed as CHC days was excluded. Although 42.7 percent of hospices billed at least 1 day of CHC, we found considerable variation in the share of CHC days among hospices that provided any CHC. Almost 90 percent of hospices that provided any CHC had less than 1 percent of their days billed as CHC, but four hospices billed more than 10 percent of their days as CHC. Forty hospices accounted for 46 percent of all CHC days and a single hospice accounted for over a quarter of all CHC days. Among hospices who billed for providing CHC, 9.4 percent provided over half of their CHC days to beneficiaries residing in a nursing home. For CHC, a hospice must provide a minimum of 8 hours of care during a 24-hour day, which begins and ends at midnight.
Finally, we analyzed inpatient respite care (IRC) utilization in CYs 2005 through 2012. IRC is provided in an approved facility, as needed, on an occasional basis to relieve the family caregivers for up to 5 consecutive days. Payment for IRC is subject to the requirement that it may not be provided consecutively for more than 5 days at a time. As stated in our regulations at § 418.302(e)(5), payment for the sixth and any subsequent day of respite care is made at the routine home care rate. Overall, while the percentage of beneficiaries receiving at least 1 day of IRC care is increasing from 1.44 percent in CY 2005 to 3.4 percent in CY 2012, only a small percentage of beneficiaries utilize IRC. We also found that 26 percent of hospices did not bill for any IRC days in CY 2012. IRC is a critical part of the Medicare hospice benefit, providing vital support and relief to the patient's caregiver and family. We will continue to monitor utilization of IRC level of care, over time, to ensure beneficiaries receiving hospice care have access to respite services for their caregivers.
The variation in the provision of GIP, CHC, and IRC could suggest that the level of hospice care that a beneficiary receives may not always be driven by patient factors. Medicare Conditions of Participation require hospices to demonstrate that they are able to provide all four levels of care—RHC, GIP, CHC, and IRC—in order to be a certified Medicare hospice provider. We will continue to monitor GIP, CHC, and IRC use to identify hospices with aberrant utilization patterns, to identify hospices that may be in violation of the CoPs or of payment regulations, and to refer hospices identified through our analysis to Survey and Certification, to the Office of Financial Management, and to the Center for Program Integrity for further investigation.
3. Hospice Live Discharges
Currently, federal regulations allow a patient who has elected to receive Medicare hospice services to revoke that election at any time. That patient may re-elect hospice benefits at any time for any other election period that is still available. However, federal regulations provide limited opportunity for a Medicare hospice provider to discharge a patient from its care. Discharge from hospice care is permissible when the patient moves out of the provider's service area, is determined to be no longer terminally ill, or for cause. Hospices may not automatically or routinely discharge the patient at its discretion, even if the care may be costly or inconvenient. Neither should the hospice request or demand that the patient revoke his/her election.
Our regulations also describe that if the hospice patient (or his/her representative) revokes the hospice election, Medicare coverage of hospice care for the remainder of that period is forfeited. The patient may, at any time, re-elect to receive hospice coverage for any other hospice election period that he or she is eligible to receive (§ 418.28(c)(3) and § 418.24(e)). During the time period between revocation/discharge and the re-election of the hospice benefit, Medicare coverage would resume for those Medicare benefits previously waived.
Prior to 2012, claims data provided limited information about the reason a hospice patient was discharged from a hospice's care. Starting July 1, 2012, the discharge information collected on the Medicare claim was expanded to capture the reason for all types of discharge, that is, if the discharge was due to a death, revocation, transfer to another hospice, moving out of the hospice's service area, discharge for cause, or due to the patient no longer being considered terminally ill (that is, no longer qualifying for hospice services). Between 2000 and 2012, the overall rate of live discharges increased from 13.2 percent of hospice discharges to 18.1 percent in 2012. In 2010, the rate of live discharges varied by state (from 12.8 percent in Connecticut to 40.5 percent in Mississippi) and by hospice provider (from a 25th percentile 9.5 percent to 75th percentile of 26.4 percent). Furthermore, analysis of our provider-level file shows that of the 3,702 hospices in our file, 71 hospices had a live discharge on 100 percent of their beneficiaries. The average lifetime length of stay for these hospices was 193 days compared to the national average lifetime length of stay of 95.4 days (among beneficiaries who were discharged alive or deceased in CY 2012). We have shared this information with the Office of Financial Management and with the Center for Program Integrity for their review and follow-up.
One study of hospice live discharges in cancer patients noted that smaller hospices and for-profit hospices had a higher rate of hospice live discharges.
5
Our subcontractors at Brown University studied 2010 hospice live discharges among all diagnoses, finding that not-for-profit hospice programs had a lower rate of hospice live discharges than for-profit hospice programs (14.6 percent vs. 22.4 percent, p<=.001). Small for-profit hospices in operations 5 years or less had a higher rate of hospice live discharges compared to older, for-profit hospices (31.5 percent vs. 12.8 percent, p<=.001). We are also concerned over patterns of revocations and elections of the Medicare hospice benefit for the purpose of potentially avoiding costly hospitalizations or expensive procedures. In 2010, 13,770 out of the 182,172 live discharges had a pattern of hospice discharge, hospital admission, and hospice readmission. These cases
accounted for $126 million dollars in Medicare payments for the hospitalization between hospice election periods. Nearly half of these Medicare payments are accounted for in ten states with the highest rate of this pattern of discharges (that is, MS, OK, AL, SC, MD, VA, TX, NJ, GA, and LA accounted for $56.0 million dollars of the hospitalization costs).
5
Carlson MD, Herrin J, Du Q, et al. Hospice characteristics and the disenrollment of patients with cancer.
Health Serv Res.
Dec 2009;44(6):2004-2021
We understand that the rate of live discharges should not be zero, given the uncertainties of prognostication and the ability of patients and their families to revoke the hospice election at any time. However, Medicare hospice care is a comprehensive patient and family focused care model designed to optimize quality of life by anticipating, preventing, and treating pain and symptoms. We are concerned that patterns of discharge, hospital admission, and hospice readmission do not provide a comprehensive, coordinated care experience for terminally ill patients.
4. Non-hospice Spending for Hospice Beneficiaries During an Election
When a beneficiary elects the Medicare hospice benefit, he or she waives the right to Medicare payment for services related to the terminal illness and related conditions, except for services provided by the designated hospice and the attending physician. However, Medicare payment is allowed for covered Medicare items or services which are unrelated to the terminal illness and related conditions. When a hospice beneficiary receives items or services unrelated to the terminal illness and related conditions from a non-hospice provider, that provider can bill Medicare for the items or services, but must include on the claim a GW modifier (if billed on a professional claim) or condition code 07 (if billed on an institutional claim). Prescription Drug Events (PDEs) unrelated to the terminal illness and related conditions for which hospice beneficiaries are receiving hospice care are billed to Part D and do not require a modifier or a condition code.
In follow up to our initial analysis of hospice drugs being paid through Part D (78 FR 48245-48246), we analyzed the magnitude of Medicare spending outside of the hospice benefit for items or services provided to hospice beneficiaries during a hospice election from Parts A, B, and D. In CY 2012, we found that Medicare paid $710.1 million for Part A and Part B items or services while a beneficiary was receiving hospice care. We estimated that 76.5 percent of the $710.1 million included either a GW modifier or a condition code 07 on the claim, which indicated that the services identified by the provider or supplier as unrelated to the terminal illness and related conditions. The remaining 23.5 percent of this $710.1 million was for claims without a GW modifier or condition code 07, some of which may have processed due to late filing of the notice of election (NOE).
The $710.1 million paid for Part A and Part B items or services was for durable medical equipment (7.0 percent), inpatient care (care in long-term care hospitals, inpatient rehabilitation facilities, acute care hospitals; 28.6 percent), outpatient Part B services (16.9 percent), other Part B services (also known as physician, practitioner and supplier claims, such as labs and diagnostic tests, ambulance transports, and physician office visits; 37.4 percent), skilled nursing facility care (5.7 percent), and home health care (4.5 percent). Part A and Part B non-hospice spending occurred mostly for hospice beneficiaries who were at home (43.3 percent). We also found that 28.3 percent of hospice beneficiaries were in a nursing facility, 14.1 percent were in an inpatient setting, 10.2 percent were in an assisted living facility, and 4.1 percent were in other settings. Although the average daily rate of expenditures outside the hospice benefit was $7.91, we found differences amongst states where beneficiaries receive care. The highest rates per day occurred for hospice beneficiaries residing in West Virginia ($13.91), or in the South (Florida ($13.17), Texas ($12.45), Mississippi ($11.91), and South Carolina ($10.16)).
Another area of concern in high non-hospice Medicare spending occurring during a hospice election is hospital emergency room (ER) visits and observation stays. Ninety-five percent of these ER visits and observation stays were billed and paid outside of the hospice benefit with condition code 07 on the claim. Using data on CY 2010 hospice admissions, followed through discharge or December 31, 2011 (whichever came first), we found that 8.8 percent of hospice beneficiaries had a total of 87,720 ER visits/observation stays billed to Medicare during their hospice election, at a cost of $268.4 million. The majority of these beneficiaries (77.6 percent) only experienced a single ER visit/observation stay, but 20.9 percent had between 2 and 4 ER visits/observation stays during their election, and 1.4 percent had more than 5 ER visits/observation stays during their hospice election. Although some beneficiaries may go directly to the ER rather than contacting the hospice first, 22.3 percent had 2 or more ER visits; these results may indicate that the hospice is not aware of the beneficiary's condition, the hospice is not being responsive to beneficiary needs, or related conditions are being treated as if they were unrelated. Most ER visits/observation stays occurred in younger beneficiaries with non-cancer diagnoses, in beneficiaries in newer hospices, and in beneficiaries receiving care in the South, with Mississippi and Oklahoma having the highest rates (21.1 and 20.5 ER visits/observation stays per 100 hospice admissions, respectively). The most frequently occurring Diagnostic Related Groups (DRGs) associated with these ER visits/observation stays were septicemia or severe sepsis, kidney and urinary tract infections, hip and femur procedures, simple pneumonia and pleurisy, and gastrointestinal hemorrhage. Some of these frequently occurring DRGs are conditions which are common at end-of-life, and could be attended to in the home or with a GIP level of care. This raises concerns about whether the ER visits/observation stays were actually related to the terminal illness and related conditions and should have been covered by the hospice.
In addition to analyzing data from Parts A and B of Medicare, we analyzed CY 2012 Part D data which showed $ 417.9 million in total drug spending by Medicare, states, beneficiaries, and other payers, for hospice beneficiaries during a hospice election. Table 4 details the various components of Part D spending.
Table 4—Drug Cost Sources for Hospice Beneficiaries' 2012 Drugs Received Through Part D
Component
Description
Total
Expenditures
Patient Pay Amount
The dollar amount the beneficiary paid that is not reimbursed by a third party
$48,191,067
Low Income Cost-Sharing Subsidy
Medicare payments to plans to subsidize the cost-sharing liability of qualifying low-income beneficiaries at the point of sale
117,558,814
Other True Out-of-Pocket Amount
Records all other third-party payments on behalf of beneficiary. Examples are state pharmacy assistance programs and charities
2,366,896
Patient Liability Reduction due to Other Payer Amount
Amount patient liability reduced due to other benefits. Examples are Veteran's Administration and TRICARE
3,120,834
Covered Drug Plan Paid Amount
Contains the net amount the plan paid for standard benefits
217,370,068
Non-Covered Plan Paid Amount
Contains the net amount the plan paid beyond standard benefits. Examples include supplemental drugs, supplemental cost-sharing, and OTC drugs paid under plan administrative costs
16,985,982
Components' Total
405,593,660
Unknown
Unreconciled/Unreported Difference between total Gross Drug Costs and Reported payer sources (includes sales taxes, drug dispensing fees, and drugs' ingredient costs)
12,307,603
Gross Total Drug Costs, Reported
417,901,263
Source: Abt Associates analysis of 100% 2012 Medicare Claim Files. For more information on the components above and on Part D data, go to the Research Data Assistance Center's (ResDAC's) Web site at
http://www.resdac.org/.
The portion of the $417.9 million total Part D spending which was paid by Medicare is the sum of the Low Income Cost-Sharing Subsidy and the Covered Drug Plan Paid Amount, or $334.9 million.
Medicare Spending:
In total, actual non-hospice Medicare expenditures occurring during a hospice election in CY 2012 were $710.1 million for Parts A and B spending, plus $334.9 million for Part D spending, or $1 billion dollars. This figure is comparable to the estimated $1 billion MedPAC reported during its December 2013 public meeting.
6
Associated with this $1 billion in Medicare spending were cost sharing liabilities such as co-payments and deductibles that beneficiaries incurred. Hospice beneficiaries had $135.5 million in cost-sharing for items and services that were billed to Medicare Parts A and B, and $48.2 million in cost-sharing for drugs that were billed to Medicare Part D, while they were in a hospice election. In total, this represents a 2012 beneficiary liability of $183.7 million for Parts A, B, and D items or services provided to hospice beneficiaries during a hospice election. Therefore, the total non-hospice costs paid by Medicare or due from beneficiaries for items or services provided to hospice beneficiaries during a hospice election were over $1.2 billion in CY 2012.
6
MedPAC, “Assessing payment adequacy and updating payments: hospice services”, December 13 2013. Available at:
http://www.medpac.gov/transcripts/hospice_December2013_Public.pdf.
All-Payer Spending:
Under Part D, gross covered drug cost on a claim includes the amount paid by the Part D plan, the beneficiary's cost sharing, and any amounts paid by others on the beneficiary's behalf. These latter amounts include the low-income subsidy amount paid by Medicare for beneficiaries who are subsidy-eligible, amounts paid by other payers whose payments can be counted toward the beneficiary's true out-of-pocket (TrOOP) costs, and amounts paid by others whose payments, though not TrOOP-eligible, reduce the amount of the beneficiary's liability. Accumulated gross covered drug costs are used to establish the beneficiary's position in the benefit. That is, these costs determine when the beneficiary has met plan's deductible, if any, and moves into the initial coverage period, and when his or her initial coverage period ends and the coverage gap begins. TrOOP, whether paid by the beneficiary or on the beneficiary's behalf by a TrOOP-eligible payer, determines when the beneficiary has met the annual out-of-pocket threshold and moves into the catastrophic phase of the benefit. Thus, administration of the Medicare prescription drug benefit is dependent upon both gross covered drug costs and TrOOP. As such, we are also describing total non-hospice Part D spending, both Medicare and non-Medicare. Non-hospice Part D spending for hospice beneficiaries during a hospice election was incurred by Medicare, by States, by the Veterans Administration, by TRICARE, by charities, and by other payers, in addition to the cost-sharing liabilities incurred by beneficiaries.
Part D spending by all-payers that occurs for hospice beneficiaries during a hospice election, including beneficiary cost-sharing, totaled $417.9 million in CY 2012. If this is added to the $710.1 million in Medicare spending for Parts A and B, and $135.5 million in cost sharing for Parts A and B, total non-hospice costs are $1.3 billion. We do not have data on other payers' spending for Part A or Part B services. Of note, 51.6 percent of this $1.3 billion is associated with 373 hospices, with an average total per beneficiary of $1,289 in non-hospice costs.
On December 6, 2013 and March 3, 2014, we issued memoranda to all Part D plan sponsors and Medicare hospice providers (available at
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-PartD-Payment.pdf
and
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Part-D-Payment-Hospice-Final-2014-Guidance.pdf,
respectively). These memoranda reiterated longstanding policy regarding the coverage of drugs in the Medicare hospice benefit, and Part D guidance regarding payment for drugs for hospice beneficiaries under Part D. These memoranda also contained new clarified guidance for addressing the determination of payment responsibility for Part D drugs for hospice beneficiaries in 2014 and the need for rulemaking to address the use of standardized processes for determining payment responsibility, recovering payment when the wrong party has paid, and resolving disputes regarding payment responsibility. We encourage providers to review these important memoranda at:
http://www.cms.gov/Center/Provider-Type/Hospice-Center.html,
and in section III.I in this proposed rule.
The dollars spent by Part D and by beneficiaries for drugs covered outside of the hospice benefit for hospice beneficiaries during a hospice election raise concerns about whether some of these drugs should have been paid for by the hospice. We examined drug costs incurred by hospices from 2004 to 2012, using hospice cost report data adjusted to constant 2010 dollars. We saw a declining trend in the drug costs per patient day, with costs declining from a mean of $20 per patient-day in 2004 to
$11 per patient-day in 2012 (see Table 5 below). We recognize that many hospices have become more efficient in their operations, but are concerned that the decline in drug costs is of a magnitude that could suggest that some hospices are not providing, and thus are not incurring the costs for, all needed patient medications.
Table 5—Costs per Patient-Day by Year, 2010 Dollars
2004
2005
2006
2007
2008
2009
2010
2011
2012
Number
n = 1,047
n = 1,218
n = 1,490
n = 1,694
n = 1,834
n = 1,882
n = 1,929
n = 2,015
n = 2,054
Provider-level drug costs per patient-day
Mean
$20
$18
$17
$15
$14
$13
$12
$11
$11
Std dev
(10)
(11)
(11)
(9)
(9)
(9)
(7)
(6)
(6)
Median
$20
$17
$16
$15
$14
$13
$12
$11
$10
Trimmed means
1%-99%
$21
$19
$17
$16
$15
$14
$13
$12
$11
5%-95%
$20
$18
$16
$15
$14
$13
$12
$11
$10
Source:
Freestanding hospice cost reports with HCRIS release date of 1/23/2014. The costs are averaged at the provider-level and adjusted to constant 2010 dollars using the Producer Price Index for prescription pharmaceuticals.
Notes:
We excluded cost reports with period less than 10 months or greater than 14 months, missing information or negative reported values for total costs or payments, were in the top and bottom 1% of cost per day, were in the top and bottom 5% of provider margins, and where the aggregate of cost centers does not equal total costs as reported.
We will continue to monitor non-hospice Medicare spending for beneficiaries in hospice elections.
B. Solicitation of Comments on Definitions of “Terminal Illness” and “Related Conditions”
1. The Development of the Medicare Hospice Benefit
Dame Cicely Saunders introduced the idea of hospice care in the United States during a lecture at Yale University in 1963. During the same decade, the international best-seller,
On Death and Dying,
published in 1969, by Dr. Elisabeth Kubler-Ross, helped to bring death out of secrecy and brought new public awareness and discussion about dying for the first time. Her interviews with over 500 dying patients shed new light on the dying process, as well as the needs and treatment wishes of those who were at the end-of-life. Her hallmark work argued for end-of-life care provided in the home, rather than in an institution, and stressed the importance of patients' being an integral part of their treatment decision-making.
7
In 1970, there were no formal hospice programs in the United States. However, healthcare providers started to recognize the need for a care delivery model to address the needs of those individuals who no longer wanted to seek out the aggressive, medical, curative model of healthcare for advancing illnesses and injuries. They also focused on a care delivery model that would provide pain and symptom relief that would offer an alternative to hospitalization and would focus on the “total person,” as he or she approached the end-of-life. The hospice model of care, which had been previously introduced to the United States by Cicely Saunders, was viewed to be the type of care delivery model that could offer those services.
7
Story, P., Knight, C. (2004).
The Hospice/Palliative Medicine Approach to End-of-Life Care,
2nd ed. UNIPAC One.
In 1972, Dr. Elisabeth Kubler-Ross testified at the first national hearings on the subject of death with dignity, conducted by the U.S. Senate Special Committee on Aging, and the first hospice legislation was introduced in the United States Senate, but was not enacted.
8
Florence Wald, the Dean of the Yale School of Nursing, who attended the 1963 lecture given by Cicely Saunders, along with two pediatricians and a chaplain, founded the first United States hospice, Connecticut Hospice, in 1974. Ongoing meetings between hospice providers and hospice leaders evolved into the formation of the National Hospice Organization in 1978 (now called the National Hospice and Palliative Care Organization, or NHPCO). The first “Standards of a Hospice Program of Care” were published by National Hospice Organization in 1979. Even during the early stages of hospice development, hospice leaders were working with key legislative leaders to develop a system to reimburse hospice care in the United States.
9
However, it was evident that before governmental reimbursement could occur, data had to be collected and analyzed to demonstrate what hospices actually provided and what costs were involved in rendering hospice care. The Health Care Finance Administration (HCFA)—now known as the Centers for Medicare & Medicaid Services (CMS) conducted a national demonstration of 26 hospices throughout the country to study the effect of reimbursed hospice care. The results of this demonstration, as well as those sponsored by the private health insurance sector and private foundations, and along with the testimony of multiple hospice industry leaders, legislators and hospice families, helped to form the structure of the Medicare Hospice Benefit.
8
Cefalu, C., Ruiz, M. (2011).
The Medicare Hospice Benefit: A Changing Philosophy of Care?
Annals of Long Term Care: Clinical Care and Aging. 19 (1); 43-48.
9
Connor, S. (2007).
Development of Hospice and Palliative Care in the United States.
OMEGA. 56 (1); 89-99.
During Congressional committee hearings regarding the development of a Medicare hospice benefit, testimony by Paul Willging, deputy administrator of HCFA, expressed caution about embracing benefit expansions that could lead to unexpected consequences and said that HCFA “must clearly define what we would pay for and to whom, in order to meet our responsibilities to patients, providers and the taxpayers.”
10
Other stakeholders agreed that a Medicare hospice benefit needed to be structured to promote an optimum movement from a point of view of controlling costs and offering the most appropriate means of service without the development of a system that focused on just getting maximum reimbursement from Medicare.
Stakeholders also agreed that unique characteristics of hospice care should be maintained. The goal was not to have the Federal government provide total support to hospice programs; rather, legislation would be enacted that would supplement the continued support of the local community, private sector and other resources which allow hospices to maintain their unique identity, spirit of volunteerism and altruistic focus.
11
The National Hospice Organization president, Dr. Edwin Olsen, testified at the March 25, 1982 Congressional hearing that, at that time, most American hospices were community charities by design and intent, and that hospice offered an integrated service. Hospices functioned not as an add-on, but as a comprehensive alternative to the typical ways of caring for the terminally ill and their families. The hospice industry, as discussed in Dr. Olsen's testimony, was very clear that their goal was to maintain that alternative service for those who were approaching end-of-life.
10
Testimony by Paul Willging, deputy administrator of HCFA, to the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
11
Testimony by Congressman Leon Panetta, to the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
Hospice industry leaders also expressed the importance of hospice program accountability. Hospices would be accountable for and be able to control the quality and delivery of patients admitted for hospice care, instead of having to “broker” the patients out to other providers for reimbursement and convenience.
12
Hospice advocates stressed the importance of maintaining continuous clinical control over all aspects of care to ensure a successful hospice program and framers of the benefit recognized this fact by requiring professional management responsibility.
13
Although there were ongoing concerns by HCFA, the Congress, and the hospice industry about the potential misuse of a new hospice benefit,
14 15
Section 122 of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 (Pub. L. 97-248, enacted on September 3, 1982) expanded the scope of Medicare benefits by authorizing coverage for hospice care for terminally ill beneficiaries.
12
Written testimony by Dr. Edwin J. Olsen, director of the National Hospice Organization, to the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
13
Health Care Financing Administration, Office of Research and Demonstrations. September, 1987. “Medicare Hospice Benefit Program Evaluation.” Health Care Financing Extramural Report. HCFA Pub. No. 03248.
14
Testimony by Paul Willging, deputy administrator of HCFA, to the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
15
Comments by Congressman Bill Gradison, at the Hearing before the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
2. Legislative History of the Medicare Hospice Benefit
After Medicare coverage of hospice care was authorized by the Congress, the General Accounting Office (now Government Accountability Office, or GAO) summarized the legislative intent of the Medicare hospice benefit in a July 13, 1983 letter. In this letter, the GAO acknowledged that there was no standard definition of what a hospice was or what services an organization must provide to be considered a hospice. However, the GAO stated that it was generally agreed that the hospice concept in the United States is a program of care in which an organized interdisciplinary team systematically provides palliative care (relief of pain and other symptoms) and supportive services to patients with terminal illnesses.
16
This letter further states that the hospice objective is to make a patient's remaining days as comfortable and meaningful as possible and to help the family cope with the stress by making the necessary adjustments to the changes in the patient's illness and death. The GAO letter also reiterates that hospices must directly provide certain core services including nursing care, physician services and counseling services and must either directly, or through arrangements, provide physical therapy, occupational therapy, speech-language pathology, home hospice aides, homemaker services, drugs, medical supplies and appliances and short-term inpatient care. The letter concluded by stating that the Congress would continue to monitor the effectiveness of the hospice demonstration program, which was ongoing at the time of enactment, the equity of the reimbursement system, method and benefit structure put into effect under the hospice provision, including the feasibility and advisability of a prospective reimbursement system for hospice care and other aspects of the hospice program.
17
16
“Hospice Care-A Growing Concept in the United States.” (HRD-79-50), March 6, 1979.
17
GAO Letter, “Comments on the Legislative Intent of Medicare's Hospice Care Benefit,” GAO-HRD-83-72, July 12, 1983.
Further description of the Medicare hospice benefit design was provided in a report prepared by the Congressional staff for the Senate Committee on Finance on September 9, 1983. In this report, four basic principles were presented, which according to hospice advocates, distinguish hospice care from the traditional health care system:
1. The patient and his/her family are considered the unit of care.
2. A multidisciplinary team is used to assess the physical, psychological and spiritual needs of the patient and family to develop an overall plan of care and to provide coordinated care.
3. Pain and collateral symptoms associated with the terminal illness and previous treatments are controlled, but no heroic efforts are made to cure the patient.
4. Bereavement follow-up is provided to help the family cope with their emotional suffering.
18
18
“Background Materials on Medicare Hospice Benefit Including Description of Proposed Implementing Regulations,” September 9, 1983. Committee on Finance, United States Senate, 24-525 0.
It was also noted that the statute provides that an individual, upon making an election to receive hospice coverage, would be deemed to have waived payments for certain other benefits in addition to choosing a palliative mode of treatment, except in “exceptional and unusual circumstances” as the Secretary may provide (section 1812(d)(2)(A) of the Act). Furthermore, the hospice plan of care must include assessment of the individual's needs and identification of the services to meet those needs including the management of discomfort and symptom relief.
Several Senators testified at a September 15, 1983 Hearing before the Subcommittee on Health of the Committee on Finance regarding ongoing concerns with the new Medicare hospice benefit. These Senators made it clear that the new healthcare delivery system—hospice—was to offer an alternative to institutionalized care for the terminally ill. Concerns were expressed over the possibility that “store front” hospices would crop up as a result of Medicare reimbursement being made available for this service. The Senators stated that they wanted to maintain flexibility within the benefit without creating incentives for fraud and abuse.
19
Similarly, industry advocates were also concerned that availability of Medicare reimbursement would attract interest from those simply interested in a new source of revenue. The hospice industry agreed that the Medicare hospice benefit was created, not as a new revenue source for providers, but as a benefit
choice for patients and their families.
20
Terminally ill Medicare beneficiaries could decide not to elect hospice care and they would continue to be able to receive all other Medicare services available, such as home health services that include skilled nursing and home health aide care, inpatient hospital services, supplies, medications, and DME. For example, in response to recent home health rulemaking we received anecdotal comments that some home health agencies commented that they are providing palliative care to homebound terminally ill individuals who have not elected the hospice benefit. In those instances, the patient is receiving home health aide services, nursing care, and supplies needed under the home health benefit and the DME and medications that the patient needs are still covered under Medicare Parts B and D. However, we note that, with the exception of home health, these services typically have associated co-payments and would be rendered through various different providers or suppliers, perhaps with a lack of continuity and coordination that would be provided under the Medicare hospice benefit. Under the Medicare hospice benefit, the hospice-eligible individual would receive all of those services, and more, with the hospice provider assuming the clinical and professional responsibility of coordinating all of the necessary care and services without the beneficiary assuming responsibility for the associated cost sharing required outside of the hospice benefit.
19
Testimony by Senators George Mitchell and Roger W. Jepsen. Testimony before the Subcommittee on Health of the Committee on Finance, United States Senate, September 15, 1983.
20
Position paper submitted by Donald J. Gaetz, president, National Hospice Organization. “Subcontracting for Nursing Services under the Medicare Hospice Benefit.” Testimony before the Subcommittee on Health of the Committee on Finance, United States Senate, September 15, 1983.
3. Hospice Care Today
The Medicare hospice benefit was a unique addition to the U.S. health care system. Prior to the implementation of the Medicare hospice benefit, the government reimbursed providers based on the cost of delivering care. Reimbursement under the Medicare hospice benefit is a fixed, per day, per level of care prospective payment structure. By creating a fixed payment for hospice care, the provider is at risk for costs that exceed the payment amount; and, if the fixed payment exceeds the cost of care, the hospice is allowed to keep the gain. Under the Medicare hospice benefit, the provider has clinical flexibility in how hospices can render care to best meet the needs of the individual patient and his or her family. This is viewed as a joint partnership between the providers of care and the federal government to provide services and the financial payment for those services for those who are dying. Hospice advocates, during the development of the benefit, welcomed this type of reimbursement structure for the flexibility it afforded in providing individualized hospice services
21
. The hospice industry continues to recognize that the Medicare hospice benefit has always been a risk-based clinical and economic model of care stating that the fixed reimbursement model means “a fixed sum for all-inclusive end of life care.”
22
Similar to the more recent medical home model for primary care, hospice has always been patient-centered, comprehensive, team-based, coordinated, accessible, focused on quality and safety, and extends throughout the continuum of care.
21
Testimony by Dr. Daniel Hadlock, Hospice, Inc, before the Select Committee on Aging. House of Representatives, May 25, 1983.
22
“NHPCO Comments on Washington Post Article”, Retrieved on December 27, 2013.
http://www.nhpco.org/press-room/press-releases/nhpco-responds-washington-post
Throughout the development of the Medicare hospice benefit, experts in the hospice field believed that the success or failure of hospice, under Medicare, would depend on the hospice plan of care, appropriate implementation of the plan of care, and the hospice team sharing the same philosophy of patient-centered, comprehensive, and holistic care.
23
A coordinated, collaborative approach to each and every hospice patient and his or her family was considered to be the most important component of the success of the Medicare hospice benefit.
24
During the development of the Medicare hospice benefit, there were concerns by both the Congress and the hospice industry regarding the potential for fraud and abuse by some providers resulting from the enactment of a Medicare hospice benefit.
25
One drafter of the legislation expressed that he wanted to maintain benefit flexibility by allowing hospices to render individualized care, promoting access to needed services, and providing high quality care while maintaining fiscal integrity of the Medicare Trust Funds.
26
This was a benefit founded in trust—trust that hospices would provide the comprehensive care and services promised during the benefit development and trust that Medicare would be a partner in helping to share the costs.
27
It was very clear throughout the development, and years after the implementation of the Medicare hospice benefit, that hospices were expected to make good on their promise to do a better job than conventional Medicare services for those who were at end-of-life.
28
Deliberately, the law made no provision for discharging a hospice patient except under very limited circumstances and only after making attempts to rectify those circumstances.
29
This meant that once a beneficiary elected hospice and was under one of the three 60-day election periods, a hospice could not just discharge a patient for the sake of cost or convenience. Currently, there are two 90-day election periods and unlimited 60-day election periods, as long as the beneficiary continues to meet eligibility criteria. However, hospices are still limited in the reasons for discharge, and still cannot discharge a hospice beneficiary for cost or convenience. Our regulations at section 418.26(a) state the reasons a hospice can discharge a beneficiary from hospice services.
23
Cefalau, C., Ruiz, M. The Medicare Hospice Benefit: A Changing Philosophy of Care? Annals of Long-Term Care: Clinical Care and Aging. 2011; 19(1): 43-48.
24
Cefalau, C., Ruiz, M. The Medicare Hospice Benefit: A Changing Philosophy of Care? Annals of Long-Term Care: Clinical Care and Aging. 2011; 19(1): 43-48.
25
Comments by Congressman Bill Gradison, at the Hearing before the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982; Testimony by Rosemary Johnson-Hurzeler, CEO, The Connecticut Hospice, Testimony before the Subcommittee on Health of the Committee on Finance, United States Senate, September 15, 1983; Testimony by Margaret Cushman, MSN, RN, Chairman of Governmental Affairs, National Association of Home Health and Hospice Care (NAHC) before the Subcommittee on Health of the Committee on Finance, United States Senate, September 15, 1983.
26
Comments by Congressman Bill Gradison, at the Hearing before the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
27
Testimony by Congressman Leon Panetta, to the Subcommittee on Health of the Committee of Ways and Means, House of Representatives, March 25, 1982.
28
Hoyer, T. (1998). A History of the Medicare Hospice Benefit. The Hospice Journal, 13(1-2), 61-69.
29
Hoyer, T. (1998). A History of the Medicare Hospice Benefit. The Hospice Journal, 13(1-2), 61-69.
Since the implementation of the Medicare hospice benefit, hospice utilization continues to grow. More Medicare beneficiaries are becoming aware and educated of the benefits of hospice care. In recent years, the percentage of Medicare deaths for patients under a hospice election has increased from 20 percent in 2000 to 44 percent in 2012. Total expenditures have increased from over $9.2 billion in 2006 to over $15.1 billion in 2013. This observed growth far outpaces the annual market basket increases and it not solely reflective of an increase in utilization. We note that average spending per
beneficiary has increased substantially between 2006 and 2013 from approximately $9,833 in 2006 to $11,458 in 2013.
30
30
Calendar year 2013 expenditures and average spending per beneficiary were calculated using hospice claims data from the Chronic Conditions Data Warehouse (CCW), accessed on February 27, 2014.
Section 3132(a) of the Affordable Care Act provides statutory authority for CMS to reform the hospice payment system no earlier than October 1, 2013. We presented data in the FY 2014 Hospice Wage Index and Payment Rate Update Final Rule, regarding diagnosis reporting on hospice claims and opioids paid under Part D for beneficiaries in a hospice election (78 FR 48234). Recent analysis of other Part A, Part B and Part D spending in 2012 (including beneficiary cost-sharing payments of $135.5 million for Parts A and B and $48.2 million for Part D) shows that there was an additional $1 billion in total Medicare spending during a hospice election (see section III.A.4). This includes Part A payments for inpatient hospitalizations and SNF stays, as well as Part B payments for outpatient and physician services, diagnostic tests and imagining, and ambulance transports, to name just a few. There is concern that many of these services should have been provided under the Medicare hospice benefit as they very likely were for services related to the terminal illness and related conditions. This strongly suggests that hospice services are being “unbundled”, negating the hospice philosophy of comprehensive, holistic care and shifting the costs to other parts of Medicare, and creating additional cost-sharing burden to those vulnerable Medicare beneficiaries who are at end-of-life. Duplicative payments for hospice-covered services also threaten the program integrity and fiscal viability of the hospice benefit.
Reports by both the Medicare Payment Advisory Committee (MedPAC) and the Office of the Inspector General (OIG) expressed similar concerns regarding the unbundling of services meant to be covered under the hospice per diem, capitated payment system. Similar to the analysis presented above, MedPAC also analyzed non-hospice utilization and spending patterns through Parts A, B and D for Medicare hospice beneficiaries. MedPAC also concluded that over $1 billion FFS spending was attributed to providing services reported as unrelated to the terminal conditions of hospice enrollees. MedPAC went on to state that 58 percent of Medicare hospice enrollees received a service or drug outside of the hospice benefit over the course of a hospice episode. The highest shares of spending were on drugs and inpatient services.
31
In addition, the OIG reported in June of 2012 that Medicare could be paying twice for prescription drugs for beneficiaries receiving services under the Medicare hospice benefit and recommended that CMS increase its oversight to make sure that Part D is not paying for medications already included in the Medicare hospice per diem payment rates.
32
As a result of the OIG report, the CMS' Center for Program Integrity (CPI) began recoupment efforts for analgesics from Part D plan sponsors.
31
MedPAC, “Assessing payment adequacy and updating payments: hospice services”, December 13 2013. Available at:
http://www.medpac.gov/transcripts/hospice_December2013_Public.pdf.
32
Office of the Inspector General, Department of Health and Human Services. Medicare Could be Paying Twice for Prescription Drugs for Beneficiaries in Hospice. June, 2012. A-06-10-00059.
Ongoing Part D memo guidance has also been issued to clarify existing coverage and payment policies. The most recent Part D guidance was provided in the March 10, 2014 memorandum entitled, `Part D Payment for Drugs for Beneficiaries Enrolled in Hospice—Final 2014 Guidance' (
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Part-D-Payment-Hospice-Final-2014-Guidance.pdf
) In addition, this rule solicits comments on processes that could be developed to address the inappropriate Part D reimbursement for medications that should be covered under the Medicare hospice per diem (see Section III.I). The purpose of these Part D guidance memos, in response to OIG reports of possible duplication of payment for drugs under the hospice per diem and Part D plans, was to outline the expectations regarding coordination of benefits and coverage responsibility between Part D plan sponsors and hospices. The ongoing concern is that hospices are not providing the broad range of medications required by hospice beneficiaries during a hospice election, especially for those drugs classified as analgesics, antianxiolytic, antiemetics and laxatives (generally considered essential medications for palliation in a hospice population).
33
Comments received, regarding this memo guidance, highlighted that there are multiple interpretations as to the meaning of what are considered “related conditions.” Additionally, it was noted in these comments that the terms, “terminal illness”, “terminal diagnosis”, “qualifying terminal diagnosis”, and “terminal prognosis” were used interchangeably and with varying interpretations as to their meanings.
33
World Health Organization. (January, 2013). Essential Medications in Palliative Care.
We believe summary of the “Development of the Hospice Benefit” and the “Legislative history of the Medicare Hospice Benefit” clearly captures the expectation that hospices are to provide holistic and comprehensive services under the Medicare hospice benefit. As stated in the 1983 proposed and final rules, and reiterated in the FY 2014 Hospice Wage Index and Rate Update proposed and final rules: “It is our general view that the waiver required by law is a broad one and that hospices are required to provide virtually all of the care that is needed by terminally ill patients” (48 FR 56010). Our expectation continues to be that hospices offer and provide comprehensive, virtually all-inclusive care, and in a better, more humane way, than is available in other healthcare settings. In order to preserve the Medicare hospice benefit and ensure that Medicare beneficiaries continue to have access to comprehensive, high-quality and appropriate end-of-life hospice care, we will continue to examine program vulnerabilities and implement appropriate safeguards in the Medicare hospice benefit, when appropriate.
4. Definition of “Terminal Illness”
Since the implementation of the Medicare hospice benefit, we have defined a “terminally ill” individual to mean “that the individual has a medical prognosis that his or her life expectancy is 6 months or less if the illness runs its normal course” (§ 418.3). We have always interpreted “terminally ill” to mean a time frame of life expectancy and expect that the individual's whole condition plays a role in that prognosis. Comments received in response to prior years' proposed rules state that longstanding, preexisting conditions should not be considered related to a patient's terminal illness or related conditions and that chronic, stable conditions play little to no role in a patient's terminal illness or related conditions. Commenters also stated that controlled pain and symptoms are not considered to be related to a patient's terminal illness or related conditions, that not all pain is related to the terminal illness and related conditions, and that comorbidities and the maintenance of comorbidities are not related to a patient's terminal illness or related conditions. These commenters believed these types of conditions
should not be included in the bundle of services covered under the Medicare hospice benefit. As previously stated in response to those comments, we believe that these conditions are included in the bundle of covered hospice services. The original implementing regulations of the Medicare hospice benefit, beginning with the 1983 Hospice proposed and final rules (48 FR 38146 and 48 FR 56008), articulates a set of requirements that do not delineate between pre-existing, chronic, nor controlled conditions. In order to be eligible to receive hospice services under the Medicare hospice benefit, the individual must be entitled to Part A and must be certified as being terminally ill, meaning that his or her medical prognosis is a life expectancy of 6 months or less if the illness runs its normal course. We have recognized throughout the federal regulations at § 418 that the total person is to be assessed, including acute and chronic conditions, as well as controlled and uncontrolled conditions, in determining an individual's terminal prognosis. All body systems are interrelated; all conditions, active or not, have the potential to affect the total individual. The presence of comorbidities is recognized as potentially contributing to the overall status of an individual and should be considered when determining the terminal prognosis. NHPCO defines “comorbidity,” as: “known factors or pathological disease impacting on the primary health problem and generally attributed to increased risk for poor health status outcomes.”
34
34
National Hospice and Palliative Care Organization: “Standards of Practices for Hospice Programs”, 2010. Retrieved on February 20, 2014 from:
http://www.nhpco.org/nhpco-standards-practice.
We have defined palliative care—the nature of the care provided under the hospice benefit—in our regulations at § 418.3 to mean: “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.” Note that, in this definition, palliative care is to anticipate and prevent, as well as treat, suffering. This means that hospices are to be proactive in their care approach and not just reactive to pain and symptoms after they arise.
Because hospice care is unique in its comprehensive, holistic, and palliative philosophy and practice, we want to ensure that the hospice services under the Medicare hospice benefit are preserved and not diluted, or unbundled in any way. For context, the definition of illness means “an abnormal process in which aspects of the social, physical, emotional, or intellectual condition and function of a person are diminished or impaired compared with that person's previous condition”.
35
An intensive review of the history of hospice, hospice philosophy and legislative actions described above provided the basis for discussion among several CMS clinical leaders across several agency components as to the meaning of “terminal illness” within the context of the Medicare hospice benefit. After a review of all of the history listed above, the clinical collaborative effort across CMS solicits comments on defining “terminal illness” to mean: “Abnormal and advancing physical, emotional, social and/or intellectual processes which diminish and/or impair the individual's condition such that there is an unfavorable prognosis and no reasonable expectation of a cure; not limited to any one diagnosis or multiple diagnoses, but rather it can be the collective state of diseases and/or injuries affecting multiple facets of the whole person, are causing progressive impairment of body systems, and there is a prognosis of a life expectancy of six months or less”.
35
Mosby's Medical Dictionary, 8th edition, 2009, Elsevier.
We are soliciting comments on this definition for further discussion and consideration for potential future rulemaking.
5. Definition of “Related Conditions”
Section 1812(d)(2) of the Act provides that an individual, upon making an election to receive hospice coverage, would be deemed to have waived payments for certain other benefits except in “exceptional and unusual circumstances as the Secretary may provide.” Comments received on the 1983 Hospice proposed rule specifically asked for further CMS clarification regarding the concept of “related conditions.” Specifically, the commenters suggested a more detailed definition of what constitutes care for a patient's terminal illness or related conditions (which is the responsibility of the hospice) and what constitutes care for unrelated conditions (for which out-of-hospice Medicare payment may be made) (48 FR 56010). Our response was: “. . . we have not received any suggestions for identifying `exceptional or unusual' circumstances that warranted the inclusion of a specific provision in the regulations to accommodate them. Most of the comments that were made attempted to suggest this exception as a means of routinely providing non-hospice Medicare financing for the expense of costly services needed by hospice patients, and we do not view this as an appropriate interpretation of the law” (48 FR 56011). The law allows for circumstances in which services needed by a hospice beneficiary would be completely unrelated to the terminal illness and related conditions, but we believe that this situation would be the rare exception rather than the norm. We reiterated this position in the FY 2014 Hospice Wage Index and Rate Update proposed rule (78 FR 27826) as a reminder of the expectation of the holistic nature of hospice services that shall be provided under the hospice benefit, as well as to remind hospices about diagnosis reporting on hospice claims.
Therefore, in keeping with the tenets of hospice philosophy described in this section, the intent of the Medicare hospice benefit, expectations of comprehensive care, and in response to previous and ongoing stakeholder comments, the CMS clinical collaborative effort solicits comments on defining “related conditions” to mean: “Those conditions that result directly from terminal illness; and/or result from the treatment or medication management of terminal illness; and/or which interact or potentially interact with terminal illness; and/or which are contributory to the symptom burden of the terminally ill individual; and/or are conditions which are contributory to the prognosis that the individual has a life expectancy of 6 months or less”.
We solicit comments on this definition for further discussion and consideration for potential future rulemaking.
C. Guidance on Determining Beneficiaries' Eligibility for Hospice
An individual must be certified by the hospice medical director and the individual's attending physician (if designated by the individual) as being terminally ill, meaning that the individual has a medical prognosis of a life expectancy of 6 months or less in order to receive the Medicare hospice benefit. However, we also have recognized the challenges in prognostication. It has always been our expectation that the certifying physicians will use their best clinical judgment, based on the initial and updated comprehensive assessments and collaboration with the hospice interdisciplinary group (IDG) to
determine if the individual has a life expectancy of six months or less with each certification and recertification. As stated in previous rules, in reaching a decision to certify that the patient is terminally ill, the hospice medical director must consider at least the following information per our regulations at § 418.25 (b):
• Diagnosis of the terminal condition of the patient.
• Other health conditions, whether related or unrelated to the terminal condition.
• Current clinically relevant information supporting all diagnoses.
We do recognize that making a prognosis is not an exact science. Section 322 of the Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) amended section 1814(a) of the Act by clarifying that the certification of an individual who elects hospice “shall be based on the physician's or medical director's clinical judgment regarding the normal course of the individual's illness.” The amendment clarified that the certification is based on a clinical judgment regarding the usual course of a terminal illness, and recognizes the fact that making medical prognostications regarding life expectancy are not exact. However, the amendment regarding the physician's clinical judgment does not negate the fact that there must be a clinical basis for a certification. A hospice is required to make certain that the physician's clinical judgment can be supported by clinical information and other documentation that provide a basis for the certification of 6 months or less if the illness runs its normal course.
While the expectation remains that the hospice physician will determine a beneficiary's eligibility for hospice, this is not to say that this decision cannot be reviewed if there is a question as to whether the clinical documentation supports or does not support a patient's hospice eligibility as hospice services provided must be reasonable and necessary for the palliation and management of the terminal illness and related conditions. The goal of any review for eligibility is to ensure that hospices are thoughtful in their eligibility determinations so that hospice beneficiaries are able to access their benefits appropriately. CMS' right to review clinical documentation that supports physician certifications has been established in federal court and by the agency in an administrative ruling. (See, for example, HCFA Ruling, 93-1
Weight to be Given to a Treating Physician's Opinion in Determining Medicare Coverage of Inpatient Care in a Hospital or Skilled Nursing Facility
(May 18, 1993);
Maximum Comfort, Inc
v.
Leavitt
(512 F.3d 1081 (9th Cir. 2007);
MacKenzie Medical Supply
v.
Leavitt
(506 F.3d 341 (4th Cir. 2007))). In order to be covered under Medicare Part A, the care must also be reasonable and necessary. There has always been a statutory prohibition (section 1862 (a)(1)(C) of the Act) against payment under the Medicare program for services which are not reasonable and necessary for the palliation or management of terminal illness. Additionally, section 1869(a)(1) of the Act makes clear that the Secretary makes determinations concerning entitlement, coverage and payment of benefits under part A and part B of Medicare.
We are reminding providers that there are multiple public sources available to assist in determining whether a patient meets Medicare hospice eligibility criteria (that is, industry-specific clinical and functional assessment tools and information on MAC Web sites). Additionally, we expect that hospices will use their expert clinical judgment in determining eligibility for hospice services. We expect that documentation supporting a 6-month or less life expectancy is included in the beneficiary's medical record and available to the MACs when requested.
If a beneficiary improves and/or stabilizes sufficiently over time while in hospice such that he/she no longer has a prognosis of 6 months or less from the most recent recertification evaluation or definitive interim evaluation, that beneficiary should be considered for discharge from the Medicare hospice benefit. Such beneficiaries can be re-enrolled for a new benefit period when a decline in their clinical status is such that their life expectancy is again 6 months or less. On the other hand, beneficiaries in the terminal stage of their illness that originally qualify for the Medicare hospice benefit but stabilize or improve while receiving hospice care, yet have a reasonable expectation of continued decline for a life expectancy of less than 6 months, remain eligible for hospice care. The hospice medical director must assess and evaluate the full clinical picture of the Medicare hospice beneficiary to make the determination whether the beneficiary still has a medical prognosis of 6 months or less, regardless of whether the beneficiary has stabilized or improved. There are prognostication tools available for hospices to assist in thoughtful evaluation of Medicare beneficiaries for terminally ill eligibility for the Medicare hospice benefit. We expect hospice providers to use the full range of tools available, including guidelines, comprehensive assessments, and the complete medical record, as necessary, to make responsible and thoughtful determinations regarding terminally ill eligibility. We have always acknowledged the uniqueness of every Medicare beneficiary and support thorough and thoughtful evaluation in determining whether beneficiaries meet the eligibility criteria of being certified as terminally ill. We continue to support the concept of shared decision-making, patient choice and the right care at the right time to allow Medicare beneficiaries full and appropriate access to their Medicare benefits, including hospice care. Furthermore, Medicare hospice beneficiaries have certain guaranteed rights. If the hospice or designated attending physician believes that the hospice beneficiary is no longer eligible for hospice care because his or her condition has improved, and the beneficiary does not agree with that determination, the hospice beneficiary has the right to ask for a review of his or her case. The hospice should provide the hospice beneficiary with a notice that explains his or her right to an expedited review by a contracted independent reviewer hired by Medicare, called a Quality Improvement Organization (QIO). If the hospice beneficiary asks for this appeal, the QIO will determine if hospice services should continue. The QIO will determine if the beneficiary still needs hospice services. The provider is expected to continue to provide services for the patient following a favorable decision by a QIO. In the QIO decision, the QIO should advise the provider as to why it disagrees with the hospice, which should help the provider to re-evaluate the discharge decision. If at another point in time following the resumption of covered services the hospice believes that the patient is no longer hospice eligible, the provider should timely deliver a CMS-10123 to notify the patent of its decision to discharge. The patient could again appeal to the QIO. Medicare beneficiaries have the right to be included in decisions about their care, the right to a fair process to appeal decisions about payment of services, and the right to privacy and confidentiality.
D. Proposed Timeframe for Hospice Cap Determinations and Overpayment Remittances
As described in sections 1861(dd)(2)(A)(iii) and 1814(i)(2)(A) through (C) of the Act, when the Medicare hospice benefit was implemented, the Congress included 2 limits on payments to hospices: An
inpatient cap and an aggregate cap. The hospice inpatient cap limits the total number of Medicare inpatient days to no more than 20 percent of a hospice's total Medicare hospice days. The intent of the inpatient cap was to ensure that hospice remained a home-based benefit. The hospice aggregate cap limits the total aggregate payment any individual hospice can receive in a year. The intent of the hospice aggregate cap was to protect Medicare from spending more for hospice care than it would for conventional care at the end of life.
The aggregate cap amount was set at $6,500 per beneficiary when first enacted in 1983; this was an amount hospice advocates agreed was well above the average cost of caring for a hospice patient.
36
The $6,500 amount is adjusted annually by the change in the medical care expenditure category of the consumer price index for urban consumers from March 1984 to March of the cap year. For the 2013 cap year, the cap amount was $26,157.50 per beneficiary. The cap year is defined as the period from November 1st to October 31st, and was set in place in the December 16, 1983 hospice final rule (48 FR 56022).
36
National Hospice and Palliative Care Organization (NHPCO), “A Short History of the Medicare Hospice Cap on Total Expenditures.” Retrieved on February 19, 2014 at:
http://www.nhpco.org/sites/default/files/public/regulatory/History_of_Hospice_Cap.pdf.
The cap amount is multiplied by the number of Medicare beneficiaries who received hospice care from a particular hospice during the year, resulting in its hospice aggregate cap, which is the allowable amount of total Medicare payments that hospice can receive for that cap year. There are two different methods for counting a hospice's beneficiaries: The streamlined and the patient-by-patient proportional methods. Which method a hospice can use to count beneficiaries depends on a number of factors, as described in our regulations at § 418.309 and in section 90.2.3 of the hospice Benefit Policy Manual (IOM 100-02, chapter 9, available at
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c09.pdf
). A hospice's total Medicare payments for the cap year cannot exceed the hospice's aggregate cap. If its aggregate cap is exceeded, then the hospice must repay the excess back to Medicare.
While hospices rarely exceed the inpatient cap, in its March 2012 Report to the Congress, MedPAC reported that an increasing number of hospices are exceeding the aggregate cap. MedPAC also noted that above-cap hospices were almost all for-profit with very long lengths of stay, high live discharge rates, and very high profit margins before the return of cap overpayments.
37
The percentage of hospices exceeding the aggregate cap rose from 2.6 percent in 2002 to a peak of 12.5 percent in 2009. In 2010, the percentage of hospices exceeding the aggregate cap decreased to 10.1 percent.
38
37
MedPAC, “Report to Congress: Medicare Payment Policy”, March 2012, pp. 293-295, 302.
38
MedPAC, “Report to Congress: Medicare Payment Policy”, March 2013, p. 276.
Abt Associates, our hospice reform contractor, also performed analysis on the number of hospices exceeding the aggregate cap with results similar to MedPAC's, where an increasing percentage of hospices exceeded their caps from 2006 (9.1 percent) to a peak in 2009 (12.8 percent), followed by a decline through 2011 (10.5 percent). However, the analysis shows an increase in 2012, with 11.6 percent of hospices exceeding their aggregate caps. Additionally, analysis of above-cap hospices showed that the average overpayment per beneficiary has increased over time, up 35.2 percent from 2006 ($7,384) to 2012 ($9,983). Using above-cap hospices, we also found that the average overpayment amount went from $732,103 in 2006 to $440,727 in 2011, but that this downward trend is estimated to change in 2012, when the average overpayment amount is estimated to increase to $547,011.
We also compared hospices' year-end percentage of their aggregate cap total that they had received in Medicare payments over time. Specifically, we examined where hospices ended their cap year in terms of Medicare reimbursements received, relative to that year's aggregate cap limit, by comparing the 2006 cap year to the 2012 cap year. Analysis revealed that more hospices ended the 2012 cap year “just below” their aggregate cap than in 2006. The cap analyses which are referenced in this section are available in the May 2014 Technical Report which will be posted in May, 2014 on our Hospice Center Web page at:
http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
The results from these recent analyses on the hospice aggregate cap highlight the importance of hospices monitoring their aggregate cap and ensuring that the beneficiaries under their care are truly eligible for hospice services. In the FY 2010 hospice wage index proposed rule we solicited comments on the aggregate hospice cap (74 FR 18920-18922). Many commenters wanted more timely notification of cap overpayments. Many also requested that hospices be given access to beneficiaries' full hospice utilization history, as having this information would enable hospices to better manage their aggregate cap. In response to concerns from hospices, we redesigned the Provider Statistical and Reimbursement (PS&R) system in 2011, so that hospices can now easily manage their inpatient and aggregate caps. The redesigned PS&R enables hospices to calculate estimated caps to monitor their cap status at different points during the cap year, and also enables them to calculate their caps after the cap year ends.
Our current practice is for the Medicare Administrative Contractors (MACs) to complete the hospice cap determinations for both the inpatient and the aggregate caps 16 to 24 months after the cap year in order to demand any overpayment. We are concerned about this long timeframe, particularly given that the percentage of hospices exceeding the aggregate cap is increasing, along with the average overpayment per beneficiary. To better safeguard the Medicare Trust Fund, we believe that demands for cap overpayments should occur sooner. This is now possible due to the redesigned PS&R system.
Therefore, for the 2014 cap year and subsequent cap years, we propose to amend § 418.308 and require that hospices complete their inpatient and aggregate caps determination within 5 months after the cap year ends (that is, by March 31) and remit any overpayments at that time. We propose that the MACs would then reconcile all payments at the final cap determination. If a provider fails to file its inpatient and aggregate cap determination 150 days after the end of the cap year, we propose that payments to the provider would be suspended in whole or in part until the self-determined cap is filed with the Medicare contractor. We propose to further amend § 418.308 and § 405.371 to state that payments to a hospice would be suspended in whole or in part, for failure to file a self-determined inpatient and aggregate cap determination. This is similar to the current practice followed by all other provider types that file cost reports with MACs.
Hospices would be provided a pro-forma spreadsheet that they would use to calculate their caps to remit any overpayments. The redesigned PS&R system provides the inpatient days, total days, beneficiary counts, and Medicare payments that are needed to calculate any inpatient or aggregate cap overpayments. The redesigned system can provide needed data whether a
hospice uses the streamlined method or the patient-by-patient proportional method for its aggregate cap calculation. All hospices are required to register in Individuals Authorized Access to CMS Computer Services (IACS) and obtain their PS&R report from the PS&R system. Hospices experiencing difficulties can request a copy of their PS&R report from their MAC.
We invite comment on this proposal and the associated change in the regulation at § 418.308 in section VI.
E. Proposed Timeframes for Filing the Notice of Election and Notice of Termination/Revocation
1. Proposed Timeframe for Filing the Notice of Election
A distinctive characteristic of the Medicare hospice benefit is that it requires patients (or their representative) to intentionally choose hospice care through an election. As part of that election, patients (or their representative) acknowledge that they fully understand the palliative, rather than curative, nature of hospice care. Another important aspect of the election is a waiver of beneficiary rights to Medicare payment for any Medicare services related to the terminal illness and related conditions during a hospice election except when provided by, or under arrangement by, the designated hospice, or by the individual's attending physician if he/she is not employed by the designated hospice (§ 418.24(d)).
Because of this waiver, providers other than the designated hospice or attending physician cannot receive payment for services to a hospice beneficiary unless those services are unrelated to the terminal illness and related conditions. For our claims processing system to properly enforce this waiver, it is necessary that the hospice election be recorded in the claims processing system as soon as possible after the election occurs. A survey of the four Medicare hospice Medicare Administrative Contractors (MACs) revealed that 16.2 percent of NOEs are filed within 2 days of the effective date of election, 39.2 percent of NOEs are filed within 5 days of the effective date of election, and 62.1 percent of NOEs are filed within 10 days of the effective date of election. Prompt recording of the notice of election (NOE) prevents inappropriate payments, as claims filed by providers other than the hospice or the attending physician will be rejected by the system, unless those claims are for items or services unrelated to the hospice terminal illness. Prompt filing of the NOE also protects beneficiaries from financial liability from deductibles and copayments for items or services provided during a hospice election which are related to the terminal prognosis.
Once an NOE is filed, the hospice election and benefit period are established in the Common Working File (CWF) and in the Daily Transaction Reply Report (DTRR). The CWF is used by Part A and Part B providers, and the DTRR is used by Part D plan sponsors, to determine whether a beneficiary is a hospice patient. This information is necessary for providers and suppliers to properly handle claims for beneficiaries under a hospice election.
Our hospice reform contractor, Abt Associates, has performed analyses of Medicare expenditures for drugs and services provided to hospice beneficiaries during a hospice election. These analyses found that Medicare Part D was paying for many drugs which should have been provided by the hospice. We also found that Parts A and B were paying claims for items or services from non-hospice providers during a hospice election (See section III.A.4), though some of these claims may have been appropriate. Once a hospice election is established in the CWF, in order for claims from other providers to process, the claim must be from the attending physician and coded with a “GV” modifier, or for items or services unrelated to the terminal illness and related conditions and must be coded with either a condition code of “07” or a “GW” modifier. However, in calendar year 2012, 10,500 claims and 2.4 million line items, totaling $159 million were processed without the condition code or modifier. Approximately $100 million was from physician/supplier Part B claims that include claims from, for example, physicians, laboratories, and ambulance companies, and approximately $46 million was billed as durable medical equipment. This suggests that these claims may have been processed in the time between when the beneficiary elected hospice and when the hospice filed its NOE. When Parts A, B, or D pay claims for items or services during a hospice election, there is typically an associated beneficiary liability (such as deductibles or copayments). For example, in 2012 hospice beneficiary liability was $135.5 million for Part A or B claims, and $48.2 million for Part D claims, for items or services provided to hospice beneficiaries during a hospice election. We want to safeguard hospice beneficiaries from inappropriate financial liability during a hospice election for items or services that should be provided by the hospice. Please see section III.A.4 of this proposed rule and the May 2014 Technical Report, which will be posted on the CMS Hospice Center Web page in May, 2014 for more details on Medicare payments made to non-hospice providers during a hospice election for hospice beneficiaries. The hospice center Web page can be accessed at
http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.
In the April 1, 2013 CMS Part D Final Call Letter, it was noted that delays in the flow of hospice election information cause retroactive updates to the information sent to Part D plan sponsors on the DTRR, and plan sponsors requested that CMS improve the timeliness of the hospice data on the DTRR.
39
More recently, CMS issued a memorandum on December 6, 2013 entitled “Part D Payment for Drugs for Beneficiaries Enrolled in Hospice,” which sought to clarify the criteria for determining payment responsibility for drugs for hospice beneficiaries.
40
Industry commenters described the lag time in the notification of Part D plan sponsors that the beneficiary had elected hospice, revoked hospice, or been discharged alive from hospice as a key problem in determining payment responsibility. Commenters suggested that CMS require that the NOE be filed within a short timeframe of election (for example, within 48 hours).
39
CMS, “Calendar Year (CY) 2014 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter,” issued April 1, 2013; available at
http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/Announcement2014.pdf.
40
Tudor CG, Wilson L, and Majestic M. “Part D Payment for Drugs for Beneficiaries Enrolled in Hospice—Request for Comments,” memorandum issued December 6, 2013, available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/Hospice-PartD-Payment.pdf.
The CWF is also used by hospices to identify the current benefit period, which helps hospices determine when a face-to-face encounter is required. We have received requests for assistance from hospices where a beneficiary was previously admitted to and then discharged from another hospice, which had not yet filed the NOE, creating a problem for the current hospice in determining the correct benefit period. This can lead to the current hospice not meeting the face-to-face requirement. Additionally, because of sequential billing requirements, the current hospice would have to cancel its NOE and all its billing for that beneficiary, to allow the previous hospice to input its NOE and billing; once the previous hospice files its claims and records the beneficiary's discharge, the current
hospice could then resubmit its NOE and its claims. The failure of the first hospice to file its NOE promptly creates an administrative burden for the second hospice.
In summary, prompt filing of the NOE avoids compliance problems with the statutorily mandated face-to-face requirement. It also avoids creating burdensome situations for hospices when sequential billing requirements are not met. Finally, because Medicare payments for services related to the terminal illness and related conditions are waived once a hospice election is in place, it is crucial that the NOE be filed promptly to safeguard the integrity of the Medicare Trust Fund, to enable smooth and efficient operation of other Medicare benefits (like Part D), and to safeguard hospice beneficiaries from inappropriate financial liability due to copayments and deductibles for services related to the terminal prognosis. For all of these reasons, we propose that a hospice must file the NOE with its MAC within 3 calendar days after the hospice effective date of election, regardless of how the NOE is filed (by direct data entry, or sent by mail or messenger). Hospices operate 24 hours per day, 7 days per week, so meeting this proposed requirement should be a part of normal business operations. Additionally, we believe that this proposed requirement will relieve hospices of the burden created when some minority of hospices do not file their NOEs promptly, will avoid inappropriate payments to other Part A, Part B, or Part D providers, and will safeguard beneficiaries from inappropriate liability for copayments or deductibles.
Currently, payment for hospice services begins on the effective date of the hospice election, regardless of when the NOE was filed. A commenter on the December 6, 2013 CMS memorandum clarifying drug payment responsibility between Part D, hospice, and beneficiaries suggested that without enforcement actions, hospices would not file NOEs within a short timeframe. We agree that providing a consequence for failing to file NOEs timely would encourage compliance. Therefore, we propose that for those hospices that do not file the NOE timely (that is, within 3 calendar days after the effective date of election), Medicare would not cover and pay for days of hospice care from the effective date of election to the date of filing of the NOE. We propose that these days be considered the financial responsibility of the hospice; the hospice could not bill the beneficiary for them. We believe that this is a reasonable step which would not be burdensome to hospices and would help us to safeguard the integrity of the Medicare Trust Fund, and help protect beneficiaries from inappropriate liability.
Once filed, the process of posting an NOE to the CWF after direct data entry (DDE) takes 1 to 5 days, depending on the host site. If an NOE is not submitted by DDE, the current policy requires hospices to send it to the MAC by mail or messenger. This policy remains in place; however, hospices may need to use overnight mail or an overnight messenger to ensure that paper NOEs are received by the MAC within the proposed 3-calendar-day timeframe after the effective date of election. Given the extremely low volume of NOEs filed by mail or messenger (an average of 68 per year), we do not believe this proposed 3-calendar day filing of the NOE would be burdensome to hospices. Using a speedier form of delivery will ensure that a paper NOE's filing is not delayed by the transit time needed to get the document from the hospice to the MAC.
We invite comment on this proposal and the associated change in the regulation at § 418.24(a) in section VI.
2. Proposed Timeframe for Filing the Notice of Termination/Revocation
Hospices may discharge patients for only three reasons: (1) Due to cause; (2) due to the patient's no longer being terminally ill; or (3) due to the patient's moving outside the hospice's service area. In contrast, hospice patients are free to revoke their election to hospice care at any time. Upon discharge or revocation, a beneficiary resumes the Medicare coverage that had previously been waived by the hospice election. It is important for hospices to record the beneficiary's discharge or revocation in the claims processing system in a timely manner. As previously noted, a number of those commenting on the December 6, 2013 CMS memorandum clarifying drug payment responsibility between Part D, hospices, and beneficiaries wrote that it was critical for beneficiary revocations and live discharges from hospice to be recorded as soon as possible within CMS claims processing systems. Commenters wrote that prompt recording of revocations or discharges is necessary to ensure that the beneficiary is able to access needed items or services, and to ensure that payment for the item or service is from the appropriate source. Providers are allowed 12 months to file a claim, so if a hospice is not prepared to file a final claim quickly, it should instead file a termination/revocation of election notice, so that the claims processing systems are updated to no longer show the beneficiary as being under a hospice election. Hereafter, we will refer to this as a Notice of Termination or Revocation, or NOTR.
We propose to revise the regulations at § 418.26 and § 418.28 to require hospices to file a NOTR within 3 calendar days after the effective date of a beneficiary's discharge or revocation, if they have not already filed a final claim. This would safeguard beneficiaries from any delays or difficulties in accessing needed drugs, items, or services that could occur if the CWF or DTRR continued to show a hospice election in place when in fact it was revoked or a discharge occurred. It would also avoid costs and administrative burden to non-hospice providers and to the claims processing system that would occur for claims for items or services provided after discharge or revocation, which would be rejected if the claims processing systems continued to show the beneficiary as being under a hospice election.
We invite comment on this proposal and the associated changes in the regulations at § 418.26 and § 418.28 in section VI.
F. Proposed Addition of the Attending Physician to the Hospice Election Form
The term “attending physician” is defined differently in different health care settings. For the Medicare hospice benefit, “attending physician” has a specific definition found in the Social Security Act at 1861(dd)(3)(B):
“The term “attending physician” means, with respect to an individual, the physician (as defined in subsection (r)(1)) or nurse practitioner (as defined in subsection (aa)(5)), who may be employed by a hospice program, whom the individual identifies as having the most significant role in the determination and delivery of medical care to the individual at the time the individual makes an election to receive hospice care.”
Our regulations at § 418.3 include a definition for “attending physician,” based on the statutory language above. We define it as either (1) a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he or she performs that function or action; or (2) a nurse practitioner who meets the training, education, and experience requirements described elsewhere in our regulations. The definition also sets out the requirement that the patient identify the attending physician at the time he or she elects to receive hospice care, as having the most significant role in the determination and delivery of the individual's medical care.
We require that the National Provider Identifier (NPI) of the attending physician be included on the NOE and on each claim. An attending physician can be a physician or a nurse practitioner, as long as he or she meets the requirements set out above. The hospice patient (or his or her representative) chooses the attending physician, not the hospice. This differs from some non-hospice settings, where an attending may be a clinician assigned to provide care to the patient. We stress that in hospice, the attending physician, who may be a nurse practitioner, is chosen by the patient (or his or her representative), and not by the hospice. This requirement is also included as part of the CoPs at § 418.52(c)(4), which states that the patient has the right to choose his or her attending physician. The hospice CoPs at § 418.64(a)(3) further require that if the attending physician is unavailable, the hospice medical director, hospice contracted physician, and/or hospice physician employee is responsible for meeting the medical needs of the patient. Therefore, the patient should receive all needed care, whether that care is provided by hospice doctors, hospice nurse practitioners (NPs), or by the designated attending physician. Hospices can bill Part A for reasonable and necessary physician services provided to hospice beneficiaries by its doctors, regardless of whether those doctors are the designated attending. However, our regulations at § 418.304(e) do not permit Medicare to be billed for reasonable and necessary physician services provided by NPs unless the NP is the attending physician, as defined in § 418.3.
We have recently heard anecdotal reports of hospices changing a patient's attending physician when the patient moves to an inpatient setting for inpatient care, often to a nurse practitioner. We have also heard reports of hospices assigning an attending physician based upon whoever is available. MACs noted that the NPI of the attending physician reported on claims was sometimes changing, and differed from that reported on the NOE. Additionally, using CY 2010 and CY 2011 data, we found that 35 percent of beneficiaries had Part B claims during their hospice election from more than one physician who claimed to be their designated attending physician. The reports of hospices changing a patient's attending physician are of great concern since the statute emphasizes that the attending physician must be chosen by the patient (or his or her representative). Finally, we have also received anecdotal reports that some hospices are not getting the signature of the attending physician on the initial certification. If a beneficiary has designated an attending physician, that physician must sign the initial certification for Medicare to cover and pay for hospice services, unless the attending is an NP.
To ensure the attending physician of record is properly documented in the patient's medical record, we propose to amend the regulations at § 418.24(b)(1) and require the election statement to include the patient's choice of attending physician. The proposed information identifying the attending physician should be recorded on the election statement in enough detail so that it is clear which physician or NP was designated as the attending physician. Hospices have the flexibility to include this information on their election statement in whatever format works best for them, provided the content requirements in § 418.24(b) are met. The language on the election form should include an acknowledgement by the patient (or representative) that the designated attending physician was the patient's (or representative's) choice.
In addition, we further propose that if a patient (or representative) wants to change his or her designated attending physician, he or she must follow a procedure similar to that which currently exists for changing the designated hospice. Specifically, the patient (or representative) must file a signed statement, with the hospice, that identifies the new attending physician in enough detail so that it is clear which physician or NP was designated as the new attending physician. Additionally, we propose that the statement include the date the change is to be effective, the date that the statement is signed, and the patient's (or representative's) signature, along with an acknowledgement that this change in the attending physician is the patient's (or representative's) choice. The effective date of the change in attending physician cannot be earlier than the date the statement is signed. We believe that such a change would help ensure that any changes in the identity of the attending physician would be the result of the patient's free choice.
We invite comment on this proposal and the associated changes in the regulations at § 418.24(b)(1) and § 418.24(f) in section VI.
G. FY 2015 Hospice Wage Index and Rates Update
1. FY 2015 Hospice Wage Index
The hospice wage index is used to adjust payment rates for hospice agencies under the Medicare program to reflect local differences in area wage levels based on the location where services are furnished. The hospice wage index utilizes the wage adjustment factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustments, and our regulations at § 418.306(c) require each labor market to be established using the most current hospital wage data available, including any changes by the Office of Management and Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions. We have consistently used the pre-floor, pre-reclassified hospital wage index when deriving the hospice wage index. In our August 4, 2005 FY 2006 Hospice Wage Index final rule (70 FR 45130), we began adopting the revised labor market area definitions as discussed in the OMB Bulletin No. 03-04 (June 6, 2003).
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