FY 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements Proposed Rule

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1 June 24, 2015 Andrew Slavitt Centers for Medicare & Medicaid Services U.S. Department of Health and Human Services Attention: CMS P, Mail Stop C Security Boulevard Baltimore, MD RE: FY 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements Proposed Rule Dear Administrator Slavitt: The Visiting Nurse Associations of America (VNAA) submits the following comments on the Fiscal Year 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements proposed rule. VNAA is a national association that supports, promotes and advocates for nonprofit home health, hospice and palliative care and health promotion services to ensure quality care within all communities. VNAA members still embody Lillian Wald s founding principle of providing cost-effective and compassionate home health and hospice care to the nation's most vulnerable individuals, particularly the elderly and individuals with disabilities. VNAA represents more than 140 agencies in over 40 states. Member agencies are diverse and include traditional independent, free-standing visiting nurse services and agencies, home health and hospices that are affiliated with or owned by integrated health care systems, and free-standing hospices. In today s health care environment, nonprofit VNAA members are an essential component of health care delivery systems in communities across the country. This rule proposes a number of changes to the way in which hospice payment rates are calculated and updated. The most significant change is to propose two routine home care day rates to account for more costly days at the beginning of a hospice stay and a supplemental payment to account for patient needs in the last seven days of life. It also proposes changes to the Hospice Quality Reporting Program (HQRP) and provides more direction to hospices on coding requirements.

2 The VNAA supports the changes proposed in the regulation, particularly since the proposed payment model more closely aligns with hospice resource use. We believe this change, if codified, will more accurately reimburse hospice providers while also removing the incentive for hospices to enroll only more profitable, longer-stay patients. Below, we provide more specific comments on the major provisions of the proposed rule. We d also take this opportunity to provide recommendations to CMS on how to improve program integrity efforts within the Medicare hospice benefit. In the rule, CMS provides updated statistics related to the hospice program, some of which raise concerns about the performance and integrity of certain hospices. VNAA recognizes that some hospice providers engage in fraudulent, wasteful, and abusive practices. We strongly support CMS s efforts to identify these providers and remove them from the program. While outside of the immediate scope of the rule, because the rule highlights practices that point to inappropriate use of the benefit, we include several program integrity proposals for your consideration. We welcome the opportunity to work more closely with CMS on program integrity proposals in the future. VNAA Comments on Major Provisions of the Proposed Rule 1. Proposed Routine Home Care Rates and Service Intensity Add-On (SIA) Payment Section 3132(a) of the ACA directed the Secretary to implement revisions to the methodology for determining the payment rates for routine home care and other services included in hospice care as determined appropriate by the Secretary. MedPAC raised concerns that the existing per diem payment model may provide an inappropriate incentive that would result in longer lengths of stay. CMS noted that the percentage of episodes that are more than 6 months in length has nearly doubled from about 7 percent in 1999 to 13 percent in CMS also acknowledged industry concerns about inadequate reimbursement for short hospice stays. CMS proposed two modifications to the existing hospice payment model to address both of these concerns: 1) create two routine home care rates, a higher one for the first 60 days of a stay and a lower one for day 61 and beyond; and 2) create a supplemental Service Intensity Add-On (SIA) payment to account for higher intensity services in the last seven of an individual s life when certain criteria are met. VNAA Comments: VNAA supports CMS proposal to create two routine home care rates and a SIA payment to better align payment to resource use within a hospice stay. We strongly encourage CMS to codify the proposed approach for FY As CMS notes in the rule, multiple studies have concluded that the current payment model insufficiently reimburses for shorter stays. Longer hospice stays receive more reimbursement even though the higher payment is not justified by actual resource use. Payment should be more closely aligned to true resource use across a stay. We encourage CMS to closely monitor this payment model against resource use. Our members experience indicates that further refinements to the model may be warranted. Specifically, CMS may find that it needs to further weight the first 60 days, adjust the SIA payment, or transition from 2

3 the first to the second routine home care rate earlier than day 60. CMS may also find that the payment should be adjusted based on beneficiary risk. Consistent with other components of the healthcare continuum, resource use per beneficiary may vary based on certain beneficiary characteristics, such as comorbidities, socio-economic status, and whether or not the beneficiary has an able and willing caregiver. Once implemented, we welcome further discussions with CMS on how the payment model can be refined to facilitate more accurate reimbursement. 2. Proposed FY Hospice Wage Index and Rates Update The rule proposes to implement three provisions that impact hospice payment rates: (a) the final installment of the Wage Index Budget Neutrality Factor (BNAF) phase out, (b) new geographic delineations for purposes of the wage index, and (c) the annual payment update. The payment update would reflect the estimated FY 2016 market basket update and productivity adjustment and the additional.3% reduction in hospice payments required by the ACA. VNAA Comment: VNAA appreciates the positive payment update for FY However, the update does not keep pace with the cost of providing highest quality care for beneficiaries. Costs associated with workforce recruitment and training, supplies, and technology are all rising faster than reimbursement. Non-profit, mission-based hospices already operate on extremely slim margins: MedPAC calculated average non-profit hospice margins at 3.7% for 2012 with an expectation for margins to decline further (MedPAC March 2015). We strongly encourage CMS to reevaluate the payment update for FY VNAA also continues to believe that the use of the hospital wage index methodology for both the hospice and home health benefits creates payment inaccuracies that, unlike those applied to hospitals, are not subject to correction through a reclassification process. We again urge CMS to take action to create a fair and level playing field through reform of the wage index process. 3. Proposed Alignment of the Inpatient Aggregate Cap Accounting Year with the Federal Fiscal Year The rule proposes to change the calculation of the aggregate cap and align the aggregate cap accounting year with the federal fiscal year. VNAA Comment: VNAA concurs with CMS approach to aligning the aggregate and inpatient caps. 4. Proposed Updates to the Hospice Quality Reporting Program (HQRP) CMS implemented the HQRP in The rule proposes several modifications to the program over FYs 2017 and 2018, including changes in communication processes, when new hospices must begin reporting, standards for timeliness of reporting, and a process to retain measures from year to year. CMS does not propose any new quality measures for FY

4 CMS discusses plans to ultimately make hospice quality data public, including via a Hospice Compare website that includes star ratings. CMS notes that it is analyzing FY 2014 data to assess the reliability and validity of the current quality measures. CMS will continue its analyses with FY 2015 data before making decisions related to public reporting. VNAA Comment: VNAA supports moving more rapidly to a quality benchmarking and public reporting process for hospices serving the Medicare program. In doing so, CMS will help hospices identify and resolve performance gaps while helping to increase transparency and accountability in the sector. In July 2014, hospices began reporting to CMS on six quality measures (the hospice item set or HIS ). CMS does not plan to make these reports public until 2020 or later, while the results of similar measures of hospital and home health providers are already made public via various compare sites. Hospices have received little feedback from CMS today on the quality data they submit. In particular, hospices do not receive any benchmarking data to help them identify where they have performance variation so that they can prioritize performance improvement efforts. We believe the sharing of such information will expedite hospice performance by providing direction on where to focus performance improvement. Because quality measurement and reporting is new for hospices, we believe CMS should provide non-public quarterly performance reports to hospices that include benchmarking data for at least one year before publishing the results publically on a compare website. This one year period will give hospices the chance to become comfortable with the data captured and reporting process and begin to make material improvements in their performance. It will also allow CMS time to correct any possible inaccuracies in the data. We recognize that hospice quality measure development is very much in its infancy and work is underway to expand the measure set to better capture hospice performance. We strongly agree with continuing the process CMS has developed using a Technical Expert Panel (TEP) and listening sessions to obtain expert and other stakeholder input. However, we do not believe future measure development should slow efforts to provide timely feedback to hospices on the existing measures and, when ready, begin to report them publically. In summary, VNAA recommends that CMS: 1) Provide a basic benchmark report to each hospice quarterly that shows how they perform against all of the hospices in the nation and in their state on the existing HIS; 2) After a transition period of at least one year, make hospice quality reports public using existing measures under a Hospice Compare website administered by CMS; and 3) Continue the development of a more robust hospice measure set with input from external experts and stakeholders. 5. Clarification Regarding Diagnosis Reporting on Hospice Claims 4

5 Based on analyses of spending on Medicare Part A, B, and D services for beneficiaries enrolled in hospice, CMS expresses concerns about potential unbundling of services that are included in the hospice benefit. CMS has identified $1.3 billion in spending annually outside of the hospice benefit for individuals who are enrolled in hospice. CMS reiterated Congressional intent of the hospice benefit as providing comprehensive care aimed at addressing (patients ) physical, emotional, psychosocial and spiritual needs as they approached the end of life. In addition to questionable levels of spending outside of the hospice benefit, CMS has also received complaints from nonhospice providers that they have been inappropriately denied reimbursement from hospices for services that should have been covered through the hospice benefit. In the rule, CMS clarifies that hospices must report all diagnoses identified in the initial and comprehensive assessments on hospice claims, whether related or unrelated to the terminal prognosis of the individual. This includes reporting any mental health disorders and conditions that would affect the plan of care. VNAA Comment: VNAA is very concerned by CMS implication that hospices may be inappropriately unbundling the hospice set of services. Since the beginning of the benefit, CMS (then HCFA) acknowledged that there would be instances in which services provided to beneficiaries were not the responsibility of the hospice provider and should be billed to another part of Medicare (48 Federal Register ). The agency spoke to determining when a service should be reimbursed outside of the hospice benefit, stating: we believe that this is a medical judgment which must be made on a case by case basis. We appreciate that CMS requires additional data to further assess which services should or should not be included in the bundle. However, we suggest an analysis of the data that does not begin with the premise that hospices are abusing benefit limitations. We propose that CMS instead seek to examine why individuals seek curative or other care in addition to hospice care and what services they receive. CMS may find that beneficiaries are less concerned about a complex and often ambiguous differentiation between related and unrelated. Instead, they may seek a range of services to improve what can be improved in their quality of life while simultaneously transitioning to the end of life with as much physical and emotional comfort as possible. CMS should examine the data for the traditional Medicare population with individuals who participate in the Medicare Care Choices demonstration project. CMS may find that, while not currently allowed through the traditional Medicare benefit, patients are seeking concurrent curative and palliative care. Program Integrity Considerations VNAA suggests that CMS consider implementing pre-payment medical review on 100% of claims for hospices that hit specified thresholds on certain indicators of abuse. The VNAA membership considered a number of metrics of fraud, waste, and abuse, including length of stay, live discharge rate, patient case mix, and high rates of patients not receiving skilled services near the end of life. We recommend that 5

6 CMS move immediately to identify and implement pre-payment review for hospices with exceptionally high live discharge rates and high rates of patients not receiving skilled services near the end of life. With respect to live discharge rates, we believe this is a clear indication that hospices are enrolling patients who are not eligible for the benefit. They may, therefore, be abusing the benefit for financial gain. Live discharge rates are also associated with higher cost. Today, approximately 40 percent of discharges in above-cap hospices involved patients who were discharged alive, compared to just 16 percent of discharges in below-cap hospices. 1 Live discharge rates are also associated with fewer average visits per week, which may also be an indicator that an individual is not ready for hospice. Hospices at or above the 90th percentile for live discharge rates provide 3.97 visits per week on average, compared to all other hospices at 4.48 visits per week. 2 We also believe that the absence of skilled services delivered in the last several days of life is an indicator of possible abuse (and poor quality). Hospices exist to provide critical services through the end of a patient s life. However, in 2013, nearly 5% of hospices did not provide any skilled visits in the last two days of life to more than 50 percent of their decedents receiving routine home care. 34 hospices did not make any skilled visits in the last two days of life to any of their decedents who died while receiving routine home care. We urge CMS to immediately place a temporarily restriction on beneficiary enrollment in those hospices pending a detailed review of clinical practice that includes, at a minimum, multiple in-home site visits with patients and unannounced visits to the providers offices. At this time, we do not recommend evaluating hospices based on length of stay and patient case mix. While we think both of these could serve as metrics of fraud, waste, and abuse, we do not believe they are sufficiently refined to put into practice. Long lengths of stay may be appropriate for individuals with certain conditions. While the program was originally designed for cancer patients, hospices are increasingly serving individuals suffering from many different ailments. We see this as a good thing. With the exception of individuals who die suddenly, we believe that nearly all people should receive holistic, palliative care services to support them and their families through the final passage of life. Many diseases do not follow the trajectory that cancer does. CMS provides the example of individuals with neurological and chronic obstructive pulmonary disease. Individuals with these conditions had substantially longer lengths of stay (139 and 112 days respectively) compared to those with cancer (51 days) and heart or circulatory conditions (76 days). Both, however, are well within the life expectancy for individuals entering hospice (6 months or roughly 180 days). The problem may be better identified as one of selectivity in the admissions process with its related impact on overall access to care. However, in 1 MedPAC: Mar 2013 report to Congress: Assessing Payment Adequacy and Updating Payments; Washington, DC. Available online at: Viewed 6/10/15. 2 Abt Associates: Analysis of Medicare Pre-Hospice Spending and Hospice Utilization [study conducted on behalf of Centers for Medicare and Medicaid services]; May Available online at: 15-.pdf. Viewed 6/10/15. 6

7 some cases, environmental factors may contribute to higher rates of certain diseases. In others, a hospice may have specialized resources or capacity to manage certain types of patients. VNAA recognizes the concern that longer average lengths of stay and patient mix may be indicators that hospices are screening for more profitable patients. We do believe there is a certain threshold of average length of stay that warrants closer scrutiny by CMS. Within our membership we considered average length of stays of 180 days and one year. However, we are not prepared to recommend a specific threshold due to insufficient data. In general, we are optimistic that long lengths of stay will be reduced by the change in payment methodology described above. Hospices will have less of an incentive to select only long-stay patients. We recommend that CMS, its contractors, and other stakeholders continue to monitor length of stay and patient mix to determine if and when these data points can serve as metrics of fraud, waste, and abuse. We recognize that the program integrity approach described above might be perceived as outside of the scope of the proposed payment rule. However, we believe CMS has opened this issue for comment through the rule s many assertions of potential abuse. VNAA welcomes further discussion with CMS about program integrity and alternative approaches to identifying and removing from the program those providers unworthy of caring for our nation s sick and dying. Thank you again for the opportunity to provide our comments. VNAA is committed to supporting its members in implementing the final payment rule. Please contact me at VNAA should you have any questions on these comments. I may be reached at or Sincerely, /s/ Molly Smith Vice President, Policy and Regulatory Affairs 7

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