On April 21, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule regarding updates to fiscal year (FY) 2017 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. In the proposed rule, CMS signals an increased focus on hospice quality issues, proposing to make hospice quality data public as early as this summer and create a consumer-facing Hospice Compare website that will ultimately provide star ratings for hospices similar to those currently available for nursing homes in addition to additional quality measures.

In Depth

On April 21, 2016, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule regarding updates to fiscal year (FY) 2017 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. In the proposed rule, CMS signals an increased focus on hospice quality issues, proposing to make hospice quality data public as early as this summer and create a consumer-facing Hospice Compare website that will ultimately provide star ratings for hospices similar to those currently available for nursing homes. The payment update also includes new quality measures, proposes to replace one of the key hospice data collection systems with a patient assessment instrument and announces increased monitoring of length of stay data and other key metrics. These changes are consistent with CMS’s move toward increased transparency in quality data across a broad range of Medicare providers. CMS continues to work toward more sophisticated oversight of the hospice industry, with payment reforms and program integrity monitoring that reflects the agency’s tighter regulatory control over other post-acute providers.

CMS Proposes Two Percent Increase in Hospice Payments

If the proposed payment update is finalized, hospices will receive a two percent increase in payments in FY 2017, which CMS projects will have an overall economic impact of approximately $330 million in increased payments to hospices during FY 2017. The update to the hospice payment percentage is based on the hospital inpatient market basket index, which CMS estimates at 2.8 percent for FY 2017. However, the market basket value must be reduced to reflect an approximate 0.5 percent reduction for productivity adjustments and an additional reduction of 0.3 percent, both mandated by the Affordable Care Act (ACA).

CMS Proposes Changes to Quality Reporting and Transparency

Much of the focus of the proposed rule is on improving quality measurement for hospices and increasing the transparency of hospice quality data. CMS proposes: (1) updating the Hospice Quality Reporting Program (HQRP) to include two new quality measures; (2) publically sharing HQRP quality measures through a public dataset and a newly created Hospice Compare website; and (3) replacing one of the current hospice data collection mechanisms with a patient assessment tool.

New Quality Measures

CMS proposes to update the Hospice Quality Reporting Program to include two new measures:

  • Hospice Visits When Death is Imminent. This proposed new measure will be used to assess hospice staff visits to patients and caregivers in the last week of a patient’s life. Currently, HQRP measures do not 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. The proposed measure would assess two components:
    • The percentage of patients receiving at least one visit from registered nurses, physicians, nurse practitioners or physician assistants in the last three days of life; and
    • The percentage of patients receiving at least two visits from medical social workers, chaplains, spiritual counselors, licensed practical nurses or hospice aides in the last seven days of life.

CMS projects that collecting information on hospice claims about both clinical and non-clinical visits during this time period will encourage hospices to visit patients and caregivers and provide services that will improve quality of life during the patients’ last days of life. Citing clinical practice guidelines but no specific studies, CMS is taking the position 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 are also shown to reduce caregiver distress and improve patient and caregiver satisfaction with care.

Data for this proposed new measure would be collected via the existing Hospice Item Set (HIS). CMS proposes that four new items be added to the HIS-Discharge record to collect the necessary data elements for the measure, beginning April 1, 2017.

  • Hospice and Palliative Care Composite Process. The second proposed measure would be used to assess the percentage of hospice patients who received care processes that were consistent with existing guidelines at the time of admission. This measure will utilize data on a total of seven individual care processes that are already collected via the HIS, including the six National Quality Forum (NQF)-endorsed quality measures and one modified NQF-endorsed quality measure. CMS indicates that a composite measure would ensure that all hospice patients receive a comprehensive assessment for both physical and psychosocial needs at admission. CMS’s objective is to provide beneficiaries 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. This new measure appears to support CMS’s goals regarding publication of hospice quality data, as described in more detail below.

Increased Transparency of Hospice Quality Data

Consistent with CMS’s trend towards greater transparency and publication of datasets in other Medicare programs, CMS proposes to make data from all seven HQRP quality measures publicly available during 2016 through an online dataset. While Section 3004 of the ACA requires CMS to establish procedures for making hospice quality data available to the public, this is the first time that CMS has proposed a process for publishing such data. As a first step, CMS plans to publish demographic data (i.e., addresses, phone numbers and scope of services services) regarding hospice agencies enrolled as Medicare providers. CMS will publish the more comprehensive quality data later this spring or summer.

CMS also proposes to create a new consumer-facing Hospice Compare website to publish hospice quality data in an easily comparable format in the spring or summer of 2017. CMS asserts that public reporting through the Hospice Compare website will provide valuable information regarding the quality of care provided by Medicare certified hospice agencies throughout the nation. Consumers will be able to search for all Medicare approved hospice providers that serve their city or zip code, and then find the agencies offering the types of services they need, along with provider quality information. Like other CMS provider comparison websites, the Hospice Compare site will eventually give rise to a new system that gives each hospice a rating between one and five stars. According to CMS, and as required by the ACA, hospices will have prepublication access to their own quality data, enabling correction of any issues or inaccuracies before public posting on the Hospice Compare website. Concerns continue to surface surrounding CMS’s various provider comparison tools. For example, a number of provider groups continue to question whether existing measures appropriately serve as a proxy for perceived overall quality in a five star rating.

Long-Term Proposal to Replace HIS with Patient Assessment Tool

CMS also proposes a more long-term goal of replacing the current HIS chart abstraction/data collection tool with a patient assessment instrument that would accumulate data currently collected through HIS as well as additional clinical information. CMS indicates in the proposed rule that such a patient assessment tool may support new quality measures and future payment refinements by allowing the collection of more detailed clinical information, beyond the patient diagnosis and comorbidities that are currently reported on hospice claims, concurrent with the provision of care instead of retrospectively. This patient assessment tool would not replace other existing data submission requirements set forth in the Medicare Hospice Conditions of Participation (i.e., initial nursing and comprehensive assessments), other non-HIS data sources utilized for HQRP measures such as the Hospice CAHPS survey or the regular submission of claims data.

Increased Oversight Over Length of Stay Data and Other Metrics

As announced in last year’s payment rate notice, CMS implemented a new two-tier per diem payment rate for routine home care provided to hospice patients in FY 2016. Under the new payment methodology, hospices are reimbursed at a higher base rate for a patient’s first 60 days of hospice care, and at a reduced base payment rate for all days following day 60 with a supplemental payment made available for care provided in the last seven days of life if certain criteria are met.

Concurrent with the implementation of this new payment methodology, CMS plans to utilize a contractor, Acumen, LLC, to monitor key metrics on a provider-specific level to assess how these changes in routine home care reimbursement are affecting hospice lengths of stay and other treatment patterns. The assessed metrics will include hospice diagnosis reporting; lengths of stay; live discharge patterns; non-hospice spending for Parts A, B, and D during a hospice election; trends of live discharge at or around day 61 of hospice care; and readmissions after a 60 day lapse following a live discharge.

CMS indicates in the proposed rule that these metrics will also be monitored for program integrity purposes, for example, to identify any new patterns of potential fraud, waste and abuse. Increased oversight of these metrics will require hospice providers to focus internally on the appropriateness of admission, discharge, and readmission determinations.

Commencement of Medicare Care Choices Model

In the proposed rule, CMS also discusses the commencement of the five-year Medicare Care Choices Model (MCCM), which allows beneficiaries with certain advanced diseases to receive hospice-like support services from participating hospices while receiving care from other Medicare providers for their terminal illnesses. Medicare beneficiaries and dual-eligible individuals with advanced cancers, chronic obstructive pulmonary disease, congestive heart failure or HIV/AIDS who otherwise qualify for the hospice benefit will be eligible to receive these services from participating hospices. CMS’s goal is to determine whether greater and earlier use of the Medicare and Medicaid hospice benefits will improve patient quality of life, improve quality of care, increase beneficiary, family, and caregiver satisfaction and reduce Medicare and Medicaid expenditures. A total of 130 hospices from 39 states are participating in the model and the first cohort of providers made services available in January 2016.

Looking Ahead

The proposed advancements announced in the FY 2017 payment rate update are consistent with CMS’s increasing sophistication in the area of hospice reimbursement and quality monitoring. These changes will continue to more closely align the hospice program with other highly regulated post-acute care settings. The widespread availability of easily comparable quality data will ultimately have an industry-wide impact on hospice services, including admission patterns, with hospice providers being forced to also compete on the basis of certain performance metrics (that may or may not be tied to value for all providers and beneficiaries). A key question will be whether metrics are sufficiently supported by clinical and health economic evidence coupled with diverse beneficiary and caregiver values. Full implementation of these objectives will take time, but the initial publications of data may have both anticipated and unanticipated impacts on hospice services.