Public Policy HCA Public Policy No

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1 Public Policy HCA Public Policy No T O: FROM: RE: HCA HOSPICE PROVIDER MEMBERS PATRICK CONOLE, VICE PRESIDENT, FINANCE & MANAGEMENT CMS ISSUES FY 2019 HOSPICE PAYMENT FINAL RULE DATE: AUGUST 3, 2018 The U.S. Centers for Medicare and Medicaid Services (CMS) has released its final rule (CMS-1692-F) to update the fiscal year (FY) 2019 (October 1, 2018 through September 30, 2019) Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. The final rule is currently at By August 7, CMS will post this final rule in the Federal Register at: CMS estimates that hospices nationally will see an estimated 1.8 percent ($340 million) increase in their payments for FY 2019 over FY CMS is finalizing updates to the hospice payment rates and the hospice aggregate cap. It also confirms that physician assistants (PAs) may be considered the Attending Physician, and it finalizes changes to the Quality Reporting Program (HQRP), including: a new factor for HQRP measure removal; new data review and correction timeframes for data submitted using the Item Set (HIS); changes to the quality measures displayed on Compare in FY 2019; updates to the public display of HIS Measures; and an extension of the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey participation requirements, exemption criteria, and public reporting policies for future years. The following summarizes the significant highlights of the final rule. FY 2019 Payment Update The final hospice payment update percentage of 1.8 percent for FY 2019 is based on the estimated inpatient hospital market basket update of 2.9 percent (based on a first quarter 2018 forecast by IHS Global Inc. with historical data through the fourth quarter of 2017). However, due to previous legislative requirements, the estimated inpatient hospital market basket update for FY 2019 of 2.9 percent must be reduced by a multifactor productivity (MFP) adjustment as mandated by the Affordable Care Act (ACA) and currently estimated to be 0.8 percentage point for FY The estimated inpatient hospital market basket update for FY 2019 is reduced further by 0.3 percentage point, as mandated by ACA. Thus the final hospice payment update percentage for FY 2019 is 1.8 percent. 1

2 Payment Rates There are four payment categories that are distinguished by the location and intensity of the services provided. They are for routine home care (RHC), continuous home care (CHC), inpatient respite care (IRC) and General Inpatient (GIP). The base payments of each payment category 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. (See p. 3.) As part of the FY 2016 final rule, CMS 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, that final rule also implemented a Service Intensity Add-on (SIA) payment for RHC when direct patient care is provided by a registered nurse (RN) or social worker during the last seven days of the beneficiary s life. The SIA payment is equal to the CHC hourly rate multiplied by the hours of nursing or social work provided (up to four hours total) that occurred on RHC days of service, if certain criteria are met. In order to maintain budget neutrality, as required under ACA, the new RHC rates were adjusted by an SIA budget neutrality factor. As part of the FY 2017 final rule, CMS 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, CMS simulated total payments using the FY 2019 hospice wage index and compared it to CMS s simulation of total payments using the FY 2018 hospice wage index. CMS divided 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. This results in a wage index standardization factor for each level of care (RHC days 1 through 60, RHC days 61or more, CHC, IRC and GIP). Table 1 below shows CMS s final FY 2019 RHC payment rates and Table 2 shows CMS s CHR, IRC and GIP payment rates. Code Description Table 1: RHC Payment Rates FY 2018 Payment Rate SIA Budget Neutrality Factor Wage Index Standardization Factor Payment Update Payment Rate 651 RHC (Days 1 60) $ X X X $ RHC (Days 61+) $ X X X $ Table 2: CHC, IRC and GIP Payment Rates Code Description FY 2018 Payment Rate Wage Index Standardization Factor Payment Update Payment Rate 652 CHC (Full Rate) = 24 hours of care at $41.56 per hour $ X X $ IRC $ X X $ GIP $ X X $

3 However, CMS will 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. Final Cap Amount for FY 2019 The hospice payment system also includes a statutory per-patient aggregate cap. The cap limits the overall payments made per-patient to a hospice annually. As mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), the cap amount for accounting years that end after September 30, 2016 and before October 1, 2025 must be updated by the hospice payment update percentage, rather than the Consumer Price Index (CPI). Therefore, the final cap amount for FY 2019 will be $29, (This is the 2018 cap amount of $28, increased by 1.8 percent.) Wage Index In 2016, CMS finalized significant changes to the home health wage index. Specifically, CMS implemented a one-year blend of: 1) the wage indexes of the previously used Core Based Statistical Areas (CBSA) designations; and 2) the new CBSA areas designated by the Office of Management and Budget (OMB) in The one-year, transitional blend utilized the old CBSA designation at 50 percent and the newer OMB designations at 50 percent. This one-year transition period expired at the end of FY CMS states that the hospice wage index for FY 2019 continues to be fully based on the revised OMB delineations, as adopted in FY 2015 and then fully implemented in FY CMS also confirms that it will continue to use the most recent pre-floor, pre-reclassified hospital wage index value available. Table 3 provides the breakdown of the labor and non-labor adjusted portions of the wage index calculation for the FY 2019 payment rates. (These have remained the same for a number of years.) Table 3: Labor and Non Labor Percentage of Wage Index Description Labor Percentage Non Labor Percentage RHC 68.71% 31.29% CHC 68.71% 31.29% IRC 54.13% 45.87% GIP 64.01% 35.99% Finally, the final hospice wage index applicable for FY 2019 is available on CMS s website at: CMS Finalizes Changes for Physician Assistants The Bipartisan Budget Act of 2018 authorizes physician assistants (PAs) to serve as a hospice patient s designated attending physician. This is a change that that many in the hospice industry have long advocated and it becomes effective on January 1, In the rule, CMS confirms revisions to hospice regulations to reflect this change, and specifies that a PA will be defined as a professional who has graduated from an accredited physician assistant educational program who performs such services as he or she is legally authorized to perform, in accordance with state law, and who meets the training, education, and experience requirements as the Secretary may prescribe. Under this 3

4 change, Medicare will pay for services regardless of whether or not the PA is directly employed by the hospice in cases where the services are: Medically reasonable and necessary services that would normally be provided by a physician, and will be paid at 85 percent of the fee schedule amount; Provided by a PA to patients who have selected the PA as their attending physician; Not related to the certification of terminal illness. PAs may not: serve as hospice medical directors; lead a hospice interdisciplinary team; certify a beneficiary s terminal illness; or conduct the hospice face-to-face encounter. Reporting of Drugs, Durable Medical Equipment (DME) on Claims As part of the FY 2018 proposed rule, CMS solicited comments on ways to relieve regulatory burdens on providers. In response, many stakeholders in the hospice industry recommended that CMS ease burdens associated with reporting of drug data on claims. In response CMS, has provided the option to report drug charges, DME and infusion drug information as monthly charges on claims. (CMS released a transmittal detailing these changes on April 26 at: Items/R4035CP.html?DLPage=1&DLEntries=10&DLFilter=hospice&DLSort=1&DLSortDir=ascending.) As part of the final rule CMS provides some clarification regarding the drug reporting changes. CMS clarifies that hospices may continue to report drugs, pumps, and infusion drugs on a line item basis in lieu of the option to report aggregate monthly charges. While hospices may use a combination of methods for drug reporting (line item and monthly), CMS encourages hospices to select a consistent method for reporting. Health Quality Reporting Program (HQRP) Updates As part of its final rule, CMS reiterates a continuing interest in accounting for social risk factors as part of the HQRP. CMS is considering options to improve health disparities among patient groups within and across hospitals by increasing the transparency of disparities as shown by quality measures. New HQRP Factor for Measure Removal As part of the FY 2016 rule, CMS adopted seven factors to consider when evaluating measures for removal from the HQRP. For FY 2019, CMS proposed the addition of an eighth factor: whether the costs associated with a measure outweigh the benefit of its continued use in the program. CMS is finalizing the inclusion of this factor but, in response to comments, agreed that the agency would seek public input prior to removing measures under the measure removal factor. Revised Data Review and Correction Timeframes for Data Submitted Using the Item Set (HIS) CMS is finalizing plans to impose an explicit period for review and correction (approximately 4.5 months) for each calendar quarter of data submitted using the HIS. The review period will follow the end of each calendar year quarter, after which CMS will freeze HIS data for posting to Compare. Any change to or inactivation of a record that occurs after the correction deadline will not be reflected in publicly reported data on the Compare website. 4

5 Beginning January 1, 2019, HIS records with target dates on or after January 1, 2019, will be subject to this review and correction time limitation, and hospices will have until 11:59:59 p.m. PST on the deadline to submit corrections. CMS says it agrees, in response to comments submitted, that widespread education will be necessary to ensure that providers understand the data review/correction deadlines going forward. Table 4 provides the deadlines as finalized by CMS. Table 4: 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 Quality Measures Displayed on Compare in FY 2019 CMS anticipates that it will begin public reporting of the HIS-based Comprehensive Assessment Measure (National Quality Forum No. 3235) on the Compare website in fall CMS plans to begin public reporting of this measure with a minimum denominator size of 20. CMS also expects to begin public reporting of the HIS-based Visits when Death is Imminent Measure Pair in FY The exact timeline for public reporting of the measure pair will be announced through regular subregulatory channels once necessary analyses and measure specifications are finalized. Updates to Public Display of HIS Measures Currently seven component HIS measures are displayed on Compare. CMS believes that the HIS Composite Measure provides consumers a more accessible measure for evaluating the quality of a hospice and holds hospices to a higher standard because it requires that they perform all seven care processes for a patient admission. Once the HIS Composite Measures are available for reporting on the Compare website, CMS will no longer directly display the seven component measures, although they will remain accessible to patients and others who are seeking additional detail on a hospice s quality of care. The existing HIS data collection requirements remain the same and the seven component measures will still be reported on CASPER reports and HIS provider preview reports. Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey The CAHPS Survey is a component of the HQRP. The final rule confirms the requirements for the CAHPS Survey for the FY 2019 through FY 2025 annual payment updates. In addition, the rule maintains the two global CAHPS Survey measures and six composite CAHPS Survey-based measures, which would be derived from data submitted on the survey. To meet the CAHPS Survey requirements for the HQRP, hospices must contract with a CMS-approved vendor to collect survey data for eligible patients on a monthly basis and report that data to CMS on the hospice s 5

6 behalf by the quarterly deadlines established for each data collection period. The list of approved vendors is available at s are responsible for making sure their respective survey vendors meet all data submission deadlines. Vendor failures to submit data on time are the responsibility of the hospices, a CMS position which remains a concern voiced by HCA in our comments. CMS began public reporting of the CAHPS results on Compare as of February The first report of CAHPS data covered survey results from deaths occurring between second quarter of 2015 and the first quarter of CMS reports the most recent eight quarters of data on the basis of a rolling average with the most recent quarter of data being added and the oldest quarter of data removed from the averages for each data refresh. CMS refreshes the data four times a year in February, May, August and November. CMS will not publish CAHPS data for any hospice that has fewer than 30 completed surveys due to concerns about statistical reliability. Finally, CMS will continue to exempt very small hospices from CAHPS requirements. s with fewer than 50 survey-eligible decedents/caregivers in the period from January 1, 2018 through December 31, 2018 are exempt from CAHPS data collection and reporting requirements for the 2021 annual payment update (APU). To qualify for the survey exemption for FY 2021 APU, hospices must submit an exemption request form. This form and any additional information on the survey can be found at Display of Public Use File Data and/or Other Publicly Available CMS Data on Compare CMS plans to move forward with its proposal to post information from the Public Use File (PUF) and other data on the Compare site. CMS notes, in response to comments, that the agency is committed to seeking input from providers, key stakeholders, and the public when considering addition of PUF and/or other publicly available data. The data will be displayed in a separate section of Compare from the HIS and CAHPS quality data. CMS says it plans to average PUF and other data over multiple years and include text explaining the purpose of the data points and how consumers can use them. PUF data for small providers (fewer than or equal to 10 patients) and small count data points will be suppressed. Analysis of Medicare Cost Report Data As part of CMS s proposed hospice payment rule, the agency included significant insights into data available from the revised hospice cost report that was implemented for cost reporting years beginning on or after October 1, As part of comments on that cost report, a subgroup from the National Association for Home Care and (NAHC) along with HCA recommended that CMS impose specific Level I edits that would reject a submitted cost report if it did not contain data on specified lines that should, based on appropriate cost reporting practices, include a value. In analysis referenced in the proposed rule, CMS indicated that if the Level I cost report edits along the lines of those recommended by NAHC and others were implemented, close to 66 percent of all hospice cost reports would be rejected. This finding underscores widespread concerns about the current quality of cost report submissions and the data that is being drawn from them, and being used to make policy decisions. In its comments on the proposed rule, NAHC and HCA encouraged CMS to move forward with plans to implement Level I edits that CMS issued as part of Transmittal 3 in mid-april. As part of the final rule, CMS responded with the following comment: 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- 6

7 Conclusion Part 2, Provider Cost Reporting Forms and Instructions, Chapter 43, Form CMS Transmittal 3 made several changes to the Cost Report, including the imposition of Level 1 and Level 2 edits ( These changes are effective for cost reporting periods ending on or after December 31, 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. HCA will update hospice provider members as any additional information becomes available. For further information, contact Patrick Conole at (518) or pconole@hcanys.org. 7

Hot Off the Press! The FY2017 Final Rule & Its Implications for Hospices. Presenter. Objectives 08/31/16

Hot Off the Press! The FY2017 Final Rule & Its Implications for Hospices August 31, 2016 Presenter Annette Kiser, MSN, RN, NE-BC Director of Quality & Compliance The Carolinas Center akiser@cchospice.org