Following is a summary we’ve developed of the proposed hospice payment/quality rule for FY2017 that was released last evening; this will also be published inNAHC Report:
CMS Releases FY2017 Hospice Wage Index, Payment Rule and Quality Reporting Requirements
Heavy Focus on Quality after FY2016 Payment Changes
The Centers for Medicare & Medicaid Services (CMS) has issuedMedicare Program; FY2017 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements(CMS-1652-P), the proposed payment and policy rule for the Medicare hospice benefit for fiscal year (FY) 2017. The rule will be printed in theFederal Registeron April 28, 2016, and the formal comment period ends on June 20, 2016. Since the FY2016 rule contained significant payment refinements and other payment-related policy changes, the rule (as anticipated) focuses more heavily on hospice quality issues. However, the rule does contain some useful information on CMS’ continuing efforts to monitor trends in hospice utilization and practice patterns that are worthy of note, some of which we have summarized below.
Trends in Hospice Utilization. Hospice spending in FY2015 was estimated at $15.5 billion, and the Office of the Actuary estimates growth rates to continue to increase by approximately 7% annually (in the FY2016 rule, the Actuary had estimated future growth at 8% annually). Diagnosis patterns have also changed, with the top 10 diagnoses for FY2015 listed as:
Alzheimer’s disease
Congestive Heart Failure, unspecified
Lung Cancer
COPD
Senile Degeneration of the Brain
Parkinson’s disease
Heart disease, unspecified
CVA/Stroke
Cerebral Atherosclerosis
Breast Cancer
A significant number of hospice claims in FY2014 (49%) still reported only a single diagnosis; preliminary analysis of hospice claims for FY2015 show that 37% of hospice claims contain a single diagnosis, with 63% submitting at least two diagnoses and 46% including at least three.
Pre-hospice Spending. CMS conducted analysis of FY2014 data and found that daily pre-hospice spending for patients with Alzheimer’s disease, non-Alzheimer’s dementia or Parkinson’s (about 20% of patients) was $64.87 per day in the 180 days prior to admission to hospice, and in the 30 days prior to hospice election, the median Medicare spending for these patients was $96.99. Both of these amounts are less than the hospice routine home care (RHC) rate. For cancer patients, the 180day “prior” figure was $143.48 and the 30-day prior figure was $293.64. The average length of stay for the Alzheimer’s, non-Alzheimer’s and Parkinson’s patients was 119 days compared to 47 days for patients with a cancer diagnosis. CMS notes that analyzing pre-hospice spending wasan initial step in determining whether patients require different resource needs prior to hospice based on the principal diagnosis on the hospice claim.
Non-hospice Spending. Based on continuing study of spending outside of hospice, CMS has found that over the CY2012 to FY2014 time period, non-hospice Part A and Part B spending during hospice elections has declined 15.4% (from $710.1 million in CY2012 to $600.8 million in FY2014). For the same time period Part D spending also declined, although by a smaller percentage ($334.9 million in CY2012 and $291.6 million in FY2014). Based on analysis, CMS remains concerned that common palliative and other disease-specific drugs for hospice beneficiaries are being covered and paid for under Part D. As a result, Medicare could be “paying twice” for drugs for hospice patients.
Live Discharge Rates. CMS continues to examine live discharge rates with an interest in better understanding characteristics of hospices with a tendency toward higher rates. CMS has found an “incremental” decrease in average annual rates of live discharge between 2006 and 2014 (live discharge rates averaged 20.4% in 2006 but rose to 21+% in the following 3 years; by 2014 average live discharge rates dropped to 17.4%). CMS found that hospices with higher live discharge rates provided fewer visits per week, as well as fewer skilled visits. CMS also found a relationship between high live discharge hospices and spending outside of hospice, as well as longer lifetime lengths of stay. CMS is continuing to improve on its oversight in this area and may, in the future, consider additional regulatory proposals.
Visits in the Final Days of Life. CMS continues to examine visits in the final days of life with an eye toward its impact on the quality and appropriateness of care provided to dying patients and their families. CMS is attempting to address concerns in this area by introducing a pair of quality measures related to “Hospice Visits when Death is Imminent” which is discussed in greater detail in the Hospice Quality Reporting Program (HQRP) section of this article. CMS is also hopeful that implementation of the Service Intensity Add-on (SIA) will have an impact in this area.
Monitoring the Impacts of Hospice Payment Reform. CMS intends to monitor the impact of hospice payment reform changes and general hospice trends to help guide future policy changes. These areas are expected to include diagnosis reporting, lengths of stay, live discharge patterns in relationship to provision of services and the aggregate Cap, non-hospice spending, trends in live discharge at and around day 61 of care, and readmissions after a 60-day lapse following live discharge. As part of the rule CMS also provides a lengthy list of payment reform metrics that its contractor Acumen LLC will monitor at the individual provider level and in the aggregate relative to the RHC payment changes that were implemented in January 2016. Data from these ongoing analyses will be used for program integrity efforts and potentially for future payment system changes. CMS also references the hospice PEPPER report and its usefulness for monitoring vulnerabilities and areas for improvement.
Proposed FY2017 Hospice Wage Index. For FY2016, hospices used a blended wage index as a transitional phase to the 2010 core-based statistical area (CBSA) values. Beginning with FY2017 (October 1, 2016),the wage index for all hospice payments will be fully based on the new OMB CBSA delineations. A link to the proposed wage index applicable for FY 2017 is available on the CMS Web siteherein the SPOTLIGHT section. The proposed wage index applicable for FY 2017 will not be published in theFederal Register; itwill be effective October 1, 2016 through September 30, 2017.
Proposed Hospice Payment Update Percentage. The hospice payment update percentage is based on the hospital inpatient market basket index, which for FY2017 CMS hasestimatedat 2.8 percent. The market basket value, however, must be reduced to reflect Affordable Care Act-mandated reductions for a “productivity” adjustment (estimated at 0.5 percentage points) and an additional reduction of 0.3 percentage point.It should be noted that the hospital market basket index and the MFP are subject to change, so the final hospice payment update percentage which will be published in late July or early August could be somewhat different from the current estimated net update of 2.0 percent. Additionally, these figures do not reflect the 2% sequester.
The labor/non-labor portion of the hospice payment rates are as follow:
Labor / Non-laborRoutine Home Care / 68.71% / 31.29%
Continuous Home Care / 68.71 / 31.29
General Inpatient Care / 64.01 / 35.99
Inpatient Respite Care / 54.13 / 45.87
Proposed FY2017 Payment Rates.CMS indicates in the proposed rule that it will continue to make the SIA payments available for RN and Social Worker visits provided under RHC during the last seven days of life budget neutral through an annual determination of a SIA budget neutrality factor (SBNF), which will then be applied to RHC rates. For FY2017, the SBNF applicable to RHC rates for days 1 through 60 is calculated at 1.0001, while the SBNF applicable to the RHC rate for days 61 and beyond has been calculated to be 0.9999.
For FY 2017, CMS is proposing to apply a wage index standardization factor to the FY 2017 hospice payment rates in order to ensure overall budget neutrality when updating the hospice wage index with more recent hospital wage data.Wage index standardization factors are applied in other payment settings such as under home health Prospective Payment System (PPS), IRF PPS, and SNF PPS. Applying a wage index standardization factor to hospice payments would eliminate the aggregate effect of annual variations in hospital wage data.To calculate the wage index standardization factor, CMS simulated total payments using the FY2017 hospice wage index and compared it its simulation of total payments using the FY 2016 hospice wage index. By dividing payments for each level of care using the FY 2017 wage index by payments for each level of care using the FY 2016 wage index, CMS obtained a wage index standardization factor for each level of care (RHC days 1-60, RHC days 61+, CHC, IRC, and GIP).
Following are the base payment rates that CMS is proposing for FY2017:
Code / Description / FY2016 Payment Rates / SBNF / Proposed Wage Index Standardization Factor (SBNF) / FY2017 Proposed Hospice Payment Update Percentage / FY2017 Proposed Payment Rates651 / Routine Home Care (days 1- 60) / $186.84 / X 1.0001 / X 0.9990 / X 1.020 / $190.41
651 / Routine Home Care (days 61+) / $146.83 / X 0.9999 / X 0.9995 / X 1.020 / $149.68
652 / Continuous Home Care
Full rate = 24 hours of care
$40.16=FY2017 hourly rate / $944.79 / N/A / X 1.0000 / X 1.020 / $963.69
655 / Inpatient Respite Care / $167.45 / N/A / X 1.0000 / X 1.020 / $170.80
656 / General Inpatient Care / $720.11 / N/A / X 0.9996 / X 1.020 / $734.22
Hospice providers should note that the above values, again, are subject to change in the final rule. They must also be modified by appropriate wage index values and will be subject to the sequester when claims are paid.Service Intensity Add-on (SIA) payments will be made at the Continuous Home Care rate, currently estimated at $40.16 per hour. Finally, hospices that fail to meet the applicable quality reporting requirements for FY2017 will have payments subject to a 2 percentage point reduction.
Hospice Aggregate Cap. As required by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), for accounting years that end after September 30, 2016, and before October 1, 2015, the hospice Aggregate Cap is updated by the hospice payment update percentage (rather than using the consumer price index for urban consumers -- CPI-U -- as has historically been the case).Consequently, the 2016 Cap (the Cap year for which runs from November 1, 2015, through October 31, 2016) will be $27,820.75, and the 2017 Cap will be $28,377.17.
Hospice providers are reminded that as part of the FY2016 hospice payment rule, CMS determined it appropriate to transition the Cap year to the federal fiscal year. Following is a table outlining the changes:
Streamlined / Patient-by-patient (Proportional)Patients / Payments / Patients / Payments
2016 / 9/28/15-9/27/16 / 11/1/15-10/31/16 / 11/1/15-10/31/16 / 11/1/15-10/31/16
2017 / 9/28/16-9/30/17 / 11/1/16-9/30/17 / 11/1/16-9/30/17 / 11/1/16-9/30/17
2018 / 10/1/17-9/30/18 / 10/1/17-9/30/18 / 10/1/17-9/30/18 / 10/1/17-9/30/18
Quality
Much of the proposed rule deals with the hospice quality reporting program.
CMS is proposing
oTwo new hospice quality reporting program (HQRP) measures:
oHospice Visits When Death is Imminent- assessing hospice staff visits to patients and caregivers in the last week of life; and
oHospice and Palliative Care Composite Process Measure- assessing the percentage of hospice patients who received care processes consistent with existing guidelines
oTo codify at §418.312 that if the National Quality Forum (NQF) makes only non-substantive changes to specifications for HQRP measures in the NQF’s re-endorsement process CMS would continue to utilize the measure in its new endorsed status.
oThat hospices that received their CCN after January 1, 2017, are exempt from the FY 2019 APU Hospice CAHPS® requirements due to newness. This exemption will be determined by CMS. The exemption is for 1 year only.
oThat hospices that received their CCN after January 1, 2018, are exempted from the FY 2020 APU Hospice CAHPS® requirements due to newness. This exemption will be determined by CMS. The exemption is for 1 year only.
In addition to these proposals,CMS is considering a hospice patient assessment instrument as a new data collection mechanism, is not proposing to remove any of the HQRP measures at this time, andplans to publicly report all seven HIS measures on a CMS Hospice Compare Web site. The CMS Hospice Compare Web site is on target to be implemented in spring/summer 2017.
Two New Proposed Measures:Collection of the two new proposed measures would impact payments in FY2019. The measures were included on CMS' List of Measures under Consideration (MUC list) for 2015 but have not yet been approved by the National Quality Forum (NQF).
The Hospice Visits When Death is Imminent Measure Pairaddresses whether a hospice patient and their caregivers’ needs were addressed by the hospice staff during the last days of life. This measure is specified as a set of two measures as follows:
oMeasure 1--assesses the percentage of patients receiving at least 1 visit from registered nurses, physicians, nurse practitioners, or physician assistants in the last 3 days of life and addresses case management and clinical care.
oMeasure 2-- assesses the percentage of patients receiving at least 2 visits from medical social workers, chaplains or spiritual counselors, licensed practical nurses, or hospice aides in the last 7 days of life and gives providers the flexibility to provide individualized care that is in line with the patient, family, and caregiver’s preferences and goals for care and contributing to the overall well-being of the individual and others important in their life
CMS believes collecting information about hospice staff visits for measuring quality of care, in addition to the requirement of reporting visits from some disciplines on hospice claims, will encourage hospices to visit patients and caregivers and provide services that will address their care needs and improve quality of life during the patients’ last days of life. CMS cited the fact that clinician visits to patients at the end of life are associated with improved outcomes such as decreased risk of hospitalization, emergency room visits, and hospital death, and decreased distress for caregivers and higher satisfaction with care. CMS also cited data that were part of previous Hospice Technical Reports completed by Abt Associates relative to the number of visits in the last days of life from skilled hospice disciplines. The 2014 AbtMedicare Hospice Payment Reform Reportindicated that 28.9 percent of Routine Home Care hospice patients did not receive a skilled visit on the last day of life.
No current HQRP measures address care beyond the hospice initial and comprehensive assessment period, nor do any current HQRP measures relate to the assessment of hospice staff visits to patients and caregivers in the last week of life.
Data for the paired measure would be collected via the existing Hospice Item Set (HIS). CMS proposed that four new items be added to the HIS-Discharge record to collect the necessary data elements for the measure.The expectation is that data collection for this quality measure via the four new HIS items would begin no earlier than April 1, 2017 (providers would begin collecting data for the measure for patient admissions and discharges occurring after April 1, 2017).
CMS submitted a request for approval to the Office of Management and Budget (OMB) for the Hospice Item Set version 2.00.0 that incorporates the four new HIS items. While not yet available, the new HIS data items that would collect this measure data will be available for public viewing at: -and -Guidance/Legislation/PaperworkReductionActof1995/PRA -Listing.html
For the second measuredata on a total of seven individual care processes will be captured, which include the six NQF-endorsed quality measures and one modified NQF-endorsed quality measure currently part of the HIS. This measure calculates the percentage of patients who received all care processes at admission. These individual component measures address care processes around hospice admission that are clinically recommended or required in the hospice Conditions of Participation. To calculate this measure, the individual component of the composite measure are assessed separately for each patient and then aggregated into one score for each hospice.
CMS indicates that a composite measure serves to ensure all hospice patients receive a comprehensive assessment for both physical and psychosocial needs at admission. Collecting information about the total number of care processes conducted for each patient will incentivize hospices to conduct all desirable care processes for each patient and provide services that will address their care needs and improve quality during the time he/she is receiving hospice care.
Additionally, creating a composite quality measure for comprehensive assessment at admission will provide consumers and providers with a single measure regarding the overall quality and completeness of assessment of patient needs at hospice admission, which can then be used to meaningfully and easily compare quality across hospice providers and increase transparency.
Analyses conducted by the CMS measure development contractor, RTI International, show that hospice performance scores on the current seven HIS measures are high (a score of 90 percent or higher); however, these analyses also revealed that, on average, only 68.1 percent of patient stays in a hospice had documentation that all of these desirable care processes were done at admission.