Medicare Program; Proposed Hospice Wage Index for Fiscal Year 2010, 18912-18970 [E9-9417]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 74, Number 78 (Friday, April 24, 2009)]
[Proposed Rules]
[Pages 18912-18970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-9417]



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Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 405 and 418



Medicare Program; Proposed Hospice Wage Index for Fiscal Year 2010; 
Proposed Rule

Federal Register / Vol. 74 , No. 78 / Friday, April 24, 2009 / 
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405 and 418

[CMS-1420-P]
RIN 0938-AP45


Medicare Program; Proposed Hospice Wage Index for Fiscal Year 
2010

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule; request for comments.

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SUMMARY: This proposed rule would set forth the hospice wage index for 
fiscal year 2010. The proposed rule would adopt a MedPAC recommendation 
regarding a process for certification and recertification of terminal 
illness. This proposed rule would also continue the phase-out of the 
wage index budget neutrality adjustment factor (BNAF), which will 
conclude in 2011. In addition, we are requesting comments on a 
suggestion to require recertification visits by physicians or advanced 
practice nurses, and on issues of payment reform for use in possible 
future policy development. Finally, the proposed rule would make 
several technical and clarifying changes to the regulatory text.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on June 22, 2009.

ADDRESSES: In commenting, please refer to file code CMS-1420-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1420-P, P.O. Box 8012, 
Baltimore, MD 21244-8012.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments (one 
original and two copies) to the following address ONLY: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1420-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp 
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by following the 
instructions at the end of the ``Collection of Information 
Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:
    Randy Throndset (410) 786-0131. Katie Lucas (410) 786-7723.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Table of Contents

I. Background
    A. General
    1. Hospice Care
    2. Medicare Payment for Hospice Care
    B. Hospice Wage Index
    1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified Hospital 
Wage Index)
    2. Changes to Core-Based Statistical Area (CBSA) Designations
    3. Definition of Urban and Rural Areas
    4. Areas Without Hospital Wage Data
    5. CBSA Nomenclature Changes
    6. Wage Data for Multi-Campus Hospitals
    7. Hospice Payment Rates
II. Provisions of the Proposed Rule
    A. FY 2010 Proposed Hospice Wage Index
    1. Background
    2. Areas Without Hospital Wage Data
    3. FY 2010 Wage Index With 75% Reduced Budget Neutrality 
Adjustment Factor (BNAF)
    4. Effects of Phasing Out the BNAF
    B. Proposed Change to the Physician Certification and 
Recertification Process, Sec.  418.22
    C. Proposed Update of Covered Services, Sec.  418.202(f)
    D. Proposed Clarification of Payment Procedures for Hospice 
Care, Sec.  418.302
    E. Proposed Clarification of Intermediary Determination and 
Notice of Amount of Program Reimbursement, Sec.  405.1803
    F. Proposed Technical and Clarifying Changes
III. Requests for Comments on Other Policy Issues
    A. Recertification Visits, Sec.  418.22
    B. Hospice Aggregate Calculation
    C. Hospice Payment Reform
IV. Update on Additional Hospice Data Collection
V. Collection of Information Requirements
VI. Regulatory Impact Analysis

I. Background

A. General

1. Hospice Care
    Hospice care is an approach to treatment that recognizes that the 
impending death of an individual warrants a change in the focus from 
curative care to palliative care for relief of pain and for symptom 
management. The goal of hospice care is to help terminally ill 
individuals continue life with minimal disruption to normal activities 
while remaining primarily in the home environment. A hospice uses

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an interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through use of a broad 
spectrum of professional and other caregivers, with the goal of making 
the individual as physically and emotionally comfortable as possible. 
Counseling services and inpatient respite services are available to the 
family of the hospice patient. Hospice programs consider both the 
patient and the family as a unit of care. Section 1861(dd) of the 
Social Security Act (the Act) provides for coverage of hospice care for 
terminally ill Medicare beneficiaries who elect to receive care from a 
participating hospice. Section 1814(i) of the Act provides payment for 
Medicare participating hospices.
2. Medicare Payment for Hospice Care
    Our regulations at 42 CFR part 418 establish eligibility 
requirements, payment standards and procedures, define covered 
services, and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart G 
provides for payment in one of four prospectively-determined rate 
categories (routine home care, continuous home care, inpatient respite 
care, and general inpatient care) to hospices based on each day a 
qualified Medicare beneficiary is under a hospice election.

B. Hospice Wage Index

    Our regulations at Sec.  418.306(c) require that the wage index for 
all labor markets in which Medicare-participating hospices do business 
be established using the most current hospital wage data available, 
including any changes by Office of Management and Budget (OMB) to the 
Metropolitan Statistical Areas (MSAs) definitions. OMB revised the MSA 
definitions beginning in 2003 with new designations called the Core 
Based Statistical Areas (CBSAs). For the purposes of the hospice 
benefit, the term ``MSA-based'' refers to wage index values and 
designations based on the previous MSA designations before 2003. 
Conversely, the term ``CBSA-based'' refers to wage index values and 
designations based on the OMB revised MSA designations in 2003, which 
now include CBSAs. In the August 11, 2004 IPPS final rule (69 FR 
49026), the revised labor market area definitions were adopted at Sec.  
412.64(b), which were effective October 1, 2004 for acute care 
hospitals. We also revised the labor market areas for hospices using 
the new OMB standards that included CBSAs. In the FY 2006 hospice wage 
index final rule (70 FR 45130), we implemented a 1-year transition 
policy using a 50/50 blend of the CBSA-based wage index values and the 
MSA-based wage index values for FY 2006. The one-year transition policy 
ended on September 30, 2006. For FY 2007, FY 2008, and FY 2009, we used 
wage index values based on CBSA designations.
    The hospice wage index is used to adjust payment rates for hospice 
agencies under the Medicare program to reflect local differences in 
area wage levels. The original hospice wage index was based on the 1981 
Bureau of Labor Statistics hospital data and had not been updated since 
1983. In 1994, because of disparity in wages from one geographical 
location to another, a committee was formulated to negotiate a wage 
index methodology that could be accepted by the industry and the 
government. This committee, functioning under a process established by 
the Negotiated Rulemaking Act of 1990, was comprised of national 
hospice associations; rural, urban, large and small hospices; multi-
site hospices; consumer groups; and a government representative. On 
April 13, 1995, the Hospice Wage Index Negotiated Rulemaking Committee 
signed an agreement for the methodology to be used for updating the 
hospice wage index.
    In the August 8, 1997 Federal Register (62 FR 42860), we published 
a final rule implementing a new methodology for calculating the hospice 
wage index based on the recommendations of the negotiated rulemaking 
Committee, using a hospital wage index rather than continuing to use 
the Bureau of Labor Statistics (BLS) data. The committee statement was 
included in the appendix of that final rule (62 FR 42883). The 
reduction in overall Medicare payments if a new wage index were adopted 
was noted in the November 29, 1995 notice transmitting the 
recommendations of the negotiated rulemaking committee (60 FR 61264). 
Therefore, the Committee also decided that for each year in updating 
the hospice wage index, aggregate Medicare payments to hospices would 
remain budget neutral to payments as if the 1983 wage index had been 
used.
    As decided upon by the Committee, budget neutrality means that, in 
a given year, estimated aggregate payments for Medicare hospice 
services using the updated hospice values will equal estimated payments 
that would have been made for these services if the 1983 hospice wage 
index values had remained in effect. Although payments to individual 
hospice programs may change each year, the total payments each year to 
hospices would not be affected by using the updated hospice wage index 
because total payments would be budget neutral as if the 1983 wage 
index had been used. To implement this policy, a BNAF would be computed 
and applied annually to the pre-floor, pre-reclassified hospital wage 
index, when deriving the hospice wage index.
    The BNAF is calculated by computing estimated payments using the 
most recent completed year of hospice claims data. The units (days or 
hours) from those claims are multiplied by the updated hospice payment 
rates to calculate estimated payments. For this proposed rule, that 
means estimating payments for FY 2010 using FY 2007 hospice claims 
data, and applying the estimated FY 2010 hospice payment rates 
(updating the FY 2009 rates by the FY 2010 estimated hospital market 
basket update). The FY 2010 hospice wage index values are then applied 
to the labor portion of the payment rates only. The procedure is 
repeated using the same claims data and payment rates, but using the 
1983 BLS-based wage index instead of the updated raw pre-floor, pre-
reclassified hospital wage index (note that both wage indices include 
their respective floor adjustments). The total payments are then 
compared, and the adjustment required to make total payments equal is 
computed; that adjustment factor is the BNAF.
    The hospice wage index is updated annually. Our most recent update, 
published in the Federal Register (73 FR 46464) on August 8, 2008, set 
forth updates to the hospice wage index for FY 2009. That update also 
finalized a provision for a 3-year phase-out of the BNAF, which was 
applied to the wage index values. As discussed in detail below, the 
update was later revised with the February 17, 2009 passage of the 
American Recovery and Reinvestment Act (ARRA), which eliminated the 
BNAF phase-out for FY 2009.
1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified Hospital Wage 
Index)
    As described in the August 8, 1997 hospice wage index final rule 
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index 
is used as the raw wage index for the hospice benefit. These raw wage 
index values are then subject to either a BNAF or application of the 
hospice floor calculation to compute the hospice wage index used to 
determine payments to hospices.
    Pre-floor, pre-reclassified hospital wage index values of 0.8 or 
greater are adjusted by the BNAF. Pre-floor, pre-reclassified hospital 
wage index values below 0.8 are adjusted by the greater of:

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(1) The hospice BNAF; or (2) the hospice 15 percent floor adjustment, 
which is a 15 percent increase subject to a maximum wage index value of 
0.8. For example, if County A has a pre-floor, pre-reclassified 
hospital wage index (raw wage index) value of 0.4000, we would perform 
the following calculations using the BNAF (which for this example is 
0.060988; we added 1 to simplify the calculation) and the hospice floor 
to determine County A's hospice wage index:
    Pre-floor, pre-reclassified hospital wage index value below 0.8 
multiplied by the BNAF: (0.4000 x 1.060988 = 0.4244)
    Pre-floor, pre-reclassified hospital wage index value below 0.8 
multiplied by the hospice 15 percent floor adjustment: (0.4000 x 1.15 = 
0.4600).
    Based on these calculations, County A's hospice wage index would be 
0.4600.
    The BNAF has been computed and applied annually to the labor 
portion of the hospice payment. Currently, the labor portion of the 
payment rates is as follows: For Routine Home Care, 68.71 percent; for 
Continuous Home Care, 68.71 percent; for General Inpatient Care, 64.01 
percent; and for Respite Care, 54.13 percent. The non-labor portion is 
equal to 100 percent minus the labor portion for each level of care. 
Therefore the non-labor portion of the payment rates is as follows: for 
Routine Home Care, 31.29 percent; for Continuous Home Care, 31.29 
percent; for General Inpatient Care, 35.99 percent; and for Respite 
Care, 45.87 percent.
    The August 8, 2008 FY 2009 Hospice Wage Index final rule (73 FR 
46464) implemented a phase-out of the hospice BNAF over 3 years, 
beginning with a 25 percent reduction in the BNAF in FY 2009, an 
additional 50 percent reduction for a total of 75 percent in FY 2010, 
and complete phase out of the BNAF in FY 2011. However, subsequent to 
the publication of the above rule, the American Recovery and 
Reinvestment Act of 2009 (Pub. L. 111-5) (ARRA) eliminated the BNAF 
phase-out for FY 2009. Specifically, division B, section 4301(a) of 
ARRA prohibited the Secretary from phasing out or eliminating the BNAF 
in the Medicare hospice wage index before October 1, 2009, and 
instructed the Secretary to recompute and apply the final Medicare 
hospice wage index for FY 2009 as if there had been no reduction in the 
BNAF. We have done so in an administrative instruction to our 
intermediaries, which was issued as Change Request (CR) 6418 
(Transmittal 1701, dated 3/13/2009).
    While ARRA eliminated the BNAF phase-out for FY 2009, it neither 
changed the 75 percent reduction in the BNAF for FY 2010, nor 
prohibited the elimination of the BNAF in FY 2011 that were previously 
implemented in the August 8, 2008 Hospice Wage Index final rule. The 
provision in the ARRA that eliminated the FY 2009 BNAF reduction 
provided the hospice industry additional time to prepare for the FY 
2010 75 percent BNAF reduction and the FY 2011 BNAF elimination. 
Therefore, in accordance with the August 8, 2008 FY 2009 Hospice Wage 
Index final rule, the rationale presented in that final rule, and 
consistent with section 4301(a) of ARRA, CMS plans to reduce the BNAF 
by 75 percent in FY 2010 and ultimately eliminate the BNAF in 2011. We 
are accepting comments on the BNAF reductions.
2. Changes to Core Based Statistical Area (CBSA) Designations
    The annual update to the hospice wage index is published in the 
Federal Register and is based on the most current available hospital 
wage data, as well as any changes by OMB to the definitions of MSAs, 
which now include CBSA designations. The August 4, 2005 hospice wage 
index final rule (70 FR 45130) set forth the adoption of the changes 
discussed in the OMB Bulletin No. 03-04 (June 6, 2003), which announced 
revised definitions for Micropolitan Statistical Areas and the creation 
of MSAs and Combined Statistical Areas. In adopting the OMB CBSA 
geographic designations, we provided for a 1-year transition with a 
blended hospice wage index for all hospices for FY 2006. Subsequent 
fiscal years have used the full CBSA-based hospice wage index.
3. Definition of Rural and Urban Areas
    Each hospice's labor market is determined based on definitions of 
MSAs issued by OMB. In general, an urban area is defined as an MSA or 
New England County Metropolitan Area (NECMA) as defined by OMB. Under 
Sec.  412.64(b)(1)(ii)(C), a rural area is defined as any area outside 
of the urban area. The urban and rural area geographic classifications 
are defined in Sec.  412.64(b)(1)(ii)(A) through (C), and have been 
used for the Medicare hospice benefit since implementation.
    In the August 22, 2007 FY 2008 Inpatient Prospective Payment System 
(IPPS) final rule with comment period (72 FR 47130), Sec.  
412.64(b)(1)(ii)(B) was revised such that the two ``New England deemed 
Counties'' that had been considered rural under the OMB definitions 
(Litchfield County, CT and Merrimack County, NH) but deemed urban, were 
no longer considered urban effective for discharges occurring on or 
after October 1, 2007. Therefore, these two counties are considered 
rural in accordance with Sec.  412.64(b)(1)(ii)(C).
    The recommendations to adjust payments to reflect local differences 
in wages are codified in Sec.  418.306(c) of our regulations; however 
there had been no explicit reference to Sec.  412.64 in Sec.  
418.306(c) before implementation of the August 8, 2008 FY 2009 Hospice 
Wage Index final rule. Although Sec.  412.64 had not been explicitly 
referred to, the hospice program has used the definition of urban in 
Sec.  412.64(b)(1)(ii)(A) and (b)(1)(ii)(B), and the definition of 
rural as any area outside of an urban area in Sec.  
412.64(b)(1)(ii)(C). With the implementation of the August 8, 2008 FY 
2009 Wage Index final rule, we now explicitly refer to those provisions 
in Sec.  412.64 to make it absolutely clear how we define urban and 
rural for purposes of the hospice wage index.
    Litchfield County, CT and Merrimack County, NH are considered rural 
areas for hospital IPPS purposes in accordance with Sec.  412.64. 
Effective October 1, 2008, Litchfield County, CT was no longer 
considered part of urban CBSA 25540 (Hartford-West Hartford-East 
Hartford, CT), and Merrimack County, NH was no longer considered part 
of urban CBSA 31700 (Manchester-Nashua, NH). Rather, these counties are 
now considered to be rural areas within their respective States under 
the hospice payment system. When the raw pre-floor, pre-reclassified 
hospital wage index was adopted for use in deriving the hospice wage 
index, it was decided not to take into account IPPS geographic 
reclassifications. This policy of following OMB designations of rural 
or urban, rather than considering some counties to be ``deemed'' urban, 
is consistent with our policy of not taking into account IPPS 
geographic reclassifications in determining payments under the hospice 
wage index.
4. Areas Without Hospital Wage Data
    When adopting OMB's new labor market designations in FY 2006, we 
identified some geographic areas where there were no hospitals, and 
thus, no hospital wage index data on which to base the calculation of 
the hospice wage index. Beginning in FY 2006, we adopted a policy to 
use the FY 2005 pre-floor, pre-reclassified hospital wage index value 
for rural areas when no hospital wage data were available. We also 
adopted the policy that for urban labor markets without a hospital from

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which hospital wage index data could be derived, all of the CBSAs 
within the State would be used to calculate a Statewide urban average 
pre-floor, pre-reclassified hospital wage index value to use as a 
reasonable proxy for these areas. Consequently, in subsequent fiscal 
years, we applied the average pre-floor, pre-reclassified hospital wage 
index data from all urban areas in that state, to urban areas without a 
hospital. The only affected CBSA is 25980, Hinesville-Fort Stewart, 
Georgia.
    Under the CBSA labor market areas, there are no hospitals in rural 
locations in Massachusetts and Puerto Rico. Since there was no rural 
proxy for more recent rural data within those areas, in the FY 2006 
hospice wage index proposed rule (70 FR 22394, 22398), we proposed 
applying the FY 2005 pre-floor, pre-reclassified hospital wage index 
value to rural areas where no hospital wage data were available. In the 
FY 2006 final rule and in the FY 2007 update notice, we applied the FY 
2005 pre-floor, pre-reclassified hospital wage index data to areas 
lacking hospital wage data in rural Massachusetts and rural Puerto 
Rico.
    In the FY 2008 hospice wage index final rule (72 FR 50217), we 
considered alternatives to our methodology to update the pre-floor, 
pre-reclassified hospital wage index for rural areas without hospital 
wage data. We indicated that we believed that the best imputed proxy 
for rural areas would--(1) use pre-floor, pre-reclassified hospital 
data; (2) use the most local data available to impute a rural pre-
floor, pre-reclassified hospital wage index; (3) be easy to evaluate; 
and (4) be easy to update from year-to-year.
    Therefore, in FY 2008, and again in FY 2009, in cases where there 
was a rural area without rural hospital wage data, we used the average 
pre-floor, pre-reclassified hospital wage index data from all 
contiguous CBSAs to represent a reasonable proxy for the rural area. 
This approach does not use rural data, however, the approach uses pre-
floor, pre-reclassified hospital wage data, is easy to evaluate, is 
easy to update from year-to-year, and uses the most local data 
available. In the FY 2008 hospice wage index final rule (72 FR 50217), 
we noted that in determining an imputed rural pre-floor, pre-
reclassified hospital wage index, we interpret the term ``contiguous'' 
to mean sharing a border. For example, in the case of Massachusetts, 
the entire rural area consists of Dukes and Nantucket Counties. We 
determined that the borders of Dukes and Nantucket Counties are 
contiguous with Barnstable and Bristol Counties. Under the adopted 
methodology, the pre-floor, pre-reclassified hospital wage index values 
for the Counties of Barnstable (CBSA 12700, Barnstable Town, MA) and 
Bristol (CBSA 39300, Providence-New Bedford-Fall River, RI-MA) would be 
averaged resulting in an imputed pre-floor, pre-reclassified rural 
hospital wage index for FY 2008. We noted in the FY 2008 final hospice 
wage index rule that while we believe that this policy could be readily 
applied to other rural areas that lack hospital wage data (possibly due 
to hospitals converting to a different provider type, such as a 
Critical Access Hospital, that does not submit the appropriate wage 
data), if a similar situation arose in the future, we would re-examine 
this policy.
    We also noted that we do not believe that this policy would be 
appropriate for Puerto Rico, as there are sufficient economic 
differences between hospitals in the United States and those in Puerto 
Rico, including the payment of hospitals in Puerto Rico using blended 
Federal/Commonwealth-specific rates. Therefore, we believe that a 
separate and distinct policy for Puerto Rico is necessary. Any 
alternative methodology for imputing a pre-floor, pre-reclassified 
hospital wage index for rural Puerto Rico would need to take into 
account the economic differences between hospitals in the United States 
and those in Puerto Rico. Our policy of imputing a rural pre-floor, 
pre-reclassified hospital wage index based on the pre-floor, pre-
reclassified hospital wage index(es) of CBSAs contiguous to the rural 
area in question does not recognize the unique circumstances of Puerto 
Rico. While we have not yet identified an alternative methodology for 
imputing a pre-floor, pre-reclassified hospital wage index for rural 
Puerto Rico, we will continue to evaluate the feasibility of using 
existing hospital wage data and, possibly, wage data from other 
sources. For FY 2008 and FY 2009, we used the most recent pre-floor, 
pre-reclassified hospital wage index available for Puerto Rico, which 
is 0.4047.
5. CBSA Nomenclature Changes
    The Office of Management and Budget (OMB) regularly publishes a 
bulletin that updates the titles of certain CBSAs. In the FY 2008 
hospice wage index final rule (72 FR 50218) we noted that the FY 2008 
rule and all subsequent hospice wage index rules and notices would 
incorporate CBSA changes from the most recent OMB bulletins. The OMB 
bulletins may be accessed at https://www.whitehouse.gov/omb/bulletins/.
6. Wage Data From Multi-Campus Hospitals
    Historically, under the Medicare hospice benefit, we have 
established hospice wage index values calculated from the raw pre-
floor, pre-reclassified hospital wage data (also called the IPPS wage 
index) without taking into account geographic reclassification under 
sections 1886(d)(8) and (d)(10) of the Act. The wage adjustment 
established under the Medicare hospice benefit is based on the location 
where services are furnished without any reclassification.
    For FY 2010, the data collected from cost reports submitted by 
hospitals for cost reporting periods beginning during FY 2005 were used 
to compute the 2009 raw pre-floor, pre-reclassified hospital wage index 
data without taking into account geographic reclassification under 
sections 1886(d)(8) and (d)(10) of the Act. This 2009 raw pre-floor, 
pre-reclassified hospital wage index was used to derive the applicable 
wage index values for the hospice wage index because these data (FY 
2005) are the most recent complete cost data.
    Beginning in FY 2008, the IPPS apportioned the wage data for multi-
campus hospitals located in different labor market areas (CBSAs) to 
each CBSA where the campuses are located (see the FY 2008 IPPS final 
rule with comment period 72 FR 47317 through 47320). We are continuing 
to use the raw pre-floor, pre-reclassified hospital wage data as a 
basis to determine the hospice wage index values for FY 2010 because 
hospitals and hospices both compete in the same labor markets, and 
therefore, experience similar wage-related costs. We note that the use 
of raw pre-floor, pre-reclassified hospital (IPPS) wage data, used to 
derive the FY 2010 hospice wage index values, reflects the application 
of our policy to use that data to establish the hospice wage index. The 
FY 2010 hospice wage index values presented in this notice were 
computed consistent with our raw pre-floor, pre-reclassified hospital 
(IPPS) wage index policy (that is, our historical policy of not taking 
into account IPPS geographic reclassifications in determining payments 
for hospice). As implemented in the August 8, 2008 FY 2009 Hospice Wage 
Index final rule, for the FY 2009 Medicare hospice benefit, the hospice 
wage index was computed from IPPS wage data (submitted by hospitals for 
cost reporting periods beginning in FY 2004 (as was the FY 2008 IPPS 
wage index)), which allocated salaries and hours to the campuses of two 
multi-campus hospitals with campuses that are located in different 
labor areas, one in

[[Page 18916]]

Massachusetts and another in Illinois. Thus, the FY 2009 hospice wage 
index values for the following CBSAs were affected by this policy: 
Boston-Quincy, MA (CBSA 14484), Providence-New Bedford-Falls River, RI-
MA (CBSA 39300), Chicago-Naperville-Joliet, IL (CBSA 16974), and Lake 
County-Kenosha County, IL-WI (CBSA 29404).
7. Hospice Payment Rates
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended 
section 1814(i)(1)(C)(ii) of the Act to establish updates to hospice 
rates for FYs 1998 through 2002. Hospice rates were to be updated by a 
factor equal to the hospital market basket index, minus 1 percentage 
point. However, neither the BBA nor subsequent legislation specified 
alteration to the hospital market basket adjustment to be used to 
compute hospice payment for fiscal years beyond 2002. Payment rates for 
FYs since 2002 have been updated according to section 
1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the 
payment rates for subsequent fiscal years will be the market basket 
percentage for the fiscal year. It has been longstanding practice to 
use the inpatient hospital market basket as a proxy for a hospice 
market basket.
    Historically, the rate update has been published through a separate 
administrative instruction issued annually, in the summer, to provide 
adequate time to implement system change requirements. Hospices 
determine their payments by applying the hospice wage index in this 
proposed rule to the labor portion of the published hospice rates.

II. Provisions of the Proposed Rule

A. FY 2010 Proposed Hospice Wage Index

1. Background
    The hospice final rule published in the Federal Register on 
December 16, 1983 (48 FR 56008) provided for adjustment to hospice 
payment rates to reflect differences in area wage levels. We apply the 
appropriate hospice wage index value to the labor portion of the 
hospice payment rates based on the geographic area where hospice care 
was furnished. As noted earlier, each hospice's labor market area is 
based on definitions of MSAs issued by the OMB. For this proposed rule, 
we will use the pre-floor, pre-reclassified hospital wage index, based 
solely on the CBSA designations, as the basis for determining wage 
index values for the proposed FY 2010 hospice wage index.
    As noted above, our hospice payment rules utilize the wage 
adjustment factors used by the Secretary for purposes of section 
1886(d)(3)(E) of the Act for hospital wage adjustments. We are 
proposing again to use the pre-floor and pre-reclassified hospital wage 
index data as the basis to determine the hospice wage index, which is 
then used to adjust the labor portion of the hospice payment rates 
based on the geographic area where the beneficiary receives hospice 
care. We believe the use of the pre-floor, pre-reclassified hospital 
wage index data, as a basis for the hospice wage index, results in the 
appropriate adjustment to the labor portion of the costs. For the FY 
2010 update to the hospice wage index, we propose to continue to use 
the most recent pre-floor, pre-reclassified hospital wage index 
available at the time of publication.
2. Areas Without Hospital Wage Data
    In adopting the CBSA designations, we identified some geographic 
areas where there are no hospitals, and no hospital wage data on which 
to base the calculation of the hospice wage index. These areas are 
described in section I.B.4 of this proposed rule. Beginning in FY 2006, 
we adopted a policy that, for urban labor markets without an urban 
hospital from which a pre-floor, pre-reclassified hospital wage index 
can be derived, all of the urban CBSA pre-floor, pre-reclassified 
hospital wage index values within the State would be used to calculate 
a statewide urban average pre-floor, pre-reclassified hospital wage 
index to use as a reasonable proxy for these areas. Currently, the only 
CBSA that would be affected by this policy is CBSA 25980, Hinesville, 
Georgia. We propose to continue this policy for FY 2010.
    Currently, the only rural areas where there are no hospitals from 
which to calculate a pre-floor, pre-reclassified hospital wage index 
are Massachusetts and Puerto Rico. In August 2007 (72 FR 50217) we 
adopted a methodology for imputing rural pre-floor, pre-reclassified 
hospital wage index values for areas where no hospital wage data are 
available as an acceptable proxy; that methodology is also described in 
section I.B.4 of this proposed rule. In FY 2010, Dukes and Nantucket 
Counties are the only areas in rural Massachusetts which are affected. 
We are again proposing to apply this methodology for imputing a rural 
pre-floor, pre-reclassified hospital wage index for those rural areas 
without rural hospital wage data in FY 2010.
    However, as we noted in section I.B.4 of this proposed rule, we do 
not believe that this policy is appropriate for Puerto Rico. For FY 
2010, we again propose to continue to use the most recent pre-floor, 
pre-reclassified hospital wage index value available for Puerto Rico, 
which is 0.4047. This pre-floor, pre-reclassified hospital wage index 
value will then be adjusted upward by the hospice 15 percent floor 
adjustment in the computing of the proposed FY 2010 hospice wage index.
3. FY 2010 Wage Index With 75 Percent Reduced Budget Neutrality 
Adjustment Factor (BNAF)
    The hospice wage index set forth in this proposed rule would be 
effective October 1, 2009 through September 30, 2010. We are not 
proposing any modifications to the hospice wage index methodology. In 
accordance with our regulations and the agreement signed with other 
members of the Hospice Wage Index Negotiated Rulemaking Committee, we 
are using the most current hospital data available. For this proposed 
rule, the FY 2009 hospital wage index was the most current hospital 
wage data available for calculating the FY 2010 hospice wage index 
values. We used the FY 2009 pre-floor, pre-reclassified hospital wage 
index data for this calculation.
    As noted above, for FY 2010, the hospice wage index values will be 
based solely on the adoption of the CBSA-based labor market definitions 
and the hospital wage index. We continue to use the most recent pre-
floor and pre-reclassified hospital wage index data available (based on 
FY 2005 hospital cost report wage data). A detailed description of the 
methodology used to compute the hospice wage index is contained in the 
September 4, 1996 hospice wage index proposed rule (61 FR 46579), the 
August 8, 1997 hospice wage index final rule (62 FR 42860), and the 
August 8, 2008 FY 2009 Hospice Wage Index final rule (73 FR 46464).
    The August 8, 2008 FY 2009 Hospice Wage Index final rule finalized 
a provision to phase out the BNAF over 3 years, with a 25 percent 
reduction in the BNAF in FY 2009, an additional 50 percent reduction 
for a total of a 75 percent reduction in FY 2010, and complete phase 
out in FY 2011. However, on February 17, 2009, the President signed 
ARRA (P.L. 111-5); Section 4301(a) of ARRA eliminated the BNAF phase-
out for FY 2009. Therefore, in an administrative instruction (Change 
Request 6418, Transmittal 1701, dated 3/13/2009) entitled ``Revision of 
the Hospice Wage Index and the Hospice Pricer for FY 2009,'' we 
instructed CMS contractors to use the revised FY 2009 hospice Pricer, 
which included a revised hospice wage index to reflect a full 
(unreduced) BNAF rather than the 25 percent reduced BNAF set forth in

[[Page 18917]]

the August 8, 2008 FY 2009 Hospice Wage Index final rule.
    While ARRA eliminated the BNAF phase-out for FY 2009, it did not 
change the 75 percent reduction in the BNAF for FY 2010, or the 
elimination of the BNAF in FY 2011 that was previously implemented in 
the August 8, 2008 FY 2009 Hospice Wage Index final rule. The provision 
in ARRA that eliminated the FY 2009 BNAF reduction provided the hospice 
industry additional time to prepare for the FY 2010 75 percent BNAF 
reduction and the FY 2011 BNAF elimination. Therefore, in accordance 
with the August 8, 2008 FY 2009 Hospice Wage Index final rule (73 FR 
46464), the rationale presented in that final rule, and consistent with 
the section 4301(a) of ARRA, we plan to reduce the BNAF for FY 2010 by 
75 percent, and ultimately eliminate the BNAF in FY 2011. We are 
accepting comments on the BNAF reductions.
    An unreduced BNAF for FY 2010 is computed to be 0.067845 (or 6.7845 
percent). A 75 percent reduced BNAF, which is subsequently applied to 
the pre-floor, pre-reclassified hospital wage index values greater than 
or equal to 0.8, is computed to be 0.016961 (or 1.6961 percent). Pre-
floor, pre-reclassified hospital wage index values, which are less than 
0.8, are subject to the hospice floor calculation; that calculation is 
described in section I.B.1.
    The proposed hospice wage index for FY 2010 is shown in Addenda A 
and B. Specifically, Addendum A reflects the proposed FY 2010 wage 
index values for urban areas under the CBSA designations. Addendum B 
reflects the proposed FY 2010 wage index values for rural areas under 
the CBSA designations.
4. Effects of Phasing Out the BNAF
    The full (unreduced) BNAF calculated for FY 2010 is 6.7845 percent. 
As implemented in the August 8, 2008 FY 2009 Hospice Wage Index final 
rule (73 FR 46464), we are reducing the BNAF by 75 percent for FY 2010, 
and eliminating it altogether for FY 2011 and beyond.
    For FY 2010, this is mathematically equivalent to taking 25 percent 
of the full BNAF value, or multiplying 0.067845 by 0.25, which equals 
0.016961 (1.6961 percent). The BNAF of 1.6961 percent reflects a 75 
percent reduction in the BNAF. The 75 percent reduced BNAF (1.6961 
percent) would be applied to the pre-floor, pre-reclassified hospital 
wage index values of 0.8 or greater in the proposed FY 2010 hospice 
wage index.
    The hospice floor calculation would still apply to any pre-floor, 
pre-reclassified hospital wage index values less than 0.8. Currently, 
the hospice floor calculation has 4 steps. First, pre-floor, pre-
reclassified hospital wage index values that are less than 0.8 are 
multiplied by 1.15. Second, the minimum of 0.8 or the pre-floor, pre-
reclassified hospital wage index value times 1.15 is chosen as the 
preliminary hospice wage index value. Steps 1 and 2 are referred to in 
this proposed rule as the hospice 15 percent floor adjustment. Third, 
the pre-floor, pre-reclassified hospital wage index value is multiplied 
by the BNAF. Finally, the greater result of either step 2 or step 3 is 
chosen as the final hospice wage index value. The hospice floor 
calculation is unchanged by the BNAF reduction. We note that steps 3 
and 4 will become unnecessary once the BNAF is eliminated.
    We examined the effects of a 75 percent reduction in the BNAF 
versus using the full BNAF of 6.7845 percent on the proposed FY 2010 
hospice wage index. The FY 2010 BNAF reduction of 75 percent resulted 
in approximately a 4.76 to 4.77 percent reduction in most hospice wage 
index values. The elimination of the BNAF in FY 2011 would result in an 
estimated final reduction of the FY 2011 hospice wage index values of 
approximately 1.66 to 1.67 percent compared to FY 2010 hospice wage 
index values.
    Those CBSAs whose pre-floor, pre-reclassified hospital wage index 
values had the hospice 15 percent floor adjustment applied before the 
BNAF reduction would not be affected by this proposed phase out of the 
BNAF. These CBSAs, which typically include rural areas, are protected 
by the hospice 15 percent floor adjustment. We have estimated that 17 
CBSAs are already protected by the hospice 15 percent floor adjustment, 
and are therefore completely unaffected by the BNAF reduction. There 
are over 100 hospices in these 17 CBSAs.
    Additionally, some CBSAs with pre-floor, pre-reclassified wage 
index values less than 0.8 will become newly eligible for the hospice 
15 percent floor adjustment as a result of the 75 percent reduced BNAF. 
Areas where the hospice floor calculation would have yielded a wage 
index value greater than 0.8 if the full BNAF were applied, but which 
will have a final wage index value less than 0.8 after the 75 percent 
reduced BNAF is applied, will now be eligible for the hospice 15 
percent floor adjustment. These CBSAs will see a smaller reduction in 
their hospice wage index values since the hospice 15 percent floor 
adjustment will apply. We have estimated that 18 CBSAs will have their 
pre-floor, pre-reclassified hospital wage index value become newly 
protected by the hospice 15 percent floor adjustment due to the 75 
percent reduction in the BNAF. Because of the protection given by the 
hospice 15 percent floor adjustment, these CBSAs will see smaller 
percentage decreases in their hospice wage index values than those 
CBSAs that are not eligible for the hospice 15 percent floor 
adjustment. This will affect those hospices with lower hospice wage 
index values, which are typically in rural areas. There are over 300 
hospices located in these 18 CBSAs.
    Finally, the hospice wage index values only apply to the labor 
portion of the payment rates; the labor portion is described in section 
I.B.1 of this proposed rule. Therefore the projected reduction in 
payments due to the 75 percent reduction of the BNAF will be an 
estimated 3.2 percent, as described in column 4 of Table 1 in section 
VI of this proposed rule. In addition, the estimated effects of the 
phase-out of the BNAF will be mitigated by any hospital market basket 
updates in payments. We will not have the final market basket update 
for FY 2010 until the summer. However, the current estimate of the 
hospital market basket update for FY 2010 is 2.1 percent. The final 
update will be communicated through an administrative instruction. The 
combined effects of a 75 percent reduction of the BNAF and an estimated 
hospital market basket update of 2.1 percent for FY 2010 is an overall 
estimated decrease in payments to hospices in FY 2010 of 1.1 percent 
(column 5 of Table 1 in section VI of this proposed rule).

B. Proposed Change to the Physician Certification and Recertification 
Process, Sec.  418.22

    The Medicare Payment Advisory Commission (MedPAC) has noted an 
increasing proportion of hospice patients with stays exceeding 180 
days, and significant variation in hospice length of stay. MedPAC has 
questioned whether there is sufficient accountability and enforcement 
related to certification and recertification of Medicare hospice 
patients. Currently, our policy requires the hospice medical director 
or physician member of the interdisciplinary group and the patient's 
attending physician (if any) to certify the patient as having a 
terminal illness for the initial 90-day period of hospice care. 
Subsequent benefit periods only require recertification by the hospice 
medical director or by the physician member of the hospice 
interdisciplinary group. These certifications must

[[Page 18918]]

indicate that the patient's life expectancy is 6 months or less if the 
illness runs its normal course, and must be signed by the physician. 
The medical record must include documentation that supports the 
terminal prognosis.
    At their November 6, 2008 public meeting, MedPAC presented the 
findings of an expert panel of hospice providers convened in October 
2008; that panel noted that while many hospices comply with the 
Medicare eligibility criteria, some are enrolling and recertifying 
patients who are not eligible.
    The expert panel noted that there were several reasons for the 
variation in compliance. First, they noted that in some cases there was 
limited medical director engagement in the certification or 
recertification process. Physicians had delegated this responsibility 
to the staff involved with patients' day-to-day care, and simply signed 
off on the paperwork. Second, inadequate charting of the patient's 
condition or a lack of staff training had led some physicians to 
certify patients who were not truly eligible for Medicare's hospice 
benefit. Finally, some panelists cited financial incentives associated 
with long-stay patients. The panelists mentioned anecdotal reports of 
hospices using questionable marketing strategies to recruit patients 
without mentioning the terminal illness requirement, and of hospices 
failing to discharge patients who had improved or enrolling patients 
who had already been discharged or turned away from other hospices. 
Consensus emerged among the panelists that more accountability and 
oversight of certification and recertification are needed. See, https://www.medpac.gov/transcripts/20081104_Hospice_final_public.pdf and 
https://www.medpac.gov/transcripts/1106-1107MedPAC%20final.pdf.
    We believe that those physicians that are certifying a hospice 
patient's continued eligibility can reasonably be expected to 
synthesize in a few sentences the clinical aspects of the patient's 
condition that support the prognosis. We believe that such a 
requirement, as suggested by the expert panel and by MedPAC, would 
encourage greater physician engagement in the certification and 
recertification process by focusing attention on the physician's 
responsibility to set out the clinical basis for the terminal prognosis 
indicated in the patient's medical record.
    To increase accountability related to the physician certification 
and recertification process, we are proposing a change to Sec.  418.22. 
Specifically, we propose to add a new paragraph (b)(3) to Sec.  418.22 
to require that physicians that certify or recertify hospice patients 
as being terminally ill include a brief narrative explanation of the 
clinical findings that support a life expectancy of 6 months or less. 
This brief narrative should be written or typed on the certification 
form itself. We do not believe that an attachment should be permissible 
because an attachment could easily be prepared by someone other than 
the physician. We seek comments on whether this proposed requirement 
would increase physician engagement in the certification and 
recertification process.

C. Proposed Update of Covered Services, Sec.  418.202

    In Part 418, subpart F, we describe covered hospice services. In 
Sec.  418.200, Requirements for Coverage, we note that covered services 
must be reasonable and necessary for the palliation or management of 
the terminal illness as well as related conditions. We also note that 
services provided must be consistent with the plan of care. The 
language at Sec.  418.202, Covered services, describes specific types 
of hospices services that are covered. Section 418.202(f) describes the 
coverage of medical appliances and supplies, including drugs and 
biologicals. The last sentence of Sec.  418.202(f) states that covered 
``Medical supplies include those that are part of the written plan of 
care.''
    The updated CoPs, which were effective as of December 2008, require 
that hospices include all comorbidities in the plan of care, even if 
those comorbidities are not related to the terminal diagnosis. In Sec.  
418.54(c)(2) we refer to assessing the patient for complications and 
risk factors that affect care planning. Comorbidities that are 
unrelated to the terminal illness need to be addressed in the 
comprehensive assessment and should be on the plan of care, clearly 
marked as comorbidities unrelated to the terminal illness. The hospice 
is not responsible for providing care for the unrelated comorbidities. 
Because these unrelated comorbidities must be included in the plan of 
care, and the hospice is not responsible for providing the care for 
these unrelated comorbidities, we propose revising Sec.  418.202(f) to 
state that medical supplies covered by the Medicare hospice benefit 
include only those that are part of the plan of care and that are for 
the palliation or management of the terminal illness or related 
conditions.

D. Proposed Clarification of Payment Procedures for Hospice Care, Sec.  
418.302

    Section 1861(dd) of the Act limits coverage of and payment for 
inpatient days for hospice patients. There are sometimes situations 
when a hospice patient receives inpatient care but is unable to return 
home, even though the medical situation no longer warrants general 
impatient care (GIP), or even though 5 days of respite have ended. In 
computing the inpatient cap, the hospice should only count inpatient 
days in which GIP or respite care is provided and billed as GIP or 
respite days. For example, assume a patient received 5 days of respite 
care while a caregiver was out of town, but the caregiver's return was 
delayed for a day due to circumstances beyond her control. The patient 
had to remain as an inpatient for a 6th day, but was no longer eligible 
for respite care. According to Sec.  418.302(e)(5), the hospice should 
switch from billing for respite care to billing for routine home care 
on the 6th day. The hospice should only count 5 days toward the 
inpatient cap, not 6 days, since only 5 inpatient days were provided 
and billed as respite days.
    Because we have received several inquiries about how to count 
inpatient days that are provided and billed as routine home care, we 
propose to revise Sec.  418.302(f)(2) to clarify that only inpatient 
days in which GIP or respite care is provided and billed are counted as 
inpatient days when computing the inpatient cap.

E. Proposed Clarification of Intermediary Determination and Notice of 
Amount of Program Reimbursement, Sec.  405.1803

    Currently, hospices that exceed either the inpatient cap or the 
aggregate cap are sent a letter by their contractor (regional home 
health and hospice intermediary (RHHI) or fiscal intermediary (FI)), 
detailing the cap results, along with a demand for repayment. As 
described in an administrative instruction (CR 6400, Transmittal 1708, 
issued April 3, 2009) effective July 1, 2009, this letter of 
determination of program reimbursement will be sent to every hospice 
provider, regardless of whether or not the hospice has exceeded the 
cap. A demand for repayment will be included for those hospices which 
have exceeded either cap. If a hospice disagrees with the contractor's 
cap calculations, the hospice has appeal rights which are set out at 42 
CFR Sec.  418.311 and Part 405, Subpart R. The letter of determination 
of program

[[Page 18919]]

reimbursement shall include language describing the hospice's appeal 
rights. We are proposing to clarify the language at Sec.  405.1803(a) 
to note that for the purposes of hospice, the determination of program 
reimbursement letter sent by the contractors serves as the written 
notice reflecting the intermediary's determination of the total amount 
of reimbursement due the hospice, which is commonly called a Notice of 
Program Reimbursement or NPR. Additionally, we are proposing to clarify 
Sec.  405.1803(a)(1)(i) to note that in the case of hospice, the 
reporting period covered by the determination of program reimbursement 
letter is the hospice cap year and the bases for the letter are the cap 
calculations rather than reasonable cost from cost report data.

F. Proposed Technical and Clarifying Changes

    In addition to the proposals and solicitation of comments discussed 
above, we are proposing to make the following technical changes to 
clarify existing regulations text, correct errors that we have 
identified in the regulations, remove obsolete cross references, or to 
ensure consistent use of terminology in our regulations.
1. Proposed Clarification of the Statutory Basis for Hospice 
Regulation, Sec.  418.1
    Currently, the statutory basis for the hospice regulations is 
described at Sec.  418.1, and notes that Part 418 implements section 
1861(dd) of the Act. The regulation describes section 1861(dd) of the 
Act as specifying covered hospice services and the conditions that a 
hospice program must meet to participate in the Medicare program. While 
that is correct, section 1861(dd) of the Act also specifies some 
limitations on coverage and payment for inpatient hospice care. We 
propose to clarify Sec.  418.1 by adding a sentence noting that section 
1861(dd) of the Act limits coverage and payment for inpatient hospice 
care.
2. Proposed Update of the Scope of Part, Sec.  418.2
    The current regulations at Sec.  418.2 (``Scope of part.'') 
describe each of the subparts in Part 418. Some of these subparts have 
been revised or removed with the update of the hospice conditions of 
participation (CoPs) in 2008. Specifically, subpart B specifies the 
eligibility and election requirements, along with the duration of 
benefits. Subparts C and D specify the Conditions of Participation, 
with subpart C now entitled ``Patient Care'' rather than ``General 
Provisions and Administration'', and subpart D now entitled 
``Organizational Environment'' rather than ``Core Services''. Subpart 
E, which is currently described as specifying reimbursement methods and 
procedures, was removed and reserved with the update of the CoPs. 
Subparts F and G relate to payment policy, including covered services 
and hospice payment; currently subpart F is described in Sec.  418.2 as 
specifying coinsurance amounts. Finally, subpart H specifies 
coinsurance amounts applicable to hospice care, rather than subpart F 
as the regulation currently reads. Accordingly, we propose to update 
section Sec.  418.2 to reflect the current organization and scope of 
Part 418.
3. Proposed Revision of Hospice Aide and Homemaker Services, Sec.  
418.76
    We are proposing a technical correction at Sec.  418.76(f)(1) to 
clarify that home health agencies that have been found out of 
compliance with paragraphs (a) or (b) of Sec.  484.36, regarding home 
health aide qualifications, are prohibited from providing hospice aide 
training. The word ``out'' was inadvertently omitted from the 
regulation text in the June 5, 2008 hospice final rule.
4. Proposed Clarification of Hospice Multiple Location, Sec.  418.100
    For the sake of clarity, we propose to delete the word ``that'' 
from Sec.  418.100(f)(1)(iii), regarding multiple locations. The 
revised element would require that the lines of authority and 
professional and administrative control must be clearly delineated in 
the hospice's organizational structure and in practice, and must be 
traced to the location issued the certification number.
5. Proposed Revision to Short Term Inpatient Care, Sec.  418.108
    We propose to correct in Sec.  418.108(b)(1)(ii) an erroneous 
reference to Sec.  418.110(f), Patient rooms. This section, which 
addresses facilities that are considered acceptable for the provision 
of respite care to hospice patients, was intended to reference the 
standard at Sec.  418.110(e), Patient areas. The published reference to 
standard (f) was a typographic error, and we propose to correct it by 
changing the reference to standard (e).
6. Proposed Clarification of the Requirements for Coverage, Sec.  
418.200
    Section 418.200 describes the requirements for coverage for 
Medicare hospice services, and references Sec.  418.58 (``Conditions of 
Participation plan of care''). This cross reference is no longer 
accurate as Sec.  418.58 was updated with the publication of the new 
CoPs in 2008. We propose to detail the requirements for coverage 
related to the plan of care rather than cross refer to the CoPs 
regulations. This revision would avoid the need to make updates to this 
section each time the CoPs are changed.
    The statute specifies requirements for hospice coverage in section 
1814(a)(7)(A) through (C) of the Act. The Act requires that the hospice 
medical director and the patient's attending physician certify the 
terminal illness for the initial period of hospice care and that the 
medical director recertify the terminal illness for each subsequent 
benefit period. Additionally, the Act requires that a plan of care 
exist before care is provided; that the plan of care be reviewed 
periodically by the attending physician, the medical director, and the 
interdisciplinary group; and that care be provided in accordance with 
the plan of care. We propose to clarify Sec.  418.200 to incorporate 
these requirements for coverage, rather than cross reference CoP 
requirements in CoP regulations.
7. Proposed Incorporation of the Term ``Hospice Aide,'' Sec.  418.202, 
Sec.  418.204, and Sec.  418.302
    Over the last several years, we have worked with the industry to 
update the hospice CoPs. These efforts culminated in publication of a 
final rule in 2008, which was effective December 2, 2008. The revised 
CoPs redesignated the ``home health aide'' who works in hospice as a 
``hospice aide''. We propose to revise Sec.  418.202(g), Sec.  
418.204(a), and Sec.  418.302 to include the new terminology.
8. Proposed Clarification of Administrative Appeals, Sec.  418.311
    A hospice that does not believe its payments have been properly 
determined may request a review from the intermediary or from the 
Provider Reimbursement Review Board (PRRB), depending on the amount in 
controversy. Section 418.311 details the procedures for appealing a 
payment decision and also refers to Part 405, Subpart R.
    We propose to clarify the last sentence of this section, which 
currently notes that ``the methods and standards for the calculation of 
the payment rates by CMS are not subject to appeal.'' The payment rates 
referred to are the national rates which are set by statute, and 
updated according to the statute using the hospital market basket 
(unless Congress has instructed us to update the rates differently). To 
ensure better understanding of what is not subject to

[[Page 18920]]

appeal, we propose to revise Sec.  418.311 to provide that methods and 
standards for the calculation of the statutorily defined payment rates 
by CMS are not subject to appeal.

III. Request for Comments on Other Policy Issues

A. Recertification Visits, Sec.  418.22

    As noted earlier, MedPAC convened an expert panel from the hospice 
industry in late 2008. That panel noted that some hospices are 
enrolling and recertifying patients who are not eligible for hospice 
care under the Medicare benefit, and consensus emerged that greater 
accountability and oversight are needed in the certification and 
recertification process. To further increase accountability in the 
recertification process, several of the panelists suggested to MedPAC 
that an additional policy change be made to the recertification 
process. Several panelists supported a requirement that a hospice 
physician or advanced practice nurse visit the patient at the time of 
the 180-day recertification to assess continued eligibility, and at 
every certification thereafter. MedPAC recommended that the physician 
or advanced practice nurse be required to attest that the visit took 
place. See, https://www.medpac.gov/transcripts/20081104_Hospice_final_public.pdf and https://www.medpac.gov/transcripts/1106-1107MedPAC%20final.pdf.
    At this time, we are not proposing any policy change requiring 
visits by physicians or advanced practice nurses in order to recertify 
patients. We note that the statute requires a physician to certify and 
recertify terminal illness for hospice patients, and specifically 
precludes nurse practitioners from doing so at 1814(a)(7)(A) of the 
Act. A recertification visit to a hospice patient by a nurse 
practitioner would not relieve the physician of his or her legal 
responsibility to recertify the terminal illness of such hospice 
patient. The physician is ultimately responsible for the 
recertification determination. However, the visit, if performed by a 
nurse practitioner, could potentially serve as an additional, objective 
source of information for the physician in the recertification of 
terminal illness decision. We are also considering other options 
related to a nurse practitioner making recertification visits. For 
example, a nurse practitioner who is involved in a patient's day-to-day 
care may not be as objective in assessing eligibility for 
recertification as a nurse practitioner who is not caring for that 
patient regularly. One option to better ensure that a nurse 
practitioner visit results in additional, objective clinical assessment 
of the patient's condition might be to require that such nurse 
practitioner not be involved in the hospice patient's day-to-day care. 
Also, there are different possible approaches regarding the timeframe 
for making visits. Visits by a physician or nurse practitioner could be 
made within a timeframe close to the recertification deadline, such as 
the 2-week period centered around the recertification date, thereby 
allowing a window of time surrounding the recertification timeframe for 
a visit to occur.
    While we are not proposing a policy change regarding 
recertification visits at this time, we are soliciting comments on the 
suggestion to require physician or nurse practitioner visits for 
hospice recertifications at or around 180 days and for every benefit 
period thereafter. We are seeking comments on all aspects of this 
suggestion, including practical issues of implementation. We will 
analyze and consider the comments received in possible future policy 
development.

B. Hospice Aggregate Cap Calculation

    As described in section 1814(i)(2)(A) through (C) of the Act, when 
the Medicare hospice benefit was implemented, the Congress included an 
aggregate cap on hospice payments. The hospice aggregate cap limits the 
total aggregate payment any individual hospice can receive in a year. 
The Congress stipulated that a ``cap amount'' be computed each year. 
The cap amount was set at $6,500 per beneficiary when first enacted in 
1983 and is adjusted annually by the change in the medical care 
expenditure category of the consumer price index for urban consumers 
from March 1984 to March of the cap year. The cap year is defined as 
the period from November 1st to October 31st, and was set in place in 
the December 16, 1983 hospice final rule (48 FR 56022). This timeframe 
was chosen as the cap year since the Medicare hospice program began on 
November 1, 1983 (48 FR 56022). For the 2008 cap year, the cap amount 
was $22,386.15 per beneficiary. This cap amount is multiplied by the 
number of Medicare beneficiaries who received hospice care in a 
particular hospice du