FY2015 Hospice Wage Index Proposed Rule

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1 FY2015 Hospice Wage Index Proposed Rule To: NHPCO Members From: NHPCO Health Policy Team Date: May 6, 2014 Summary of FY2015 Hospice Wage Index Proposed Rule On Friday, May , CMS released the FY2015 Hospice Wage Index proposed rule. Hospice payment reform is NOT proposed in the FY2015 proposed rule. The proposed rule includes the following: Data analysis that will inform hospice payment reform Focus areas Definitions of terminal illness and related conditions Attending physician is patient decision Cap self report and overpayment expected 5 months after close of cap year 2% payment update (net 1.3%) for FY2015 (less 2% because of sequestration) Hospice quality reporting updates Part D and hospice communication ICD-9 to ICD-10 Update Topics for data analysis CMS and its hospice payment reform contractor, Abt Associates, have published key findings on data analysis as hospice payment reform is considered. Topics analyzed by Abt Associates include: Beneficiaries dying without skilled visits in last 48 hours of life Analysis of GIP, Continuous Home Care and Inpatient Respite Live discharges Frequency of live discharges Live discharges and readmissions after hospital stay Medicare expenditures in Part A and B outside the MHB Medicare expenditures in Part D when patient has elected hospice 1 P a g e

2 In addition, CMS has posted the May 1, 2014 Abt Associates analyses on the CMS Hospice Center, entitled Medicare Hospice Payment Reform: Analyses to Support Payment Reform. A literature review is also posted: Medicare Hospice Payment Reform: A Review of the Literature (2013 Update) Definitions of terminal illness and related conditions In the proposed rule, CMS states Because hospice care is unique in its comprehensive, holistic, and palliative philosophy and practice, we want to ensure that the hospice services under the Medicare hospice benefit are preserved and not diluted, or unbundled in any way. A proposed definition of terminally ill is offered for comment: Proposed definition of terminally ill: Abnormal and advancing physical, emotional, social and/or intellectual processes which diminish and/or impair the individual s condition such that there is an unfavorable prognosis and no reasonable expectation of a cure; not limited to any one diagnosis or multiple diagnoses, but rather it can be the collective state of diseases and/or injuries affecting multiple facets of the whole person, are causing progressive impairment of body systems, and there is a prognosis of a life expectancy of six months or less. In addition, CMS proposes a corollary definition of related conditions for hospice providers to review and comment: Proposed definition of related conditions: Those conditions that result directly from terminal illness; and/or result from the treatment or medication management of terminal illness; and/or which interact or potentially interact with terminal illness; and/or which are contributory to the symptom burden of the terminally ill individual; and/or are conditions which are contributory to the prognosis that the individual has a life expectancy of 6 months or less. Guidance on Determining Beneficiaries Eligibility for Hospice The rule provides a reminder that the hospice medical director must consider at least the following information for hospice eligibility per CMS regulations at (b): Diagnosis of the terminal condition of the patient Other health conditions, whether related or unrelated to the terminal condition. Current clinically relevant information supporting all diagnoses. Clinical judgment supported by documentation: CMS goes on to state that a hospice is required to make certain that the physician's clinical judgment can be supported by clinical information and other documentation that provide a basis for the certification of 6 months or less if the illness runs its normal course. 2 P a g e

3 Documentation must include: Hospice services must be reasonable and necessary for the palliation and management of the terminal illness and related conditions. Documentation supporting a 6-month or less life expectancy is included in the beneficiary s medical record and available to the MACs when requested. Resources for Determining Eligibility: Multiple public sources available to assist in determining whether a patient meets Medicare hospice eligibility criteria: industry specific clinical and functional assessment tools information on MAC websites Summary: CMS states that we expect hospice providers to use the full range of tools available to make responsible and thoughtful determinations regarding terminally ill eligibility. Proposed Timeframe for Hospice Cap Determinations and Overpayment Remittances CMS states that the percentage of hospices exceeding the cap has increased, as the table below shows: Year % of Hospices Over Cap Average Cost per Patient Below Cap Hospice % $10,649 $20, % $11,595 $21, % $12,301 $22, % $12,957 $23, % $13,312 $23, % $13,500 $24, % $14,100 $25,377 Average Cost per Patient Above Cap Hospice CMS has made efforts in the last two years to update the Provider Statistical and Reimbursement (PS&R) system, where the inpatient and aggregate caps could be managed. The updated PS&R enables hospices to calculate estimated caps and to monitor their cap status at different points during the cap year. The PS&R also allows hospices to calculate their cap liability after the cap year ends. Proposed change: CMS is proposing to require that hospices complete and self report their inpatient and aggregate caps determination within 5 months after the cap year ends on October 31 of each year, due by March 31 of each year. CMS also proposes that any cap overpayments would be remitted at that time. The MAC would reconcile all payments at the final cap determination, but would not initiate the cap report. 3 P a g e

4 Fail to file cap report: CMS proposes that if a provider fails to file the cap report, that payments to the provider would be suspended in whole or in part until the self-determined cap is filed with the Medicare contractor. Proposed Timeframes for Filing the Notice of Election and Notice of Termination/Revocation Days from Effective Date of Election to NOE Filing % of NOEs Filed Within 2 days 16.2% Within 5 days 39.2% Within 10 days 62.1% CMS notes that the timeliness of reporting the hospice election is critically important. CMS proposes that the Notice of Election (NOE) be filed as soon as possible after the election occurs, and within three days of the effective date of the NOE. Benefits of Timely NOE Filing: Limits ability of other Part A, B and D providers to bill in error Provides up to date information on face-to-face encounter Identify current benefit period Provide smooth transitions for sequential billing Proposed Enforcement Action CMS proposes that if the hospice does not file within 3 calendar days, Medicare would not cover and pay for days of hospice care from the effective date of election to the date of filing of the NOE. CMS further proposes that these days be considered the financial responsibility of the hospice and that the hospice could not bill the beneficiary for them. Proposed Timeframe for Filing the Notice of Termination/Revocation CMS states that it is important to record discharge or revocation in claims processing system in a timely way and that there is no current notification for hospices other than the claims process. CMS proposes to revise the regulations at and to require hospices to file a Notice of Termination/Revocation (NOTR) within 3 calendar days after the effective date of a beneficiary s discharge or revocation if final claim is not already filed. Proposed Addition of the Attending Physician to the Hospice Election Form CMS reminds hospice providers that the attending physician, who may be a nurse practitioner, is chosen by the patient (or his or her representative). Anecdotal reports show that hospices are 4 P a g e

5 changing a patient s attending physician when the patient moves to an inpatient setting for care, often to a nurse practitioner, or choosing whoever is available as the patient s attending physician. Further, MACs have noted that the NPI of the attending physician reported on claims was sometimes changing, and differed from that reported on the NOE. In addition, analysis of Part B claims showed that 35% of beneficiaries had Part B claims during their hospice election from more than one physician who claimed to be their designated attending physician. Proposed change If a patient (or representative) wants to change his or her designated attending physician, they must follow a procedure similar to changing the designated hospice. The patient or their representative must file a signed statement that identifies the new attending physician. The information must be in enough detail so that it is clear which physician or NP was designated as the new attending physician Components of proposed statement: the date the change is to be effective the date that the statement is signed, the patient s (or representative s) signature Acknowledgement that this change in the attending physician is the patient s (or representative s) choice. FY 2015 Hospice Wage Index and Rates Update CMS announced a proposed payment update for FY 2015 of 2.0%. The net impact before sequestration is 1.3%, after taking the Budget Neutrality Adjustment Factor (BNAF) into account. Note: The 2% sequestration reduction for all Medicare providers means that the rates for FY2015 will remain the same as the FY2014 rates, with no increase. Code Level of Care FY2014 Rate Multiply by 2.0% Rate Increase 651 Routine Home Care 652 Continuous Home Care Full rate of 24 hours = $ Hourly = $ Inpatient Respite Care 656 General Inpatient Care Proposed FY2015 Rate $ x 1.02 $ $ $ x 1.02 $ $ $ x 1.02 $ $ $ x 1.02 $ $ Proposed FY2015 Rate with Sequestration 5 P a g e

6 IF Hospice Provider Does Not Submit Required Quality Data, FY2015 Hospice Payment Rates will be Reduced by 2.0% Code Level of Care FY2014 Rate Multiply by 2.0% Rate Increase 651 Routine Home Care 652 Continuous Home Care Full rate of 24 hours = $ Hourly = $ Inpatient Respite Care 656 General Inpatient Care Proposed FY2015 Rate Proposed FY2015 Rate with Sequestration $ x 1.00 $ $ $ x 1.00 $ $ $ x 1.00 $ $ $ x 1.00 $ $ Hospice Cap Amount The hospice aggregate cap amount for the 2014 cap year will be $26, Cap year is November 1, 2013 to October 31, 2014 Proposed Updates to the Hospice Quality Reporting Program Quality Measures CMS reiterates that the 7 quality measures announced in the FY2014 final hospice wage index rule remain in place for FY2015. They are: 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) (modified) 6 P a g e

7 Hospice Item Set CMS reiterates that the Hospice Item Set (HIS) will begin with regular and ongoing electronic submission of the HIS data for each patient admission to hospice on or after July 1, 2014, regardless of payer or patient age and a separate admission HIS and discharge HIS for each patient. Failure to report quality data via HIS in 2014 will result in a market basket update reduced by 2% in FY Newly Certified Hospices On or after November 1, 2014: If a hospice receives its certification number on or after November 1, 2014, CMS proposes to exclude from quality reporting requirements for the FY 2016 payment determination. Proposed for hospices certified on or after November 1 of the preceding year: CMS proposes that hospices report quality measures but would be excluded from any payment penalty for quality reporting purposes for the following FY. This provision is proposed to be codified in the Hospice Conditions of Participation at Extraordinary Circumstances and Quality Reporting CMS proposes that hospices could request extensions/exceptions for extraordinary circumstances beyond the control of the provider. When an extension/exception is granted, a hospice will not incur payment reduction penalties. New Measures Not proposing any new measures at this time. Future measures should expand measures already in use in other quality reporting programs that could apply or develop new measures if no suitable measures are ready for implementation or expansion. Electronic Health Records CMS is interested in hearing from hospice providers about their adoption of EHR, what functional aspects are most important, whether hospice EHRs have the ability to send or receive transfer of care Information and whether hospices have the ability to support medication orders/medication reconciliation. Communicate with other health care providers: They also ask for feedback on whether the hospice EHR can communicate with other healthcare providers, such as acute care hospitals, physician practices and skilled nursing facilities. 7 P a g e

8 Electronic Clinical Quality Measures: CMS asks for feedback on whether CMS should develop electronic clinical quality measures for hospice providers. What would be the benefits and limitations? Public Reporting Data collected by hospices during Q1-3 CY 2015 will be analyzed starting in CY 2015 and decisions about reporting will be based on findings and analysis of CY2015 data. CMS also states that public reporting may occur during FY2017. CAHPS Hospice Survey The CAHPS Hospice Survey is a component of CMS quality reporting program which emphasizes the experiences of hospice patients and their primary caregivers listed in the hospice patients records. Measures from the survey will be submitted to the National Quality Forum (NQF) for approval as hospice quality measures. Each measure maps directly to one or more questions on the survey. The measures include: Hospice Team Communication Getting Timely Care Treating Family Member with Respect Providing Emotional Support Getting Help for Symptoms Information Continuity Understanding the Side Effects of Pain Medication Getting Hospice Care Training (Home Setting of Care Only) Survey Implementation CMS will create a CAHPS website that will be available during the summer of 2014 and will provide resources for hospices and vendors. The website is: The launch date will be announced during an upcoming Open Door Forum. In general, hospice patients and their caregivers are eligible for inclusion in the survey sample with the exception of the following ineligible groups: primary caregivers of patients under the age of 18 at the time of death; primary caregivers of patients who died within 48 hours of admission to hospice care; patients for whom no caregiver is listed or available, or for whom caregiver contact information is not known; patients whose primary caregiver is a legal guardian unlikely to be familiar with care experiences; patients for whom the primary caregiver has a foreign (Non-US or US Territory address) home address; caregivers of patients who request that they not be contacted (those who sign no publicity requests while under the care of hospice or otherwise directly request not to be contacted). 8 P a g e

9 Identification of patients and caregivers for exclusion will be based on hospice administrative data. Requirements for participation in the CAHPS Hospice Survey vary depending on number of deaths in the previous calendar year. Deaths in Previous Survey and Reporting Calendar Year < 50 deaths Exempt from CAHPS data collection and reporting 50 to 699 deaths Survey and report all cases n = 2,326 hospices >= 700 deaths n = 274 hospices Sample of 700 will be drawn under equal probability design CAHPS Survey Vendors Hospices are required to contract with a third-party vendor that is CMS-trained and approved, which ensures that the data are unbiased and collected by an organization that is trained to collect this type of data. A list of approved vendors will be provided on the CAHPS Hospice Survey website closer to national implementation. Applications for survey vendors available at Coordination of Benefits Process and Appeals for Part D Payment for Drugs While Beneficiaries are Under a Hospice Election CMS provides comments on the coordination between Part D and Medicare hospices. CMS is considering amending language in the Part D regulations (at ) by adding a new paragraph Coordination with Medicare hospices. The new section would require that a Part D sponsor communicate and coordinate with Medicare hospices in determining coverage for drugs whenever coverage determination process is initiated or a hospice furnishes information regarding a beneficiary s hospice election or drug profile. CMS is considering a proposed Hospice Initiated Communication which would report a beneficiary s hospice status, notice of election (NOE), notice of termination/revocation (NOTR) and may also provide drug profile information, identification of drugs unrelated to the terminal illness or related conditions and an explanation of why the drug is unrelated. This would permit hospices to initiate communication with the beneficiary s Part D sponsor CMS considering requiring Part D sponsors to accept NOE and NOTR information as use for coverage until official CMS notification is received. In addition, they state the CMS expects Part D 9 P a g e

10 plan sponsors to have processes in place to confirm CMS-reported data and communicate with hospice Part D Plans Use Proposed Definitions CMS proposes that Part D sponsor be required to use the criteria described in the definitions of terminal illness and related conditions. It will provide the basis for determining whether drug is unrelated to the terminal illness and related conditions, and will satisfy the beneficiary-level hospice PA. The definitions of terminal illness and related conditions would guide hospices, prescribers, and Part D sponsors and would clarify and strengthen the concepts of holistic and comprehensive hospice care. Independent Review Process CMS is considering establishing an independent review process for hospice providers and Part D plan sponsors. The review process would be separate and distinct from the enrollee appeals process. CMS states that Independent Review Entity (IRE) decision would be binding on both the Part D sponsor and the hospice, and CMS solicits comments on the changes under consideration regarding the coordination of benefits process and appeals for Part D payment for drugs while beneficiaries are under a hospice election. Hospice Coordination of Payment with Part D Sponsors and Other Payers Formulary CMS provides anecdotal reports from Medicare hospice beneficiaries that they are not receiving medications related to their terminal illness and related conditions from their hospice. Beneficiaries state that hospices have told patients that those medications are not on the hospice s formulary. CMS states: If the drugs on the hospice formulary are not providing the relief needed, then the hospice must provide alternatives in order to relieve pain and symptoms EVEN if it means providing drugs that are not on the hospice formulary. Hospice Conditions of Participation reference: (f) Hospices are to cover all drugs which are reasonable and necessary to meet the needs of the patient in order to provide palliation and symptom management of the individual's terminal illness and related conditions. CMS reminds providers that treatment decisions should be driven by clinical appropriateness, rather than costs. Hospices should use thoughtful clinical judgment, with a patient-centered focus, when developing the hospice plan of care, including the recommendations for medication management 10 P a g e

11 ICD-9 to ICD-10 Coding and Timeline ICD-9-CM diagnosis codes will continue to be used for hospice claims reporting until October 1, Diagnosis reporting on hospice claims must adhere to ICD-9-CM coding conventions and guidelines, which applies to both the principal diagnosis and the reporting of additional diagnoses Medicare Code Editor Edits CMS announced that they will implement certain edits from Medicare Code Editor (MCE). The code editor will report errors in the coding of claims data and will applied to all hospice claims effective October 1, 2014 or later. Inappropriate principal or secondary diagnosis codes, per ICD-9-CM coding conventions and guidelines will be returned to Provider (RTP) for correction and resubmission prior to payment. Year % of Claims Submitted with One Diagnosis % First Quarter 72% FY2013 (October 1, 2012 December 31, 2012) FY % What s Next? NHPCO Regulatory Committee will review the proposed rule and solicits comments and concerns from the NHPCO membership. NHPCO will write an official comment letter on the proposed rule, which is due to CMS on July 1, A final rule will be published no later than September 30, 2014, but is most likely published in early to mid August. Wage Index and Rate Charts The NHPCO-developed state/county wage index charts will be available on the NHPCO website in the coming days. Watch for the announcement on my.nhpco.org and for the posting on the NHPCO website, under Regulatory/Hot Topics/FY2015 Wage Index. Questions? Please send to if you have questions or need clarification. NHPCO 1731 King Street Suite 100 Alexandria, VA / / (fax) 11 P a g e

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