# Medicare Program; FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2018-16539

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** August 6, 2018
- **Citation:** 83 FR 38622

## Text

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1692-F]
RIN 0938-AT26
Medicare Program; FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Final rule.

SUMMARY:

This final rule updates the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2019. The rule also makes conforming regulations text changes to recognize physician assistants as designated hospice attending physicians effective January 1, 2019. Finally, the rule includes changes to the Hospice Quality Reporting Program.

DATES:

These regulations are effective on October 1, 2018.

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, send your inquiry via email to:
hospicepolicy@cms.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose

This final rule updates the hospice payment rates for fiscal year (FY) 2019, as required under section 1814(i) of the Social Security Act (the Act). This rule also revises the hospice regulations as a result of section 51006 of the Bipartisan Budget Act of 2018, which amended section 1861(dd)(3)(B) of the Act such that, effective January 1, 2019, physician assistants (PAs) will be recognized as designated hospice attending physicians in addition to physicians and nurse practitioners. Finally, this rule includes changes to 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, 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.B.1 of this rule 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 of this final rule, we discuss the FY 2019 hospice payment update percentage of 1.8 percent. Sections III.B.3 and III.B.4 of this final rule update the hospice payment rates and hospice cap amount for FY 2019 by the hospice payment update percentage discussed in section III.B.2 of this final rule. We also include regulations text changes in section III.C and section III.D pertaining to the definition of “attending physician” and “cap period.”

Finally, in section III.E of this rule, we discuss updates to the HQRP, including: Data review and correction timeframes for data submitted using the HIS; extension of the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Hospice Survey participation requirements, exemption criteria and public reporting policies to future years; procedures to announce quality measure readiness for public reporting and public reporting timelines; removal of routine public reporting of the 7 HIS measures; and public display of public use file data on the Hospice Compare website.

C. Summary of Impacts

The overall economic impact of this final rule is estimated to be $340 million in increased payments to hospices during FY 2019.

D. Improving Patient Outcomes and Reducing Burden Through Meaningful Measures

Regulatory reform and reducing regulatory burden are high priorities for CMS. To reduce the regulatory burden on the healthcare industry, lower health care costs, and enhance patient care, in October 2017, we launched the Meaningful Measures Initiative.
1

This initiative is one component of our agency-wide Patients Over Paperwork Initiative,
2

which is aimed at evaluating and streamlining regulations with a goal to reduce unnecessary cost and burden, increase efficiencies, and improve beneficiary experience. The Meaningful Measures Initiative is aimed at identifying the highest priority areas for quality measurement and quality improvement in order to assess the core quality of care issues that are most vital to advancing our work to improve patient outcomes. The Meaningful Measures Initiative represents a new approach to quality measures that fosters operational efficiencies, and it will reduce costs, including collection and reporting burden, while producing quality measurement that is more focused on meaningful outcomes.

1
Meaningful Measures web page:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.

2
See Remarks by Administrator Seema Verma at the Health Care Payment Learning and Action Network (LAN) Fall Summit, as prepared for delivery on October 30, 2017:
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html.

The Meaningful Measures Framework has the following objectives:

• Address high-impact measure areas that safeguard public health;

• Patient-centered and meaningful to patients;

• Outcome-based where possible;

• Fulfill each program's statutory requirements;

• Minimize the level of burden for health care providers (for example, through a preference for EHR-based measures where possible, such as electronic clinical quality measures
3

);

3
See section VIII.A.8.c. of the preamble of this final rule where we solicited comments on the potential future development and adoption of eCQMs.

• Significant opportunity for improvement;

• Address measure needs for population based payment through alternative payment models; and

• Align across programs and/or with other payers.

In order to achieve these objectives, we have identified 19 Meaningful Measures areas and mapped them to six overarching quality priorities as shown in the Table 1 below.

Table 1—Meaningful Measures

Quality priority
Meaningful measure area

Making Care Safer by Reducing Harm Caused in the Delivery of Care
Healthcare-Associated Infections.

Preventable Healthcare Harm.

Strengthen Person and Family Engagement as Partners in Their Care
Care is Personalized and Aligned with Patient's Goals.

End of Life Care according to Preferences.

Patient's Experience of Care.

Patient Reported Functional Outcomes.

Promote Effective Communication and Coordination of Care
Medication Management.

Admissions and Readmissions to Hospitals.

Transfer of Health Information and Interoperability.

Promote Effective Prevention and Treatment of Chronic Disease
Preventive Care.

Management of Chronic Conditions.

Prevention, Treatment, and Management of Mental Health.

Prevention and Treatment of Opioid and Substance Use Disorders.

Risk Adjusted Mortality.

Work with Communities to Promote Best Practices of Healthy Living
Equity of Care.

Community Engagement.

Make Care Affordable
Appropriate Use of Healthcare.

Patient-focused Episode of Care.

Risk Adjusted Total Cost of Care.

By including Meaningful Measures in our programs, we believe that we can also address the following cross-cutting measure criteria:

• Eliminating disparities;

• Tracking measurable outcomes and impact;

• Safeguarding public health;

• Achieving cost savings;

• Improving access for rural communities; and

• Reducing burden.

We believe that the Meaningful Measures Initiative will improve outcomes for patients, their families, and health care providers while reducing burden and costs for clinicians and providers as well as promoting operational efficiencies.

We received numerous supportive comments from stakeholders regarding the Meaningful Measures Initiative and the impact of its implementation in CMS' quality programs. Many of these comments pertained to specific program proposals, and are discussed in the appropriate program-specific sections of this final rule. Commenters also provided insights and recommendations for the ongoing development of the Meaningful Measures Initiative. We look forward to continuing to work with stakeholders to refine and further implement the Meaningful Measures Initiative, and will take commenters' insights and recommendations into account moving forward.

E. Advancing Health Information Exchange

The Department of Health and Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of interoperable health information technology and to promote nationwide health information exchange to improve health care. The Office of the National Coordinator for Health Information Technology (ONC) and CMS work collaboratively to advance interoperability across settings of care.

The Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113 185) (IMPACT Act) requires assessment data to be standardized and interoperable to allow for exchange of the data among post-acute providers and other providers. To further progress toward the goal of interoperability, we are developing a Data Element Library to serve as a publically available centralized, authoritative resource for standardized data elements and their associated mappings to health IT standards. These interoperable data elements can reduce provider burden by allowing the use and reuse of healthcare data, support provider exchange of electronic health information for care coordination, person-centered care, and support real-time, data driven, clinical decision making. Once available, standards in the Data Element Library can be referenced on the CMS website and in the ONC Interoperability Standards Advisory (ISA).

The 2018 Interoperability Standards Advisory (ISA) is available at:
https://www.healthit.gov/standards-advisory.

Most recently, the 21st Century Cures Act (Pub. L. 114-255), enacted in 2016, requires HHS to take new steps to enable the electronic sharing of health information, ensuring interoperability for providers and settings across the care continuum. Specifically, the Congress directed ONC to “develop or support a trusted exchange framework, including a common agreement among health information networks nationally.” This framework (
https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement
) sets out a common set of principles for trusted exchange and minimum terms and conditions for trusted exchange in order to enable interoperability across disparate health information networks. In another important provision, the Congress established new authority for HHS to discourage “information blocking”, defined as practices likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information. We suggested that hospice providers learn more about these important developments and how they are likely to affect hospices.

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. Medicare regulations define “palliative care” as patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and to facilitate patient autonomy, access to information, and choice (42 CFR 418.3). Palliative care is at the core of hospice philosophy and care practices, and is a critical component of the Medicare hospice benefit.

The goal of hospice care is to help terminally ill individuals continue life

with minimal disruption to normal activities while remaining primarily in the home environment. A hospice uses an interdisciplinary approach to deliver medical, nursing, social, psychological, emotional, and spiritual services through a collaboration of professionals and other caregivers, with the goal of making the beneficiary as physically and emotionally comfortable as possible. Hospice is compassionate beneficiary and family/caregiver-centered care for those who are terminally ill.

As referenced in our regulations at § 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.

Under the Medicare hospice benefit, the election of hospice care is a patient choice and once a terminally ill patient elects to receive hospice care, a hospice interdisciplinary group is essential in the seamless provision of services. These hospice services are provided primarily in the individual's home. 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.

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. Services Covered by the Medicare Hospice Benefit

Coverage under the Medicare Hospice benefit requires that hospice services must be reasonable and necessary for the palliation and management of the terminal illness and related conditions. Section 1861(dd)(1) of the Act establishes the services that are to be rendered by a Medicare-certified hospice program. These covered services include: Nursing care; physical therapy; occupational therapy; speech-language pathology therapy; medical social services; home health aide services (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 also 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 FY 1983 Hospice Wage Index and Rate Update proposed rule (48 FR 38149), the hospice interdisciplinary group should comprise paid hospice employees as well as hospice volunteers, and that “the hospice benefit and the resulting Medicare reimbursement is not intended to diminish the voluntary spirit of hospices.” This expectation supports the hospice philosophy of community based, holistic, comprehensive, and compassionate end-of-life care.

C. Medicare Payment for Hospice Care

Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of the Act, and our regulations in 42 CFR part 418, establish eligibility requirements, payment standards and procedures; define covered services; and delineate the conditions a hospice must meet to be approved for participation in the Medicare program. Part 418, subpart G, provides for a per diem payment in one of four prospectively-determined rate categories of hospice care (routine home care (RHC), CHC, IRC, and general inpatient care (GIP)), 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 and items 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 changes in the methodology concerning updating the daily payment rates based on the hospital market basket percentage increase applied to the payment rates in effect during the previous federal fiscal year.

2. Balanced Budget Act of 1997

Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) established that updates to the hospice payment rates beginning FY 2002 and subsequent FYs be the hospital market basket percentage increase for the FY.

3. FY 1998 Hospice Wage Index Final Rule

The FY 1998 Hospice Wage Index final rule (62 FR 42860), implemented a new methodology for calculating the hospice wage index and instituted an annual Budget Neutrality Adjustment Factor (BNAF) so aggregate Medicare payments to hospices would remain budget neutral to payments calculated using the 1983 wage index.

4. FY 2010 Hospice Wage Index Final Rule

The FY 2010 Hospice Wage Index and Rate Update final rule (74 FR 39384) instituted an incremental 7-year phase-out of the BNAF beginning in FY 2010 through FY 2016. The BNAF phase-out reduced the amount of the BNAF increase applied to the hospice wage index value, but was not a reduction in the hospice wage index value itself or in the hospice payment rates.

5. The Affordable Care Act

Starting with FY 2013 (and in subsequent FYs), the market basket percentage 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 Patient Protection and Affordable Care Act (PPACA) (Pub. L. 111-148), 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 PPACA, 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 FY 2011 Hospice Wage Index final rule (75 FR 70435) that the 180th-day recertification and subsequent recertifications would correspond to the beneficiary's third or subsequent benefit periods. Further, section 1814(i)(6) of the Act, as added by section 3132(a)(1)(B) of the PPACA, 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 PPACA could capture accurate resource utilization, which could be collected on claims, cost reports, and possibly other mechanisms, as the Secretary determined to be appropriate. The data collected could be used to revise the methodology for determining the payment rates for RHC and other services included in hospice care, no earlier than October 1, 2013, as described in section 1814(i)(6)(D) of the Act. In addition, 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

In the FY 2012 Hospice Wage Index final rule (76 FR 47308 through 47314) we announced that beginning in 2012, 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 through the original streamlined methodology, also within certain limits. As of FY 2012, new hospices have their cap determinations calculated using the patient-by-patient proportional methodology. If a hospice's total Medicare payments for the cap year exceed the hospice aggregate cap, then the hospice must repay the excess back to Medicare.

7. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule

The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 50452) finalized a requirement that 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 within 5 calendar days after the effective date of the discharge/revocation (unless the hospice has already filed a final claim) through the submission of a final claim or a Notice of Termination or Revocation (NOTR).

The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 50479) also finalized a requirement that the election form include the beneficiary's choice of attending physician and that the beneficiary provide the hospice with a signed document when he or she chooses to change attending physicians.

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 Rate Update final rule (79 FR 50496) provided background, eligibility criteria, survey respondents, and implementation of the Hospice Experience of Care Survey for informal caregivers, that hospices are required to use as of 2015.

Finally, the FY 2015 Hospice Wage Index and Rate Update final rule required providers to complete their aggregate cap determination not sooner than 3 months after the end of the cap year, and not later than 5 months after, and remit any overpayments. Those hospices that fail to timely submit their aggregate cap determinations will have their payments suspended until the determination is completed and received by the Medicare contractor (79 FR 50503).

8. IMPACT Act of 2014

The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-185) became law on October 6, 2014. Section 3(a) of the IMPACT Act mandated that all Medicare certified hospices be surveyed every 3 years beginning April 6, 2015 and ending September 30, 2025. In

addition, section 3(c) of the IMPACT Act requires medical review of hospice cases involving beneficiaries receiving more than 180 days 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 Wage Index and Rate Update final rule (80 FR 47172), 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. 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 Rate Update final rule (80 FR 47186) 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 thereafter. Finally, the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47144) 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.

10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule

In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 52160), we finalized several new policies and requirements related to the HQRP. First, we codified our policy that if the National Quality Forum (NQF) made non-substantive changes to specifications for HQRP measures as part of the NQF's re-endorsement process, we would continue to utilize the measure in its new endorsed status, without going through new notice-and-comment rulemaking. We would 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 would be made on a measure-by-measure basis. Second, we finalized two new quality measures for the HQRP for the FY 2019 payment determination and subsequent years: Hospice Visits when Death is Imminent Measure Pair and Hospice and Palliative Care Composite Process Measure-Comprehensive Assessment at Admission (81 FR 52173). The data collection mechanism for both of these measures is the HIS, and the measures were 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 Consumer Assessment of Healthcare Providers and Systems (CAHPS®) requirements due to newness (81 FR 52182). The exemption is determined by CMS and is for 1 year only.

D. 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 1.5 million in FY 2017. Similarly, Medicare hospice expenditures have risen from $2.8 billion in FY 2000 to approximately $17.7 billion in FY 2017. Our Office of the Actuary (OACT) projects that hospice expenditures are expected to continue to increase, by approximately 8 percent annually, reflecting an increase in the number of Medicare beneficiaries, more beneficiary awareness of the Medicare hospice benefit for end-of-life care, and a growing preference for care provided in home and community-based settings.

There have also been changes in the diagnosis patterns among Medicare hospice enrollees. While in 2002, lung cancer was the top principal diagnosis, neurologically based diagnoses have topped the list for the past 5 years. Additionally, 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; however, effective October 1, 2014, these diagnoses are no longer permitted as principal diagnosis codes on hospice claims. As a result of this, the most common hospice claims-reported diagnoses have changed from primarily cancer diagnoses to neurological and organ-based failure diagnoses. The top 20 most frequently hospice claims-reported diagnoses for FY 2017 are in Table 2 below.

Table 2—The Top Twenty Principal Hospice Diagnoses, FY 2017

Rank
ICD-10/reported principal diagnosis
Count
Percentage

1
G30.9 Alzheimer's disease, unspecified
155,066
10

2
J44.9 Chronic obstructive pulmonary disease
77,758
5

3
I50.9 Heart failure, unspecified
69,216
4

4
G31.1 Senile degeneration of brain, not elsewhere classified
66,309
4

5
C34.90 Malignant Neoplasm Of Unsp Part Of Unsp Bronchus Or Lung
53,137
3

6
G20 Parkinson's disease
40,186
3

7
G30.1 Alzheimer's disease with late onset
38,710
2

8
I25.10 Atherosclerotic heart disease of native coronary art without angina pectoris
34,761
2

9
J44.1 Chronic obstructive pulmonary disease with (acute) exacerbation
33,547
2

10
I67.2 Cerebral atherosclerosis
30,146
2

11
C61 Malignant neoplasm of prostate
25,215
2

12
I63.9 Cerebral infarction, unspecified
22,825
1

13
N18.6 End stage renal disease
21,549
1

14
C18.9 Malignant neoplasm of colon, unspecified
21,543
1

15
C25.9 Malignant neoplasm of pancreas, unspecified
20,851
1

16
I51.9 Heart disease, unspecified
18,794
1

17
I11.0 Hypertensive heart disease with heart failure
18,345
1

18
I67.9 Cerebrovascular disease, unspecified
18,234
1

19
I13.0 Hypertensive heart and chronic kidney disease with heart failure and stage 1 through stage 4 chronic kidney disease, or unspecified chronic kidney disease
15,632
1

20
A41.9 Sepsis, unspecified organism
14,012
1

Note(s):
The frequencies shown represent beneficiaries that had a least one claim with the specific ICD-10 code reported as the principal diagnosis. Beneficiaries could be represented multiple times in the results if they have multiple claims during that time period with different principal diagnoses.

Source: FY 2017 hospice claims data from the CCW, accessed and merged with ICD-10 codes on January 10, 2018.

In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47201), 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 2017 hospice claims show that 100 percent of hospices reported more than one diagnosis, 89 percent submitted at least two diagnoses, and 81 percent included at least three diagnoses.

III. Provisions of the Final Rule

On May 8, 2018, we published the FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements proposed rule in the
Federal Register
(83 FR 20934 through 20970) and provided a 60-day comment period. In that proposed rule, we proposed to update the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2019. In addition, we proposed regulations text changes to recognize physician assistants as designated hospice attending physicians effective January 1, 2019. Finally, we proposed changes to the Hospice Quality Reporting Program. We received 56 public comments on the proposed rule, including comments from hospice agencies, national provider associations, patient organizations, nurses, and advocacy groups.

Below we provide a summary of each proposed provision, a summary of the public comments received and our responses to them, and the policies we are finalizing in the FY 2019 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements final rule.

A. Monitoring for Potential Impacts—Affordable Care Act Hospice Reform

In the FY 2019 Hospice Wage Index and Payment Rate Update proposed rule (83 FR 20934), we provided a summary of analysis conducted on hospice length of stay, live discharge rates, skilled visits in the last days of life, and non-hospice spending. Additionally, we discussed initial analyses of data from recently revised cost reports. We will continue to monitor the impact of future payment and policy changes and will provide the industry with periodic updates on our analysis in future rulemaking and/or announcements on the Hospice Center web page at:
https://www.cms.gov/Center/Provider-Type/Hospice-Center.html.

We received comments on the hospice monitoring analysis and CMS's plans for future monitoring efforts with regard to hospice payment reform outlined in the proposed rule. The comments and our responses are described below:

Comment:
Commenters expressed continued support for our plans to monitor the impact of hospice payment reform and suggested the use of monitoring results in order to better target program integrity efforts. One commenter suggested that providers would benefit from CMS providing data assessing the impact of the payment changes that occurred in early 2016 and the degree to which they are on track with the re-distributional impact that CMS anticipated as a part of its modeling. A commenter suggested that CMS focus on short lengths of stays in hospice rather than long length of stays as long length of stays, which could be an indicator of problematic behavior, noting that the median length of stay has remained constant at 18 days, and the commenter suggested that the focus of analysis should be on beneficiary access to hospice services. One commenter recommended that CMS revisit and clarify what should be covered under the hospice per diem, noting that clarification would enhance care for patients and families, allow for easier comparison of programs, and allow for increased program integrity efforts based on this data point. Finally, a few commenters noted concerns with increased scrutiny of claims for GIP care and the variability of costs for GIP care depending on whether the hospice provides the care in a facility or contracts with another entity. Commenters suggested that CMS provide further education and clarification of acceptable GIP utilization for hospice providers as a means of encouraging them to provide the most appropriate level of care for the patient.

Response:
We appreciate the comments provided regarding the ongoing analysis presented, and we plan continue to monitor hospice trends and vulnerabilities within the hospice benefit, while also investigating the means by which we can educate the provider community regarding the hospice benefit and appropriate billing practices. We will also consider these suggestions for future monitoring efforts, program integrity, and for potential policy or payment refinements. Additionally, we refer readers to sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of the Act, our regulations in the Code of Federal Regulations (CFR) 42 CFR part 418, which 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 and the CMS Hospice Center web page for more information (
https://www.cms.gov/Center/Provider-Type/Hospice-Center.html
).

Comment:
Several commenters recommended that CMS move to implement additional Level 1 edits for the hospice cost reports in order to address existing gaps in data collection to meet minimum standards of accuracy. In addition, many commenters suggested that CMS should wait until the latest cost report changes (including imposition of additional Level 1 edits) are reflected in the data to ensure greater accuracy of data inputs.

Response:
We appreciate support of the Level 1 edits to further address accuracy in cost reporting. As several commenters noted, on April 13, 2018, CMS issued Transmittal 3 revising the Medicare Provider Reimbursement

Manual—Part 2, Provider Cost Reporting Forms and Instructions, Chapter 43, Form CMS-1984-14. Transmittal 3 made several changes to the Hospice Cost Report, including the imposition of Level 1 and Level 2 edits (
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R3P243.pdf
). These changes are effective for cost reporting periods ending on or after December 31, 2017. We will continue to analyze Medicare hospice cost report data as it becomes available in determining whether additional hospice payment reform changes are needed to better align hospice payments with costs.

B. FY 2019 Hospice Wage Index and Rate Update

1. FY 2019 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 Office of Management and Budget (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 2019, the hospice wage index will be based on the FY 2018 hospital pre-floor, pre-reclassified wage index. This means that the hospital wage data used for the hospice wage index are 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 RHC or CHC. The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving GIP or IRC.

In the FY 2006 Hospice Wage Index final rule (70 FR 45135), we adopted the policy that, for urban labor markets without a hospital from which hospital wage index data could be derived, all of the Core-Based Statistical Areas (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 2019, the only CBSA without a hospital from which hospital wage data can be derived is 25980, Hinesville-Fort Stewart, Georgia.

In the FY 2008 Hospice Wage Index final rule (72 FR 50214), we adopted a policy for instances where there are rural areas without rural hospital wage data. In such instances, we use the average pre-floor, pre-reclassified hospital wage index data from all contiguous CBSAs, to represent a reasonable proxy for the rural area. The term “contiguous” means sharing a border (72 FR 50217). Currently, the only rural area without a hospital from which hospital wage data could be derived is Puerto Rico. However, for rural Puerto Rico, we would not apply this methodology due to the distinct economic circumstances that exist there (for example, due to the close proximity 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 2019, we proposed to continue to use the most recent pre-floor, pre-reclassified hospital wage index value available for Puerto Rico, which is 0.4047, subsequently adjusted by the hospice floor.

As described in the August 8, 1997 Hospice Wage Index final rule (62 FR 42860), the pre-floor and pre-reclassified hospital wage index is used as the raw wage index for the hospice benefit. These raw wage index values are subject to application of the hospice floor to compute the hospice wage index used to determine payments to hospices. 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 Combined Statistical Areas, and guidance on uses of the delineation in these areas. In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47178), we adopted the OMB's new area delineations using a 1-year transition. In that final rule, we stated that beginning October 1, 2016, the wage index for all hospice payments would be fully based on the new OMB delineations.

On August 15, 2017, OMB issued bulletin No. 17-01, which is available at
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.
In this bulletin, OMB announced that one Micropolitan Statistical Area, Twin Falls, Idaho, now qualifies as a Metropolitan Statistical Area. The new CBSA (46300) comprises the principal city of Twin Falls, Idaho in Jerome County, Idaho and Twin Falls County, Idaho. The FY 2019 hospice wage index value for CBSA 46300, Twin Falls, Idaho, will be 0.8000.

The hospice wage index applicable for FY 2019 (October 1, 2018 through September 30, 2019) is available on our website at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.

A summary of the comments we received regarding the wage index and our responses to those comments appear below:

Comment:
A commenter stated that in FY 2018, the wage index for Spokane, WA had increased, which helped increase wages for employees and reduced turnover. However, the commenter noted that in the FY 2019 proposed rule, this increase is reversing. The commenter stated that using older wage index data, not allowing reclassification, and not accounting for outward migration speaks to the need for wage index reform for the hospice payment system. One commenter stated that in rural Kentucky and Indiana, the costs of providing hospice care exceed Medicare payments. The commenter further asserted that a lower reimbursement rate for rural areas when compared to urban areas is not sensible, given that urban areas have infrastructure that facilitates access to care. Another commenter expressed concern with the continued use of the pre-floor, pre-reclassified hospital wage index to adjust the hospice payment rates and stated that this causes continued volatility of the hospice wage index from one year to the next. The commenter stated that the volatility is often based on inaccurate or incomplete hospital cost report data.

Response:
The annual changes in the wage index reflect real variations in costs of providing care in various

geographic locations. We utilize efficient means to ensure and review the accuracy of the hospital cost report data and resulting wage index. The hospice wage index is derived from the pre-floor, pre-reclassified wage index, which is calculated based on cost report data from hospitals. All Inpatient Prospective Payment System (IPPS) hospitals must complete the wage index survey (Worksheet S-3, Parts II and III) as part of their Medicare cost reports. Cost reports will be rejected if Worksheet S-3 is not completed. In addition, our Medicare contractors perform desk reviews on all hospitals' Worksheet S-3 wage data, and we run edits on the wage data to further ensure the accuracy and validity of the wage data. Our review processes result in an accurate reflection of the applicable wages for the areas given. In addition, we finalized a hospice wage index standardization factor in FY 2017 to ensure overall budget neutrality when updating the hospice wage index with more recent hospital wage data. Applying a wage index standardization factor to hospice payments will eliminate the aggregate effect of annual variations in hospital wage data. Our policy of utilizing a hospice wage index standardization factor provides a safeguard to the Medicare program as well as to hospices because it will mitigate fluctuations in the wage index by ensuring that wage index updates and revisions are implemented in a budget neutral manner.

We note that the current statute and regulations that govern the hospice payment system do not currently provide a mechanism for allowing hospices to seek geographic reclassification. The reclassification provision is found in section 1886(d)(10)(C)(i) of the Act, which states, “The Board shall consider the application of any subsection (d) hospital requesting that the Secretary change the hospital's geographic classification . . . ” This provision is only applicable to hospitals as defined in section 1886(d) of the Act. In addition, we do not believe that using hospital reclassification data would be appropriate, as these data are specific to the requesting hospitals and they may or may not apply to a given hospice.

Comment:
One commenter expressed concern that the proposed FY 2019 hospice wage index will be based on the OMB geographic area wage delineations. The commenter was particularly concerned with the New York City CBSA and the fact that the CBSA contains counties from New Jersey where labor costs are lower.

Response:
The OMB's CBSA designations reflect the most recent available geographic classifications and are a reasonable and appropriate method of defining geographic areas for the purposes of wage adjusting the hospice payment rates.

Comment:
One commenter expressed concern that hospices in Montgomery County, Maryland, which are included in CBSA 43524 (Silver Spring-Frederick-Rockville, MD), are reimbursed at a lower rate than hospices in the greater Washington DC area that are included in CBSA 47894 (Washington-Arlington-Alexandria, DCVA-MD-WV). The commenters request that CMS reconsider CBSA 43524 (Silver Spring-Frederick-Rockville, MD).

Response:
CBSA delineations are determined by the OMB. The OMB reviews its Metropolitan Area definitions preceding each decennial census to reflect recent population changes. The OMB's CBSA designations reflect the most recent available geographic classifications and were a reasonable and appropriate way to define geographic areas for purposes of wage index values. Ten years ago, in our FY 2006 Hospice Wage Index final rule (70 FR 45130), we finalized the adoption of the revised labor market area definitions as discussed in the OMB Bulletin No. 03-04 (June 6, 2003). In the December 27, 2000
Federal Register
(65 FR 82228 through 82238), OMB announced its new standards for defining metropolitan and micropolitan statistical areas. According to that notice, OMB defines a CBSA, beginning in 2003, as “a geographic entity associated with at least one core of 10,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. The general concept of the CBSAs is that of an area containing a recognized population nucleus and adjacent communities that have a high degree of integration with that nucleus. The purpose of the standards is to provide nationally consistent definitions for collecting, tabulating, and publishing federal statistics for a set of geographic areas. CBSAs include adjacent counties that have a minimum of 25 percent commuting to the central counties of the area. This is an increase over the minimum commuting threshold for outlying counties applied in the previous MSA definition of 15 percent. Based on the OMB's current delineations, Montgomery County (along with Frederick County, Maryland) belongs in a separate CBSA from the areas defined in the Washington-Arlington-Alexandria, DC-VA CBSA. Unlike IPPS, inpatient rehabilitation facility (IRF), and SNF, where each provider uses a single CBSA, hospice agencies may be reimbursed based on more than one wage index. Payments are based upon the location of the beneficiary for routine and continuous home care or the location of the agency for respite and general inpatient care. It is very likely that hospices in Montgomery County, Maryland provide RHC and CHC to patients in the “Washington-Arlington-Alexandria, DC-VA” CBSA in addition to serving patients in the “Baltimore-Columbia-Towson, Maryland” CBSA.

While CMS and other stakeholders have explored potential alternatives to the current CBSA-based labor market system (we refer readers to our website:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html
), no consensus has been achieved regarding how best to implement a replacement system. As discussed in the FY 2005 IPPS final rule (69 FR 49027), “While we recognize that MSAs are not designed specifically to define labor market areas, we believe they do represent a useful proxy for this purpose.” We further believe that using the most current OMB delineations will increase the integrity of the hospice wage index by creating a more accurate representation of geographic variation in wage levels. We recognize that the OMB cautions that the delineations should not be used to develop and implement federal, state, and local nonstatistical programs and policies without full consideration of the effects of using these delineations for such purposes. As discussed in the OMB Bulletin No. 03-04 (June 6, 2003), The OMB stated that, “In cases where there is no statutory requirement and an agency elects to use the Metropolitan, Micropolitan, or Combined Statistical Area definitions in nonstatistical programs, it is the sponsoring agency's responsibility to ensure that the definitions are appropriate for such use. When an agency is publishing for comment a proposed regulation that would use the definitions for a nonstatistical purpose, the agency should seek public comment on the proposed use.”
4

While we recognize that OMB's geographic area delineations are not designed specifically for use in nonstatistical programs or for program purposes, including the allocation of federal funds, we continue to believe that the

OMB's geographic area delineations represent a useful proxy for differentiating between labor markets and that the geographic area delineations are appropriate for use in determining Medicare hospice payments. In implementing the use of CBSAs for hospice payment purposes in our FY 2006 rule (70 FR 45130), we considered the effects of using these delineations. We have used CBSAs for determining hospice payments for 10 years (since FY 2006). In addition, other provider types, such as IPPS hospital, home health, SNF, IRF), and the ESRD program, have used CBSAs to define their labor market areas for the last decade.

4

https://www.whitehouse.gov/wp-content/uploads/2017/11/bulletins_b03-04.pdf.

Final Decision:
After considering the comments received in response to the proposed rule and for the reasons discussed above, we are finalizing our proposal to use the pre-floor, pre-reclassified hospital inpatient wage index as the wage adjustment to the labor portion of the hospice rates. For FY 2019, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2013 and before October 1, 2014 (FY 2014 cost report data).

The wage index applicable for FY 2019 is available on our website at
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/index.html.
The hospice wage index for FY 2019 will be effective October 1, 2018 through September 30, 2019.

2. FY 2019 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 PPACA 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 ACA 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).

The hospice payment update percentage for FY 2019 is based on the inpatient hospital market basket update of 2.9 percent (based on IHS Global Inc.'s second-quarter 2018 forecast with historical data through the first-quarter 2018). Due to the requirements at sections 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the inpatient hospital market basket update for FY 2019 of 2.9 percent must be reduced by a MFP adjustment as mandated by the PPACA (0.8 percentage point for FY 2019). The inpatient hospital market basket update for FY 2019 is reduced further by 0.3 percentage point, as mandated by the PPACA. In effect, the hospice payment update percentage for FY 2019 is 1.8 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/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-1984-14.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 would be proposed in future rulemaking and would be subject to public comments.

A summary of the comments we received regarding the payment update percentage and our responses to those comments appear below:

Comment:
Several commenters noted their support of the hospice payment update percentage.

Response:
We appreciate the comments in support of the hospice payment update percentage.

Comment:
Several commenters stated that the FY 2019 payment update of 1.8 percent is inadequate. One commenter stated that the payment update is insufficient to sustainably cover the broad range of services and high-quality care that their members provide regardless of diagnosis, location and payment source. Another commenter suggested that the multifactor productivity (MFP) adjustment is not related to hospice care productivity, but instead, is a uniform adjustment factor that is being applied to all proposed prospective payment rate increases for 2019. The commenter suggests that CMS should identify and report specific productivity performances for each unique healthcare category. Another commenter expressed concern that the 1.8 percent increase would not cover the 2 percent decrease in reimbursement that would be imposed should sequestration be required in 2019.

Response:
The hospice payment update percentage and the application of the MFP are required by statute, as previously described in detail in this section, and we do not have regulatory authority to alter the update. Likewise, sequestration is determined outside of CMS' authority and the hospice payment updates are statutory.

Final Decision:
We are implementing the hospice payment update percentage as discussed in the proposed rule. Based on IHS Global Insight, Inc.'s updated forecast, the hospice payment update percentage for FY 2019 will be 1.8 percent for hospices that submit the required quality data and −0.2 percent (FY 2019 hospice payment update of 1.8 percent minus 2 percentage points) for hospices that do not submit the required quality data.

3. FY 2019 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 Rate Update final rule (80 FR 47172), we implemented two different RHC payment rates, one RHC rate for the first 60 days and a second RHC rate for days 61 and beyond. In addition, in that final rule, we implemented a Service Intensity Add-on (SIA) payment for RHC when direct patient care is provided by a 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 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 utilization data available at the time of rulemaking. For FY 2019, we calculated the SBNF using FY 2017 utilization data. For FY 2019, the SBNF that would apply to days 1 through 60 is calculated to be 0.9991. The SBNF that would apply to days 61 and beyond is calculated to be 0.9998.

In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 52156), we initiated a policy of applying a wage index standardization factor to hospice payments in order to eliminate the aggregate effect of annual variations in hospital wage data. In order to calculate the wage index standardization factor, we simulate total payments using the FY 2019 hospice wage index and compare it to our simulation of total payments using the FY 2018 hospice wage index. By dividing payments for each level of care using the FY 2019 wage index by payments for each level of care using the FY 2018 wage index, we obtain a wage index standardization factor for each level of care (RHC days 1 through 60, RHC days 61+, CHC, IRC, and GIP). The wage index standardization factors for each level of care are shown in the tables below.

The FY 2019 RHC rates are shown in Table 3. The FY 2019 payment rates for CHC, IRC, and GIP are shown in Table 4.

Table 3—FY 2019 Hospice RHC Payment Rates

Code
Description

FY 2018
payment rates

SIA budget neutrality
factor

Wage index standardization factor

FY 2019
hospice
payment
update

FY 2019
payment rates

651
Routine Home Care (days 1-60)
$192.78
× 0.9991
× 1.0009
× 1.018
$196.25

651
Routine Home Care (days 61+)
151.41
× 0.9998
× 1.0007
× 1.018
154.21

Table 4—FY 2019 Hospice CHC, IRC, and GIP Payment Rates

Code
Description

FY 2018
payment rates

Wage index standardization factor

FY 2019
hospice
payment
update

FY 2019
payment rates

652
Continuous Home Care; Full Rate = 24 hours of care; $41.56 = FY 2019 hourly rate
$976.42
× 1.0034
× 1.018
$997.38

655
Inpatient Respite Care
172.78
× 1.0007
× 1.018
176.01

656
General Inpatient Care
743.55
× 1.0015
× 1.018
758.07

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 PPACA. 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 FY 2019 rates for hospices that do not submit the required quality data would be updated by the FY 2019 hospice payment update percentage of 1.8 percent minus 2 percentage points. These rates are shown in Tables 5 and 6.

Table 5—FY 2019 Hospice RHC Payment Rates for Hospices That Do Not Submit the Required Quality Data

Code
Description

FY 2018
payment rates

SIA budget neutrality
factor

Wage index standardization factor

FY 2019
hospice
payment
update of
1.8% minus 2
percentage
points = −0.2%

FY 2019
payment rates

651
Routine Home Care (days 1-60)
$192.78
× 0.9991
× 1.0009
× 0.998
$192.39

651
Routine Home Care (days 61+)
151.41
× 0.9998
× 1.0007
× 0.998
151.18

Table 6—FY 2019 Hospice CHC, IRC, and GIP Payment Rates for Hospices That Do Not Submit the Required Quality Data

Code
Description

FY 2018
payment rates

Wage index standardization factor

FY 2019
hospice payment update of 1.8% minus 2 percentage points = −0.2%

FY 2019
payment rates

652
Continuous Home Care; Full Rate = 24 hours of care; $40.74 = FY 2019 hourly rate
$976.42
× 1.0034
× 0.998
$977.78

655
Inpatient Respite Care
172.78
× 1.0007
× 0.998
172.56

656
General Inpatient Care
743.55
× 1.0015
× 0.998
743.18

A summary of the comments we received regarding the payment rates and our responses to those comments appear below:

Comment:
Several commenters mentioned the SIA payment and stated that CMS should allow visits by Licensed Practical Nurses (LPNs) in the last 7 days of life to be eligible for SIA payment due to short length of stays and clinical demands of hospice patients.

Response:
We finalized the SIA payment policy in the FY 2016 Hospice Wage Index and Payment Update final rule (80 FR 47141) and we did not solicit comments on a proposal to modify these policy parameters in the FY 2019 Hospice Wage Index and Payment Rate update proposed rule (83 FR 20934). However, we will continue to consider and monitor for potential refinements to this policy, including current monitoring efforts that were described in the FY 2019 Hospice Wage Index and Payment Rate Update proposed rule (83 FR 20934) in response to these policy changes, and we will take these comments into account as we continue to do so.

Final Decision:
We are implementing the updates to hospice payment rates as discussed in the proposed rule.

4. Hospice Cap Amount for FY 2019

As discussed in the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47183), we implemented changes mandated by the IMPACT Act of 2014 (Pub. L. 113-185). 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 2019 cap year will be $29,205.44, which is equal to the 2018 cap amount ($28,689.04) updated by the FY 2019 hospice payment update percentage of 1.8 percent.

A summary of the comments we received regarding the hospice cap amount and our responses to those comments appear below:

Comment:
One commenter suggested resetting and lowering the cap amount by an additional 10 to 15 percent, which the commenter stated will help to keep intact the original intent of the hospice philosophy and shift the narrative back towards the spirit of the community.

Response:
We appreciate the commenter's suggestion that CMS should reset and lower the annual cap amount. However, the restriction set forth in section 1814(i)(2)(B) of the Act, as amended by section 3(d) of the IMPACT Act, does not give us discretion to adjust the cap amount.

Final Decision:
We are implementing the changes to the hospice cap amount as discussed in the proposed rule.

C. Request for Information Update—Comments Related to Hospice Claims Processing

In the FY 2018 Hospice Wage Index and Rate Update proposed rule (82 FR 20789), we solicited public comments to start a national conversation about improvements that can be made to the health care delivery system that reduce unnecessary burdens for clinicians, other providers, and patients and their families. We specifically stated that we would not respond to the comment submissions in the FY 2018 final rule. Instead, we would review the submitted request for information comments and actively consider them as we develop future regulatory proposals or future sub-regulatory policy guidance. After reviewing all submitted responses to our requests for information in the FY 2018 proposed rule, one recommendation in particular warranted a revision to our current policy. Commenters suggested that CMS remove the requirement to report detailed drug data on the hospice claim as a way to reduce burden for hospices. We initially began asking for this information via Hospice Change Request 8358 in support of hospice payment reform (
https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/Hospice/Downloads/R2747CP.pdf).

In the FY 2019 Hospice Wage Index and Rate Update proposed rule, (83 FR 20953), we provided an update that effective October 1, 2018, we proposed to no longer require the reporting of detailed drug data on the hospice claim as this information is not currently used for quality, payment, or program integrity purposes. Rescinding this requirement could result in a significant reduction of burden to Medicare hospices, potentially reducing the number of line items on hospice claims by approximately 21.5 million, in aggregate. Therefore, in the FY 2019 proposed rule, we stated that we would allow hospice two options for reporting hospice drug information: (1) Hospice providers would have the option to continue reporting infusion pumps and drugs, with corresponding NDC information, on separate line items on hospice claims, though it is no longer mandatory to report it this way; or (2) Hospice providers can submit total aggregate DME and drug charges on the claim.

While the majority of commenters were supportive of this proposal and agreed that it would help to reduce regulatory burden, we did receive some comments primarily asking for more clarification regarding the options for reporting. A summary of the comments we received regarding this change in drug reporting and our responses to those comments appear below:

Comments:
Several commenters wanted to know if they needed to choose one option, and others requested clarification regarding options for submission. Some commenters asked if the reporting method could be determined on a case by case basis or if all claims had to be submitted using the same reporting option, meaning whether some claims could be reported with detailed line item information while others reported in the aggregate. One commenter suggested that it could be easier to report in the aggregate, depending on the responsiveness of the

physician or pharmacy that was involved in the patient's care. One commenter requested clarification if the claim would include all DME or just infusion pumps and drugs that were an item of DME. One commenter asked if this process would account for potential delay from receiving invoices from pharmacies. Several commenters raised concerns about the costs associated with retraining personnel to accurately capture claims data and vendor activities to build software and reports. Several commenters also noted concerns regarding whether there would be sufficient time for training and software revisions and testing prior to implementation.

Response:
We appreciate the commenters' feedback regarding this sub-regulatory change. We will allow hospices two options for reporting hospice drug information. Providers will have the option to continue to report infusion pumps and drugs, with corresponding NDC information, on the hospice claim as separate line items. This submission option will no longer be mandatory. Alternatively, hospices can submit total, aggregate DME and drug charges on the claim. At this time, there is no claims processing edit prohibiting providers to submit both separate line item drug data and aggregate drug data on the claim. However, we encourage providers to select one consistent mechanism for reporting this data. In order to implement this change, we have issued a detailed sub-regulatory change request, effective October 1, 2018, that provides further guidance. Change Request 10573 and related educational materials are available for review at the following URL:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R4035CP.pdf.

We received several comments that were outside the scope of the CY 2019 Hospice Wage Index and Rate Update proposed rule. We received comments regarding the timely posting of beneficiary's hospice status in the Medicare system and the communication process between the CWF and the Part D MarX system, sequential billing, feedback on working with the Quality Improvement Organizations (QIOs) on beneficiary appeals of hospice discharges, the role of recreational therapy under the Medicare hospice benefit, and utilization of CHC and the midnight-midnight rule.

We thank commenters for their feedback and we will consider these suggestions for potential policy refinements. As we stated in the FY 2018 proposed rule, we will actively consider all input as we develop future regulatory proposals or future sub-regulatory policy guidance.

D. Regulations Text Changes in Recognition of Physician Assistants as Designated Attending Physicians

When electing the Medicare hospice benefit, the beneficiary agrees to forgo the right to have Medicare payment made for services related to the beneficiary's terminal illness and related conditions, except when such services are provided by the designated hospice and the beneficiary's designated attending physician as outlined in section 1812(d)(2)(A) of the Act. The designated attending physician plays an important role in the care of a Medicare hospice beneficiary. If a beneficiary designates an attending physician, the beneficiary or his or her representative acknowledges that the identified attending physician was his or her choice and that the attending physician identified by the beneficiary, at the time he or she elects to receive hospice care, has the most significant role in the determination and delivery of the individual's medical care. The designated attending physician is required to certify that the beneficiary is terminally ill and participates as a member of the hospice IDG that establishes and/or or updates the individual's plan of care, ensuring that the Medicare beneficiary receives high quality hospice care.

Under the current regulations at § 418.3, the attending physician is defined as a doctor of medicine or osteopathy who is legally authorized to practice medicine or surgery by the state in which he or she performs that function, or a nurse practitioner, and is identified by the individual as having the most significant role in the determination and delivery of the individual's medical care. In the FY 2019 Hospice Wage Index and Rate Update proposed rule (83 FR 20953), we stated that section 51006 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123) amended section 1861(dd)(3)(B) of the Social Security Act such that, effective January 1, 2019, physician assistants (PAs) will be recognized as designated hospice attending physicians, in addition to physicians and nurse practitioners. We proposed to change the definition of “attending physician” under § 418.3 to include physician assistants (PAs).

In the proposed rule, we also stated that, effective January 1, 2019, Medicare will pay for medically reasonable and necessary services provided by PAs to Medicare beneficiaries who have elected the hospice benefit and who have selected a PA as their attending physician. PAs are paid 85 percent of the fee schedule amount for their services as attending physicians. Attending physician services provided by PAs may be separately billed to Medicare only if the PA is the beneficiary's designated attending physician, services are medically reasonable and necessary, services would normally be performed by a physician in the absence of the PA, whether or not the PA is directly employed by the hospice, and services are not related to the certification of terminal illness. Since PAs are not physicians, as defined in 1861(r)(1) of the Act, they may not act as medical directors or physicians of the hospice or certify the beneficiary's terminal illness and hospices may not contract with a PA for their attending physician services as described in section 1861(dd)(2)(B)(i)(III) of the Act, which sets out the requirements of the interdisciplinary group as including at least one physician, employed by or under contract with the agency or organization. All of these provisions apply to PAs without regard to whether they are hospice employees. We also proposed to amend 42 CFR 418.304 (Payment for physician and nurse practitioner services) in the regulations to include the details outlined above regarding Medicare payment for designated hospice attending physician services provided by physician assistants.

We solicited comments on the above proposals to expand the definition of “attending physician” at § 418.3 to include physician assistants (PA), and to amend the regulations at § 418.304 to allow payment for PA attending physician services. A summary of the comments and our responses to those comments are provided below:

Comment:
Many commenters expressed support and appreciation for the inclusion of physician assistants as designated hospice attending physicians, as commenters noted that PAs have an important role in providing hospice care, including supplying care to rural areas, and believe that this change will increase access to hospice services for Medicare beneficiaries.

Response:
We thank commenters for their support. Inclusion of PAs in the definition of attending physician for the Medicare hospice benefit will lead to more flexibility for hospice beneficiaries and providers alike.

Comment:
Several commenters suggested aligning the nurse practitioner and physician assistant rules in regards to hospice face-to-face encounters and

certifying terminal illness. One commenter stated that the exclusion of PAs from being able to provide the face-to-face encounter falls short of the goals of expanding the number of providers assisting this vulnerable population. This commenter stated that allowing PAs to conduct the face-to-face encounter and to certify terminal illness ensures greater continuity of care and prevent patients from having to engage with another healthcare professional for this encounter. One commenter recommended that the regulations at § 418.22, which describe the requirements for the certification of terminal illness, be amended to include PAs. A commenter recommended that the regulations at § 418.22 be amended to add physician assistant.

Response:
We appreciate commenters' suggestions that PAs be permitted to both perform hospice face-to-face encounters and certify terminal illness for hospice beneficiaries. As we described in the FY 2019 Hospice Wage Index and Rate Update proposed rule (83 FR 20953), the BBA of 2018 did not make changes to allow PAs to certify terminal illness or perform the face-to-face encounter for Medicare beneficiaries. In regards to the certification of terminal illness, section 51006 of the BBA of 2018 amended section 1814(a)(7)(A)(i)(I) of the Act explicitly to exclude physician assistants from certifying terminal illness. We reiterate that no one other than a medical doctor or doctor of osteopathy can certify or re-certify terminal illness. Additionally, PAs were not authorized by section 51006 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123) to perform the required hospice face-to-face encounter for re-certifications. The hospice face-to-face encounter is required per section 1814(a)(7)(D)(i) of the Act, which continues to state that only a hospice physician or a hospice nurse practitioner can perform the encounter. We wish to note that the regulations at § 418.22 will continue to state that the hospice face-to-face encounter must be performed by a hospice physician or hospice nurse practitioner and that only a medical doctor or doctor of osteopathy can certify or re-certify terminal illness.

Comment:
Several commenters suggested developing and supporting appropriate education and training programs for PAs and other clinicians who serve as attending physicians in hospice care to ensure that they have the experience and training needed to deliver quality end-of-life care to beneficiaries.

Response:
We appreciate the commenter's interest in the development of educational materials and programs for PAs regarding the role of the attending physician in the Medicare hospice benefit. We expect that providers will appropriately train staff according to the existing rules and regulations that govern Medicare hospice care and remain in compliance with state practice acts.

Comment:
A few commenters noted that there may be issues regarding state hospice licensure requirements and the scope of practice of PAs as an individual state. The commenters note that some states may not allow PAs to serve as the hospice patient's attending physician, and these state laws and regulations would apply.

Response:
We thank the commenter for noting that the states' scope of practice governance may not permit a PA to serve as a hospice beneficiary's attending physician. We note that hospice providers are responsible for reviewing the state hospice licensure requirements and scope of practice regulations for PAs to ensure that PAs are allowed to serve as a hospice patient's attending physician in accordance with state law and make staffing decisions accordingly.

Comment:
One commenter stated that an advanced registered nurse practitioner (ARNP) and a PA cannot be a member of the hospice interdisciplinary group (IDG) other than as the attending physician. The commenter suggested that CMS continue exploring how these credentialed healthcare providers can work at the top of their licenses and assist providers in gaining efficiency and enhancing the members of the IDG.

Response:
We thank the commenter for the comment regarding the composition of the IDG. The Condition of participation, “Interdisciplinary group, care planning, and coordination of services”, described at § 418.56, states that “the hospice must designate an interdisciplinary group or groups as specified in paragraph (a) of this section which, in consultation with the patient's attending physician, must prepare a written plan of care for each patient.” Therefore, the attending physician, which could include an NP or a PA, does, in fact, play an essential role in the function of the IDG. Additionally, § 418.56 states “the interdisciplinary group must include, but is not limited to, individuals who are qualified and competent to practice in the following professional roles: (i) A doctor of medicine or osteopathy (who is an employee or under contract with the hospice). (ii) A registered nurse. (iii) A social worker. (iv) A pastoral or other counselor.” The required members of the IDG are described in the CoPs, but other professionals, including NPs and PAs, are not excluded from participating in the IDG as appropriate for the beneficiary's plan of care.

Final Decision:
Effective for January 1, 2019, we are finalizing statutorily-required updates to the regulations to expand the definition of attending physician at § 418.3 to include physician assistants (PA). We are also finalizing amendments to the regulations at § 418.304 to include the details regarding Medicare payment for designated hospice attending physician services provided by physician assistants.

E. Proposed Technical Correction Regarding Hospice Cap Period Definition

In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47142), we finalized aligning the cap period, for both the inpatient cap and the hospice aggregate cap, with the federal FY for FY 2017 and later. Therefore, the cap year now begins October 1 and ends on September 30 (80 FR 47186). We proposed to make a technical correction in § 418.3 to reflect the revised timeframes for hospice cap periods. Specifically, we proposed that § 418.3 would specify that the cap period means the twelve-month period ending September 30 used in the application of the cap on overall hospice reimbursement specified in § 418.309.

Additionally, we are making a technical correction in § 418.309 to reflect the revised timeframes for hospice cap periods. Specifically, we are inserting a reference to the definition of “cap period” as defined in § 418.3 and removing language setting out specific month and day information. We inadvertently did not propose to amend the regulations at § 418.309, but we now believe it is appropriate to make a technical correction to the regulations text; the specific changes we are making in the regulations simply codify the final policies previously finalized in the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47142), and do not reflect any additional substantive changes.

Final Decision:
We did not receive any comments on our proposed changes therefore, we are finalizing the changes to the regulations text regarding the hospice cap period as discussed in the proposed rule.

F. Updates to the Hospice Quality Reporting Program (HQRP)

1. Background and Statutory Authority

The Hospice Quality Reporting Program includes HIS and CAHPS. Section 3004(c) of the Affordable Care Act amended section 1814(i)(5) of the Act to authorize a quality reporting program for hospices. 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 for that FY. Depending on the amount of the annual update for a particular year, a reduction of 2 percentage points could result in the annual market basket update being less than 0 percent for a FY and may result in payment rates that are less than payment rates for the preceding FY. Any reduction based on failure to comply with the reporting requirements, as required by section 1814(i)(5)(B) of the Act, would apply only for the particular year involved. Any such reduction would not be cumulative nor be taken into account in computing the payment amount for subsequent FYs. Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the Secretary on quality measures specified by the Secretary. The data must be submitted in a form, manner, and at a time specified by the Secretary.

2. General Considerations Used for Selection of Quality Measures for the Hospice QRP

a. Background

The “Meaningful Measures” initiative is intended to provide a framework for quality measurement and improvement work at CMS. While this framework serves to focus on those core issues that are most vital to providing high-quality care and improving patient outcomes, it also takes into account opportunities to reduce paperwork and reporting burden on providers associated with quality measurement. To that end, we have begun assessing our programs' quality measures in accordance with the Meaningful Measures framework. We refer readers to the Executive Summary for more information on the “Meaningful Measures” initiative.

Comment:
CMS received several comments that supported the Meaningful Measures Initiative. Additionally, commenters stated that the “Strengthen Person and Family Engagement as Partners in Their Care” Quality Priority, as set out in 83 FR 20935 is an important area that is central to the provision of hospice care delivery. One commenter stated that the following Meaningful Measure Areas are applicable to hospice patients: End of Life Care according to Preferences, Patient's Experience of Care, Patient Reported Functional Outcomes (83 FR 20935). One commenter stated that adverse event reporting in the hospice setting can be challenging due to the variety of levels and settings of care. CMS received a few comments regarding quality measure development processes. Commenters recommended that CMS seek stakeholder input as part of the quality measure development process. Additionally, measure development across all care settings should consider special populations such as those that are terminally ill, and that expected declines in functional status due to advanced illness should not negatively impact the provider. Further, CMS should pursue development of quality measures that are important for hospice patients at the end of life, such as person and family engagement, pain and symptom management, effective communication, care coordination, and care concordant with patients' wishes. Finally, one commenter requested that CMS be transparent in its planning and development of potential HQRP quality measures and inform and engage stakeholders as frequently as possible.

Response:
Since no changes were proposed regarding Meaningful Measures or quality measure development processes, comments received are outside the scope of the current rule. We discuss quality development processes in the FY 2018 Hospice final rule (82 FR 36652 through 36654), and we refer readers to that detailed discussion.

b. Accounting for Social Risk Factors in the Hospice QRP

In the FY 2018 Hospice Wage Index final rule (82 FR 36652 through 36654), we discussed the importance of improving beneficiary outcomes including reducing health disparities. We also discussed our commitment to ensuring that medically complex patients, as well as those with social risk factors, receive excellent care. We discussed how studies show that social risk factors, such as being near or below the poverty level, as set out annually in HHS guidelines,
https://www.federalregister.gov/documents/2018/01/18/2018-00814/annual-update-of-the-hhs-poverty-guidelines,
belonging to a racial or ethnic minority group, or living with a disability, can be associated with poor health outcomes and how some of this disparity is related to the quality of health care.
5

Among our core objectives, we aim to improve health outcomes, attain health equity for all beneficiaries, and ensure that complex patients as well as those with social risk factors receive excellent care. Within this context, reports by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) and the National Academy of Medicine have examined the influence of social risk factors in CMS value-based purchasing programs.
6

As we noted in the FY 2018 Hospice Wage Index final rule (82 FR 36652 through 36654), ASPE's report to Congress, which was required by section 2(d) of the IMPACT Act, found that, in the context of value-based purchasing programs, dual eligibility was the most powerful predictor of poor health care outcomes among those social risk factors that they examined and tested. ASPE is continuing to examine this issue in its second report required by the IMPACT Act, which is due to Congress in the fall of 2019. In addition, as we noted in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38428), the National Quality Forum (NQF) undertook a 2-year trial period in which certain new measures and measures undergoing maintenance review have been assessed to determine if risk adjustment for social risk factors is appropriate for these measures.
7

The trial period ended in April 2017 and a final report is available at:
http://www.qualityforum.org/SES_Trial_Period.aspx.
The trial concluded that “measures with a conceptual basis for adjustment generally did not demonstrate an empirical relationship” between social risk factors and the outcomes measured. This discrepancy may be explained in part by the “methods used for adjustment and the limited availability of robust data on social risk factors”. NQF has extended

the socioeconomic status (SES) trial,
8

allowing further examination of social risk factors in outcome measures.

5
See, for example United States Department of Health and Human Services. “Healthy People 2020: Disparities. 2014.” Available at:
http://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities;
or National Academies of Sciences, Engineering, and Medicine. Accounting for Social Risk Factors in Medicare Payment: Identifying Social Risk Factors. Washington, DC: National Academies of Sciences, Engineering, and Medicine 2016.

6
Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE), “Report to Congress: Social Risk Factors and Performance Under Medicare's Value-Based Purchasing Programs.” December 2016. Available at:
https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.

7
Available at:
http://www.qualityforum.org/SES_Trial_Period.aspx.

8
Available at:
http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86357.

In the FY 2018/CY 2018 proposed rules for our quality reporting and value-based purchasing programs, we solicited feedback on which social risk factors provide the most valuable information to stakeholders and the methodology for illuminating differences in outcomes rates among patient groups within provider that would also allow for a comparison of those differences, or disparities, across providers. Feedback we received across our quality reporting programs included encouraging CMS to explore whether factors that could be used to stratify or risk adjust the measures (beyond dual eligibility); considering the full range of differences in patient backgrounds that might affect outcomes; exploring risk adjustment approaches; and offering careful consideration of what type of information display would be most useful to the public.

We also sought public comment on confidential reporting and future public reporting of some of our measures stratified by patient dual-eligibility. In general, commenters noted that stratified measures could serve as tools for hospitals to identify gaps in outcomes for different groups of patients, improve the quality of health care for all patients, and empower consumers to make informed decisions about health care. We were encouraged to stratify measures by other social risk factors such as age, income, and educational attainment. With regard to value-based purchasing programs, commenters also cautioned CMS to balance fair and equitable payment while avoiding payment penalties that mask health disparities or discouraging the provision of care to more medically complex patients. Commenters also noted that value-based payment program measure selection, domain weighting, performance scoring, and payment methodology must account for social risk.

As discussed in last year's final rule, 82 FR 36652 through 36654, we are considering options to improve health disparities among patient groups within and across hospitals by increasing the transparency of disparities as shown by quality measures. We also are considering how this work applies to other CMS quality programs in the future. We refer readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38403 through 38409) for more details, where we discuss the potential stratification of certain Hospital Inpatient Quality Reporting Program outcome measures. Furthermore, we continue to consider options to address equity and disparities in our value-based purchasing programs.

We plan to continue working with ASPE, the public, and other key stakeholders on this important issue to identify policy solutions that achieve the goals of attaining health equity for all beneficiaries and minimizing unintended consequences.

Comment:
CMS received several comments that supported the administration's continued investigation of ways that social risk factors can be applied to quality measure development. Several commenters recommended additional research on the inclusion of social determinants of health in the development of quality measures, especially for those that apply to the seriously and terminally ill population. Commenters also provided several recommendations for possible social risk factors, including native language of the patient, income level, race and ethnicity, adequacy of caregiver support, presence of PTSD, and number of facility-based patients.

Response:
We appreciate commenters' continued support of our efforts to attain health equity for all beneficiaries. Since no changes were proposed to the social risk factors, comments received are outside the scope of the current rule. We addressed these issues in the FY 2018 final rule (82 FR 36652 through 36654), and we refer readers to that detailed discussion.

c. New Measure Removal Factor

In the FY 2016 Hospice Final Rule (80 FR 47186), we adopted seven factors for measure removal. We are adopting an eighth factor to consider when evaluating measures for removal from the HQRP measure set: The costs associated with a measure outweighs the benefit of its continued use in the program.

As we discussed in the Executive Summary, we are engaging in efforts to ensure that the HQRP measure set continues to promote improved health outcomes for beneficiaries while minimizing the overall costs associated with the program. These costs are multi-faceted and include not only the burden associated with reporting, but also the costs associated with complying with the program. We have identified several different types of costs, including, but not limited to: (1) Provider and clinician information collection burden and burden associated with the submitting/reporting of quality measures to CMS; (2) the provider and clinician cost associated with complying with other Hospital IQR programmatic requirements; (3) the provider and clinician cost associated with participating in multiple quality programs, and tracking multiple similar or duplicative measures within or across those programs; (4) the cost to CMS associated with the program oversight of the measure including measure maintenance and public display; and/or (5) the provider and clinician cost associated with compliance to other federal and/or state regulations (depending upon the measure). For example, it may be needlessly costly and/or of limited benefit to retain or maintain a measure for which our analyses show no longer meaningfully supports program objectives (for example, informing beneficiary choice or payment scoring). It may also be costly for health care providers to track the confidential feedback and preview reports, as well as publicly reported information on a measure we use in more than one program. We may also have to expend unnecessary resources to maintain the specifications for the measure, including the tools we need to collect, validate, analyze, and publicly report the measure data. Furthermore, beneficiaries may find it confusing to see public reporting on the same measure in different programs. There also may be other burdens associated with a measure that arise on a case-by-case basis.

When these costs outweigh the evidence supporting the continued use of a measure in the HQRP, it may be appropriate to remove the measure from the program. Although we recognize that one of the main goals of the HQRP is to improve beneficiary outcomes by incentivizing health care providers to focus on specific care issues and making public data related to those issues, we also recognize that those goals can have limited utility where, for example, the publicly reported data is of limited use because it cannot be easily interpreted by beneficiaries and used to influence their choice of providers. In these cases, removing the measure from the HQRP may better accommodate the costs of program administration and compliance without sacrificing improved health outcomes and beneficiary choice.

We will remove measures based on this factor on a case-by-case basis. We might, for example, decide to retain a measure that is burdensome for health care providers to report if we conclude that the benefit to beneficiaries justifies the reporting burden. Our goal is to move the program forward in the least burdensome manner possible, while

maintaining a parsimonious set of meaningful quality measures and continuing to incentivize improvement in the quality of care provided to patients.

We solicited public comment on our proposal to adopt an additional measure removal factor, “the costs associated with a measure outweighs the benefit of its continued use in the program,” beginning with the FY 2019 Hospice Wage Index final rule. The vast majority of commenters supported our proposal to adopt an eighth criterion for measure removal. Most commenters were appreciative of CMS acknowledging burden of measures as an important criterion for retaining measures in the HQRP. However, one commenter disagreed with this proposal as discussed further below. A summary of the comments we received on this proposal and our responses to those comments appear below:

Comment:
Several commenters raised concerns and provided recommendations. Among those who supported the proposal, several commenters requested CMS seek public input before removing any measure from the HQRP under this criterion. Commenters noted that cost and benefits could be hard to define, and that interested parties may have different perspectives about relative costs versus benefits of a measure. Moreover, one commenter noted that benefits can be difficult to quantify (for example, timely care, good communication, quality of life). Thus, commenters recommended CMS seek public input prior to removing a measure based on this criterion in order to obtain meaningful stakeholder input on benefits of a measure, especially in instances where a measure may be costly, but provides value in distinguishing quality of hospice care. Commenters also recommended that if CMS decides a measure is appropriate for removal based on this criterion, that CMS announce removal of the measure through rulemaking.

Response:
We appreciate the commenters input regarding the measure removal factor. We agree with commenters who suggested that CMS seek public input prior to removing measures under this measure removal factor. We value transparency in our processes, and continually seek stakeholder input through education and outreach sessions, other webinars, rulemaking, and other collaborative engagements with stakeholders. We intend to continue to adopt and remove measures through our previously identified processes, which include notice and comment rulemaking for proposed adoption and removal of measures. The only exception to this is that we may immediately remove a measure from the Hospice Program if we identify the measure as having unintended consequences that may adversely affect patient safety.

Comment:
The commenter who disagreed with this proposal stated that the existing seven criteria were sufficient for determining removal of a measure from the HQRP, and stated the eighth factor could open the door for providers to argue for dropping a measure they do not want collected for reasons other than true cost versus benefit concerns (for example, arguing to drop a measure they are performing poorly on by stating the measure's costs outweigh the benefits).

Response:
We agree that it is possible that providers may recommend removal of measures they do not support based on the case that these measures are costly. However, input from providers is only one element of our case-by-case analysis of measures. We also intend to consider input from other stakeholders, including patients, caregivers, advocacy organizations, healthcare researchers, and other parties as appropriate to each measure. We will weigh the input received from stakeholders with our own analysis of each measure to make a case-by-case determination of whether it's appropriate to remove a measure based on its costs outweighing the benefit of its continued use in the program.

Overall, in our assessment of measure sets across quality reporting and value-based purchasing programs under the Meaningful Measure Initiative, we identified measures that were no longer sufficiently beneficial to justify their costs within their respective programs. However, none of the previously finalized measure removal factors applied to these measures. Therefore, we determined that our measure removal factors were incomplete without this newly identified factor.

Final Decision:
After consideration of the comments, we are finalizing our proposal to adopt an additional measure removal factor for the HQRP, “the costs associated with a measure outweighs the benefit of its continued use in the program,” for FY 2019 and subsequent years.

3. Previously Adopted Quality Measures for FY 2019 Payment Determination and Future Years

In the FY 2014 Hospice Wage Index final rule (78 FR 48257), and in compliance with section 1814(i)(5)(C) of the Act, we finalized the specific collection of data items that support the following 7 National Quality Forum (NQF)-endorsed measures for hospice:

• NQF #1617 Patients Treated with an Opioid who are Given a Bowel Regimen,

• NQF #1634 Pain Screening,

• NQF #1637 Pain Assessment,

• NQF #1638 Dyspnea Treatment,

• NQF #1639 Dyspnea Screening,

• NQF #1641 Treatment Preferences,

• NQF #1647 Beliefs/Values Addressed (if desired by the patient).

We finalized the following 2 additional measures in the FY 2017 Hospice Wage Index final rule, effective April 1, 2017. Data collected will, if not reported, affect payments for FY 2019 and subsequent years. (81 FR 52163 through 52173):

• Hospice Visits when Death is Imminent,

• Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission.

The Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission measure (hereafter referred to as “the Hospice Comprehensive Assessment Measure”) underwent an off-cycle review by the NQF Palliative and End-of-Life Standing Committee and successfully received NQF endorsement in July 2017.

Data for the Hospice Visits when Death is Imminent measure pair is being collected using new items added to the HIS V2.00.0, effective April 1, 2017. This one measure comprises a measure pair assessing hospice staff visits to patients at the end of life. Measure 1: Percentage of patients receiving at least one visit from registered nurses, physicians, nurse practitioners, or physician assistants in the last 3 days of life. Measure 2: Percentage of patients receiving at least two visits from medical social workers, chaplains or spiritual counselors, licensed practical nurses or hospice aides in the last 7 days of life. We will need at least 4 quarters of reliable data to conduct the necessary analyses to support submission to NQF. We will also need to assess the quality of data submitted in the first quarter of item implementation to determine whether they can be used in the analyses. We have begun analysis of the data, and, pending analysis, we will submit the Hospice Visits when Death is Imminent measure pair to NQF for endorsement review in accordance with NQF project timelines and call for measures. We will use a similar process to analyze and submit new quality measures to NQF for endorsement in future years. Providers will be notified of measure endorsement

and public reporting through sub-regulatory channels.

In the FY 2015 Hospice Wage Index final rule (79 FR 50491 through 50496), we also finalized the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Hospice Survey to support quality measures based on patient and family experience of care. We refer readers to section III.F.5 of the FY 2019 final rule for details regarding the CAHPS® Hospice Survey, including public reporting of selected survey measures.

Table 7—Previously Finalized Quality Measures Affecting the FY 2019 Payment Determination and Subsequent Years

NQF No.
Hospice item set quality measure
Year the measure was first adopted for use in APU determination

1641
Treatment Preferences
FY 2016

1647
Beliefs/Values Addressed (if desired by the patient)
FY 2016

1634
Pain Screening
FY 2016

1637
Pain Assessment
FY 2016

1639
Dyspnea Screening
FY 2016

1638
Dyspnea Treatment
FY 2016

1617
Patients Treated with an Opioid Who are Given a Bowel Regimen
FY 2016

3235
The Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission
FY 2019

TBD
Hospice Visits when Death is Imminent
FY 2019

A summary of the comments we received regarding Hospice Visits and our response to those comments appear below:

Comment:
CMS received several comments pertaining to the Hospice Visits when Death is Imminent Measure Pair. Even though commenters supported the Hospice Visits when Death is Imminent Measure Pair, they recommended updates to Measure Pair, such as excluding patients with a length of stay of 7 days or less, aligning the measure pair and the SIA reimbursement structure, and accounting for patient or family refusal of services in measure specifications.

Response:
Since no changes were proposed to Hospice Visits when Death is Imminent Measure Pair, comments received are outside the scope of the current rule. We addressed these issues in the FY 2017 final rule (81 FR 52162 through 52169), and we refer the reader to that detailed discussion.

4. Form, Manner, and Timing of Quality Data Submission

a. Background

Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the Secretary on quality measures specified by the Secretary. Such data must be submitted in a form and manner, and at a time specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act requires that beginning with the FY 2014 and for 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 for that FY.

b. Revised Data Review and Correction Timeframes for Data Submitted Using the HIS

In the FY 2015 Hospice Wage Index final rule (79 FR 50486), we finalized our policy requiring that hospices complete and submit HIS records for all patient admissions to hospice on or after July 1, 2014. For each HQRP reporting year, we require that hospices submit data in accordance with the reporting requirements specified in the FY 2015 Hospice final rule (79 FR 50486) for the designated reporting period. Electronic submission is required for all HIS records. For more information about HIS data collection and submission policies and procedures, we refer readers to the FY 2018 Hospice Wage Index final rule (82 FR 36663) and the CMS HQRP website:
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html.
For more information about CAHPS® Hospice Survey data submission policies and timelines, we refer readers to section III.F.5 of the FY 2019 final rule.

Hospices currently have 36 months to modify HIS records. However, only data modified before the public reporting “freeze date” are reflected in the corresponding CMS Hospice Compare website refresh. For more information about the HIS “freeze date”, see the Public Reporting: Key Dates for Providers page on the CMS HQRP website:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Public-Reporting-Key-Dates-for-Providers.html.

To ensure that the data reported on Hospice Compare is accurate, we proposed that hospices be provided a distinct period of time to review and correct the data that is to be publically reported. This approach would allow hospices a time frame in which they may analyze their data and make corrections (up until 11:59:59 p.m. ET of the quarterly deadline) prior to receiving their preview reports. Once the preview reports are received, it is infeasible to make corrections to the data underlying the quality measure scores that are to be made public. Therefore, we proposed that for data reported using the HIS that there be a specified time period for data review and a correlating data correction deadline for public reporting at which point the data is frozen for the associated quarter. Similar to the policies outlined in the FY 2016 SNF final rule (81 FR 24271) and the FY 2016 IPPS/LTCH final rule (80 FR 49754), at this deadline for public reporting, we proposed that data from HIS records with target dates within the correlating quarter become a frozen “snapshot” of data for public reporting purposes. Any record-level data correction after the date on which the data are frozen will not be incorporated into measure calculation for the purposes of public reporting on the CMS Hospice Compare website. For each calendar quarter of data submitted using the HIS, approximately 4.5 months after the end of each CY quarter we proposed a deadline, or freeze date for the submissions of corrections to records. We note that this new data correction deadline for HIS records is separate and apart from the established 30-day data submission deadline. More information about the data submission deadline can be found at

https://www.cms.gov/Medicare/Quality-

Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/.

Specifically, each data correction deadline will occur on the 15th of the CY month that is approximately 4.5 months after the end of each CY quarter, and hospices will have up until 11:59:59 p.m. ET on that date to submit corrections or requests for inactivation of their data for the quarter involved. For example, for data reported in CY Q1, the freeze date will be August 15th, for CY Q2 the freeze date will be November 15th and so on. Under this policy, any modification to or inactivation of records that occur after the proposed correction deadline will not be reflected in publicly reported data on the CMS Hospice Compare website. For example, for the data collected during the 1st quarter, that is January 1st through March 31st of a given year, the hospice will have until 11:59:59 p.m. ET on August 15th of that year to ensure all of their data is correct. Any modifications to first quarter data that are submitted to us after August 15th would not be reflected during any subsequent Hospice Compare refresh. We believe that this is a reasonable amount of time to allow providers to make any necessary corrections to submitted data prior to public reporting. This revised policy aligns HQRP with the policies and procedures that exist in our other quality reporting programs including the post-acute care programs, which also enable providers to review their data and make necessary corrections within the specified time frame of approximately 4.5 months following the end of a given CY quarter and prior to the public reporting of such data.

We proposed that beginning January 1, 2019, HIS records with target dates on or after January 1, 2019 will have a data correction deadline for public reporting of approximately 4.5 months after the end of each CY quarter in which the target date falls, and that hospices will have until 11:59:59 p.m. ET on the deadline to submit corrections.

We also proposed that for the purposes of public reporting, the first quarterly freeze date for CY 2019 data corrections will be August 15, 2019. To accommodate those HIS records with target dates prior to January 1, 2019 and still within a target period for public reporting, we also proposed to extend to hospices the opportunity to review their data and submit corrections up until the CY 19 Q1 deadline of 11:59:59 p.m. ET on August 15, 2019. Table 8 presents the proposed data correction deadlines for public reporting beginning in CY 2019.

Table 8—Data Correction Deadlines for Public Reporting Beginning CY 2019

Data reporting period *
Data correction deadline for public reporting *

Prior to January 1, 2019
August 15, 2019

January 1, 2019-March 31, 2019
August 15, 2019

April 1, 2019-June 30, 2019
November 15, 2019

July 1, 2019-September 30, 2019
February 15, 2020

October 1,2019-December 31, 2019
May 15, 2020

* This CY time period involved is intended to inform both CY 2019 data and to serve as an illustration for the review and correction deadlines that are associated with each calendar year of data reporting quarter.

We received multiple comments pertaining to the revised data review and correction timeframes for data submitted using the HIS. A summary of the comments we received on this proposal and our responses to those comments appear below:

Comment:
A majority of the commenters supported the proposed 4.5 month data correction deadline for publicly reported HIS data. Commenters noted that this timeframe was sufficient for providers to review their data and make necessary corrections prior to public reporting. One commenter questioned why CMS would create a shorter, 4.5 month timeframe for data corrections when hospices may submit claims for services up to 12 months from the date of service. This commenter suggested that quality data corrections should be permitted for a similar amount of time. Additionally, CMS received one comment that emphasized the importance of widespread provider education related to the data correction deadline for public reporting of HIS data. This commenter stated that providers may experience challenges submitting and reviewing data in a shorter timeframe due to various circumstances, such as if the hospice is converting to a new EHR or if HIS data collection is not integrated into the hospice's routine assessment.

Response:
We appreciate the commenters' support of a 4.5 month data correction deadline for publicly reported HIS data. CMS expects that the data that hospices submit to CMS is as accurate as possible upon the initial submission of that data, and that corrections should not be the rule, but rather the exception here. When a hospice does need to make a modification or inactivation requests, they will continue to be permitted for up to 36 months from the assessment target date. However, HIS data that are submitted more than 4.5 months from the end of the corresponding CY quarter will impact data displayed on Hospice Compare because that data will not be reflected in the hospices measure scores that are displayed on Hospice Compare. More information about modification and inactivation requests can be found in the HIS Manual (Section 3.6) available under the downloads section of the HIS web page on the CMS HQRP website:
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Item-Set-HIS.html.

Requiring that data be reviewed and corrected for public reporting purposes within a defined period of time will result in more timely and accurate data on Hospice Compare, ensuring that consumers have access to a resource with consistent and accurate representatio

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2018-16539. Public record. Not legal advice.