# Medicare Program; FY 2018 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2017-08563 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** May 3, 2017 - **Citation:** 82 FR 20750 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 418 [CMS-1675-P] RIN 0938-AT00 Medicare Program; FY 2018 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. SUMMARY: This proposed rule would update the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2018. Additionally, this rule proposes changes to the hospice quality reporting program, including proposing new quality measures, soliciting feedback on an enhanced data collection instrument, and describing plans to publicly display quality measures and other hospice data. DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on June 26, 2017. ADDRESSES: In commenting, please refer to file code CMS-1675-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-1675-P, P.O. Box 8010, Baltimore, MD 21244-1850. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1675-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. Cindy Massuda, (410) 786-0652 for questions regarding the hospice quality reporting program. 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 our Web site at: ( http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html. ) 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 Impacts 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 7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule 8. IMPACT Act of 2014 9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule 10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule E. Trends in Medicare Hospice Utilization III. Provisions of the Proposed Rule A. Monitoring for Potential Impacts—Affordable Care Act Hospice Reform 1. Hospice Payment Reform: Research and Analyses a. Length of Stay and Live Discharges b. Skilled Visits in the Last Days of Life c. Non-Hospice Spending 2. Initial Analysis of Revised Hospice Cost Report Data a. Background b. Methodology c. Overall Payments and Costs and Costs by Level of Care B. Proposed FY 2018 Hospice Wage Index and Rate Update 1. Proposed FY 2018 Hospice Wage Index 2. Proposed FY 2018 Hospice Payment Update Percentage 3. Proposed FY 2018 Hospice Payment Rates 4. Hospice Cap Amount for FY 2018 C. Discussion and Solicitation of Comments Regarding Sources of Clinical Information for Certifying Terminal Illness D. Proposed Updates to the Hospice Quality Reporting Program 1. Background and Statutory Authority 2. General Considerations Used for Selection of Quality Measures for the HQRP 3. Policy for Retention of HQRP Measures Adopted for Previous Payment Determination 4. Policy for Adopting Changes to Previously Adopted Measures 5. Previously Adopted Quality Measures for FY 2018 Payment Determination and Future Years 6. Proposed Removal of Previously Adopted Measures 7. Measure Concepts Under Consideration for Future Years 8. Form, Manner, and Timing of Quality Data Submission 9. Previously Adopted APU Determination and Compliance Criteria for the HQRP 10. HQRP Submission Exemption and Extension Requirements for the FY 2019 Payment Determination and Subsequent Years 11. CAHPS® Hospice Survey Participation Requirements for the FY 2020 APU and Subsequent Years 12. HQRP Reconsideration and Appeals Procedures for the FY 2018 Payment Determination and Subsequent Years 13. Confidential Feedback Reports 14. Public Display of Quality Measures and Other Hospice Data for the HQRP IV. Collection of Information Requirements A. Hospice Item Set B. Summary of CAHPS® Hospice Survey Information Collection Requirements (OMB Control Number 0938-1257) V. Response to Comments VI. Request for Information on Medicare Flexibilities and Efficiencies VII. Regulatory Impact Analysis A. Statement of Need B. Overall Impacts C. Anticipated Effects D. Detailed Economic Analysis E. Alternatives Considered F. Accounting Statement G. Reducing Regulation and Controlling Regulatory Costs H. Conclusion 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: APU Annual Payment Update ASPE Assistant Secretary of Planning and Evaluation 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 CASPER Certification and Survey Provider Enhanced Reports CBSA Core-Based Statistical Area CCN CMS Certification Number CCW Chronic Conditions Data Warehouse CFR Code of Federal Regulations CHC Continuous Home Care CHF Congestive Heart Failure CMS Centers for Medicare & Medicaid Services COPD Chronic Obstructive Pulmonary Disease CoPs Conditions of Participation CPI-U Consumer Price Index-Urban Consumers CVA Cerebral Vascular Accident CWF Common Working File CY Calendar Year DME Durable Medical Equipment DRG Diagnostic Related Group 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 HIS Hospice Item Set HQRP Hospice Quality Reporting Program 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 IMPACT Act Improving Medicare Post-Acute Care Transformation Act of 2014 IPPS Inpatient Prospective Payment System IRC Inpatient Respite Care LCD Local Coverage Determination MAC Medicare Administrative Contractor MACRA Medicare Access and CHIP Reauthorization Act of 2015 MAP Measure Applications Partnership MedPAC Medicare Payment Advisory Commission MFP Multifactor Productivity MSA Metropolitan Statistical Area 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 OMB Office of Management and Budget PEPPER Program for Evaluating Payment Patterns Electronic Report PRRB Provider Reimbursement Review Board PS&R Provider Statistical and Reimbursement Report Pub. L. Public Law POC Plan of Care QAPI Quality Assessment and Performance Improvement QIO Quality Improvement Organization RHC Routine Home Care RN Registered Nurse SBA Small Business Administration SEC Securities and Exchange Commission SIA Service Intensity Add-on SNF Skilled Nursing Facility TEFRA Tax Equity and Fiscal Responsibility Act of 1982 TEP Technical Expert Panel UHDDS Uniform Hospital Discharge Data Set U.S.C. United States Code I. Executive Summary A. Purpose This rule proposes updates to the hospice payment rates for fiscal year (FY) 2018, as required under section 1814(i) of the Social Security Act (the Act). This rule also discusses and solicits comments on the source of the clinical information used to certify an individual as terminally ill (that is, having a life expectancy of 6 months or less as defined in section 1861(dd)(3)(A)) as required by section 1814(a)(7)(A) of the Act. Finally, this rule also proposes new quality measures and provides an update on the hospice quality reporting program (HQRP) consistent with the requirements of section 1814(i)(5) of the Act. In accordance with section 1814(i)(5)(A) of the Act, starting in FY 2014, hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to their payments. B. Summary of the Major Provisions Section III.A of this proposed rule describes monitoring activities intended to identify potential impacts related to the hospice reform policies finalized in the FY 2016 Hospice Wage Index and Payment Rate Update final rule and analyzes current trends in hospice utilization and expenditures. Section III.B.1 updates the hospice wage index with updated wage data and makes the application of the updated wage data budget neutral for all four levels of hospice care. In section III.B.2, we discuss the FY 2018 hospice payment update percentage of 1.0 percent. Sections III.B.3 and III.B.4 update the hospice payment rates and hospice cap amount for FY 2018 by the hospice payment update percentage discussed in section III.B.2. In section III.C of this proposed rule, we discuss and solicit comments on the appropriate source(s) of the required clinical information for certification of a medical prognosis of a life expectancy of 6 months or less. Finally, in section III.D of this proposed rule, we discuss updates to HQRP, including proposed changes to the CAHPS® Hospice Survey measures as well as the possibility of utilizing a new assessment instrument to collect quality data. In section III.D, we will also discuss proposed enhancements to the current Hospice Item Set (HIS) data collection instrument to be more in line with other post-acute care settings. The new data collection instrument would be a comprehensive patient assessment instrument, rather than the current chart abstraction tool. Additionally, in this section we discuss our plans for sharing HQRP data publicly later in Calendar Year (CY) 2017, as well as plans to provide public reporting via a Compare Site in CY 2017 and future years. C. Summary of Impacts Table 1—Impact Summary Table Provision description Transfers FY 2018 Hospice Wage Index and Payment Rate Update The overall economic impact of this proposed rule is estimated to be an estimated $180 million in increased payments to hospices during FY 2018. II. Background A. Hospice Care Hospice care is a comprehensive, holistic approach to treatment that recognizes that the impending death of an individual, upon his or her choice, 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 a collaboration of professionals and other caregivers, with the goal of making the beneficiary as physically and emotionally comfortable as possible. Hospice is compassionate beneficiary and family/caregiver-centered care for those who are terminally ill. 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 (§ 418.3). Palliative care is at the core of hospice philosophy and care practices, and is a critical component of the Medicare hospice benefit. See also “Medicare and Medicaid Programs: Hospice Conditions of Participation” final rule (73 FR 32088, June 5, 2008). The goal of palliative care in hospice is to improve the quality of life of beneficiaries and their families and caregivers through early identification and management of pain and other issues associated with a life limiting condition. The hospice interdisciplinary group works with the beneficiary, family, and caregivers to develop a coordinated, comprehensive care plan; reduce unnecessary diagnostics or ineffective therapies; and maintain ongoing communication with individuals and their families about changes in their condition. The beneficiary's care plan will shift over time to meet the changing needs of the individual, family, and caregiver(s) as the individual approaches the end of life. 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. When a beneficiary is terminally ill, many health problems are related to the underlying condition(s), as bodily systems are interdependent. In the 2008 Hospice Conditions of Participation final rule, we stated that “the [hospice] 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” (73 FR 32176). 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,” as defined in section 1861(dd)(3)(A) of the Act and our regulations at § 418.3; that is, the individual's prognosis is for a life expectancy of 6 months or less if the terminal illness runs its normal course. The regulations at § 418.22(b)(3) require that the certification and recertification forms include a brief narrative explanation of the clinical findings that support a life expectancy of 6 months or less. While the goal of hospice care is to allow the beneficiary to remain in his or her home, circumstances during the end-of-life may necessitate short-term inpatient admission to a hospital, skilled nursing facility (SNF), or hospice facility for necessary pain control or acute or chronic symptom management that cannot be managed in any other setting. These acute hospice care services ensure that any new or worsening symptoms are intensively addressed so that the beneficiary can return to his or her home. Limited, short-term, intermittent, inpatient respite care (IRC) is also available because of the absence or need for relief of the family or other caregivers. Additionally, an individual can receive continuous home care (CHC) during a period of crisis in which an individual requires continuous care to achieve palliation or management of acute medical symptoms so that the individual can remain at home. Continuous home care may be covered for as much as 24 hours a day, and these periods must be predominantly nursing care, in accordance with our regulations at § 418.204. A minimum of 8 hours of nursing care, or nursing and aide care, must be furnished on a particular day to qualify for the 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 and patient care representatives with disabilities consistent with section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act. Additionally, they must 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 programs were originally operated 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 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 beneficiary “electing” the hospice benefit and being certified as terminally ill were two key components of 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 Act, 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 beneficiary's physical, psychosocial, emotional, and spiritual needs related to the terminal illness and related conditions, and address those needs in order to promote the beneficiary'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, as well as, care for interventions to manage pain and symptoms, as described in the beneficiary's plan of care. Additionally, the hospice Conditions of Participation (CoPs) at § 418.56(c) require that the hospice must provide all reasonable and necessary services 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. 2 In the December 16, 1983 Hospice final rule (48 FR 56010), 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 conditions are considered to be related to the terminal prognosis and the responsibility of the hospice to address and treat. 1 Connor, Stephen. (2007). Development of Hospice and Palliative Care in the United States. OMEGA. 56(1), p. 89-99. 2 Paolini, DO, Charlotte. (2001). Symptoms Management at End of Life. JAOA. 101(10). p. 609-615. 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 beneficiary typically returns home from an institutional setting or remains in the home, to be surrounded by family and friends, and to prepare emotionally and spiritually, if requested, for death while receiving expert symptom management and other supportive services. Election of hospice care also requires waiving the right to Medicare payment for curative treatment for the terminal prognosis, and instead receiving palliative care to manage pain or other 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, at the beginning of each period, a physician must certify that the beneficiary has 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 biologicals); medical appliances; counseling services (including dietary counseling); short-term inpatient care in a hospital, nursing facility, or hospice inpatient facility (including both respite care and procedures necessary for pain control and acute or chronic symptom management); continuous home care during periods of crisis, and only as necessary to maintain the terminally ill individual at home; and any other item or service which is specified in the plan of care and for which payment may otherwise be made under Medicare, in accordance with Title XVIII of the Act. Section 1814(a)(7)(B) of the Act requires that a written plan for providing hospice care to a beneficiary who is a hospice patient be established before care is provided by, or under arrangements made by, 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 to beneficiaries as needed, 24 hours a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act). Upon the implementation of the hospice benefit, the Congress 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). As stated in the August 22, 1983 Hospice proposed rule, the hospice interdisciplinary group should comprise paid hospice employees as well as hospice volunteers (48 FR 38149). This expectation supports the hospice philosophy of community based, holistic, comprehensive, and compassionate end-of-life care. Before the Medicare hospice benefit was established, the Congress requested a demonstration project to test the feasibility of covering hospice care under Medicare. 3 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 and principles as the following: 3 Greer, D., Mor, V., Sherwood, S. (1983) National hospice study analysis plan. Journal of Chronic Diseases, Vol 36, 11, 737-780. https://doi.org/10.1016/0021-9681(83)90069-3. • 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 (RHC), Continuous Home Care (CHC), 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 beneficiary's 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 RHC and other services 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 RHC and other services included in hospice care for fiscal years (FYs) 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 composed 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) was 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, were subject to either a budget neutrality adjustment or application of the wage index floor. Wage index values of 0.8 or greater were adjusted by the BNAF. Starting in FY 2010, a 7-year phase-out of the BNAF began (FY 2010 Hospice Wage Index final rule, (74 FR 39384, August 6, 2009)), 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 continued with an additional 15 percent reduction for a total reduction of 85 percent in FY 2015, and an additional, and final, 15 percent reduction for complete elimination in FY 2016. We note that the BNAF was an adjustment which increased the hospice wage index value. Therefore, the BNAF phase-out reduced the amount of the BNAF increase applied to the hospice wage index value. It was not a reduction in the hospice wage index value itself or in the hospice payment rates. 5. The Affordable Care Act Starting with FY 2013 (and in subsequent FYs), the market basket percentage update under the hospice payment system referenced in sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act is subject to annual reductions related to changes in economy-wide productivity, as specified in section 1814(i)(1)(C)(iv) of the 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 specified in section 1814(i)(1)(C)(v) of the Act). In addition, sections 1814(i)(5)(A) through (C) of the Act, as added 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 of the Department of Health and Human Services (the Secretary), for FY 2014 and subsequent FYs. Beginning in FY 2014, hospices that fail to report quality data will have their market basket percentage increase reduced by 2 percentage points. Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) of the Affordable Care Act, requires, effective January 1, 2011, that a hospice physician or nurse practitioner have a face-to-face encounter with the beneficiary to determine continued eligibility of the beneficiary's hospice care prior to the 180th-day recertification and each subsequent recertification, and to attest that such visit took place. When implementing this provision, we finalized in the CY 2011 Home Health Prospective Payment System final rule (75 FR 70435) that the 180th-day recertification and subsequent recertifications would correspond to the beneficiary's third or subsequent benefit periods. Further, section 1814(i)(6) of the Act, as added by section 3132(a)(1)(B) of the 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 could capture accurate resource utilization, which could be collected on claims, cost reports, and possibly other mechanisms, as the Secretary determined to be appropriate. The data collected could be used to revise the methodology for determining the payment rates for RHC and other services included in hospice care, no earlier than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. In addition, we were 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 has been 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 was defined as the period from November 1st to October 31st. 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, we announced that subsequently, the hospice aggregate cap would be calculated using the patient-by-patient proportional methodology, within certain limits. We allowed existing hospices the option of having their cap calculated via the original streamlined methodology, also within certain limits. As of FY 2012, new hospices have their cap determinations calculated using the patient-by-patient proportional methodology. 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 payments for the cap year exceed the hospice aggregate cap, then the hospice must repay the excess back to Medicare. 7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule When electing hospice, a beneficiary waives Medicare coverage for any care for the terminal illness and related conditions except for services provided by the designated hospice and attending physician. The FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452) finalized a requirement that requires the Notice of Election (NOE) be filed within 5 calendar days after the effective date of hospice election. If the NOE is filed beyond this 5 day period, hospice providers are liable for the services furnished during the days from the effective date of hospice election to the date of NOE filing (79 FR 50474). Similar to the NOE, the claims processing system must be notified of a beneficiary's discharge from hospice or hospice benefit revocation. This update to the beneficiary's status allows claims from non-hospice providers to be processed and paid. Late filing of the NOE can result in inaccurate benefit period data and leaves Medicare vulnerable to paying non-hospice claims related to the terminal illness and related conditions and beneficiaries possibly liable for any cost-sharing of associated costs. Upon live discharge or revocation, the beneficiary immediately resumes the Medicare coverage that had been waived when he or she elected hospice. The FY 2015 Hospice Wage Index and Payment Rate Update final rule also finalized a requirement that requires hospices to file a notice of termination/revocation within 5 calendar days of a beneficiary's live discharge or revocation, unless the hospices have already filed a final claim. This requirement helps to protect beneficiaries from delays in accessing needed care (§ 418.26(e)). A hospice “attending physician” is described by the statutory and regulatory definitions as a medical doctor, osteopath, or nurse practitioner whom the beneficiary identifies, at the time of hospice election, as having the most significant role in the determination and delivery of his or her medical care. Over time, we have received reports of problems with the identification of the person's designated attending physician and a third of hospice patients had multiple providers submit Part B claims as the “attending physician,” using a claim modifier. The FY 2015 Hospice Wage Index and Payment Rate Update final rule finalized a requirement that the election form include the beneficiary's choice of attending physician and that the beneficiary provide the hospice with a signed document when he or she chooses to change attending physicians (79 FR 50479). Hospice providers are required to begin using a Hospice Experience of Care Survey for informal caregivers of hospice patients as of 2015. The FY 2015 Hospice Wage Index and Payment Rate Update final rule provided background and a description of the development of the Hospice Experience of Care Survey, including the model of survey implementation, the survey respondents, eligibility criteria for the sample, and the languages in which the survey is offered. The FY 2015 Hospice Rate Update final rule also set out participation requirements for CY 2015 and discussed vendor oversight activities and the reconsideration and appeals process for entities that failed to win CMS approval as vendors (79 FR 50496). Finally, the FY 2015 Hospice Wage Index and Payment Rate Update final rule required providers to complete their aggregate cap determination not sooner than 3 months after the end of the cap year, and not later than 5 months after, and remit any overpayments. Those hospices that fail to timely submit their aggregate cap determinations will have their payments suspended until the determination is completed and received by the Medicare Administrative Contractor (MAC) (79 FR 50503). 8. IMPACT Act of 2014 The Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113-185) (IMPACT Act) became law on October 6, 2014. Section 3(a) of the IMPACT Act mandated that all Medicare certified hospices be surveyed every 3 years beginning April 6, 2015 and ending September 30, 2025. In addition, section 3(c) of the IMPACT Act requires medical review of hospice cases involving beneficiaries receiving more than 180 days care in select hospices that show a preponderance of such patients; section 3(d) of the IMPACT Act contains a new provision mandating that the cap amount for accounting years that end after September 30, 2016, and before October 1, 2025 be updated by the hospice payment update rather than using the consumer price index for urban consumers (CPI-U) for medical care expenditures. 9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule In the FY 2016 Hospice Rate Update final rule, we created two different payment rates for RHC that resulted in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for subsequent days of hospice care (80 FR 47172). We also created a Service Intensity Add-on (SIA) payment payable for services during the last 7 days of the beneficiary's life, equal to the CHC hourly payment rate multiplied by the amount of direct patient care provided by a registered nurse (RN) or social worker that occurs during the last 7 days (80 FR 47177). In addition to the hospice payment reform changes discussed, the FY 2016 Hospice Wage Index and Payment Rate Update final rule implemented changes mandated by the IMPACT Act, in which the cap amount for accounting years that end after September 30, 2016 and before October 1, 2025 is updated by the hospice payment update percentage rather than using the CPI-U. This was applied to the 2016 cap year, starting on November 1, 2015 and ending on October 31, 2016. In addition, we finalized a provision to align the cap accounting year for both the inpatient cap and the hospice aggregate cap with the fiscal year for FY 2017 and later (80 FR 47186). This allows for the timely implementation of the IMPACT Act changes while better aligning the cap accounting year with the timeframe described in the IMPACT Act. Finally, the FY 2016 Hospice Wage Index and Payment Rate Update final rule clarified that hospices must report all diagnoses of the beneficiary on the hospice claim as a part of the ongoing data collection efforts for possible future hospice payment refinements. Reporting of all diagnoses on the hospice claim aligns with current coding guidelines as well as admission requirements for hospice certifications. 10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule In the FY 2017 Hospice Wage Index and Payment Rate Update final rule, we finalized several new policies and requirements related to the HQRP. First, we codified our policy that if the National Quality Forum (NQF) makes non-substantive changes to specifications for HQRP measures as part of the NQF's re-endorsement process, we will continue to utilize the measure in its new endorsed status, without going through new notice-and-comment rulemaking (81 FR 52160). We will continue to use rulemaking to adopt substantive updates made by the NQF to the endorsed measures we have adopted for the HQRP; determinations about what constitutes a substantive versus non-substantive change will be made on a measure-by-measure basis. Second, we finalized two new quality measures for the HQRP for the FY 2019 payment determination and subsequent years: Hospice Visits when Death is Imminent Measure Pair and Hospice and Palliative Care Composite Process Measure-Comprehensive Assessment at Admission (81 FR 52173). The data collection mechanism for both of these measures is the HIS, and the measures are effective April 1, 2017. Regarding the CAHPS® Hospice Survey, we finalized a policy that hospices that receive their CMS Certification Number (CCN) after January 1, 2017 for the FY 2019 Annual Payment Update (APU) and January 1, 2018 for the FY 2020 APU will be exempted from the Hospice CAHPS® requirements due to newness (81 FR 52182). The exemption is determined by CMS and is for 1 year only. 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 benefit utilization. The number of Medicare beneficiaries receiving hospice services has grown from 513,000 in FY 2000 to nearly 1.4 million in FY 2016. Similarly, Medicare hospice expenditures have risen from $2.8 billion in FY 2000 to approximately $16.5 billion in FY 2016. Our Office of the Actuary (OACT) projects that hospice expenditures are expected to continue to increase, by approximately 7 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. There have also been changes in the diagnosis patterns among Medicare hospice enrollees. Specifically, as described in Table 2, there have been notable increases between 2002 and 2016 in neurologically-based diagnoses, including diagnoses of Alzheimer's disease. 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 2013, “debility” and “adult failure to thrive” were the first and sixth most common hospice claims-reported diagnoses, respectively, accounting for approximately 14 percent of all diagnoses. Effective October 1, 2014, hospice claims are returned to the provider if “debility” and “adult failure to thrive” are coded as the principal hospice diagnosis as well as other ICD-9-CM (and as of October 1, 2015, ICD-10-CM) codes that are not permissible as principal diagnosis codes per ICD-9-CM (or ICD-10-CM) coding guidelines. In the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452), we reminded the hospice industry that this policy would go into effect and claims would start to be returned to the provider effective October 1, 2014. As a result of this, there has been a shift in coding patterns on hospice claims. For FY 2016, the most common hospice principal diagnoses were Alzheimer's disease, Heart Failure, Chronic Obstructive Pulmonary Disease, Lung Cancer, and Senile Degeneration of the Brain, which constituted approximately 30 percent of all claims-reported principal diagnosis codes reported in FY 2016 (see Table 2). Table 2—The Top Twenty Principal Hospice Diagnoses, FY 2002, FY 2007, FY 2013, FY 2016 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 Behavior 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 2013 1 799.3 Debility Unspecified 127,415 9 2 428.0 Congestive Heart Failure 96,171 7 3 162.9 Lung Cancer 91,598 6 4 496 COPD 82,184 6 5 331.0 Alzheimer's Disease 79,626 6 6 783.7 Adult Failure to Thrive 71,122 5 7 290.0 Senile Dementia, Uncomp. 60,579 4 8 429.9 Heart Disease Unspecified 36,914 3 9 436 CVA/Stroke 34,459 2 10 294.10 Dementia in Other Diseases w/o Behavioral Dist. 30,963 2 11 332.0 Parkinson's Disease 25,396 2 12 153.9 Colon Cancer 23,228 2 13 294.20 Dementia Unspecified w/o Behavioral Dist. 23,224 2 14 174.9 Breast Cancer 23,059 2 15 157.9 Pancreatic Cancer 22,341 2 16 185 Prostate Cancer 21,769 2 17 585.6 End-Stage Renal Disease 19,309 1 18 518.81 Acute Respiratory Failure 15,965 1 19 294.8 Other Persistent Mental Dis.—classified elsewhere 14,372 1 20 294.11 Dementia In Other Diseases w/Behavioral Dist. 13,687 1 Year: FY 2016 1 G30.9 Alzheimer's disease, unspecified 162,845 11 2 I50.9 Heart failure, unspecified 84,088 6 3 J44.9 Chronic obstructive pulmonary disease, unspecified 74,131 5 4 C34.90 Malignant Neoplasm of Unsp Part of Unsp Bronchus or Lung 57,077 4 5 G31.1 Senile degeneration of brain, not elsewhere classified 55,305 4 6 G20 Parkinson's disease 37,245 2 7 I25.10 Atherosclerotic heart disease of native coronary art without angina pectoris 33,647 2 8 J44.1 Chronic obstructive pulmonary disease with (acute) exacerbation 32,851 2 9 G30.1 Alzheimer's disease with late onset 29,223 2 10 I67.2 Cerebral atherosclerosis 27,629 2 11 C61 Malignant neoplasm of prostate 24,576 2 12 N18.6 End stage renal disease 22,261 1 13 C18.9 Malignant neoplasm of colon, unspecified 22,203 1 14 I51.9 Heart disease, unspecified 21,868 1 15 C25.9 Malignant neoplasm of pancreas, unspecified 20,400 1 16 I63.9 Cerebral infarction, unspecified 18,546 1 17 I67.9 Cerebrovascular disease, unspecified 14,879 1 18 C50.919 Malignant neoplasm of unspecified site of unspecified female breast 14,022 1 19 A41.9 Sepsis, unspecified organism 12,723 1 20 I50.22 Chronic systolic (congestive) heart failure 12,083 1 Note(s): The frequencies shown represent beneficiaries that had at least one claim with the specific ICD-9-CM/ICD-10 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 and 2007 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 June 26, 2014, and FY 2016 hospice claims data from the CCW, accessed and merged with ICD-10 codes on January 9, 2017. While there has been a shift in the reporting of the principal diagnosis as a result of diagnosis clarifications, a significant proportion of hospice claims (49 percent) in FY 2014 only reported a single principal diagnosis, which may not fully explain the characteristics of Medicare beneficiaries who are approaching the end of life. To address this pattern of single diagnosis reporting, the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50498) reiterated ICD-9-CM coding guidelines for the reporting of the principal and additional diagnoses on the hospice claim. We reminded providers to report all diagnoses on the hospice claim for the terminal illness and related conditions, including those that affect the care and clinical management for the beneficiary. Additionally, in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47201), we provided further clarification regarding diagnosis reporting on hospice claims. We clarified that hospices will report all diagnoses identified in the initial and comprehensive assessments on hospice claims, whether related or unrelated to the terminal prognosis of the individual, effective October 1, 2015. Analysis of FY 2016 hospice claims shows that 100 percent of hospices reported more than one diagnosis, with 86 percent submitting at least two diagnoses and 77 percent including at least three diagnoses. III. Provisions of the Proposed Rule A. Monitoring for Potential Impacts—Affordable Care Act Hospice Reform 1. Hospice Payment Reform: Research and Analyses This section of the proposed rule describes current trends in hospice utilization and provider behavior, such as lengths of stay, live discharge rates, skilled visits during the last days of life, and non-hospice spending. Utilization data on these metrics were examined to determine the potential impacts related to the hospice reform policies finalized in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47142), if any. Moreover, in response to Office of Inspector General (OIG) report “Hospice Inappropriately Billed Medicare Over $250 Million for General Inpatient Care” (OEI-02-10-00491) released in March 2016, which identified the drugs paid for by Part D and provided to beneficiaries during general inpatient care (GIP) stays, we have also continued to monitor non-hospice spending during a hospice election as described in this section. Additionally, we have included preliminary information on the costs of hospice care using data from the new hospice Medicare cost report, effective for cost reporting periods that began on or after October 1, 2014 (FY 2015). Section 1814(i)(6) of the Act, as amended by section 3132(a)(1)(B) of the Affordable Care Act, authorized the Secretary to collect additional data and information determined appropriate to revise payments for hospice care and other purposes, including such data sources as the Medicare cost reports. These preliminary analyses may inform future work that could include such refinements to hospice payment rates. a. Length of Stay and Live Discharges Hospice Length of Stay Eligibility under the Medicare hospice benefit is predicated on the individual being certified as terminally ill. Medicare regulations at § 418.3 define “terminally ill” 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. However, we have recognized in previous rules that prognostication is not an exact science (79 FR 50470), and thus, a beneficiary may be under a hospice election longer than 6 months, as long as there remains a reasonable expectation that the individual has a life expectancy of 6 months or less. The number of days that a hospice beneficiary receives care under a hospice election is referred to as the hospice length of stay. Hospice length of stay can be influenced by a number of factors including disease course, timing of referral, decision to resume curative treatment, and/or stabilization or improvement where the individual is no longer certified as terminally ill. Longer lengths of stay in hospice may reflect admission to hospice earlier in the disease trajectory or miscalculation of prognosis, among other situations. Shorter lengths of stay in hospice may reflect hospice election late in the disease trajectory or a rapidly progressing acute condition. This also may be due to individual reluctance to accept that his or her condition is terminal and choose the hospice benefit; inadequate knowledge regarding the breadth of services available under hospice care; cultural, ethnic, and/or religious backgrounds inhibiting or even precluding the use of hospice services; and other reasons. 4 As such, hospice lengths of stay are variable. 4 Vig, E., Starks, H., Taylor, J., Hopley, E., Fryer-Edwards, K. (2010). “Why Don't Patients Enroll in Hospice? Can We Do Anything About It?” Journal of General Internal Medicine. 25(10): 1009-19. Doi: 10.1007/s11606-010-1423-9. We examined length of stay, meaning the number of hospice days during a single hospice election at the date of live discharge or death. We also examined total lifetime length of stay, which would include the sum of all days of hospice care across all hospice elections. This would mean if a beneficiary had one hospice election, was discharged alive, and then re-elected the benefit at a later date, the sum of both elections would count towards their lifetime length of stay. In FY 2016, the average length of stay in hospice was 79 days and the average lifetime length of stay in hospice was 96.1 days. The average length of stay remained virtually the same between FY 2015 and FY 2016, 78 days compared to 79 days, respectively. The average lifetime length of stay similarly remained virtually the same between FY 2015 and FY 2016, 95.2 and 96.1 days, respectively. The median (50th percentile) length of stay in FY 2016 was 18 days. This means that half of hospice beneficiaries received care for fewer than 18 days and half received care for more than 18 days. While the median length of stay has remained relatively constant over the past several years, the average length of stay has typically increased from year to year. The Medicare hospice benefit provides four levels of care: Routine home care (RHC), general inpatient care (GIP), continuous home care (CHC), and inpatient respite care (IRC). The majority of hospice patient care is provided at the RHC level of care and can be provided wherever the patient calls “home,” including nursing homes and assisted living facilities. As indicated in Table 3 below, most hospice care (98 percent) provided is routine home care (RHC). Approximately 56 percent of all hospice days are provided at the RHC level of care in the patient's residence whereas 41 percent is provided at the RHC level of care to patients that reside in a nursing home or assisted living facility. Table 3—Share of Hospice Days by Level of Care and Site of Service, for Beneficiaries Discharged Alive or Deceased in FY 2016 Level of care Site of service Number of hospice days % of all hospice days RHC Home + Hospice Residential Facility 59,818,337 55.75 SNF/NF 25,953,198 24.19 Assisted Living Facility 18,182,931 16.95 Other 1,224,979 1.14 Total 105,179,445 98.02 GIP Inpatient Hospital 378,792 0.35 Inpatient Hospice Facility 1,060,487 0.99 Skilled Nursing Facility 59,158 0.06 Other 5,571 0.01 Total 1,504,008 1.40 CHC Home + Hospice Residential Facility 180,206 0.17 SNF/NF 42,224 0.04 Assisted Living Facility 69,849 0.07 Other 484 0.00 Total 292,763 0.27 IRC Inpatient Hospital 29,895 0.03 Inpatient Hospice Facility 111,004 0.10 SNF/NF 185,351 0.17 Other 1,490 0.00 Total 327,740 0.31 Total 107,303,956 100 Source: Common Working File (CWF). All hospice claims from 2006 to 2016 were included, for beneficiaries whose final claim in FY 2016, according to through date, for a hospice discharge (excluded status code “30”, indicating a continuing patient). Hospice days with invalid or missing site of service HCPCS code are excluded. In addition to analyzing the hospice average and average lifetime lengths of stay, we examined the average lifetime lengths of stay associated with hospice principal diagnoses by site of service at admission in FY 2015 (see Table 4 below). We limited our analysis to those beneficiaries that were receiving RHC at admission. As noted in Table 3 above, RHC was the level of care for 98 percent of all hospice days. We found that beneficiaries with chronic, progressive neurological diseases such as Alzheimer's disease and related dementias, and Parkinson's disease had the longest average lifetime lengths of stay at 165.3 days in FY 2015. Beneficiaries with Chronic Kidney Disease and cancer had shorter average lifetime lengths of stay, 57 and 63.7 days, respectively. For all diagnoses, the average lifetime length of stay was 113.5 days in FY 2015 when level of care at admission is RHC. Table 4—Average Lifetime Length of Stay by Diagnosis and Site of Service on the Day of Admission in FY 2015, When Level of Care at Admission Is RHC Primary hospice diagnosis at admission Home + hospice residential facility Number of benes Average lifetime length of stay Assisted living facility Number of benes Average lifetime length of stay SNF + LTC or non-skilled nursing facility Number of benes Average lifetime length of stay Other Number of benes Average lifetime length of stay All sites of service Number of benes Average lifetime length of stay All Diagnoses 576,657 106.75 101,085 159.77 208,747 106.21 9,530 90.90 897,298 113.51 Alzheimer's, Dementia, and Parkinson's 83,527 172.45 39,019 186.89 67,438 140.34 2,314 143.33 192,593 165.32 CVA/Stroke 32,329 95.82 9,359 98.97 23,927 77.17 971 53.56 66,668 90.06 Cancers 233,771 62.04 11,773 93.90 30,437 63.23 1,964 46.41 278,047 63.69 Chronic Kidney Disease 14,328 58.41 1,655 82.34 6,644 47.60 273 48.84 22,907 57.01 Heart (CHF and Other Heart Disease) 101,243 121.77 19,784 131.11 35,052 83.54 1,771 84.69 158,167 115.14 Lung (COPD and Pneumonias) 58,183 131.97 6,866 127.83 16,631 82.42 870 65.42 82,656 122.11 All Other Diagnoses 53,276 163.47 12,629 254.83 28,618 150.98 1,367 125.28 96,260 173.36 Source: Common Working File (CWF). All hospice claims from 2006 to 2015 were included, for beneficiaries whose final claim in FY 2015, according to through date, for a hospice discharge (excluded status code “30”, indicating a continuing patient). Diagnosis code and site of service were determined by the first hospice claim for a beneficiary. Diagnosis categories are consistent with those outlined in Abt's 2015 technical report ( https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/December-2015-Technical-Report.pdf ). Note 1: “Other” category includes inpatient hospital, inpatient hospice facility, LTCH, IPF, and places not otherwise specified. Although dementia was no longer a valid primary diagnosis for the hospice benefit, our study time period examines primary diagnoses dating back to 2006. Note 2: The data used for this table spans multiple years (2006 and forward). We were not able to convert ICD-9-CM diagnosis codes to ICD-10-CM codes, given the inherent complexities with appropriately mapping ICD-9-CM codes to ICD-10-CM codes, in time for this proposed rule. Therefore, we limited this analysis to those hospice patients that were discharged (alive or deceased) in FY 2015. As we indicated above, the average lifetime length of stay across all levels of care at admission was 96.1 days in FY 2016. However, the average lifetime length of stay was 114 days in FY 2016 when the level of care was RHC at admission (see Table 5 below). This suggests that beneficiaries not receiving RHC level of care at admission had shorter lifetime lengths of stay compared to the beneficiaries whose level of care was RHC at admission. In particular, those beneficiaries who are admitted to hospice at the GIP level of care typically are more acute and often die without transitioning to RHC and thus, have overall shorter lengths of stay. Therefore, the shorter lengths of stay for those admitted at the GIP level of care affect the overall average lifetime length of stay across all levels of care. Table 5—Average Lifetime Length of Stay Level of Care to RHC at Admission, FY 2015-FY 2016 FY 2015 Number of benes Average lifetime length of stay FY 2016 Number of benes Average lifetime length of stay Any Level of Care at Admission 1,111,967 95.16 1,117,643 96.14 RHC at Admission 897,298 113.51 909,961 114.02 Source: Common Working File (CWF). All hospice claims from 2006 to 2016 were included, for beneficiaries whose final claim in FY 2016, according to through date, for a hospice discharge (excluded status code “30”, indicating a continuing patient). Live Discharges A beneficiary who has elected hospice may revoke his or her hospice election at any time and for any reason. The regulations state that if the hospice beneficiary (or his or her representative) revokes the hospice election, the beneficiary may, at any time, re-elect to receive hospice coverage for any other hospice election period that he or she is eligible to receive (§ 418.24(e) and § 418.28(c)(3)). Immediately upon hospice revocation, Medicare coverage resumes for those Medicare benefits previously waived with the hospice election. A revocation can only be made by the beneficiary, in writing, and must specify the effective date of the revocation. A hospice cannot “revoke” a beneficiary's hospice election, nor is it appropriate for hospices to encourage, request, or demand that the beneficiary or his or her representative revoke his or her hospice election. Like the hospice election, a hospice revocation is to be an informed choice based on the beneficiary's goals, values and preferences for the services the person wishes to receive through Medicare. Federal regulations limit the circumstances in which a Medicare hospice provider may discharge a patient from its care. In accordance with § 418.26, discharge from hospice care is permissible when the patient moves out of the provider's service area, is determined to be no longer terminally ill, or for cause. Hospices may not discharge the patient at their discretion, even if the care may be costly or inconvenient for the hospice program. As we indicated in the FY 2015 Hospice Wage Index and Payment Rate Update proposed and final rules, we understand that the rate of live discharges should not be zero, given the uncertainties of prognostication and the ability of beneficiaries and their families to revoke the hospice election at any time (79 FR 26549 and 79 FR 50463). On July 1, 2012, we began collecting discharge information on the claim to capture the reason for all types of discharges which includes, death, revocation, transfer to another hospice, moving out of the hospice's service area, discharge for cause, or due to the beneficiary no longer being considered terminally ill (that is, no longer qualifying for hospice services). In FY 2016, approximately 17 percent of hospice beneficiaries were discharged alive (see Figure 1 below). Beneficiary revocations represented 38 percent of all live discharges whereas 51 percent of live discharges were instances where the beneficiary was discharged because the beneficiary was considered no longer terminally ill, and 11 percent of live discharges were instances where beneficiaries transferred to other hospices. In analyzing hospice live discharge rates over time, Figure 1 demonstrates an incremental decrease in average annual rates of live discharge rates from FY 2007 to FY 2015, but an increase in the live discharge rate between FY 2015 and FY 2016. Between FY 2007 and FY 2016, there has been a reduction in the live discharge rate of 22.8 percent over this time period. EP03MY17.000 As part of our ongoing monitoring efforts, we analyzed the distribution of live discharge rates among hospices with 50 or more discharges (discharged alive or deceased). Table 6 shows that there is significant variation in the rate of live discharge between the 10th and 90th percentiles. Most notably, hospices at the 95th percentile discharged 49.1 percent of their patients alive in FY 2016. While the live discharge rate in FY 2016 for every percentile has decreased compared to FY 2014, the median live discharge rate remains around 17 percent. Table 6—Distribution of Live Discharge Rates for Hospices With 50 or More Live Discharges, FY 2014 to FY 2016 Statistics Live discharge rate FY 2014 FY 2015 FY 2016 5th Percentile 7.5% 6.9% 6.8% 10th Percentile 9.0% 8.5% 8.4% 25th Percentile 12.4% 11.6% 11.6% Median 17.6% 16.8% 16.9% 75th Percentile 26.5% 24.6% 25.4% 90th Percentile 39.4% 35.9% 37.2% 95th Percentile 50.0% 45.6% 49.1% # Providers 3,160 3,215 3,232 Source: FY 2014, FY 2015, and FY 2016 hospice claims data from Common Working File (CWF) that list a discharge status code (meaning claims were excluded if they listed status code 30, indicating a continuing patient). Live discharges were defined as hospice claims with a status code of “01”. Finally, we looked at the distribution of live discharges by length of stay intervals. In looking at the length of stay intervals, 26 percent of the live discharges occurred within 30 days of the start of hospice care, 13 percent between 31 to 60 days, 14 percent between 61 to 90 days, 19 percent between 91 to 180 days, and 28 percent of live discharges occurred after a length of stay over 180 days of hospice care (see Figure 2 below). The proportion of live discharges occurring between the length of stay intervals was relatively constant from FY 2013 to FY 2016. Overall, our analyses do not reveal any anomalies in trends in lengths of stay and rates of live discharge at this time. However, we will continue to monitor the data available so as to identify any concerning behavior in response to recent payment policy reforms. EP03MY17.001 b. Skilled Visits in the Last Days of Life As we noted in both the FY 2016 and FY 2017 Hospice Wage Index and Payment Rate Update final rules (80 FR 47164 and 81 FR 52143, respectively), we are concerned that many hospice beneficiaries may not be receiving skilled visits during the last days of life. In the period of time immediately preceding death, patient needs typically surge and more intensive services are warranted, so we expect that the provision of care would proportionately escalate in order to meet the increased clinical, emotional, and other needs of the hospice beneficiary and his or her family and caregiver(s). The last week of life is typically the period within the terminal illness trajectory that is associated with the highest symptom burden, typically marked by impactful physical and emotional symptoms, necessitating attentive care and engagement from the integrated hospice team. In the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47164 through 47177), the Service Intensity Add-on (SIA) payment policy was finalized with an implementation date of January 1, 2016. This payment was developed in part with the objective of encouraging visits during the last days of life. Additionally, in the FY 2017 Hospice Wage Index and Payment Rate Update final rule (81 FR 52143) we finalized two new hospice quality reporting program (HQRP) measures, effective April 1, 2017: (1) Hospice Visits When Death is Imminent, assessing hospice staff visits to patients and caregivers in the last week of life; and (2) Hospice and Palliative Care Composite Process Measure, assessing the percentage of hospice patients who received care processes consistent with existing guidelines. These efforts represent meaningful advances in encouraging visits to hospice beneficiaries during the time period preceding death. In the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47164), commenters expressed concern regarding potential impacts of the new payment policies. Some noted that the new payment structures could potentially impact patient access to hospice care and articulated concerns around provider jettisoning of hospice beneficiaries, specifically around the 60-day mark of a hospice stay. In response to these concerns, we pledged to monitor real-time hospice data, evaluating for any shifts in utilization or provision of services to Medicare beneficiaries. As part of our monitoring efforts, we assessed the delivery of hospice care during the period of time preceding death. Analysis of FY 2016 claims data, which encompasses hospice claims from October 1, 2015 through September 30, 2016, shows that on any given day during the last 7 days of a hospice election, nearly 44 percent of the time the patient has not received a skilled visit (skilled nursing or social worker visit) (see Table 7 below). This figure represents an incremental improvement when compared to the figures presented in our FY 2017 Hospice Wage Index and Payment Rate Update proposed rule (81 FR 25515), where FY 2014 claims showed approximately 46 percent for this metric. Additionally, Table 7 shows that approximately 21 percent of beneficiaries did not receive a skilled visit (skilled nursing or social work visit) on the day of death in FY 2016. This value also indicates an improvement compared to the FY 2014 claims data, in which nearly 26 percent of hospice beneficiaries did not receive a skilled visit on the day of death (81 FR 25515). Table 7—Frequency and Length of Skilled Nursing and Social Work Visits (Combined) During the Last 7 Days of a Hospice Election Ending in Death, FY 2016 Visit length Days Before Death 0 days (day of death) (%) 1 day (%) 2 days (%) 3 days (%) 4 days (%) 5 days (%) 6 days (%) All 7 days combined (%) No Visit 21.2 36.7 43.7 48.9 53.1 55.8 58.0 43.6 15 Minutes to 1 Hour 25.6 30.0 28.2 26.7 25.2 24.4 23.7 26.5 1 Hour, 15 Minutes to 2 Hours 26.8 20.0 17.8 15.9 14.5 13.5 12.6 17.9 2 Hours, 15 Minutes to 3 Hours 13.8 7.1 5.8 4.9 4.3 3.9 3.5 6.6 3 Hours, 15 Minutes to 3 Hours, 45 Minutes 4.8 2.3 1.8 1.5 1.2 1.1 1.0 2.1 4 or More Hours 7.8 3.9 2.7 2.1 1.7 1.4 1.2 3.3 Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016). While Table 7 above shows the frequency and length of skilled nursing and social work visits combined during the last 7 days of a hospice election in FY 2016, Tables 8 and 9 below show the frequency and length of visits for skilled nursing and social work separately. Analysis of FY 2016 claims data shows that on any given day during the last 7 days of a hospice election, almost 47 percent of the time the patient had not received a visit by a skilled nurse, and 90 percent of the time the patient had not received a visit by a social worker (see Tables 8 and 9, respectively). We believe it is important to ensure that beneficiaries and their families and caregivers are, in fact, receiving the level of care necessary during critical periods such as the very end of life. Table 8—Frequency and Length of Skilled Nursing Visits During the Last 7 Days of a Hospice Election Ending in Death, FY 2016 Visit length Days Before Death 0 days (day of death) (%) 1 day (%) 2 days (%) 3 days (%) 4 days (%) 5 days (%) 6 days (%) All 7 days combined (%) No Visit 22.7 39.6 46.9 52.2 56.5 59.2 61.5 46.5 15 Minutes to 1 Hour 26.4 31.5 29.1 27.0 25.2 24.1 23.2 27.0 1 Hour, 15 Minutes to 2 Hours 27.3 19.0 16.8 14.9 13.4 12.5 11.5 17.2 2 Hours, 15 Minutes to 3 Hours 13.2 5.4 4.2 3.5 3.0 2.7 2.4 5.4 3 Hours, 15 Minutes to 3 Hours, 45 Minutes 4.1 1.6 1.2 0.9 0.7 0.7 0.6 1.5 4 or More Hours 6.2 2.9 1.9 1.4 1.2 1.0 0.8 2.4 Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016). Table 9—Frequency and Length of Social Work Visits During the Last 7 Days of a Hospice Election Ending in Death, FY 2016 Visit length Days Before Death 0 days (day of death) (%) 1 day (%) 2 days (%) 3 days (%) 4 days (%) 5 days (%) 6 days (%) All 7 days combined No Visit 89.9 87.1 88.6 89.7 90.5 91.1 91.4 89.6 15 Minutes to 1 Hour 6.3 8.8 7.8 7.1 6.6 6.3 6.1 7.1 1 Hour, 15 Minutes to 2 Hours 2.7 3.4 3.0 2.7 2.5 2.3 2.2 2.7 2 Hours, 15 Minutes to 3 Hours 0.7 0.5 0.4 0.4 0.3 0.3 0.3 0.4 3 Hours, 15 Minutes to 3 Hours, 45 Minutes 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.1 4 or More Hours 0.2 0.1 0.1 0.0 0.0 0.0 0.0 0.1 Source: FY 2016 hospice claims data from Common Working File (CWF) (as of December 9, 2016). Additionally, we have analyzed the overall levels of nursing and medical social services provided during the 7 days prior to death. In an assessment of FY 2015 claims, we estimate that the total number of hours of skilled services, including skilled nursing (as reported with code G0154) and medical social services visits, provided to Medicare hospice beneficiaries in the RHC level of care in the 7 days preceding death was approximately 1.61 hours per day. As depicted in Figure 3 below, from our analysis of FY 2016 hospice claims data that begins January 1, 2016 and spans through December 31, 2016, a relatively consistent level of nursing and medical social services visits are being provided among RHC days in the 7 days prior to death, averaging around 1.6 hours per day. For the period spanning January 1, 2016 through December 31, 2016, our analysis shows that approximately 1.24 hours of services were provided by RNs, 0.18 hours were provided by LPNs, and 0.18 hours were provided by social workers per day. We note that for purposes of the SIA payment, only those hours of service provided by an RN, which became separately categorized as G0299 beginning January 1, 2016, and medical social worker count toward the calculation of the SIA payment. Additionally, we note that G0154 was retired as of January 1, 2016; however, this code was still reported by some providers in the months of January and February 2016, and thus was included in Figure 3. EP03MY17.002 Given this evaluation of the initial wave of data, which now encompasses the payment policy changes that began on January 1, 2016, we do not believe that the results highlight any immediate concerns regarding behavior changes among hospices, and it appears that beneficiaries are receiving similar levels of care when compared to time periods prior to the implementation of the payment policy reforms. As more complete data become available, we will continue to monitor the provision of services at end-of-life and impacts of the SIA payment and other policies. c. Non-Hospice Spending When a beneficiary elects the Medicare hospice benefit, he or she waives the right to Medicare payment for services related to the treatment of the individual's condition with respect to which a diagnosis of terminal illness has been made, except for services provided by the designated hospice and the attending physician. Hospice services are comprehensive and we have reiterated since 1983 that “virtually all” care needed by the terminally ill individual would be provided by hospice. We believe that it would be unusual and exceptional to see services provided outside of hospice for those individuals who are approaching the end of life. However, we continue to conduct ongoing analysis of non-hospice spending during a hospice election and the results of our analysis seems to suggest the unbundling of items and services that perhaps should have been provided and covered under the Medicare hospice benefit. We first reported findings on 2012 non-hospice spending during a hospice election in the FY 2015 Hospice Wage Index and Payment Rate Update final rule (79 FR 50452). This proposed rule updates our analysis of non-hospice spending during a hospice election using FY 2016 data. We found that in FY 2016, Medicare paid over $900 million for items and services under Parts A, B, and D for beneficiaries during a hospice election. Medicare payments for non-hospice Part A and Part B items and services received by hospice beneficiaries during hospice election were $748 million in FY 2012, $712 million in FY 2013, $624 million in FY 2014, $593 million in FY 2015, and $534 million in FY 2016 (see Figure 4 below). The beneficiary cost sharing amount in FY 2016 was $129.6 million. Non-hospice spending for Part A and Part B items and services has decreased each year since we began reporting these findings. Overall, from FY 2012 to FY 2016 non-hospice Medicare spending for Parts A and B during hospice election declined 25 percent. However, there continues to be a non-trivial amount of non-hospice Parts A and B spending on beneficiaries under a hospice election, and we will continue to monitor data regarding this issue EP03MY17.003 We also examined Part D spending from FY 2012 to FY 2016 for those beneficiaries under a hospice election. The data shows Medicare payments for non-hospice Part D drugs received by hospice beneficiaries during a hospice election were $331.3 million in FY 2012, $348 million in FY 2013, $294 million in FY 2014, $315.2 million in FY 2015, and $347.5 million in FY 2016 (see Figure 5). In contrast to non-hospice spending during a hospice election for Medicare Parts A and B items and services, non-hospice spending for Part D drugs increased in FY 2016 compared to FY 2012. Recent analyses of Part D prescription drug event (PDE) data suggest that the current prior authorization (PA) has reduced Part D program payments for drugs in four targeted categories (analgesics, anti-nauseants, anti-anxiety, and laxatives). However, under Medicare Part D there has been an increase in hospice beneficiaries filling prescriptions for a separate category of drugs we refer to as maintenance drugs, as recently analyzed by CMS. 5 Currently, maintenance drugs for beneficiaries under a hospice election are not subject to the Part D PA process. After a hospice election, many maintenance drugs as well as drugs used to treat or cure a condition are typically discontinued as the focus of care shifts to palliation and comfort measures. However, there are maintenance drugs that are appropriate to continue as they may offer symptom relief for the palliation and management of the terminal illness and related conditions, and therefore should be covered under the hospice benefit, not Part D. Examples of maintenance drugs are those used to treat high blood pressure, heart disease, asthma and diabetes. These categories include beta blockers, calcium channel blockers, corticosteroids, and insulin. 5 https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf . EP03MY17.004 Table 10 below details the various components of Part D spending for patients receiving hospice care for FY 2016. The portion of the $436.1 million total Part D spending that was paid by Medicare is the sum of the Low Income Cost-Sharing Subsidy (row 2 in Table 10) and the Covered Drug Plan Paid Amount (row 5), or approximately $347.5 million. The beneficiary cost sharing amount was approximately $64.9 million, including patient pay amount (row 1), other true out-of-pocket amount (row 3), and patient liability reduction due to other payer amount (row 4). Table 10—Drug Cost Sources for Hospice Beneficiaries' FY 2016 Drugs Received Through Part D Component FY 2016 expenditures Patient Pay Amount $47,289,374 Low Income Cost-Sharing Subsidy 103,715,821 Other True Out-of-Pocket Amount 1,749,182 Patient Liability Reduction due to Other Payer Amount 15,868,623 Covered Drug Plan Paid Amount 243,791,919 Non-Covered Plan Paid Amount 7,878,966 Six Payment Amount Totals 420,293,884 Unknown/Unreconciled 15,836,435 Gross Total Drug Costs, Reported 436,130,318 Source: Analysis of 100% FY 2016 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/. Hospices are responsible for covering drugs and biologicals related to the palliation and management of the terminal illness and while the patient is under hospice care. For a prescription drug to be covered under Part D for an individual enrolled in hospice, the drug must be for treatment unrelated to the terminal illness or related conditions. After a hospice election, many maintenance drugs or drugs used to treat or cure a condition are typically discontinued as the focus of care shifts to palliation and comfort measures. However, those same drugs may be appropriate to continue as they may offer symptom relief for the palliation and management of the terminal prognosis. 5 In our ongoing analysis of non-hospice spending, we remain concerned that common palliative and other disease-specific drugs for hospice beneficiaries that should be covered under the Part A Medicare hospice benefit are instead being covered and paid for through Part D. Based on our own analysis as demonstrated in the data provided above and similar analyses conducted by the Office of the Inspector General (OIG) regarding Part D drug expenditures for Medicare hospice beneficiaries, we believe that Medicare could be paying twice for drugs that are already covered under the hospice per diem payment by also paying for them under Part D. 6 5 https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf . 6 https://oig.hhs.gov/oas/reports/region6/61000059.asp, “Medicare Could Be Paying Twice for Prescriptions for Beneficiaries in Hospice.” We continue to expect that hospices should be providing virtually all of the care needed by terminally ill individuals, including related prescription drugs. The comprehensive nature of the services covered under the Medicare hospice benefit is structured such that hospice beneficiaries should not have to routinely seek items, services, and/or medications beyond those provided by hospice. The hospice medical director, the attending physician (if any), and the hospice IDG determine, on a case-by-case basis, what items and services are related and unrelated to the palliation and management of the terminal illness and related conditions during the admission process, the initial and comprehensive assessments, and in the development of the hospice plan of care (§§ 418.25, 418.54, and 418.56). To the extent that individuals receive services outside of the Medicare hospice benefit, Medicare coverage is determined by whether or not the services are for the treatment of a condition completely unrelated to the individual's terminal illness and related conditions (48 FR 38148). However, we have presented hospice monitoring data from the past several years, as seen above, that continue to show a non-trivial amount of items, services, and medications being furnished outside of the Medicare hospice benefit to beneficiaries under a hospice election. We encourage hospices to educate beneficiaries regarding the comprehensive nature of the hospice benefit. Although it should be rare, if any conditions are identified by the hospice as unrelated to the terminal illness and related conditions, we further encourage hospices to inform the beneficiary (or representative) at or near the time of election and provide the clinical rationale for such determinations. The regulations at § 476.78 state that providers must inform Medicare beneficiaries at the time of admission, in writing, that the care for which Medicare payment is sought will be subject to Quality Improvement Organization (QIO) review. If a beneficiary disagrees with the hospice determination of what conditions are unrelated to the terminal illness and related conditions (and thus arguably not provided as part of the hospice benefit), we strongly encourage hospices to work to resolve the disagreement with the beneficiary (or representative), taking into consideration his or her wishes, treatment preferences and goals. If a resolution cannot be reached, the beneficiary and the hospice can agree to participate in a flexible, dialogue-based resolution process, called immediate advocacy, which is coordinated by the QIO. We will continue to monitor non-hospice spending during a hospice election and consider ways to address this issue through future regulatory and/or program integrity efforts, if needed. 2. Initial Analysis of Revised Hospice Cost Report Data a. Background As mentioned in section II.B of this proposed rule, the Medicare hospice per diem payment amounts were developed to cover all services needed for the palliation and management of the terminal illness and related conditions, as described in section 1861(dd)(1) of the Act. Services provided under a written plan of care could include: Nursing care provided by or under the supervision of a registered professional nurse; physical therapy, occupational therapy, speech-language pathology services; counseling (including dietary counseling); medical social services under the direction of a physician; services of a home health aide; homemaker services; medical supplies (including drugs and biologicals) and the use of durable medical equipment; physician services; short-term inpatient care (including both respite care and care necessary for pain control and acute and chronic symptom management) in a qualified inpatient facility; or any other item or service which has been specified in the plan of care for which payment may be made under Medicare. Under the current payment system, hospices are paid for each day that a beneficiary is enrolled in hospice care, regardless of whether services are rendered on any given day. As described in the FY 2016 Hospice Wage Index and Payment Rate Update final rule, we finalized changes to the hospice cost report form in order to broaden the scope and detail of data we collect regarding the costs of providing hospice care (80 FR 47150). 7 We believed that changes were needed to the hospice cost report in order to collect data on the costs of services provided at each level of care, rather than by costs per day, regardless of the level of care. The revisions to the cost report form for freestanding hospices became effective for cost reporting periods beginning on or after October 1, 2014. The instructions for completing the revised freestanding hospice cost report form are found in the Medicare Provider Reimbursement Manual—Part 2, chapter 43. 8 Medicare-certified institutional providers are required to submit an annual cost report to a Medicare Administrative Contractor (MAC). The cost report contains provider information such as facility characteristics, utilization data, costs by cost center (for all payers as well as Medicare), Medicare settlement data, and financial statement data. 7 CMS Transmittal 2864. “Additional Data Reporting Requirements for Hospice Claims”, Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2864CP.pdf. 8 https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1P243.pdf. b. Methodology Section 1814(i)(6) of the Act, as amended by section 3132(a)(1)(B) of the Affordable Care Act, authorized the Secretary to collect additional data and information determined appropriate to revise payments for hospice care and other purposes. The data collected may be used to revise the methodology for determining the payment rates for RHC and other services included in hospice care. Effective October 1, 2014, we finalized changes to the hospice cost report to improve data collection on the costs of providing hospice care. We conducted a preliminary analysis of the new cost report data (CMS Form 1984-14) for freestanding hospices with cost reporting periods in FY 2015, which totaled 2,675 reports. Using this data we calculated preliminary estimates of total costs per day by level of care. It is important to note that the values we computed for cost per day include all payer sources, both Medicare and non-Medicare; however, we believe that the total cost figures represent a reasonable proxy for estimating costs related to the provision of care for Medicare beneficiaries. In order to compute total Medicare-related costs by level of care, we multiplied the computed cost per day by level of care (as reported on Worksheet C) for each hospice by the number of Medicare days by level of care. We then calculated total payments by level of care for each hospice by multiplying the FY 2015 Medicare hospice payments by level of care by the number of Medicare days by level of care. Total costs, payments, and days by level of care were summed for each unique hospice. In order to more accurately account for the hourly CHC cost per day, we used data from Medicare claims in order to quantify the hours of CHC provided by summing the hours of CHC reported in revenue center 0652, which tallies the units of CHC care. We then divided the CHC costs by the number of CHC hours as reported in revenue center 0652 to calculate a CHC per-hour value. In order to mitigate the impact of statistical outliers, we applied trims on the outer bounds of cost per day by level of care, set at the 1st and 99th percentile of the distribution. c. Overall Payments and Costs and Costs by Level of Care For the purposes of evaluating calculated costs per day by level of care compared to Medicare payment amounts, we compared the reported costs on the Medicare cost report to the FY 2015 per diem payment rates by level of care, as follows (79 FR 50485). We note that these amounts were not adjusted by geographic differences in wage rates and are meant to serve as a general benchmark: • $159.34 for RHC • $929.91 for 24 hours of CHC (hourly rate of $38.75) • $164.81 for IRC • $708.77 for GIP Table 11 shows the distribution of the calculated Average Cost Per Day by Level of Care, using data from Worksheet C—Rows 3, 8, 13, 18—Column 3. Table 11—Summary Statistics: Medicare Costs Per Day By Level of Care, FY 2015 Level of care Number of cost reports Mean Weighted mean Minimum value 25th Percentile Median 75th Percentile Maximum value FY2015 per diem payment amounts CHC cost per day, per hour 1,088 $91 $49 $4 $18 $51 $95 $1,853 $929.91 for 24 hours ($38.75 hourly rate). RHC cost per day 2,578 133 123 50 105 125 150 399 159.34. IRC cost per day 1,930 632 467 38 221 343 549 17,813 164.81. GIP cost per day 1,782 1,079 792 64 564 879 1,251 10,858 708.77. Source: Medicare hospice cost report data for FY 2015. As mentioned above, the data analyzed were trimmed to minimize the effect of statistical anomalies. Nevertheless, there is substantial variation in the reported cost per day by hospices. Total cost per day values in the four levels of care span from a minimum of $4 to maximum values in the tens of thousands. Because of this wide range of values in the distribution, we used the median as well as the mean values weighted by the number of days by level of care as reference points in these preliminary analyses. When compared with the FY 2015 per diem payment rates, the calculated median and weighted mean costs associated with providing RHC are lower than the base payment rates. As noted in section III.A of this proposed rule, the RHC level of care accounts for over 98 percent of all hospice days based on our analysis of claims for FY 2016. The median and weighted mean costs for the provision of RHC are estimated at $125 and $123 respectively, with both figures presenting lower values than the FY 2015 per diem payment rate of $159.34, a difference of approximately $35 per day. Conversely, for CHC the estimated median and weighted mean costs per day, per hour are $51 and $49, respectively. The FY 2015 payment rate for CHC was $38.75 per hour. The CHC level of care accounts for approximately 0.27 percent of all hospice days in FY 2016, as noted in section III.A of this proposed rule. Similarly, the median and weighted mean costs per day associated with the provision of GIP care is estimated at $879 and $792, respectively, while the FY 2015 per diem payment amount for GIP was $708.77. As noted in section III.A of this proposed rule, the GIP level of care accounts for approximately 1.40 percent of all hospice days based on our analysis of FY 2016 claims. Likewise, the median and weighted mean costs per day associated with the IRC level of care are estimated at $343 and $467, respectively, while the per diem payment amount for FY 2015 was $164.81, and we estimate that IRC days represent approximately 0.31 percent of all hospice days in FY 2016 claims as described in section III.A above. We recognize that this is the first period in which hospices have supplied cost information on the revised cost report that became effective for cost reporting periods beginning on or after October 1, 2014 and expect that some of the early trends may be the result of hospices learning how to accurately report this information. Therefore, any interpretations regarding the overall alignment between costs and payment would likely be premature given the newness of the data. Moreover, this preliminary analysis did not incorporate factors that merit consideration in future analyses, such as the exclusion of providers surpassing the hospice inpatient and aggregate caps as well as the application of a more robust trimming process to the cost report dataset. As we continue to gather more cost report data, we plan to conduct more thorough analyses of the cost report data and fully assess Medicare-related hospice costs as compared with Medicare hospice payments by level of care. We encourage hospices to continue to submit the most accurate data possible on Medicare cost reports. B. Proposed FY 2018 Hospice Wage Index and Rate Update 1. Proposed FY 2018 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. Our regulations at § 418.306(c) require each labor market to be established using the most current hospital wage data available, including any changes made by OMB to the Metropolitan Statistical Areas (MSAs) definitions. We use the previous FY's hospital wage index data to calculate the hospice wage index values. For FY 2018, the hospice wage index will be based on the FY 2017 hospital pre-floor, pre-reclassified wage index. This means that the hospital wage data used for the hospice wage index is not adjusted to take into account any geographic reclassification of hospitals including those in accordance with section 1886(d)(8)(B) or 1886(d)(10) of the Act. The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic area in which the beneficiary resides when receiving routine home care (RHC) or continuous home care (CHC). The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving general inpatient care (GIP) or Inpatient Respite Care (IRC). There exist some geographic areas where there were no hospitals, and thus, no hospital wage index data on which to base the calculation of the hospice wage index. In the FY 2008 Hospice Wage Index final rule (72 FR 50214), we implemented a methodology to update the hospice wage index for such areas. In cases where there was a rural area without rural hospital wage data, we use the average pre-floor, pre-reclassified hospital wage index data from all contiguous Core-Based Statistical Areas (CBSAs), to represent a reasonable proxy for the rural area. The term “contiguous” means sharing a border (72 FR 50217). Currently, the only rural area without a hospital from which hospital wage data could be derived is Puerto Rico. However, for rural Puerto Rico, we would not apply this methodology due to the distinct economic circumstances that exist there (for example, due to the close proximity to one another of almost all of Puerto Rico's various urban and non-urban areas, this methodology would produce a wage index for rural Puerto Rico that is higher than that in half of its urban areas); instead, we would continue to use the most recent wage index previously available for that area. For FY 2018, we propose to continue to use the most recent pre-floor, pre-reclassified hospital wage index value available for Puerto Rico, which is 0.4047. In the FY 2010 Hospice Wage Index final rule (74 FR 39386), we adopted the policy that for urban labor markets without a hospital from which hospital wage index data could be derived, all of the CBSAs within the state would be used to calculate a statewide urban average pre-floor, pre-reclassified hospital wage index value to use as a reasonable proxy for these areas. For FY 2018, the only CBSA without a hospital from which hospital wage data can be derived is 25980, Hinesville-Fort Stewart, Georgia. As described in the August 8, 1997 Hospice Wage Index final rule (62 FR 42860), the pre-floor and pre-reclassified hospital wage index is used as the raw wage index for the hospice benefit. These raw wage index values are subject to application of the hospice floor to compute the hospice wage index used to determine payments to hospices. Pre-floor, pre-reclassified hospital wage index values below 0.8 are adjusted by a 15 percent increase subject to a maximum wage index value of 0.8. For example, if County A has a pre-floor, pre-reclassified hospital wage index value of 0.3994, we would multiply 0.3994 by 1.15, which equals 0.4593. Since 0.4593 is not greater than 0.8, then County A's hospice wage index would be 0.4593. In another example, if County B has a pre-floor, pre-reclassified hospital wage index value of 0.7440, we would multiply 0.7440 by 1.15 which equals 0.8556. Because 0.8556 is greater than 0.8, County B's hospice wage index would be 0.8. On February 28, 2013, OMB issued OMB Bulletin No. 13-01, announcing revisions to the delineation of MSAs, Micropolitan Statistical Areas, and Combines Statistical Areas, and guidance on uses of the delineation in these areas. In the FY 2016 Hospice Wage Index final rule (80 FR 47178), we adopted the OMB's new area delineations using a 1-year transition. In the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47178), we stated that beginning October 1, 2016, the wage index for all hospice payments would be fully based on the new OMB delineations. The most recent bulletin (No. 15-01) concerning the revised delineations was published by the OMB on July 15, 2015. The proposed hospice wage index applicable for FY 2018 (October 1, 2017 through September 30, 2018) is available on the Web site at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html. 2. Proposed Hospice Payment Update Percentage Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish updates to hospice rates for FYs 1998 through 2002. Hospice rates were to be updated by a factor equal to the inpatient hospital market basket percentage increase set out under section 1886(b)(3)(B)(iii) of the Act, minus 1 percentage point. Payment rates for FYs since 2002 have been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the payment rates for subsequent FYs must be the inpatient market basket percentage increase for that FY. The Act historically required us to use the inpatient hospital market basket as the basis for the hospice payment rate update. Section 3401(g) of the Affordable Care Act mandated that, starting with FY 2013 (and in subsequent FYs), the hospice payment update percentage would be annually reduced by changes in economy-wide productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multifactor productivity (MFP). In addition to the MFP adjustment, section 3401(g) of the Affordable Care Act also mandated that in FY 2013 through FY 2019, the hospice payment update percentage would 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 specified in section 1814(i)(1)(C)(v) of the Act). Normally, the proposed hospice payment update percentage for FY 2018 would have been based on the estimated inpatient hospital market basket update of 2.9 percent (based on IHS Global Insight, Inc.'s fourth quarter 2016 forecast with historical data through the third quarter of 2016 of the proposed 2014-based IPPS market basket). Due to the requirements at section 1886(b)(3)(B)(xi)(II) of the Act, the estimated FY 2018 inpatient hospital market basket update of 2.9 percent would have been reduced by a MFP adjustment as mandated by Affordable Care Act (currently estimated to be 0.4 percentage point for FY 2018). Section 1814(i)(1)(C)(v) of the Act requires that the estimated inpatient hospital market basket update for FY 2018 would be reduced further by 0.3 percentage point. In effect, the proposed hospice payment update percentage for FY 2018 would be 2.2 percent. However, section 411(d) of the Medicare Access and CHIP Reauthorization Act of 2015, Public Law 114-10 (April 16, 2015) (MACRA) amended section 1814(i)(1)(C) of the Act such that for hospice payments for FY 2018, the market basket percentage increase, after application of the productivity adjustment and the 0.3 percent reduction, if applicable, shall be 1 percent. Therefore, for FY 2018, the hospice payment update percentage will be 1 percent. Currently, the labor portion of the hospice payment rates is as follows: For RHC, 68.71 percent; for CHC, 68.71 percent; for General Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The non-labor portion is equal to 100 percent minus the labor portion for each level of care. Therefore, the non-labor portion of the payment rates is as follows: For RHC, 31.29 percent; for CHC, 31.29 percent; for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 percent. Beginning with cost reporting periods starting on or after October 1, 2014, freestanding hospice providers are required to submit cost data using CMS Form 1984-14 ( https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/Hospice-2014.html ). We are currently analyzing this data for possible use in updating the labor portion of the hospice payment rates. Any changes to the labor portions will be proposed in future rulemaking and will be subject to public comments. 3. Proposed FY 2018 Hospice Payment Rates There are four payment categories that are distinguished by the location and intensity of the services provided. The base payments are adjusted for geographic differences in wages by multiplying the labor share, which varies by category, of each base rate by the applicable hospice wage index. A hospice is paid the RHC rate for each day the beneficiary is enrolled in hospice, unless the hospice provides CHC, IRC, or GIP. CHC is provided during a period of patient crisis to maintain the patient at home; IRC is short-term care to allow the usual caregiver to rest and be relieved from caregiving; and GIP is to treat symptoms that cannot be managed in another setting. As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47172), we implemented two different RHC payment rates, one RHC rate for the first 60 days and a second RHC rate for days 61 and beyond. In addition, in the final rule, we adopted a Service Intensity Add-on (SIA) payment for RHC for when direct patient care is provided by a RN or social worker during the last 7 days of the beneficiary's life. The SIA payment is equal to the CHC hourly rate multiplied by the hours of nursing or social work provided (up to 4 hours total) that occurred on the day of service, if certain criteria are met. In order to maintain budget neutrality, as required under section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were adjusted by a SIA budget neutrality factor. As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47177), we will continue to make the SIA payments budget neutral through an annual determination of the SIA budget neutrality factor (SBNF), which will then be applied to the RHC payment rates. The SBNF will be calculated for each FY using the most current and complete FY utilization data available at the time of rulemaking. For FY 2018, we calculated the SBNF using FY 2016 utilization data. We examined skilled nursing and social work visit data for the last 7 days of life where RHC was billed and found that, from January 1 through September 30, 2016, approximately 86 percent of nursing visits were identified as RN visits (using G0299) and 14 percent of nursing visits were identified as LPN visits (using G0300). For skilled nursing visits during the last 7 days of life where RHC was billed and that occurred between October 1 and December 31, 2015, we assumed that 86 percent of the line item visits reported using G0154 were RN and 14 percent were LPN. For FY 2018, the budget neutrality adjustment that would apply to days 1 through 60 is calculated to be 1.0018. The budget neutrality adjustment that would apply to days 61 and beyond is calculated to be 1.0005. In the FY 2017 Hospice Wage Index and Payment Rate Update final rule (82 FR 52156), we initiated a policy of applying a wage index standardization factor to hospice payments in order to eliminate the aggregate effect of annual variations in hospital wage data. In order to calculate the wage index standardization factor, we simulate total payments using the proposed FY 2018 hospice wage index and compare it to our simulation of total payments using the FY 2017 hospice wage index. By dividing payments for each level of care using the proposed FY 2018 wage index by payments for each level of care using the FY 2017 wage index, we obtain a wage index standardization factor for each level of care (RHC days 1-60, RHC days 61+, CHC, IRC, and GIP). The wage index standardization factors for each level of care are shown in the tables below. Lastly, the hospice payment rates for hospices that submit the required quality data would be increased by the proposed FY 2018 hospice payment update percentage of 1.0 percent as discussed in section III.B.2. The proposed FY 2018 RHC rates are shown in Table 12. The proposed FY 2018 payment rates for CHC, IRC, and GIP are shown in Table 13. Table 12—Proposed FY 2018 Hospice RHC Payment Rates Code Description FY 2017 payment rates SBNF Wage index standardization factor FY 2018 proposed hospice payment update FY 2018 Proposed payment rates 651 Routine Home Care (days 1-60) $190.55 × 1.0018 × 1.0000 × 1.01 $192.80 651 Routine Home Care (days 61+) $149.82 × 1.0005 × 1.0001 × 1.01 $151.41 Table 13—Proposed FY 2018 Hospice CHC, IRC, and GIP Payment Rates Code Description FY 2017 payment rates Wage index standardization factor FY 2018 proposed hospice payment update FY 2018 proposed payment rates 652 Continuous Home Care Full Rate = 24 hours of care $40.68 = FY 2018 hourly rate $964.63 × 1.0022 × 1.01 $976.42 655 Inpatient Respite Care 170.97 × 1.0006 × 1.01 172.78 656 General Inpatient Care 734.94 × 1.0017 × 1.01 743.55 Sections 1814(i)(5)(A) through (C) of the Act require that hospices submit quality data, based on measures to be specified by the Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320 through 47324), we implemented a Hospice Quality Reporting Program (HQRP) as required by section 3004 of the Affordable Care Act. Hospices were required to begin collecting quality data in October 2012, and submit that quality data in 2013. Section 1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and each subsequent FY, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements with respect to that FY. The proposed FY 2018 rates for hospices that do not submit the required quality data would be updated by the proposed FY 2018 hospice payment update percentage of 1 percent minus 2 percentage points. These rates are shown in Tables 14 and 15. Table 14—Proposed FY 2018 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data Code Description FY 2017 payment rates SBNF Wage index standardization factor FY 2018 proposed hospice payment update of 1% minus 2 percentage points = -0.1% FY 2018 proposed payment rates FY 2018 Proposed Payment Rates 651 Routine Home Care (days 1-60) $190.55 × 1.0018 × 1.0000 × 0.99 $188.98 651 Routine Home Care (days 61+) $149.82 × 1.0005 × 1.0001 × 0.99 148.41 Table 15—Proposed FY 2018 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required Quality Data Code Description FY 2017 payment rates Wage index standardization factor FY 2018 proposed hospice payment update FY 2018 Proposed payment rates 652 Continuous Home Care Full Rate = 24 hours of care $39.88 = FY 2018 hourly rate $964.63 × 1.0022 × 0.99 $957.08 655 Inpatient Respite Care $170.97 × 1.0006 × 0.99 $169.36 656 General Inpatient Care 734.94 × 1.0017 × 0.99 728.83 4. Hospice Cap Amount for FY 2018 As discussed in the FY 2016 Hospice Wage Index and Payment Rate Update final rule (80 FR 47183), we implemented changes mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). Specifically, for accounting years that end after September 30, 2016 and before October 1, 2025, the hospice cap is updated by the hospice payment update percentage rather than using the consumer price index for urban consumers (CPI-U). The hospice cap amount for the 2018 cap year will be $28,689.04, which is equal to the 2017 cap amount ($28,404.99) updated by the FY 2018 hospice payment update percentage of 1.0 percent. C. Discussion and Solicitation of Comments Regarding Sources of Clinical Information for Certifying Terminal Illness Hospice provides relief from pain and symptoms, provides psychosocial and spiritual comfort, and allows an individual to die with dignity and surrounded by family and friends. Despite the invaluable support hospices offer, it is not an easy decision and not one individuals generally arrive at on their own. Election of hospice is a significant decision and one which patients and their physicians do not take lightly, as it involves a shift in traditional health care philosophy from curative to palliative care. In general, the majority of hospice referrals do come from family physicians who have often cared for patients with chronic illnesses for long periods of time. 9 These providers are in the unique position of understanding and identifying the individualized progression of the patient's illness and recognizing when the condition becomes terminal. To be eligible to elect the Medicare hospice benefit, the individual must have Medicare Part A and be certified as terminally ill as articulated at § 418.20. The regulations define “terminally ill” 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). The regulations at § 418.22(c) require that for the initial 90-day period of hospice care, the hospice must obtain written certification statements from the medical director of the hospice or the physician member of the hospice interdisciplinary group, and the individual's attending physician, if the individual has an attending physician. The current regulations at § 418.25(b) state that in reaching a decision to certify, the hospice medical director, or hospice physician designee reviews the clinical information for each hospice patient and provides written certification that it is anticipated that the patient's life expectancy is 6 months or less if the illness runs its normal course. These regulations require that the hospice medical director consider at least the following information: 9 Michelle T. Weckmann, MD, MS, University of Iowa Hospitals and Clinics, Iowa The Role of the Family Physician in the Referral and Management of Hospice Patients. Am Fam Physician, 2008 Mar 15;77(6):807-812. 1. Diagnosis of the terminal condition of the patient. 2. Other health conditions, whether related or unrelated to the terminal condition. 3. Current clinically relevant information supporting all diagnoses. The admission requirements at § 418.22(b)(2) require that this clinical information and other documentation that supports the medical prognosis must accompany the certification and be filed in the medical record with the written certification. Whereas the regulations at § 418.25(b) provide the type of clinical information the hospice medical director or hospice physician designee must consider in the certification of terminal illness, the source of this clinical information is not clearly identified. This raises the question as to what clinical information the hospice medical director (or hospice physician designee) is relying on to support his or her certification that the individual is terminally ill and from where this information was obtained. Multiple clinical tools and guidelines, and more specifically the Medicare Administrative Contractor (MAC) Local Coverage Determinations (LCDs), exist to assist the patient-designated attending physician and hospice medical director/hospice physician designee in determining the patient's terminal prognosis. These guidelines provide indicators that support a decline in clinical status, including, but not limited to: History of recurrent infections, worsening symptoms that are non- responsive to treatment, increasing emergency department and clinician visits, laboratory results supporting progression of disease, and change in functional status. 10 However, documentation of these indicators would likely not exist without some degree of long-term monitoring and evaluation by a physician separate from the hospice medical director/hospice physician designee. As such, this information would typically be found in the referring physician's and/or acute/post- acute care facility's medical records. 10 https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx. Understandably, many family physicians typically take on the role of the attending physician once the patient chooses to elect hospice. They have played an invaluable role in coordinating care throughout the spectrum of the patient's life, and as such, have in depth “knowledge of the patient's values, family issues, and communication style.” 11 However, in accordance with our regulation at § 418.22(c)(1)(ii), only the initial certification has to involve the attendi [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2017-08563. Public record. Not legal advice.